The key energy questions for 2018:
"What are the issues that will shape the global energy market in 2018? What will be the energy mix, trade patterns and price trends? Every country is different and local factors, including politics, are important. But at the global level there are four key questions, and each of which answers is highly uncertain. The first question is whether Saudi Arabia is stable. The kingdom’s oil exports now mostly go to Asia but the volumes involved mean that any volatility will destabilise a market where speculation is rife. Crown Prince Mohammed bin Salman is apparently in control but it is a strange and fragile sort of control that requires the imprisonment of dozens of senior businessmen including members of the royal family, the concentration of power in the hands of one individual and a huge international PR campaign to persuade the world that MbS is a modernising liberal. That is certainly not the view held in Yemen or across the Middle East. Behind the grand plans for a new $500bn city (sorry, "urban metropolis for the world") run by robots and the radical notion of allowing Saudi women to drive for the first time is a degree of old-fashioned religious fanaticism directed against the Shia communities across the region and Iran in particular. This could produce real instability over the next few months. "
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Sunday, 31 December 2017
Saudi developer Dar Al Arkan to sell a 30 per cent stake of unit in IPO - The National
Saudi developer Dar Al Arkan to sell a 30 per cent stake of unit in IPO - The National:
"Dar Al Arkan Real Estate Development, the biggest publicly traded real estate developer in Saudi Arabia, has received a nod from its board for plans to sell a 30 per cent stake in its property management unit, joining a growing list of regional companies looking to raise funds through initial public offerings of their subsidiary businesses. "The company plans to file the offering application to the [ Saudi Arabia's] Capital Market Authority to obtain the approvals," Dar Al Arkan said in a statement the Tadawul stock exchange, where its shares are traded. Samba Capital & Investment Management is advising Dar Al Arkan on the deal, it said without giving a timeline of the transaction or how much it plans to raise through the share float. Dar Al Arkan Properties Company, is a wholly-owned unit and runs Dar Al Arkan's property management and leasing business. It has income producing assets worth 2.68 billion Saudi riyals (Dh2.62bn) spread across a number of cities in the kingdom."
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"Dar Al Arkan Real Estate Development, the biggest publicly traded real estate developer in Saudi Arabia, has received a nod from its board for plans to sell a 30 per cent stake in its property management unit, joining a growing list of regional companies looking to raise funds through initial public offerings of their subsidiary businesses. "The company plans to file the offering application to the [ Saudi Arabia's] Capital Market Authority to obtain the approvals," Dar Al Arkan said in a statement the Tadawul stock exchange, where its shares are traded. Samba Capital & Investment Management is advising Dar Al Arkan on the deal, it said without giving a timeline of the transaction or how much it plans to raise through the share float. Dar Al Arkan Properties Company, is a wholly-owned unit and runs Dar Al Arkan's property management and leasing business. It has income producing assets worth 2.68 billion Saudi riyals (Dh2.62bn) spread across a number of cities in the kingdom."
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Adnoc Distribution IPO to spur more listings in energy sector | GulfNews.com
Adnoc Distribution IPO to spur more listings in energy sector | GulfNews.com:
"The successful listing of Adnoc Distribution on Abu Dhabi bourse is likely to encourage more energy companies from the region to go public to raise capital as low oil prices hurt their revenues, according to analysts. Adnoc Distribution, the fuel and retail arm of Abu Dhabi National Oil Company (Adnoc) was listed on Abu Dhabi Securities Exchange (ADX) on December 13 with the stock opening at Dh2.90 compared to the final IPO price of Dh2.50, a 16 per cent increase. Both local and international investors showed strong interest in the IPO (initial public offering) and the company raised Dh3.1 billion after it offered 10 per cent of its shares."
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"The successful listing of Adnoc Distribution on Abu Dhabi bourse is likely to encourage more energy companies from the region to go public to raise capital as low oil prices hurt their revenues, according to analysts. Adnoc Distribution, the fuel and retail arm of Abu Dhabi National Oil Company (Adnoc) was listed on Abu Dhabi Securities Exchange (ADX) on December 13 with the stock opening at Dh2.90 compared to the final IPO price of Dh2.50, a 16 per cent increase. Both local and international investors showed strong interest in the IPO (initial public offering) and the company raised Dh3.1 billion after it offered 10 per cent of its shares."
