UAE government bank deposits rise again after tracing lows | The National:
"Government bank deposits rose by 8.3 per cent last month, according to the latest figures from the Central Bank of the UAE.
The amount of money deposited by the Government last month increased to Dh172.9 billion – up from Dh159.6bn in October as oil prices staged an end-of-year surge.
November’s increase came after the amount of money the Government deposited in the Central Bank dipped to its lowest level in seven months in October, broadly following oil price fluctuations."
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Sunday 25 December 2016
Tough road ahead for Saudi Aramco IPO plans | The National
Tough road ahead for Saudi Aramco IPO plans | The National:
"Saudi Aramco’s planned initial public offering has a tough road ahead of it amid a shifting political landscape in the United States. The uncertainties over how policies pursued by Donald Trump, when he becomes president, might affect Saudi’s oil interests, including the sale of a 5 per cent stake in its state oil company, were underlined by Saudi Arabia’s hectic efforts to lobby for changes to a law that could leave the government and its entities open to civil lawsuits. At the same time, a top Trump oil adviser urged the administration to block Saudi ownership of refining assets, arguing that it runs counter to the national interest.
"The potentially biggest IPO in history [of Aramco] is likely to be fraught with challenges and insiders continue to highlight that sorting these out could take a few years," Amrita Sen, the chief oil analyst at Energy Aspects, a consultancy, has said.
Adel Al Jubeir, Saudi Arabia’s foreign minister, has been lobbying intensely in the US this past month for lawmakers to amend the Justice Against Sponsors of Terrorism Act (Jasta), which in September overrode a presidential veto and gave US citizens the right to bring civil lawsuits against Saudi Arabia on behalf of victims of the September 11, 2001 terrorist attacks."
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"Saudi Aramco’s planned initial public offering has a tough road ahead of it amid a shifting political landscape in the United States. The uncertainties over how policies pursued by Donald Trump, when he becomes president, might affect Saudi’s oil interests, including the sale of a 5 per cent stake in its state oil company, were underlined by Saudi Arabia’s hectic efforts to lobby for changes to a law that could leave the government and its entities open to civil lawsuits. At the same time, a top Trump oil adviser urged the administration to block Saudi ownership of refining assets, arguing that it runs counter to the national interest.
"The potentially biggest IPO in history [of Aramco] is likely to be fraught with challenges and insiders continue to highlight that sorting these out could take a few years," Amrita Sen, the chief oil analyst at Energy Aspects, a consultancy, has said.
Adel Al Jubeir, Saudi Arabia’s foreign minister, has been lobbying intensely in the US this past month for lawmakers to amend the Justice Against Sponsors of Terrorism Act (Jasta), which in September overrode a presidential veto and gave US citizens the right to bring civil lawsuits against Saudi Arabia on behalf of victims of the September 11, 2001 terrorist attacks."
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UAE better positioned for structural reforms among GCC countries | GulfNews.com
UAE better positioned for structural reforms among GCC countries | GulfNews.com:
"The UAE is making serious attempts to reform its economy and public finances to adjust to the new reality of lower oil prices, and the country has a head start in reforms in terms of economic diversification and larger role for private sector in the economy, said Senior Citi executives.
“There have been efforts at consolidation, be it in the financial sector, in the public sector or the oil sector. This is all in the agenda of driving efficiency and dealing with the new lower levels of commodity prices,” said Elissar Farah Antonios, Citi CEO, UAE.
The UAE is the most diversified economy within the GCC, and thus has been the least vulnerable to the low oil price environment of the past two years. Among the emirates, Abu Dhabi has been in the forefront of fiscal and other economic reforms last year as it bears the greater impact of lower oil prices."
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"The UAE is making serious attempts to reform its economy and public finances to adjust to the new reality of lower oil prices, and the country has a head start in reforms in terms of economic diversification and larger role for private sector in the economy, said Senior Citi executives.
“There have been efforts at consolidation, be it in the financial sector, in the public sector or the oil sector. This is all in the agenda of driving efficiency and dealing with the new lower levels of commodity prices,” said Elissar Farah Antonios, Citi CEO, UAE.
