Rolls-Royce to pay £671m over bribery claims | Business | The Guardian:
"Rolls-Royce plc, Britain’s leading manufacturing multinational, is set to pay £671m in penalties following long-running investigations into claims it paid bribes to land export contracts.
The voluntary payments will mean the company will avoid being prosecuted by anti-corruption investigators, although individual executives may still be charged.
In deals announced on Monday, Rolls-Royce said it would pay £497m to the UK Serious Fraud Office (SFO), subject to approval by the high court. It will also pay $169m (£140m) in penalties to the US Department of Justice and $25m to the Brazil authorities."
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Monday, 16 January 2017
Saudi Arabia seeks $30bn-$50bn solar and wind energy investment
Saudi Arabia seeks $30bn-$50bn solar and wind energy investment:
"Saudi Arabia will “within weeks” start issuing tenders for a big solar and wind power programme that envisages investment worth $30bn-$50bn by 2030, the country’s oil minister said on Monday. The oil-rich kingdom was also in the early stages of feasibility and design proposals for the country’s first commercial nuclear power stations, with capacity of 2.8 gigawatts, added Khalid al-Falih. “There will be significant investment in nuclear energy,” he said at a renewable energy event in Abu Dhabi. Mr Falih gave no further details on the programme’s timeframe and cost."
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"Saudi Arabia will “within weeks” start issuing tenders for a big solar and wind power programme that envisages investment worth $30bn-$50bn by 2030, the country’s oil minister said on Monday. The oil-rich kingdom was also in the early stages of feasibility and design proposals for the country’s first commercial nuclear power stations, with capacity of 2.8 gigawatts, added Khalid al-Falih. “There will be significant investment in nuclear energy,” he said at a renewable energy event in Abu Dhabi. Mr Falih gave no further details on the programme’s timeframe and cost."
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GCC deficits set to narrow amid higher revenue | The National
GCC deficits set to narrow amid higher revenue | The National:
"GCC governments are likely to face rising levels of public debt this year, despite higher oil prices, according to Moody’s.
The ratings agency’s 2017 outlook for GCC governments says that although economies will experience an average increase in revenue for the first time in three years – 8.5 per cent this year and 13.8 per cent in 2018 – most will continue to record fiscal deficits as spending pressures remain.
The report said that the region’s governments "will continue to face headwinds from subdued economic growth, increasing fiscal and structural reform fatigue, and persistent oil price volatility".
"
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"GCC governments are likely to face rising levels of public debt this year, despite higher oil prices, according to Moody’s.
The ratings agency’s 2017 outlook for GCC governments says that although economies will experience an average increase in revenue for the first time in three years – 8.5 per cent this year and 13.8 per cent in 2018 – most will continue to record fiscal deficits as spending pressures remain.
The report said that the region’s governments "will continue to face headwinds from subdued economic growth, increasing fiscal and structural reform fatigue, and persistent oil price volatility".
"
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IMF Slashes Saudi Arabia Growth Forecast on Lower Oil Output - Bloomberg
IMF Slashes Saudi Arabia Growth Forecast on Lower Oil Output - Bloomberg:
"The International Monetary Fund cut its growth outlook for Saudi Arabia on lower oil production, underscoring the challenges facing the kingdom as it seeks to overhaul its economy. Gross domestic product will expand 0.4 percent in 2017, the lender said in its World Economic Outlook report update on Monday, citing the impact of the recent deal by the Organization of the Petroleum Exporting Countries to reduce output. It compares with the fund’s October prediction of 2 percent, and a median estimate of 0.9 percent in a Bloomberg survey. The forecast reflects cuts in government spending as well as the impact of lower oil production, Gian Maria Milesi-Ferretti, deputy director of the IMF’s research department, told reporters on Monday. “There is a big adjustment in spending downwards,” he said. “There is an adjustment in taxes upwards, and as a result non-oil growth is not going to be as good as it was during periods of strong oil prices.”"
