Brent Oil Retreats as Trump Tweets, Sanctions Muddy Iran Policy - Bloomberg:
Oil investors delivered a split decision Monday that reflected the muddy outlook for the U.S.-Iran confrontation, with global benchmark Brent crude retreating while U.S. futures gained for the third straight day.
Brent closed down 0.5% while U.S. West Texas Intermediate crude added almost 1%. Days after abruptly aborting a strike on Iran, President Donald Trump in a tweet asked “why are we protecting" the Strait of Hormuz, the critical Persian Gulf waterway. Yet he also imposed new sanctions on Iran’s supreme leader, Ayatollah Ali Khamenei, and eight military commanders.
Brent fell in part due to traders downgrading the chances of an immediate confrontation, said Bill O’Grady, chief market strategist at Confluence Investment Management LLC in St. Louis. U.S. barrels, nonetheless, may look more attractive as tensions simmer, he said; government data last week also suggested U.S. demand is on the rise, O’Grady said.
“Between higher exports and hopes for inventory contractions in the U.S., being long on WTI might make some sense," he said.
West Texas Intermediate for August delivery rose 47 cents, or 0.8%, to $57.90 a barrel at the close of official trading on the New York Mercantile Exchange. Brent for August settlement slipped 34 cents to $64.86 on London’s ICE Futures Europe Exchange.
Monday, 24 June 2019
Russia Withholds Opinion on OPEC+ Agreement, Waiting for G20 - Bloomberg
Russia Withholds Opinion on OPEC+ Agreement, Waiting for G20 - Bloomberg:
Russia is sticking to its wait-and-see approach on the future of the OPEC+ deal, while its neighbors Kazakhstan and Azerbaijan favor an extension of oil-production cuts due to expire this month.
“We need to wait until the G-20 leaders’ meeting” in Japan this week, Russia’s Energy Minister Alexander Novak told reporters in St. Petersburg. “We’ll see what will be discussed there, how the economic situation will develop.” The Energy Ministry is still holding talks with Russian oil companies on OPEC+ pact options, according to Novak.
Just a week remains before the Organization of Petroleum Exporting Countries and its partners will meet in Vienna to decide whether to prolong the deal. While Saudi Arabia has said a rollover “is almost in the bag for OPEC,” with some adjustments possible for non-OPEC countries, Russia, one of the architects of the current deal, has been holding back amid differing views from its biggest oil companies over the benefits of cooperation.
Russia is sticking to its wait-and-see approach on the future of the OPEC+ deal, while its neighbors Kazakhstan and Azerbaijan favor an extension of oil-production cuts due to expire this month.
“We need to wait until the G-20 leaders’ meeting” in Japan this week, Russia’s Energy Minister Alexander Novak told reporters in St. Petersburg. “We’ll see what will be discussed there, how the economic situation will develop.” The Energy Ministry is still holding talks with Russian oil companies on OPEC+ pact options, according to Novak.
Just a week remains before the Organization of Petroleum Exporting Countries and its partners will meet in Vienna to decide whether to prolong the deal. While Saudi Arabia has said a rollover “is almost in the bag for OPEC,” with some adjustments possible for non-OPEC countries, Russia, one of the architects of the current deal, has been holding back amid differing views from its biggest oil companies over the benefits of cooperation.
#Lebanon's Debt Fix Now Hinges on Central Bank After Lenders Balk - Bloomberg
Lebanon's Debt Fix Now Hinges on Central Bank After Lenders Balk - Bloomberg:
Lebanese lenders are turning against a government plan to coax them into buying Treasury bonds at lower interest rates, leaving the central bank to go it alone as regional turmoil and budget delays keep the market on edge.
Finance Minister Ali Hassan Khalil said in May that the government wanted to issue 11 trillion pounds ($7.3 billion) of the securities at a rate of 1%, allowing it to cut 1 trillion pounds from the cost of servicing debt under this year’s draft budget. Lenders won’t agree to purchase the bonds at a 10th of the market rate, according to Makram Sader, secretary general of the Association of Banks in Lebanon.
The central bank will most likely handle the program alone, with the details made clearer after parliament approves the final version of the budget, an official familiar with the matter said.
Lebanese lenders are turning against a government plan to coax them into buying Treasury bonds at lower interest rates, leaving the central bank to go it alone as regional turmoil and budget delays keep the market on edge.