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No New Year cheer for UAE property market | Arab News
No New Year cheer for UAE property market | Arab News:
"It is that time of year when the Gulf’s plethora of real estate pundits look into their crystal balls to see what the future might hold.
Last year was a particularly difficult for the region as it contended with weak oil prices, political tensions and volatile investor sentiment. The introduction of value-added tax in Saudi Arabia and the UAE from 2018 will inject yet more short-term uncertainty into the market, some commentators have said.
However, as the global price of crude picks up, the economic growth prospects of the region’s oil-exporting countries are projected to improve in 2018."
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"It is that time of year when the Gulf’s plethora of real estate pundits look into their crystal balls to see what the future might hold.
Last year was a particularly difficult for the region as it contended with weak oil prices, political tensions and volatile investor sentiment. The introduction of value-added tax in Saudi Arabia and the UAE from 2018 will inject yet more short-term uncertainty into the market, some commentators have said.
However, as the global price of crude picks up, the economic growth prospects of the region’s oil-exporting countries are projected to improve in 2018."
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MIDEAST STOCKS-Gulf underperforms in 2017, has reason to expect better 2018
MIDEAST STOCKS-Gulf underperforms in 2017, has reason to expect better 2018:
"Middle Eastern stock markets far underperformed the rest of the world in 2017 but as the year ended, beaten-down valuations for shares and plans for higher government spending gave investors reason to expect a better 2018.
Egypt’s stock index surged 21.7 percent in 2017 as economic reforms bore fruit, but the picture in the Gulf was little short of disastrous because of geopolitical tensions, sluggish economic growth and sagging real estate prices.
Saudi Arabia’s index edged up just 0.2 percent during the year compared to a 34 percent leap for MSCI’s emerging markets index. Among other major Gulf markets, Dubai fell 4.6 percent and Qatar, hit by a boycott imposed by other Arab states, lost 18.3 percent."
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"Middle Eastern stock markets far underperformed the rest of the world in 2017 but as the year ended, beaten-down valuations for shares and plans for higher government spending gave investors reason to expect a better 2018.
Egypt’s stock index surged 21.7 percent in 2017 as economic reforms bore fruit, but the picture in the Gulf was little short of disastrous because of geopolitical tensions, sluggish economic growth and sagging real estate prices.
Saudi Arabia’s index edged up just 0.2 percent during the year compared to a 34 percent leap for MSCI’s emerging markets index. Among other major Gulf markets, Dubai fell 4.6 percent and Qatar, hit by a boycott imposed by other Arab states, lost 18.3 percent."
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Qatar year in review: isolation casts a shadow over economic prospects for 2018 - The National
Qatar year in review: isolation casts a shadow over economic prospects for 2018 - The National:
"The diplomatic crisis in the Arabian Gulf region that has affected Qatar’s economy shows no signs of abating and any escalation in the issue between the gas-rich country and the quartet of Saudi Arabia, the UAE, Bahrain and Egypt means Doha will have to dig deep into its reserves to support its economy. “The economy is likely to rely increasingly on state funding for growth, reversing a funding model in the past couple of years, where non-resident [bank] deposits were the key source of funding,” the investment bank EFG-Hermes said in a research note. A forecast by BMI Research, a unit of Fitch Ratings, of an oversupply in the liquefied natural gas market next year that could force the spot prices of LNG down significantly does not bode well for the economic and fiscal prospects of Qatar. The country is the world’s biggest LNG exporter and revenues from the sale of hydrocarbons account for about 90 per cent of its income."
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"The diplomatic crisis in the Arabian Gulf region that has affected Qatar’s economy shows no signs of abating and any escalation in the issue between the gas-rich country and the quartet of Saudi Arabia, the UAE, Bahrain and Egypt means Doha will have to dig deep into its reserves to support its economy. “The economy is likely to rely increasingly on state funding for growth, reversing a funding model in the past couple of years, where non-resident [bank] deposits were the key source of funding,” the investment bank EFG-Hermes said in a research note. A forecast by BMI Research, a unit of Fitch Ratings, of an oversupply in the liquefied natural gas market next year that could force the spot prices of LNG down significantly does not bode well for the economic and fiscal prospects of Qatar. The country is the world’s biggest LNG exporter and revenues from the sale of hydrocarbons account for about 90 per cent of its income."
