Theresa May and the great Qatar conundrum:
"Barely three months ago, when Theresa May seemed more secure as Britain’s prime minister, and attitudes to triggering EU secession felt that much more bullish, there was a lot of bluster about the continuing attractiveness of the UK as an investment destination.
Qatar, a big investor in the UK, was wheeled out to trumpet the case for a post-Brexit boom. Two days before the Article 50 Brexit button was pressed, the Qatari prime minister said he expected to pump £5bn into the UK over the next five years.
This small Gulf state has long been a core supplier of energy to the UK — it accounts for as much as 90 per cent of Britain’s imports of liquefied natural gas. But, especially in the years since the 2008 financial crisis, it has also become a disproportionately important financial investor."
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Monday, 5 June 2017
London Stock Exchange shouldn't bend rules for $2tn Saudi flotation | Nils Pratley | Business | The Guardian
London Stock Exchange shouldn't bend rules for $2tn Saudi flotation | Nils Pratley | Business | The Guardian:
"Roll up, roll up, who wants some lovely Saudi dosh that would arrive with a stock market listing in London of Saudi Aramco, the enormous state-owned national oil company? Almost every investment banker and corporate lawyer in town, obviously. Aramco, if it is really worth about $2tn (£1.5tn), would be the world’s biggest flotation. The advisory fees would keep rolling in for decades because, once a firm has settled on a foreign stock exchange, it tends to stick around. That is why there is an intense lobbying effort to persuade City regulators that, to sweeten the appeal of London over New York, Aramco should be given fast-track entry to the FTSE 100 index, even though the Saudi regime seems to have no intention of meeting one of the basic qualifying criteria. Only a 5% slice of Aramco would be sold to outsiders, it is reported, whereas the rules state that at least 25% of the shares must be in public hands to be a so-called “premium” listing. The Saudis seem to fancy the “premium” label and prestige of FTSE 100 status, but don’t like the obligations that would go with them. Thank goodness, then, that the Investment Association, which represents the fund management establishment, is kicking up a fuss. It makes a point that is really just common sense. If you have a sound rule, born from hard experience of how minority investors can be exploited by a single controlling shareholder, stick to it. If you bend the rules to accommodate a deep-pocketed new arrival, you will look desperate and grasping, which will damage London’s supposed standing as a high-class financial centre."
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"Roll up, roll up, who wants some lovely Saudi dosh that would arrive with a stock market listing in London of Saudi Aramco, the enormous state-owned national oil company? Almost every investment banker and corporate lawyer in town, obviously. Aramco, if it is really worth about $2tn (£1.5tn), would be the world’s biggest flotation. The advisory fees would keep rolling in for decades because, once a firm has settled on a foreign stock exchange, it tends to stick around. That is why there is an intense lobbying effort to persuade City regulators that, to sweeten the appeal of London over New York, Aramco should be given fast-track entry to the FTSE 100 index, even though the Saudi regime seems to have no intention of meeting one of the basic qualifying criteria. Only a 5% slice of Aramco would be sold to outsiders, it is reported, whereas the rules state that at least 25% of the shares must be in public hands to be a so-called “premium” listing. The Saudis seem to fancy the “premium” label and prestige of FTSE 100 status, but don’t like the obligations that would go with them. Thank goodness, then, that the Investment Association, which represents the fund management establishment, is kicking up a fuss. It makes a point that is really just common sense. If you have a sound rule, born from hard experience of how minority investors can be exploited by a single controlling shareholder, stick to it. If you bend the rules to accommodate a deep-pocketed new arrival, you will look desperate and grasping, which will damage London’s supposed standing as a high-class financial centre."
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Why Investors Aren't Panicking Over Qatar's Stock Slide - Bloomberg
Why Investors Aren't Panicking Over Qatar's Stock Slide - Bloomberg:
"Investors schooled in the diplomatic ups and downs between Qatar and other Arab nations say there’s no reason for panic. The Gulf nation’s equities plummeted the most since 2009 as four Arab nations push to isolate Qatar for its ties to Iran. If history is any guide, the tensions won’t have a lasting impact on the country’s financial assets. “It’s not the first time there have been diplomatic problems,” said Viktor Szabo, a London-based money manager at Aberdeen Asset Management Plc, which oversees $11 billion of emerging-market assets. “While this is bad for the economy, it’s not tragic. It’s not so much a prime tourist destination, it’s more a financial center.”"
