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Sunday, 23 July 2017

S&P affirms Abu Dhabi's AA/A-1+ credit ratings as high cash reserves outweigh low oil prices  - The National

S&P affirms Abu Dhabi's AA/A-1+ credit ratings as high cash reserves outweigh low oil prices  - The National:

"S&P Global Ratings affirmed on Sunday the credit ratings for Abu Dhabi despite the recent slowdown in economic growth on account of low oil prices due, to the large cash reserves of the emirate which make it "resilient" to shocks in the commodity market.   

At the same time, the rating agency also affirmed the credit ratings of both Sharjah and Ras Al Khaimah. 

The rating agency said it maintained its AA/A-1+ sovereign credit rating on Abu Dhabi while keeping its outlook stable. "



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Oil markets need regulator in face of speculators: Eni CEO

Oil markets need regulator in face of speculators: Eni CEO:

"Energy markets might need to be regulated to put a brake on widespread financial speculation that is distorting crude prices, the head of Italian oil major Eni told Il Sole 24 Ore newspaper. Eni (ENI.MI) CEO Claudio Descalzi said OPEC and Saudi Arabia were not in a position to push prices higher by cutting output, adding that geopolitical tensions, growing U.S. shale oil production and heavy speculation in crude futures were hurting the sector. "The financial speculation is so strong that it has transformed even those with long term strategies into short term investors," Descalzi was quoted as saying."



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MIDEAST STOCKS-Amlak boosts Dubai, Qatar pulls back from near pre-crisis level

MIDEAST STOCKS-Amlak boosts Dubai, Qatar pulls back from near pre-crisis level:

"Islamic finance firm Amlak helped to boost Dubai's stock market on Sunday while Qatar pulled back after events at the weekend failed to point to progress in resolving the diplomatic crisis between Doha and neighbouring states.

The Dubai index added 0.6 percent as Amlak surged 3.6 percent to 1.16 dirhams, closing above its 200-day average for the first time since January, though it came far off its intra-day high of 1.24 dirhams. It was the market's most active stock; on Thursday, Amlak had soared 14.3 percent.

Traders attributed the rise to last week's announcement by real estate developer DAMAC that it was partnering with Amlak to sell second homes to customers. However, the partners gave no financial details, and many investors piled into the stock just because it had momentum. DAMAC rose 1.8 percent on Sunday."



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The argument to be a buyer of the Saudi Aramco IPO

The argument to be a buyer of the Saudi Aramco IPO:

"Like cats transfixed by a pigeon, the world’s bankers are quivering in anticipation of next year’s initial public offering by Saudi Aramco, the state oil group. Once-strict regulators are finding exceptions to rules, lawyers are straining to magic away litigation risk, and giant real-money investors are being cajoled into orderly queues.

Many problems can be waved away for the opportunity to participate in “The IPO” as it is referred to on Wall Street. The fees on a ticket of maybe $75bn . . . no wonder they are focused. There is just one question from investors, though: what about shale? Do the US producers continue to depress oil and gas prices?

Let me answer the question with another question. Is the shale industry still competitive thanks to technology, or thanks to quantitative easing? Americans tend to say that rising “unconventional” hydrocarbon production is all about superior science and engineering. International oil people believe the shale people are the spoiled children of the Federal Reserve, the US central bank, and overindulgent investors."



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Dubai aircraft lessor prices $2.4bn bonds - The National

Dubai aircraft lessor prices $2.4bn bonds - The National:

"Dubai Aerospace Enterprise (DAE), the aircraft leasing and maintenance company controlled by the Dubai Government, has priced US$2.3 billion in senior bonds split across three tranches, the company said on Sunday.

The firm priced $500 million of 4 per cent notes due in 2020, $800m 4.5 per cent bonds due in 2022 and $1bn 5 per cent bonds due in 2024, it said.DAE said it will use part of the proceeds from the bond sale, together with cash on hand, to pay for the acquisition of the Dublin-based lessor Awas, announced earlier this year.

DAE said in April it was acquiring Awas from the private equity firm Terra Firma Capital Partners and the Canadian Pension Plan Investment Board.The acquisition, subject to regulatory approval, is expected to close in the third quarter."



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Etihad submits non-binding offer for Alitalia - The National

Etihad submits non-binding offer for Alitalia - The National:

"Etihad Airways has emerged as one of around 10 bidders interested in acquiring a partial or full stake in the Italian airline Alitalia, suggesting the Abu Dhabi-based carrier remains committed to its investment in the troubled airline. The non-binding bid, submitted ahead of a deadline on Friday, also suggests that Etihad may not be ready to reverse course on its international investment strategy, despite last week selling off its stake in Switzerland’s Darwin Airline following a strategic review launched last year. This weekend Etihad was named in the Italian press as one the airlines that had submitted a non-binding offer for total or partial takeover of Alitalia, alongside the Irish low-cost carrier Ryanair."