Finance Minister Ali Hassan Khalil said in May that the government wanted to issue 11 trillion pounds ($7.3 billion) of the securities at a rate of 1%, allowing it to cut 1 trillion pounds from the cost of servicing debt under this year’s draft budget. Lenders won’t agree to purchase the bonds at a 10th of the market rate, according to Makram Sader, secretary general of the Association of Banks in Lebanon.
The central bank will most likely handle the program alone, with the details made clearer after parliament approves the final version of the budget, an official familiar with the matter said.
MIDEAST STOCKS-Geopolitical concerns continue to weigh on #Saudi, Egypt extends losses - Reuters
MIDEAST STOCKS-Geopolitical concerns continue to weigh on Saudi, Egypt extends losses - Reuters:
Saudi Arabia's stock market fell sharply
on Monday to drop for a fourth straight session as geopolitical
concerns in the Gulf region weighed, while Egypt's blue-chip
index also extended its losing streak.
Yemen's Iran-backed Houthi movement attacked Abha airport in
southern Saudi Arabia on Sunday, killing one person and wounding
21 others, the Saudi-led coalition in Yemen said.
Long-time foes Iran and the U.S. have also come the closest
in years to a direct military confrontation in the past week
with the shooting down of a U.S. drone by Iran. U.S. President
Donald Trump aborted a retaliatory strike minutes before impact.
Saudi Arabia's stock market fell sharply
on Monday to drop for a fourth straight session as geopolitical
concerns in the Gulf region weighed, while Egypt's blue-chip
index also extended its losing streak.
Yemen's Iran-backed Houthi movement attacked Abha airport in
southern Saudi Arabia on Sunday, killing one person and wounding
21 others, the Saudi-led coalition in Yemen said.
Long-time foes Iran and the U.S. have also come the closest
in years to a direct military confrontation in the past week
with the shooting down of a U.S. drone by Iran. U.S. President
Donald Trump aborted a retaliatory strike minutes before impact.
Norway wealth fund ‘crazy’ to offload oil groups, says Lundin chief | Financial Times
Norway wealth fund ‘crazy’ to offload oil groups, says Lundin chief | Financial Times:
Norway’s decision to force its sovereign wealth fund to sell out of some oil producers is “crazy” and singles out his company, says the chief executive of Lundin Petroleum, one of Europe’s largest independent producers.
Alex Schneiter said that almost no other oil company operating in Norway would be affected by the ban as they are either Norwegian-based — meaning the $1tn national oil fund is not allowed to own them — or an oil major, groups which are unaffected by the measure.
Swedish-listed and Swiss-based Lundin has been the most successful exploration company in Norway in recent times, delivering half of its discoveries including the Johan Sverdrup field, with up to 3bn barrels of oil.
Norway’s decision to force its sovereign wealth fund to sell out of some oil producers is “crazy” and singles out his company, says the chief executive of Lundin Petroleum, one of Europe’s largest independent producers.
Alex Schneiter said that almost no other oil company operating in Norway would be affected by the ban as they are either Norwegian-based — meaning the $1tn national oil fund is not allowed to own them — or an oil major, groups which are unaffected by the measure.
Swedish-listed and Swiss-based Lundin has been the most successful exploration company in Norway in recent times, delivering half of its discoveries including the Johan Sverdrup field, with up to 3bn barrels of oil.
Oil Climbs to a Three-Week High as U.S.-Iran Tensions Simmer - Bloomberg
Oil Climbs to a Three-Week High as U.S.-Iran Tensions Simmer - Bloomberg:
Oil rose to the highest level in more than three weeks as political tensions between the U.S. and Iran continued to simmer, with President Donald Trump announcing plans for further sanctions against the OPEC member.
Futures added as much as 1.4% in New York after surging 9.4% last week. Trump tweeted about the sanctions days after abruptly calling off planned air strikes against the Islamic Republic in retaliation for the shooting down of a U.S. Navy drone. Iran’s navy warned the downing of unmanned aircraft could be repeated if intrusions into its airspace continue, according to state news agency Tasnim.
“The events of last week mean that there is much for oil bulls to hang their hats on,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London.
Oil rose to the highest level in more than three weeks as political tensions between the U.S. and Iran continued to simmer, with President Donald Trump announcing plans for further sanctions against the OPEC member.
