POLL- Mideast funds more cautious on bonds, Saudi plans draw interest | ZAWYA MENA Edition:
"Middle East fund managers have become more cautious about investing in regional bonds while ambitious economic development plans in Saudi Arabia have increased interest in equities there, a monthly Reuters poll shows. Twenty-three percent of regional funds expect to reduce their allocations to fixed income in the next three months while 8 percent expect to increase them, according to the poll of 13 leading managers conducted over the past several days (for full poll results, click). That is a shift from last month's poll, when 15 percent expected to increase fixed income allocations and 15 percent foresaw reducing them."
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Tuesday, 31 October 2017
UK financial watchdog denies government pressure over Aramco IPO
UK financial watchdog denies government pressure over Aramco IPO:
"The head of Britain’s financial watchdog has rejected suggestions its proposed changes to listing rules for sovereign-controlled companies were influenced by the government to try to persuade oil giant Saudi Aramco to list in London.
Saudi Arabia is considering floating a 5 percent stake in Aramco in London or New York. It is expected to be the biggest IPO ever and boost the reputation of its chosen venue.
But the possible listing has been met with resistance from British fund managers concerned about governance. It would require the Financial Conduct Authority (FCA) to relax certain rules, including that companies float at least 25 percent of their shares - a power not used in the FCA’s four-year history."
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"The head of Britain’s financial watchdog has rejected suggestions its proposed changes to listing rules for sovereign-controlled companies were influenced by the government to try to persuade oil giant Saudi Aramco to list in London.
Saudi Arabia is considering floating a 5 percent stake in Aramco in London or New York. It is expected to be the biggest IPO ever and boost the reputation of its chosen venue.
But the possible listing has been met with resistance from British fund managers concerned about governance. It would require the Financial Conduct Authority (FCA) to relax certain rules, including that companies float at least 25 percent of their shares - a power not used in the FCA’s four-year history."
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MIDEAST STOCKS-Saudi soft again, Emaar and DSI hold back Dubai
MIDEAST STOCKS-Saudi soft again, Emaar and DSI hold back Dubai:
"Saudi Arabia’s stock market fell on Tuesday despite a big rebound by petrochemical company PetroRabigh, while Dubai Investments helped offset losses by real estate-related shares in that market. The Saudi stock index dropped 0.2 percent as PetroRabigh’s gain failed to bolster the petrochemical sector as a whole while banking and insurance stocks weighed heavily on the market. PetroRabigh jumped 4.3 percent in its heaviest trade since May after reporting third-quarter net profit of 706 million riyals ($188.3 million) versus a year-earlier loss of 211 million riyals, with sales surging 43 percent."
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"Saudi Arabia’s stock market fell on Tuesday despite a big rebound by petrochemical company PetroRabigh, while Dubai Investments helped offset losses by real estate-related shares in that market. The Saudi stock index dropped 0.2 percent as PetroRabigh’s gain failed to bolster the petrochemical sector as a whole while banking and insurance stocks weighed heavily on the market. PetroRabigh jumped 4.3 percent in its heaviest trade since May after reporting third-quarter net profit of 706 million riyals ($188.3 million) versus a year-earlier loss of 211 million riyals, with sales surging 43 percent."
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Oil market enters ‘new normality’ after price correction, says BP
Oil market enters ‘new normality’ after price correction, says BP:
"The oil market is settling into “a new normality” according to BP, which announced a doubling of third-quarter profits and launched a share buyback programme. The results beat market expectations, pushing BP shares up 3.3 per cent on Tuesday morning, in a further sign of confidence returning to the oil and gas sector. Geopolitical tensions and tightening supplies have driven Brent crude, the international benchmark, above $60 a barrel in recent days for the first time since 2015. "
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"The oil market is settling into “a new normality” according to BP, which announced a doubling of third-quarter profits and launched a share buyback programme. The results beat market expectations, pushing BP shares up 3.3 per cent on Tuesday morning, in a further sign of confidence returning to the oil and gas sector. Geopolitical tensions and tightening supplies have driven Brent crude, the international benchmark, above $60 a barrel in recent days for the first time since 2015. "
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Saudis Leads Gulf Nations in Cutting Break-Even Oil Price - Bloomberg
Saudis Leads Gulf Nations in Cutting Break-Even Oil Price - Bloomberg:
"Saudi Arabia, OPEC’s biggest oil producer, is also a leader when it comes to slashing the crude price the country needs to balance its budget.
