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Monday, 5 December 2016

Exchange traded funds: Taking over the markets

Exchange traded funds: Taking over the markets:

"Stock markets have a new purpose. Once devoted to trading stocks and setting their prices, they are now the venue for buying and selling something other than shares: exchange traded funds.

ETFs are taking over markets. Shares in Apple, the world’s biggest and most heavily traded company, turn over more than $3bn each day. But that is dwarfed by the biggest ETF, State Street’s SPDR S&P 500, which trades more than $14bn each day. Five of the world’s seven most heavily traded equity securities are ETFs.

“From a modest beginning, ETFs’ impact on stock trading has now reached mammoth proportions, and ETFs now account for nearly one-half of all trading in US stocks,” says Jack Bogle, founder of asset manager Vanguard."



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Air Berlin Gets EU300 Million Lifeline From Etihad in Niki Deal - Bloomberg

Air Berlin Gets EU300 Million Lifeline From Etihad in Niki Deal - Bloomberg:
"Air Berlin Plc will receive 300 million euros ($319 million) from Etihad Airways, the main backer of the troubled German airline, gaining an important lifeline as it restructures.

Abu Dhabi-based Etihad will buy Air Berlin’s stake in Austrian leisure-flight operator Niki for more than four times Air Berlin’s market value and will sidestep restrictions on foreign ownership of European airlines by folding the company into an Austrian-based holding.

The transaction is part of a larger deal reached in November between Etihad and tour operator TUI AG to combine airline assets in a leisure market burdened by a glut in capacity. Etihad will end up with 25 percent of the joint venture, which will operate about 60 aircraft with capacity to carry 15 million passengers a year. TUI will hold 24.8 percent, with the remaining shares owned by private foundation Niki Privatstiftung."

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Jordan investors set to buy Arab Bank stake after Saudi bid fades | Reuters

Jordan investors set to buy Arab Bank stake after Saudi bid fades | Reuters:
"A Jordanian consortium has bid for Saudi Oger's 20 percent stake in Arab Bank Group after the family of Saudi Arabia's Fawaz Alhokair dropped its own $1.1 billion offer, banking sources told Reuters on Monday.

A deal with investors led by Arab Bank Group's chairman Sabih al Masri, a leading Jordanian businessmen with extensive holdings in banking and hotels, could be imminent, they said.

The Alhokair family was in talks to buy the stake in the Jordan-based bank, one of the Arab world's largest privately owned banks, after construction giant Saudi Oger began seeking buyers to help ease cashflow problems brought on by difficulties in the Saudi building sector."

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Oil retreats on doubts OPEC cuts can ease glut | Reuters

Oil retreats on doubts OPEC cuts can ease glut | Reuters:
"U.S. crude futures strengthened Monday before retreating in post-settlement trade as the market lost confidence OPEC cuts would be sufficient to reduce oversupply given increased U.S. drilling.

U.S. West Texas Intermediate crude rose early in the day and began to pare gains in the late afternoon, settling at $51.79 a barrel, up 11 cents or 0.21 percent, before retreating to as low as $51.11 a barrel.

Brent crude settled at $54.94 a barrel, up 48 cents - or 0.88 percent - before retreating to $54.22 a barrel."

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With Dakota denial, outlook for U.S. pipelines turns murky | Reuters #StandingRock

With Dakota denial, outlook for U.S. pipelines turns murky | Reuters:
"The U.S. Army's denial of an easement for the Dakota Access Pipeline, after permitting and legal obligations were followed, sets an uncertain precedent for new projects despite President-elect Donald Trump's promise to support energy infrastructure.

The decision came after months of protests by the Standing Rock Sioux tribe and others who said the line could desecrate tribal grounds, or a spill could contaminate drinking water.

While most of the 1,172-mile (1,885-km) pipeline is complete, Energy Transfer Partners, the line's owner, needed an easement from the U.S. Army Corps of Engineers (USACE) to drill under Lake Oahe. The lake, a water source formed by a dam on the Missouri River, has been the focus of protesters."

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Saudi Arabia’s Samba Said to Block $3.5 Billion Oger Talks - Bloomberg

Saudi Arabia’s Samba Said to Block $3.5 Billion Oger Talks - Bloomberg:
"Saudi Arabia’s Samba Financial Group rejected a proposed payment freeze by construction firm Saudi Oger, blocking negotiations between the company and lenders over 13 billion riyals ($3.47 billion) of debt.

The Riyadh-based bank has started legal action to secure repayment of the debt after rejecting a so-called standstill agreement, the people said, asking not to be identified as the information is private. The accord would have prevented creditors from taking legal action against the company while it negotiated terms. Saudi Oger had been seeking to extend the maturity of the loan while it tried to recover delayed government payments, they said.

Saudi Arabia halted payments to contractors after the oil slump pressured the government’s finances, creating financial problems for the country’s largest construction firms. The construction company, owned by Lebanese Prime Minister-Designate Saad Hariri’s family, had been seeking to sell a 20 percent stake in Jordan’s Arab Bank to Saudi Arabia’s Fawaz Al Hokair Group, people with knowledge of the matter said last month."

