OPEC ‘effectively dissolved’; oil will slide to $50 - Bank of America — RT Business:
"OPEC has lost its competence, as it failed to stabilize oil prices at the last meeting, according to Bank of America. It warns oil will slide to $50 a barrel leading to wild prices, where only rich Middle East states like Saudi Arabia will benefit.
Countries that don’t possess vast reserves, such as Venezuela and Nigeria, will struggle to survive; The Telegraph quotes Francisco Blanch, Bank of America’s Head of Commodity Research.
The crucial changes in the global energy industry are also caused by the development of liquefied natural gas (LNG). Years of oversupply will bring down oil prices allowing Europe to look for cheaper sources of gas."
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Wednesday, 10 December 2014
For Saudi Arabia, plunging oil prices are a political weapon - FT.com
For Saudi Arabia, plunging oil prices are a political weapon - FT.com:
"As the price of oil plummets to a five-year low, Saudi Arabia – owner of the world’s largest proven crude reserves – is behaving with almost preternatural calm. So much so that Prince Alwaleed bin Talal Al Saud, the kingdom’s highest-profile investor, a few weeks ago professed himself astonished by official complacency in the face of this “catastrophe” – and that was when the price was still above $90 a barrel.
Now, there are doubtless technical reasons why the Saudis remain sanguine as the price dips well below $70, and the kingdom’s oil technocracy has been prodigal in providing them. This is no different, they say, from any other commodities cycle, in which the market sets prices. The main Saudi concern is to protect market share. If there is any “politics” involved here, analysts add, it is an attempt to force US shale producers with higher production costs out of the market.
It is true, as the Saudis protest, that neither they nor Opec as a whole can set the price. But do they protest too much, as they do nothing to arrest the speed of falling prices? It is not just that the oil producers’ cartel, where Saudi Arabia still rules the roost, declined to cut output at last month’s meeting. As recently as September the Saudis were actually increasing supply to a glutting market."
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"As the price of oil plummets to a five-year low, Saudi Arabia – owner of the world’s largest proven crude reserves – is behaving with almost preternatural calm. So much so that Prince Alwaleed bin Talal Al Saud, the kingdom’s highest-profile investor, a few weeks ago professed himself astonished by official complacency in the face of this “catastrophe” – and that was when the price was still above $90 a barrel.
Now, there are doubtless technical reasons why the Saudis remain sanguine as the price dips well below $70, and the kingdom’s oil technocracy has been prodigal in providing them. This is no different, they say, from any other commodities cycle, in which the market sets prices. The main Saudi concern is to protect market share. If there is any “politics” involved here, analysts add, it is an attempt to force US shale producers with higher production costs out of the market.
It is true, as the Saudis protest, that neither they nor Opec as a whole can set the price. But do they protest too much, as they do nothing to arrest the speed of falling prices? It is not just that the oil producers’ cartel, where Saudi Arabia still rules the roost, declined to cut output at last month’s meeting. As recently as September the Saudis were actually increasing supply to a glutting market."
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If oil price stays low, how do we react to the ‘new normal’? | The National
If oil price stays low, how do we react to the ‘new normal’? | The National:
"At a gathering of the leading analytical stars in the HSBC firmament in Dubai recently, a near-apocalyptic vision of life in the new regime of lower oil prices was drawn: the “glorious decade” of cheap oil and high growth for the Arabian Gulf was over; the region would have to learn to live in the “post-abundance era” of reduced energy revenues, budget deficits and lower public spending.
The HSBC experts recognised that the region had certain advantages as they embarked on this new era of austerity, notably in the huge capital reserves that have been built up over the past decade of high oil prices (except for the blip in 2009). But overall, the message was that lower oil prices were here to stay and the region had better get used to it.
Most economists agree with the basic scenario that low oil is likely to be the norm for the foreseeable future. Capital Economics (CapEcon), the London research house that has spent the past year telling us that energy prices were due for a fall, is forecasting US$65 a barrel for the end of next year and $60 for the end of 2016."