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Qatari lenders strained under the ongoing diplomatic row - The National
Qatari lenders strained under the ongoing diplomatic row - The National:
"Government deposits have extended a lifeline to Qatari banks, easing some of the damage of deposits outflow in the wake of the diplomatic row with the Arab quartet of Saudi Arabia, the UAE, Bahrain and Egypt.
However, any escalation of the dispute or it continuing over an extended period will increase pressure, affect asset quality and impact the profitability of the lenders.
“The longer the crisis lasts, the more it will weaken investor confidence [in the Qatari banking sector],” BMI, a unit of Fitch Ratings, said in a research note released on November 21. “In turn, this poses risks to banks’ funding and profitability – particularly at a time of structurally lower oil prices and rising interest rates.”"
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"Government deposits have extended a lifeline to Qatari banks, easing some of the damage of deposits outflow in the wake of the diplomatic row with the Arab quartet of Saudi Arabia, the UAE, Bahrain and Egypt.
However, any escalation of the dispute or it continuing over an extended period will increase pressure, affect asset quality and impact the profitability of the lenders.
“The longer the crisis lasts, the more it will weaken investor confidence [in the Qatari banking sector],” BMI, a unit of Fitch Ratings, said in a research note released on November 21. “In turn, this poses risks to banks’ funding and profitability – particularly at a time of structurally lower oil prices and rising interest rates.”"
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Qatar’s PPI increased 6.1% in November - The Peninsula Qatar
Qatar’s PPI increased 6.1% in November - The Peninsula Qatar:
"The Producer Price Index (PPI) for the industrial sector for November 2017 increased by 6.1 percent to 60.8 points compared to the previous month and rose by 21.4 percent (y-o-y) compared to the corresponding month of the previous year 2016. The Index data, released yesterday by the Ministry of Development Planning and Statistics, consists of three components of three main sectors including mining, 72.7 percent of the general index, manufacturing, 26.8 percent, and electricity and water, 0.5 percent. The mining index showed a 6.9 percent rise compared to the previous month as a result of the increase of the prices of the group of crude oil and natural gas by 6.9 percent. The index rose by 20.8 percent compared to November 2016."
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"The Producer Price Index (PPI) for the industrial sector for November 2017 increased by 6.1 percent to 60.8 points compared to the previous month and rose by 21.4 percent (y-o-y) compared to the corresponding month of the previous year 2016. The Index data, released yesterday by the Ministry of Development Planning and Statistics, consists of three components of three main sectors including mining, 72.7 percent of the general index, manufacturing, 26.8 percent, and electricity and water, 0.5 percent. The mining index showed a 6.9 percent rise compared to the previous month as a result of the increase of the prices of the group of crude oil and natural gas by 6.9 percent. The index rose by 20.8 percent compared to November 2016."
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QIIB high ratings by Moody’s, Fitch reflect Qatar’s economic strength, says Al-Shaibei
QIIB high ratings by Moody’s, Fitch reflect Qatar’s economic strength, says Al-Shaibei:
"QIIB announced that Moody’s and Fitch Ratings have affirmed its ratings at ‘A2’ and ‘A’ respectively, which reflects the bank’s strong financial position and its ability to confront challenges and market factors.
On QIIB’s ratings at ‘A2’, Moody’s said that it is based on several considerations, one of which is that the bank maintains high levels of liquidity and a strong capital base. Additionally, QIIB is one of the oldest Islamic banks in Qatar and has a strong client base, especially in the retail sector.
Fitch explained that “The affirmation of the bank’s Viability Rating (VR) and the removal of the Rating Watch Negative (RWN) reflect Fitch’s view that immediate risks from the diplomatic crisis to the bank’s overall standalone credit profile has reduced. "
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"QIIB announced that Moody’s and Fitch Ratings have affirmed its ratings at ‘A2’ and ‘A’ respectively, which reflects the bank’s strong financial position and its ability to confront challenges and market factors.
On QIIB’s ratings at ‘A2’, Moody’s said that it is based on several considerations, one of which is that the bank maintains high levels of liquidity and a strong capital base. Additionally, QIIB is one of the oldest Islamic banks in Qatar and has a strong client base, especially in the retail sector.
