Saudi Arabia’s budget deficit declines by 84% in second quarter:
The Saudi finance ministry said the country’s budget deficit in the second quarter fell by 84 percent to 7.4 billion riyals.
Saudi Arabia also said revenues surged by more than two thirds in the second quarter of the year to reach SR273.588 billion ($72.95 billion), supported by a stronger oil price.
It means the overall deficit fell to SR7.361 billion, the Ministry of Finance said in a statement.
Wednesday 8 August 2018
Qatar’s sovereign bond of $12bn largest in Q2: PwC report
Qatar’s sovereign bond of $12bn largest in Q2: PwC report:
Qatar has issued the highest value of sovereign bond at $12.0bn in the second quarter of 2018, according to a report by PwC Middle East.
The report said Qatar issued a bond, which consisted of three tranches: a $3.0bn five-year tranche, a $3.0bn 10-year tranche, and a $6.0bn 30-year tranche.
In addition, the government of Saudi Arabia issued a triple-tranche bond total valued $10.9bn.
Qatar has issued the highest value of sovereign bond at $12.0bn in the second quarter of 2018, according to a report by PwC Middle East.
The report said Qatar issued a bond, which consisted of three tranches: a $3.0bn five-year tranche, a $3.0bn 10-year tranche, and a $6.0bn 30-year tranche.
In addition, the government of Saudi Arabia issued a triple-tranche bond total valued $10.9bn.
Tesla Marks the Latest High-Profile Bet for Saudi Wealth Fund - Bloomberg
Tesla Marks the Latest High-Profile Bet for Saudi Wealth Fund - Bloomberg:
Saudi Arabia’s purchase of a stake of about $2 billion in Tesla Inc. is only the latest high-profile investment by its sovereign wealth fund since 2016.
The Public Investment Fund built up a less-than 5 percent stake in the electric carmaker in recent months, according to a person familiar with the matter, just as Elon Musk considers taking the company private. PIF’s move comes as it seeks to turn into a $2 trillion powerhouse and help diversify Saudi Arabia’s oil-dependent economy. Here’s a selection of PIF’s recent investments and holdings:
Saudi Arabia’s purchase of a stake of about $2 billion in Tesla Inc. is only the latest high-profile investment by its sovereign wealth fund since 2016.
The Public Investment Fund built up a less-than 5 percent stake in the electric carmaker in recent months, according to a person familiar with the matter, just as Elon Musk considers taking the company private. PIF’s move comes as it seeks to turn into a $2 trillion powerhouse and help diversify Saudi Arabia’s oil-dependent economy. Here’s a selection of PIF’s recent investments and holdings:
Oil Price Jump Sends Saudi Quarterly Revenue Up Annual 67% - Bloomberg
Oil Price Jump Sends Saudi Quarterly Revenue Up Annual 67% - Bloomberg:
Saudi Arabia’s second-quarter budget revenue increased 67 percent from the year-earlier period as higher oil prices helped boost income, the country’s Finance Ministry said in a statement on its website.
Revenue climbed to 273.6 billion riyals ($73 billion), boosted by an 82 percent increase in oil revenue, the ministry said on Wednesday. Non-oil revenue rose 42 percent to 89.4 billion riyals, while the budget deficit fell to 7.4 billion riyals, the ministry said.
While Crown Prince Mohammed bin Salman’s plan to transform the economy aims to reduce its reliance on crude in the long term, higher oil prices are central to efforts to support growth while introducing measures that would help boost revenue from other sources. Brent crude, an international benchmark, has gained 8.6 percent this year and was trading at more than $72 a barrel in London on Wednesday.
Saudi Arabia’s second-quarter budget revenue increased 67 percent from the year-earlier period as higher oil prices helped boost income, the country’s Finance Ministry said in a statement on its website.
