Why Everyone's Talking About Dana Gas's Sukuk - Bloomberg:
"A decision by a Middle Eastern gas producer to declare its own Shariah-compliant bonds unlawful has baffled investors in the $2 trillion Islamic finance industry. Sharjah-based Dana Gas PJSC said Tuesday it no longer considered its two Islamic bonds totaling $700 million issued four years ago as Shariah compliant under the United Arab Emirates’ law. A court in Sharjah has since barred bondholders from taking any action against the company’s securities until it reviews Dana Gas’s application to declare its debt “unlawful and unenforceable.” “As creditors we understand that this is a liquidity and a payment issue not a solvency issue, but clearly the company is trying to squeeze sukukholders to the benefit of shareholders and that is a strategy that will end up hurting everybody down the road,” said Abdul Kadir Hussain, the head of fixed-income asset management at Arqaam Capital Ltd. Even if there were potential developments in Islamic finance that raised questions on the structure, “it is still a debt instrument and money they have borrowed,” he said."
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Thursday 15 June 2017
1MDB Loot Included Picasso, ‘Dumb and Dumber To,’ U.S. Says - Bloomberg
1MDB Loot Included Picasso, ‘Dumb and Dumber To,’ U.S. Says - Bloomberg:
"The U.S. Justice Department is seeking to recover $540 million in assets -- including art works, jewelry and film rights -- that it says were purchased with funds misappropriated from Malaysia’s 1MDB wealth fund. It’s the latest attempt by the U.S. government to seize assets linked to the tainted fund, bringing the total sought by the Justice Department to $1.8 billion. From 2009 through 2015, more than $4.5 billion belonging to 1Malaysia Development Bhd was diverted by high-level officials of the fund and their associates, according to complaints filed Thursday in the Central District of California."
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"The U.S. Justice Department is seeking to recover $540 million in assets -- including art works, jewelry and film rights -- that it says were purchased with funds misappropriated from Malaysia’s 1MDB wealth fund. It’s the latest attempt by the U.S. government to seize assets linked to the tainted fund, bringing the total sought by the Justice Department to $1.8 billion. From 2009 through 2015, more than $4.5 billion belonging to 1Malaysia Development Bhd was diverted by high-level officials of the fund and their associates, according to complaints filed Thursday in the Central District of California."
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International lenders support Qatari banks hit by regional rift | Reuters
International lenders support Qatari banks hit by regional rift | Reuters:
"A few large Asian, European and U.S. banks are providing funds to help to keep Qatari banks running smoothly after a diplomatic rift has dried up financing from the United Arab Emirates, Bahrain and Saudi Arabia, banking sources said.
The foreign banks' support is critical for Qatari banks, whose reliance on international funding has grown sharply over the years to about $50 billion as of April, or around a quarter of their domestic loans, Standard & Poor's estimated. That is up from 13.2 percent at the end of 2015.
Saudi Arabia, the UAE, Bahrain and Egypt last week severed diplomatic relations with Qatar, accusing it of support for Islamist militants and Iran. The UAE has also decided to blacklist Qatari individuals and entities."
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"A few large Asian, European and U.S. banks are providing funds to help to keep Qatari banks running smoothly after a diplomatic rift has dried up financing from the United Arab Emirates, Bahrain and Saudi Arabia, banking sources said.
The foreign banks' support is critical for Qatari banks, whose reliance on international funding has grown sharply over the years to about $50 billion as of April, or around a quarter of their domestic loans, Standard & Poor's estimated. That is up from 13.2 percent at the end of 2015.
Saudi Arabia, the UAE, Bahrain and Egypt last week severed diplomatic relations with Qatar, accusing it of support for Islamist militants and Iran. The UAE has also decided to blacklist Qatari individuals and entities."
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In Qatar and Saudi Arabia’s fight, Iran’s the real winner | Reuters
In Qatar and Saudi Arabia’s fight, Iran’s the real winner | Reuters:
"Thanks to a hack allegedly carried out by Russian intelligence, relations between Qatar and Saudi Arabia are tense to say the least. The Kingdom has blockaded Qatar ports and several Gulf states have removed envoys and ambassadors. Right now, the Middle East looks a lot like Europe on the eve of World War I. This week on War College, Oklahoma University professor Joshua Landis runs us through the complicated factions making up the Middle East. According to Landis, Iran is the real winner in the latest dust up between old allies."