The UAE is the most diversified economy within the GCC, and thus has been the least vulnerable to the low oil price environment of the past two years. Among the emirates, Abu Dhabi has been in the forefront of fiscal and other economic reforms last year as it bears the greater impact of lower oil prices."
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Saudi paper retracts Aramco 49% stake sale plan story | GulfNews.com
Saudi paper retracts Aramco 49% stake sale plan story | GulfNews.com:
"The Riyadh-based newspaper Al-Eqtisadiah retracted a story saying Saudi Arabia is planning to sell almost half of Saudi Arabian Oil Co., the world’s largest oil company known as Aramco.
The stake that the government plans to sell and the time frame of the sale are different than what was mentioned in the story published on Saturday, al-Eqtisadiah said in a statement published Sunday. The story, which cited an unidentified government official, contained a number of other errors, the newspaper said.
“Al-Eqtisadiah apologises to its readers, and wishes that all media outlets that cited the story to publish this apology and clarification,” the newspaper said. It will start an investigation into how the mistaken information was published, the newspaper said."
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"The Riyadh-based newspaper Al-Eqtisadiah retracted a story saying Saudi Arabia is planning to sell almost half of Saudi Arabian Oil Co., the world’s largest oil company known as Aramco.
The stake that the government plans to sell and the time frame of the sale are different than what was mentioned in the story published on Saturday, al-Eqtisadiah said in a statement published Sunday. The story, which cited an unidentified government official, contained a number of other errors, the newspaper said.
“Al-Eqtisadiah apologises to its readers, and wishes that all media outlets that cited the story to publish this apology and clarification,” the newspaper said. It will start an investigation into how the mistaken information was published, the newspaper said."
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Why Barclays CEO Staley Opted for War When Dimon Chose Surrender - Bloomberg
Why Barclays CEO Staley Opted for War When Dimon Chose Surrender - Bloomberg:
"When the U.S. was seeking a record-breaking payment from JPMorgan Chase & Co. for the sale of toxic mortgage-backed securities three years ago, Jamie Dimon went to Washington to sit down with Eric Holder, then the attorney general. Dimon, normally an outspoken critic of regulatory overreach, sought to make peace.
“I didn’t go pounding the table,” the JPMorgan chief executive officer recalled later in a Bloomberg Television interview. “I said, Eric, I’m here to surrender. You’re my judge and my jury. I have no choice.” A month later, the two sides reached a $13 billion settlement."
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"When the U.S. was seeking a record-breaking payment from JPMorgan Chase & Co. for the sale of toxic mortgage-backed securities three years ago, Jamie Dimon went to Washington to sit down with Eric Holder, then the attorney general. Dimon, normally an outspoken critic of regulatory overreach, sought to make peace.
“I didn’t go pounding the table,” the JPMorgan chief executive officer recalled later in a Bloomberg Television interview. “I said, Eric, I’m here to surrender. You’re my judge and my jury. I have no choice.” A month later, the two sides reached a $13 billion settlement."
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Expat Fee, Subsidy Cuts: What’s in Saudi Arabia’s Fiscal Balance Plan? - Bloomberg
Expat Fee, Subsidy Cuts: What’s in Saudi Arabia’s Fiscal Balance Plan? - Bloomberg:
"Saudi Arabia followed a historic budget announcement last week with an 84-page document outlining how the Arab world’s largest economy plans to balance its budget by 2020. The document includes plans to curtail capital spending, raise new revenue and stimulate the private sector.
Following are highlights of what caught our attention:
Capital Expenditure:
Authorities reviewed projects with a total cost of 490 billion riyals ($131 billion) under the five civilian ministries with the highest capital spending. Of the total, 270 billion riyals had already been spent and the revision identified potential savings of 100 billion riyals.
An investor guide to the highlights of Saudi Arabia’s budget
The next phase will see the government examining capital spending at 13 entities with a total cost of about 1.18 trillion riyals. To control the costs of projects, the government is creating a strategic procurement unit.
Subsidy Reforms:
Additional subsidy cuts will involve a steady change in energy and water prices from 2017 to 2020. This is expected to help the kingdom save 209 billion riyals annually by 2020.