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"The International Monetary Fund cut its growth outlook for Saudi Arabia on lower oil production, underscoring the challenges facing the kingdom as it seeks to overhaul its economy. Gross domestic product will expand 0.4 percent in 2017, the lender said in its World Economic Outlook report update on Monday, citing the impact of the recent deal by the Organization of the Petroleum Exporting Countries to reduce output. It compares with the fund’s October prediction of 2 percent, and a median estimate of 0.9 percent in a Bloomberg survey. The forecast reflects cuts in government spending as well as the impact of lower oil production, Gian Maria Milesi-Ferretti, deputy director of the IMF’s research department, told reporters on Monday. “There is a big adjustment in spending downwards,” he said. “There is an adjustment in taxes upwards, and as a result non-oil growth is not going to be as good as it was during periods of strong oil prices.”"
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Oil Trades Near $52 as Saudis See No Need to Extend Supply Cuts - Bloomberg
Oil Trades Near $52 as Saudis See No Need to Extend Supply Cuts - Bloomberg:
"Oil traded near $52 a barrel as Saudi Arabia’s energy minister said it was unlikely OPEC would extend its supply cuts beyond June and the U.S. drilling expansion paused.
Futures were little changed in New York after losing 3 percent last week. Rigs targeting crude in the U.S. fell for the first time in 11 weeks, according to data from Baker Hughes Inc. OPEC probably won’t need to prolong output cuts beyond the agreed six-month term given the level of compliance with the reductions and the outlook for an increase in global consumption, Saudi Minister of Energy and Industry Khalid Al-Falih said."
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"Oil traded near $52 a barrel as Saudi Arabia’s energy minister said it was unlikely OPEC would extend its supply cuts beyond June and the U.S. drilling expansion paused.
Futures were little changed in New York after losing 3 percent last week. Rigs targeting crude in the U.S. fell for the first time in 11 weeks, according to data from Baker Hughes Inc. OPEC probably won’t need to prolong output cuts beyond the agreed six-month term given the level of compliance with the reductions and the outlook for an increase in global consumption, Saudi Minister of Energy and Industry Khalid Al-Falih said."
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Dubai's Majid Al Futtaim in talks with banks for revolving loan -sources | Reuters
Dubai's Majid Al Futtaim in talks with banks for revolving loan -sources | Reuters:
"Dubai's Majid Al Futtaim, a holding company which owns and operates shopping centres in the Middle East and North Africa, is in talks with banks to obtain a revolving credit facility likely to be in excess of $1.5 billion, sources familiar with the situation said on Monday. The company is self-coordinating the loan, meaning it has not appointed a bank to arrange the fund-raising exercise, said the sources. The loan would refinance existing debt. A spokesman for the company said Majid Al Futtaim had no comment. "
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"Dubai's Majid Al Futtaim, a holding company which owns and operates shopping centres in the Middle East and North Africa, is in talks with banks to obtain a revolving credit facility likely to be in excess of $1.5 billion, sources familiar with the situation said on Monday. The company is self-coordinating the loan, meaning it has not appointed a bank to arrange the fund-raising exercise, said the sources. The loan would refinance existing debt. A spokesman for the company said Majid Al Futtaim had no comment. "
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Saudi's flynas orders 60 Airbus A320neos, upgrades 20 more | Reuters
Saudi's flynas orders 60 Airbus A320neos, upgrades 20 more | Reuters:
"Saudi Arabian budget carrier flynas is to buy 80 Airbus (AIR.PA) A320neo narrow body jets in a deal worth $8.6 billion that includes upgrading an earlier order, it said on Monday. The 80 A320neo order is valued at $8.6 billion, flynas Chairman Ayed Al Jeaid said at press conference in Riyadh on Monday. The order is for 60 A320neos and an upgrade of an existing order for 20 current model A320s to neos, an Airbus spokesman confirmed."
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"Saudi Arabian budget carrier flynas is to buy 80 Airbus (AIR.PA) A320neo narrow body jets in a deal worth $8.6 billion that includes upgrading an earlier order, it said on Monday. The 80 A320neo order is valued at $8.6 billion, flynas Chairman Ayed Al Jeaid said at press conference in Riyadh on Monday. The order is for 60 A320neos and an upgrade of an existing order for 20 current model A320s to neos, an Airbus spokesman confirmed."
