Parsons chief remains upbeat on region despite payment issues | The National:
"The chief executive of Parsons has said that he sees "several good signs" in the Middle East market, despite the challenges that it has faced in getting payments from some clients over the past 12 months.
In an interview with The National, Chuck Harrington cites a stabilisation of the oil price, greater Arabian Gulf sovereign debt issuance, projects linked to Dubai Expo 2020, Qatar’s 2022 Fifa World Cup and Kuwait’s modernisation attempts as factors for optimism in the region.
The US engineering consultancy, which has about one-third (4,213) of its 13,000-plus global employees based in the Middle East, also envisages greater opportunities for providing defence and security consultancy, systems and services to regional governments."
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Sunday 23 April 2017
Shale's the Wild Horse OPEC Can't Tame - Bloomberg Gadfly
Shale's the Wild Horse OPEC Can't Tame - Bloomberg Gadfly:
"It was all so simple. By lifting restraints on output, Saudi Arabia would stop subsidizing high-cost oil producers and halt the rapid rise in U.S. production that was eating into OPEC's market share. At least, that was the logic back in November 2014.But things haven't gone according to plan. OPEC's four-month experiment with production curbs has failed. More worryingly, the strength of shale's rebound suggests that OPEC faces a long-term struggle against this new source of supply in an industry where technological advances are the norm and today's niche play becomes the next decade's global standard.Even when the group restored production curbs last year, Saudi Energy Minister Khalid al-Falih said he didn’t expect a big supply response from American shale producers in 2017. In fact, it turns out that response had already begun, and it is much stronger than anyone had expected."
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"It was all so simple. By lifting restraints on output, Saudi Arabia would stop subsidizing high-cost oil producers and halt the rapid rise in U.S. production that was eating into OPEC's market share. At least, that was the logic back in November 2014.But things haven't gone according to plan. OPEC's four-month experiment with production curbs has failed. More worryingly, the strength of shale's rebound suggests that OPEC faces a long-term struggle against this new source of supply in an industry where technological advances are the norm and today's niche play becomes the next decade's global standard.Even when the group restored production curbs last year, Saudi Energy Minister Khalid al-Falih said he didn’t expect a big supply response from American shale producers in 2017. In fact, it turns out that response had already begun, and it is much stronger than anyone had expected."
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Malaysia Reaches Deal on $2.5 Billion of 1MDB Bonds - Bloomberg
Malaysia Reaches Deal on $2.5 Billion of 1MDB Bonds - Bloomberg:
"The battle over the repayment of 1MDB bonds may be coming to an end.
Malaysia has reached an agreement to pay Abu Dhabi $2.5 billion as partial debt settlement for embattled government fund 1Malaysia Development Bhd., according to a person familiar with the matter.
Under a deal that’s expected to be announced Monday on the London Stock Exchange, Malaysia will pay Abu Dhabi $1.2 billion before the end of this year, said the person, who asked not to be identified as the information isn’t yet public. Malaysia will also assume the coupon obligations for two dollar bonds issued by 1MDB and co-guaranteed by Middle Eastern sovereign wealth fund International Petroleum Investment Co., the person said. "
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"The battle over the repayment of 1MDB bonds may be coming to an end.
Malaysia has reached an agreement to pay Abu Dhabi $2.5 billion as partial debt settlement for embattled government fund 1Malaysia Development Bhd., according to a person familiar with the matter.
Under a deal that’s expected to be announced Monday on the London Stock Exchange, Malaysia will pay Abu Dhabi $1.2 billion before the end of this year, said the person, who asked not to be identified as the information isn’t yet public. Malaysia will also assume the coupon obligations for two dollar bonds issued by 1MDB and co-guaranteed by Middle Eastern sovereign wealth fund International Petroleum Investment Co., the person said. "
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Trophy assets lose lustre as Qatar embraces prudence and ETFs
Trophy assets lose lustre as Qatar embraces prudence and ETFs:
"Qatar, owner of London landmarks the Shard and Harrods, is moving cash into exchange traded funds and index funds as part of a more “prudent” investment strategy, two people familiar with the investment strategy said. The shift away from so-called trophy assets at the Qatar Investment Authority (QIA), the world’s ninth-largest sovereign wealth fund know as an aggressive deal hunter, makes it the latest high-profile convert to a low-cost, passive style of investment. It follows a change of leadership in December 2014, when Sheikh Abdullah bin Mohamed bin Saud al-Thani was appointed chief executive of the country’s historically secretive sovereign wealth fund."
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"Qatar, owner of London landmarks the Shard and Harrods, is moving cash into exchange traded funds and index funds as part of a more “prudent” investment strategy, two people familiar with the investment strategy said. The shift away from so-called trophy assets at the Qatar Investment Authority (QIA), the world’s ninth-largest sovereign wealth fund know as an aggressive deal hunter, makes it the latest high-profile convert to a low-cost, passive style of investment. It follows a change of leadership in December 2014, when Sheikh Abdullah bin Mohamed bin Saud al-Thani was appointed chief executive of the country’s historically secretive sovereign wealth fund."
