New Saudi oil era ignites old questions - FT.com:
"The new Saudi administration under construction by Mohammed bin Salman, the monarchy’s young deputy crown prince, has been quick to jettison ministers deemed inefficient or out of line with a prevailing reformist tone in the royal court.
Ali al-Naimi, once Saudi Arabia’s most influential commoner and for decades the face of energy policy in the world’s largest oil exporter, has become the most prominent minister yet to be replaced. Khalid al-Falih, a fellow Saudi Aramco veteran, took over his role on Saturday as oil minister. He is playing an influential role in shaping Prince Mohammed’s reform plans, which include taking part of the state oil company public."
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Sunday, 8 May 2016
Oil discoveries slump to 60-year low - FT.com
Oil discoveries slump to 60-year low - FT.com:
"Discoveries of new oil reserves have dropped to their lowest level for more than 60 years, pointing to potential supply shortages in the next decade.
Oil explorers found 2.8bn barrels of crude and related liquids last year, according to IHS, a consultancy. This is the lowest annual volume recorded since 1954, reflecting a slowdown in exploration activity as hard-pressed oil companies seek to conserve cash."
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"Discoveries of new oil reserves have dropped to their lowest level for more than 60 years, pointing to potential supply shortages in the next decade.
Oil explorers found 2.8bn barrels of crude and related liquids last year, according to IHS, a consultancy. This is the lowest annual volume recorded since 1954, reflecting a slowdown in exploration activity as hard-pressed oil companies seek to conserve cash."
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Bonds Buy Time for Arab Oil States in for $900 Billion Shortfall - Bloomberg
Bonds Buy Time for Arab Oil States in for $900 Billion Shortfall - Bloomberg:
"The let-up in oil’s two-year downward spiral is allowing Middle Eastern governments and companies to step back from raiding reserves and belt-tightening by reopening access to international capital markets.
Since Abu Dhabi’s $5 billion Eurobond last month brought an end to a drought that pushed issuance to a seven-year low in 2015, Qatar’s government, a real estate group in the country, a Kuwaiti bank and a United Arab Emirates investment company have been sounding out potential investors as the region’s borrowing costs drop to near the cheapest in six months."
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"The let-up in oil’s two-year downward spiral is allowing Middle Eastern governments and companies to step back from raiding reserves and belt-tightening by reopening access to international capital markets.
Since Abu Dhabi’s $5 billion Eurobond last month brought an end to a drought that pushed issuance to a seven-year low in 2015, Qatar’s government, a real estate group in the country, a Kuwaiti bank and a United Arab Emirates investment company have been sounding out potential investors as the region’s borrowing costs drop to near the cheapest in six months."
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HSBC Middle East CEO Joins Saudi Government After Shakeup - Bloomberg
HSBC Middle East CEO Joins Saudi Government After Shakeup - Bloomberg:
"Saudi Arabia named HSBC Holdings Plc Middle East and North Africa Chief Executive Officer Mohammad Al Tuwaijri deputy minister of economy and planning as part of a government shakeup that also ushered in a new central banker and oil minister.
Al Tuwaijri, regional CEO of the London-based bank since October 2013, takes on the role immediately and reports to economy and planning minister Adel Fakeih. Robin Jones, previously deputy CEO in MENA, will become interim CEO and a permanent replacement will be announced "in due course," HSBC spokesman Paul Harris said by phone on Sunday.
While Saudi-national Al Tuwaijri’s appointment forms part of a wider reshuffle in the kingdom, he joins a growing number of bankers taking senior government roles as OPEC’s top producer reboots its economy. Mohammed Al Jadaan, head of the country’s Capital Markets Authority, was a special adviser to Morgan Stanley’s board in Saudi Arabia, while Yasir Al Rumayyan, former chief executive officer at Credit Agricole-backed Saudi Fransi Capital, recently became head of Saudi Arabia’s Public Investment Fund."
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"Saudi Arabia named HSBC Holdings Plc Middle East and North Africa Chief Executive Officer Mohammad Al Tuwaijri deputy minister of economy and planning as part of a government shakeup that also ushered in a new central banker and oil minister.