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MIDEAST STOCKS-Sinking banks drag down Saudi stocks, rest of region mixed | Reuters
MIDEAST STOCKS-Sinking banks drag down Saudi stocks, rest of region mixed | Reuters:
"A slide in banking shares after earnings at a major bank missed analysts' estimates dragged down Saudi Arabia's stock market on Monday, while markets in the rest of the region were mixed.
Riyad Bank, the first major Saudi bank to report fourth-quarter earnings, posted a 66 percent fall in net profit to 293 million riyals ($78 million), citing higher impairment charges for credit losses as well as lower operating income from fees and commissions.
It was the sixth quarter in the last seven in which Riyad Bank reported either declining or flat profits, highlighting the challenges the kingdom's banks face as growth in lending and deposits is constrained by sagging oil prices, which have dampened spending by the government, companies and consumers."
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"A slide in banking shares after earnings at a major bank missed analysts' estimates dragged down Saudi Arabia's stock market on Monday, while markets in the rest of the region were mixed.
Riyad Bank, the first major Saudi bank to report fourth-quarter earnings, posted a 66 percent fall in net profit to 293 million riyals ($78 million), citing higher impairment charges for credit losses as well as lower operating income from fees and commissions.
It was the sixth quarter in the last seven in which Riyad Bank reported either declining or flat profits, highlighting the challenges the kingdom's banks face as growth in lending and deposits is constrained by sagging oil prices, which have dampened spending by the government, companies and consumers."
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London court to hear £10bn Lehman v Lehman creditors’ claim
London court to hear £10bn Lehman v Lehman creditors’ claim:
"A £10bn claim by the administrators of Lehman Brothers’ European operations will come before London courts on Monday, more than eight years after the US investment bank collapsed. The case pits scores of businesses and thousands of former Lehman bankers, who claim they are still owed money, against the hedge funds and distressed debt investors that bought the investment bank’s European bonds after its collapse. Lehman failed in 2008 mainly because of its lack of liquidity but its European operations were well capitalised. Since then its senior unsecured creditors have received more than £35bn, and PwC, the administrator, is now looking at a potential surplus of between £7bn and £8bn to be distributed to creditors, who are still claiming missed interest and foreign exchange losses."
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"A £10bn claim by the administrators of Lehman Brothers’ European operations will come before London courts on Monday, more than eight years after the US investment bank collapsed. The case pits scores of businesses and thousands of former Lehman bankers, who claim they are still owed money, against the hedge funds and distressed debt investors that bought the investment bank’s European bonds after its collapse. Lehman failed in 2008 mainly because of its lack of liquidity but its European operations were well capitalised. Since then its senior unsecured creditors have received more than £35bn, and PwC, the administrator, is now looking at a potential surplus of between £7bn and £8bn to be distributed to creditors, who are still claiming missed interest and foreign exchange losses."
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Norway’s $885bn-nil advantage in Britain’s sea of social troubles | Business | The Guardian
Norway’s $885bn-nil advantage in Britain’s sea of social troubles | Business | The Guardian:
"One of the most famous pieces of football commentary came at the end of a match in Oslo more than 35 years ago in which unfancied Norway beat England 2-1. Few fans could now name the Norwegian commentator, Bjørge Lillelien, but plenty remember the rant and how it ended: “Maggie Thatcher, can you hear me? Your boys took one hell of a beating.” The humiliation for the boys with three lions on their shirts took place in 1981 during the early stages of a North Sea oil boom that benefited both Norway and Britain. Norway decided that it would set up a sovereign wealth fund – a piggy bank for the people – so future generations would reap the benefits of the unexpected bonanza. Britain did not. The result is that Norway has amassed $885bn (£727bn) – easily enough to cope with the cost of looking after a population of 5 million as it ages. In Britain, by contrast, the NHS is at breaking point, the social care system is struggling to cope and there is no pot of gold to pay for the healthcare and nursing fees of the baby boomer generation as it advances into old age. Norway is currently winning the sovereign wealth fund contest $885bn to nil. One hell of a beating indeed."
