Morocco takes a ride on the hunt for yield – beyondbrics - Blogs - FT.com:
"The rush of emerging markets into euro-denominated debt continued on Friday, with Morocco issuing a €1bn 10-year bond with a 3.5 per cent coupon, priced to yield 215 basis points above midswaps, the benchmark euro bond rate.
Mohamed Boussaïd, Morocco’s finance and economy minister (pictured), told beyondbrics that while market conditions had been favourable, the deal was above all an endorsement of Morocco’s economic and political reforms and of its success in steadily reducing the government’s budget deficit.
“We are on course to return to a sustainable and manageable deficit level and the country has all the means to achieve that,” he said. “This deal was crucial for us to continue to communicate with the market and update the investor community about the reforms under way.”"
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Friday, 13 June 2014
Ukraine: sounding the “gas war” alarm bells – beyondbrics - Blogs - FT.com
Ukraine: sounding the “gas war” alarm bells – beyondbrics - Blogs - FT.com:
"Ukraine’s prime minister ordered his government on Friday to prepare for a possible cut-off in natural gas supplies from Russia from Monday – and to initiate a Stockholm arbitration tribunal – citing failed negotiations with Kremlin-controlled Gazprom.
“The energy security of Ukraine and the European Union is being disrupted in connection with the intentional one-sided refusal of the Russian Federation to regulate this conflict,” Arseniy Yatseniuk said in a statement.
The warning that Ukraine and Russia were on the verge of their third “gas war” in eight years threatens once again to disrupt European supplies, after weeks of three-way negotiations between energy chiefs from Kiev, Moscow and the EU."
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"Ukraine’s prime minister ordered his government on Friday to prepare for a possible cut-off in natural gas supplies from Russia from Monday – and to initiate a Stockholm arbitration tribunal – citing failed negotiations with Kremlin-controlled Gazprom.
“The energy security of Ukraine and the European Union is being disrupted in connection with the intentional one-sided refusal of the Russian Federation to regulate this conflict,” Arseniy Yatseniuk said in a statement.
The warning that Ukraine and Russia were on the verge of their third “gas war” in eight years threatens once again to disrupt European supplies, after weeks of three-way negotiations between energy chiefs from Kiev, Moscow and the EU."
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Investors Buy Rosneft Credit-Linked Debt as Ukraine Crisis Eases - Bloomberg
Investors Buy Rosneft Credit-Linked Debt as Ukraine Crisis Eases - Bloomberg:
"Securities tied to the debt of OAO Rosneft accounted for the biggest proportion of credit-linked notes sold this month as demand for Russian corporate debt recovers amid ebbing tensions in Ukraine.
Investors bought $119 million of securities in dollars and rubles linked to Russia’s largest oil producer, about a quarter of credit-linked securities sold so far this month, according to data compiled by Bloomberg. The yield on Rosneft’s 4.199 percent bond due March 2022 has fallen 6 basis points since the start of June to 5.25 percent after reaching a record 7.02 percent on April 25, the data show.
Demand for credit linked to Russia is returning as peace talks this week showed signs of progress in resolving the three-month conflict. Rosneft’s bond yields rose after violence broke out in Ukraine and the U.S. announced sanctions against people close to Russia President Vladimir Putin, including the Moscow-based company’s Chief Executive Officer Igor Sechin. The sanctions didn’t extend to Rosneft, which is state-run."
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"Securities tied to the debt of OAO Rosneft accounted for the biggest proportion of credit-linked notes sold this month as demand for Russian corporate debt recovers amid ebbing tensions in Ukraine.
Investors bought $119 million of securities in dollars and rubles linked to Russia’s largest oil producer, about a quarter of credit-linked securities sold so far this month, according to data compiled by Bloomberg. The yield on Rosneft’s 4.199 percent bond due March 2022 has fallen 6 basis points since the start of June to 5.25 percent after reaching a record 7.02 percent on April 25, the data show.
Demand for credit linked to Russia is returning as peace talks this week showed signs of progress in resolving the three-month conflict. Rosneft’s bond yields rose after violence broke out in Ukraine and the U.S. announced sanctions against people close to Russia President Vladimir Putin, including the Moscow-based company’s Chief Executive Officer Igor Sechin. The sanctions didn’t extend to Rosneft, which is state-run."
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Gulf Keystone Rises Most 2 Weeks on Kurdistan Estimate - Bloomberg
Gulf Keystone Rises Most 2 Weeks on Kurdistan Estimate - Bloomberg:
"Gulf Keystone Petroleum Ltd. (GKP), an oil producer in Iraq’s Kurdistan region, gained the most in two weeks after saying production from its key asset was proceeding as planned.
The company advanced 1.9 percent to 81.5 pence at the close in London. That’s the biggest gain since May 30, valuing the company at 724 million pounds ($1.2 billion).
