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Tuesday, 2 January 2018

Oil's Famous Five: People Who Could Define the Market in 2018 - Bloomberg

Oil's Famous Five: People Who Could Define the Market in 2018 - Bloomberg:

"Will Saudi Arabia and Russia maintain their grip on production, or could they succumb to another surge in U.S. shale? Is it possible for the economic collapse of a major producer to send crude prices soaring, or perhaps Silicon Valley will usher in the end of the combustion engine?

After ending 2017 at a two-year high, oil prices could go either way this year, and these five individuals could play defining roles.

Saudi Minister of Energy and Industry Khalid Al-Falih is facing a crucial 12 months. Having defied skeptics in 2016 by reversing the kingdom’s strategy and sealing the Organization of Petroleum Exporting Countries’ first output cut in eight years, the former chairman of Aramco finished last year on another high after securing a deal to extend the curbs to the end of 2018. "



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Saudi Arabia and UAE introduce 5% VAT in bid to narrow deficits

Saudi Arabia and UAE introduce 5% VAT in bid to narrow deficits:

"Saudi Arabia and the United Arab Emirates have imposed value added tax as the largest Gulf economies seek to boost non-oil income and narrow wide fiscal deficits caused by years of low oil prices. By introducing a 5 per cent tax on most goods and services on January 1, the two allies took a pivotal measure towards ending decades of tax-free living for residents and most businesses. Some sectors have avoided VAT, such as health, education and public transport. The UAE, home to two of the world’s largest airlines, has not imposed VAT on international aviation. "



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Oil price climbs to its highest level since 2015

Oil price climbs to its highest level since 2015:

"Oil rose to the highest level since 2015 on Tuesday, climbing above $67 a barrel as hedge funds placed a record bet that Brent crude’s near 35 per cent rally over the past six months will continue into the new year, with protests in Iran stoking buying. While Iran’s oilfields have so far been unaffected by the largest protests against the Islamic regime in almost a decade, traders said renewed risks in Opec’s third-biggest producer had added to momentum as prices test new peaks. “Geopolitical risks are clearly back on the crude oil agenda after having been absent almost entirely since the oil market ran into a surplus in the second half of 2014,” said Bjarne Schieldrop at Nordic bank SEB. “Geopolitical risks started to impact the oil price again last autumn as production cuts then had drawn inventories significantly lower.”"



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MIDEAST STOCKS-UAE, Qatar bought as year starts, Saudi still soft after petrol hike

MIDEAST STOCKS-UAE, Qatar bought as year starts, Saudi still soft after petrol hike:

"Stock markets in the United Arab Emirates and Qatar rose as they opened for the first day of trade in 2018, while Saudi Arabia continued to slip after a hike in domestic gasoline prices. The Dubai index had a poor 2017, falling 4.6 percent, but it rose 1.2 percent on Tuesday as stocks in the blue-chip Emaar group, which were beaten down last year by the slump in Dubai’s real estate market, surged in particular. Flagship Emaar Properties, which had been trading near 12-month lows, climbed 3.6 percent in modest trading volume. Emaar Development, which had sunk from November’s initial public offer price of 6.03 dirhams to a record low of 5.02 dirhams, rebounded 3.9 percent to 5.29 dirhams, while Emaar Malls added 2.8 percent."



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Russia Natural Gas Output Jumps to Record in Expansion Drive - Bloomberg

Russia Natural Gas Output Jumps to Record in Expansion Drive - Bloomberg: "Russia’s natural gas production rose to its highest ever last year, driven by increasing sales to Europe and rising domestic demand.

Government data published Tuesday showed that output jumped 7.9 percent to beat a 2011 record. With a pipeline of projects including plans to expand into China and new liquefied natural gas plants, the country may close the gap on the U.S., which leapfrogged Russia to the top spot in global production of the fuel nine years ago.

Russia needs to strengthen its position in the global gas market as it’s considered a leading global energy power, President Vladimir Putin said last month. Already the world’s largest exporter of the fuel, the nation is working to boost output with new LNG plants stretching from the Baltic region to the Pacific coast. That will pit the country against the biggest producers of the super-chilled fuel, including Qatar and Australia. "



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UPDATE 1-Oman 2018 state budget lifts spending; little to reassure rating agencies

UPDATE 1-Oman 2018 state budget lifts spending; little to reassure rating agencies:

"Oman’s state budget for 2018, approved by ruler Sultan Qaboos on Monday, boosts spending at the expense of running a large deficit, despite increasing concern among credit rating agencies about the health of the country’s finances. The budget projects spending of 12.5 billion rials ($32.5 billion) this year, up from 11.7 billion in the original budget for 2017, local media quoted a Finance Ministry statement as saying. Revenue are projected at 9.5 billion rials, up from 8.7 billion in the 2017 budget. That leaves a planned deficit of 3 billion rials this year, the same as last year’s projected deficit."



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Moody's sees oil prices at $40-$60 per barrel this year | ZAWYA MENA Edition

Moody's sees oil prices at $40-$60 per barrel this year | ZAWYA MENA Edition:

"Moody's Investors Service said on Tuesday it expects oil prices in the range of $40 to $60 per barrel in 2018, with abundant supplies of U.S. natural gas constraining prices, even while demand goes up.

"Prices will likely remain range-bound, and possibly volatile, on a combination of increasing U.S. shale production, reduced but still significant global supplies, and potential non-compliance with agreed production cuts - especially if demand growth is more tepid," Moody's said.  

