Saudi borrowers fuel MENA syndicated loan boom:
Newly published league tables from Bloomberg show that regional loans increased by more than half last year, surpassing the previous record set in 2007.
Saudi borrowers topped the league with more than a third of the market, while the UAE accounted for more than a quarter of the total and Oman almost 10 percent.
A weak oil price, falling property values and emerging market uncertainty rattled regional debt markets in 2018, while rising US interest rates put some borrowers under pressure.
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Sunday 6 January 2019
Gulf IPO outlook hinges on oil prices, secondary markets: Kamco
Gulf IPO outlook hinges on oil prices, secondary markets: Kamco:
The outlook for initial public offerings (IPO) in the Gulf Co-operation Council (GCC) this year will depend on secondary equity markets and oil price stability, even as the GCC sovereigns continue to propel the non-oil economy by largely maintaining their budget spending, according to Kamco Research.
"The issuers are likely to watch the development of secondary markets early on in 2019, and also ascertain whether taking the debt market route for capital needs would be viable," Kamco said in a report.
The REIT (real estate investment trusts) IPO volumes are likely to come down over structural issues affecting fundamental demand for real estate, and declining spreads between returns of REITs and deposit rates for safer time deposits going forward, it said.
"Nevertheless, we believe that companies from the GCC with unique business models, industry classification and ability to show capital efficiency should continue to garner increased interest from both the local and international investors looking at IPO participation," it added.
The outlook for initial public offerings (IPO) in the Gulf Co-operation Council (GCC) this year will depend on secondary equity markets and oil price stability, even as the GCC sovereigns continue to propel the non-oil economy by largely maintaining their budget spending, according to Kamco Research.
"The issuers are likely to watch the development of secondary markets early on in 2019, and also ascertain whether taking the debt market route for capital needs would be viable," Kamco said in a report.
The REIT (real estate investment trusts) IPO volumes are likely to come down over structural issues affecting fundamental demand for real estate, and declining spreads between returns of REITs and deposit rates for safer time deposits going forward, it said.
"Nevertheless, we believe that companies from the GCC with unique business models, industry classification and ability to show capital efficiency should continue to garner increased interest from both the local and international investors looking at IPO participation," it added.
OPEC Strategy Still a Winner for Members Despite Oil Slump - Bloomberg
OPEC Strategy Still a Winner for Members Despite Oil Slump - Bloomberg:
Given oil’s plummet at the end of last year, OPEC’s strategy to stabilize the market might look a bust. But where it matters most for the cartel’s members -- petroleum revenues -- it’s still a winner.
Crude prices in London have sunk back to the same range when the group began production cuts in early 2017, of between $50 and $60 a barrel, as record U.S. oil output and shaky fuel demand counteract the group’s efforts. That’s below the levels most of its members need to balance government budgets.
But while the price slide may be an alarming sign for the Organization of Petroleum Exporting Countries, the strategy of output restraint has continued to deliver what matters most: higher revenues for their export-reliant economies.
Given oil’s plummet at the end of last year, OPEC’s strategy to stabilize the market might look a bust. But where it matters most for the cartel’s members -- petroleum revenues -- it’s still a winner.
Crude prices in London have sunk back to the same range when the group began production cuts in early 2017, of between $50 and $60 a barrel, as record U.S. oil output and shaky fuel demand counteract the group’s efforts. That’s below the levels most of its members need to balance government budgets.
But while the price slide may be an alarming sign for the Organization of Petroleum Exporting Countries, the strategy of output restraint has continued to deliver what matters most: higher revenues for their export-reliant economies.
Goldman Sachs Asks What If #Lebanon Is Forced to Restructure Debt - Bloomberg
Goldman Sachs Asks What If Lebanon Is Forced to Restructure Debt - Bloomberg:
Goldman Sachs Group Inc. still sees an imminent debt restructuring in Lebanon as unlikely but is already turning its attention to how much investors could recover as one of the world’s most indebted countries teeters on the brink of financial crisis.
Under Goldman’s base scenario, foreign investors would recover 35 cents on the dollar, Farouk Soussa, an economist at Goldman Sachs, said in a report. But he said any debt overhaul would put the country’s banks first, meaning “the actual recovery value” would be significantly different to contain damage. Local lenders are among the biggest holders of Lebanon’s sovereign debt.
Political turmoil and sluggish economic growth are prompting questions on how long Lebanon can avoid a financial meltdown that would further destabilize an area rattled by war in Syria and tension between Israel and Hezbollah. Lebanon’s sovereign debt risk surged 280 basis points over the past year to 800, making it the world’s third-worst performing among credit default swaps tracked by Bloomberg.