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Mubadala Aerospace's Strata business to break even in 2018 - executive | Reuters

Mubadala Aerospace's Strata business to break even in 2018 - executive | Reuters:
"Strata, the manufacturing business of Abu Dhabi's state-owned Mubadala Aerospace, expects to break even in 2018, a senior executive said on Monday.

Strata is part of the United Arab Emirates' efforts to diversify away from hydrocarbons. The government hopes to use companies such as Strata to build up industry and high-tech manufacturing.

The company, which was established in 2009 and started production in 2010, has an aero parts manufacturing facility in Al Ain, an oasis town within the Abu Dhabi emirate, producing aircraft components for Airbus, Boeing and others."

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After two years, why an OPEC deal now? Kemp | Reuters

After two years, why an OPEC deal now? Kemp | Reuters:
"OPEC has finally agreed to cut production, but only after two years of fruitless negotiations. So what changed to make an agreement possible now, after it had eluded negotiators at previous OPEC meetings?

The intense diplomatic maneuvering behind the deal has been capably chronicled by my colleagues at Reuters (“How Putin, Khamenei and Saudi prince got OPEC deal done”), Bloomberg (“OPEC deal hinged on 2 a.m. phone call and it nearly failed”) and the Financial Times (“Saudi prince’s ambition for life beyond oil forces OPEC deal”).

The common theme in these accounts is the personal intervention of top political leaders, which overcame the obstacles which had stalled negotiations at technical level (“OPEC talks struggle with question of market share”, Reuters, Nov 24)."

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MIDEAST STOCKS-Gulf slips as global shares wobble on Italy vote, Egypt's OTMT sold off | Reuters

MIDEAST STOCKS-Gulf slips as global shares wobble on Italy vote, Egypt's OTMT sold off | Reuters:
"Most stock markets in the Gulf fell on Monday as the mood on global exchanged darkened because of the 'No' vote in Italy's referendum on constitutional reform, while Egypt's most heavily traded stock sank on news its chief executive would step down.

Riyadh's main index fell 0.3 percent to 7,106 points, but it closed 83 points above its intra-day low and is still up 3.2 percent year-to-date.

Trading volume shrank slightly but remained healthy compared to this year's average, and fund managers characterised the selling of stocks as profit-taking rather than an reversal of the strong uptrend of the last few weeks."

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Brent oil above $55 a barrel for first time since mid-2015

Brent oil above $55 a barrel for first time since mid-2015:
"The price of a barrel of Brent crude oil has risen above $55 for the first time since July 2015, with traders still optimistic after Opec agreed its first production cut since the financial crisis last week."

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Markets circumspect after Italy vote | Market Minute

Gulf shares pull back as Italy vote hits global market sentiment | The National

Gulf shares pull back as Italy vote hits global market sentiment | The National:
"Stock markets in the Gulf fell in early trade on Monday as investors took profits on gains in the past few weeks after the mood in global markets darkened because of the ‘no’ vote in Italy’s referendum on constitutional reform.

The euro has dropped to a 20-month low and investors are exiting riskier assets after Italian prime minister Matteo Renzi said he would resign following the referendum defeat, which could destabilise the banking system of Europe’s third largest economy.


Riyadh’s main index lost 1.0 per cent after 70 minutes of trade with all but one of 14 listed petrochemical shares slipping. Blue chip producer Yanbu National Petrochemical fell 1.5 per cent."

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UAE non-oil business growth rebounds in November: PMI | Reuters

UAE non-oil business growth rebounds in November: PMI | Reuters:
"Business activity growth in the United Arab Emirates' non-oil private sector rebounded slightly in November from a six-month low in October, according to a corporate survey published on Monday.

The seasonally adjusted Emirates NBD UAE Purchasing Managers' Index, which covers manufacturing and services, rose to 54.2 last month from 53.3 in October. The 50-point level divides expansion from contraction.

"The November PMI data is encouraging as it continues to point to strong activity growth in the UAE, even as external demand remains soft," said Khatija Haque, head of regional research at Emirates NBD."

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Oil tops $55 for first time in 16 months as OPEC deal fuels buying | Reuters

Oil tops $55 for first time in 16 months as OPEC deal fuels buying | Reuters:
"Brent crude oil prices rose above $55 a barrel on Monday, trading at a fresh 16-month high, as optimism spread about the prospect of a tightening market after OPEC members agreed on a landmark deal to cut production last week.

Monday's gains take the rally since the agreement was struck on Wednesday to 19 percent for Brent, the highest in almost eight years, and 16 percent for U.S. crude.

Brent crude oil futures LCOc1, the global benchmark used to trade oil, soared to its highest since July 6, 2015 to $55.20 a barrel. It last traded at $55.08 a barrel, up 62 cents, or 1.1 percent, at 0946 GMT."

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