Oil Stumbles as Putin Clouds Outlook for More Production Curbs - Bloomberg:
Brent for June settlement fell 49 cents to $70.61 a barrel on the London-based ICE Futures Europe exchange at the close of trading. The global benchmark crude was at a premium of $6.65 to WTI for the same month.
WTI for May delivery traded at $64.14 a barrel at 4:40 p.m. after settling at $63.98 a barrel on the New York Mercantile Exchange, a day after posting its highest close since Oct. 31. The grade’s 14-day relative strength index rose as high as 77 on Tuesday, above the 70 level that signals it’s overbought.
Tuesday 9 April 2019
Stock market traders are not buying FAB-ADIB merger denial; shares snapped up heavily
Stock market traders are not buying FAB-ADIB merger denial; shares snapped up heavily:
Stock market traders are not buying denial of reports of a potential merger between First Abu Dhabi Bank (FAB) and Abu Dhabi Islamic Bank (ADIB).
ADIB shares have been witnessing continuous bouts of buying since the last four sessions, and on Tuesday, shares saw their biggest gain since 2017. Traded volumes were the highest since the third quarter of 2016. ADIB shares jumped more than 5 per cent to be at Dh4.88, with 9.6 million shares changing hands.
“The combined entity will help FAB surpass its regional competitor QNB both in terms of assets and net profits. However, we believe the room for extracting cost synergies would be limited given one is conventional and the other fully Islamic,” Vrajesh Bhandari, senior portfolio manager at Al Mal Capital told Gulf News.
Stock market traders are not buying denial of reports of a potential merger between First Abu Dhabi Bank (FAB) and Abu Dhabi Islamic Bank (ADIB).
ADIB shares have been witnessing continuous bouts of buying since the last four sessions, and on Tuesday, shares saw their biggest gain since 2017. Traded volumes were the highest since the third quarter of 2016. ADIB shares jumped more than 5 per cent to be at Dh4.88, with 9.6 million shares changing hands.
“The combined entity will help FAB surpass its regional competitor QNB both in terms of assets and net profits. However, we believe the room for extracting cost synergies would be limited given one is conventional and the other fully Islamic,” Vrajesh Bhandari, senior portfolio manager at Al Mal Capital told Gulf News.
$2tn global Islamic finance market is a key focus area: QFC
$2tn global Islamic finance market is a key focus area: QFC:
The Qatar Financial Center (QFC) aims to serve the $2tn global Islamic finance market through three core geographies as Shariah-principled finance will progressively evolve as the most equitable gateway to financial security, according to its top official.
"Islamic finance is a key focus area for both Qatar and the QFC. This was reaffirmed in 2018, when Qatar launched the world's largest single country Islamic exchange traded fund with an initial asset value of $120mn, and in the QFC’s new strategy, which aims to serve the $2tn global Islamic finance market through three core markets – Turkey, Qatar, and Malaysia," QFC Authority chief executive Yousuf Mohamed al-Jaida told the World Economic Forum on the Middle East and North Africa.
As part of moves towards achieving a sustainable and inclusive economy, the QFC will also continue to participate in meaningful dialogues that create opportunities and collaborations in support of this goal, he said at a panel discussion ‘The Promise of Islamic Finance,’ which delved into crucial issues that impact the realisation of the full potential of the sector.
The Qatar Financial Center (QFC) aims to serve the $2tn global Islamic finance market through three core geographies as Shariah-principled finance will progressively evolve as the most equitable gateway to financial security, according to its top official.
"Islamic finance is a key focus area for both Qatar and the QFC. This was reaffirmed in 2018, when Qatar launched the world's largest single country Islamic exchange traded fund with an initial asset value of $120mn, and in the QFC’s new strategy, which aims to serve the $2tn global Islamic finance market through three core markets – Turkey, Qatar, and Malaysia," QFC Authority chief executive Yousuf Mohamed al-Jaida told the World Economic Forum on the Middle East and North Africa.
As part of moves towards achieving a sustainable and inclusive economy, the QFC will also continue to participate in meaningful dialogues that create opportunities and collaborations in support of this goal, he said at a panel discussion ‘The Promise of Islamic Finance,’ which delved into crucial issues that impact the realisation of the full potential of the sector.