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"One of the most famous pieces of football commentary came at the end of a match in Oslo more than 35 years ago in which unfancied Norway beat England 2-1. Few fans could now name the Norwegian commentator, Bjørge Lillelien, but plenty remember the rant and how it ended: “Maggie Thatcher, can you hear me? Your boys took one hell of a beating.” The humiliation for the boys with three lions on their shirts took place in 1981 during the early stages of a North Sea oil boom that benefited both Norway and Britain. Norway decided that it would set up a sovereign wealth fund – a piggy bank for the people – so future generations would reap the benefits of the unexpected bonanza. Britain did not. The result is that Norway has amassed $885bn (£727bn) – easily enough to cope with the cost of looking after a population of 5 million as it ages. In Britain, by contrast, the NHS is at breaking point, the social care system is struggling to cope and there is no pot of gold to pay for the healthcare and nursing fees of the baby boomer generation as it advances into old age. Norway is currently winning the sovereign wealth fund contest $885bn to nil. One hell of a beating indeed."
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Tough decisions must be taken to diversify the oil economies | The National
Tough decisions must be taken to diversify the oil economies | The National:
"In November 2013, Norway’s prime minister, Erna Solberg, said that "We have to prepare Norway for an economy that [has] less oil income, directly, and less oil activity … That’s a 20-year perspective, not a four-month perspective." The Nordic country, where crude and natural gas accounted for 41 per cent of exports in the second quarter, gets about 25 per cent of its total economic output from oil and gas. As Norway has worried for some time about its diversification, so have the GCC countries, especially since the collapse of oil prices in 2014. The difference is that in the GCC, the 20-year perspective on diversification is more about creating the right preconditions than it is about opening the taps of government spending. In Norway, to promote a more diverse economy, Ms Solberg’s Conservative Party has so far focused on cutting taxes and boosting public spending. The government of Norway plans to withdraw money for a second consecutive year from its US$880 billion wealth fund and spend 226bn krone (Dh97.64bn) of its oil revenue, equal to almost 8 per cent of the economy. General government spending is already topping 50 per cent of GDP, a level not reached in 20 years. "
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"In November 2013, Norway’s prime minister, Erna Solberg, said that "We have to prepare Norway for an economy that [has] less oil income, directly, and less oil activity … That’s a 20-year perspective, not a four-month perspective." The Nordic country, where crude and natural gas accounted for 41 per cent of exports in the second quarter, gets about 25 per cent of its total economic output from oil and gas. As Norway has worried for some time about its diversification, so have the GCC countries, especially since the collapse of oil prices in 2014. The difference is that in the GCC, the 20-year perspective on diversification is more about creating the right preconditions than it is about opening the taps of government spending. In Norway, to promote a more diverse economy, Ms Solberg’s Conservative Party has so far focused on cutting taxes and boosting public spending. The government of Norway plans to withdraw money for a second consecutive year from its US$880 billion wealth fund and spend 226bn krone (Dh97.64bn) of its oil revenue, equal to almost 8 per cent of the economy. General government spending is already topping 50 per cent of GDP, a level not reached in 20 years. "
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Saudi energy minister: unlikely to extend producers' agreement | Reuters
Saudi energy minister: unlikely to extend producers' agreement | Reuters:
"OPEC and non-OPEC producers are unlikely to extend their agreement to cut oil output beyond six months, because of the level of compliance with the deal and the rebalancing of the market, Saudi Arabian Energy Minister Khalid al-Falih said on Monday. However Falih, speaking to reporters on the sidelines of an industry event in Abu Dhabi, also said producers would reassess the situation and extend the agreement if necessary. "We don't think it's necessary given the level of compliance...and given the expectations of demand," he said."
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"OPEC and non-OPEC producers are unlikely to extend their agreement to cut oil output beyond six months, because of the level of compliance with the deal and the rebalancing of the market, Saudi Arabian Energy Minister Khalid al-Falih said on Monday. However Falih, speaking to reporters on the sidelines of an industry event in Abu Dhabi, also said producers would reassess the situation and extend the agreement if necessary. "We don't think it's necessary given the level of compliance...and given the expectations of demand," he said."
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UPDATE 1-Higher funding costs erode Emirates NBD's Q4 net profit | Reuters
UPDATE 1-Higher funding costs erode Emirates NBD's Q4 net profit | Reuters:
"Emirates NBD (ENBD) posted a 13 percent fall in fourth-quarter net profit on Monday as Dubai's largest lender was squeezed by higher costs of fixed deposits and wholesale funding, as well as lower fees and commission.