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"Thanks to a hack allegedly carried out by Russian intelligence, relations between Qatar and Saudi Arabia are tense to say the least. The Kingdom has blockaded Qatar ports and several Gulf states have removed envoys and ambassadors. Right now, the Middle East looks a lot like Europe on the eve of World War I. This week on War College, Oklahoma University professor Joshua Landis runs us through the complicated factions making up the Middle East. According to Landis, Iran is the real winner in the latest dust up between old allies."
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Invasion, Coup or Muddle Through? How the Qatar Crisis Could End - Bloomberg
Invasion, Coup or Muddle Through? How the Qatar Crisis Could End - Bloomberg:
"If Saudi Arabia and the United Arab Emirates hoped the shock of their sudden economic and diplomatic blockade of Qatar would produce a rapid capitulation, it isn’t panning out that way. With the dispute well into its second week, both sides have dug in and are bidding for support from outside powers, above all the U.S., but also Iran, Turkey, Russia and Pakistan. Much will depend on which way the U.S. eventually leans as it weighs addressing longstanding concerns over Qatar’s permissive approach to Islamist groups and American geopolitical interests. President Donald Trump has tweeted a message very different from his administration’s during a crisis that carries significant implications for regional stability and U.S. military capabilities. Here are four scenarios for what may happen next, ranging from a relatively painless deal to a Saudi-led invasion of Qatar."
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"If Saudi Arabia and the United Arab Emirates hoped the shock of their sudden economic and diplomatic blockade of Qatar would produce a rapid capitulation, it isn’t panning out that way. With the dispute well into its second week, both sides have dug in and are bidding for support from outside powers, above all the U.S., but also Iran, Turkey, Russia and Pakistan. Much will depend on which way the U.S. eventually leans as it weighs addressing longstanding concerns over Qatar’s permissive approach to Islamist groups and American geopolitical interests. President Donald Trump has tweeted a message very different from his administration’s during a crisis that carries significant implications for regional stability and U.S. military capabilities. Here are four scenarios for what may happen next, ranging from a relatively painless deal to a Saudi-led invasion of Qatar."
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The Long-Term Price of Oil Is ... - Bloomberg Gadfly
The Long-Term Price of Oil Is ... - Bloomberg Gadfly:
"What's the right way to think about the long-term price of oil?This question consumes the industry -- and markets -- no matter what prices are on any given day. Back in 2000, when mega-mergers formed giants like Exxon Mobil Corp., it was typical to plug roughly $20 a barrel into valuation models. Only a few years ago, we were being told that "$100 a barrel is becoming the new $20". One crash later, no oil major's slide deck is complete without a pledge to fund itself at $55 or less.Take a look at the oil futures curve just prior to the crash and in several more recent periods and you can see that, for all the movement in daily prices, longer term prices seem pretty anchored around that level:"
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"What's the right way to think about the long-term price of oil?This question consumes the industry -- and markets -- no matter what prices are on any given day. Back in 2000, when mega-mergers formed giants like Exxon Mobil Corp., it was typical to plug roughly $20 a barrel into valuation models. Only a few years ago, we were being told that "$100 a barrel is becoming the new $20". One crash later, no oil major's slide deck is complete without a pledge to fund itself at $55 or less.Take a look at the oil futures curve just prior to the crash and in several more recent periods and you can see that, for all the movement in daily prices, longer term prices seem pretty anchored around that level:"
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MIDEAST STOCKS-Oil price fall has mixed impact on Gulf, Doha extends recovery | Reuters
MIDEAST STOCKS-Oil price fall has mixed impact on Gulf, Doha extends recovery | Reuters:
"Stock markets in the Gulf were mixed on Thursday with Qatar and Dubai rising despite a fall in crude oil prices, while Saudi Arabia's decline was cushioned by hopes it will be put on review for possible emerging market status next week. Riyadh's stock index lost 0.5 percent after Brent crude dipped below $47 a barrel; all but one of the 14 listed petrochemical producers fell, with National Industrialization Co (Tasnee) dropping 3.7 percent. Jassim al-Jubran, senior equity analyst at Riyadh-based Aljazira Capital, said the stock market's losses were relatively small because most funds had been moving into shares that would benefit from any decision by index compiler MSCI next Tuesday to place Riyadh on review for possible upgrade to emerging market status. "Funds can withstand volatility in oil markets because they build long-term positions, and the MSCI review next week is higher on their list," said Jubran."