Oil price rise in late 2017 was supported by assumptions of OPEC extending its agreement to cut production and "political unrest" in the middle east, Moody's said. "



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OPEC Deal Doesn't Stop Russia From Record Oil Output in 2017 - Bloomberg

OPEC Deal Doesn't Stop Russia From Record Oil Output in 2017 - Bloomberg:

"Russia’s oil industry continued its long-term expansion last year, with production hitting a record even as President Vladimir Putin joined forces with OPEC to clear a global glut and lift prices.


The nation’s oil output increased to an average 10.98 million barrels a day in 2017, up 0.1 percent from the previous year, according to data published Tuesday by the Energy Ministry’s CDU-TEK statistics unit. That’s the ninth consecutive annual increase to the highest level since the collapse of the Soviet Union in 1991."



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Gulf Corporate Bond Sales Seen Balancing Sovereign Dip This Year - Bloomberg

Gulf Corporate Bond Sales Seen Balancing Sovereign Dip This Year - Bloomberg:

"Remember that flood of bond sales analysts said companies would unleash after Gulf governments tapped the market? It’s probably happening in 2018, according to First Abu Dhabi Bank PJSC and Mitsubishi UFJ Financial Group Inc.


There are at least two risks driving companies and banks to the market. The first is a debt wall of about $60 billion of syndicated loans and bonds due in 2018, according to data compiled by Bloomberg. The other is the threat of rising interest rates in the Gulf, where central banks typically follow monetary policy decisions in the U.S."



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Gulf Corporate Bond Sales Seen Balancing Sovereign Dip This Year - Bloomberg

Gulf Corporate Bond Sales Seen Balancing Sovereign Dip This Year - Bloomberg:

"Remember that flood of bond sales analysts said companies would unleash after Gulf governments tapped the market? It’s probably happening in 2018, according to First Abu Dhabi Bank PJSC and Mitsubishi UFJ Financial Group Inc.


There are at least two risks driving companies and banks to the market. The first is a debt wall of about $60 billion of syndicated loans and bonds due in 2018, according to data compiled by Bloomberg. The other is the threat of rising interest rates in the Gulf, where central banks typically follow monetary policy decisions in the U.S."



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UAE's Al-Futtaim acquires Marks & Spencer’s retail business in Hong Kong and Macau | ZAWYA MENA Edition

UAE's Al-Futtaim acquires Marks & Spencer’s retail business in Hong Kong and Macau | ZAWYA MENA Edition:

"Marks & Spencer (M&S) today confirmed the sale and franchise of its retail business in Hong Kong and Macau to its long-established franchise partner Al-Futtaim. The sale, which completed on 30th December, sees Al-Futtaim become the new sole franchisee for M&S in Hong Kong and Macau.

Al-Futtaim has worked in partnership with M&S since 1998 when it opened Dubai’s first M&S store. Following the purchase of 27 Marks & Spencer stores in Hong Kong and Macau, Al-Futtaim now operates 72 Marks & Spencer stores across 11 markets in Asia and the Middle East.

Paul Friston, Marks & Spencer’s International Director, said, "We have substantially reshaped our International business, which has improved profitability and positioned us for growth. As one of the world’s leading retail operators, with strong logistics capabilities and local expertise, Al-Futtaim is the ideal partner for us to develop and grow our business in Hong Kong and Macau." Stephen Rayfield, Vice President M&S and Sports & Lifestyle Division at Al-Futtaim, said, "We are delighted to strengthen our long-term partnership with M&S and expand Al-Futtaim’s international footprint to Hong Kong and Macau. Al-Futtaim looks forward to building on our solid foundations as we continue to enrich our customers’ lives and aspirations through the provision of quality products and services in Hong Kong and Macau." The sale follows M&S’s strategic review of its International business in November 2016, where M&S proposed to have a greater focus on its established franchise and joint venture partnerships and operate with fewer wholly-owned markets."



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Al Rajhi Capital launches largest REIT IPO in Saudi Arabia | ZAWYA MENA Edition

Al Rajhi Capital launches largest REIT IPO in Saudi Arabia | ZAWYA MENA Edition:

"Today marks the first day open for public subscription in Al Rajhi Capital’s Al Rajhi REIT Fund IPO, which will run from Jan. 1 to Jan. 14. The fund manager will offer 42.67 million units at SR10 each. Subscription will be available through Al Rajhi Bank website and Al Rajhi Capital investment centers at a minimum value of SR1,000. Al Rajhi REIT will have a fund size of SR 1.62 billion, the fund manager said. The Shariah-compliant fund aims to acquire or invest in income generating commercial, office, and educational assets, as well as warehouses, which are mainly located in the Kingdom, except for Makkah and Madinah."



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MIDEAST STOCKS-Gulf markets little changed in early trade | ZAWYA MENA Edition

MIDEAST STOCKS-Gulf markets little changed in early trade | ZAWYA MENA Edition:

"Gulf stock markets were little changed in early trade on Tuesday as most opened for the first time in 2018, as Dubai shipper Gulf Navigation fell sharply on news of a rights issue. The Dubai index edged up 0.1 percent as Gulf Navigation dropped 3.1 percent. The company's board raised issued and paid-up capital by 448.3 million dirhams ($122.2 million) to 1 billion dirhams. All stocks in the blue chip Emaar stable rose, with flagship Emaar Properties gaining 1.4 percent. "



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