OPEC oil output hits lowest since 2011 on Saudi cut, sanctions: Reuters survey - Reuters:
OPEC oil output hit an eight-year low in July as a further voluntary cut by top exporter Saudi Arabia deepened losses caused by U.S. sanctions on Iran and outages elsewhere in the group, a Reuters survey found.
The 14-member Organization of the Petroleum Exporting Countries pumped 29.42 million barrels per day (bpd) this month, the survey showed, down 280,000 bpd from June’s revised figure and the lowest OPEC total since 2011.
The survey suggests Saudi Arabia is sticking to its plan of voluntarily restraining output by more than called for by an OPEC-led supply deal to support the market. OPEC renewed the supply pact this month, shrugging off pressure from U.S. President Donald Trump to pump more.
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Wednesday 31 July 2019
Oil rises as U.S. crude stocks fall again, Fed cuts interest rates - Reuters
Oil rises as U.S. crude stocks fall again, Fed cuts interest rates - Reuters:
Oil prices rose for a fifth day on Wednesday following a larger-than-expected drop in U.S. inventories and after the Federal Reserve cut U.S. interest rates for the first time in more than a decade.
The front-month Brent crude LCOc1 futures contract, which expired Wednesday, rose 45 cents to settle at $65.17 a barrel. Brent posted a monthly decline of 2.1%.
U.S. West Texas Intermediate (WTI) crude CLc1 futures gained 53 cents to settle at $58.58 a barrel, and inched up 0.2% in July.
U.S. crude stockpiles USOILC=ECI fell for a seventh straight week, slumping 8.5 million barrels last week, the Energy Information Administration said, far exceeding analysts’ expectations for a decrease of 2.6 million barrels.
At 436.5 million barrels, U.S. crude inventories, not including strategic oil reserves, were at the five year average for this time of year, the EIA said.
Oil prices rose for a fifth day on Wednesday following a larger-than-expected drop in U.S. inventories and after the Federal Reserve cut U.S. interest rates for the first time in more than a decade.
The front-month Brent crude LCOc1 futures contract, which expired Wednesday, rose 45 cents to settle at $65.17 a barrel. Brent posted a monthly decline of 2.1%.
U.S. West Texas Intermediate (WTI) crude CLc1 futures gained 53 cents to settle at $58.58 a barrel, and inched up 0.2% in July.
U.S. crude stockpiles USOILC=ECI fell for a seventh straight week, slumping 8.5 million barrels last week, the Energy Information Administration said, far exceeding analysts’ expectations for a decrease of 2.6 million barrels.
At 436.5 million barrels, U.S. crude inventories, not including strategic oil reserves, were at the five year average for this time of year, the EIA said.
#Iran Cabinet Approves Plan to Slash Four Zeros From Currency - Bloomberg
Iran Cabinet Approves Plan to Slash Four Zeros From Currency - Bloomberg:
Iran’s cabinet has approved a plan to slash four zeros from the national currency, the rial, the official Islamic Republic News Agency reported Wednesday, citing government spokesman Ali Rabiei.
The redenomination of the currency has been discussed for years as the rial’s value has plummeted. Rabiei did not specify whether the plan requires parliamentary support or when it would take effect.
Iran’s cabinet has approved a plan to slash four zeros from the national currency, the rial, the official Islamic Republic News Agency reported Wednesday, citing government spokesman Ali Rabiei.
The redenomination of the currency has been discussed for years as the rial’s value has plummeted. Rabiei did not specify whether the plan requires parliamentary support or when it would take effect.
UPDATE 1- #SaudiArabia keeps July oil output below 10 mln bpd- Saudi source - Reuters
UPDATE 1-Saudi Arabia keeps July oil output below 10 mln bpd- Saudi source - Reuters:
Saudi Arabia’s oil production fell to 9.6 million barrels per day in July and will stay below 10 million bpd in the coming months, a Saudi oil source told Reuters on Wednesday.
Saudi’s July crude output is lower than its June production by around 200,000 bpd, the source said.
“We believe now after talking with customers and consumers that the market is getting tighter, as we see that the U.S. commercial stocks are going down,” the source said.
Saudi Arabia’s oil production fell to 9.6 million barrels per day in July and will stay below 10 million bpd in the coming months, a Saudi oil source told Reuters on Wednesday.