Fitch explained that “The affirmation of the bank’s Viability Rating (VR) and the removal of the Rating Watch Negative (RWN) reflect Fitch’s view that immediate risks from the diplomatic crisis to the bank’s overall standalone credit profile has reduced. "
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Mideast funds to boost equities positions, favor Saudi after state budget: Reuters poll
Mideast funds to boost equities positions, favor Saudi after state budget: Reuters poll:
"Middle East fund managers plan to boost their equity holdings after a very weak year in which the region underperformed emerging markets globally because of geopolitics and slow economic growth, a Reuters poll showed on Sunday.
Egypt’s stock market surged to record highs in 2017 as economic reforms took hold but Gulf Cooperation Council markets sagged, with Dubai’s index .DFMGI falling 4.6 percent and Saudi Arabia .TASI almost flat. By contrast, MSCI’s emerging markets index .MSCIEF soared 34 percent.
As a result, Middle East and North African equity funds returned just 2.5 percent on average in the year through November, compared with more than 21 percent for global emerging market equity funds, according to calculations by Citywire using data from Lipper, a Reuters company. "
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"Middle East fund managers plan to boost their equity holdings after a very weak year in which the region underperformed emerging markets globally because of geopolitics and slow economic growth, a Reuters poll showed on Sunday.
Egypt’s stock market surged to record highs in 2017 as economic reforms took hold but Gulf Cooperation Council markets sagged, with Dubai’s index .DFMGI falling 4.6 percent and Saudi Arabia .TASI almost flat. By contrast, MSCI’s emerging markets index .MSCIEF soared 34 percent.
As a result, Middle East and North African equity funds returned just 2.5 percent on average in the year through November, compared with more than 21 percent for global emerging market equity funds, according to calculations by Citywire using data from Lipper, a Reuters company. "
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A Guide to Mideast Markets in 2018 - Bloomberg
A Guide to Mideast Markets in 2018 - Bloomberg:
"For as long as Gulf economies rely on oil, crude will be a factor in determining how investors trade regional markets. But right now, politics is king. In the past 12 months, tension between Saudi Arabia and Iran escalated, ties between Qatar and its neighbors were severed, rebels in Yemen fired rockets over Riyadh and Saudi Arabia started a crackdown on corruption that led to the arrest of high-profile businessmen and royals, including Prince Alwaleed bin Talal. Rising geopolitical risks has impacted the way Middle Eastern investors react to oil prices, making shares in the six-nation Gulf Cooperation Council the most negatively correlated with crude since 2014, according to a Bloomberg index of the region’s major indexes. The stock gauge fell about 3 percent so far this year even after crude prices recovered to the highest level since 2015."
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"For as long as Gulf economies rely on oil, crude will be a factor in determining how investors trade regional markets. But right now, politics is king. In the past 12 months, tension between Saudi Arabia and Iran escalated, ties between Qatar and its neighbors were severed, rebels in Yemen fired rockets over Riyadh and Saudi Arabia started a crackdown on corruption that led to the arrest of high-profile businessmen and royals, including Prince Alwaleed bin Talal. Rising geopolitical risks has impacted the way Middle Eastern investors react to oil prices, making shares in the six-nation Gulf Cooperation Council the most negatively correlated with crude since 2014, according to a Bloomberg index of the region’s major indexes. The stock gauge fell about 3 percent so far this year even after crude prices recovered to the highest level since 2015."
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Saudi Aramco faces a momentous year as IPO deadline looms | ZAWYA MENA Edition
Saudi Aramco faces a momentous year as IPO deadline looms | ZAWYA MENA Edition:
"When in October 2016, Crown Prince Mohammed bin Salman announced that the Kingdom’s national oil champion, Saudi Aramco, would go public in 2018, it seemed as though there was all the time in the world to prepare the company for a record-breaking initial public offering on global stock markets. How time flies. As 2017 progressed, the pace of preparation accelerated ahead of that deadline, but it also became apparent that there were challenges in sticking to an unbending plan for the biggest IPO in history, and that the Kingdom had other options as it looked to raise $100 billion from the sale. But amid the debate and uncertainty over the precise eventual form of the IPO, Aramco quietly stuck to its strategic plan: Diversifying away from the being a mere crude pumper to become a diversified energy conglomerate at the center of Saudi industry, as well as a global force in the energy business. That will surely continue, at an even faster pace, in 2018."