Revenue climbed to 273.6 billion riyals ($73 billion), boosted by an 82 percent increase in oil revenue, the ministry said on Wednesday. Non-oil revenue rose 42 percent to 89.4 billion riyals, while the budget deficit fell to 7.4 billion riyals, the ministry said.
While Crown Prince Mohammed bin Salman’s plan to transform the economy aims to reduce its reliance on crude in the long term, higher oil prices are central to efforts to support growth while introducing measures that would help boost revenue from other sources. Brent crude, an international benchmark, has gained 8.6 percent this year and was trading at more than $72 a barrel in London on Wednesday.
Iran's Reliance on Own Oil Tankers Grows Even as Flows Slump - Bloomberg
Iran's Reliance on Own Oil Tankers Grows Even as Flows Slump - Bloomberg:
It is still nearly three months until U.S. sanctions on Iran’s oil exports snap back into force, but they are already having a big impact on the Persian Gulf country’s trade.
The nation’s outflow has fallen, and Iran is having to rely more on its own fleet of tankers to carry oil to its customers, according to ship-tracking data compiled by Bloomberg.
Iran’s exports of crude and condensate, a form of light oil extracted from gas fields, were down by 430,000 barrels a day, or 15 percent, in July compared with April, the last month before President Trump announced that he was pulling the U.S. out of the Iran nuclear deal and re-imposing sanctions.
It is still nearly three months until U.S. sanctions on Iran’s oil exports snap back into force, but they are already having a big impact on the Persian Gulf country’s trade.
The nation’s outflow has fallen, and Iran is having to rely more on its own fleet of tankers to carry oil to its customers, according to ship-tracking data compiled by Bloomberg.
Iran’s exports of crude and condensate, a form of light oil extracted from gas fields, were down by 430,000 barrels a day, or 15 percent, in July compared with April, the last month before President Trump announced that he was pulling the U.S. out of the Iran nuclear deal and re-imposing sanctions.
Saudi Arabia Investment Freeze Doesn't Amount to Much in Canada - Bloomberg
Saudi Arabia Investment Freeze Doesn't Amount to Much in Canada - Bloomberg:
The decision by Saudi Arabia to halt new investments and unload assets in Canada is likely to have limited impact.
Saudi assets in Canada are confined mainly to stakes in upscale hotel operators, some small stock holdings in companies like Canadian National Railway Co., and grain facilities.
Most investments have been made by Saudi billionaire Prince Alwaleed Bin Talal through his Kingdom Holding Co., a Riyadh-based conglomerate with investments in hotels, real estate and equities. The company’s international hotel unit joined Bill Gates’s Cascade Investment and Canadian Isadore Sharp in a 2007 buyout of management company Four Seasons Hotels Inc., taking a 47.5 percent stake.
The decision by Saudi Arabia to halt new investments and unload assets in Canada is likely to have limited impact.
Saudi assets in Canada are confined mainly to stakes in upscale hotel operators, some small stock holdings in companies like Canadian National Railway Co., and grain facilities.
Most investments have been made by Saudi billionaire Prince Alwaleed Bin Talal through his Kingdom Holding Co., a Riyadh-based conglomerate with investments in hotels, real estate and equities. The company’s international hotel unit joined Bill Gates’s Cascade Investment and Canadian Isadore Sharp in a 2007 buyout of management company Four Seasons Hotels Inc., taking a 47.5 percent stake.
Saudi Arabia sells Canadian assets as dispute escalates | Financial Times
Saudi Arabia sells Canadian assets as dispute escalates | Financial Times:
Saudi Arabia is selling Canadian assets as the kingdom escalates its response to Ottawa’s criticism of the arrest of a female activist.
The Saudi central bank and state pension funds have instructed their overseas asset managers to dispose of their Canadian equities, bonds and cash holdings “no matter the cost”, two people with direct knowledge of the orders said.
Third-party managers are estimated to be mandated to invest more than $100bn of Saudi funds in global markets, executives say. While the proportion of that figure invested in Canadian holdings would be “fairly small in absolute terms”, the asset sale sent a strong message, one of the people said.