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"At a gathering of the leading analytical stars in the HSBC firmament in Dubai recently, a near-apocalyptic vision of life in the new regime of lower oil prices was drawn: the “glorious decade” of cheap oil and high growth for the Arabian Gulf was over; the region would have to learn to live in the “post-abundance era” of reduced energy revenues, budget deficits and lower public spending.
The HSBC experts recognised that the region had certain advantages as they embarked on this new era of austerity, notably in the huge capital reserves that have been built up over the past decade of high oil prices (except for the blip in 2009). But overall, the message was that lower oil prices were here to stay and the region had better get used to it.
Most economists agree with the basic scenario that low oil is likely to be the norm for the foreseeable future. Capital Economics (CapEcon), the London research house that has spent the past year telling us that energy prices were due for a fall, is forecasting US$65 a barrel for the end of next year and $60 for the end of 2016."
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New Scotland Yard bought by Abu Dhabi Financial Group for Dh2.1bn | The National
New Scotland Yard bought by Abu Dhabi Financial Group for Dh2.1bn | The National:
"Abu Dhabi Financial Group (ADFG) has acquired New Scotland Yard, the headquarters of the London Metropolitan Police, for £370 million (Dh2.1 billion).
The company plans to redevelop the 600,000 square foot site in Central London into a world-class multi-use development.
ADFG said in a statement that it was the preferred bidder ahead of 10 other competitors for the property owned by the Mayor’s Office for Policing and Crime."
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"Abu Dhabi Financial Group (ADFG) has acquired New Scotland Yard, the headquarters of the London Metropolitan Police, for £370 million (Dh2.1 billion).
The company plans to redevelop the 600,000 square foot site in Central London into a world-class multi-use development.
ADFG said in a statement that it was the preferred bidder ahead of 10 other competitors for the property owned by the Mayor’s Office for Policing and Crime."
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Kanoo Group deputy chairman takes aim at the UAE corporate landscape | The National
Kanoo Group deputy chairman takes aim at the UAE corporate landscape | The National:
"Once Mishal Kanoo gets on a roll it is hard to stop him.
Our meeting was intended to discuss the challenges facing family businesses in the Arabian Gulf, a subject on which he, as the fourth generation representative of the eponymous family group, is well qualified to opine.
But he soon pulled the trigger of the Kanoo scattergun, and it was relentless. Governance, IPOs, bribery and corruption and corporate scandal all came within range and were shot down with a few iconoclastic bullets. Here’s a few examples:"
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"Once Mishal Kanoo gets on a roll it is hard to stop him.
Our meeting was intended to discuss the challenges facing family businesses in the Arabian Gulf, a subject on which he, as the fourth generation representative of the eponymous family group, is well qualified to opine.
But he soon pulled the trigger of the Kanoo scattergun, and it was relentless. Governance, IPOs, bribery and corruption and corporate scandal all came within range and were shot down with a few iconoclastic bullets. Here’s a few examples:"
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Dollar peg here to stay, UAE central bank official says | GulfNews.com
Dollar peg here to stay, UAE central bank official says | GulfNews.com:
"The UAE will keep its currency peg to the US dollar, a senior central bank official reiterated on Tuesday after an unusually large move by the dirham in the forwards market.
Asked by Reuters whether the dollar’s global strength was putting any pressure on the peg, Saif Al Shamsi, assistant governor for monetary policy and financial stability, said the dirham had effectively been pegged since the 1980s.
“We have been maintaining this peg and this exchange rate since 1980 until today, and in the future we will continue with this.”"
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"The UAE will keep its currency peg to the US dollar, a senior central bank official reiterated on Tuesday after an unusually large move by the dirham in the forwards market.
Asked by Reuters whether the dollar’s global strength was putting any pressure on the peg, Saif Al Shamsi, assistant governor for monetary policy and financial stability, said the dirham had effectively been pegged since the 1980s.
“We have been maintaining this peg and this exchange rate since 1980 until today, and in the future we will continue with this.”"
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UAE central bank studying new rules for bank lending against shares | GulfNews.com
UAE central bank studying new rules for bank lending against shares | GulfNews.com:
"The UAE central bank is looking at proposals for new rules covering bank loans against shares, a senior official said on Tuesday.