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"Stock markets in the Gulf were mixed on Thursday with Qatar and Dubai rising despite a fall in crude oil prices, while Saudi Arabia's decline was cushioned by hopes it will be put on review for possible emerging market status next week. Riyadh's stock index lost 0.5 percent after Brent crude dipped below $47 a barrel; all but one of the 14 listed petrochemical producers fell, with National Industrialization Co (Tasnee) dropping 3.7 percent. Jassim al-Jubran, senior equity analyst at Riyadh-based Aljazira Capital, said the stock market's losses were relatively small because most funds had been moving into shares that would benefit from any decision by index compiler MSCI next Tuesday to place Riyadh on review for possible upgrade to emerging market status. "Funds can withstand volatility in oil markets because they build long-term positions, and the MSCI review next week is higher on their list," said Jubran."
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Qatari investors rush to sell Dubai properties as deadline for them to leave looms | The National
Qatari investors rush to sell Dubai properties as deadline for them to leave looms | The National:
"Property brokers in Dubai are reporting a rush in sales from Qatari investors attempting to get their assets out of the UAE before the Monday deadline to leave the country. Brokers say that Qataris in the UAE are selling property portfolios worth millions of dirhams at steep discounts as they rush to liquidate their assets and leave. "It is an extremely difficult time for many of our Qatari clients," said Mario Volpi, the chief sales officer at Kensington Exclusive Properties. "We had one guy who managed to sell everything – some town houses in JVC, a plot of land in Dubailand, some commercial units in the Marina and a full building."
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"Property brokers in Dubai are reporting a rush in sales from Qatari investors attempting to get their assets out of the UAE before the Monday deadline to leave the country. Brokers say that Qataris in the UAE are selling property portfolios worth millions of dirhams at steep discounts as they rush to liquidate their assets and leave. "It is an extremely difficult time for many of our Qatari clients," said Mario Volpi, the chief sales officer at Kensington Exclusive Properties. "We had one guy who managed to sell everything – some town houses in JVC, a plot of land in Dubailand, some commercial units in the Marina and a full building."
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Abu Dhabi's Senaat Said to Revive $1 Billion Share Sale Plans - Bloomberg
Abu Dhabi's Senaat Said to Revive $1 Billion Share Sale Plans - Bloomberg:
"Senaat, which holds stakes in Abu Dhabi’s National Petroleum Construction Co. and Emirates Steel, is considering reviving plans for an initial public offering three years after putting them on hold, people with knowledge of the matter said. The company plans to raise about $1 billion from the offering and list shares on the Abu Dhabi stock exchange as the year, said the people, asking not to be identified because the information is private. Senaat is talking to banks including JPMorgan Chase & Co., HSBC Holdings Plc and First Abu Dhabi Bank PJSC about the potential IPO, they said. Senaat shelved plans for a share sale in 2014 after Abu Dhabi’s executive council, the emirate’s highest decision-making body, rejected them, people familiar with the decision said at the time. The industrial conglomerate then decided to focus on selling shares in its subsidiaries, Chairman Hussain Al Nowais said in 2015. Senaat hasn’t announced any plans to IPO any of its units since then."
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"Senaat, which holds stakes in Abu Dhabi’s National Petroleum Construction Co. and Emirates Steel, is considering reviving plans for an initial public offering three years after putting them on hold, people with knowledge of the matter said. The company plans to raise about $1 billion from the offering and list shares on the Abu Dhabi stock exchange as the year, said the people, asking not to be identified because the information is private. Senaat is talking to banks including JPMorgan Chase & Co., HSBC Holdings Plc and First Abu Dhabi Bank PJSC about the potential IPO, they said. Senaat shelved plans for a share sale in 2014 after Abu Dhabi’s executive council, the emirate’s highest decision-making body, rejected them, people familiar with the decision said at the time. The industrial conglomerate then decided to focus on selling shares in its subsidiaries, Chairman Hussain Al Nowais said in 2015. Senaat hasn’t announced any plans to IPO any of its units since then."
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RPT-MIDEAST DEBT-Islamic finance industry frets as Dana Gas deems its sukuk invalid | Reuters
RPT-MIDEAST DEBT-Islamic finance industry frets as Dana Gas deems its sukuk invalid | Reuters:
"A decision by Abu Dhabi-listed Dana Gas to declare $700 million of its sukuk invalid has sent shivers through the Islamic finance industry, raising concern about the safety of sharia-compliant debt instruments in general. Dana said on Tuesday it had received legal advice that its sukuk, or Islamic bonds, which mature in October, were not compliant with the Islamic sharia code and had become "unlawful" in the United Arab Emirates. The firm said it would halt payments and proposed that creditors exchange the sukuk for new Islamic instruments offering profit distributions less than half those of the existing sukuk."
