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Thursday, 15 December 2016

Dubai said to plan $36b spend on world’s top airport | GulfNews.com

Dubai said to plan $36b spend on world’s top airport | GulfNews.com:
"Dubai aims to spend $35.7 billion (Dh131 billion) to develop its second airport and logistics hub in the south of the city and is likely to rely on debt for a significant part of the financing, two people with knowledge of the plan said.
The investments will be made in Dubai World Central and associated facilities, including Al Maktoum International Airport, over the next 12 years, the people said, asking not to be identified because the information isn’t public. The spending plan is outlined in documents inviting banks to bid for a $3 billion loan the government is seeking to raise for initial expansion, the people said. HSBC Holdings Plc is the financial adviser on the loan.
The loan is being raised by a special purpose company, which will be paid by Dubai’s department of finance based on a formula linked to passenger numbers at the city’s two airports, said the people. The company will also raise future funding for the project including debt, the people said."

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OPEC supply still opaque despite more data: Petro-Logistics | Reuters

OPEC supply still opaque despite more data: Petro-Logistics | Reuters:
"OPEC's first supply cut deal in eight years came as good news for a Swiss family business founded by an economics analyst who once helped the then Rhodesian government procure oil supplies in the face of sanctions.

Geneva-based Petro-Logistics earns money from the lack of timely and complete information from OPEC members and other oil exporters like Russia in the 95 million barrels-per-day global market, by tracking shipments to estimate production and supply.

The Organization of the Petroleum Exporting Countries is planning to cut its output by 1.2 million bpd from Jan. 1, its first such deal since 2008. Russia and other non-members are planning to cut about half as much."

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MIDEAST STOCKS-Most markets fall after Fed rate hike but retail investors boost Saudi | Reuters

MIDEAST STOCKS-Most markets fall after Fed rate hike but retail investors boost Saudi | Reuters:
"Most major Middle Eastern stock markets fell on Thursday after the U.S. central bank raised interest rates but buying by local retail investors lifted Saudi Arabia.

The central banks of Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates and Qatar followed the Fed with their own 0.25 percentage point rate hikes and Oman, which has been raising its repo rate gradually in recent months, is expected to continue doing so.

This was no surprise to Gulf equity investors and banking system liquidity has actually shown signs of improving in parts of the region as oil prices have climbed. Nevertheless, most Gulf bourses followed global markets lower on Thursday."

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Lloyd’s of London to establish EU base in the new year

Lloyd’s of London to establish EU base in the new year:
"Lloyd’s of London has become one of the first major City businesses to put a timetable on plans to move a part of its operations to the EU in preparation for Brexit.

The 328-year-old insurance market is in the throes of choosing a destination from a short list of five and is likely to put a proposal to its members by February next year.

The market will then seek regulatory clearance for the subsidiary, which will be used to conduct business around the EU using the “passporting” system. This allows financial services businesses to conduct trade across the bloc from a single location."

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The Opec agreement: Russia’s role adds a geopolitical twist

The Opec agreement: Russia’s role adds a geopolitical twist:
"The consent of Russia and other non-Opec oil producers to production cuts of 558,000 barrels a day to support Opec members’ agreement on a 1.2mbd cut for the first six months of 2017 represents an important breakthrough whose strategic significance, both for the oil market and for Middle East geopolitics, should not be underestimated.

Three aspects of this agreement underlie its significance. First, it is clear that Saudi Arabia has permanently abandoned its market share-focused strategy and gone back to defending the price of oil. Second, all indications are that this agreement, in contrast to other Opec agreements in the past, will be sustained, perhaps even beyond the agreed period. And finally, the agreement may have opened an exceptional opportunity for President Vladimir Putin to further deepen Russia’s involvement in the Middle East.

It is clear that Saudi Arabia was the key driver in the year-long effort to reach a deal, as the country’s leadership began to doubt the efficacy of its market share strategy. Two factors in particular convinced the Saudi leadership to reconsider."

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Into the fintech sandbox of the United Arab Emirates

Into the fintech sandbox of the United Arab Emirates:
"Financial technology in the United Arab Emirates shares a great deal with the sector in places like New York, London and Singapore: the buzzwords, the hype, the enthusiasm. But one key difference is scale.

“It’s a tiny ecosystem. We go to events and there’s six guys having the same conversations every month,” jokes David Martinez de Lecea, a management consultant and co-founder of Finerd, a Dubai-based robo-advisory investment manager.

In financial centres across the world, fintech has attracted large amounts of investment and even more attention as banks try to maintain their competitive edge and local governments seek to position themselves as hubs for innovation. Last year, global fintech investment more than doubled to $19.1bn, according to KPMG and CB Insights."

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The privatisation of Saudi Aramco

The privatisation of Saudi Aramco:
"The planned sale of up to 5 per cent of Saudi Arabia’s state oil producer could create not only the world’s largest publicly traded energy company but the biggest initial public offering of all time. More than this, however, the move also offers the rest of the world access to one of the kingdom’s prized industries — and could pave the way for greater internationalisation of the Saudi economy.

Saudi Aramco’s IPO is part of a transformation plan, envisaged by the powerbroker deputy crown prince, Mohammed bin Salman, which seeks broad-based privatisation to boost employment and diversify the kingdom away from oil. But there is scepticism about whether the country is capable of such an overhaul when its people have grown accustomed to the state providing cradle-to-grave services.

Even partially untangling entities such as Saudi Aramco from the state will be difficult: in addition to exploiting the kingdom’s hydrocarbon riches, the company — which employs 65,000 people — constructs schools, hospitals and sport stadiums."

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UAE central bank hikes interest rates too after US Fed | GulfNews.com

UAE central bank hikes interest rates too after US Fed | GulfNews.com:
"The UAE central bank said on Thursday it has raised interest rates applied to its Certificates of Deposits by 25 basis points after the US Federal Reserve hiked Fed funds rate on Wednesday.
Analysts suggest that this would increase borrowing costs for consumers. Certificates of Deposit, which the central bank issues to banks operating in the country, are the monetary policy instrument through which changes in interest rates are transmitted to the local banking system."

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MIDEAST STOCKS-Gulf shares fall after U.S. rate hike but Saudi buoyed by banks | Reuters

MIDEAST STOCKS-Gulf shares fall after U.S. rate hike but Saudi buoyed by banks | Reuters:
"Stock markets in the United Arab Emirates and Qatar fell early on Thursday after the U.S. Federal Reserve raised interest rates and hinted at the risk of a faster pace of tightening next year, but Saudi Arabian banks bucked the market downtrend.

As expected, the central banks of Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates and Qatar followed with their own 25 basis point rate hikes while Oman, which has been raising its repo rate gradually in recent months, is expected to continue doing so.

But since market interest rates in the Gulf have recently been influenced more by oil price and their impact on banking system liquidity than by official policy rates, the latest increases may not have much negative impact on economies."

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