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Sunday, 1 January 2017

Signs of recovery adding up for US oil sector | The National

Signs of recovery adding up for US oil sector | The National:
"The US oil sector is showing further signs of recovery from the depths reached early last year, particularly in west Texas.

Rig counts are up, job postings in the sector have risen by half and productivity continues to improve. Together these factors suggest that a quick bounceback in the US sector could put a cap on gains in the oil price, undoing some of the gains made in the wake of Opec’s initiative to restrain output.


In its latest report, the oil services company Baker Hughes said late last week that US oil rigs in use were up another five in the latest week at 658."

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Banks’ liquidity conditions likely to ease in 2017, but pressures to persist | GulfNews.com

Banks’ liquidity conditions likely to ease in 2017, but pressures to persist | GulfNews.com:
"Liquidity conditions in the GCC banking sector is gradually improving but pressures will continue to persist during 2017, despite some visible strengthening of oil prices following supply cut deals among oil producers, according to analysts.
Liquidity has stabilised but continues to apply pressure on GCC banks, and may still deteriorate in some markets. Due to falling oil revenue, government deposits in banks have either been shrinking or at least not growing as fast as in the recent past.
The main consequence of tighter liquidity can be seen in higher funding costs and lower loan growth. Customer deposits form the bulk of GCC bank funding. Interbank rates have gone up significantly in all GCC countries."

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MIDEAST STOCKS-Saudi rises, Oman hit by higher telecommunications tax | Reuters

MIDEAST STOCKS-Saudi rises, Oman hit by higher telecommunications tax | Reuters:
"Saudi Arabia's stock market rose on Sunday with much activity focusing on second- and third-tier stocks rather than blue chips, while Oman's bourse was dragged down by a higher tax on telecommunications companies.

The main Saudi index added 0.4 percent. Banking stocks were soft but major gains were seen in a few stocks such as conglomerate Jazan Development, which jumped 5.4 percent after announcing a 0.50 riyal per share dividend for 2016.

Saudi Automotive Services surged its 10 percent daily limit after saying it would post a special gain of 4.4 million riyals ($1.2 million) for the fourth quarter after selling two of its equities investment portfolios.

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Bahraini private equity firm invests in UAE utility Utico | The National

Bahraini private equity firm invests in UAE utility Utico | The National:
"A Bahrain-based private equity firm has invested US$147 million in Utico, the UAE’s only private utility company.

Based in Ras Al Khaimah, Utico is expanding its infrastructure assets in water, power, transmission and distribution, storage, billing and collection businesses. It is building a -water desalination plant in Ras Al Khaimah and upgrading two other desalination plants.

Asma Capital, which is owned by sovereign institutions including Islamic Development Bank (IDB), Saudi Arabia’s Public Investment Fund (PIF) and Public Pension Agency (PPA), the ministry of finance of Bahrain and the ministry of finance of Brunei, signed the deal with Utico for a "significant minority stake" in its water business, according to the company."

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Arab oil export group can do its bit for environment | GulfNews.com

Arab oil export group can do its bit for environment | GulfNews.com:
"The Organisation of Arab Petroleum Exporting Countries (OAPEC) acted successfully in its early years as an instrument of Arab economic integration (as discussed in last week’s column).
It even endeavoured to build working relations with organisations, research centres, universities and specialised companies outside of the Arab world “to present an Arab perspective on energy and development” and to promote cooperation among energy stakeholders.
Most importantly, the relationships developed with hydrocarbon research bodies were to “facilitate access to new scientific and technological developments in the field of energy”. All these were maintained either by direct contacts or by from specialised seminars whose highlights were reported to member countries through the publication of the OAPEC journal “Oil and Arab Cooperation” or through a monthly bulletin."

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Building better bonds | GulfNews.com

Building better bonds | GulfNews.com:
"The regional debt markets have been a source of financing which governments and corporations are increasingly turning towards in order to fill their financial shortfalls. According to Bloomberg, there is currently $125 billion foreign issued government debt outstanding from the GCC, with $54.5 billion having been issued so far in 2016. With Saudi Arabia’s largest emerging market debt issuance of $17.5 in October this year, it is clear that there is significant investor appetite for GCC issued debt. Michael Grifferty, the president of the Gulf Bond and Sukuk Association (GBSA), noted that the GCC is starting to firmly establish itself among other emerging markets due to its foreign issuances and the development of its regional bond market.
To develop regional debt markets, the most important short-term goal is establishing government bond yield curves for each country in the GCC. In order to accomplish this, governments must regularly issue short duration and long duration debt, which adds liquidity and enables issuers, as well as investors, to accurately value and price debt. With GCC countries expected to have a 10.4% fiscal deficit in 2016 (according to the World Bank), governments are deeply aware of the need to regularly issue debt.
Over the medium-term, the Gulf needs to develop a local currency debt market and deepen the current dollar denominated debt market. The GCC, similar to other emerging markets, must progressively supplement its foreign borrowing with more local borrowing. In order to develop a liquid local debt market, governments start with short duration debt and progressively issue longer duration debt at a market rate on a regular basis. This helps pave the way for corporations to have a market to issue local debt to. Establishing a local debt market is vital for efficiently allocating investor capital, managing foreign exchange risk and ensuring corporations can borrow efficiently."

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Oman 2017 state budget projects smaller deficit, continued austerity | Reuters

Oman 2017 state budget projects smaller deficit, continued austerity | Reuters:
"A 2017 state budget plan released by Oman's government on Sunday projected a smaller deficit but maintained tight curbs on spending because of low oil prices, which are hurting state revenues.

Government spending this year is projected to total 11.7 billion rials ($30.4 billion) and revenues 8.7 billion rials, which would result in a deficit of 3 billion rials.

That compares with the government's original 2016 budget plan of 11.9 billion rials in spending, 8.6 billion rials in revenues and a 3.3 billion rial deficit. The actual deficit has turned out to be much bigger than expected this year; it was 4.8 billion rials in the first 10 months of 2016, according to official data."

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MIDEAST STOCKS-Saudi stocks rise with second tier outperforming | Reuters

MIDEAST STOCKS-Saudi stocks rise with second tier outperforming | Reuters:
"Saudi Arabia's stock market rose in early trading on Sunday with activity focusing on second- and third-tier stocks rather than blue chips.

The main Saudi index was up 0.5 percent in the first hour. Petrochemical and banking blue chips were little changed but major gains were seen in stocks such as conglomerate Jazan Development, which jumped 5.9 percent after announcing a 0.50 riyal per share dividend for 2016.

Saudi Automotive Services surged its 10 percent daily limit after saying it would post a special gain of 4.4 million riyals ($1.2 million) for the fourth quarter after selling two of its equities investment portfolios."

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Martin Wolf on global economy in 2017 | Opinion

Oil outpaces its trackers

2017 in a minute: european equities

FT writers on Trump, geopolitics in 2017