Saudi Arabia plans bond deal to help finance budget deficit:
"Saudi Arabia plans to follow its record-breaking debut on global debt markets with an Islamic bond issue in a sale that could come as early as February.
The sharia-compliant sukuk will form part of a pipeline of bond sales to finance the kingdom’s budget deficit and invest in economic diversification away from oil and is likely to appeal to regional investors in the Gulf.
Last year, Saudi Arabia set a record for developing countries with its first sovereign bond sale, attracting $67bn in investor bids for a $17.5bn issue."
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Wednesday, 11 January 2017
Saudi capital flight ‘overshadowing’ reform efforts – BAML
Saudi capital flight ‘overshadowing’ reform efforts – BAML:
"Capital outflows continue to “overshadow” efforts at economic reform in Saudi Arabia, according to analysis from Bank of America Merrill Lynch.
Recent data on Saudi Arabia’s balance of payments suggest financial outflows accelerated compared to the same period last year, when adjusting for the issue of a $10bn syndicated loan.
Outflows put further pressure on the riyal, which is pegged to the US dollar but has come under pressure from investors betting that the kingdom will be forced to revalue it."
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"Capital outflows continue to “overshadow” efforts at economic reform in Saudi Arabia, according to analysis from Bank of America Merrill Lynch.
Recent data on Saudi Arabia’s balance of payments suggest financial outflows accelerated compared to the same period last year, when adjusting for the issue of a $10bn syndicated loan.
Outflows put further pressure on the riyal, which is pegged to the US dollar but has come under pressure from investors betting that the kingdom will be forced to revalue it."
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US crude inventories rise far more than forecast
US crude inventories rise far more than forecast:
"US crude oil inventories climbed last week by a far larger margin than Wall Street anticipated, underscoring worries that the higher oil price will prompt suppliers to ramp up drilling.
Stocks were up by 4.1m barrels last week, according to the US Department of Energy. That compares with analysts’ estimate of 930,000.
Inventories of gasoline, which oil is refined into, rose by 5m barrels, also eclipsing expectations for a build of 2.1m."
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"US crude oil inventories climbed last week by a far larger margin than Wall Street anticipated, underscoring worries that the higher oil price will prompt suppliers to ramp up drilling.
Stocks were up by 4.1m barrels last week, according to the US Department of Energy. That compares with analysts’ estimate of 930,000.
Inventories of gasoline, which oil is refined into, rose by 5m barrels, also eclipsing expectations for a build of 2.1m."
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Passenger demand increases steeply for Middle Eastern airlines | The National
Passenger demand increases steeply for Middle Eastern airlines | The National:
"Middle Eastern carriers reported the steepest rise in passenger demand globally in November despite a slowdown on routes from the region to Asia and Europe.
During November, demand increased by 12.2 per cent year-on-year for Middle Eastern carriers, up from 5.9 per cent in October, according to the International Air Transport Association (Iata).
Load factor rose by 0.3 percentage points to 68.7 per cent although some key routes showed a slowdown."
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"Middle Eastern carriers reported the steepest rise in passenger demand globally in November despite a slowdown on routes from the region to Asia and Europe.
During November, demand increased by 12.2 per cent year-on-year for Middle Eastern carriers, up from 5.9 per cent in October, according to the International Air Transport Association (Iata).
Load factor rose by 0.3 percentage points to 68.7 per cent although some key routes showed a slowdown."
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Etihad Airways said to seek $2.6b for Boeing, Airbus jets | GulfNews.com
Etihad Airways said to seek $2.6b for Boeing, Airbus jets | GulfNews.com:
"Abu Dhabi-based carrier Etihad Airways PJSC is in talks with banks to raise about $2.6 billion (Dh9.5 billion) in loans to finance aircraft deliveries, according to three people familiar with the matter.
The airline is seeking to raise $2 billion in 12-year loans for 10 Boeing Co. Dreamliner aircraft and about $600 million in financing for two Airbus Group SE A380 superjumbos, said the people, asking not to be identified because the discussions are private.
Separately, low-cost carrier flydubai is in early talks with Emirates NBD PJSC, Noor Bank PJSC and Union National Bank PJSC for a club loan “to supports its infrastructure requirements”, a spokeswoman for the airline said, without detailing how much it plans to raise. The carrier, which currently operates out of Dubai International Airport and Al Maktoum International Airport, is due to move all of its operations to Al Maktoum International this year.
"
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"Abu Dhabi-based carrier Etihad Airways PJSC is in talks with banks to raise about $2.6 billion (Dh9.5 billion) in loans to finance aircraft deliveries, according to three people familiar with the matter.
The airline is seeking to raise $2 billion in 12-year loans for 10 Boeing Co. Dreamliner aircraft and about $600 million in financing for two Airbus Group SE A380 superjumbos, said the people, asking not to be identified because the discussions are private.
Separately, low-cost carrier flydubai is in early talks with Emirates NBD PJSC, Noor Bank PJSC and Union National Bank PJSC for a club loan “to supports its infrastructure requirements”, a spokeswoman for the airline said, without detailing how much it plans to raise. The carrier, which currently operates out of Dubai International Airport and Al Maktoum International Airport, is due to move all of its operations to Al Maktoum International this year.