The government is looking to increase prices of local retail fuel by linking them to benchmark oil prices or to the average of gasoline and diesel fuel prices on the international market. Prices will change according to fluctuations in the international market and they will be revised periodically.
"
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"Saudi Arabia followed a historic budget announcement last week with an 84-page document outlining how the Arab world’s largest economy plans to balance its budget by 2020. The document includes plans to curtail capital spending, raise new revenue and stimulate the private sector.
Following are highlights of what caught our attention:
Capital Expenditure:
Authorities reviewed projects with a total cost of 490 billion riyals ($131 billion) under the five civilian ministries with the highest capital spending. Of the total, 270 billion riyals had already been spent and the revision identified potential savings of 100 billion riyals.
An investor guide to the highlights of Saudi Arabia’s budget
The next phase will see the government examining capital spending at 13 entities with a total cost of about 1.18 trillion riyals. To control the costs of projects, the government is creating a strategic procurement unit.
Subsidy Reforms:
Additional subsidy cuts will involve a steady change in energy and water prices from 2017 to 2020. This is expected to help the kingdom save 209 billion riyals annually by 2020.
The government is looking to increase prices of local retail fuel by linking them to benchmark oil prices or to the average of gasoline and diesel fuel prices on the international market. Prices will change according to fluctuations in the international market and they will be revised periodically.
"
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UAE's Etisalat, Saudi's Mobily discuss new alliance after ending management deal | Reuters
UAE's Etisalat, Saudi's Mobily discuss new alliance after ending management deal | Reuters:
"United Arab Emirates telecommunications conglomerate Etisalat said on Sunday that its management agreement with Saudi Arabian affiliate Mobily had expired and the companies were working on a new arrangement.
Etisalat, which owns 27.4 percent of Mobily, helped to found the Saudi company more than a decade ago and has played a major role in its management.
But Mobily has been hit by controversy in the last couple of years after it restated 27 months of earnings to March 31, 2015, citing accounting errors due to premature booking of revenue from a promotional campaign. The restatement slashed Mobily’s total profits by 3.63 billion riyals ($968 million)."
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"United Arab Emirates telecommunications conglomerate Etisalat said on Sunday that its management agreement with Saudi Arabian affiliate Mobily had expired and the companies were working on a new arrangement.
Etisalat, which owns 27.4 percent of Mobily, helped to found the Saudi company more than a decade ago and has played a major role in its management.
But Mobily has been hit by controversy in the last couple of years after it restated 27 months of earnings to March 31, 2015, citing accounting errors due to premature booking of revenue from a promotional campaign. The restatement slashed Mobily’s total profits by 3.63 billion riyals ($968 million)."
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MIDEAST STOCKS-State budget boosts Saudi, rest of Gulf sluggish; Egypt drops | Reuters
MIDEAST STOCKS-State budget boosts Saudi, rest of Gulf sluggish; Egypt drops | Reuters:
"Saudi Arabia's stock market rose sharply on Sunday in response to the release of the 2017 state budget, which includes an increase in government spending, while other major Gulf bourses were sluggish and Egypt retreated on profit-taking.
The Saudi stock index added 1.5 percent to 7,191 points, nearing technical resistance on this year's peak of 7,235 points, hit earlier this month. Trading volume rose to its highest in over a week.
Financial analysts generally welcomed the budget as balancing the need to continue cutting Saudi Arabia's fiscal deficit with support for economic growth. But many said it would not avert a further slowdown next year from the 1.4 percent gross domestic product growth in 2016."
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"Saudi Arabia's stock market rose sharply on Sunday in response to the release of the 2017 state budget, which includes an increase in government spending, while other major Gulf bourses were sluggish and Egypt retreated on profit-taking.
The Saudi stock index added 1.5 percent to 7,191 points, nearing technical resistance on this year's peak of 7,235 points, hit earlier this month. Trading volume rose to its highest in over a week.
Financial analysts generally welcomed the budget as balancing the need to continue cutting Saudi Arabia's fiscal deficit with support for economic growth. But many said it would not avert a further slowdown next year from the 1.4 percent gross domestic product growth in 2016."