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Spike in NPLs continue to challenge bank profits | GulfNews.com

Spike in NPLs continue to challenge bank profits | GulfNews.com:

"Significantly higher provision costs in the first six months of 2017 has impacted profit growth of a few leading banks. Broad trend indicates that despite proactive efforts, a creeping increase in non-performing loans continue to adversely impact asset quality and profitability of some banks. Commercial Bank of Dubai’s (CBD) first half profits were lower by 31.6 per cent at Dh332.5 million for the first half of 2017 compared to Dh485.8 million for the same period last year mainly due to higher provisions and costs. Net impairment provisions of Dh531.5 million were set aside during the first half compared to Dh288.7 million for the same period previous year. Operating expenses were 7 per cent higher at Dh449.3 million for the first half of 2017 compared to Dh420.1 million for the same period last year. Total assets were higher at Dh67.9 billion as at June 30, 2017, an increase of 10.6 per cent over the Dh61.4 billion reported in the first half of 2016. CBD’s loans and advances increased 14.1 per cent year on year to Dh46.3 billion in the first half of this year and was up 10.4 per cent compared to Dh42 billion at year-end 2016."



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MIDEAST STOCKS-Oil slide may dampen Gulf, no good news on Qatar crisis

MIDEAST STOCKS-Oil slide may dampen Gulf, no good news on Qatar crisis:

"Demand for business credit and personal loans in the United Arab Emirates increased slightly in the April-June quarter and is expected to continue rising slowly in the current quarter, a central bank survey showed on Sunday.

The net balance measure for business lending - the weighted percentage of respondents reporting an increase in demand for loans minus those reporting a fall in demand - was plus 7.5 in the latest quarter compared to plus 7.6 in the previous quarter.

Over 50 percent of respondents reported no changes in credit standards during the latest quarter while 25-35 percent reported a modest tightening, the survey found. For the current quarter, respondents expect the net balance measure to rise to plus 16.3. "



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Saudi finance ministry says domestic sukuk program established

Saudi finance ministry says domestic sukuk program established:

"Saudi Arabia's ministry of finance said on Sunday it had established a program to issue local currency Islamic bonds, as the government covers a large budget deficit caused by low oil prices. The ministry described the program as "unlimited" and said it would announce on a case-by-case basis details such as the types of eligible investors, the size of the issues and the expected profit rate. The program has been submitted to the Capital Market Authority, the ministry added without specifying when the first sukuk issue would take place. "



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No Winners in Gulf Feud as Saudi, Qatari Assets Converge on Oil - Bloomberg

No Winners in Gulf Feud as Saudi, Qatari Assets Converge on Oil - Bloomberg:

"Investors aren’t taking sides in the biggest political crisis in the Gulf in decades because their focus has already returned to oil.

Seven weeks after Saudi Arabia led a coalition of Arab states in cutting ties with Qatar over allegations that it supports terrorism, holders of both countries’ stocks and bonds are paying almost identical risk premiums. Their five-year credit default swaps converged for the first time in two years, stocks are valued at an average 13.8 times’ projected earnings over the next 12 months, and their international bonds traded level on Friday at 3.39 percent."



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Saudi Arabia Turns Off the U.S. Oil Tap - Bloomberg Gadfly

Saudi Arabia Turns Off the U.S. Oil Tap - Bloomberg Gadfly:

"At last, Saudi Arabia seems to be doing what it takes to reduce the world's most visible oil glut: the one in the U.S.Unfortunately, its renewed vigor comes as OPEC's deal to reduce excess crude stockpiles starts to show signs of unraveling elsewhere, a subject that will be wrestled with by the group's oil ministers as they and other producer nations meet in St Petersburg on Monday. "



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MIDEAST STOCKS-Dubai outperforms quiet region as Amlak leaps

MIDEAST STOCKS-Dubai outperforms quiet region as Amlak leaps:

"Dubai's stock market outperformed a quiet region in early trade on Sunday as Islamic finance firm Amlak jumped for a second straight day in very heavy trade.

The Dubai index added 0.6 percent as Amlak surged 8.0 percent to a four-month high of 1.21 dirhams and was the market's most active stock, accounting for nearly a quarter of turnover.

It rose above its 200-day average, now at 1.14 dirhams, for the first time since February. On Thursday, it had soared 14.3 percent."



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