"
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Emirates challenging us for future A380 version: Airbus chief | GulfNews.com
Emirates challenging us for future A380 version: Airbus chief | GulfNews.com:
"As Emirates gives up on Airbus’ future version of the A380 aircraft, or the A380neo (new engine option) as it’s known as, Airbus chief says its biggest superjumbo customer continues to challenge it for an upgrade of the double-decker.
“We have studied the possible evolution of the A380neo aircraft and we came to the conclusion that the time was not yet there to launch it. To do that we would need, of course, to inject some development cost and we would need to have a better environment from the market perspective, and also clear return on investment.
“Regarding Emirates, what I can say is that I am very grateful that they are such a strong supporter of the A380 and that they are challenging us to say ‘we want to buy more, we want the new version, we will be your big customer’. So I believe that this is also a key to the future success of the A380 and future versions of this aircraft,” Fabrice Brégier, President of Airbus Commercial Aircraft and Chief Operating Officer of Airbus, told Gulf News in a webcast on Wednesday during its commercial aircraft media briefing."
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"As Emirates gives up on Airbus’ future version of the A380 aircraft, or the A380neo (new engine option) as it’s known as, Airbus chief says its biggest superjumbo customer continues to challenge it for an upgrade of the double-decker.
“We have studied the possible evolution of the A380neo aircraft and we came to the conclusion that the time was not yet there to launch it. To do that we would need, of course, to inject some development cost and we would need to have a better environment from the market perspective, and also clear return on investment.
“Regarding Emirates, what I can say is that I am very grateful that they are such a strong supporter of the A380 and that they are challenging us to say ‘we want to buy more, we want the new version, we will be your big customer’. So I believe that this is also a key to the future success of the A380 and future versions of this aircraft,” Fabrice Brégier, President of Airbus Commercial Aircraft and Chief Operating Officer of Airbus, told Gulf News in a webcast on Wednesday during its commercial aircraft media briefing."
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Weak growth outlook in GCC to keep government ratings under pressure | GulfNews.com
Weak growth outlook in GCC to keep government ratings under pressure | GulfNews.com:
"Weakening economic activity resulting in low gross domestic product (GDP) growth across the Gulf Cooperation Council (GCC) is expected to apply further downward pressure on sovereign credit ratings of many countries, according to Standard & Poor’s.
Available data for 2016 show a weakening trend in GCC economic activity, reflecting the impact of low oil prices and the resulting fiscal consolidation and reduced banking sector liquidity.
“We expect average GCC GDP growth to slow to about 2 per cent in 2016, compared with closer to 4 per cent in 2015 and to remain around these relatively weak growth rates in 2017,” said S&P credit analyst Trevor Cullinan,"
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"Weakening economic activity resulting in low gross domestic product (GDP) growth across the Gulf Cooperation Council (GCC) is expected to apply further downward pressure on sovereign credit ratings of many countries, according to Standard & Poor’s.
Available data for 2016 show a weakening trend in GCC economic activity, reflecting the impact of low oil prices and the resulting fiscal consolidation and reduced banking sector liquidity.
“We expect average GCC GDP growth to slow to about 2 per cent in 2016, compared with closer to 4 per cent in 2015 and to remain around these relatively weak growth rates in 2017,” said S&P credit analyst Trevor Cullinan,"
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The Man Who Helped Saudi Arabia Raise $17.5 Billion Is Leaving - Bloomberg
The Man Who Helped Saudi Arabia Raise $17.5 Billion Is Leaving - Bloomberg:
"The head of Saudi Arabia’s debt management office, who oversaw the kingdom’s $17.5 billion sovereign bond sale in October, is leaving to rejoin HSBC Holding Plc’s local unit, according to people with knowledge of the matter.
Fahad Al Saif, who was seconded to the Ministry of Finance in May, plans to return to Saudi British Bank as head of global banking and markets, the people said, asking not to be identified as the negotiations are private. Al Saif will also rejoin the board of HSBC Saudi Arabia Ltd., the British lender’s local investment banking unit, they said.
The Saudi government hired Al Saif to establish the debt management office as part of preparations for its debut international bond sale, which was a record for emerging markets. He was among government officials who met with investors on the roadshow for the debt sale. The kingdom is “very likely” to tap debt markets later this quarter with an Islamic bond, Finance Minister Mohammed Al-Jadaan told Bloomberg in December."
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"The head of Saudi Arabia’s debt management office, who oversaw the kingdom’s $17.5 billion sovereign bond sale in October, is leaving to rejoin HSBC Holding Plc’s local unit, according to people with knowledge of the matter.
Fahad Al Saif, who was seconded to the Ministry of Finance in May, plans to return to Saudi British Bank as head of global banking and markets, the people said, asking not to be identified as the negotiations are private. Al Saif will also rejoin the board of HSBC Saudi Arabia Ltd., the British lender’s local investment banking unit, they said.