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"A decision by Abu Dhabi-listed Dana Gas to declare $700 million of its sukuk invalid has sent shivers through the Islamic finance industry, raising concern about the safety of sharia-compliant debt instruments in general. Dana said on Tuesday it had received legal advice that its sukuk, or Islamic bonds, which mature in October, were not compliant with the Islamic sharia code and had become "unlawful" in the United Arab Emirates. The firm said it would halt payments and proposed that creditors exchange the sukuk for new Islamic instruments offering profit distributions less than half those of the existing sukuk."
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Oil Holds Losses Below $45 on Surprise U.S. Gasoline Supply Gain - Bloomberg
Oil Holds Losses Below $45 on Surprise U.S. Gasoline Supply Gain - Bloomberg:
"Oil held losses below $45 a barrel after sliding to the lowest in seven months as U.S. gasoline supplies unexpectedly rose for a second week. Futures were little changed in New York after slumping 3.7 percent Wednesday, the first drop in four sessions. Motor fuel stockpiles expanded by 2.1 million barrels last week, the Energy Information Administration reported. Most analysts surveyed by Bloomberg had forecast a decline. Crude output rose while nationwide inventories fell less than predicted."
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"Oil held losses below $45 a barrel after sliding to the lowest in seven months as U.S. gasoline supplies unexpectedly rose for a second week. Futures were little changed in New York after slumping 3.7 percent Wednesday, the first drop in four sessions. Motor fuel stockpiles expanded by 2.1 million barrels last week, the Energy Information Administration reported. Most analysts surveyed by Bloomberg had forecast a decline. Crude output rose while nationwide inventories fell less than predicted."
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Qatar Crisis Challenges Gulf Assets as Middle East's Safe Haven - Bloomberg
Qatar Crisis Challenges Gulf Assets as Middle East's Safe Haven - Bloomberg:
"Gulf countries and their assets for years have been seen as a safe bet for investors in Middle Eastern emerging markets. Not anymore. Their reputation as rich, commodity-oriented economies that could maintain high credit ratings has eroded as tension escalated in the region last week after Saudi Arabia and allies severed diplomatic and transport links with Qatar. The move to punish Qatar for its ties to Iran and extremist groups in the region surprised investors. The average spread paid by governments in the Middle East to borrow in bond markets has since risen seven basis points, compared with a three basis point decline for emerging-market debt, according to JPMorgan Chase & Co. indexes."
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"Gulf countries and their assets for years have been seen as a safe bet for investors in Middle Eastern emerging markets. Not anymore. Their reputation as rich, commodity-oriented economies that could maintain high credit ratings has eroded as tension escalated in the region last week after Saudi Arabia and allies severed diplomatic and transport links with Qatar. The move to punish Qatar for its ties to Iran and extremist groups in the region surprised investors. The average spread paid by governments in the Middle East to borrow in bond markets has since risen seven basis points, compared with a three basis point decline for emerging-market debt, according to JPMorgan Chase & Co. indexes."
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MIDEAST STOCKS-Gulf falls as oil drops; banks soft despite rate rises | Reuters
MIDEAST STOCKS-Gulf falls as oil drops; banks soft despite rate rises | Reuters:
"A tumble in crude oil prices to November lows put pressure on Gulf stock markets on Thursday morning, while banking shares reacted little to interest rate hikes in the region following the U.S. Federal Reserve's move overnight. Riyadh's stock index was down 0.3 percent after half an hour after Brent crude dipped below $47 a barrel; half of the 14 listed petrochemical producers fell, with PetroRabigh down 0.9 percent. But small propylene maker Alujain surged 6.7 percent after it announced that minority shareholders had voted to remove the current board of directors and an election of new members would take place on Thursday. National Commercial Bank edged up 0.1 percent after its board recommended a cash dividend of 1.1 riyal per share for the first half of the year, up from the 0.6 riyal paid out for the prior-year period. "
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"A tumble in crude oil prices to November lows put pressure on Gulf stock markets on Thursday morning, while banking shares reacted little to interest rate hikes in the region following the U.S. Federal Reserve's move overnight. Riyadh's stock index was down 0.3 percent after half an hour after Brent crude dipped below $47 a barrel; half of the 14 listed petrochemical producers fell, with PetroRabigh down 0.9 percent. But small propylene maker Alujain surged 6.7 percent after it announced that minority shareholders had voted to remove the current board of directors and an election of new members would take place on Thursday. National Commercial Bank edged up 0.1 percent after its board recommended a cash dividend of 1.1 riyal per share for the first half of the year, up from the 0.6 riyal paid out for the prior-year period. "
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