Goldman Sachs Group Inc. still sees an imminent debt restructuring in Lebanon as unlikely but is already turning its attention to how much investors could recover as one of the world’s most indebted countries teeters on the brink of financial crisis.
Under Goldman’s base scenario, foreign investors would recover 35 cents on the dollar, Farouk Soussa, an economist at Goldman Sachs, said in a report. But he said any debt overhaul would put the country’s banks first, meaning “the actual recovery value” would be significantly different to contain damage. Local lenders are among the biggest holders of Lebanon’s sovereign debt.
Political turmoil and sluggish economic growth are prompting questions on how long Lebanon can avoid a financial meltdown that would further destabilize an area rattled by war in Syria and tension between Israel and Hezbollah. Lebanon’s sovereign debt risk surged 280 basis points over the past year to 800, making it the world’s third-worst performing among credit default swaps tracked by Bloomberg.
Mideast Stocks: Rajhi leads #Saudi jump, other markets rise | ZAWYA MENA Edition
Mideast Stocks: Rajhi leads Saudi jump, other markets rise | ZAWYA MENA Edition:
Saudi Arabia's stock market rose on Sunday trade on positive investor sentiment, higher oil prices and solid gains by blue chips, led by Al Rajhi Bank which announced a capital increase, while other regional markets also closed higher.
Oil rose nearly 2 percent on Friday after proposed trade talks between the United States and China eased some fears about a global economic slowdown.
The Saudi index , the Middle East's biggest, rose 1.3 percent to almost a three-week high.
Saudi Arabia's stock market rose on Sunday trade on positive investor sentiment, higher oil prices and solid gains by blue chips, led by Al Rajhi Bank which announced a capital increase, while other regional markets also closed higher.
Oil rose nearly 2 percent on Friday after proposed trade talks between the United States and China eased some fears about a global economic slowdown.
The Saudi index , the Middle East's biggest, rose 1.3 percent to almost a three-week high.
#Iran's central bank proposes slashing four zeros from falling currency - IRNA | Reuters
Iran's central bank proposes slashing four zeros from falling currency - IRNA | Reuters:
Iran’s central bank has proposed slashing four zeros from the rial, state news agency IRNA reported on Sunday, after the currency plunged in a year marked by an economic crisis fuelled by U.S. sanctions.
“A bill to remove four zeros from the national currency was presented to the government by the central bank yesterday and I hope this matter can be concluded as soon as possible,” IRNA quoted central bank governor Abdolnaser Hemmati as saying.
Proposals to remove four zeros from the currency have been floated since 2008, but the idea has gained strength as the rial lost more than 60 percent of its value in 2018 despite a recent recovery engineered by the central bank in defiance of U.S. sanctions.
Iran’s central bank has proposed slashing four zeros from the rial, state news agency IRNA reported on Sunday, after the currency plunged in a year marked by an economic crisis fuelled by U.S. sanctions.
“A bill to remove four zeros from the national currency was presented to the government by the central bank yesterday and I hope this matter can be concluded as soon as possible,” IRNA quoted central bank governor Abdolnaser Hemmati as saying.
Proposals to remove four zeros from the currency have been floated since 2008, but the idea has gained strength as the rial lost more than 60 percent of its value in 2018 despite a recent recovery engineered by the central bank in defiance of U.S. sanctions.
#Saudi court to hold first hearing on AHAB dispute under new bankruptcy law: Maal | Reuters
Saudi court to hold first hearing on AHAB dispute under new bankruptcy law: Maal | Reuters:
A commercial court in Dammam will hold on Monday a first hearing on a debt settlement for the conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) under Saudi Arabia’s new bankruptcy law, according to the Maaal financial news website.
AHAB has been the first company to file for a settlement under the new law, seeking to resolve the kingdom’s longest-running and largest debt dispute.
Representatives of some 150 AHAB’s creditors will be present, according to Maal.
A commercial court in Dammam will hold on Monday a first hearing on a debt settlement for the conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) under Saudi Arabia’s new bankruptcy law, according to the Maaal financial news website.
AHAB has been the first company to file for a settlement under the new law, seeking to resolve the kingdom’s longest-running and largest debt dispute.
Representatives of some 150 AHAB’s creditors will be present, according to Maal.
Energy funds top list of 2018 worst performers | Financial Times
Energy funds top list of 2018 worst performers | Financial Times:
A sharp fall in oil prices in the last quarter of 2018 hit American mutual funds exposed to the energy sector and sent many of them tumbling towards the bottom of the year’s US performance table.
The price of US crude dropped from more than $75 a barrel in October to under $50 in December, sending a wintry blast across energy-focused funds.
The wooden spoon went to the Global Natural Resources fund run by Ohio-based Victory Capital, which lost 45.8 per cent.