Gulf Keystone expects production from Shaikan to rise to 40,000 barrels of oil a day by the end of the year, the Hamilton, Bermuda-based company said today in a statement. The shares had lost 14 percent this week through yesterday, amid concern violent unrest in Iraq could spread toward the region."
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"Gulf Keystone Petroleum Ltd. (GKP), an oil producer in Iraq’s Kurdistan region, gained the most in two weeks after saying production from its key asset was proceeding as planned.
The company advanced 1.9 percent to 81.5 pence at the close in London. That’s the biggest gain since May 30, valuing the company at 724 million pounds ($1.2 billion).
Gulf Keystone expects production from Shaikan to rise to 40,000 barrels of oil a day by the end of the year, the Hamilton, Bermuda-based company said today in a statement. The shares had lost 14 percent this week through yesterday, amid concern violent unrest in Iraq could spread toward the region."
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Oil Rallies as Militant Advance in Iraq Threatens Crude - Bloomberg
Oil Rallies as Militant Advance in Iraq Threatens Crude - Bloomberg:
"West Texas Intermediate crude headed for the biggest weekly advance since December and Brent gained as escalating violence in Iraq threatened supplies from OPEC’s second-largest oil producer.
Futures pared gains after earlier rising 1.1 percent in New York. Iraqi Oil Minister Abdul Kareem al-Luaibi speculated that U.S. planes may bomb his nation’s north as militants linked to al-Qaeda, that captured the city of Mosul this week, moved south toward Baghdad. Events in Iraq highlight the risks to oil supply from the nation, which is forecast to provide about 60 percent of OPEC’s output growth in the rest of this decade, the Paris-based International Energy Agency said.
“There has been some positioning for the potential for supply disruptions in Iraq,” Olivier Jakob, managing director of Switzerland-based researcher Petromatrix GmbH, said by phone. “It’s a major supplier.”"
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"West Texas Intermediate crude headed for the biggest weekly advance since December and Brent gained as escalating violence in Iraq threatened supplies from OPEC’s second-largest oil producer.
Futures pared gains after earlier rising 1.1 percent in New York. Iraqi Oil Minister Abdul Kareem al-Luaibi speculated that U.S. planes may bomb his nation’s north as militants linked to al-Qaeda, that captured the city of Mosul this week, moved south toward Baghdad. Events in Iraq highlight the risks to oil supply from the nation, which is forecast to provide about 60 percent of OPEC’s output growth in the rest of this decade, the Paris-based International Energy Agency said.
“There has been some positioning for the potential for supply disruptions in Iraq,” Olivier Jakob, managing director of Switzerland-based researcher Petromatrix GmbH, said by phone. “It’s a major supplier.”"
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Iraqi Bonds Set for Worst Week in Year as Shiites Called to Arms - Bloomberg
Iraqi Bonds Set for Worst Week in Year as Shiites Called to Arms - Bloomberg:
"Iraqi bonds headed for their worst week in a year as Sunni Islamist fighters pushed further into the country and a report said a top Shiite cleric urged citizens to fight, stoking concern over escalating sectarian warfare.
The yield on January 2028 rose six basis points to 6.93 percent at 3:32 p.m. in London. It is up 55 basis points this week, the most since June 2013. Iraq’s army failed to upend extremist movement Islamic State in Iraq and the Levant from areas near Baghdad as fighters entered two northeast towns of Jalulah and Saaiydiyah, Al Jazeera reported.
Amid signs Sunni militants are pushing Iraq to another round of civil war, a representative of Shiite leader Ali Al Sistani called citizens to arms, according to Al-Mada Press. The violence across northern and central Iraq, three years after U.S. troops withdrew following the 2003 invasion, led Iraqi stocks to sink the most since at least 2009. President Barack Obama signaled he won’t rule out airstrikes to help OPEC’s second-biggest oil producer."
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"Iraqi bonds headed for their worst week in a year as Sunni Islamist fighters pushed further into the country and a report said a top Shiite cleric urged citizens to fight, stoking concern over escalating sectarian warfare.
The yield on January 2028 rose six basis points to 6.93 percent at 3:32 p.m. in London. It is up 55 basis points this week, the most since June 2013. Iraq’s army failed to upend extremist movement Islamic State in Iraq and the Levant from areas near Baghdad as fighters entered two northeast towns of Jalulah and Saaiydiyah, Al Jazeera reported.
Amid signs Sunni militants are pushing Iraq to another round of civil war, a representative of Shiite leader Ali Al Sistani called citizens to arms, according to Al-Mada Press. The violence across northern and central Iraq, three years after U.S. troops withdrew following the 2003 invasion, led Iraqi stocks to sink the most since at least 2009. President Barack Obama signaled he won’t rule out airstrikes to help OPEC’s second-biggest oil producer."