Putin says no imminent decision on oil output cuts - Reuters
Putin says no imminent decision on oil output cuts - Reuters:
President Vladimir Putin said on Tuesday that Russia and OPEC should discuss the future of their oil output-cutting deal later this year, adding that current oil prices suited Moscow.
The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia agreed to reduce their combined output by 1.2 million barrels per day (bpd) from Jan. 1 this year for six months in an attempt to balance the market.
Russia undertook to cut its production by 228,000 bpd but has struggled to comply with the pact.
President Vladimir Putin said on Tuesday that Russia and OPEC should discuss the future of their oil output-cutting deal later this year, adding that current oil prices suited Moscow.
The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia agreed to reduce their combined output by 1.2 million barrels per day (bpd) from Jan. 1 this year for six months in an attempt to balance the market.
Russia undertook to cut its production by 228,000 bpd but has struggled to comply with the pact.
#Qatar plan for further stake in Deutsche Bank has stalled: sources - Reuters
Qatar plan for further stake in Deutsche Bank has stalled: sources - Reuters:
A plan by Qatar’s sovereign wealth fund to make a significant investment in Deutsche Bank has stalled, according to two people with knowledge of the matter.
The Qatar Investment Authority (QIA) approached financial regulators months ago to seek approval to buy a big stake in Germany’s largest lender, the people said. Qatar’s royal family already holds a combined 6.1 percent stake in Deutsche Bank.
But Qatari officials haven’t yet provided the necessary documentation, which could derail the QIA’s investment plans, they said. It was unclear whether the fund had lost interest or whether it was simply taking its time.
A plan by Qatar’s sovereign wealth fund to make a significant investment in Deutsche Bank has stalled, according to two people with knowledge of the matter.
The Qatar Investment Authority (QIA) approached financial regulators months ago to seek approval to buy a big stake in Germany’s largest lender, the people said. Qatar’s royal family already holds a combined 6.1 percent stake in Deutsche Bank.
But Qatari officials haven’t yet provided the necessary documentation, which could derail the QIA’s investment plans, they said. It was unclear whether the fund had lost interest or whether it was simply taking its time.
Aramco sells $12 billion bonds out of record $100 billion demand - Reuters
Aramco sells $12 billion bonds out of record $100 billion demand - Reuters:
Saudi Aramco is set to raise $12 billion with its first international bond issue after receiving more than $100 billion in orders, a record breaking vote of market confidence for the oil giant which has faced investor concerns about government influence over the company.
State-owned Aramco’s bond issue, split into maturities ranging from three to 30 years, is seen as a gauge of potential investor interest in the Saudi company’s eventual initial public offering.
Before the bond deal was marketed on Monday, Saudi Energy Minister Khalid al-Falih said initial indications of interest for the paper were over $30 billion.
Saudi Aramco is set to raise $12 billion with its first international bond issue after receiving more than $100 billion in orders, a record breaking vote of market confidence for the oil giant which has faced investor concerns about government influence over the company.
State-owned Aramco’s bond issue, split into maturities ranging from three to 30 years, is seen as a gauge of potential investor interest in the Saudi company’s eventual initial public offering.
Before the bond deal was marketed on Monday, Saudi Energy Minister Khalid al-Falih said initial indications of interest for the paper were over $30 billion.
Oil falls from five-month highs as Russia signals output increase - Reuters
Oil falls from five-month highs as Russia signals output increase - Reuters:
Oil prices fell on Tuesday, slipping from five-month highs as Russian comments indicating a possible easing from its production-cutting deal with OPEC overshadowed the prospect that violence in Libya could further tighten global markets.
A U.S. threat to slap tariffs on hundreds of European goods and a downgrade by the International Monetary Fund in its global economic growth forecasts took the steam out of the rally in global equities and also added to concerns that a slowdown this year will hit fuel consumption and prevent crude prices from rising even higher.
Supply curbs led by the Organization of the Petroleum Exporting Countries and allies like Russia have underpinned a more than 30 percent rally this year for Brent crude, despite downward pressure from fears of an economic slowdown and weaker demand.