Al Tuwaijri, regional CEO of the London-based bank since October 2013, takes on the role immediately and reports to economy and planning minister Adel Fakeih. Robin Jones, previously deputy CEO in MENA, will become interim CEO and a permanent replacement will be announced "in due course," HSBC spokesman Paul Harris said by phone on Sunday.
While Saudi-national Al Tuwaijri’s appointment forms part of a wider reshuffle in the kingdom, he joins a growing number of bankers taking senior government roles as OPEC’s top producer reboots its economy. Mohammed Al Jadaan, head of the country’s Capital Markets Authority, was a special adviser to Morgan Stanley’s board in Saudi Arabia, while Yasir Al Rumayyan, former chief executive officer at Credit Agricole-backed Saudi Fransi Capital, recently became head of Saudi Arabia’s Public Investment Fund."
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Saudi Shakeup Helps End Gulf Stocks' Worst Streak in Two Months - Bloomberg
Saudi Shakeup Helps End Gulf Stocks' Worst Streak in Two Months - Bloomberg:
"Saudi Arabian stocks advanced as investors judged the government shakeup that ushered in a new central banker and oil minister would help the kingdom reduce its dependence on crude. Gulf stocks ended their longest losing streak in almost two months.
The Tadawul All Share Index rose as much as 1.2 percent before closing 0.2 percent higher at 6,672.48 in a second day of gains. Saudi Arabia’s King Salman appointed deputy central bank governor Ahmed Alkholifey to head the Saudi Arabian Monetary Agency, and Saudi Aramco Chairman Khalid Al-Falih as oil minister. Bloomberg’s GCC 200 Index climbed 0.4 percent, the most in almost two weeks."
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"Saudi Arabian stocks advanced as investors judged the government shakeup that ushered in a new central banker and oil minister would help the kingdom reduce its dependence on crude. Gulf stocks ended their longest losing streak in almost two months.
The Tadawul All Share Index rose as much as 1.2 percent before closing 0.2 percent higher at 6,672.48 in a second day of gains. Saudi Arabia’s King Salman appointed deputy central bank governor Ahmed Alkholifey to head the Saudi Arabian Monetary Agency, and Saudi Aramco Chairman Khalid Al-Falih as oil minister. Bloomberg’s GCC 200 Index climbed 0.4 percent, the most in almost two weeks."
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Three key challenges for successors of the Ali Al Naimi oil era | The National
Three key challenges for successors of the Ali Al Naimi oil era | The National:
"In Saturday’s reshuffle, Khaled Al Falih becomes only the fifth ever Saudi oil minister, replacing the doyen of oil markets, Ali Al Naimi. The change of faces should not bring a shift of policy, but does continue a turnover of Middle East energy leaders. The next generation has to master three key challenges: managing through an age of austerity; internationalising the national oil companies; and opening up the industry.
Mr Al Naimi’s removal is no surprise, even if accelerated by the collapse of Opec’s talks in Doha amid changes in the Saudi stance on oil output. Aged 80, and minister for 21 years, he has long been known to be ready for retirement. The 55-year-old Mr Al Falih, chairman and previously chief executive of Saudi Aramco, now heads a renamed Ministry of Energy, Industry and Mineral Resources.
Over the past few years, Abdullah Al Attiyah, the architect of Qatar’s gas industry, stepped down in 2011, Suhail Al Mazrouei came from Mubadala to be the UAE’s energy minister in March 2013, and Sultan Al Jaber, chairman of Masdar, and chief executive of energy at Mubadala, was appointed to head Adnoc in February. Anas Al Saleh, Kuwait’s 43-year-old minister of finance, became acting oil minister in November, though job security is a little less than for Saudi oil ministers (there have been 10 since 2004)."
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"In Saturday’s reshuffle, Khaled Al Falih becomes only the fifth ever Saudi oil minister, replacing the doyen of oil markets, Ali Al Naimi. The change of faces should not bring a shift of policy, but does continue a turnover of Middle East energy leaders. The next generation has to master three key challenges: managing through an age of austerity; internationalising the national oil companies; and opening up the industry.
Mr Al Naimi’s removal is no surprise, even if accelerated by the collapse of Opec’s talks in Doha amid changes in the Saudi stance on oil output. Aged 80, and minister for 21 years, he has long been known to be ready for retirement. The 55-year-old Mr Al Falih, chairman and previously chief executive of Saudi Aramco, now heads a renamed Ministry of Energy, Industry and Mineral Resources.
