Russian capital control options explained - YouTube: ""
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Wednesday, 17 December 2014
Saudi Arabia's Political Play In Oil - Business Insider
Saudi Arabia's Political Play In Oil - Business Insider:
"
Saudi Arabia may not be aiming at the US in its hands-off policy toward falling oil prices.
At a panel discussion Wednesday hosted by the Overseas Press Club and Control Risks (the latter a global risk consultancy), the speakers seemed skeptical of the idea that Saudi Arabia was refusing to prop up oil prices because it wanted to force American producers out of the market. (US shale basins are among the most expensive sources of oil to tap.)
There may be better political reasons for this move, with a reduction in American shale supply on the market just being the icing on the cake."
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"
At a panel discussion Wednesday hosted by the Overseas Press Club and Control Risks (the latter a global risk consultancy), the speakers seemed skeptical of the idea that Saudi Arabia was refusing to prop up oil prices because it wanted to force American producers out of the market. (US shale basins are among the most expensive sources of oil to tap.)
There may be better political reasons for this move, with a reduction in American shale supply on the market just being the icing on the cake."
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Gas in Ukraine: On another front | The Economist
Gas in Ukraine: On another front | The Economist:
"GAS is flowing again from Russia to Ukraine, but blackouts have hit factories and homes. Ukraine’s prime minister, Arseniy Yatsenyuk, says Ukraine’s independence is compromised by its energy dependence on Russia. Mykhailo Gonchar of the Centre for Global Studies in Kiev claims that in its battle in Ukraine, Russia has opened an energy front where it has big advantages—thanks to Ukraine’s own failings.
Until the 1970s Ukraine powered the Soviet Union. But since independence in 1991, inefficiency and falling production have left it reliant on Russia. The problems are crystallised in Naftogaz, a state-controlled gas giant with a bigger budget deficit than Ukraine. Ukraine has spent $6.4 billion keeping the company afloat this year, much of it going to Russia’s Gazprom.
After Naftogaz was created in 1998, it soon became a fount of corruption. Artificially low prices and patchy metering offer ample pickings. Opaque finances and central control over extraction, transport, storage and sales allow rent-seekers to act with impunity. Yevgeny Bakulin, who led Naftogaz under President Viktor Yanukovych, is under investigation for corruption. Yet he has won a seat in parliament for the Opposition Bloc led by Yuri Boiko, another former Naftogaz official."
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"GAS is flowing again from Russia to Ukraine, but blackouts have hit factories and homes. Ukraine’s prime minister, Arseniy Yatsenyuk, says Ukraine’s independence is compromised by its energy dependence on Russia. Mykhailo Gonchar of the Centre for Global Studies in Kiev claims that in its battle in Ukraine, Russia has opened an energy front where it has big advantages—thanks to Ukraine’s own failings.
Until the 1970s Ukraine powered the Soviet Union. But since independence in 1991, inefficiency and falling production have left it reliant on Russia. The problems are crystallised in Naftogaz, a state-controlled gas giant with a bigger budget deficit than Ukraine. Ukraine has spent $6.4 billion keeping the company afloat this year, much of it going to Russia’s Gazprom.
After Naftogaz was created in 1998, it soon became a fount of corruption. Artificially low prices and patchy metering offer ample pickings. Opaque finances and central control over extraction, transport, storage and sales allow rent-seekers to act with impunity. Yevgeny Bakulin, who led Naftogaz under President Viktor Yanukovych, is under investigation for corruption. Yet he has won a seat in parliament for the Opposition Bloc led by Yuri Boiko, another former Naftogaz official."
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Ruble Rebounds on Central Bank Stability Steps as Sberbank Soars - Bloomberg
Ruble Rebounds on Central Bank Stability Steps as Sberbank Soars - Bloomberg:
"The ruble rallied the most since 1998 and shares of Russia’s largest bank jumped 29 percent in London as the government sold dollars and the central bank said it will help companies meet foreign-currency debt obligations.
The currency gained 11 percent to 60.7495 a dollar by 6:13 p.m. in London, ending a seven-day, 22 percent drop. The Bank of Russia said lenders won’t have to write down the value of assets affected by the weaker ruble and falling bonds, allowing banks to use the third-quarter exchange rate in valuing risk-weighted assets. Shares of OAO Sberbank (SBER), the nation’s largest lender, rose the most on record in London and its bonds rallied.