Futures added as much as 1.4% in New York after surging 9.4% last week. Trump tweeted about the sanctions days after abruptly calling off planned air strikes against the Islamic Republic in retaliation for the shooting down of a U.S. Navy drone. Iran’s navy warned the downing of unmanned aircraft could be repeated if intrusions into its airspace continue, according to state news agency Tasnim.
“The events of last week mean that there is much for oil bulls to hang their hats on,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London.
#Kuwait Exchange Sees $2.8 Billion of Inflows on MSCI Upgrade - Bloomberg
Kuwait Exchange Sees $2.8 Billion of Inflows on MSCI Upgrade - Bloomberg:
MSCI Inc. will probably upgrade Kuwaiti equities to its main emerging-market index this week, which could trigger $2.8 billion of inflows from passive funds, according to the head of the nation’s stock exchange.
“We have ticked all the boxes that are required by MSCI,” Mohammad Al-Osaimi, the acting chief executive officer of Boursa Kuwait, said in an interview on Sunday. “We have also offered international investors additional services and products they were looking for and some changes in bylaws they requested. We have touched base with them on our roadshows. We saw a comfortable response.”
The New York-based index compiler, whose emerging-market group of indexes has about $1.8 trillion of assets tied to it, will announce on June 25 whether it’s lifting the country from its current frontier classification. The decision will become public shortly after 10:30 p.m. Central European Summer Time.
MSCI Inc. will probably upgrade Kuwaiti equities to its main emerging-market index this week, which could trigger $2.8 billion of inflows from passive funds, according to the head of the nation’s stock exchange.
“We have ticked all the boxes that are required by MSCI,” Mohammad Al-Osaimi, the acting chief executive officer of Boursa Kuwait, said in an interview on Sunday. “We have also offered international investors additional services and products they were looking for and some changes in bylaws they requested. We have touched base with them on our roadshows. We saw a comfortable response.”
The New York-based index compiler, whose emerging-market group of indexes has about $1.8 trillion of assets tied to it, will announce on June 25 whether it’s lifting the country from its current frontier classification. The decision will become public shortly after 10:30 p.m. Central European Summer Time.
Zain #Saudi's shares plunge following cancelled tower sales announcement | ZAWYA MENA Edition
Zain Saudi's shares plunge following cancelled tower sales announcement | ZAWYA MENA Edition:
Mobile Telecommunications Company Saudi Arabia (Zain) announced late on Sunday that it had decided not to sell its towers to IHS Holding Limited for regulatory reasons, triggering a sharp drop in its shares on Monday.
Zain received a letter from Saudi Arabia’s Communications and Information Technology Commission (CITC) stating that IHS did not meet the regulatory requirements and did not obtain the license required to lease and purchase Zain Saudi’s towers.
Zain first said back in 2016 that it was exploring the sale of its passive tower infrastructure. In August 2017, the company announced that its board of directors decided to enter into exclusive negotiations with a consortium led by IHS Holding Limited and Towershare Management Limited for the sale and leaseback (SLB) of its towers. In November 2018, it announced that it had agreed a 15-year deal covering the sale and leaseback of 8,100 towers worth 2.43 billion Saudi riyals ($647.7 million).
Mobile Telecommunications Company Saudi Arabia (Zain) announced late on Sunday that it had decided not to sell its towers to IHS Holding Limited for regulatory reasons, triggering a sharp drop in its shares on Monday.
Zain received a letter from Saudi Arabia’s Communications and Information Technology Commission (CITC) stating that IHS did not meet the regulatory requirements and did not obtain the license required to lease and purchase Zain Saudi’s towers.
Zain first said back in 2016 that it was exploring the sale of its passive tower infrastructure. In August 2017, the company announced that its board of directors decided to enter into exclusive negotiations with a consortium led by IHS Holding Limited and Towershare Management Limited for the sale and leaseback (SLB) of its towers. In November 2018, it announced that it had agreed a 15-year deal covering the sale and leaseback of 8,100 towers worth 2.43 billion Saudi riyals ($647.7 million).
Demand uncertainty weighs on decision over oil pact: Russia minister - Reuters
Demand uncertainty weighs on decision over oil pact: Russia minister - Reuters:
Uncertainty over global oil demand in the second half of this year, including the effect of U.S. sanctions, will have a big impact on whether Russia backs extending a deal on oil output cuts, Russian Energy Minister Alexander Novak said on Monday.
