Oil plunges 6 percent as economic slowdown fears grip market | Reuters:
Oil prices plunged more than 6 percent to the lowest level in more than a year on Monday, pulling back sharply late in the session as fears of an economic slowdown rattled the market.
U.S. crude futures CLc1 and global benchmark Brent LCOc1 hit their lowest levels since 2017 during the session, putting both benchmarks on track for losses of about 40 percent in the fourth quarter.
“What’s happening in the stock market is raising fears that the economy is grinding to a halt and thereby will basically kill any future oil demand,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “They’re pricing in a slowdown in the economy if not a recession with this drop."
....... U.S. crude futures CLc1 settled at $42.53 a barrel, down $3.06, or 6.7 percent. Brent crude futures settled down $3.35, or 6.2 percent, at $50.47 a barrel. The market settled early ahead of the Christmas holiday. Prices extended losses in post-settlement trade.
Monday, 24 December 2018
UPDATE 1- #SaudiArabia's biggest bank NCB in merger talks with rival Riyad | Reuters
UPDATE 1-Saudi Arabia's biggest bank NCB in merger talks with rival Riyad | Reuters:
Saudi Arabia’s National Commercial Bank (NCB), the kingdom’s biggest lender by assets, has begun preliminary discussions to merge with smaller rival Riyad Bank, the two lenders said on Monday.
A merger would further extend NCB’s lead over its closest rivals including Al Rajhi Bank, by boosting its assets by almost a third to 685 billion riyals ($183 billion)
The move comes two months after Saudi British Bank (SABB) and smaller rival Alawwal Bank agreed a binding deal to create Saudi Arabia’s third-biggest lender in the first major tie-up for the country’s banking sector in recent times.
Saudi Arabia’s National Commercial Bank (NCB), the kingdom’s biggest lender by assets, has begun preliminary discussions to merge with smaller rival Riyad Bank, the two lenders said on Monday.
A merger would further extend NCB’s lead over its closest rivals including Al Rajhi Bank, by boosting its assets by almost a third to 685 billion riyals ($183 billion)
The move comes two months after Saudi British Bank (SABB) and smaller rival Alawwal Bank agreed a binding deal to create Saudi Arabia’s third-biggest lender in the first major tie-up for the country’s banking sector in recent times.
MIDEAST STOCKS-Saudi banks rebound after tax deal, #Dubai hits 5-year low | Reuters
MIDEAST STOCKS-Saudi banks rebound after tax deal, Dubai hits 5-year low | Reuters:
Saudi Arabia’s stock index rose on Monday as banks rebounded after a sell-off triggered by news of a deal with tax authorities, while Dubai dropped to a five-year low, pressured by a slide in Emirates NBD.
The Saudi index was up 0.4 percent with Samba Financial Group gaining 1.7 percent and Alinma Bank adding 2.0 percent. Ten of 12 banking stocks rose.
The sector weakened on Sunday after banks agreed with Islamic tax authorities to resolve a dispute over increased liabilities that will result in one-off payments, although many banks had already made provisions for much of the liabilities.
Saudi Arabia’s stock index rose on Monday as banks rebounded after a sell-off triggered by news of a deal with tax authorities, while Dubai dropped to a five-year low, pressured by a slide in Emirates NBD.
The Saudi index was up 0.4 percent with Samba Financial Group gaining 1.7 percent and Alinma Bank adding 2.0 percent. Ten of 12 banking stocks rose.
The sector weakened on Sunday after banks agreed with Islamic tax authorities to resolve a dispute over increased liabilities that will result in one-off payments, although many banks had already made provisions for much of the liabilities.
Elon Musk's Teslas in #Dubai: Driven by the State and the Rich - Bloomberg
Elon Musk's Teslas in Dubai: Driven by the State and the Rich - Bloomberg:
Dubai has ambitious goals for electric cars. Early adopters get free parking, no tolls and discounts on registration fees. Even the power is gratis at the 200 charging stations the government installed throughout the city.
The trouble is the public is just fine without them.
The biggest buyer of electric vehicles is the government itself, dealers say, with hundreds sold in bulk to local authorities over the past few years. The few others spotted speeding up Dubai’s highways tend to be Teslas, which start at 335,730 dirhams ($91,400). Expats will splash out in this relatively low-tax city, but they often go for flashy sports cars.
Dubai has ambitious goals for electric cars. Early adopters get free parking, no tolls and discounts on registration fees. Even the power is gratis at the 200 charging stations the government installed throughout the city.
The trouble is the public is just fine without them.