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Record Saudi Bond Sale Was a Start. Here Is What’s Next - Bloomberg
Record Saudi Bond Sale Was a Start. Here Is What’s Next - Bloomberg:
"Saudi Arabia laid out key elements of its borrowing plans for 2017 as the kingdom seeks to capitalize on investor demand for its debut sale this year to finance the budget deficit.
The world’s biggest oil exporter plans to raise between $10 billion and $15 billion from international bond markets, Mohammad Al Tuwaijri, secretary-general of the Finance Committee at the Royal Court, told Saudi-owned Al Arabiya television. Authorities will sell about 70 billion riyals ($18.7 billion) locally, he said.
Officials from Saudi Arabia have met with banks to discuss the potential sale of Shariah-compliant bonds in the first quarter, according to five people familiar with the matter. Saudi Arabia raised $17.5 billion in October in the biggest ever emerging-market bond sale, attracting $67 billion of bids, people familiar with the sale told Bloomberg at the time."
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"Saudi Arabia laid out key elements of its borrowing plans for 2017 as the kingdom seeks to capitalize on investor demand for its debut sale this year to finance the budget deficit.
The world’s biggest oil exporter plans to raise between $10 billion and $15 billion from international bond markets, Mohammad Al Tuwaijri, secretary-general of the Finance Committee at the Royal Court, told Saudi-owned Al Arabiya television. Authorities will sell about 70 billion riyals ($18.7 billion) locally, he said.
Officials from Saudi Arabia have met with banks to discuss the potential sale of Shariah-compliant bonds in the first quarter, according to five people familiar with the matter. Saudi Arabia raised $17.5 billion in October in the biggest ever emerging-market bond sale, attracting $67 billion of bids, people familiar with the sale told Bloomberg at the time."
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Saudi's Mobily and UAE's Etisalat agreement ends-statement | Reuters
Saudi's Mobily and UAE's Etisalat agreement ends-statement | Reuters:
"Saudi Arabia's Etihad Etisalat (Mobily) said on Sunday it has discontinued its management agreement with its founder, Emirates Telecommunications, also known as Etisalat.
The agreement expired on Friday "and Mobily and Etisalat Group agreed on the non-renewal of the same", Mobily said in a bourse statement. "
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"Saudi Arabia's Etihad Etisalat (Mobily) said on Sunday it has discontinued its management agreement with its founder, Emirates Telecommunications, also known as Etisalat.
The agreement expired on Friday "and Mobily and Etisalat Group agreed on the non-renewal of the same", Mobily said in a bourse statement. "
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MIDEAST STOCKS-Saudi surges on budget, Saudi Electricity leaps | Reuters
MIDEAST STOCKS-Saudi surges on budget, Saudi Electricity leaps | Reuters:
"Saudi Arabia's stock market surged in early trade on Sunday in response to the release of the 2017 state budget, which includes an increase in government spending next year to support flagging economic growth.
The Saudi stock index added 1.1 percent to 7,167 points in the first 15 minutes, nearing technical resistance on this year's peak of 7,235 points, hit earlier this month.
Utility Saudi Electricity jumped 6.6 percent after the government said in the budget it would raise domestic fuel and electricity prices by unspecified margins later this year."
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"Saudi Arabia's stock market surged in early trade on Sunday in response to the release of the 2017 state budget, which includes an increase in government spending next year to support flagging economic growth.
The Saudi stock index added 1.1 percent to 7,167 points in the first 15 minutes, nearing technical resistance on this year's peak of 7,235 points, hit earlier this month.
Utility Saudi Electricity jumped 6.6 percent after the government said in the budget it would raise domestic fuel and electricity prices by unspecified margins later this year."
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Online retail to shake up UAE’s bricks-and-mortar sector | The National
Online retail to shake up UAE’s bricks-and-mortar sector | The National:
"Online retailers could be a new threat to the UAE’s bricks-and-mortar retailers next year. Retailers were under pressure this year from a sluggish economy and global macro conditions that made the UAE an expensive place to shop for many international visitors. The hope that 2017 may be an easier year is complicated by the rise of home-grown online retail channels that further threaten the status quo.