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"Investors schooled in the diplomatic ups and downs between Qatar and other Arab nations say there’s no reason for panic. The Gulf nation’s equities plummeted the most since 2009 as four Arab nations push to isolate Qatar for its ties to Iran. If history is any guide, the tensions won’t have a lasting impact on the country’s financial assets. “It’s not the first time there have been diplomatic problems,” said Viktor Szabo, a London-based money manager at Aberdeen Asset Management Plc, which oversees $11 billion of emerging-market assets. “While this is bad for the economy, it’s not tragic. It’s not so much a prime tourist destination, it’s more a financial center.”"
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OPEC's LNG Giant Keeps Exporting Gas and Oil as Saudis Cut Ties - Bloomberg
OPEC's LNG Giant Keeps Exporting Gas and Oil as Saudis Cut Ties - Bloomberg:
"Qatar, the world’s biggest seller of liquefied natural gas, can still access shipping routes to deliver oil and gas to buyers after Saudi Arabia and other neighboring states barred the emirate from exporting through their territorial waters. State producer Qatargas told Japan’s Jera Co. that it would keep supplying LNG as normal in spite of the Saudi-led severing of diplomatic ties with Qatar, Jera spokesman Atsuo Sawaki said by phone. Jera is Japan’s biggest buyer of Qatari LNG under long-term contracts, according to data compiled by Bloomberg. The escalation of tensions in the energy-rich Persian Gulf probably won’t disrupt LNG supplies to Qatar’s main customers in Asia, according to Robin Mills, head of Dubai-based consultant Qamar Energy. “In principle Qatar should still be able to export via its own waters, Iran and Oman,” Mills said."
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"Qatar, the world’s biggest seller of liquefied natural gas, can still access shipping routes to deliver oil and gas to buyers after Saudi Arabia and other neighboring states barred the emirate from exporting through their territorial waters. State producer Qatargas told Japan’s Jera Co. that it would keep supplying LNG as normal in spite of the Saudi-led severing of diplomatic ties with Qatar, Jera spokesman Atsuo Sawaki said by phone. Jera is Japan’s biggest buyer of Qatari LNG under long-term contracts, according to data compiled by Bloomberg. The escalation of tensions in the energy-rich Persian Gulf probably won’t disrupt LNG supplies to Qatar’s main customers in Asia, according to Robin Mills, head of Dubai-based consultant Qamar Energy. “In principle Qatar should still be able to export via its own waters, Iran and Oman,” Mills said."
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MIDEAST STOCKS-Qatar plunges as other GCC states cut ties; Saudi rises on MSCI hopes | Reuters
MIDEAST STOCKS-Qatar plunges as other GCC states cut ties; Saudi rises on MSCI hopes | Reuters:
"Qatar's stock market plunged on Monday after four Middle Eastern states severed ties with Doha, while Saudi Arabian shares rose on hopes that index compiler MSCI will move towards upgrading it to emerging market status.
The Qatari index tumbled 7.3 percent, erasing over $8 billion of value, in the heaviest trade for nearly three months. It was the index's steepest drop since late 2009, during the global financial crisis.
Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed air, sea and land transport links with Doha, accusing it of supporting terrorism. Some Egyptian banks stopped dealing with Qatari institutions, but Saudi and UAE banks said they had not made such a decision so far."
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"Qatar's stock market plunged on Monday after four Middle Eastern states severed ties with Doha, while Saudi Arabian shares rose on hopes that index compiler MSCI will move towards upgrading it to emerging market status.
The Qatari index tumbled 7.3 percent, erasing over $8 billion of value, in the heaviest trade for nearly three months. It was the index's steepest drop since late 2009, during the global financial crisis.
Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed air, sea and land transport links with Doha, accusing it of supporting terrorism. Some Egyptian banks stopped dealing with Qatari institutions, but Saudi and UAE banks said they had not made such a decision so far."
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Lawyers warn Saudi Aramco of New York IPO litigation risks
Lawyers warn Saudi Aramco of New York IPO litigation risks:
"Saudi Arabia is nearing a long-awaited decision on the main international stock exchange for the initial public offering of its state energy company, with lawyers advising the kingdom that a New York listing poses the greatest litigation risk of any jurisdiction.