The biggest buyer of electric vehicles is the government itself, dealers say, with hundreds sold in bulk to local authorities over the past few years. The few others spotted speeding up Dubai’s highways tend to be Teslas, which start at 335,730 dirhams ($91,400). Expats will splash out in this relatively low-tax city, but they often go for flashy sports cars.
Oil Gets Little Relief From OPEC's Hints That Curbs Could Deepen - Bloomberg
Oil Gets Little Relief From OPEC's Hints That Curbs Could Deepen - Bloomberg:
Oil fell toward $45 a barrel as worries over rising U.S. supplies and the global economy overshadowed signals from OPEC that it may extend or even deepen its pledged output curbs.
Futures fell 0.3 percent in New York, after declining 11 percent last week -- the most since January 2016. Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia’s expectation that the group will extend its cuts for another six months. They will have to contend with U.S. producers, which added 10 oil rigs last week, according to Baker Hughes data, even as the nation’s output stays near record high levels.
Oil fell toward $45 a barrel as worries over rising U.S. supplies and the global economy overshadowed signals from OPEC that it may extend or even deepen its pledged output curbs.
Futures fell 0.3 percent in New York, after declining 11 percent last week -- the most since January 2016. Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia’s expectation that the group will extend its cuts for another six months. They will have to contend with U.S. producers, which added 10 oil rigs last week, according to Baker Hughes data, even as the nation’s output stays near record high levels.
#UAE banks' digital drive causes upheaval in jobs market | ZAWYA MENA Edition
UAE banks' digital drive causes upheaval in jobs market | ZAWYA MENA Edition:
The digitisation drive among banks to use new technologies to replace routine roles with apps and artificial intelligence (AI)-enabled technology is already underway in the United Arab Emirates, with Standard Chartered and Mashreq Bank among the firms to lay off staff as a result, but its impact will take some time to be felt throughout the sector, experts have told Zawya.
Standard Chartered confirmed to Reuters that it was cutting jobs in its retail division as more customers migrate to digital services.
Meanwhile, Zawya understands that Mashreq Bank has also recently laid off a large number of sales and call centre staff. The bank declined to comment on the number of jobs lost, but it said these posts were being replaced with "an equivalent number of relationship managers, product management and digital banking" roles.
The digitisation drive among banks to use new technologies to replace routine roles with apps and artificial intelligence (AI)-enabled technology is already underway in the United Arab Emirates, with Standard Chartered and Mashreq Bank among the firms to lay off staff as a result, but its impact will take some time to be felt throughout the sector, experts have told Zawya.
Standard Chartered confirmed to Reuters that it was cutting jobs in its retail division as more customers migrate to digital services.
Meanwhile, Zawya understands that Mashreq Bank has also recently laid off a large number of sales and call centre staff. The bank declined to comment on the number of jobs lost, but it said these posts were being replaced with "an equivalent number of relationship managers, product management and digital banking" roles.
Brent crude edges up, but concern over demand limits gains | Reuters
Brent crude edges up, but concern over demand limits gains | Reuters:
Oil prices edged up on Monday after evidence that a recent fall to 15-month lows may be affecting output in the United States, the world’s largest producer, although concern about the outlook for demand tempered gains.
Brent crude futures LCOc1 were up 12 cents at $53.94 a barrel by 0858 GMT, while U.S. crude futures CLc1 lost 3 cents to $45.56.
Brent fell 11 percent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017, bringing the decline in the two contracts to 35 percent so far this quarter.
Oil prices edged up on Monday after evidence that a recent fall to 15-month lows may be affecting output in the United States, the world’s largest producer, although concern about the outlook for demand tempered gains.
Brent crude futures LCOc1 were up 12 cents at $53.94 a barrel by 0858 GMT, while U.S. crude futures CLc1 lost 3 cents to $45.56.
Brent fell 11 percent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017, bringing the decline in the two contracts to 35 percent so far this quarter.
Mideast Stocks: Saudi banks stabilise after tax settlement, #Dubai sinks | ZAWYA MENA Edition
Mideast Stocks: Saudi banks stabilise after tax settlement, Dubai sinks | ZAWYA MENA Edition:
Most Gulf stock markets moved little early on Monday and Saudi Arabian banking shares were largely stable after some dropped on the previous day in response to news of a deal with tax authorities. Two blue chips dragged Dubai's market down sharply.
The Saudi index was up 0.1 percent after 80 minutes with Al Rajhi Bank flat and Samba Financial Group adding 0.5 percent. Five bank stocks were higher, two lower and the rest flat.
Saudi banks agreed with Islamic tax authorities to resolve a dispute over increased liabilities that will result in one-off payments, although many banks had already made provisions for much of the liabilities.