Oil prices fell on Tuesday, slipping from five-month highs as Russian comments indicating a possible easing from its production-cutting deal with OPEC overshadowed the prospect that violence in Libya could further tighten global markets.
A U.S. threat to slap tariffs on hundreds of European goods and a downgrade by the International Monetary Fund in its global economic growth forecasts took the steam out of the rally in global equities and also added to concerns that a slowdown this year will hit fuel consumption and prevent crude prices from rising even higher.
Supply curbs led by the Organization of the Petroleum Exporting Countries and allies like Russia have underpinned a more than 30 percent rally this year for Brent crude, despite downward pressure from fears of an economic slowdown and weaker demand.
#Qatar National Bank first-quarter net profit rises 3.8 percent, loans up 5 percent - Reuters
Qatar National Bank first-quarter net profit rises 3.8 percent, loans up 5 percent - Reuters:
Qatar National Bank (QNB), the Gulf’s largest lender, reported a 3.8 percent increase in first-quarter net profit on Tuesday, broadly in line with analysts’ forecasts.
Net profit in the three months to March 31 was 3.56 billion riyals ($978 million), the bank said in a statement, compared with 3.43 billion riyals in the corresponding period of 2018.
EFG Hermes forecast a higher net profit of 3.71 billion riyals, while SICO Bahrain’s estimate was marginally lower at 3.51 billion riyals.
Qatar National Bank (QNB), the Gulf’s largest lender, reported a 3.8 percent increase in first-quarter net profit on Tuesday, broadly in line with analysts’ forecasts.
Net profit in the three months to March 31 was 3.56 billion riyals ($978 million), the bank said in a statement, compared with 3.43 billion riyals in the corresponding period of 2018.
EFG Hermes forecast a higher net profit of 3.71 billion riyals, while SICO Bahrain’s estimate was marginally lower at 3.51 billion riyals.
Shareholders back latest restructuring plan for #Dubai's Drake & Scull | ZAWYA MENA Edition
Shareholders back latest restructuring plan for Dubai's Drake & Scull | ZAWYA MENA Edition:
Heavily-indebted contracting firm Drake & Scull has said that its board has passed a restructuring plan that will allow the company to continue trading.
A notice informing the Dubai Financial Market (DFM) of resolutions passed at a company board meeting on Monday stated that a restructuring plan approved by its chairman was backed by a majority of attendees, who also gave approval for the “continuation of the company in carrying out business”.
The majority of shareholders also backed a resolution to give board directors the right to “liquidate/close/sell certain branches of the company or subsidiaries according to the restructuring plan”, according to the announcement.
Heavily-indebted contracting firm Drake & Scull has said that its board has passed a restructuring plan that will allow the company to continue trading.
A notice informing the Dubai Financial Market (DFM) of resolutions passed at a company board meeting on Monday stated that a restructuring plan approved by its chairman was backed by a majority of attendees, who also gave approval for the “continuation of the company in carrying out business”.
The majority of shareholders also backed a resolution to give board directors the right to “liquidate/close/sell certain branches of the company or subsidiaries according to the restructuring plan”, according to the announcement.
MIDEAST STOCKS- #Dubai continues rally, most major Gulf markets mixed - Reuters
MIDEAST STOCKS-Dubai continues rally, most major Gulf markets mixed - Reuters:
Dubai's stock market edged up on Tuesday stretching its rally for the ninth consecutive session, aided by its industrial and financial shares, while trading was mixed across other major Gulf markets.
The Dubai index closed 0.2 percent higher, with Emirates Integrated Telecommunications rising 1.6 percent.
Dubai Investments rose 2 percent to reach its highest level since November. On Sunday, the firm signed an $86 million contract with ABB Industries to commission a new Dubai Electricity and Water Authority substation.
Dubai's stock market edged up on Tuesday stretching its rally for the ninth consecutive session, aided by its industrial and financial shares, while trading was mixed across other major Gulf markets.
The Dubai index closed 0.2 percent higher, with Emirates Integrated Telecommunications rising 1.6 percent.
Dubai Investments rose 2 percent to reach its highest level since November. On Sunday, the firm signed an $86 million contract with ABB Industries to commission a new Dubai Electricity and Water Authority substation.
