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Tuesday, 13 December 2016

Markets outlook for 2017 | Markets

Good year forecast for Gulf equities, thanks to firmer oil prices | The National

Good year forecast for Gulf equities, thanks to firmer oil prices | The National:
"Firmer oil prices and improved global economic growth prospects will lead Arabian Gulf equities to generate returns of up to 15 per cent next year, according to Emirates NBD.

The rise comes in line with an overweight recommendation by the bank on global equities for 2017, despite concerns over US share valuations in the medium term.

Gary Dugan, the chief investment officer for wealth management at Emirates NBD, said equities in the Arabian Gulf were forecast to rise by 10 per cent next year, with an additional dividend yield of up to 5 per cent, with recent agreements by oil producers to cut output finally bringing investors back to market."

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IranAir hopes to finalise Airbus deal in two weeks | GulfNews.com

IranAir hopes to finalise Airbus deal in two weeks | GulfNews.com:
"European plane maker Airbus and IranAir will finalise a deal to buy aircraft in two weeks, the head of Iran’s flag carrier said on Tuesday, adding Airbus has agreed to arrange financing for the first 17 planes.
Uncertainty over financing of the deal and political opposition in the United States against Iran have slowed down Tehran’s efforts to import aircraft following the lifting of nuclear-related sanctions this year.
Iran signed a $16.6-billion deal for 80 Boeing passenger jets on Sunday and was said to be close to a deal with Airbus, in the biggest package of firm contracts with Western companies since Iran’s 1979 revolution."

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Saudis to claim partial victory in taming huge deficit with 2017 budget | Reuters

Saudis to claim partial victory in taming huge deficit with 2017 budget | Reuters:
"Saudi Arabia's 2017 state budget is likely to show Riyadh has shrunk a huge deficit caused by cheap oil faster than expected, which may let it spend more to bolster a shaky economy

This year was one of the most painful for the Saudi economy in decades. Growth slowed sharply and speculators bet against the Saudi currency as the government fought to curb a deficit that totalled a record 367 billion riyals ($98 billion) in 2015.

But when Riyadh reveals next year's budget in about two weeks, it will claim more progress in controlling its finances than many thought possible 12 months ago, bankers and analysts in touch with Saudi economic officials said.

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MIDEAST STOCKS-Saudi, UAE retreat ahead of likely U.S. rate hike, Saudi budget; Egypt slips | Reuters

MIDEAST STOCKS-Saudi, UAE retreat ahead of likely U.S. rate hike, Saudi budget; Egypt slips | Reuters:
"Stock markets in the Gulf pulled back on Tuesday as investors turned their attention to an expected U.S. interest rate hike on Wednesday and the upcoming Saudi Arabian state budget for 2017.

In Riyadh, the index declined for a second straight session, falling 0.8 percent. Trading volume shrank by roughly half from Monday's very large amount.

Investors have been readjusting their portfolios in anticipation of the 2017 budget announcement, which is expected late this month."

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Qatar sovereign fund tells Washington will invest $10 billion in U.S. infrastructure: sources | Reuters

Qatar sovereign fund tells Washington will invest $10 billion in U.S. infrastructure: sources | Reuters:
"The head of Qatar's sovereign wealth fund has told U.S. officials it will invest $10 billion in infrastructure projects inside the United States, sources said, in an apparent boost to the economic plans of president-elect Donald Trump.

Sheikh Abdullah bin Mohamed bin Saud al-Thani, chief executive of the Qatar Investment Authority (QIA), delivered the message to officials including Charles Rivkin, U.S. assistant secretary of state for economic and business affairs, in Doha on Monday, a Qatari official and another source close to the QIA told Reuters.

No time frame was given for the investment. Both the QIA, one of the world's largest sovereign funds, and a spokesman for the U.S. embassy in Qatar declined to comment."

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Saudi Arabia Plans to Take Its Biggest and Best Companies Global - Bloomberg

Saudi Arabia Plans to Take Its Biggest and Best Companies Global - Bloomberg:
"Saudi Arabia has hired consultants to advise on plans to create top global companies in industries from petrochemicals to telecommunications as it seeks to bolster its economy and reputation, according to people with knowledge of the matter.

The kingdom has identified about five companies -- including Saudi Arabian Oil Co., Saudi Basic Industries Corp. and Saudi Telecom Co. -- that fit the profile and has asked advisers to draw up policies that will boost their international competitiveness and profile, the people said, asking not to be identified as the plans aren’t public. The country is also studying industries in which it can be a leading player and incentives such as access to funding, the people said.
Saudi Arabia is keen to emulate the example of South Korea where companies like Samsung Electronics Co Ltd. have become household names, according to the people. Regionally, Abu Dhabi is merging its two largest lenders -- National Bank of Abu Dhabi PJSC and First Gulf Bank PJSC -- to make its financial services industry more internationally competitive."