Saudi’s July crude output is lower than its June production by around 200,000 bpd, the source said.
“We believe now after talking with customers and consumers that the market is getting tighter, as we see that the U.S. commercial stocks are going down,” the source said.
Mideast Stocks: Petchems lead #Saudi lower, financials drag down #Qatar | ZAWYA MENA Edition
Mideast Stocks: Petchems lead Saudi lower, financials drag down Qatar | ZAWYA MENA Edition:
Saudi stocks dropped on Wednesday as losses in petrochemical shares outweighed earnings-fuelled gains in some banking stocks, while Qatar Insurance pulled the Qatari market down.
Saudi's index slipped 0.1%, with petrochemical maker Saudi Basic Industries Co 2010.SE shedding 1.1% after earlier this week reporting its lowest quarterly profit since late 2009.
The kingdom has returned to deficit in the second quarter after posting its first surplus in the first quarter since 2014, as oil revenues fell 5% and non-oil revenues declined 4%.
Saudi stocks dropped on Wednesday as losses in petrochemical shares outweighed earnings-fuelled gains in some banking stocks, while Qatar Insurance pulled the Qatari market down.
Saudi's index slipped 0.1%, with petrochemical maker Saudi Basic Industries Co 2010.SE shedding 1.1% after earlier this week reporting its lowest quarterly profit since late 2009.
The kingdom has returned to deficit in the second quarter after posting its first surplus in the first quarter since 2014, as oil revenues fell 5% and non-oil revenues declined 4%.
Emirates NBD will support Denizbank if it needs capital increase -NBD CEO | ZAWYA MENA Edition
Emirates NBD will support Denizbank if it needs capital increase -NBD CEO | ZAWYA MENA Edition:
Emirates NBD Group CEO Shayne Nelson said that the bank would support Turkey's Denizbank if it needed a capital increase, as the Dubai-based bank completed the purchase of Denizbank on Wednesday.
Speaking at the signing ceremony of Sberbank's sale of its shares in Denizbank to Emirates NBD, Nelson said that NBD is a long-term investor in Turkey.
In April, Emirates NBD said it was buying Denizbank from Sberbank for 15.48 billion lira ($2.8 billion), lower than a previously agreed price. Turkey's BDDK banking watchdog approved the transaction in June and the sale was completed on Wednesday.
Emirates NBD Group CEO Shayne Nelson said that the bank would support Turkey's Denizbank if it needed a capital increase, as the Dubai-based bank completed the purchase of Denizbank on Wednesday.
Speaking at the signing ceremony of Sberbank's sale of its shares in Denizbank to Emirates NBD, Nelson said that NBD is a long-term investor in Turkey.
In April, Emirates NBD said it was buying Denizbank from Sberbank for 15.48 billion lira ($2.8 billion), lower than a previously agreed price. Turkey's BDDK banking watchdog approved the transaction in June and the sale was completed on Wednesday.
#Saudi Binladin group seeks adviser for jumbo debt restructuring: sources - Reuters
Saudi Binladin group seeks adviser for jumbo debt restructuring: sources - Reuters:
The Saudi Binladin Group is seeking a financial adviser for a restructuring of the group’s debt, which could range between $20 and $30 billion, sources familiar with the matter said.
The move is the latest in state efforts to restructure the construction giant, in which the Saudi government took a roughly one-third stake from Bin Laden family members that were swept up in an anti-graft campaign that Riyadh launched in late 2017.
The company, which has dominated the construction sector for years, is crucial to the kingdom’s plans for tourism and infrastructure projects aimed at diversifying the economy away from oil revenues by 2030.
The Saudi Binladin Group is seeking a financial adviser for a restructuring of the group’s debt, which could range between $20 and $30 billion, sources familiar with the matter said.
The move is the latest in state efforts to restructure the construction giant, in which the Saudi government took a roughly one-third stake from Bin Laden family members that were swept up in an anti-graft campaign that Riyadh launched in late 2017.
The company, which has dominated the construction sector for years, is crucial to the kingdom’s plans for tourism and infrastructure projects aimed at diversifying the economy away from oil revenues by 2030.