“The central bank board is studying new regulations for credit against shares,” Saif Al Shamsi, assistant governor for monetary policy and financial stability, told reporters on the sidelines of a financial conference.
He did not elaborate. In July, the Securities and Commodities Authority met with the central bank, the economy ministry and the Dubai and Abu Dhabi stock exchanges to discuss tightening supervision of the bourses."
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"The UAE central bank is looking at proposals for new rules covering bank loans against shares, a senior official said on Tuesday.
“The central bank board is studying new regulations for credit against shares,” Saif Al Shamsi, assistant governor for monetary policy and financial stability, told reporters on the sidelines of a financial conference.
He did not elaborate. In July, the Securities and Commodities Authority met with the central bank, the economy ministry and the Dubai and Abu Dhabi stock exchanges to discuss tightening supervision of the bourses."
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Russia Set to Raise Main Rate as Ruble Rout Risks Stability - Bloomberg
Russia Set to Raise Main Rate as Ruble Rout Risks Stability - Bloomberg:
"Russia’s central bank will probably raise borrowing costs to avert threats to financial stability as oil prices near the lowest in more than five years and sanctions over Ukraine risk the collapse of the ruble.
The Bank of Russia will increase its key rate to 10 percent from 9.5 percent, according to the median estimate of 28 economists surveyed by Bloomberg. Ten forecast no change. Fifty of 77 traders polled by brokerage Tradition project a rate increase of between 100 and 400 basis points. The regulator will announce the decision at about 1:30 p.m. tomorrow in Moscow, followed by a news conference.
The ruble’s 40 percent slide this year has left policy makers with dwindling options after they shifted to a free-floating exchange rate ahead of schedule last month and spent almost $80 billion on defending the currency. The central bank, led by Governor Elvira Nabiullina, has raised rates by 400 basis points since President Vladimir Putin’s incursion into Crimea in March, which led the U.S. and the European Union to impose sanctions. Oil has tumbled into a bear market."
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"Russia’s central bank will probably raise borrowing costs to avert threats to financial stability as oil prices near the lowest in more than five years and sanctions over Ukraine risk the collapse of the ruble.
The Bank of Russia will increase its key rate to 10 percent from 9.5 percent, according to the median estimate of 28 economists surveyed by Bloomberg. Ten forecast no change. Fifty of 77 traders polled by brokerage Tradition project a rate increase of between 100 and 400 basis points. The regulator will announce the decision at about 1:30 p.m. tomorrow in Moscow, followed by a news conference.
The ruble’s 40 percent slide this year has left policy makers with dwindling options after they shifted to a free-floating exchange rate ahead of schedule last month and spent almost $80 billion on defending the currency. The central bank, led by Governor Elvira Nabiullina, has raised rates by 400 basis points since President Vladimir Putin’s incursion into Crimea in March, which led the U.S. and the European Union to impose sanctions. Oil has tumbled into a bear market."
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Citigroup Sued in Abu Dhabi By Investor Over Fund Losses - Bloomberg
Citigroup Sued in Abu Dhabi By Investor Over Fund Losses - Bloomberg:
"Citigroup Inc. (C) is being sued in Abu Dhabi (ADCB) by an investor who alleges the New York-based bank defrauded investors and covered up losses in a real estate fund.
The bank hid losses in its Citi Real Estate Asset Management Fund for three years before sending a letter that said an “operational error” was to blame for inaccurate values, according to the lawsuit in the Abu Dhabi Commercial Court of First Instance filed by Sami Abbas Hussein Ali.
The lawsuit also alleges that Citigroup acquired two shopping centers in the U.K. at “questionable values,” one of which was owned by the fund’s manager. A public relations company issued a statement on behalf of Ali, detailing the claim."
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"Citigroup Inc. (C) is being sued in Abu Dhabi (ADCB) by an investor who alleges the New York-based bank defrauded investors and covered up losses in a real estate fund.