Over the past few years, Abdullah Al Attiyah, the architect of Qatar’s gas industry, stepped down in 2011, Suhail Al Mazrouei came from Mubadala to be the UAE’s energy minister in March 2013, and Sultan Al Jaber, chairman of Masdar, and chief executive of energy at Mubadala, was appointed to head Adnoc in February. Anas Al Saleh, Kuwait’s 43-year-old minister of finance, became acting oil minister in November, though job security is a little less than for Saudi oil ministers (there have been 10 since 2004)."
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Sell Gulf stocks in May and go away? | GulfNews.com
Sell Gulf stocks in May and go away? | GulfNews.com:
"Should investors in Gulf stocks sell in May and go away?
Historically stocks have underperformed from May through October compared to the six-month period from November to April, but with the summer season ahead of local investors, combined with the Ramadan and Eid period, many fund managers are advising this could be a good strategy.
All markets posted either a relatively smaller loss or even a gain as in the case of Abu Dhabi in the 6-month period from November 2015 through April 2016 versus the preceding 6-month period, according to Amr Al Alfy. head of global research at Mubasher Financial.
"
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"Should investors in Gulf stocks sell in May and go away?
Historically stocks have underperformed from May through October compared to the six-month period from November to April, but with the summer season ahead of local investors, combined with the Ramadan and Eid period, many fund managers are advising this could be a good strategy.
All markets posted either a relatively smaller loss or even a gain as in the case of Abu Dhabi in the 6-month period from November 2015 through April 2016 versus the preceding 6-month period, according to Amr Al Alfy. head of global research at Mubasher Financial.
"
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GCC banks feel the pinch as funding costs rise | GulfNews.com
GCC banks feel the pinch as funding costs rise | GulfNews.com:
"A substantial increase in the cost of funds combined with liquidity squeeze is forcing regional banks and governments to source funding outside their home markets at wider spreads. The rising cost of funds is expected to hurt the profitability of Gulf banks, Arqaam Capital said in a recent report.
Although banks are expected to benefit from a rate hike in terms of gains in return on equity and net interest margins (NIMs) they are being offset by the higher cost of external funding.
“With credit growth slowing down, limited possibilities to boost net interest margins [given tightening liquidity], a market reduction in loan origination fees, banks can only reduce their operating expenses to shield themselves partially from the headwinds,” said Jaap Meijer, head of Research at Arqaam Capital.
"
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"A substantial increase in the cost of funds combined with liquidity squeeze is forcing regional banks and governments to source funding outside their home markets at wider spreads. The rising cost of funds is expected to hurt the profitability of Gulf banks, Arqaam Capital said in a recent report.
Although banks are expected to benefit from a rate hike in terms of gains in return on equity and net interest margins (NIMs) they are being offset by the higher cost of external funding.
“With credit growth slowing down, limited possibilities to boost net interest margins [given tightening liquidity], a market reduction in loan origination fees, banks can only reduce their operating expenses to shield themselves partially from the headwinds,” said Jaap Meijer, head of Research at Arqaam Capital.
"
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MIDEAST STOCKS-Saudi rises after government reshuffle | Reuters
MIDEAST STOCKS-Saudi rises after government reshuffle | Reuters:
"Saudi Arabia's stock market rose in early trade on Sunday after the king announced a sweeping reorganisation of the economic policy-making apparatus, while most other Gulf bourses were firm.
The Saudi stock index climbed 1.0 percent in the first 15 minutes. Petrochemical shares were particularly strong with Saudi Basic Industries up 1.2 percent.
The Saudi reorganisation replaced the oil minister and central bank governor and restructured some major ministries."
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"Saudi Arabia's stock market rose in early trade on Sunday after the king announced a sweeping reorganisation of the economic policy-making apparatus, while most other Gulf bourses were firm.
The Saudi stock index climbed 1.0 percent in the first 15 minutes. Petrochemical shares were particularly strong with Saudi Basic Industries up 1.2 percent.
The Saudi reorganisation replaced the oil minister and central bank governor and restructured some major ministries."