Blowout #Saudi Bond Deal Sends a Message to Markets - Bloomberg
Blowout Saudi Bond Deal Sends a Message to Markets - Bloomberg:
Saudi Arabia on Monday began offering $10 billion of bonds of Saudi Aramco, the world’s largest oil company. Most of the focus was on how investors submitted orders for about $60 billion of bonds. Even if you are (rightly) skeptical of “order books” and think the true demand was for half that amount, it’s still a remarkable development for a country that just a few months ago was being ostracized for its role in the killing of Washington Post columnist Jamal Khashoggi. But there’s more to the story.
In essence, the high demand is a referendum on the oil market. Investors are really looking to jump into the deal because they think that oil prices, which are up more than 50 percent from the lows in December, are headed much higher. Rising oil prices are generally not a problem for markets during times of economic strength, but the majority of analysts expect weaker growth, with the Organization for Economic Cooperation and Development having just slashed its global forecast for this year to 3.3 percent from a previous estimate of 3.5 percent. Higher crude prices could act as a further drag on the economy and weigh on riskier financial assets. In the U.S., for example, prices for a gallon of regular grade gasoline have risen to an average of $2.74 heading into the all-important summer driving season, according to the Automobile Association of America, up from January’s low of $2.23 a gallon. Prices are in sight of the $2.90 a gallon seen in early October right before personal spending took a dive and equity markets collapsed. Some might say that higher oil prices indicate an economy that isn’t as bad as thought, but the reality is they probably have more to do with a decline in the supplies, thanks to OPEC.
Saudi Arabia on Monday began offering $10 billion of bonds of Saudi Aramco, the world’s largest oil company. Most of the focus was on how investors submitted orders for about $60 billion of bonds. Even if you are (rightly) skeptical of “order books” and think the true demand was for half that amount, it’s still a remarkable development for a country that just a few months ago was being ostracized for its role in the killing of Washington Post columnist Jamal Khashoggi. But there’s more to the story.
In essence, the high demand is a referendum on the oil market. Investors are really looking to jump into the deal because they think that oil prices, which are up more than 50 percent from the lows in December, are headed much higher. Rising oil prices are generally not a problem for markets during times of economic strength, but the majority of analysts expect weaker growth, with the Organization for Economic Cooperation and Development having just slashed its global forecast for this year to 3.3 percent from a previous estimate of 3.5 percent. Higher crude prices could act as a further drag on the economy and weigh on riskier financial assets. In the U.S., for example, prices for a gallon of regular grade gasoline have risen to an average of $2.74 heading into the all-important summer driving season, according to the Automobile Association of America, up from January’s low of $2.23 a gallon. Prices are in sight of the $2.90 a gallon seen in early October right before personal spending took a dive and equity markets collapsed. Some might say that higher oil prices indicate an economy that isn’t as bad as thought, but the reality is they probably have more to do with a decline in the supplies, thanks to OPEC.
Gulf's bond and sukuk markets set to grow after slow start | ZAWYA MENA Edition
Gulf's bond and sukuk markets set to grow after slow start | ZAWYA MENA Edition:
Bond and sukuk issuance by corporate entities in the Gulf Cooperation Council (GCC) is likely to pick up in 2019 after a slow start to the year when global capital markets were weighed by uncertainty, according to ratings agency S&P Global.
In a note published on Monday, the agency said that there had been "visibly lower issuances by GCC corporates" in the first three months of the year, with issuance to date standing at $1.1 billion.
Some $500 million of this was raised via a debut sukuk from Saudi food and beverage firm Almarai Company, and the remaining $600 million was issued by Bahrain's sovereign wealth fund, Mumtalakat.
Bond and sukuk issuance by corporate entities in the Gulf Cooperation Council (GCC) is likely to pick up in 2019 after a slow start to the year when global capital markets were weighed by uncertainty, according to ratings agency S&P Global.
In a note published on Monday, the agency said that there had been "visibly lower issuances by GCC corporates" in the first three months of the year, with issuance to date standing at $1.1 billion.
Some $500 million of this was raised via a debut sukuk from Saudi food and beverage firm Almarai Company, and the remaining $600 million was issued by Bahrain's sovereign wealth fund, Mumtalakat.