The bank hid losses in its Citi Real Estate Asset Management Fund for three years before sending a letter that said an “operational error” was to blame for inaccurate values, according to the lawsuit in the Abu Dhabi Commercial Court of First Instance filed by Sami Abbas Hussein Ali.
The lawsuit also alleges that Citigroup acquired two shopping centers in the U.K. at “questionable values,” one of which was owned by the fund’s manager. A public relations company issued a statement on behalf of Ali, detailing the claim."
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Legoland Developer Plunges 15% on Trading Debut in Dubai - Bloomberg
Legoland Developer Plunges 15% on Trading Debut in Dubai - Bloomberg:
"Dubai Parks & Resorts PJSC slumped on its first day trading in the emirate after raising 2.53 billion dirhams ($690 million) in an initial public offering to finance the construction of three theme parks.
Shares of the amusement park developer and operator dropped 14.5 percent to 0.86 dirhams at 10:16 a.m. local time. The DFM General Index (DFMGI), Dubai’s main measure, declined 1.2 percent, bringing its seven-day loss to 15 percent.
The IPO, equal to 40 percent of the company, attracted institutional investors such as sovereign wealth funds from Qatar and Kuwait and wealthy families, who made offers of about 100 billion dirhams, the company said. Dubai’s stock market was the world’s best performing this year until it was caught up in a regional selloff amid tumbling oil prices."
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"Dubai Parks & Resorts PJSC slumped on its first day trading in the emirate after raising 2.53 billion dirhams ($690 million) in an initial public offering to finance the construction of three theme parks.
Shares of the amusement park developer and operator dropped 14.5 percent to 0.86 dirhams at 10:16 a.m. local time. The DFM General Index (DFMGI), Dubai’s main measure, declined 1.2 percent, bringing its seven-day loss to 15 percent.
The IPO, equal to 40 percent of the company, attracted institutional investors such as sovereign wealth funds from Qatar and Kuwait and wealthy families, who made offers of about 100 billion dirhams, the company said. Dubai’s stock market was the world’s best performing this year until it was caught up in a regional selloff amid tumbling oil prices."
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JPMorgan Leaps to Second Spot on Gulf Sukuk Deals in 2014 - Bloomberg
JPMorgan Leaps to Second Spot on Gulf Sukuk Deals in 2014 - Bloomberg:
"JPMorgan Chase & Co. didn’t do enough deals the past two years to rank among the top Islamic-bond underwriters in the Gulf. This year, they’ve leapt to second place, behind only HSBC Holdings Plc.
The biggest U.S. bank underwrote $1.3 billion of sukuk sales in the six-nation Gulf Cooperation Council in 2014, its best annual performance on record, according to data compiled by Bloomberg. JPMorgan advised on four deals, including for Saudi Electricity Co., while HSBC underwrote $2.49 billion in 10 issues.
JPMorgan’s rise comes less than two years after hiring Hussein Hassan from UBS Group AG, where roles included global head of Islamic structuring, according to a press release from the New York-based lender. The bank is chasing a slice of a market whose financial assets were worth $1.66 trillion in 2013, according to the Dubai government. It also reflects strength in Saudi Arabia, with all four bonds sold by companies from the kingdom."
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"JPMorgan Chase & Co. didn’t do enough deals the past two years to rank among the top Islamic-bond underwriters in the Gulf. This year, they’ve leapt to second place, behind only HSBC Holdings Plc.
The biggest U.S. bank underwrote $1.3 billion of sukuk sales in the six-nation Gulf Cooperation Council in 2014, its best annual performance on record, according to data compiled by Bloomberg. JPMorgan advised on four deals, including for Saudi Electricity Co., while HSBC underwrote $2.49 billion in 10 issues.
JPMorgan’s rise comes less than two years after hiring Hussein Hassan from UBS Group AG, where roles included global head of Islamic structuring, according to a press release from the New York-based lender. The bank is chasing a slice of a market whose financial assets were worth $1.66 trillion in 2013, according to the Dubai government. It also reflects strength in Saudi Arabia, with all four bonds sold by companies from the kingdom."
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