A sharp fall in oil prices in the last quarter of 2018 hit American mutual funds exposed to the energy sector and sent many of them tumbling towards the bottom of the year’s US performance table.
The price of US crude dropped from more than $75 a barrel in October to under $50 in December, sending a wintry blast across energy-focused funds.
The wooden spoon went to the Global Natural Resources fund run by Ohio-based Victory Capital, which lost 45.8 per cent.
Is the tide at last on the turn for the world’s ‘strongman’ leaders? | World news | The Guardian
Is the tide at last on the turn for the world’s ‘strongman’ leaders? | World news | The Guardian:
The trial of 11 people charged with the murder of dissident Saudi journalist Jamal Khashoggi opened and was quickly adjourned in Riyadh last week. It may be that the outcome is fixed in advance. Yet that the hearing took place at all could be seen as progress of a kind. It suggests even a state as autocratic, inward-looking and undemocratic as Saudi Arabia is not immune to international opinion and can be forced, in extremis, to respect the human right to justice.
The Khashoggi affair has provided a chastening lesson for Mohammed bin Salman, the Saudi crown prince, who is widely believed to have ordered the journalist’s slaying in Istanbul in October. Until then, Salman was riding high, courted by Donald Trump, lauded at home for modest social reform and feared, if not respected, across the Arab Middle East for his war of attrition in Yemen and determination to face down Iran.
Salman’s subsequent fall from grace was swift. His reversal of fortune confounded the accepted narrative of an inexorable, global rise of like-minded, authoritarian “strongman” figures, riding waves of reviving nationalism and intolerant, rightwing populist and unilateralist sentiment. Yet there were signs elsewhere, too, that this toxic surge may be nearing its high point.
The trial of 11 people charged with the murder of dissident Saudi journalist Jamal Khashoggi opened and was quickly adjourned in Riyadh last week. It may be that the outcome is fixed in advance. Yet that the hearing took place at all could be seen as progress of a kind. It suggests even a state as autocratic, inward-looking and undemocratic as Saudi Arabia is not immune to international opinion and can be forced, in extremis, to respect the human right to justice.
The Khashoggi affair has provided a chastening lesson for Mohammed bin Salman, the Saudi crown prince, who is widely believed to have ordered the journalist’s slaying in Istanbul in October. Until then, Salman was riding high, courted by Donald Trump, lauded at home for modest social reform and feared, if not respected, across the Arab Middle East for his war of attrition in Yemen and determination to face down Iran.
Salman’s subsequent fall from grace was swift. His reversal of fortune confounded the accepted narrative of an inexorable, global rise of like-minded, authoritarian “strongman” figures, riding waves of reviving nationalism and intolerant, rightwing populist and unilateralist sentiment. Yet there were signs elsewhere, too, that this toxic surge may be nearing its high point.
#Saudi Oil Production Cuts May Stoke Oil Prices, Spur Trump Tweets - Bloomberg
Saudi Oil Production Cuts May Stoke Oil Prices, Spur Trump Tweets - Bloomberg: The list of things that President Donald Trump criticizes in his tweets varies from one day to the next. He may soon have to direct his ire to oil prices and the actions of his ally, Saudi Arabia, once again.
The desert kingdom is already making good on its promise to slash supply, and the initial evidence suggests that the biggest cut is being made in deliveries to the U.S. On top of that, the price it charges American buyers of its crude has been raised to near record levels for cargoes to be shipped in February. That could be bad news for a president who just celebrated falling gas prices.
The OPEC+ group of countries met in December and, after Russia took the reins, eventually agreed to cut supplies by 1.2 million barrels a day from January. For Saudi Arabia, that meant cutting production to just over 10.3 million, but it pledged to go further — oil minister Khalid Al-Falih told reporters and analysts that it would be slashed to 10.2 million barrels a day in January.
The desert kingdom is already making good on its promise to slash supply, and the initial evidence suggests that the biggest cut is being made in deliveries to the U.S. On top of that, the price it charges American buyers of its crude has been raised to near record levels for cargoes to be shipped in February. That could be bad news for a president who just celebrated falling gas prices.
The OPEC+ group of countries met in December and, after Russia took the reins, eventually agreed to cut supplies by 1.2 million barrels a day from January. For Saudi Arabia, that meant cutting production to just over 10.3 million, but it pledged to go further — oil minister Khalid Al-Falih told reporters and analysts that it would be slashed to 10.2 million barrels a day in January.
#Saudi Banks Set for Most Growth in 4 Years as Rates Offset Oil - Bloomberg
Saudi Banks Set for Most Growth in 4 Years as Rates Offset Oil - Bloomberg:
Saudi Arabian banks may report double-digit earnings growth this year as rising interest rates and increased government spending offset the risk of higher bad-debt charges.