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MIDEAST STOCKS-Saudi boosted by civil servant perk restoration, Egypt corrects | Reuters
MIDEAST STOCKS-Saudi boosted by civil servant perk restoration, Egypt corrects | Reuters:
"Saudi stocks rose in heavy volumes on Sunday as investors cheered news that King Salman had issued a royal decree restoring financial allowances for civil servants and military personnel, while Egypt fell steeply on profit taking. The allowances were reduced last September as part of austerity measures due to low oil prices. Officials said on Saturday the cuts had been cancelled because of better-than-expected budgetary performance in the first quarter of 2017. The move is likely to boost consumption, benefiting the retail and food sectors, according to economists at Riyadh-based Alrajhi Capital."
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"Saudi stocks rose in heavy volumes on Sunday as investors cheered news that King Salman had issued a royal decree restoring financial allowances for civil servants and military personnel, while Egypt fell steeply on profit taking. The allowances were reduced last September as part of austerity measures due to low oil prices. Officials said on Saturday the cuts had been cancelled because of better-than-expected budgetary performance in the first quarter of 2017. The move is likely to boost consumption, benefiting the retail and food sectors, according to economists at Riyadh-based Alrajhi Capital."
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UAE’s banks on the brink of revival, first-quarter results show | The National
UAE’s banks on the brink of revival, first-quarter results show | The National:
"UAE banks maybe on the cusp of revival amid cost cutting and higher interest rates – if the first batch of first-quarter results are anything to go by. Among the big banks to report over the past week both the National Bank of Abu Dhabi and Emirates NBD, the country’s two biggest lenders, posted earnings that also showed an improvement in non-performing loans, a sign that the debt crisis that plagued small and medium-sized enterprises in the wake of the oil price crash are subsiding. "System liquidity is improving and concerns with SME credit quality have eased," said Sanyalaksna Manibhandu, the head of research at NBAD Securities."
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"UAE banks maybe on the cusp of revival amid cost cutting and higher interest rates – if the first batch of first-quarter results are anything to go by. Among the big banks to report over the past week both the National Bank of Abu Dhabi and Emirates NBD, the country’s two biggest lenders, posted earnings that also showed an improvement in non-performing loans, a sign that the debt crisis that plagued small and medium-sized enterprises in the wake of the oil price crash are subsiding. "System liquidity is improving and concerns with SME credit quality have eased," said Sanyalaksna Manibhandu, the head of research at NBAD Securities."
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What comes next in UAE markets will be telling | GulfNews.com
What comes next in UAE markets will be telling | GulfNews.com:
"Last week the Dubai Financial Market General Index (DFMGI) dropped by 39.52 or 1.13 per cent to close at 3,469.82. There were eight advancing issues and 31 declining, while volume exceeded the prior week’s level. The DFMGI remains in a precarious position as this is the second week in a row that it has closed below the long-term uptrend line on a weekly basis, and it has again ended the week below the 200-day exponential moving average (ema). Each of those trend indicators tells us something about the strength or weakness of the long-term uptrend. The DFMGI has now closed below the trend line in four out of the past five weeks and below the 200-day ema three out of the past five weeks. It is a sign of weakness that the index is closing below both indicators. At the same time the price area of the trend line is still supportive. A move out of the six-week range should tell us the next direction. Support is around the recent swing low of 3,435.14. That price area was tested last week and held as last week’s low was 3,445.86. If support continues to hold around those lows we may have the beginning of a double bottom reversal pattern forming."
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"Last week the Dubai Financial Market General Index (DFMGI) dropped by 39.52 or 1.13 per cent to close at 3,469.82. There were eight advancing issues and 31 declining, while volume exceeded the prior week’s level. The DFMGI remains in a precarious position as this is the second week in a row that it has closed below the long-term uptrend line on a weekly basis, and it has again ended the week below the 200-day exponential moving average (ema). Each of those trend indicators tells us something about the strength or weakness of the long-term uptrend. The DFMGI has now closed below the trend line in four out of the past five weeks and below the 200-day ema three out of the past five weeks. It is a sign of weakness that the index is closing below both indicators. At the same time the price area of the trend line is still supportive. A move out of the six-week range should tell us the next direction. Support is around the recent swing low of 3,435.14. That price area was tested last week and held as last week’s low was 3,445.86. If support continues to hold around those lows we may have the beginning of a double bottom reversal pattern forming."