The kingdom will need oil to trade at $70 a barrel next year to break even, the Washington-based International Monetary Fund said Tuesday in its Regional Economic Outlook for the Middle East and Central Asia. That’s down from a break-even of $96.60 a barrel in 2016, the biggest drop of eight crude producers in the Persian Gulf. The break-even is a measure of the crude price needed to meet spending plans and balance the budget."
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"Saudi Arabia, OPEC’s biggest oil producer, is also a leader when it comes to slashing the crude price the country needs to balance its budget.
The kingdom will need oil to trade at $70 a barrel next year to break even, the Washington-based International Monetary Fund said Tuesday in its Regional Economic Outlook for the Middle East and Central Asia. That’s down from a break-even of $96.60 a barrel in 2016, the biggest drop of eight crude producers in the Persian Gulf. The break-even is a measure of the crude price needed to meet spending plans and balance the budget."
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Dubai’s Emirates REIT plans debut sukuk of at least $300 mln this year -source
Dubai’s Emirates REIT plans debut sukuk of at least $300 mln this year -source:
"Dubai-based Emirates REIT , a sharia-compliant real estate investment trust, plans to issue a debut Islamic bond of at least $300 million by the end of this year, said a source close to the company. The sukuk, to be denominated in U.S. dollars, could potentially replace all of the company’s outstanding debt, said the source, who spoke on condition of anonymity because of commercial sensitivities. The addition of a new issuer to the Gulf’s international bond market comes at a time of record debt sales in the region, as governments raise debt to plug budget deficits and corporates change their capital structures in an era of low oil prices."
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"Dubai-based Emirates REIT , a sharia-compliant real estate investment trust, plans to issue a debut Islamic bond of at least $300 million by the end of this year, said a source close to the company. The sukuk, to be denominated in U.S. dollars, could potentially replace all of the company’s outstanding debt, said the source, who spoke on condition of anonymity because of commercial sensitivities. The addition of a new issuer to the Gulf’s international bond market comes at a time of record debt sales in the region, as governments raise debt to plug budget deficits and corporates change their capital structures in an era of low oil prices."
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Gulf states still committed to VAT but dates will vary, IMF says
Gulf states still committed to VAT but dates will vary, IMF says:
"All six countries in the Gulf Cooperation Council remain committed to introducing value-added tax, though they will do so at different speeds, a senior International Monetary Fund official said. “My feeling, through my interaction with the authorities, is that they are still committed and they are still preparing implementation,” Jihad Azour, head of the IMF’s Middle East department, said in an interview. Seeking to close budget deficits caused by low oil prices, GCC states have agreed to introduce VAT at a 5 percent rate in 2018 - a big step for governments that have traditionally levied little tax and relied instead on oil revenues."
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"All six countries in the Gulf Cooperation Council remain committed to introducing value-added tax, though they will do so at different speeds, a senior International Monetary Fund official said. “My feeling, through my interaction with the authorities, is that they are still committed and they are still preparing implementation,” Jihad Azour, head of the IMF’s Middle East department, said in an interview. Seeking to close budget deficits caused by low oil prices, GCC states have agreed to introduce VAT at a 5 percent rate in 2018 - a big step for governments that have traditionally levied little tax and relied instead on oil revenues."
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IMF endorses Saudi plan for $500-billion business zone
IMF endorses Saudi plan for $500-billion business zone:
"The International Monetary Fund has endorsed an ambitious Saudi Arabian plan to build a $500-billion business and industrial zone extending into Jordan and Egypt, saying the project could benefit the whole region.
Jihad Azour, head of the IMF’s Middle East department, said Riyadh would need to balance the huge cost of the zone and other economic projects with its drive to cut a big state budget deficit caused by low oil prices.