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"When in October 2016, Crown Prince Mohammed bin Salman announced that the Kingdom’s national oil champion, Saudi Aramco, would go public in 2018, it seemed as though there was all the time in the world to prepare the company for a record-breaking initial public offering on global stock markets. How time flies. As 2017 progressed, the pace of preparation accelerated ahead of that deadline, but it also became apparent that there were challenges in sticking to an unbending plan for the biggest IPO in history, and that the Kingdom had other options as it looked to raise $100 billion from the sale. But amid the debate and uncertainty over the precise eventual form of the IPO, Aramco quietly stuck to its strategic plan: Diversifying away from the being a mere crude pumper to become a diversified energy conglomerate at the center of Saudi industry, as well as a global force in the energy business. That will surely continue, at an even faster pace, in 2018."
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Dubai's Emirates airline ends 2017 on a high note reaching fleet and product milestones | ZAWYA MENA Edition
Dubai's Emirates airline ends 2017 on a high note reaching fleet and product milestones | ZAWYA MENA Edition:
"Emirates, the world’s largest international airline, is concluding another banner year of growth and innovation, marking significant milestones across its fleet, network, and product innovation initiatives, cementing its position as a market leader and industry trendsetter. Since January 2017, Emirates has carried over 59 million passengers. The airline served over 63 million meals on its flights departing Dubai, and moved over 35 million pieces of baggage in Dubai to its network of 156 destinations. Emirates registered over 3,600 passenger flights on average per week, or over 191,000 flights in 2017, travelling more than 886 million km around the globe, which is equivalent to over 16,000 trips to Mars. Reflecting on the year, Sir Tim Clark, president Emirates Airline said: “Despite the ups and downs of 2017, Emirates delivered steady growth and we have come out stronger and even more resilient. "
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"Emirates, the world’s largest international airline, is concluding another banner year of growth and innovation, marking significant milestones across its fleet, network, and product innovation initiatives, cementing its position as a market leader and industry trendsetter. Since January 2017, Emirates has carried over 59 million passengers. The airline served over 63 million meals on its flights departing Dubai, and moved over 35 million pieces of baggage in Dubai to its network of 156 destinations. Emirates registered over 3,600 passenger flights on average per week, or over 191,000 flights in 2017, travelling more than 886 million km around the globe, which is equivalent to over 16,000 trips to Mars. Reflecting on the year, Sir Tim Clark, president Emirates Airline said: “Despite the ups and downs of 2017, Emirates delivered steady growth and we have come out stronger and even more resilient. "
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Saudi's NCB plans to raise capital with 10 billion riyal bonus share issue
Saudi's NCB plans to raise capital with 10 billion riyal bonus share issue:
"Saudi Arabia’s National Commercial Bank (NCB), the kingdom’s largest lender, said on Sunday its board had proposed increasing the bank’s capital by 10 billion riyals ($2.7 billion) through issuing bonus shares to help support growth.
In a statement to the Saudi stock market, NCB said it will increase its capital to 30 billion riyals from retained earnings, by issuing one bonus share for every two shares owned, subject to approval from shareholders and authorities.
No money is being raised from shareholders, who are getting the new shares for free, but the move is an accounting device that bolsters the bank’s equity, thus helps future lending."
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"Saudi Arabia’s National Commercial Bank (NCB), the kingdom’s largest lender, said on Sunday its board had proposed increasing the bank’s capital by 10 billion riyals ($2.7 billion) through issuing bonus shares to help support growth.
In a statement to the Saudi stock market, NCB said it will increase its capital to 30 billion riyals from retained earnings, by issuing one bonus share for every two shares owned, subject to approval from shareholders and authorities.
No money is being raised from shareholders, who are getting the new shares for free, but the move is an accounting device that bolsters the bank’s equity, thus helps future lending."
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Winds of change blow through renewable energy market
Winds of change blow through renewable energy market:
"Europe’s renewable energy industry is used to breaking records for generating more power from low carbon sources.
Yet two recent milestones stand out.
Vattenfall, the Swedish energy group, and Norway’s Statoil were among the companies that took the market by surprise before Christmas when they bid in the world’s first exclusively subsidy-free offshore wind auction, held by the Dutch government."
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"Europe’s renewable energy industry is used to breaking records for generating more power from low carbon sources.
Yet two recent milestones stand out.
Vattenfall, the Swedish energy group, and Norway’s Statoil were among the companies that took the market by surprise before Christmas when they bid in the world’s first exclusively subsidy-free offshore wind auction, held by the Dutch government."
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