White & Case, Saudi Aramco’s legal firm on the float, and others offering informal counsel have in recent weeks briefed top oil executives and the kingdom’s highest authorities, emphasising the US’s litigious culture, four people familiar with the matter have said.
The advice comes as a trade body representing the UK’s largest asset managers with £5.7tn in assets warned that no exceptions should be made to current rules requiring new “premium” London listings to float 25 per cent of their shares to gain inclusion into the FTSE indices. The Saudi government plans to sell less than 5 per cent of the company’s equity in a listing."
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"Saudi Arabia is nearing a long-awaited decision on the main international stock exchange for the initial public offering of its state energy company, with lawyers advising the kingdom that a New York listing poses the greatest litigation risk of any jurisdiction.
White & Case, Saudi Aramco’s legal firm on the float, and others offering informal counsel have in recent weeks briefed top oil executives and the kingdom’s highest authorities, emphasising the US’s litigious culture, four people familiar with the matter have said.
The advice comes as a trade body representing the UK’s largest asset managers with £5.7tn in assets warned that no exceptions should be made to current rules requiring new “premium” London listings to float 25 per cent of their shares to gain inclusion into the FTSE indices. The Saudi government plans to sell less than 5 per cent of the company’s equity in a listing."
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Wealth funds question UK’s future as EU investment hub
Wealth funds question UK’s future as EU investment hub:
"Sovereign wealth funds see the UK as a less attractive location for investment following Britain’s vote last year to leave the European Union, while Germany’s desirability has increased, according to a new survey.
Some funds with EU interests have questioned the future of the UK as an “investment hub” for Europe following the Brexit decision, the survey by Invesco, the fund manager, found.
Invesco’s report about the survey of 97 sovereign investors — which include sovereign wealth funds, state pension funds, central banks and government ministries collectively holding $12tn of assets — said the Brexit decision “poses a threat to the long-term attractiveness of the UK”."
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"Sovereign wealth funds see the UK as a less attractive location for investment following Britain’s vote last year to leave the European Union, while Germany’s desirability has increased, according to a new survey.
Some funds with EU interests have questioned the future of the UK as an “investment hub” for Europe following the Brexit decision, the survey by Invesco, the fund manager, found.
Invesco’s report about the survey of 97 sovereign investors — which include sovereign wealth funds, state pension funds, central banks and government ministries collectively holding $12tn of assets — said the Brexit decision “poses a threat to the long-term attractiveness of the UK”."
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GFH confirms it has withdrawn from talks to buy Shuaa Capital | The National
GFH confirms it has withdrawn from talks to buy Shuaa Capital | The National:
"GFH, the Bahraini Sharia’a-compliant investment firm, said in a clarification to the Bahrain stock market today that it was postponing discussions to acquire the Dubai-based investment bank Shuaa Capital after an agreement over the terms of the acquisition could not be reached. "GFH confirms to its shareholders and the markets that the withdrawal was result due to both parties not reaching agreed acquisition terms and not receiving initial regulatory approval yet," Nabeel Mirza, senior director for compliance at GFH was quoted as saying in the statement filed with the Bahrain Stock Exchange. "Therefore, both parties have agreed to postpone the discussions regarding the acquisition for the time being.""
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"GFH, the Bahraini Sharia’a-compliant investment firm, said in a clarification to the Bahrain stock market today that it was postponing discussions to acquire the Dubai-based investment bank Shuaa Capital after an agreement over the terms of the acquisition could not be reached. "GFH confirms to its shareholders and the markets that the withdrawal was result due to both parties not reaching agreed acquisition terms and not receiving initial regulatory approval yet," Nabeel Mirza, senior director for compliance at GFH was quoted as saying in the statement filed with the Bahrain Stock Exchange. "Therefore, both parties have agreed to postpone the discussions regarding the acquisition for the time being.""
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REFILE-GCC rift could affect Qatar credit quality via trade, capital flows -Moody's | Reuters
REFILE-GCC rift could affect Qatar credit quality via trade, capital flows -Moody's | Reuters:
"Credit rating agency Moody's Investors Service is concerned that the rift between Qatar and other regional states could have an impact on Qatar's credit outlook, if trade and capital flows are disrupted, a senior Moody's analyst told Reuters on Monday. "There's a high degree of uncertainty. There's not much clarity on what could resolve this spat between Qatar and other GCC countries," Mathias Angonin said in Dubai. "The last tension ended with no credit implications," he said, referring to a row when Saudi Arabia, the United Arab Emirates and Bahrain withdrew their ambassadors from Qatar in March 2014."