The central bank measures, which also include the provision of foreign-exchange loans and additional repurchase auctions, come after the Finance Ministry bought rubles today to arrest the worst depreciation since 1998. Russian markets went into freefall yesterday as a surprise interest-rate increase failed to shore up investor confidence. Today’s advance trims the ruble’s slide this year to 45 percent."
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"The ruble rallied the most since 1998 and shares of Russia’s largest bank jumped 29 percent in London as the government sold dollars and the central bank said it will help companies meet foreign-currency debt obligations.
The currency gained 11 percent to 60.7495 a dollar by 6:13 p.m. in London, ending a seven-day, 22 percent drop. The Bank of Russia said lenders won’t have to write down the value of assets affected by the weaker ruble and falling bonds, allowing banks to use the third-quarter exchange rate in valuing risk-weighted assets. Shares of OAO Sberbank (SBER), the nation’s largest lender, rose the most on record in London and its bonds rallied.
The central bank measures, which also include the provision of foreign-exchange loans and additional repurchase auctions, come after the Finance Ministry bought rubles today to arrest the worst depreciation since 1998. Russian markets went into freefall yesterday as a surprise interest-rate increase failed to shore up investor confidence. Today’s advance trims the ruble’s slide this year to 45 percent."
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MIDEAST STOCKS-Saudi rebounds on spending pledge; Gulf markets stabilise | Reuters
MIDEAST STOCKS-Saudi rebounds on spending pledge; Gulf markets stabilise | Reuters:
"Most Gulf stock markets regained strength on Wednesday as oil's slide paused, with blue chip banks pushing Abu Dhabi up sharply and Saudi Arabia's bourse jumping after the kingdom's finance minister said the government would continue spending heavily.
Brent crude held below $60 a barrel on Wednesday, at roughly the same levels as on Tuesday, as major oil producers signalled they would maintain output despite a supply glut and faltering demand in Russia and Europe.
Saudi Finance Minister Ibrahim Alassaf partially reassured investors when he said his government would continue spending on development projects and social benefits in its 2015 budget, and that it would maintain a "counter-cyclical" policy in the face of challenging global economic conditions."
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"Most Gulf stock markets regained strength on Wednesday as oil's slide paused, with blue chip banks pushing Abu Dhabi up sharply and Saudi Arabia's bourse jumping after the kingdom's finance minister said the government would continue spending heavily.
Brent crude held below $60 a barrel on Wednesday, at roughly the same levels as on Tuesday, as major oil producers signalled they would maintain output despite a supply glut and faltering demand in Russia and Europe.
Saudi Finance Minister Ibrahim Alassaf partially reassured investors when he said his government would continue spending on development projects and social benefits in its 2015 budget, and that it would maintain a "counter-cyclical" policy in the face of challenging global economic conditions."
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With Oil’s Slump, Gulf Nations Seen Turning to More Sukuk - Bloomberg
With Oil’s Slump, Gulf Nations Seen Turning to More Sukuk - Bloomberg:
"The almost 50 percent plunge in oil this year is set to unleash a wave of Islamic bond sales as Gulf Cooperation Council nations seek to compensate for slumping revenues.
Sukuk issuance across the region in 2015 will surpass this year’s $14.8 billion, according to Emad Mostaque at Ecstrat Ltd. The 2014 figure is the lowest in three years, data compiled by Bloomberg show. The Gulf states may sell sukuk to help meet planned expenditure, including to fund infrastructure projects at home, said John Sfakianakis, Middle East Director at Ashmore Group Plc.
With Saudi Arabia and Qatar planning more than $700 billion of spendng during the next seven years, boosting sales of sukuk will help compensate for oil prices that are about 25 percent below the $80 a barrel the International Monetary Fund says governments in the region need to balance their budgets. The six-nation GCC includes four members of OPEC, which supplies 40 percent of the world’s oil."
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"The almost 50 percent plunge in oil this year is set to unleash a wave of Islamic bond sales as Gulf Cooperation Council nations seek to compensate for slumping revenues.