The Organization of the Petroleum Exporting Countries and other leading oil producers have an agreement to cut their combined oil output but this expires at the end of this month. Talks on whether to extend the pact are scheduled for July 1-2 in Vienna.
Speaking to reporters on the sidelines of an energy forum in St Petersburg, Novak, when asked about an extension of the deal between OPEC and non-OPEC oil producers, said: “It’s too early to say.”
Uncertainty over global oil demand in the second half of this year, including the effect of U.S. sanctions, will have a big impact on whether Russia backs extending a deal on oil output cuts, Russian Energy Minister Alexander Novak said on Monday.
The Organization of the Petroleum Exporting Countries and other leading oil producers have an agreement to cut their combined oil output but this expires at the end of this month. Talks on whether to extend the pact are scheduled for July 1-2 in Vienna.
Speaking to reporters on the sidelines of an energy forum in St Petersburg, Novak, when asked about an extension of the deal between OPEC and non-OPEC oil producers, said: “It’s too early to say.”
#Qatar will invest $3 billion in Pakistan, state news agency says - Reuters
Qatar will invest $3 billion in Pakistan, state news agency says - Reuters:
Qatar is making $3 billion worth of new investments in Pakistan, in the form of deposits and direct investments, the Qatari state news agency QNA said on Monday.
Following this investment, the economic partnership between Qatar and Pakistan will reach $9 billion, the agency reported, quoting Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani.
Last month, Pakistan reached an accord in principle with the International Monetary Fund for a three-year, $6 billion bailout package aimed at shoring up its fragile public finances and strengthening a slowing economy.
Qatar is making $3 billion worth of new investments in Pakistan, in the form of deposits and direct investments, the Qatari state news agency QNA said on Monday.
Following this investment, the economic partnership between Qatar and Pakistan will reach $9 billion, the agency reported, quoting Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani.
Last month, Pakistan reached an accord in principle with the International Monetary Fund for a three-year, $6 billion bailout package aimed at shoring up its fragile public finances and strengthening a slowing economy.
Filling #Iran oil gap in India: U.S. supplies outshine Middle East crude - Reuters
Filling Iran oil gap in India: U.S. supplies outshine Middle East crude - Reuters:
A surge in India’s oil imports from the United States outpaced growth in shipments from its traditional suppliers in the Middle East, after Washington imposed sanctions on Tehran in November, according to tanker arrival data obtained from sources.
U.S. President Donald Trump’s administration renewed sanctions against Iran last year over its nuclear program, although some buyers were allowed to continue taking limited volumes of Iranian oil under a six-month waiver.
In May, the United States ended those exemptions and said countries that continued to buy Iranian oil would face sanctions, but India buyers had already begun shifting some of their sourcing away from the Middle East.
A surge in India’s oil imports from the United States outpaced growth in shipments from its traditional suppliers in the Middle East, after Washington imposed sanctions on Tehran in November, according to tanker arrival data obtained from sources.
U.S. President Donald Trump’s administration renewed sanctions against Iran last year over its nuclear program, although some buyers were allowed to continue taking limited volumes of Iranian oil under a six-month waiver.
In May, the United States ended those exemptions and said countries that continued to buy Iranian oil would face sanctions, but India buyers had already begun shifting some of their sourcing away from the Middle East.
#Qatar teams up with Chevron Phillips for petrochemical project - Reuters
Qatar teams up with Chevron Phillips for petrochemical project - Reuters:
Qatar Petroleum has signed an agreement with Chevron Phillips Chemical to build a new petrochemicals complex, part of plans by the world’s top liquefied natural gas (LNG) exporter to broaden its energy interests.
The project highlights how Middle East oil producers are expanding further into petrochemicals, used in the production of plastics and packaging materials, to move into new markets and find new sources of income beyond exporting crude oil and natural gas.
Saudi Arabia’s and UAE’s national oil companies have both already announced plans to boost their refining capacity and petrochemicals operations.
Qatar Petroleum has signed an agreement with Chevron Phillips Chemical to build a new petrochemicals complex, part of plans by the world’s top liquefied natural gas (LNG) exporter to broaden its energy interests.
The project highlights how Middle East oil producers are expanding further into petrochemicals, used in the production of plastics and packaging materials, to move into new markets and find new sources of income beyond exporting crude oil and natural gas.