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"Credit rating agency Moody's Investors Service is concerned that the rift between Qatar and other regional states could have an impact on Qatar's credit outlook, if trade and capital flows are disrupted, a senior Moody's analyst told Reuters on Monday. "There's a high degree of uncertainty. There's not much clarity on what could resolve this spat between Qatar and other GCC countries," Mathias Angonin said in Dubai. "The last tension ended with no credit implications," he said, referring to a row when Saudi Arabia, the United Arab Emirates and Bahrain withdrew their ambassadors from Qatar in March 2014."
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UPDATE 1-Qatar stock market tumbles on diplomatic rift with Saudi, GCC states | Reuters
UPDATE 1-Qatar stock market tumbles on diplomatic rift with Saudi, GCC states | Reuters:
"Qatar's stock market plunged on Monday after Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed ties with Doha, accusing it of supporting terrorism.
The Qatari stock index sank 7.6 percent in the first hour of trade. Some of the market's top blue chips were hit hardest, with Vodafone Qatar, the most heavily traded stock, sliding its 10 percent daily limit.
Qatar National Bank, the country's largest bank, dropped 5.7 percent."
'via Blog this'
"Qatar's stock market plunged on Monday after Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed ties with Doha, accusing it of supporting terrorism.
The Qatari stock index sank 7.6 percent in the first hour of trade. Some of the market's top blue chips were hit hardest, with Vodafone Qatar, the most heavily traded stock, sliding its 10 percent daily limit.
Qatar National Bank, the country's largest bank, dropped 5.7 percent."
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Qatar's dispute with Arab states lifts oil prices, may impact LNG supplies | Reuters
Qatar's dispute with Arab states lifts oil prices, may impact LNG supplies | Reuters:
"Saudi Arabia and key allies on Monday cut ties with Qatar, the world's top seller of liquefied natural gas (LNG), accusing it of supporting extremism and sending shockwaves through the energy industry. Saudi Arabia, along with the United Arab Emirates, Egypt, and Bahrain said they would sever all ties including transport links with Qatar, which also sells oil products like condensate but is not a big crude oil exporter. "(Qatar) embraces multiple terrorist and sectarian groups aimed at disturbing stability in the region, including the Muslim Brotherhood, ISIS (Islamic State) and al-Qaeda, and promotes the message and schemes of these groups through their media constantly," Saudi state news agency SPA said."
'via Blog this'
"Saudi Arabia and key allies on Monday cut ties with Qatar, the world's top seller of liquefied natural gas (LNG), accusing it of supporting extremism and sending shockwaves through the energy industry. Saudi Arabia, along with the United Arab Emirates, Egypt, and Bahrain said they would sever all ties including transport links with Qatar, which also sells oil products like condensate but is not a big crude oil exporter. "(Qatar) embraces multiple terrorist and sectarian groups aimed at disturbing stability in the region, including the Muslim Brotherhood, ISIS (Islamic State) and al-Qaeda, and promotes the message and schemes of these groups through their media constantly," Saudi state news agency SPA said."
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Qatar Stocks Drop Most Since 2009 as Regional Spat Rocks Markets - Bloomberg
Qatar Stocks Drop Most Since 2009 as Regional Spat Rocks Markets - Bloomberg:
"Qatari’s markets received a battering as four of the country’s Middle East neighbors cut ties in a row over its stance on Iran and Islamist extremists.
The nation’s dollar bonds tumbled and contracts used to bet the Qatari riyal will weaken surged the most since 2009. More than four times the daily average of shares changed hands on the key stock index in Doha, where many Muslims are fasting for the holy month of Ramadan, as the gauge slipped the most in more than seven years. With Monday’s selloff, the country’s main equity benchmark became the worst performer globally this year. "
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"Qatari’s markets received a battering as four of the country’s Middle East neighbors cut ties in a row over its stance on Iran and Islamist extremists.
The nation’s dollar bonds tumbled and contracts used to bet the Qatari riyal will weaken surged the most since 2009. More than four times the daily average of shares changed hands on the key stock index in Doha, where many Muslims are fasting for the holy month of Ramadan, as the gauge slipped the most in more than seven years. With Monday’s selloff, the country’s main equity benchmark became the worst performer globally this year. "
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