Sukuk issuance across the region in 2015 will surpass this year’s $14.8 billion, according to Emad Mostaque at Ecstrat Ltd. The 2014 figure is the lowest in three years, data compiled by Bloomberg show. The Gulf states may sell sukuk to help meet planned expenditure, including to fund infrastructure projects at home, said John Sfakianakis, Middle East Director at Ashmore Group Plc.
With Saudi Arabia and Qatar planning more than $700 billion of spendng during the next seven years, boosting sales of sukuk will help compensate for oil prices that are about 25 percent below the $80 a barrel the International Monetary Fund says governments in the region need to balance their budgets. The six-nation GCC includes four members of OPEC, which supplies 40 percent of the world’s oil."
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Saudi Arabia Spending Reduces Room for OPEC Output Cuts - Bloomberg
Saudi Arabia Spending Reduces Room for OPEC Output Cuts - Bloomberg:
"Saudi Arabia’s plan to continue spending on social projects and security increases the likelihood that the world’s biggest oil exporter will stick with OPEC’s policy of maintaining output even as crude prices plunge.
“Saudi Arabia is backing up OPEC policy with action to strengthen the home front against the adverse impact of falling oil prices,” Arabia Monitor Chief Economist Florence Eid-Oakden, whose firm advises investors on business risks in the Middle East, said today by phone from London.
The Saudi stock market rebounded after Finance Minister Ibrahim al-Assaf announced today that the government plans to fund “massive” development projects next year, focusing on health care, education, social services and security. Tadawul (SASEIDX) stocks advanced for the first time since Dec. 4, increasing 4.2 percent. The gauge lost almost a third of its value since September amid expectations that falling oil prices will curtail public spending."
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"Saudi Arabia’s plan to continue spending on social projects and security increases the likelihood that the world’s biggest oil exporter will stick with OPEC’s policy of maintaining output even as crude prices plunge.
“Saudi Arabia is backing up OPEC policy with action to strengthen the home front against the adverse impact of falling oil prices,” Arabia Monitor Chief Economist Florence Eid-Oakden, whose firm advises investors on business risks in the Middle East, said today by phone from London.
The Saudi stock market rebounded after Finance Minister Ibrahim al-Assaf announced today that the government plans to fund “massive” development projects next year, focusing on health care, education, social services and security. Tadawul (SASEIDX) stocks advanced for the first time since Dec. 4, increasing 4.2 percent. The gauge lost almost a third of its value since September amid expectations that falling oil prices will curtail public spending."
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Hello 2015: having failed in Ukraine, Russia will turn inwards | beyondbrics
Hello 2015: having failed in Ukraine, Russia will turn inwards | beyondbrics:
"This time last year I was asked to contribute an article for beyondbrics on the outlook for 2014, and I chose Ukraine (see Hello 2014: Ukraine’s crisis may run and run, December 20, 2014). That post turned out to be prescient, although even I could never have imagined the remarkable turn of events in that country this year.
For 2015 I think Ukraine will remain in the headlines, but its future is likely at least partially to be determined by events in its eastern neighbour, Russia. The new reform administration in Kiev can succeed, if Moscow gives it some breathing space and scales back its own direct intervention in Ukraine.
Vladimir Putin, Russia’s president, faces some stark choices. His policy towards Ukraine has had decidedly mixed results. He has annexed Crimea, but he already had de facto control over the peninsula, through the long-running Black Sea Fleet agreement and the stationing of tens of thousands of Russian servicemen."
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"This time last year I was asked to contribute an article for beyondbrics on the outlook for 2014, and I chose Ukraine (see Hello 2014: Ukraine’s crisis may run and run, December 20, 2014). That post turned out to be prescient, although even I could never have imagined the remarkable turn of events in that country this year.
For 2015 I think Ukraine will remain in the headlines, but its future is likely at least partially to be determined by events in its eastern neighbour, Russia. The new reform administration in Kiev can succeed, if Moscow gives it some breathing space and scales back its own direct intervention in Ukraine.
