Oil crashes 7% as Trump announces additional tariffs on Chinese imports - Reuters:
Oil prices plummeted more than 7% on Thursday to the lowest level in about seven weeks, after U.S. President Donald Trump said he would impose an additional 10% tariff on $300 billion worth of Chinese imports starting Sept. 1.
A prolonged trade war between the world’s two largest economies has triggered worries about oil demand.
Brent crude LCOc1 fell $4.55, or 6.99%, to settle at $60.50 a barrel, having dropped as low as $60.02, the lowest since June 13. The international benchmark’s decline on Thursday was its biggest daily percentage drop since February 2016.
U.S. West Texas Intermediate (WTI) CLc1 crude ended the session down $4.63, or 7.9%, at $53.95 after sinking to a low of $53.59, the lowest level since June 19. It was the biggest percentage decline since February 2015.
“Oil prices have fallen considerably today, done in by a one-two punch of the underwhelming Federal Reserve easing moves and the announcement by President Trump that more tariffs will be placed on imported Chinese goods,” said John Kilduff, partner at Again Capital Manageme
Thursday, 1 August 2019
MIDEAST STOCKS-Gulf shares dip as Fed hints no further rate cuts - Reuters
MIDEAST STOCKS-Gulf shares dip as Fed hints no further rate cuts - Reuters:
Major Gulf stock markets fell on Thursday after the U.S.
Federal Reserve cut interest rates by 25 basis points but, significantly,
signalled the move may not mark the beginning of a long easing cycle.
Markets had been looking for the Fed to signal more cuts were coming.
Central banks in Saudi Arabia, the United Arab Emirates and Qatar followed
the move, cutting their rates by the same degree. Their currencies are pegged to
the U.S. dollar and they follow the Fed on interest rate moves.
Banking shares were hard hit as the rate cuts are expected to take a toll on
their margins.
Major Gulf stock markets fell on Thursday after the U.S.
Federal Reserve cut interest rates by 25 basis points but, significantly,
signalled the move may not mark the beginning of a long easing cycle.
Markets had been looking for the Fed to signal more cuts were coming.
Central banks in Saudi Arabia, the United Arab Emirates and Qatar followed
the move, cutting their rates by the same degree. Their currencies are pegged to
the U.S. dollar and they follow the Fed on interest rate moves.
Banking shares were hard hit as the rate cuts are expected to take a toll on
their margins.
Mozambique Sues Billionaire Safa for Fraud in $2 Billion Scandal - Bloomberg
Mozambique Sues Billionaire Safa for Fraud in $2 Billion Scandal - Bloomberg:
Mozambique is suing Lebanese-French billionaire Iskandar Safa for fraud, targeting the chief executive officer and founder of the shipbuilding company at the center of the southeast African nation’s $2 billion debt scandal.
The government, represented by Peters & Peters Solicitors LLP, filed the case on Wednesday in the High Court of Justice’s commercial court in London, according to a filing, which didn’t provide further details.
The legal action is the latest in a saga that has seen arrests including the son of Mozambique’s ex-president, former Finance Minister Manuel Chang, and three ex-bankers at Credit Suisse Group AG. The U.S. has accused Mozambique government officials, the bankers and Safa’s company Privinvest of setting up the $2 billion project as a front to pay themselves more than $200 million in bribes and kickbacks.
Mozambique is suing Lebanese-French billionaire Iskandar Safa for fraud, targeting the chief executive officer and founder of the shipbuilding company at the center of the southeast African nation’s $2 billion debt scandal.
The government, represented by Peters & Peters Solicitors LLP, filed the case on Wednesday in the High Court of Justice’s commercial court in London, according to a filing, which didn’t provide further details.
The legal action is the latest in a saga that has seen arrests including the son of Mozambique’s ex-president, former Finance Minister Manuel Chang, and three ex-bankers at Credit Suisse Group AG. The U.S. has accused Mozambique government officials, the bankers and Safa’s company Privinvest of setting up the $2 billion project as a front to pay themselves more than $200 million in bribes and kickbacks.
Shares in Zain #Kuwait rally as Q2 profit rises | ZAWYA MENA Edition
Shares in Zain Kuwait rally as Q2 profit rises | ZAWYA MENA Edition:
Zain Kuwait reported a rise in Q2 2019 net profit, triggering a rally in the company’s shares.
The telecom provider’s net profit attributable to shareholders amounted to 50.2 million Kuwaiti dinars ($164.72 million), compared to 45.6 million dinars in Q2 2018, a 10.09 percent increase. Its total operating revenue for the quarter amounted to 406.6 million dinars, compared to 244.3 million dinars in the same period last year, a 66.43 percent increase.
Zain Kuwait’s shares rose 1.56 percent to 587 fils on Thursday at 13:45 GST and have added 30.96 percent since the start of 2019.
Zain Kuwait reported a rise in Q2 2019 net profit, triggering a rally in the company’s shares.
The telecom provider’s net profit attributable to shareholders amounted to 50.2 million Kuwaiti dinars ($164.72 million), compared to 45.6 million dinars in Q2 2018, a 10.09 percent increase. Its total operating revenue for the quarter amounted to 406.6 million dinars, compared to 244.3 million dinars in the same period last year, a 66.43 percent increase.