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ETFs and EMs: a difficult marriage

ETFs and EMs: a difficult marriage:
"The week after Donald Trump was elected US president, emerging market equities had their steepest sell-off since the financial crisis.

Shares in the developing world tumbled amid fears for the future of global trade. Within five days, the main index for emerging market stocks — the MSCI EM — had sunk 6.7 per cent. And exchange traded funds were one easy way investors used to express their newfound aversion to the sector.

Providing money managers and retail investors with a low cost to buy and sell assets, the rise of ETFs has in many ways been a boon for playing emerging markets. ETFs are popular in the developed world, but in emerging markets they are outrunning the competition. Of the $47bn that poured into EM funds during 2016, three-quarters has been allocated to ETFs, according to data from EPFR."

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Glencore uses Aussie playbook for Rosneft deal

Glencore uses Aussie playbook for Rosneft deal:
"On Tuesday last week Glencore’s fast-talking chief executive Ivan Glasenberg made his way to a five-star hotel in Moscow for a commodities conference.

As he took questions about a new agreement by Opec, the oil producers’ cartel, to curb production and boost prices, few if any in the audience would have guessed that Mr Glasenberg was closing in on a deal that would also stun the market.

But one day later, Glencore and Qatar’s sovereign wealth fund, the miner cum trader’s largest shareholder, confirmed a complex deal to buy a 19.5 per cent stake in Rosneft, Russia’s largest oil producer, for €10.2bn."

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IEA predicts oil glut will end if producers deliver deal

IEA predicts oil glut will end if producers deliver deal:
"Demand for oil will outstrip supply in the next six months as long as Opec and countries outside the cartel can implement a deal signed over the weekend to lower output, according to one of the world’s leading energy forecasters.

The International Energy Agency said the planned production cuts, which add up to 1.8m barrels a day, could reduce stockpiles by as much as 600,000 b/d over in the first half of 2017 if all of the signatories deliver their pledges.

“Success means the reinforcement of prices and revenue stability for producers after two difficult years; failure risks starting a fourth year of stock builds and a possible return to lower prices,” the Paris-based global energy advisory body said in a report on Tuesday."

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Person of the year: Donald Trump | Opinion

As U.S. Shale Seeps Into Top Oil Market, Saudis Hone Defense - Bloomberg

As U.S. Shale Seeps Into Top Oil Market, Saudis Hone Defense - Bloomberg:
"As Saudi Arabia goes on a shock and awe attack to curb a global oil glut, it’s also playing defense to hold on to its most prized customers.

The kingdom is largely sparing Asia from reductions in crude sales, at least for now. That’s amid the threat of more U.S. and European supply coming to the world’s biggest market, as Saudi-led production cuts have boosted the Middle East oil benchmark relative to other regions. Also, crude’s surge risks reviving shale output while American shipments are already making their way to countries including Thailand, Japan and South Korea.

While OPEC’s biggest member could yet curb some volumes to Asia in coming months, it’s unlikely to completely abandon the battle for market share even as it changes tack from its pump-at-will policy of the past two years. It’s counting on regional refiners’ inability to completely switch over to rival supply, as their plants are geared to process ‘sour’ sulfurous crudes like those produced by Saudi Arabia rather than ‘sweet’ shale or North Sea oil. It can afford to cut sales more significantly in other places that aren’t as valuable as Asia.

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UAE's ADNOC to cut January oil supplies to Asia; Kuwait, Oman to follow | Reuters

UAE's ADNOC to cut January oil supplies to Asia; Kuwait, Oman to follow | Reuters:
"Abu Dhabi National Oil Company on Tuesday said it would cut crude supplies by 3-5 percent across its three export grades to meet commitments under an OPEC deal to curb output.

The move is one of the first visible indicators that oil markets could be physically tighter in 2017 as the Organization of the Petroleum Exporting Countries (OPEC) and other producers cut production to ease a supply glut and prop up prices.

Still, ADNOC's cut is unlikely to have a large impact on the market as it is within operational tolerance limits, while some buyers have extra oil from Saudi Arabia and Iraq to replace lost Abu Dhabi supplies, traders said.

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Advantage OPEC in global crude game, but no checkmate | Reuters

Advantage OPEC in global crude game, but no checkmate | Reuters:
"The global crude oil market is starting to resemble a gigantic game of chess, with a bold opening gambit by OPEC and its allies giving them an advantage, but the game is still far from checkmate.

The weekend deal by 12 countries outside OPEC to join the producer group's agreement to curb crude output certainly looks bullish for prices, as it takes the total amount of oil leaving the market in the first half of 2017 to almost 1.8 million barrels per day (bpd).

Brent crude, the global benchmark, reacted strongly in early trade in Asia on Monday, gaining as much as 6.6 percent from the close on Dec. 9 to as much as $57.89 a barrel."

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