The trend crystallised at a press conference in Dubai on the noon-hour of November 13.
That is when Mohamed Alabbar, the billionaire chairman of Emaar Properties, said that next month a group of investors would launch Noon.com, an online retailer carrying 20 million products. To give that number some relevance, your typical mall carries about 1.5 million items, and Amazon, the world’s biggest online retailer, carries about 20 million products."
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"Online retailers could be a new threat to the UAE’s bricks-and-mortar retailers next year. Retailers were under pressure this year from a sluggish economy and global macro conditions that made the UAE an expensive place to shop for many international visitors. The hope that 2017 may be an easier year is complicated by the rise of home-grown online retail channels that further threaten the status quo.
The trend crystallised at a press conference in Dubai on the noon-hour of November 13.
That is when Mohamed Alabbar, the billionaire chairman of Emaar Properties, said that next month a group of investors would launch Noon.com, an online retailer carrying 20 million products. To give that number some relevance, your typical mall carries about 1.5 million items, and Amazon, the world’s biggest online retailer, carries about 20 million products."
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Sellers dominate UAE markets as volume evaporates | GulfNews.com
Sellers dominate UAE markets as volume evaporates | GulfNews.com:
"Last week the Dubai Financial Market General Index (DFMGI) was down by 37.13 or 1.04 per cent to close at 3,517.33. There were 16 advancing issues and 20 declining, while volume fell to a seven-week low. To date the index is up 14.8 per cent for 2016.
The DFMGI continued to pull back off the new 2016 high of 3,658.61 hit two weeks ago as it closed below the prior week’s low on a weekly basis. A bullish breakout was triggered on the approach to that high as the index was moving out of a large rectangle consolidation pattern. So far though the breakout shows signs of failure that should lead to a deeper retracement than what has been seen so far.
A decline below last week’s low of 3,490.66 signals a continuation of the decline. The first support target has been around the 38.2 per cent Fibonacci retracement at 3,479.85, not too far below last week’s low. Also, the 21-day exponential moving average (ema) is at 3,475.40 and it too represents a potential support level. This provides a clear tight range from 3,479.85 to 3,475.40 as the next target. Therefore, a decisive drop and daily close below that range increases the likelihood that the DFMGI could fall further before seeing much of a bounce or recovery. Otherwise, support would be seen in this price range leading to at least a stall if not a bounce."
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"Last week the Dubai Financial Market General Index (DFMGI) was down by 37.13 or 1.04 per cent to close at 3,517.33. There were 16 advancing issues and 20 declining, while volume fell to a seven-week low. To date the index is up 14.8 per cent for 2016.
The DFMGI continued to pull back off the new 2016 high of 3,658.61 hit two weeks ago as it closed below the prior week’s low on a weekly basis. A bullish breakout was triggered on the approach to that high as the index was moving out of a large rectangle consolidation pattern. So far though the breakout shows signs of failure that should lead to a deeper retracement than what has been seen so far.
A decline below last week’s low of 3,490.66 signals a continuation of the decline. The first support target has been around the 38.2 per cent Fibonacci retracement at 3,479.85, not too far below last week’s low. Also, the 21-day exponential moving average (ema) is at 3,475.40 and it too represents a potential support level. This provides a clear tight range from 3,479.85 to 3,475.40 as the next target. Therefore, a decisive drop and daily close below that range increases the likelihood that the DFMGI could fall further before seeing much of a bounce or recovery. Otherwise, support would be seen in this price range leading to at least a stall if not a bounce."
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Saudi Arabia Planning to Sell 49% of Aramco, Eqtisadiah Says - Bloomberg
Saudi Arabia Planning to Sell 49% of Aramco, Eqtisadiah Says - Bloomberg:
"Saudi Arabia is planning to sell almost half of Saudi Arabian Oil Co., the world’s largest oil company, al-Eqtisadiah reported.
A 49 percent stake will be sold within 10 years, according to the Riyadh-based newspaper, which cites an unidentified senior government official. Deputy Crown Prince Mohammed bin Salman said in April that an initial public offering is planned for 2018, or even a year earlier, with the country planning to sell less than 5 percent.