Oil Trades Near Two-Week High on Tighter Supply, Mideast Risks - Bloomberg
Oil Trades Near Two-Week High on Tighter Supply, Mideast Risks - Bloomberg:
Oil traded near a two-week high in New York amid signs of a further drop in U.S. stockpiles and ongoing concerns that political friction in the Persian Gulf could disrupt exports.
Futures rose as much as 1.1%. American crude inventories dropped by 6.02 million barrels last week, according to an industry report. If confirmed by government data on Wednesday, it will be a seventh weekly decline. BP Plc is avoiding sending ships through the Strait of Hormuz, Chief Executive Officer Bob Dudley said Tuesday, in a sign Middle East tensions could affect the flow of crude. Libya’s oil production dropped to the lowest in five months after an issue with a pipeline connected to its biggest field.
West Texas Intermediate for September delivery rose as much as 62 cents to $58.67 a barrel on the New York Mercantile Exchange, and traded at $58.65 as of 8:47 a.m. local time. Prices are up for a fifth day, after climbing 2.1% on Tuesday, the biggest gain since July 10.
Brent crude for September, which expires Wednesday, added 54 cents to $65.26 a barrel on the ICE Futures Europe exchange, after rising 1.6% on Tuesday. The more-active October contract was at $65.19, up 56 cents. The September contract traded at a $6.85 premium to WTI for the same month.
Oil traded near a two-week high in New York amid signs of a further drop in U.S. stockpiles and ongoing concerns that political friction in the Persian Gulf could disrupt exports.
Futures rose as much as 1.1%. American crude inventories dropped by 6.02 million barrels last week, according to an industry report. If confirmed by government data on Wednesday, it will be a seventh weekly decline. BP Plc is avoiding sending ships through the Strait of Hormuz, Chief Executive Officer Bob Dudley said Tuesday, in a sign Middle East tensions could affect the flow of crude. Libya’s oil production dropped to the lowest in five months after an issue with a pipeline connected to its biggest field.
West Texas Intermediate for September delivery rose as much as 62 cents to $58.67 a barrel on the New York Mercantile Exchange, and traded at $58.65 as of 8:47 a.m. local time. Prices are up for a fifth day, after climbing 2.1% on Tuesday, the biggest gain since July 10.
Brent crude for September, which expires Wednesday, added 54 cents to $65.26 a barrel on the ICE Futures Europe exchange, after rising 1.6% on Tuesday. The more-active October contract was at $65.19, up 56 cents. The September contract traded at a $6.85 premium to WTI for the same month.
#Dubai Stocks Shine in July as Regional Rotation Picks Up - Bloomberg
Dubai Stocks Shine in July as Regional Rotation Picks Up - Bloomberg:
Equity investors rotating from expensive Saudi and Kuwaiti markets into cheaper Dubai are helping the Emirate’s main equity index enjoy its best monthly performance in over four years.
The DFM General Index finished July 9.8% higher, its biggest monthly gain since April 2015 and the third-best among major gauges globally after Jamaica and Sri Lanka. The positive performance contrasts with a decline of 1.5% for the MSCI EM Index.
Analysts and money managers say that valuations for some of Dubai’s biggest and most liquid stocks are attractive even as economic growth remains subdued. They also note that other markets in the region, such as Saudi Arabia and Kuwait, are losing the appeal initially triggered by their inclusion in emerging-market benchmarks.
Equity investors rotating from expensive Saudi and Kuwaiti markets into cheaper Dubai are helping the Emirate’s main equity index enjoy its best monthly performance in over four years.
The DFM General Index finished July 9.8% higher, its biggest monthly gain since April 2015 and the third-best among major gauges globally after Jamaica and Sri Lanka. The positive performance contrasts with a decline of 1.5% for the MSCI EM Index.
Analysts and money managers say that valuations for some of Dubai’s biggest and most liquid stocks are attractive even as economic growth remains subdued. They also note that other markets in the region, such as Saudi Arabia and Kuwait, are losing the appeal initially triggered by their inclusion in emerging-market benchmarks.
#Abraaj Used Colors and Noise to Prioritize Payments to Investors - Bloomberg
Abraaj Used Colors and Noise to Prioritize Payments to Investors - Bloomberg:
It paid to make noise as an investor in the now defunct Abraaj Group.