The bank, the first lender from the United Arab Emirates to report its earnings this quarter, made a net profit of 1.86 billion dirhams ($506.4 million) in the three months to Dec. 31, it said, down from 2.13 billion dirhams a year earlier but beating analysts' forecasts for 1.62 billion dirhams.
The profit drop follows a decline in the third quarter, which marked an end to a run of 16 straight quarters of rising earnings as profits are hurt by the impact of Dubai's slower growth."
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"Emirates NBD (ENBD) posted a 13 percent fall in fourth-quarter net profit on Monday as Dubai's largest lender was squeezed by higher costs of fixed deposits and wholesale funding, as well as lower fees and commission.
The bank, the first lender from the United Arab Emirates to report its earnings this quarter, made a net profit of 1.86 billion dirhams ($506.4 million) in the three months to Dec. 31, it said, down from 2.13 billion dirhams a year earlier but beating analysts' forecasts for 1.62 billion dirhams.
The profit drop follows a decline in the third quarter, which marked an end to a run of 16 straight quarters of rising earnings as profits are hurt by the impact of Dubai's slower growth."
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Oil prices slip on doubts over output cuts | Reuters
Oil prices slip on doubts over output cuts | Reuters:
"Oil prices slipped on Monday, pressured by doubts that large oil producers will reduce production as promised and on expectations that U.S. production would increase again this year. Benchmark Brent crude oil LCOc1 was down 10 cents a barrel at $55.35 by 0915 GMT (04:15 a.m. ET) and U.S. light crude CLc1 fell 10 cents to $52.27. The Organization of the Petroleum Exporting Countries (OPEC) has agreed to cut production by 1.2 million barrels per day (bpd) to 32.5 million bpd from Jan. 1 in an attempt to clear global oversupply that has depressed prices for more than two years."
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"Oil prices slipped on Monday, pressured by doubts that large oil producers will reduce production as promised and on expectations that U.S. production would increase again this year. Benchmark Brent crude oil LCOc1 was down 10 cents a barrel at $55.35 by 0915 GMT (04:15 a.m. ET) and U.S. light crude CLc1 fell 10 cents to $52.27. The Organization of the Petroleum Exporting Countries (OPEC) has agreed to cut production by 1.2 million barrels per day (bpd) to 32.5 million bpd from Jan. 1 in an attempt to clear global oversupply that has depressed prices for more than two years."
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MIDEAST STOCKS-Gulf markets edge down in early trade on Q4 earnings | Reuters
MIDEAST STOCKS-Gulf markets edge down in early trade on Q4 earnings | Reuters:
"Gulf stock markets edged down in early trade on Monday after several earnings misses by major companies, with Kuwait stalling after a very strong start to the year.
Qatar's index slipped 0.2 percent as Qatar National Bank dropped 1.2 percent after reporting an 8.3 percent increase in fourth-quarter net profit to 2.75 billion riyals ($755 million); EFG Hermes had forecast 2.99 billion riyals and SICO Bahrain, 3.44 billion riyals.
In Saudi Arabia, the index was down 0.5 percent in the first 45 minutes of trade. Riyad Bank, the first major Saudi bank to reported fourth-quarter earnings, slipped 2.3 percent after posting a 65.6 percent fall in profit to 293 million riyals ($78 million); analysts polled by Reuters had on average forecast 780 million riyals."
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"Gulf stock markets edged down in early trade on Monday after several earnings misses by major companies, with Kuwait stalling after a very strong start to the year.
Qatar's index slipped 0.2 percent as Qatar National Bank dropped 1.2 percent after reporting an 8.3 percent increase in fourth-quarter net profit to 2.75 billion riyals ($755 million); EFG Hermes had forecast 2.99 billion riyals and SICO Bahrain, 3.44 billion riyals.
In Saudi Arabia, the index was down 0.5 percent in the first 45 minutes of trade. Riyad Bank, the first major Saudi bank to reported fourth-quarter earnings, slipped 2.3 percent after posting a 65.6 percent fall in profit to 293 million riyals ($78 million); analysts polled by Reuters had on average forecast 780 million riyals."
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