Saudi Arabia is selling Canadian assets as the kingdom escalates its response to Ottawa’s criticism of the arrest of a female activist.
The Saudi central bank and state pension funds have instructed their overseas asset managers to dispose of their Canadian equities, bonds and cash holdings “no matter the cost”, two people with direct knowledge of the orders said.
Third-party managers are estimated to be mandated to invest more than $100bn of Saudi funds in global markets, executives say. While the proportion of that figure invested in Canadian holdings would be “fairly small in absolute terms”, the asset sale sent a strong message, one of the people said.
Oil tumbles on slowing Chinese demand, U.S.-China trade spat | Reuters
Oil tumbles on slowing Chinese demand, U.S.-China trade spat | Reuters:
Oil prices slid about 3 percent on Wednesday as a trade dispute between the United States and China escalated further and after Chinese import data showed a slowdown in energy demand.
Brent crude LCOc1 futures fell $2.37 to settle at $72.28 a barrel, a 3.17 percent loss.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $2.23 to settle at $66.94 a barrel, a 3.22 percent loss. The session low of $66.32 was the lowest since June 22.
Oil prices slid about 3 percent on Wednesday as a trade dispute between the United States and China escalated further and after Chinese import data showed a slowdown in energy demand.
Brent crude LCOc1 futures fell $2.37 to settle at $72.28 a barrel, a 3.17 percent loss.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $2.23 to settle at $66.94 a barrel, a 3.22 percent loss. The session low of $66.32 was the lowest since June 22.
RPT-Saudi-Canada row could further rattle foreign investors eyeing kingdom | Reuters
RPT-Saudi-Canada row could further rattle foreign investors eyeing kingdom | Reuters:
A worsening row between Saudi Arabia and Canada about human rights threatens to undermine Riyadh’s foreign investment drive, a campaign already unsettled by a series of assertive political and diplomatic initiatives by the top oil exporter.
The kingdom froze new trade and investment with Canada and expelled its ambassador this week, angered by a call from Ottawa for the freeing of arrested rights activists.
Riyadh’s action may do some damage to the miniscule trade between the two countries - Saudi Arabia’s main state wheat buying agency, for example, has told grains exporters it will no longer buy Canadian wheat and barley.
A worsening row between Saudi Arabia and Canada about human rights threatens to undermine Riyadh’s foreign investment drive, a campaign already unsettled by a series of assertive political and diplomatic initiatives by the top oil exporter.
The kingdom froze new trade and investment with Canada and expelled its ambassador this week, angered by a call from Ottawa for the freeing of arrested rights activists.
Riyadh’s action may do some damage to the miniscule trade between the two countries - Saudi Arabia’s main state wheat buying agency, for example, has told grains exporters it will no longer buy Canadian wheat and barley.
COLUMN-Oil market balance of power shifts: Kemp | Reuters
COLUMN-Oil market balance of power shifts: Kemp | Reuters:
The shift in oil market power away from OPEC towards a bilateral relationship between Saudi Arabia and Russia is the culmination of structural changes in oil production over the last 20 years.
These shifts are deeply structural and have little to do with the personality or negotiating skills of individual oil ministers, which arguably attract far too much attention from commentators and journalists.
Most of these changes can be traced back for 20 years or more, though some of them have recently accelerated, such as the recent slump in output from Venezuela and Libya.
The shift in oil market power away from OPEC towards a bilateral relationship between Saudi Arabia and Russia is the culmination of structural changes in oil production over the last 20 years.
These shifts are deeply structural and have little to do with the personality or negotiating skills of individual oil ministers, which arguably attract far too much attention from commentators and journalists.
Most of these changes can be traced back for 20 years or more, though some of them have recently accelerated, such as the recent slump in output from Venezuela and Libya.