As the buyout firm’s financial woes grew, senior management drew up a color chart to pay limited partners according to how much “noise” they made, a report by Dubai’s financial regulator showed.
Abraaj, which once managed about $14 billion, was forced into liquidation last year after being accused of mismanaging investor funds. The firm’s backers included the Bill & Melinda Gates Foundation and the World Bank’s International Finance Corp.
It paid to make noise as an investor in the now defunct Abraaj Group.
As the buyout firm’s financial woes grew, senior management drew up a color chart to pay limited partners according to how much “noise” they made, a report by Dubai’s financial regulator showed.
Abraaj, which once managed about $14 billion, was forced into liquidation last year after being accused of mismanaging investor funds. The firm’s backers included the Bill & Melinda Gates Foundation and the World Bank’s International Finance Corp.
MIDEAST STOCKS- #Saudi shares rise as NCB gains; financials weigh on #Qatar - Reuters
MIDEAST STOCKS-Saudi shares rise as NCB gains; financials weigh on Qatar - Reuters:
Saudi stocks rose on Wednesday as the earnings at National Commercial Bank boosted financial stocks. However, financial shares weighed down the Qatar market.
Saudi’s index edged up 0.1%. The country’s biggest bank, National Commercial Bank, gained 0.7% after posting a 24% rise in second-quarter profit, helped by higher fee and commission income and lower expenses.
Saudi banks have benefited from higher interest rates and increased demand for loans to support housing and government-related projects.
Saudi stocks rose on Wednesday as the earnings at National Commercial Bank boosted financial stocks. However, financial shares weighed down the Qatar market.
Saudi’s index edged up 0.1%. The country’s biggest bank, National Commercial Bank, gained 0.7% after posting a 24% rise in second-quarter profit, helped by higher fee and commission income and lower expenses.
Saudi banks have benefited from higher interest rates and increased demand for loans to support housing and government-related projects.
Oil price swings won’t cause stocks to slide | Financial Times
Oil price swings won’t cause stocks to slide | Financial Times:
Depending who you ask about oil, you currently get one of two answers. Either mounting Middle Eastern tensions will soon send prices surging — wreaking havoc on the world economy. Or faltering global economic growth will crater oil prices. Either way, pundits posit that the global economy — and stocks — will suffer. No.
Oil prices may swing, but investors should expect little economic fallout. Here’s why I think oil has lost its famed economic power of yesteryear.
Wild oil price swings over the past 12 months caused confusion. Between mid-August and early October last year, Brent crude oil prices jumped 25.9 per cent as folks feared the US president Donald Trump’s Iran sanctions would squeeze supply. Pundits projected prices would keep climbing. Instead, they plunged -41.2 per cent through year-end, as the global stock market correction in the fourth quarter stoked recession and demand fears.
Depending who you ask about oil, you currently get one of two answers. Either mounting Middle Eastern tensions will soon send prices surging — wreaking havoc on the world economy. Or faltering global economic growth will crater oil prices. Either way, pundits posit that the global economy — and stocks — will suffer. No.
Oil prices may swing, but investors should expect little economic fallout. Here’s why I think oil has lost its famed economic power of yesteryear.
Wild oil price swings over the past 12 months caused confusion. Between mid-August and early October last year, Brent crude oil prices jumped 25.9 per cent as folks feared the US president Donald Trump’s Iran sanctions would squeeze supply. Pundits projected prices would keep climbing. Instead, they plunged -41.2 per cent through year-end, as the global stock market correction in the fourth quarter stoked recession and demand fears.
#Saudi stocks attract billions of dollars in inflows | Financial Times
Saudi stocks attract billions of dollars in inflows | Financial Times:
Investors have flooded into Saudi stocks this year after the kingdom’s share market was included in widely followed benchmarks that guide trillions of dollars in assets.
Mutual and exchange traded funds that invest in companies on Riyadh’s Tadawul stock exchange have rocketed to $4.8bn in assets from just $356m at the start of the year, according to EPFR Global data. The growth comes after indexing groups MSCI, FTSE Russell and S&P Dow Jones Indices included the stocks in popular emerging markets benchmarks and as the government has eased rules governing foreign ownership of shares.
