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Wednesday, 7 December 2016

Crude rally loses steam ahead of Opec/non-Opec meeting

Crude rally loses steam ahead of Opec/non-Opec meeting:
"US crude prices slid below the $50 a barrel mark as oil declined for a second straight day ahead of Opec’s meeting with non-members on Saturday.

West Texas Intermediate, the US oil marker, declined 2 per cent to $49.91 a barrel, while Brent crude, the global oil benchmark, dropped 1.6 per cent to $53.07 a barrel.

The oil cartel agreed last week to reduce output by 1.2m barrels per day to 32.5m for an initial period of six months, sending Brent crude above $55 a barrel. And Opec is now trying to convince 14 non-members to partake in output cuts as well. Indeed, Russia had previously indicated that it would make half of the 600,000 bpd cut the cartel wants to see from non-Opec countries."

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Glencore and Qatar take stake worth €10bn in Rosneft

Glencore and Qatar take stake worth €10bn in Rosneft:
"Glencore and the sovereign wealth fund of Qatar are to take a 19.5 per cent stake in Russian oil company Rosneftin a surprise €10.5bn deal that marks a triumph for President Vladimir Putin.

The deal, which was announced by Mr Putin’s press secretary on Wednesday evening, is the largest under a privatisation programme launched by the cash-strapped Russian government at the start of the year and one of the largest ever investments into the country.

It comes in spite of US and EU financial and technological sanctions against Rosneft, which it was thought would deter western companies’ participation in the Russian oil producer’s share sale, even though they do not prohibit it."

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Shareholders of NBAD, FGB approve merger | GulfNews.com

Shareholders of NBAD, FGB approve merger | GulfNews.com:
"Shareholders of the National Bank of Abu Dhabi (NBAD) and FGB approved the banks’ plans to merge, thus creating the largest bank in the Middle East and North Africa, with Dh655 billion in total assets.
The approvals came in general assembly meetings held by each bank on Wednesday, and pave the way for the banks to merge in the first quarter of 2017. The merger has already been approved by each bank’s board of directors and the Central Bank of the UAE.
The merger still requires approval from international regulators and the UAE market regulator, the Securities and Commodities Authority (SCA)."

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Consortium to pay $1.12 bln for Oger's stake in Jordan's Arab Bank- TV | Reuters

Consortium to pay $1.12 bln for Oger's stake in Jordan's Arab Bank- TV | Reuters:
"A group of investors will pay $1.12 billion for Saudi Oger's stake in Jordan's Arab Bank and expects to complete the deal by mid-January, a member of the consortium told Al Arabiya TV on Wednesday.

Saudi Arabian conglomerate Astra Group was part of the consortium, led by Arab Bank Group Chairman Sabih al-Masri, that was buying the 20 percent stake, Ghassan Akeel, chief executive for Saudi Arabia and the Gulf Cooperation Council at Astra Group, told the broadcaster.

Masri is also chairman of Astra Group."

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MIDEAST STOCKS-UAE outperforms region, profit-taking hits Saudi, Egypt | Reuters

MIDEAST STOCKS-UAE outperforms region, profit-taking hits Saudi, Egypt | Reuters:
"Stock markets in the United Arab Emirates outperformed the region on Wednesday while investors booked profits in Saudi Arabian petrochemical shares and Egyptian blue chips.

Dubai's main index closed 1.3 percent higher in healthy volume as some large and mid-sized shares, which had been relatively quiet so far this week, gained. Emaar Properties rose 2.4 percent.

A Dubai-based stock broker said she was seeing significant buy orders from foreign investors."

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Fitch: GCC Banks Outlook Stays Negative; Low Oil Raises Pressure | Reuters

Fitch: GCC Banks Outlook Stays Negative; Low Oil Raises Pressure | Reuters:
"Low oil prices continue to pressure bank liquidity and are also taking their toll on asset quality and earnings for banks in Gulf Cooperation Council (GCC) countries, Fitch Ratings says. The 2017 Sector Outlook for GCC banks remains Negative as weaker economic growth will feed through to credit fundamentals. The slow oil price recovery affects banks in all GCC countries, where about 70% of GDP is driven, directly or indirectly, by oil revenue. We forecast oil prices to flatline in 2017 with Brent crude averaging USD45/bbl. Lower oil prices have put significant pressure on the fiscal and external positions of all GCC sovereigns and governments are cutting spending and looking to raise additional revenue in response. Governments will be more selective with new large infrastructure projects, but we expect non-oil growth rates to pick up in 2017 as GCC economies overcome the initial shock of government cutbacks. Nevertheless, the pressure on governments and subdued economic growth negatively affect banks' credit profiles. Government deposits in banks have been shrinking or growing more slowly. Deposit and interbank rates have increased and banks have issued more debt and tapped the international syndicated loan market. Liquidity is still comfortable, but this tightening is likely to put pressure on loan growth, especially in Oman, Qatar and Saudi Arabia. We expect asset-quality metrics to decline slightly in 2017 as lower government spending and GDP growth affects the loan portfolios."