Most Gulf stock markets moved little early on Monday and Saudi Arabian banking shares were largely stable after some dropped on the previous day in response to news of a deal with tax authorities. Two blue chips dragged Dubai's market down sharply.
The Saudi index was up 0.1 percent after 80 minutes with Al Rajhi Bank flat and Samba Financial Group adding 0.5 percent. Five bank stocks were higher, two lower and the rest flat.
Saudi banks agreed with Islamic tax authorities to resolve a dispute over increased liabilities that will result in one-off payments, although many banks had already made provisions for much of the liabilities.
#UAE traders weigh to take pain in short-term for a long-term gain
UAE traders weigh to take pain in short-term for a long-term gain:
UAE traders in stock markets, who may be sitting on losses, are in two minds whether to book losses and sit on cash or wait for a longer term for future gains.
Analysts feel there might be more pain in the short-term because of weak fundamentals of real estate and banking stocks.
“There is a fear in the minds of people, whether the stocks will go lower from here, and how much of downside it has, and how much they can withstand to avoid any margin calls,” said an analyst who did not wish to be named.
UAE traders in stock markets, who may be sitting on losses, are in two minds whether to book losses and sit on cash or wait for a longer term for future gains.
Analysts feel there might be more pain in the short-term because of weak fundamentals of real estate and banking stocks.
“There is a fear in the minds of people, whether the stocks will go lower from here, and how much of downside it has, and how much they can withstand to avoid any margin calls,” said an analyst who did not wish to be named.
‘Dumb-money’ for Saudi stocks won’t be enough to aid market
‘Dumb-money’ for Saudi stocks won’t be enough to aid market:
While billions of dollars will flow into Saudi Arabia with its inclusion in MSCI Inc’s emerging-market benchmark in June, don’t count on the passive money to revive the market’s fortunes, says Eaton Vance Corp.
Government-related funds, which appeared to have propped up Saudi equities following the murder of columnist Jamal Khashoggi in October, will probably become sellers next year to investors tracking the MSCI index – in classic buy-low, sell-high style, according to the Boston-based money manager.
“We would expect a dumb-money passive bid to purchase Saudi equities, regardless of their valuation, which, I might add, is not particularly cheap,” said Marshall Stocker, a Boston-based portfolio manager at Eaton Vance, which oversees about $439bn. “I do not think the Saudi stock market will trade up upon inclusion. Instead, the Saudi state may prove ingenious in selling their holdings to index funds.”
While billions of dollars will flow into Saudi Arabia with its inclusion in MSCI Inc’s emerging-market benchmark in June, don’t count on the passive money to revive the market’s fortunes, says Eaton Vance Corp.
Government-related funds, which appeared to have propped up Saudi equities following the murder of columnist Jamal Khashoggi in October, will probably become sellers next year to investors tracking the MSCI index – in classic buy-low, sell-high style, according to the Boston-based money manager.
“We would expect a dumb-money passive bid to purchase Saudi equities, regardless of their valuation, which, I might add, is not particularly cheap,” said Marshall Stocker, a Boston-based portfolio manager at Eaton Vance, which oversees about $439bn. “I do not think the Saudi stock market will trade up upon inclusion. Instead, the Saudi state may prove ingenious in selling their holdings to index funds.”
Here’s what could go right (and wrong) for Gulf bonds next year
Here’s what could go right (and wrong) for Gulf bonds next year:
The performance of nearly $340bn of Eurobonds in the Gulf Arab region depends on what the Federal Reserve does next.
Securities from the Gulf Co-operation Council are poised for their worst year since 2013, and could face another painful 12 months if the US maintains its pace of rate increases. That, and the risk of more declines in oil prices, will keep investors on tenterhooks, although inclusion in JPMorgan Chase & Co’s emerging-market bond indexes starting January will likely attract billions of dollars.
The good news is that investors are now reducing bets on the number of rate increases in 2019 as they weigh the prospect of slowing global economic growth, fading US fiscal stimulus and volatile financial markets.
The performance of nearly $340bn of Eurobonds in the Gulf Arab region depends on what the Federal Reserve does next.
Securities from the Gulf Co-operation Council are poised for their worst year since 2013, and could face another painful 12 months if the US maintains its pace of rate increases. That, and the risk of more declines in oil prices, will keep investors on tenterhooks, although inclusion in JPMorgan Chase & Co’s emerging-market bond indexes starting January will likely attract billions of dollars.
The good news is that investors are now reducing bets on the number of rate increases in 2019 as they weigh the prospect of slowing global economic growth, fading US fiscal stimulus and volatile financial markets.
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