Vladimir Putin, Russia’s president, faces some stark choices. His policy towards Ukraine has had decidedly mixed results. He has annexed Crimea, but he already had de facto control over the peninsula, through the long-running Black Sea Fleet agreement and the stationing of tens of thousands of Russian servicemen."
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CBRE warns oil decline could take toll on overseas ambitions of GCC sovereign wealth funds | The National
CBRE warns oil decline could take toll on overseas ambitions of GCC sovereign wealth funds | The National:
"Slumping oil prices could prevent the GCC’s vast sovereign wealth funds from buying trophy assets abroad, experts have warned.
The property broker CBRE is predicting that if the price of Brent crude continues to drop for a sustained period then the huge government-owned funds tasked with spending surplus cash on assets abroad may cut back on their ambitious plans to buy European trophy assets.
“The biggest impact is potentially on the international property markets than the local markets,” said Nick Maclean, the managing director of CBRE’s Dubai office. “Because we see that the principal component of the surplus where oil is priced and production costs goes to the sovereign wealth funds in the region."
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"Slumping oil prices could prevent the GCC’s vast sovereign wealth funds from buying trophy assets abroad, experts have warned.
The property broker CBRE is predicting that if the price of Brent crude continues to drop for a sustained period then the huge government-owned funds tasked with spending surplus cash on assets abroad may cut back on their ambitious plans to buy European trophy assets.
“The biggest impact is potentially on the international property markets than the local markets,” said Nick Maclean, the managing director of CBRE’s Dubai office. “Because we see that the principal component of the surplus where oil is priced and production costs goes to the sovereign wealth funds in the region."
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UAE markets stabilise after rout | GulfNews.com
UAE markets stabilise after rout | GulfNews.com:
"The UAE markets stabilised on Wednesday after sharp cuts in the previous session mirroring similar trend in crude oil.
The Dubai Financial Market General Index ended 1.64 per cent lower at 3,033, after losing more than 7 per cent on Tuesday.
The Abu Dhabi Securities Exchange general index ended 5.11 per cent to be at 4,090.99."
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"The UAE markets stabilised on Wednesday after sharp cuts in the previous session mirroring similar trend in crude oil.
The Dubai Financial Market General Index ended 1.64 per cent lower at 3,033, after losing more than 7 per cent on Tuesday.
The Abu Dhabi Securities Exchange general index ended 5.11 per cent to be at 4,090.99."
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UAE developers wary about Russian buyer exposure | GulfNews.com
UAE developers wary about Russian buyer exposure | GulfNews.com:
"Some UAE developers are taking a closer look at their off-plan sales to see the level of their exposures to overseas buyers, and especially to those from Russia or one of the CIS states. The check is to see whether these buyers can stick with their upcoming instalment commitments given how some of the currencies have been performing in recent days.
For instance, with their currency in a free fall against the dollar, Russian buyers with exposure in Dubai’s real estate will have to use up more of their roubles to stick to their dollar/dirham commitments. Dubai’s leading developers have in the past extensively chased Russian and CIS buyers for their prestige projects, with some even timing their latest global launches through roadshows in Moscow.
“They deal principally in cash transactions and do have extensive income generating assets outside of their home markets,” said one industry analyst. “They could use these to meet any payment commitments on their Dubai exposures and not rely on their rouble-based assets. Local developers need not be overly concerned, but it’s always a sound practice to see where they stand on their sales exposures to overseas buyers.”"
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"Some UAE developers are taking a closer look at their off-plan sales to see the level of their exposures to overseas buyers, and especially to those from Russia or one of the CIS states. The check is to see whether these buyers can stick with their upcoming instalment commitments given how some of the currencies have been performing in recent days.
For instance, with their currency in a free fall against the dollar, Russian buyers with exposure in Dubai’s real estate will have to use up more of their roubles to stick to their dollar/dirham commitments. Dubai’s leading developers have in the past extensively chased Russian and CIS buyers for their prestige projects, with some even timing their latest global launches through roadshows in Moscow.
“They deal principally in cash transactions and do have extensive income generating assets outside of their home markets,” said one industry analyst. “They could use these to meet any payment commitments on their Dubai exposures and not rely on their rouble-based assets. Local developers need not be overly concerned, but it’s always a sound practice to see where they stand on their sales exposures to overseas buyers.”"