Glencore says Rosneft deal to close in second half, loses No.2 oil trader spot | Reuters
Glencore says Rosneft deal to close in second half, loses No.2 oil trader spot | Reuters:
Glencore (GLEN.L) said on Wednesday the sale of the bulk of its stake in Russia’s Rosneft to the Qatari sovereign wealth fund is due to close in the second half of this year, as the Swiss company loses its spot as the world’s second-largest oil trader.
Glencore reported a slump in its traded oil volumes for the first half, pushing it into third place behind rivals Vitol and Trafigura.
Qatar’s fund QIA initially bought 19.5 percent in Rosneft together with Glencore in a consortium named QHG for 10.2 billion euros ($12.2 billion) during the Russian firm’s partial privatization in 2016.
Glencore (GLEN.L) said on Wednesday the sale of the bulk of its stake in Russia’s Rosneft to the Qatari sovereign wealth fund is due to close in the second half of this year, as the Swiss company loses its spot as the world’s second-largest oil trader.
Glencore reported a slump in its traded oil volumes for the first half, pushing it into third place behind rivals Vitol and Trafigura.
Qatar’s fund QIA initially bought 19.5 percent in Rosneft together with Glencore in a consortium named QHG for 10.2 billion euros ($12.2 billion) during the Russian firm’s partial privatization in 2016.
PetroChina, Qatar holding advanced talks on LNG supply deals: sources | Reuters
PetroChina, Qatar holding advanced talks on LNG supply deals: sources | Reuters:
PetroChina Ltd is in advanced discussions with Qatar to purchase liquefied natural gas (LNG) under short- and long-term agreements, three sources with knowledge of the talks said on Wednesday.
China needs to secure LNG to supply its push to replace coal with cleaner burning natural gas to reduce air pollution. After Beijing started the program last year, China has overtaken South Korea as the world’s second-biggest buyer of LNG.
Tying up with Qatar, the world’s biggest LNG producer, makes sense as the Middle Eastern country seeks buyers for a planned output expansion.
PetroChina Ltd is in advanced discussions with Qatar to purchase liquefied natural gas (LNG) under short- and long-term agreements, three sources with knowledge of the talks said on Wednesday.
China needs to secure LNG to supply its push to replace coal with cleaner burning natural gas to reduce air pollution. After Beijing started the program last year, China has overtaken South Korea as the world’s second-biggest buyer of LNG.
Tying up with Qatar, the world’s biggest LNG producer, makes sense as the Middle Eastern country seeks buyers for a planned output expansion.
MIDEAST STOCKS-Abu Dhabi hits four-year high, Saudi slips amid Canada row | Reuters
MIDEAST STOCKS-Abu Dhabi hits four-year high, Saudi slips amid Canada row | Reuters:
Abu Dhabi’s stockmarket touched four-year highs on Wednesday, helped by bank stocks, while Saudi Arabia’s dipped amid a diplomatic row with Canada.
First Abu Dhabi Bank climbed by 0.7 percent. Other banks also rose, with Abu Dhabi Islamic Bank up 1.8 percent and Union National Bank rising by 2.8 percent.
Banks are expected to be among the beneficiaries of a 50 billion dirham ($13.6 billion) plan announced by Abu Dhabi in June to revitalise the economy.
Abu Dhabi’s stockmarket touched four-year highs on Wednesday, helped by bank stocks, while Saudi Arabia’s dipped amid a diplomatic row with Canada.
First Abu Dhabi Bank climbed by 0.7 percent. Other banks also rose, with Abu Dhabi Islamic Bank up 1.8 percent and Union National Bank rising by 2.8 percent.
Banks are expected to be among the beneficiaries of a 50 billion dirham ($13.6 billion) plan announced by Abu Dhabi in June to revitalise the economy.
Mubadala Dealmaking Surges to Dwarf Mid-East Peers -- For Now - Bloomberg
Mubadala Dealmaking Surges to Dwarf Mid-East Peers -- For Now - Bloomberg:
While Saudi Arabia’s sovereign wealth fund might be attracting all the hype, business is brisk a little to the east in Abu Dhabi.