Saudi Arabia’s and UAE’s national oil companies have both already announced plans to boost their refining capacity and petrochemicals operations.
Russia/ #Saudi Oil Bromance Is a Pairing of Convenience for OPEC - Bloomberg
Russia/Saudi Oil Bromance Is a Pairing of Convenience for OPEC - Bloomberg:
They got there in the end. After a fraught period when nobody could agree on when to meet, OPEC and its friends will gather on July 1-2 in Vienna. All 24 oil ministers will have to decide whether to renew their commitment to output cuts, which have have already run five times longer than originally intended.
OPEC’s three biggest members – Saudi Arabia, Iraq and the United Arab Emirates – are all willing to continue the policy of reduced production. But the big question is what Russia will do.
Though it has a lot of reason to back away from the deal, it will continue to pay lip service to the agreement. President Vladimir Putin’s wider ambitions to rebuild the country’s geopolitical role in the Middle East will outweigh objections from the boss of the country’s biggest oil company and any evidence that the cuts are undermining economic growth.
They got there in the end. After a fraught period when nobody could agree on when to meet, OPEC and its friends will gather on July 1-2 in Vienna. All 24 oil ministers will have to decide whether to renew their commitment to output cuts, which have have already run five times longer than originally intended.
OPEC’s three biggest members – Saudi Arabia, Iraq and the United Arab Emirates – are all willing to continue the policy of reduced production. But the big question is what Russia will do.
Though it has a lot of reason to back away from the deal, it will continue to pay lip service to the agreement. President Vladimir Putin’s wider ambitions to rebuild the country’s geopolitical role in the Middle East will outweigh objections from the boss of the country’s biggest oil company and any evidence that the cuts are undermining economic growth.
#Saudi equity market upgrades bring in $10.8bln of foreign inflows this year: IIF | ZAWYA MENA Edition
Saudi equity market upgrades bring in $10.8bln of foreign inflows this year: IIF | ZAWYA MENA Edition:
Saudi Arabia has attracted $10.8 billion worth of foreign equity investment as a result of upgrades to its stock market to emerging market status by index providers FTSE Russell and MSCI, according to a new paper.
The Institute of International Finance (IIF) said that its Capital Flows Tracker highlighted that "foreign investors have significantly increased their exposure to Saudi equities" ahead of MSCI's upgrade, which began late last month. It will take place in two tranches - in May and August. FTSE Russell's upgrade began in March and will be spread over five tranches. (Read more here).
The IIF said that May was generally a poor month for emerging market equities, with outflows of $14.7 billion experienced during the month - about half of this was money pulled from Chinese equities.
Saudi Arabia has attracted $10.8 billion worth of foreign equity investment as a result of upgrades to its stock market to emerging market status by index providers FTSE Russell and MSCI, according to a new paper.
The Institute of International Finance (IIF) said that its Capital Flows Tracker highlighted that "foreign investors have significantly increased their exposure to Saudi equities" ahead of MSCI's upgrade, which began late last month. It will take place in two tranches - in May and August. FTSE Russell's upgrade began in March and will be spread over five tranches. (Read more here).
The IIF said that May was generally a poor month for emerging market equities, with outflows of $14.7 billion experienced during the month - about half of this was money pulled from Chinese equities.
MIDEAST STOCKS- #SaudiArabia falls for a fourth day on Gulf concerns - Reuters
MIDEAST STOCKS-Saudi Arabia falls for a fourth day on Gulf concerns - Reuters:
Saudi Arabia’s stock market dropped for a fourth straight day on Monday as geopolitical concerns in the Gulf region weighed.
Yemen’s Houthi movement attacked Abha airport in southern Saudi Arabia on Sunday, killing one person and wounding 21 others, the Saudi-led coalition in Yemen said.
And tensions between Iran and the United States remained high after Secretary of State Mike Pompeo said the U.S. would announce “significant” sanctions against Tehran.
Saudi Arabia’s stock market dropped for a fourth straight day on Monday as geopolitical concerns in the Gulf region weighed.
Yemen’s Houthi movement attacked Abha airport in southern Saudi Arabia on Sunday, killing one person and wounding 21 others, the Saudi-led coalition in Yemen said.
And tensions between Iran and the United States remained high after Secretary of State Mike Pompeo said the U.S. would announce “significant” sanctions against Tehran.