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Ukraine Bond Rally Best in Region Signals Mounting Risks - Businessweek
Ukraine Bond Rally Best in Region Signals Mounting Risks - Businessweek:
"Since Ukraine’s territorial integrity started crumbling in March, the nation’s bonds have outperformed regional peers. For Landesbank Berlin Investment GmbH, that’s unsustainable.
“Nobody should buy anything in Ukraine,” Lutz Roehmeyer, who helps manage $1.1 billion of emerging-market assets at the fund manager known as LBB-Invest, said by e-mail June 10.
Ukraine’s dollar debt has returned 14 percent since Crimea’s vote for secession on March 16 escalated the conflict with Russia. That’s the best performance among 13 eastern European nations in the Bloomberg Dollar Emerging Market Sovereign Bond Index, which gained 6.4 percent through yesterday."
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"Since Ukraine’s territorial integrity started crumbling in March, the nation’s bonds have outperformed regional peers. For Landesbank Berlin Investment GmbH, that’s unsustainable.
“Nobody should buy anything in Ukraine,” Lutz Roehmeyer, who helps manage $1.1 billion of emerging-market assets at the fund manager known as LBB-Invest, said by e-mail June 10.
Ukraine’s dollar debt has returned 14 percent since Crimea’s vote for secession on March 16 escalated the conflict with Russia. That’s the best performance among 13 eastern European nations in the Bloomberg Dollar Emerging Market Sovereign Bond Index, which gained 6.4 percent through yesterday."
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Could World Cup 2022 result in economic own goal for Qatar? - CNN.com
Could World Cup 2022 result in economic own goal for Qatar? - CNN.com:
"When Qatar won the bid to host the 2022 FIFA World Cup there was much pomp and pageantry in the tiny Persian Gulf state.
Ever since then, however, the successful bid has been dogged by controversy.
Issues relating to the feasibility of playing in scorching summer temperatures, the conditions of migrant workers building World Cup infrastructure and allegations of bribery and corruption have all been raised."
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"When Qatar won the bid to host the 2022 FIFA World Cup there was much pomp and pageantry in the tiny Persian Gulf state.
Ever since then, however, the successful bid has been dogged by controversy.
Issues relating to the feasibility of playing in scorching summer temperatures, the conditions of migrant workers building World Cup infrastructure and allegations of bribery and corruption have all been raised."
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Ukraine Agriculture Stocks Advance on Closer Europe Ties - Businessweek
Ukraine Agriculture Stocks Advance on Closer Europe Ties - Businessweek:
"Ukrainian agricultural companies from Agroton Public Ltd. to Kernel Holding SA are rallying on speculation the government will reach a trade pact with the European Union that will help them boost exports.
The stocks are the best performers among 356 companies on the Warsaw Stock Exchange in the last five trading days. Wheat and sunflower producer Agroton soared 18 percent in the past week for the biggest gain. Kernel, the largest Ukrainian company listed on the Polish bourse, surged 46 percent from a March low while Milkiland NV, a dairy producer with businesses in Russia and Ukraine, has advanced 42 percent in three weeks as the confrontation between the two countries eased.
Petro Poroshenko, who was sworn in as Ukraine’s new president on June 7, vowed to complete a trade agreement with the EU “soonest” as he battles pro-Russian rebels in the country’s easternmost regions. A Bloomberg index of the most-traded Russian stocks in the U.S. fell yesterday for the first time in nine days as Ukraine accused President Vladimir Putin’s government of allowing armored vehicles to cross its border to help separatists. Markets in Moscow were closed for a holiday."
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"Ukrainian agricultural companies from Agroton Public Ltd. to Kernel Holding SA are rallying on speculation the government will reach a trade pact with the European Union that will help them boost exports.
The stocks are the best performers among 356 companies on the Warsaw Stock Exchange in the last five trading days. Wheat and sunflower producer Agroton soared 18 percent in the past week for the biggest gain. Kernel, the largest Ukrainian company listed on the Polish bourse, surged 46 percent from a March low while Milkiland NV, a dairy producer with businesses in Russia and Ukraine, has advanced 42 percent in three weeks as the confrontation between the two countries eased.
Petro Poroshenko, who was sworn in as Ukraine’s new president on June 7, vowed to complete a trade agreement with the EU “soonest” as he battles pro-Russian rebels in the country’s easternmost regions. A Bloomberg index of the most-traded Russian stocks in the U.S. fell yesterday for the first time in nine days as Ukraine accused President Vladimir Putin’s government of allowing armored vehicles to cross its border to help separatists. Markets in Moscow were closed for a holiday."