Mubadala Investment Co., which doubled in size after a tie-up with another local fund, is using its new scale to compete for global deals and sell assets. Since the start of 2017, it’s completed 31 deals, according to the Sovereign Wealth Fund Institute, with more in the works. Saudi Arabia’s Public Investment Fund completed 16 deals and boycott-hit Qatar Investment Authority did 19.
While Saudi Arabia’s sovereign wealth fund might be attracting all the hype, business is brisk a little to the east in Abu Dhabi.
Mubadala Investment Co., which doubled in size after a tie-up with another local fund, is using its new scale to compete for global deals and sell assets. Since the start of 2017, it’s completed 31 deals, according to the Sovereign Wealth Fund Institute, with more in the works. Saudi Arabia’s Public Investment Fund completed 16 deals and boycott-hit Qatar Investment Authority did 19.
Speculators Rattle China Oil Futures as Prices Break From World - Bloomberg
Speculators Rattle China Oil Futures as Prices Break From World - Bloomberg:
The crude futures contract that China launched with ambitions to challenge U.S. and European benchmarks is proving to be an eccentric outlier rather than a legitimate rival.
Futures in Shanghai -- which made their debut in March -- slid 2.6 percent from the close on Tuesday, when they had jumped by their daily limit to a record. Wednesday’s decline has pared gains in August to less than 2 percent. By comparison, Brent crude in London and West Texas Intermediate in New York have been relatively staid and are little changed for the month.
The crude futures contract that China launched with ambitions to challenge U.S. and European benchmarks is proving to be an eccentric outlier rather than a legitimate rival.
Futures in Shanghai -- which made their debut in March -- slid 2.6 percent from the close on Tuesday, when they had jumped by their daily limit to a record. Wednesday’s decline has pared gains in August to less than 2 percent. By comparison, Brent crude in London and West Texas Intermediate in New York have been relatively staid and are little changed for the month.
What Now for Saudi Arabia's Planned $2 Trillion Fund? - Bloomberg
What Now for Saudi Arabia's Planned $2 Trillion Fund? - Bloomberg:
Saudi Arabia is now looking for Plan B to propel its sovereign wealth fund into the ranks of global giants. The initial plan was to raise at least $100 billion through an initial public offering of a small stake in Saudi Aramco, the state-owned oil company, in the second half of 2018. Though the IPO is not going ahead as originally planned, the nation’s Public Investment Fund still hopes to control more than $2 trillion by 2030.
1. Why is Saudi Arabia trying to grow its fund?
PIF, as it’s known, is central to the government’s effort to diversify the economy away from oil, under a plan known as Vision 2030. The fund was set up in 1971 to support projects of strategic significance to the Saudi economy and for most of its history focused mainly on its home market. It holds about $150 billion of assets in listed Saudi companies, including stakes in Saudi Basic Industries Corp., the world’s second-biggest chemicals manufacturer; Saudi Telecom Co.; and National Commercial Bank, the kingdom’s largest lender by assets. But in recent years, it has made headline-making investments around the globe. It currently has assets of about $230 billion.
Saudi Arabia is now looking for Plan B to propel its sovereign wealth fund into the ranks of global giants. The initial plan was to raise at least $100 billion through an initial public offering of a small stake in Saudi Aramco, the state-owned oil company, in the second half of 2018. Though the IPO is not going ahead as originally planned, the nation’s Public Investment Fund still hopes to control more than $2 trillion by 2030.
1. Why is Saudi Arabia trying to grow its fund?
PIF, as it’s known, is central to the government’s effort to diversify the economy away from oil, under a plan known as Vision 2030. The fund was set up in 1971 to support projects of strategic significance to the Saudi economy and for most of its history focused mainly on its home market. It holds about $150 billion of assets in listed Saudi companies, including stakes in Saudi Basic Industries Corp., the world’s second-biggest chemicals manufacturer; Saudi Telecom Co.; and National Commercial Bank, the kingdom’s largest lender by assets. But in recent years, it has made headline-making investments around the globe. It currently has assets of about $230 billion.