Oil Gains as New Sanctions Set to Ratchet Up Pressure on #Iran - Bloomberg
Oil Gains as New Sanctions Set to Ratchet Up Pressure on Iran - Bloomberg: Oil extended its rally after the U.S. said it was preparing new sanctions against Iran, further escalating tensions between the two states.
Futures in New York were up 0.5%, after surging 9.4% last week -- the biggest weekly gain in more than two years. U.S. Secretary of State Mike Pompeo said a “significant set of new sanctions” against Iran would come on Monday, although President Donald Trump said he was willing to negotiate with Iranian leaders with “no preconditions” to ensure the Islamic Republic never acquires a nuclear weapon.
It emerged Friday that Trump had aborted planned air strikes against Iran, citing concern that the death toll wouldn’t have been “proportionate” to Iran’s downing of an American spy drone earlier in the week. Trump said he was in “no hurry” to respond.
Futures in New York were up 0.5%, after surging 9.4% last week -- the biggest weekly gain in more than two years. U.S. Secretary of State Mike Pompeo said a “significant set of new sanctions” against Iran would come on Monday, although President Donald Trump said he was willing to negotiate with Iranian leaders with “no preconditions” to ensure the Islamic Republic never acquires a nuclear weapon.
It emerged Friday that Trump had aborted planned air strikes against Iran, citing concern that the death toll wouldn’t have been “proportionate” to Iran’s downing of an American spy drone earlier in the week. Trump said he was in “no hurry” to respond.
#Saudi, #UAE Bank Revenues Seen Pressured by U.S. Rate Cuts - Bloomberg
Saudi, U.A.E. Bank Revenues Seen Pressured by U.S. Rate Cuts - Bloomberg: Saudi Arabia and United Arab Emirates banks may have their annual revenue estimates cut by one or two percentage points for every 25 basis basis point decline in U.S. interest rates, according to Bloomberg Intelligence.
A 25 basis point cut in U.S. rates will pull down the net interest margin at banks by about 6 basis points, analyst Edmond Christou said in a report on Sunday. The margin is the difference between what a bank earns on assets such as loans and what it pays out on liabilities such as deposits.
Currencies in Saudi Arabia and the U.A.E. are pegged to the dollar, and the two countries usually follow interest-rate changes made by the U.S. Federal Reserve. The market is pricing in about a 75 basis point reduction in U.S. rates by year-end, data compiled by Bloomberg show.
A 25 basis point cut in U.S. rates will pull down the net interest margin at banks by about 6 basis points, analyst Edmond Christou said in a report on Sunday. The margin is the difference between what a bank earns on assets such as loans and what it pays out on liabilities such as deposits.
Currencies in Saudi Arabia and the U.A.E. are pegged to the dollar, and the two countries usually follow interest-rate changes made by the U.S. Federal Reserve. The market is pricing in about a 75 basis point reduction in U.S. rates by year-end, data compiled by Bloomberg show.
Gulf Spreads May Fall as Trump Favors #Iran Sanctions Over Attack - Bloomberg
Gulf Spreads May Fall as Trump Favors Iran Sanctions Over Attack - Bloomberg:
Investors in Gulf assets breathed a sigh of relief after U.S. President Donald Trump showed restraint against Iran.
Calling off airstrikes and opting for additional sanctions on Iran eases the risk of military combat between the Persian nation and its Arab neighbors, and will probably have a positive impact on GCC spreads, according to Arqaam Capital Ltd.
“While GCC bonds have continued to rally despite the uncertain geopolitical environment, they have under-performed emerging-market peers,” said Dubai-based Abdul Kadir Hussain, the head of fixed-income asset management. An easing of geopolitical risk “may also mean that issuers like Oman that have been waiting for a toning down of political rhetoric might use the opportunity to issue,” he said.
Investors in Gulf assets breathed a sigh of relief after U.S. President Donald Trump showed restraint against Iran.
Calling off airstrikes and opting for additional sanctions on Iran eases the risk of military combat between the Persian nation and its Arab neighbors, and will probably have a positive impact on GCC spreads, according to Arqaam Capital Ltd.
“While GCC bonds have continued to rally despite the uncertain geopolitical environment, they have under-performed emerging-market peers,” said Dubai-based Abdul Kadir Hussain, the head of fixed-income asset management. An easing of geopolitical risk “may also mean that issuers like Oman that have been waiting for a toning down of political rhetoric might use the opportunity to issue,” he said.
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