But the plan to develop the zone, known as NEOM, could stimulate trade and allow the Middle East to capitalize on its location as a bridge between Asia and Europe, Azour said in an interview."
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"The International Monetary Fund has endorsed an ambitious Saudi Arabian plan to build a $500-billion business and industrial zone extending into Jordan and Egypt, saying the project could benefit the whole region.
Jihad Azour, head of the IMF’s Middle East department, said Riyadh would need to balance the huge cost of the zone and other economic projects with its drive to cut a big state budget deficit caused by low oil prices.
But the plan to develop the zone, known as NEOM, could stimulate trade and allow the Middle East to capitalize on its location as a bridge between Asia and Europe, Azour said in an interview."
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IMF Expects U.A.E. Economy to Rebound in 2018 as Abu Dhabi Grows - Bloomberg
IMF Expects U.A.E. Economy to Rebound in 2018 as Abu Dhabi Grows - Bloomberg:
"The International Monetary Fund expects the United Arab Emirates’ economic growth to nearly triple next year as the country’s largest sheikhdom, Abu Dhabi, benefits from an expected recovery in oil exports.
The U.A.E.’s gross domestic product will expand 3.4 percent in 2018 from 1.3 percent this year, largely on expectations that growth in oil-rich Abu Dhabi will surge to 3.2 percent from 0.3 percent this year, the IMF forecast. Dubai’s output will accelerate more moderately, to 3.5 percent from 3.3 percent in 2017, the Washington-based lender estimated.
“The non-oil sector both in Dubai and Abu Dhabi is almost growing at the same speed, around 3 percent,” Jihad Azour, head of the IMF’s Middle East and Central Asia Department, told reporters in Dubai on Tuesday. The recovery in Abu Dhabi, which holds about 6 percent of the world’s proven oil reserves, will be helped by a recovery in oil output next year after the OPEC-led agreement to reduce production caused exports to decline this year, he said."
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"The International Monetary Fund expects the United Arab Emirates’ economic growth to nearly triple next year as the country’s largest sheikhdom, Abu Dhabi, benefits from an expected recovery in oil exports.
The U.A.E.’s gross domestic product will expand 3.4 percent in 2018 from 1.3 percent this year, largely on expectations that growth in oil-rich Abu Dhabi will surge to 3.2 percent from 0.3 percent this year, the IMF forecast. Dubai’s output will accelerate more moderately, to 3.5 percent from 3.3 percent in 2017, the Washington-based lender estimated.
“The non-oil sector both in Dubai and Abu Dhabi is almost growing at the same speed, around 3 percent,” Jihad Azour, head of the IMF’s Middle East and Central Asia Department, told reporters in Dubai on Tuesday. The recovery in Abu Dhabi, which holds about 6 percent of the world’s proven oil reserves, will be helped by a recovery in oil output next year after the OPEC-led agreement to reduce production caused exports to decline this year, he said."
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MIDEAST STOCKS-Gulf stays sluggish but Saudi's PetroRabigh surges on strong results
MIDEAST STOCKS-Gulf stays sluggish but Saudi's PetroRabigh surges on strong results:
"Saudi Arabia’s stock market stayed soft in early trade on Tuesday despite a big rebound by petrochemical company PetroRabigh, while real estate-related shares again weighed on Dubai. The Saudi stock index dropped 0.3 percent in the first hour as PetroRabigh’s gain was offset by losses in the banking and insurance sectors. PetroRabigh jumped 5.6 percent in heavy trade; it reported third-quarter net profit of 706 million riyals ($188.3 million) versus a year-earlier loss of 211 million riyals, with sales surging 43 percent. "
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"Saudi Arabia’s stock market stayed soft in early trade on Tuesday despite a big rebound by petrochemical company PetroRabigh, while real estate-related shares again weighed on Dubai. The Saudi stock index dropped 0.3 percent in the first hour as PetroRabigh’s gain was offset by losses in the banking and insurance sectors. PetroRabigh jumped 5.6 percent in heavy trade; it reported third-quarter net profit of 706 million riyals ($188.3 million) versus a year-earlier loss of 211 million riyals, with sales surging 43 percent. "
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