The surge in assets reflects the heft that index providers wield in guiding investor assets across global financial markets. Inclusion in a benchmark induces active fund managers to buy the stocks to keep pace with the indices they are ranked against, while passive funds automatically hoover up the shares by design.
Investors have flooded into Saudi stocks this year after the kingdom’s share market was included in widely followed benchmarks that guide trillions of dollars in assets.
Mutual and exchange traded funds that invest in companies on Riyadh’s Tadawul stock exchange have rocketed to $4.8bn in assets from just $356m at the start of the year, according to EPFR Global data. The growth comes after indexing groups MSCI, FTSE Russell and S&P Dow Jones Indices included the stocks in popular emerging markets benchmarks and as the government has eased rules governing foreign ownership of shares.
The surge in assets reflects the heft that index providers wield in guiding investor assets across global financial markets. Inclusion in a benchmark induces active fund managers to buy the stocks to keep pace with the indices they are ranked against, while passive funds automatically hoover up the shares by design.
#Saudi Private School Operator Jumps 10% in Riyadh Trading Debut - Bloomberg
Saudi Private School Operator Jumps 10% in Riyadh Trading Debut - Bloomberg:
One of Saudi Arabia’s biggest private-school operators surged in its first day of trading in Riyadh, the latest evidence of a push by the local exchange to attract smaller companies.
Shares of Ataa Educational Co. rose 10% shortly after open, the maximum allowed for the session. Twelve million shares were sold at 29 riyals apiece in an initial public offering, raising 348 million riyals ($93 million).
The education company is the fourth to list in the kingdom’s capital this year, with all deals involving share sales of less than $700 million. The bourse is attempting to add more names to the biggest stock exchange in the Middle East and Africa and expects 2019 to be one of the best in the past five years for new deals, its head said in an April interview.
One of Saudi Arabia’s biggest private-school operators surged in its first day of trading in Riyadh, the latest evidence of a push by the local exchange to attract smaller companies.
Shares of Ataa Educational Co. rose 10% shortly after open, the maximum allowed for the session. Twelve million shares were sold at 29 riyals apiece in an initial public offering, raising 348 million riyals ($93 million).
The education company is the fourth to list in the kingdom’s capital this year, with all deals involving share sales of less than $700 million. The bourse is attempting to add more names to the biggest stock exchange in the Middle East and Africa and expects 2019 to be one of the best in the past five years for new deals, its head said in an April interview.
Oil rises for fifth straight day as market awaits Fed, stockpiles fall - Reuters
Oil rises for fifth straight day as market awaits Fed, stockpiles fall - Reuters:
Oil prices rose for a fifth day on Wednesday, buoyed by a bigger-than-expected drop in U.S. inventories and as investors awaited a widely expected cut in interest rates by the U.S. Federal Reserve, the first in more than 10 years.
Brent crude LCOc1 was up 57 cents, or 0.9%, at $65.29 a barrel by 0716 GMT.
U.S. West Texas Intermediate crude CLc1 gained 41 cents, or 0.7%, to $58.46 a barrel.
“The market is quite optimistic leading into what the Fed is going to do on interest rates and as a result of that we’ll see more demand,” Jonathan Barratt, chief investment officer at Probis Group in Sydney, said by telephone, referring to the widely expected cut.
Oil prices rose for a fifth day on Wednesday, buoyed by a bigger-than-expected drop in U.S. inventories and as investors awaited a widely expected cut in interest rates by the U.S. Federal Reserve, the first in more than 10 years.
Brent crude LCOc1 was up 57 cents, or 0.9%, at $65.29 a barrel by 0716 GMT.
U.S. West Texas Intermediate crude CLc1 gained 41 cents, or 0.7%, to $58.46 a barrel.
“The market is quite optimistic leading into what the Fed is going to do on interest rates and as a result of that we’ll see more demand,” Jonathan Barratt, chief investment officer at Probis Group in Sydney, said by telephone, referring to the widely expected cut.
#Dubai-based GEMS Education issues $900mln bonds | ZAWYA MENA Edition
Dubai-based GEMS Education issues $900mln bonds | ZAWYA MENA Edition:
Dubai-based GEMS Education has raised $900 million in senior secured notes maturing in 2026, a document issued by one of the banks leading the deal showed.