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Saudi Arabia's Early Christmas Gift To Oil Markets Won't Last

Saudi Arabia's Early Christmas Gift To Oil Markets Won't Last:
"Last Wednesday, Saudi Arabia finally pulled it off. The world’s largest oil exporter and de facto OPEC leader led the 14-nation oil producing cartel in its first oil production cut agreement since 2008.

Much has already been said about the deal since it was reached, while markets have reacted in jubilation. The following three trading sessions after the deal was reached to trim OPEC production levels by 1.2 million barrels per day (b/d)  - more than 1% of global output - both global oil benchmark, London-traded Brent crude and its U.S. counterpart, NYMEX-traded West Texas Intermediate (WTI) crude had spiked by around 15% to levels not seen since mid-2015.

On Tuesday, markets did pull back some as traders engaged in profit-taking. Brent crude fell 0.1% to $54.93 a barrel while WTI futures were trading down 0.4% at $51.59 a barrel."

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NBAD and FGB shares rally ahead of shareholders’ meetings to approve merger | The National

NBAD and FGB shares rally ahead of shareholders’ meetings to approve merger | The National:
"Shares of National Bank of Abu Dhabi (NBAD) and FGB rallied on Wednesday ahead of general assemblies for both banks today where shareholders are expected to approve a merger that will create the largest lender by assets in the Middle East.

NBAD shares jumped as high as 3 per cent as of midday in Abu Dhabi while shares of FGB advanced as much as 5.4 per cent.

NBAD, the biggest bank by assets in Abu Dhabi, and FGB, its closest competitor in the emirate, in October invited shareholders to separate general assembly meetings to approve their merger."

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Mubadala Capital to set up at Abu Dhabi Global Market | The National

Mubadala Capital to set up at Abu Dhabi Global Market | The National:
"Mubadala Capital, the financial investment business of Abu Dhabi’s strategic investment company, is to set up under the jurisdiction of Abu Dhabi Global Market, the capital’s new financial free zone.

Ahmed Al Sayegh, ADGM’s chairman, announced the move at the Bloomberg Markets Most Influential Summit on Wednesday, saying that it "confirms the strategy that our sovereign wealth funds will move into the jurisdiction".


The move is a significant development in ADGM’s growth. Mr Al Sayegh said that, in just over a year since the market was declared "open for business", it had attracted 210 companies, including some big-name international financial institutions."

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U.A.E. Oil Minister Says OPEC Will Act Again If Prices Decline - Bloomberg

U.A.E. Oil Minister Says OPEC Will Act Again If Prices Decline - Bloomberg:
"A cut in global oil output by 1.8 million barrels a day would be enough to balance the crude market, and OPEC is ready to take further action if prices fail to stabilize, United Arab Emirates Energy Minister Suhail Al Mazrouei said in Abu Dhabi.

The Organization of Petroleum Exporting Countries decided last week to pare its collective production by 1.2 million barrels a day to counter a global glut, and non-OPEC nations need to share the burden by reducing supply by an additional 600,000 barrels a day, Al Mazrouei said Wednesday. The U.A.E. wants oil producers outside OPEC to make their commitments when the two sides meet Saturday in Vienna, he said.
 
If OPEC’s production cut doesn’t stop prices from falling to $40 or $50 a barrel, “we will meet again and we will discuss with non-OPEC and we will take the right measures,” he said at a Bloomberg conference in Abu Dhabi."

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UPDATE 1-OPEC deal will go ahead even if only Russia commits - Nigeria oil min | Reuters

UPDATE 1-OPEC deal will go ahead even if only Russia commits - Nigeria oil min | Reuters:
"OPEC's deal to cut oil production will go ahead even if Russia becomes the only non-OPEC country to commit to reduce output at a meeting this week, Nigeria said on Wednesday, while the UAE voiced optimism that other producers would participate.

OPEC agreed last week to slash output by around 1.2 million barrels per day beginning in January in an effort to reduce global oversupply and prop up oil prices. It hopes non-OPEC countries will contribute a further 600,000 bpd of cuts. Russia has said it will reduce output by around 300,000 bpd.

"Yes, we will go ahead, but we will continue to work on the rest to come onboard," Nigerian Oil Minister Emmanuel Ibe Kachikwu said when asked whether OPEC was ready to go ahead with the production agreement even if only Russia committed to cut."

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