Saudi Arabia, under pressure from lower crude prices, has been planning the share sale as part of an effort to generate revenue and reform its economy. The government hopes to raise about $100 billion from the IPO of its flagship asset. Saudi Arabia’s Public Investment Fund will use the proceeds, and eventually control more than $2 trillion and help wean the kingdom off oil."
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"Saudi Arabia is planning to sell almost half of Saudi Arabian Oil Co., the world’s largest oil company, al-Eqtisadiah reported.
A 49 percent stake will be sold within 10 years, according to the Riyadh-based newspaper, which cites an unidentified senior government official. Deputy Crown Prince Mohammed bin Salman said in April that an initial public offering is planned for 2018, or even a year earlier, with the country planning to sell less than 5 percent.
Saudi Arabia, under pressure from lower crude prices, has been planning the share sale as part of an effort to generate revenue and reform its economy. The government hopes to raise about $100 billion from the IPO of its flagship asset. Saudi Arabia’s Public Investment Fund will use the proceeds, and eventually control more than $2 trillion and help wean the kingdom off oil."
'via Blog this'
Sovereign-Wealth Funds Threatened by Government Spending - WSJ
Sovereign-Wealth Funds Threatened by Government Spending - WSJ:
"Kazakh President Nursultan Nazarbayev says the country’s sovereign-wealth fund has the money to help wean the central Asian nation off its dependence on oil revenues and build an economy of entrepreneurs.
The 76-year-old president, who led Kazakhstan to independence from the Soviet Union 25 years ago, earlier this year told visitors to the new capital city he built that “Kazakhs have never lived as well as they live today” and the nation’s savings help maintain living standards.
But since Mr. Nazarbayev created the so-called National Fund in 2000, his government has withdrawn $83 billion from it, according to a Wall Street Journal analysis of data from Kazakhstan’s central bank that was corroborated by the International Monetary Fund. The National Fund has a balance of $61 billion as of Nov. 30, down 21% from its peak in August 2014."
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"Kazakh President Nursultan Nazarbayev says the country’s sovereign-wealth fund has the money to help wean the central Asian nation off its dependence on oil revenues and build an economy of entrepreneurs.
The 76-year-old president, who led Kazakhstan to independence from the Soviet Union 25 years ago, earlier this year told visitors to the new capital city he built that “Kazakhs have never lived as well as they live today” and the nation’s savings help maintain living standards.
But since Mr. Nazarbayev created the so-called National Fund in 2000, his government has withdrawn $83 billion from it, according to a Wall Street Journal analysis of data from Kazakhstan’s central bank that was corroborated by the International Monetary Fund. The National Fund has a balance of $61 billion as of Nov. 30, down 21% from its peak in August 2014."
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Chinese firms face competition to maintain role in developing Iranian oilfields | Reuters
Chinese firms face competition to maintain role in developing Iranian oilfields | Reuters:
"Iran plans to ask international oil companies to bid for the second phase of development of its Yadavaran and North Azadegan oilfields, a senior official said on Saturday.
That means Chinese firms China National Petroleum Corp (CNPC) [CNPET.UL] and Sinopec (0386.HK), which have played a leading role in developing the fields until now, will have to compete with other firms if they want to maintain that position.
"CNPC would like to extend its North Azadegan contract, but we have announced that ...they should take part in the bidding for a new contract," Gholamreza Manouchehri, deputy head of the National Iranian Oil Company (NIOC), was quoted as saying by state news agency IRNA."
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"Iran plans to ask international oil companies to bid for the second phase of development of its Yadavaran and North Azadegan oilfields, a senior official said on Saturday.
That means Chinese firms China National Petroleum Corp (CNPC) [CNPET.UL] and Sinopec (0386.HK), which have played a leading role in developing the fields until now, will have to compete with other firms if they want to maintain that position.
"CNPC would like to extend its North Azadegan contract, but we have announced that ...they should take part in the bidding for a new contract," Gholamreza Manouchehri, deputy head of the National Iranian Oil Company (NIOC), was quoted as saying by state news agency IRNA."
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