MIDEAST STOCKS-Financials lift #Dubai, most Gulf markets rise - Reuters
MIDEAST STOCKS-Financials lift Dubai, most Gulf markets rise - Reuters:
Dubai’s stock market rose for a ninth straight session on Tuesday as most of its financial shares rose, while other major Gulf markets inched up.
The Dubai index was up 0.2 percent, with Dubai Islamic Bank adding 0.4 percent and its largest lender Emirates NBD rising 0.4 percent.
Dubai Islamic Bank, the United Arab Emirates’ largest sharia-compliant bank, is in talks with Dubai-based Noor Bank over a possible acquisition of the lender, three sources told Reuters on Monday.
Dubai’s stock market rose for a ninth straight session on Tuesday as most of its financial shares rose, while other major Gulf markets inched up.
The Dubai index was up 0.2 percent, with Dubai Islamic Bank adding 0.4 percent and its largest lender Emirates NBD rising 0.4 percent.
Dubai Islamic Bank, the United Arab Emirates’ largest sharia-compliant bank, is in talks with Dubai-based Noor Bank over a possible acquisition of the lender, three sources told Reuters on Monday.
#Dubai's non-oil private sector economy expands in March | ZAWYA MENA Edition
Dubai's non-oil private sector economy expands in March | ZAWYA MENA Edition:
Dubai's non-oil private sector economy expanded at a faster rate in March, with total business output increasing at the fastest rate since January 2015, according to Emirates NBD.
Moreover, two of the three key monitored sectors, the tourism and retail industries posted record upticks in activity and wholesale and retail - posted series record increases in activity.
The seasonally adjusted Emirates NBD Dubai Economy Tracker Index -- a composite indicator developed with IHS Markit and designed to give an accurate overview of operating conditions in the non-oil private sector economy - rose to 57.6 in March, the highest since May 2018, from 55.8 in February.
Dubai's non-oil private sector economy expanded at a faster rate in March, with total business output increasing at the fastest rate since January 2015, according to Emirates NBD.
Moreover, two of the three key monitored sectors, the tourism and retail industries posted record upticks in activity and wholesale and retail - posted series record increases in activity.
The seasonally adjusted Emirates NBD Dubai Economy Tracker Index -- a composite indicator developed with IHS Markit and designed to give an accurate overview of operating conditions in the non-oil private sector economy - rose to 57.6 in March, the highest since May 2018, from 55.8 in February.
UPDATE 1- #UAE's Finablr considers London float that could raise at least $200 mln - Reuters
UPDATE 1-UAE's Finablr considers London float that could raise at least $200 mln - Reuters:
United Arab Emirates-based payments and foreign exchange company Finablr is considering a stock market flotation in London that could raise at least $200 million to finance expansion and cut debt.
Finablr, whose brands include UAE Exchange, Travelex Holdings and Xpress Money, said on Tuesday it could sell a mix of new and existing shares totalling at least 25 percent of its equity, though a final decision had not been made to proceed with the issue.
The plan comes after its rival Network International’s initial public offering (IPO) drew strong demand in a deal that could raise 870 million pounds ($1.1 billion). Network is set to price at 435 pence per share, a term sheet showed on Monday.
United Arab Emirates-based payments and foreign exchange company Finablr is considering a stock market flotation in London that could raise at least $200 million to finance expansion and cut debt.
Finablr, whose brands include UAE Exchange, Travelex Holdings and Xpress Money, said on Tuesday it could sell a mix of new and existing shares totalling at least 25 percent of its equity, though a final decision had not been made to proceed with the issue.
The plan comes after its rival Network International’s initial public offering (IPO) drew strong demand in a deal that could raise 870 million pounds ($1.1 billion). Network is set to price at 435 pence per share, a term sheet showed on Monday.
RPT-COLUMN-Oil traders hail output cuts but wary on economic outlook: Kemp - Reuters
RPT-COLUMN-Oil traders hail output cuts but wary on economic outlook: Kemp - Reuters:
Hedge fund managers are becoming progressively more bullish on the outlook for crude and gasoline prices, but they are turning increasingly against diesel, notwithstanding the IMO marine fuel deadline at the end of the year.