The Saudi government hired Al Saif to establish the debt management office as part of preparations for its debut international bond sale, which was a record for emerging markets. He was among government officials who met with investors on the roadshow for the debt sale. The kingdom is “very likely” to tap debt markets later this quarter with an Islamic bond, Finance Minister Mohammed Al-Jadaan told Bloomberg in December."
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Qatar Sovereign Wealth Fund's $335 Global Empire - Bloomberg
Qatar Sovereign Wealth Fund's $335 Global Empire - Bloomberg:
"Qatar is regaining its appetite for deals. In the past two months alone, the world’s richest country per capita invested in Turkey’s biggest poultry producer, Russian oil giant Rosneft PJSC, and U.K. gas company National Grid Plc.
The investments have been made through the Qatar Investment Authority, created in 2005 to handle the country’s windfall from liquefied natural gas sales, of which it is the world’s biggest exporter.
Since then, the country - with a population smaller than Houston - has amassed $335 billion in assets around the globe, making its sovereign wealth fund the 14th largest in the world, according to the Sovereign Wealth Fund Institute."
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"Qatar is regaining its appetite for deals. In the past two months alone, the world’s richest country per capita invested in Turkey’s biggest poultry producer, Russian oil giant Rosneft PJSC, and U.K. gas company National Grid Plc.
The investments have been made through the Qatar Investment Authority, created in 2005 to handle the country’s windfall from liquefied natural gas sales, of which it is the world’s biggest exporter.
Since then, the country - with a population smaller than Houston - has amassed $335 billion in assets around the globe, making its sovereign wealth fund the 14th largest in the world, according to the Sovereign Wealth Fund Institute."
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Oil rises ahead of U.S. stock data as Saudi trims Asian exports | Reuters
Oil rises ahead of U.S. stock data as Saudi trims Asian exports | Reuters:
"Oil prices rose for the first time in three days on Wednesday ahead of the U.S. weekly inventory data, following news of Saudi supply cuts to Asia.
But, traders said persistent doubt over output reductions and signs of rising shipments from other producers kept gains in check.
"We expect some bullish OPEC rhetoric to ramp up in an attempt to neutralize the bearish vibes that have emanated from the recent production increases indicated out of Libya, Iran, Iraq and Nigeria," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note."
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"Oil prices rose for the first time in three days on Wednesday ahead of the U.S. weekly inventory data, following news of Saudi supply cuts to Asia.
But, traders said persistent doubt over output reductions and signs of rising shipments from other producers kept gains in check.
"We expect some bullish OPEC rhetoric to ramp up in an attempt to neutralize the bearish vibes that have emanated from the recent production increases indicated out of Libya, Iran, Iraq and Nigeria," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note."
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Hedge funds: fully invested in oil or not? Kemp | Reuters
Hedge funds: fully invested in oil or not? Kemp | Reuters:
"Hedge funds amassed a record bullish position in crude oil futures and options by the end of last year, which helped drive crude prices sharply higher in the final six weeks of 2016.
Fund managers had accumulated a net long position in the three main futures and options contracts linked to Brent and West Texas Intermediate (WTI) equivalent to 796 million barrels by Dec. 27 (tmsnrt.rs/2jkKeOm).
The net position was almost double the 422 million barrels fund managers held on Nov. 15, according to an analysis of position data published by regulators and exchanges."
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"Hedge funds amassed a record bullish position in crude oil futures and options by the end of last year, which helped drive crude prices sharply higher in the final six weeks of 2016.
Fund managers had accumulated a net long position in the three main futures and options contracts linked to Brent and West Texas Intermediate (WTI) equivalent to 796 million barrels by Dec. 27 (tmsnrt.rs/2jkKeOm).
The net position was almost double the 422 million barrels fund managers held on Nov. 15, according to an analysis of position data published by regulators and exchanges."
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MIDEAST STOCKS-Saudi declines on oil, Dubai stalls near 15-month high | Reuters
MIDEAST STOCKS-Saudi declines on oil, Dubai stalls near 15-month high | Reuters:
"Saudi Arabia's stock market declined for a fourth straight day on Wednesday after oil prices fell further, but other Gulf bourses largely moved sideways and Dubai held near a 15-month high.
The Saudi index pulled back 1.6 percent to 6,895 points, falling below technical support at the mid-December low of 7,002 points. Another straight close below support would confirm a break, triggering a double top formed by the December and January peaks and pointing down to around 6,770 points.
The market had rebounded more than 30 percent from its October lows so analysts said profit-taking pressure was inevitable."
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"Saudi Arabia's stock market declined for a fourth straight day on Wednesday after oil prices fell further, but other Gulf bourses largely moved sideways and Dubai held near a 15-month high.
The Saudi index pulled back 1.6 percent to 6,895 points, falling below technical support at the mid-December low of 7,002 points. Another straight close below support would confirm a break, triggering a double top formed by the December and January peaks and pointing down to around 6,770 points.
The market had rebounded more than 30 percent from its October lows so analysts said profit-taking pressure was inevitable."
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