The bonds, which were priced late on Tuesday, offer a yield of 7.125%, according to the document.
Goldman Sachs GS.N was sole bookrunner and global coordinator for the transaction. Other banks involved in arranging the deal were Credit Suisse - as global coordinator and joint bookrunner - and Citi, Emirates NBD, and HSBC as joint bookrunners.
Dubai-based GEMS Education has raised $900 million in senior secured notes maturing in 2026, a document issued by one of the banks leading the deal showed.
The bonds, which were priced late on Tuesday, offer a yield of 7.125%, according to the document.
Goldman Sachs GS.N was sole bookrunner and global coordinator for the transaction. Other banks involved in arranging the deal were Credit Suisse - as global coordinator and joint bookrunner - and Citi, Emirates NBD, and HSBC as joint bookrunners.
#Oman to delay VAT to 2021 amid sluggish growth - Reuters
Oman to delay VAT to 2021 amid sluggish growth - Reuters:
Oman plans to introduce value-added tax in 2021, it said in a document, further delaying a fiscal consolidation measure that economists say could be politically sensitive at a time of sluggish growth and high unemployment.
All six Gulf Arab states agreed to introduce 5% VAT in 2018 after a slump in oil prices hit their revenues, but Oman, whose financial position is the weakest of the six, delayed its tax to 2019.
Moody’s, Fitch and S&P Global Ratings have said they expect Oman, rated junk by all three major rating agencies, to introduce VAT in 2020.
Oman plans to introduce value-added tax in 2021, it said in a document, further delaying a fiscal consolidation measure that economists say could be politically sensitive at a time of sluggish growth and high unemployment.
All six Gulf Arab states agreed to introduce 5% VAT in 2018 after a slump in oil prices hit their revenues, but Oman, whose financial position is the weakest of the six, delayed its tax to 2019.
Moody’s, Fitch and S&P Global Ratings have said they expect Oman, rated junk by all three major rating agencies, to introduce VAT in 2020.
MENA fund managers to boost #UAE investments, bearish on #Saudi: Reuters poll - Reuters
MENA fund managers to boost UAE investments, bearish on Saudi: Reuters poll - Reuters:
Middle Eastern funds plan to increase their investments in the United Arab Emirates and decrease their investments in Saudi Arabia, while keeping their exposure to other countries in the region at current levels, according to a Reuters poll.
Seven of the 10 fund managers polled said they would increase their investments in the United Arab Emirates, building on a trend over recent months.
Dubai was one of the worst-performing markets globally last year, but has rebounded with its benchmark index .DFMGI up almost 15% so far. On Monday, it had its best day in almost a year, rising 1.2%, buoyed by rising real estate shares.
Middle Eastern funds plan to increase their investments in the United Arab Emirates and decrease their investments in Saudi Arabia, while keeping their exposure to other countries in the region at current levels, according to a Reuters poll.
Seven of the 10 fund managers polled said they would increase their investments in the United Arab Emirates, building on a trend over recent months.
Dubai was one of the worst-performing markets globally last year, but has rebounded with its benchmark index .DFMGI up almost 15% so far. On Monday, it had its best day in almost a year, rising 1.2%, buoyed by rising real estate shares.
#Saudi NCB posts 24% rise in quarterly profit - Reuters
Saudi NCB posts 24% rise in quarterly profit - Reuters:
National Commercial Bank , Saudi Arabia’s biggest lender, posted a 24% rise in second-quarter profit on Wednesday, helped by higher fee and commission income, as well as lower expenses.
The bank reported a net profit of 2.69 billion riyals ($717.24 million) in the quarter ended June 30, compared to 2.17 billion riyals in the same quarter a year earlier.
EFG Hermes had projected a net profit of 2.63 billion riyals for the second quarter.
National Commercial Bank , Saudi Arabia’s biggest lender, posted a 24% rise in second-quarter profit on Wednesday, helped by higher fee and commission income, as well as lower expenses.
The bank reported a net profit of 2.69 billion riyals ($717.24 million) in the quarter ended June 30, compared to 2.17 billion riyals in the same quarter a year earlier.
EFG Hermes had projected a net profit of 2.63 billion riyals for the second quarter.