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Dubai Aluminium Said to Seek $1.8 Billion Loan to Expand - Bloomberg
Dubai Aluminium Said to Seek $1.8 Billion Loan to Expand - Bloomberg:
"Dubai Aluminium, part of a metals joint venture between Dubai and Abu Dhabi, is seeking to pay 145 basis points above the London interbank offered rate on a $1.8 billion loan, according to two people familiar with the matter.
Dubal, as the company is known, appointed Citigroup, Emirates NBD PJSC (EMIRATES) and Societe Generale SA (GLE) to arrange the facility, the people said, asking not to be identified as the information is private. Lenders committing to $200 million of funding will be paid a one time fee of 90 basis points, they said.
Abu Dhabi government-owned Mubadala Development Co. and Dubai Investment Corp. merged Dubal with Abu Dhabi-based smelter Emirates Aluminium Co. last year to create a company with an enterprise value of $15 billion."
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"Dubai Aluminium, part of a metals joint venture between Dubai and Abu Dhabi, is seeking to pay 145 basis points above the London interbank offered rate on a $1.8 billion loan, according to two people familiar with the matter.
Dubal, as the company is known, appointed Citigroup, Emirates NBD PJSC (EMIRATES) and Societe Generale SA (GLE) to arrange the facility, the people said, asking not to be identified as the information is private. Lenders committing to $200 million of funding will be paid a one time fee of 90 basis points, they said.
Abu Dhabi government-owned Mubadala Development Co. and Dubai Investment Corp. merged Dubal with Abu Dhabi-based smelter Emirates Aluminium Co. last year to create a company with an enterprise value of $15 billion."
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Dubai Sees Real-Estate Leading Growth 7 Years After Crash - Bloomberg
Dubai Sees Real-Estate Leading Growth 7 Years After Crash - Bloomberg:
"Dubai expects real estate and construction will likely drive economic growth in 2015, seven years after a crash in property prices brought the Gulf emirate to the brink of default.
The emirate’s economy is expected to grow 4.5 percent next year from an estimated 4 percent in 2014, the Department of Economic Development said in a presentation yesterday. Real-estate and construction may expand about 6 percent each. Preliminary forecasts for 2014 show the property sector will grow 3.5 percent.
Dubai, the second-richest sheikhdom in the United Arab Emirates after Abu Dhabi, is home to the world’s tallest skyscraper and largest airline by international traffic. The emirate has relied on tourism and hospitality since the 2008 real-estate crash. Property prices rebounded last year, prompting authorities to take steps against speculation, including measures to curb mortgage lending and the doubling of the transaction tax."
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"Dubai expects real estate and construction will likely drive economic growth in 2015, seven years after a crash in property prices brought the Gulf emirate to the brink of default.
The emirate’s economy is expected to grow 4.5 percent next year from an estimated 4 percent in 2014, the Department of Economic Development said in a presentation yesterday. Real-estate and construction may expand about 6 percent each. Preliminary forecasts for 2014 show the property sector will grow 3.5 percent.
Dubai, the second-richest sheikhdom in the United Arab Emirates after Abu Dhabi, is home to the world’s tallest skyscraper and largest airline by international traffic. The emirate has relied on tourism and hospitality since the 2008 real-estate crash. Property prices rebounded last year, prompting authorities to take steps against speculation, including measures to curb mortgage lending and the doubling of the transaction tax."
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BBC News - Rouble turmoil leads to Apple halting online sales in Russia
BBC News - Rouble turmoil leads to Apple halting online sales in Russia:
"Technology giant Apple says it cannot sell products online in Russia because the rouble's value is too volatile for it to set prices.
The company stopped sales of its iPhones, iPads and other products in the country after a day in which the currency went into free-fall.
The rouble has lost more than 20% this week, despite a dramatic decision to raise interest rates from 10.5% to 17%."
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"Technology giant Apple says it cannot sell products online in Russia because the rouble's value is too volatile for it to set prices.
The company stopped sales of its iPhones, iPads and other products in the country after a day in which the currency went into free-fall.
The rouble has lost more than 20% this week, despite a dramatic decision to raise interest rates from 10.5% to 17%."
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