Hedge funds and other money managers were net buyers of 23 million barrels of futures and options linked to crude and refined products in the week to April, according to exchange and regulatory position records.
Fund managers have raised their overall bullish position in the six most important petroleum-linked futures and options contracts to a total of 745 million barrels, an increase of 444 million barrels in the last 12 weeks.
Hedge fund managers are becoming progressively more bullish on the outlook for crude and gasoline prices, but they are turning increasingly against diesel, notwithstanding the IMO marine fuel deadline at the end of the year.
Hedge funds and other money managers were net buyers of 23 million barrels of futures and options linked to crude and refined products in the week to April, according to exchange and regulatory position records.
Fund managers have raised their overall bullish position in the six most important petroleum-linked futures and options contracts to a total of 745 million barrels, an increase of 444 million barrels in the last 12 weeks.
M&A Fever Has Yet to Break in the Gulf - Bloomberg
M&A Fever Has Yet to Break in the Gulf - Bloomberg:
From Dubai’s Burj Khalifa to Kuwait’s Al Hamra Tower, oil-rich Gulf economies built up their skylines in a hurry in the few years preceding the financial crisis. Now, as the price of the region’s most precious commodity languishes, a similarly frantic pace is on to merge some of the region’s banking and industrial behemoths.
Banks across the Gulf are leading a record wave of mergers and acquisitions as governments look for ways to stay competitive and battle slow growth. About a dozen lenders are involved in mergers or takeovers. The flow of deals has been gathering speed ever since the megamerger between two of Abu Dhabi’s largest banks in 2017 and the combination of three of the emirate’s investment firms that was completed last year.
In Saudi Arabia, the first bank merger in 20 years is under way, as well as what’s set to be the kingdom’s largest M&A deal: the acquisition of Saudi Basic Industries Corp. (Sabic) by Saudi Arabian Oil Co. (Saudi Aramco) from the country’s sovereign wealth fund. This follows Saudi International Petrochemical Co.’s agreement last year to acquire Sahara Petrochemical Co. in an all-share deal valued at about $2 billion.
From Dubai’s Burj Khalifa to Kuwait’s Al Hamra Tower, oil-rich Gulf economies built up their skylines in a hurry in the few years preceding the financial crisis. Now, as the price of the region’s most precious commodity languishes, a similarly frantic pace is on to merge some of the region’s banking and industrial behemoths.
Banks across the Gulf are leading a record wave of mergers and acquisitions as governments look for ways to stay competitive and battle slow growth. About a dozen lenders are involved in mergers or takeovers. The flow of deals has been gathering speed ever since the megamerger between two of Abu Dhabi’s largest banks in 2017 and the combination of three of the emirate’s investment firms that was completed last year.
In Saudi Arabia, the first bank merger in 20 years is under way, as well as what’s set to be the kingdom’s largest M&A deal: the acquisition of Saudi Basic Industries Corp. (Sabic) by Saudi Arabian Oil Co. (Saudi Aramco) from the country’s sovereign wealth fund. This follows Saudi International Petrochemical Co.’s agreement last year to acquire Sahara Petrochemical Co. in an all-share deal valued at about $2 billion.
#Saudi Aramco Offers 6-Part Debt, Order Book at $60 Billion - Bloomberg
Saudis Emerge From Khashoggi Crisis With $85 Billion Bond Orders
- Bloomberg:Saudi Aramco, the world’s largest oil company, has received $85 billion in orders for its debut bond sale, an offering where yields may fall in line or below Saudi Arabia’s sovereign debt.
It’s rare for bonds of a state-owned company to pay less than the sovereign debt and the demand reflects intense investor appetite for high-quality paper. For Saudi Arabia and Aramco itself, the early success in selling the bonds marks a tremendous turnaround after investors, Wall Street bankers and corporate titans briefly shunned the kingdom last year following the assassination of journalist Jamal Khashoggi.
The U.S. has blacklisted 16 Saudi nationals for their role in the Khashoggi murder, according to a statement Monday. The crisis, along with sliding crude prices, hit the kingdom late last year and in early 2019, with the economy slowing down and investors taking money out of the local stock market. Now, the situation appears to be reversing, helped by oil rising to more than $70 a barrel, up from $50 in December.
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