Even loans may expand faster -- albeit nowhere near the pace of a decade ago -- after four years of declines led to a contraction in 2017. The government’s 2019 budget increased spending in the face of plunging oil prices, casting doubt on whether the kingdom will hit its fiscal-deficit targets.
“More stimulus, business confidence, privatization and a stronger economy will also support lending to the private sector,” said Edmond Christou, a banking analyst at Bloomberg Intelligence in Dubai. “Strong mortgage lending is likely to continue into 2019, boosted by government incentives, which may compensate for slower growth in personal loans and car leases as new responsible lending rules take effect.”
Saudi Arabian banks may report double-digit earnings growth this year as rising interest rates and increased government spending offset the risk of higher bad-debt charges.
Even loans may expand faster -- albeit nowhere near the pace of a decade ago -- after four years of declines led to a contraction in 2017. The government’s 2019 budget increased spending in the face of plunging oil prices, casting doubt on whether the kingdom will hit its fiscal-deficit targets.
“More stimulus, business confidence, privatization and a stronger economy will also support lending to the private sector,” said Edmond Christou, a banking analyst at Bloomberg Intelligence in Dubai. “Strong mortgage lending is likely to continue into 2019, boosted by government incentives, which may compensate for slower growth in personal loans and car leases as new responsible lending rules take effect.”
#Kuwait KIA Sees No Conflict of Interest in KFH-AUB Merger: Qabas - Bloomberg
Kuwait KIA Sees No Conflict of Interest in KFH-AUB Merger: Qabas - Bloomberg:
Kuwait Investment Authority, the country’s wealth fund, sees no conflict of interest in a potential merger between Kuwait Finance House KSCP and Bahrain’s Ahli United Bank BSC, Al Qabas newspaper reported.
Kuwait’s Public Institution for Social Security owns 18.7 percent of Ahli United, while the KIA holds 24.1 percent of Kuwait Finance House, according to Bloomberg data. Kuwait’s finance minister is the chairman of both the Public Institution for Social Security and the KIA.
The role of finance minister at the two institutions doesn’t constitute a conflict of interest, Al Qabas reported, citing the KIA.
Kuwait Investment Authority, the country’s wealth fund, sees no conflict of interest in a potential merger between Kuwait Finance House KSCP and Bahrain’s Ahli United Bank BSC, Al Qabas newspaper reported.
Kuwait’s Public Institution for Social Security owns 18.7 percent of Ahli United, while the KIA holds 24.1 percent of Kuwait Finance House, according to Bloomberg data. Kuwait’s finance minister is the chairman of both the Public Institution for Social Security and the KIA.
The role of finance minister at the two institutions doesn’t constitute a conflict of interest, Al Qabas reported, citing the KIA.
Mideast Stocks: Rajhi leads Saudi morning jump, other markets firm | ZAWYA MENA Edition
Mideast Stocks: Rajhi leads Saudi morning jump, other markets firm | ZAWYA MENA Edition:
Saudi Arabia's stock market jumped in early Sunday trade on positive investor sentiment, higher oil prices and solid gains by blue chips, led by Al Rajhi Bank which announced a capital increase, while other markets rose slightly.
Oil rose nearly 2 percent on Friday after proposed trade talks between the United States and China eased some fears about a global economic slowdown.
The Saudi index, the region's biggest, jumped 1.2 percent to almost a three-week high. Out of 165 traded stocks, 112 advanced and 35 declined.
Saudi Arabia's stock market jumped in early Sunday trade on positive investor sentiment, higher oil prices and solid gains by blue chips, led by Al Rajhi Bank which announced a capital increase, while other markets rose slightly.
Oil rose nearly 2 percent on Friday after proposed trade talks between the United States and China eased some fears about a global economic slowdown.
The Saudi index, the region's biggest, jumped 1.2 percent to almost a three-week high. Out of 165 traded stocks, 112 advanced and 35 declined.
#Dubai airport's November passenger traffic falls | ZAWYA MENA Edition
Dubai airport's November passenger traffic falls | ZAWYA MENA Edition:
Dubai International Airport's monthly passenger numbers dropped in November, leaving the world's busiest airport for international travellers needing a record month to meet its full-year target.
The number of passengers using the airport fell 0.8 percent to 6.9 million in November, said operator Dubai Airports on Sunday.
For the first 11 months of the year, 81.4 million passengers have used the airport, up 1.3 percent.
Dubai International Airport's monthly passenger numbers dropped in November, leaving the world's busiest airport for international travellers needing a record month to meet its full-year target.
The number of passengers using the airport fell 0.8 percent to 6.9 million in November, said operator Dubai Airports on Sunday.
For the first 11 months of the year, 81.4 million passengers have used the airport, up 1.3 percent.