Iran's foreign minister: U.S. will not stop Iran oil exports - newspaper | Reuters
Iran's foreign minister: U.S. will not stop Iran oil exports - newspaper | Reuters:
A U.S. plan to reduce Iran’s oil exports to zero will not succeed, Iranian Foreign Minister Mohammad Javad Zarif was cited as saying by an Iranian newspaper on Wednesday.
U.S. officials have said in recent weeks that they aim to pressure countries to stop buying oil from Iran in a bid to force Tehran to halt its nuclear and missile programs and involvement in regional conflicts in Syria and Iraq.
“If the Americans want to keep this simplistic and impossible idea in their minds they should also know its consequences,” Zarif told the Iran newspaper.
A U.S. plan to reduce Iran’s oil exports to zero will not succeed, Iranian Foreign Minister Mohammad Javad Zarif was cited as saying by an Iranian newspaper on Wednesday.
U.S. officials have said in recent weeks that they aim to pressure countries to stop buying oil from Iran in a bid to force Tehran to halt its nuclear and missile programs and involvement in regional conflicts in Syria and Iraq.
“If the Americans want to keep this simplistic and impossible idea in their minds they should also know its consequences,” Zarif told the Iran newspaper.
MIDEAST STOCKS-Abu Dhabi stocks near four-year high | Reuters
MIDEAST STOCKS-Abu Dhabi stocks near four-year high | Reuters:
Abu Dhabi’s market hovered around a four-year high on Wednesday, bolstered by banks shares, while Saudi Arabia’s market was more subdued.
Abu Dhabi’s index was up 0.5 percent, after hitting its highest level since late 2014 earlier in trading. First Abu Dhabi Bank rose 1.1 percent and Union National Bank 1.9 percent.
Investor sentiment has been boosted by a recovery in oil prices and an announcement by Abu Dhabi in June of a 50 billion- dirham ($13.6 billion) plan to revitalise the economy.
Abu Dhabi’s market hovered around a four-year high on Wednesday, bolstered by banks shares, while Saudi Arabia’s market was more subdued.
Abu Dhabi’s index was up 0.5 percent, after hitting its highest level since late 2014 earlier in trading. First Abu Dhabi Bank rose 1.1 percent and Union National Bank 1.9 percent.
Investor sentiment has been boosted by a recovery in oil prices and an announcement by Abu Dhabi in June of a 50 billion- dirham ($13.6 billion) plan to revitalise the economy.
RPT-COLUMN-Oil market enters post-OPEC era: Kemp | Reuters
RPT-COLUMN-Oil market enters post-OPEC era: Kemp | Reuters:
Saudi Arabia and Russia started to raise their oil production several weeks before the formal decision to increase output was taken by OPEC and its allies towards the end of June.
Saudi Arabia increased its production to 10.49 million barrels per day (bpd) in June from 10.03 million in May and 9.87 million bpd in April, according to government data submitted to OPEC (tmsnrt.rs/2M7dhH5).
Russia’s Rosneft also started to raise output from late May, anticipating a relaxation of the supply curbs, according to an investor presentation released with the company’s second-quarter results on Tuesday.
Saudi Arabia and Russia started to raise their oil production several weeks before the formal decision to increase output was taken by OPEC and its allies towards the end of June.
Saudi Arabia increased its production to 10.49 million barrels per day (bpd) in June from 10.03 million in May and 9.87 million bpd in April, according to government data submitted to OPEC (tmsnrt.rs/2M7dhH5).
Russia’s Rosneft also started to raise output from late May, anticipating a relaxation of the supply curbs, according to an investor presentation released with the company’s second-quarter results on Tuesday.
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