Deutsche Bank’s $10-Billion Scandal - The New Yorker:
"Almost every weekday between the fall of 2011 and early 2015, a Russian broker named Igor Volkov called the equities desk of Deutsche Bank’s Moscow headquarters. Volkov would speak to a sales trader—often, a young woman named Dina Maksutova—and ask her to place two trades simultaneously. In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented. Usually, the order was for about ten million dollars’ worth of the stock. In the second trade, Volkov—acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands—would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros. Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself.
At first glance, the trades appeared banal, even pointless. Deutsche Bank earned a small commission for executing the buy and sell orders, but in financial terms the clients finished roughly where they began. To inspect the trades individually, however, was like standing too close to an Impressionist painting—you saw the brushstrokes and missed the lilies. These transactions had nothing to do with pursuing profit. They were a way to expatriate money. Because the Russian company and the offshore company both belonged to the same owner, these ordinary-seeming trades had an alchemical purpose: to turn rubles that were stuck in Russia into dollars stashed outside Russia. On the Moscow markets, this sleight of hand had a nickname: konvert, which means “envelope” and echoes the English verb “convert.” In the English-language media, the scheme has become known as “mirror trading.”
Mirror trades are not inherently illegal. The purpose of an equities desk at an investment bank is to help approved clients buy and sell stock, and there could be legitimate reasons for making a simultaneous trade. A client might want to benefit, say, from the difference between the local and the foreign price of a stock. Indeed, because the individual transactions involved in mirror trades did not directly contravene any regulations, some employees who worked at Deutsche Bank’s Russian headquarters at the time deny that such activity was improper. (Fourteen former and current employees of Deutsche Bank in Moscow spoke to me about the mirror trades, as did several people involved with the clients. Most of them asked not to be named, either because they had signed nondisclosure agreements or because they still work in banking.)"
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Tuesday 23 August 2016
Nepal Airlines says it is in stake sale talks with Mideast carrier | GulfNews.com
Nepal Airlines says it is in stake sale talks with Mideast carrier | GulfNews.com:
"Nepal Airlines has held informal stake sale talks with a Middle East airline after the Nepalese government mandated it to find a “strategic partner,” its managing director said Monday.
The state-owned carrier is in the midst of a turnaround, having recently brought in two Airbus A320 narrow body jets and with plans to bring in two A330 wide-bodies as it phases out out-of-production Boeing 757s.
It resumed flights to Dubai from Kathmandu on August 18 after a four-year hiatus and is considering more than doubling its network to 19 destinations. Nepal's government wants the airline to bring in an outside investor to fast track the expansion plan that also includes adding at least one new aircraft a year from 2017.
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"Nepal Airlines has held informal stake sale talks with a Middle East airline after the Nepalese government mandated it to find a “strategic partner,” its managing director said Monday.
The state-owned carrier is in the midst of a turnaround, having recently brought in two Airbus A320 narrow body jets and with plans to bring in two A330 wide-bodies as it phases out out-of-production Boeing 757s.
It resumed flights to Dubai from Kathmandu on August 18 after a four-year hiatus and is considering more than doubling its network to 19 destinations. Nepal's government wants the airline to bring in an outside investor to fast track the expansion plan that also includes adding at least one new aircraft a year from 2017.
"
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UPDATE 2-Oil prices fall as analysts say market still oversupplied | Reuters
UPDATE 2-Oil prices fall as analysts say market still oversupplied | Reuters:
"Oil prices fell on Tuesday, with Goldman Sachs warning that August's price rally had been overdone and that a proposed oil production freeze at current near-record levels would not help rein in an oversupplied market.
International Brent crude oil futures were trading at $48.86 per barrel at 0644 GMT, down 30 cents, or 0.61 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude was down 40 cents, or 0.84 percent, at $47.01 per barrel."
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"Oil prices fell on Tuesday, with Goldman Sachs warning that August's price rally had been overdone and that a proposed oil production freeze at current near-record levels would not help rein in an oversupplied market.
International Brent crude oil futures were trading at $48.86 per barrel at 0644 GMT, down 30 cents, or 0.61 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude was down 40 cents, or 0.84 percent, at $47.01 per barrel."