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Saudi Plans More Bond Sales, Cheap Loans for Job-Rich Industries - Bloomberg
Saudi Plans More Bond Sales, Cheap Loans for Job-Rich Industries - Bloomberg:
"Saudi Arabia may offer “almost interest-free” loans to companies in labor-intensive industries as part of a plan to stimulate an economy squeezed by low oil prices and spending cuts, Finance Minister Mohammed Al-Jadaan said. Al-Jadaan, speaking in an interview in Washington, also said the government is on track to slash its budget deficit by 30 percent this year to about 200 billion Saudi riyals ($53 billion), and aims to finance it mainly through debt sales instead of drawing on reserves. This means the kingdom will likely tap global bond markets again this year after raising $9 billion from its debut Islamic debt sale, he said. Saudi Arabia has embarked on what it describes as an unprecedented shakeup of an economy that’s heavily reliant on oil. The so-called Vision 2030, spearheaded by Deputy Crown Prince Mohammed bin Salman, was announced last year and includes plans to sell shares in state companies and curb government spending on subsidies and wages."
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"Saudi Arabia may offer “almost interest-free” loans to companies in labor-intensive industries as part of a plan to stimulate an economy squeezed by low oil prices and spending cuts, Finance Minister Mohammed Al-Jadaan said. Al-Jadaan, speaking in an interview in Washington, also said the government is on track to slash its budget deficit by 30 percent this year to about 200 billion Saudi riyals ($53 billion), and aims to finance it mainly through debt sales instead of drawing on reserves. This means the kingdom will likely tap global bond markets again this year after raising $9 billion from its debut Islamic debt sale, he said. Saudi Arabia has embarked on what it describes as an unprecedented shakeup of an economy that’s heavily reliant on oil. The so-called Vision 2030, spearheaded by Deputy Crown Prince Mohammed bin Salman, was announced last year and includes plans to sell shares in state companies and curb government spending on subsidies and wages."
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Saudi King Restores State Employee Bonuses With New Changes - Bloomberg
Saudi King Restores State Employee Bonuses With New Changes - Bloomberg:
"Saudi Arabia’s King Salman restored bonuses and allowances for state employees, scaling back an austerity program that generated widespread criticism among citizens used to generous state handouts. The government said bonuses canceled in September were reinstated because higher-than-expected revenue helped to drive down the budget deficit. Minister of State Mohammed Alsheikh said in a statement to Bloomberg that the injection of more money was expected to stimulate economic growth, but others said the kingdom’s rulers were responding to the public discontent the cutbacks created. The decision “constitutes a step back in terms of forging a new social contract that no longer offers the Saudi public cradle-to-grave welfare,” said James M. Dorsey, a Saudi specialist and senior fellow in international studies at Nanyang Technological University in Singapore. It suggests the government is worried that its economic overhaul plan hasn’t been accepted “by segments of the population who have the most to lose from diversification and streamlining of the economy, including the bureaucracy,” he said."
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"Saudi Arabia’s King Salman restored bonuses and allowances for state employees, scaling back an austerity program that generated widespread criticism among citizens used to generous state handouts. The government said bonuses canceled in September were reinstated because higher-than-expected revenue helped to drive down the budget deficit. Minister of State Mohammed Alsheikh said in a statement to Bloomberg that the injection of more money was expected to stimulate economic growth, but others said the kingdom’s rulers were responding to the public discontent the cutbacks created. The decision “constitutes a step back in terms of forging a new social contract that no longer offers the Saudi public cradle-to-grave welfare,” said James M. Dorsey, a Saudi specialist and senior fellow in international studies at Nanyang Technological University in Singapore. It suggests the government is worried that its economic overhaul plan hasn’t been accepted “by segments of the population who have the most to lose from diversification and streamlining of the economy, including the bureaucracy,” he said."
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MIDEAST STOCKS-Saudi shares up on news civil servant, military allowances restored | Reuters
MIDEAST STOCKS-Saudi shares up on news civil servant, military allowances restored | Reuters:
"The Saudi stock index jumped in early trade on Sunday on overnight news that King Salman had issued a royal decree restoring financial allowances for Saudi civil servants and military personnel.
The allowances were reduced last September as part of austerity measures due to low oil prices. Officials said on Saturday that the cuts had been cancelled because of better-than-expected budgetary performance in the first quarter of 2017.
Advancing shares outnumbered declining ones 152 to 6, taking Riyadh's index 1.4 percent higher after 25 minutes of trade, with domestically focused shares in the lead."
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"The Saudi stock index jumped in early trade on Sunday on overnight news that King Salman had issued a royal decree restoring financial allowances for Saudi civil servants and military personnel.
The allowances were reduced last September as part of austerity measures due to low oil prices. Officials said on Saturday that the cuts had been cancelled because of better-than-expected budgetary performance in the first quarter of 2017.
Advancing shares outnumbered declining ones 152 to 6, taking Riyadh's index 1.4 percent higher after 25 minutes of trade, with domestically focused shares in the lead."
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