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Saudi shake-up rolls on with big reshuffle of economic posts | Reuters
Saudi shake-up rolls on with big reshuffle of economic posts | Reuters:
"Saudi Arabia's King Salman on Saturday replaced his veteran oil minister and restructured some big ministries in a major reshuffle apparently intended to support a wide-ranging economic reform programme unveiled last week.
The most eye-catching move was the creation of a new Energy, Industry and Natural Resources Ministry under Khaled al-Falih, chairman of the state oil company Aramco. He replaces the 80-year-old oil minister Ali al-Naimi, in charge of energy policy at the world's biggest oil exporter since 1995.
But major changes were also made to the economic leadership, with Majed al-Qusaibi named head of the new Commerce and Investment Ministry, and Ahmed al-Kholifey made governor of the Saudi Arabian Monetary Agency (SAMA), the central bank."
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"Saudi Arabia's King Salman on Saturday replaced his veteran oil minister and restructured some big ministries in a major reshuffle apparently intended to support a wide-ranging economic reform programme unveiled last week.
The most eye-catching move was the creation of a new Energy, Industry and Natural Resources Ministry under Khaled al-Falih, chairman of the state oil company Aramco. He replaces the 80-year-old oil minister Ali al-Naimi, in charge of energy policy at the world's biggest oil exporter since 1995.
But major changes were also made to the economic leadership, with Majed al-Qusaibi named head of the new Commerce and Investment Ministry, and Ahmed al-Kholifey made governor of the Saudi Arabian Monetary Agency (SAMA), the central bank."
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Ali al-Naimi: shrewd technocrat with a calming voice - FT.com
Ali al-Naimi: shrewd technocrat with a calming voice - FT.com:
"After rising from humble beginnings as an errand boy at Saudi Arabia’s national oil company nearly 70 years ago to become one of the energy world’s most influential voices for more than two decades, Ali al Naimi is stepping aside.
The softly spoken octogenarian has been described by those who have dealt with him as a respected and shrewd technocrat who rose to become the most important non-royal in the kingdom."
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"After rising from humble beginnings as an errand boy at Saudi Arabia’s national oil company nearly 70 years ago to become one of the energy world’s most influential voices for more than two decades, Ali al Naimi is stepping aside.
The softly spoken octogenarian has been described by those who have dealt with him as a respected and shrewd technocrat who rose to become the most important non-royal in the kingdom."
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Khalid al-Falih takes the helm of Saudi Arabia’s oil ministry - FT.com
Khalid al-Falih takes the helm of Saudi Arabia’s oil ministry - FT.com:
"Khalid al-Falih, long regarded as the Saudi oil minister-in-waiting, has taken control of a revamped energy ministry at the vanguard of national reform as the kingdom battles low oil prices.
A close adviser to the powerful Deputy Crown Prince Mohammed bin Salman, Mr Falih will become the kingdom’s interlocutor with the world on oil policy."
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"Khalid al-Falih, long regarded as the Saudi oil minister-in-waiting, has taken control of a revamped energy ministry at the vanguard of national reform as the kingdom battles low oil prices.
A close adviser to the powerful Deputy Crown Prince Mohammed bin Salman, Mr Falih will become the kingdom’s interlocutor with the world on oil policy."
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Saudi Arabia replaces veteran oil minister Ali al-Naimi - FT.com
Saudi Arabia replaces veteran oil minister Ali al-Naimi - FT.com:
"Saudi Arabia has replaced veteran oil minister Ali al-Naimi, one of the industry’s most influential leaders for 20 years, as part of a broader shake-up at the world’s largest oil exporter.
In a move that redirects further power towards the king’s son, Deputy Crown Prince Mohammed bin Salman, the kingdom will replace Mr Naimi with Khalid al-Falih, chairman of state oil company Saudi Aramco, according to a royal decree issued on Saturday."
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"Saudi Arabia has replaced veteran oil minister Ali al-Naimi, one of the industry’s most influential leaders for 20 years, as part of a broader shake-up at the world’s largest oil exporter.
In a move that redirects further power towards the king’s son, Deputy Crown Prince Mohammed bin Salman, the kingdom will replace Mr Naimi with Khalid al-Falih, chairman of state oil company Saudi Aramco, according to a royal decree issued on Saturday."
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