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Fitch: Index Move Boosts Sukuk; Frameworks & Standards Still Key | Reuters
Fitch: Index Move Boosts Sukuk; Frameworks & Standards Still Key | Reuters:
"The inclusion of sukuk in major bond indexes would be a significant boost for the product, but initiatives to harmonise standards, structures and legal frameworks and improve transparency remain key to its long-term development, Fitch Ratings says. Reuters reported on Friday that JP Morgan would include eight sovereign and corporate sukuk in various bond indexes from 31 October this year, citing a research report that the bank had sent to its clients. If confirmed, index inclusion should raise the profile of sukuk and support inflows from international institutional investors, including index tracking funds. This in turn may encourage issuers to supply index-eligible sukuk (criteria for inclusion include a credit rating and a liquidity assessment, according to Reuters) and support secondary market liquidity. Nevertheless, we believe the sukuk market's growth rate will be determined by two factors: firstly, product-specific initiatives around regulation and standardisation of sukuk issuance, which have been noteable in some jurisdictions, but have not always been harmonised across jurisdictions; and secondly, the broader attempts to deepen the investor base and improve transparency in the relevant national and regional debt capital markets. "
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"The inclusion of sukuk in major bond indexes would be a significant boost for the product, but initiatives to harmonise standards, structures and legal frameworks and improve transparency remain key to its long-term development, Fitch Ratings says. Reuters reported on Friday that JP Morgan would include eight sovereign and corporate sukuk in various bond indexes from 31 October this year, citing a research report that the bank had sent to its clients. If confirmed, index inclusion should raise the profile of sukuk and support inflows from international institutional investors, including index tracking funds. This in turn may encourage issuers to supply index-eligible sukuk (criteria for inclusion include a credit rating and a liquidity assessment, according to Reuters) and support secondary market liquidity. Nevertheless, we believe the sukuk market's growth rate will be determined by two factors: firstly, product-specific initiatives around regulation and standardisation of sukuk issuance, which have been noteable in some jurisdictions, but have not always been harmonised across jurisdictions; and secondly, the broader attempts to deepen the investor base and improve transparency in the relevant national and regional debt capital markets. "
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MIDEAST STOCKS-Gulf continues sliding as oil sags | Reuters
MIDEAST STOCKS-Gulf continues sliding as oil sags | Reuters:
"Gulf stock markets continued dropping early on Tuesday after Brent crude oil fell back below $49 a barrel and short-term technicals for several indexes in the region turned negative over the past few days.
The Saudi index fell 0.6 percent to 6,074 points in the first 45 minutes of trade. On Monday it confirmed a break of support on its early August low of 6,226 points, triggering a right triangle formed by the highs and lows since April and pointing down to the 5,600-point area in the medium term.
The drop was broad-based on Tuesday with losers outnumbering gainers by 123 to 12. Saudi Basic Industries, the biggest petrochemical producer, fell 0.3 percent."
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"Gulf stock markets continued dropping early on Tuesday after Brent crude oil fell back below $49 a barrel and short-term technicals for several indexes in the region turned negative over the past few days.
The Saudi index fell 0.6 percent to 6,074 points in the first 45 minutes of trade. On Monday it confirmed a break of support on its early August low of 6,226 points, triggering a right triangle formed by the highs and lows since April and pointing down to the 5,600-point area in the medium term.
The drop was broad-based on Tuesday with losers outnumbering gainers by 123 to 12. Saudi Basic Industries, the biggest petrochemical producer, fell 0.3 percent."
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U.A.E. Deposits $1 Billion in Egypt to Shore Up IMF Loan Deal - Bloomberg
U.A.E. Deposits $1 Billion in Egypt to Shore Up IMF Loan Deal - Bloomberg:
"The United Arab Emirates agreed to deposit $1 billion with Egypt’s central bank to help the North African nation meet the requirements for a $12 billion loan deal with the International Monetary Fund.
Egypt has secured an initial agreement with the Washington-based lender, but the IMF’s executive board will not consider the loan deal before the country secures commitments of as much as $6 billion from bilateral creditors. The deposit has a six-year tenor, the U.A.E.’s state-run WAM news agency reported, without saying whether the money has arrived in Cairo.
Egyptian central bank officials didn’t immediately answer calls and messages seeking comment."