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Three strands run through the new Silk Road | The National
Three strands run through the new Silk Road | The National:
"When the German geographer Baron Ferdinand von Richthofen coined the term “Silk Road” in 1877 to depict the 2,000-year-old east-west trade artery built on the exchange of Arabian stallions and fine fabrics, he could never have imagined that 137 years later one in every three new cars in China would be fuelled by Middle East oil.
China’s economic presence in the Middle East is fast expanding. Chinese engineers assembled the 26,000 reflective glass panels, each individually hand cut, for the 828-metre-high Burj Khalifa, the world’s tallest building. Chinese goods are big business in the modern shopping centres in Dubai and the old bazaars and souqs in Egypt and Morocco. Everywhere you look, the interdependency between the regions is strengthening.
The relationship has three distinct strands."
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"When the German geographer Baron Ferdinand von Richthofen coined the term “Silk Road” in 1877 to depict the 2,000-year-old east-west trade artery built on the exchange of Arabian stallions and fine fabrics, he could never have imagined that 137 years later one in every three new cars in China would be fuelled by Middle East oil.
China’s economic presence in the Middle East is fast expanding. Chinese engineers assembled the 26,000 reflective glass panels, each individually hand cut, for the 828-metre-high Burj Khalifa, the world’s tallest building. Chinese goods are big business in the modern shopping centres in Dubai and the old bazaars and souqs in Egypt and Morocco. Everywhere you look, the interdependency between the regions is strengthening.
The relationship has three distinct strands."
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Caution urged on risks in real estate sector | GulfNews.com
Caution urged on risks in real estate sector | GulfNews.com:
"In its 2014 Article IV consultation concluding statement, the International Monetary Fund urged the UAE government’s continued focus on addressing potential risks stemming from the real estate market.
While acknowledging that the situation in the real estate market is different from 2008 in that price increases partly still reflect a recovery from the post-crisis trough and demand today is significantly less bank-financed, the IMF said by some measures, nominal residential real estate prices in Dubai have already reached their 2008 peak levels.
“The fast pace of price increases could trigger an intensification of potentially destabilising speculative demand and thus warrants close monitoring,” the IMF statement said."
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"In its 2014 Article IV consultation concluding statement, the International Monetary Fund urged the UAE government’s continued focus on addressing potential risks stemming from the real estate market.
While acknowledging that the situation in the real estate market is different from 2008 in that price increases partly still reflect a recovery from the post-crisis trough and demand today is significantly less bank-financed, the IMF said by some measures, nominal residential real estate prices in Dubai have already reached their 2008 peak levels.
“The fast pace of price increases could trigger an intensification of potentially destabilising speculative demand and thus warrants close monitoring,” the IMF statement said."
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Ciao, Alitalia! Abu Dhabi's Etihad 'Rescue' Only Delays Demise
Ciao, Alitalia! Abu Dhabi's Etihad 'Rescue' Only Delays Demise:
"Etihad, the national airline of the United Arab Emirates, is about to clinch a deal to rescue Italy’s long-suffering flag carrier Alitalia. Etihad could put some 500 million euro in the Italian firm in exchange for a 49 percent stake, provided the debt level is cut and operating costs reduced mainly through a wave of redundancies.
Existing shareholders will see their stakes cut. This includes the Italian post operator, the Atlantia toll road operator, banks Intesa Sanpaolo and Unicredit and former white-knight, airline Air France KLM. The banks have to give twice as they lose part of an equity stake and have to take a debt haircut. The alternative is a grounding of the airline – a traumatic experience that Swissair suffered in 2001 when lack of cash meant it could not pay fuel and its planes could not take off, hitting some 40,000 passengers.
There still remain hurdles to the deal. The labor unions could launch industrial action to protest job cuts and the European Commission may frown about a state-owned airline, Etihad, taking a stake in Alitalia in a sort of partial privatization."
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"Etihad, the national airline of the United Arab Emirates, is about to clinch a deal to rescue Italy’s long-suffering flag carrier Alitalia. Etihad could put some 500 million euro in the Italian firm in exchange for a 49 percent stake, provided the debt level is cut and operating costs reduced mainly through a wave of redundancies.
Existing shareholders will see their stakes cut. This includes the Italian post operator, the Atlantia toll road operator, banks Intesa Sanpaolo and Unicredit and former white-knight, airline Air France KLM. The banks have to give twice as they lose part of an equity stake and have to take a debt haircut. The alternative is a grounding of the airline – a traumatic experience that Swissair suffered in 2001 when lack of cash meant it could not pay fuel and its planes could not take off, hitting some 40,000 passengers.
There still remain hurdles to the deal. The labor unions could launch industrial action to protest job cuts and the European Commission may frown about a state-owned airline, Etihad, taking a stake in Alitalia in a sort of partial privatization."
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