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"The United Arab Emirates agreed to deposit $1 billion with Egypt’s central bank to help the North African nation meet the requirements for a $12 billion loan deal with the International Monetary Fund.
Egypt has secured an initial agreement with the Washington-based lender, but the IMF’s executive board will not consider the loan deal before the country secures commitments of as much as $6 billion from bilateral creditors. The deposit has a six-year tenor, the U.A.E.’s state-run WAM news agency reported, without saying whether the money has arrived in Cairo.
Egyptian central bank officials didn’t immediately answer calls and messages seeking comment."
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Dubai developer Nakheel brings an end to debt restructuring saga with Dh4.4bn payment | The National
Dubai developer Nakheel brings an end to debt restructuring saga with Dh4.4bn payment | The National:
"Nakheel has repaid a Dh4.4 billion Islamic bond as the developer emerges from a five-year financial restructuring.
The company behind Dubai’s palm-shaped islands said the final trade creditor sukuk payment this week marked the end of a process that began in August 2011.
It represents a major milestone for a developer often associated with both the highs and lows of the emirate’s turbulent property market."
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"Nakheel has repaid a Dh4.4 billion Islamic bond as the developer emerges from a five-year financial restructuring.
The company behind Dubai’s palm-shaped islands said the final trade creditor sukuk payment this week marked the end of a process that began in August 2011.
It represents a major milestone for a developer often associated with both the highs and lows of the emirate’s turbulent property market."
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A UAE merger play that can set precedents | GulfNews.com
A UAE merger play that can set precedents | GulfNews.com:
"A UAE merger play that can set precedents
As a statutory coming together, the NBAD-FGB deal sets the bar high
Image Credit: ©Gulf News
Published: 06:39 August 22, 2016
By Fraser Dawson, Special to Gulf News
In July, the boards of First Gulf Bank (FGB) and the National Bank of Abu Dhabi (NBAD) approved the merger of FGB and NBAD, forming what will be considered the biggest bank in the Middle East and North Africa, with Dh642 billion in assets and a combined market capitalisation of approximately Dh106.9 billion. The merger remains subject to certain conditions, including approval by the Securities and Commodities Authority and approval of shareholders, and will be effected by way of statutory merger. So what exactly is a statutory merger and why is it important?"
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"A UAE merger play that can set precedents
As a statutory coming together, the NBAD-FGB deal sets the bar high
Image Credit: ©Gulf News
Published: 06:39 August 22, 2016
By Fraser Dawson, Special to Gulf News
In July, the boards of First Gulf Bank (FGB) and the National Bank of Abu Dhabi (NBAD) approved the merger of FGB and NBAD, forming what will be considered the biggest bank in the Middle East and North Africa, with Dh642 billion in assets and a combined market capitalisation of approximately Dh106.9 billion. The merger remains subject to certain conditions, including approval by the Securities and Commodities Authority and approval of shareholders, and will be effected by way of statutory merger. So what exactly is a statutory merger and why is it important?"
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Iran to start using new oil and gas contract | GulfNews.com
Iran to start using new oil and gas contract | GulfNews.com:
"Iran’s Vice-President Eshaq Jahangiri has told the oil and finance ministries to start using the approved new draft for the Iran Petroleum Contract (IPC) for oil and gas deals, the Oil Ministry’s news agency Shana reported on Monday.
The launch of the IPC has been postponed several times as hardline rivals of President Hassan Rouhani resisted any deal that could end the so-called buy-back system under which foreign firms were banned from owning stakes in Iranian companies.
Oil Minister Bijan Zanganeh attended a parliamentary session on Sunday to answer criticisms of the IPC. He said last week the IPC would need minor amendments but that implementation of its final draft would not need the approval of parliament."
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"Iran’s Vice-President Eshaq Jahangiri has told the oil and finance ministries to start using the approved new draft for the Iran Petroleum Contract (IPC) for oil and gas deals, the Oil Ministry’s news agency Shana reported on Monday.
The launch of the IPC has been postponed several times as hardline rivals of President Hassan Rouhani resisted any deal that could end the so-called buy-back system under which foreign firms were banned from owning stakes in Iranian companies.
Oil Minister Bijan Zanganeh attended a parliamentary session on Sunday to answer criticisms of the IPC. He said last week the IPC would need minor amendments but that implementation of its final draft would not need the approval of parliament."
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