Zain Kuwait’s shares rose 1.56 percent to 587 fils on Thursday at 13:45 GST and have added 30.96 percent since the start of 2019.
Oil drops below $65 on Fed outlook, ample supply - Reuters
Oil drops below $65 on Fed outlook, ample supply - Reuters:
Oil dropped below $65 a barrel on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of interest rate cuts and as rising U.S. output helped keep the market well supplied.
The Federal Reserve reduced rates on Wednesday, but against expectations the head of the U.S. central bank said the move might not be the start of a lengthy series of cuts to shore up the economy against global economic weakness.
Brent crude LCOc1, the international benchmark, fell 69 cents to $64.36 a barrel by 1031 GMT, having dropped more than $1 earlier in the session. U.S. West Texas Intermediate (WTI) CLc1 crude was down 78 cents at $57.80.
Oil dropped below $65 a barrel on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of interest rate cuts and as rising U.S. output helped keep the market well supplied.
The Federal Reserve reduced rates on Wednesday, but against expectations the head of the U.S. central bank said the move might not be the start of a lengthy series of cuts to shore up the economy against global economic weakness.
Brent crude LCOc1, the international benchmark, fell 69 cents to $64.36 a barrel by 1031 GMT, having dropped more than $1 earlier in the session. U.S. West Texas Intermediate (WTI) CLc1 crude was down 78 cents at $57.80.
Tom Barrack Snagged Saudi Money After Trump Transition Meetings - Bloomberg
Tom Barrack Snagged Saudi Money After Trump Transition Meetings - Bloomberg:
Tom Barrack, the investor and longtime friend of President Donald Trump, was an early advocate of strengthening ties between the White House and Saudi Arabia.
Now his firm, Colony Capital Inc., is doing business with the kingdom’s sovereign wealth fund.
When Colony decided to invest in digital infrastructure such as cellphone towers and data centers after Trump’s election, it brought in the kingdom’s Public Investment Fund, according to people familiar with the matter. Colony worked with another firm, Digital Bridge, to form a $4 billion investment vehicle that closed in June. Since then, Colony has decided to acquire Digital Bridge of Boca Raton, Florida.
Tom Barrack, the investor and longtime friend of President Donald Trump, was an early advocate of strengthening ties between the White House and Saudi Arabia.
Now his firm, Colony Capital Inc., is doing business with the kingdom’s sovereign wealth fund.
When Colony decided to invest in digital infrastructure such as cellphone towers and data centers after Trump’s election, it brought in the kingdom’s Public Investment Fund, according to people familiar with the matter. Colony worked with another firm, Digital Bridge, to form a $4 billion investment vehicle that closed in June. Since then, Colony has decided to acquire Digital Bridge of Boca Raton, Florida.
Oil trade unchanged, but fewer UK tankers will cross the Strait of Hormuz - Refinitiv | ZAWYA MENA Edition
Oil trade unchanged, but fewer UK tankers will cross the Strait of Hormuz - Refinitiv | ZAWYA MENA Edition:
Tensions in the Strait of Hormuz have heightened in the wake of Iran’s seizure of an oil tanker, and the number of British-flagged tankers crossing the region is expected to drop significantly as a result. However, Refinitiv ship tracking data suggests that the oil trade has remained unaffected.
Tensions in the Gulf escalated to new levels in July when the British-flagged Stena Impero, owned by Sweden’s Stena Bulk, was seized by Iran’s Revolutionary Guard. Ship-tracking data from Refinitiv shows that the British vessel had not deviated from its passage through the Strait of Hormuz, where a strict traffic separation scheme is in operation under the rules of International Maritime Organization.
Refinitiv’s data also shows that the first half of 2019 has recorded a total of 5,250 tankers (oil and LNG) compared to the total of 11,277 tankers sailing in the region over the whole of 2018. The drop in the number of ships in the region is partly due to a fall in exports from Iran and to the maintenance season in Asia during the first half of the year.
Tensions in the Strait of Hormuz have heightened in the wake of Iran’s seizure of an oil tanker, and the number of British-flagged tankers crossing the region is expected to drop significantly as a result. However, Refinitiv ship tracking data suggests that the oil trade has remained unaffected.
Tensions in the Gulf escalated to new levels in July when the British-flagged Stena Impero, owned by Sweden’s Stena Bulk, was seized by Iran’s Revolutionary Guard. Ship-tracking data from Refinitiv shows that the British vessel had not deviated from its passage through the Strait of Hormuz, where a strict traffic separation scheme is in operation under the rules of International Maritime Organization.
Refinitiv’s data also shows that the first half of 2019 has recorded a total of 5,250 tankers (oil and LNG) compared to the total of 11,277 tankers sailing in the region over the whole of 2018. The drop in the number of ships in the region is partly due to a fall in exports from Iran and to the maintenance season in Asia during the first half of the year.
MIDEAST STOCKS-Gulf markets tumble after Fed dashes hopes for more rate cuts - Reuters
MIDEAST STOCKS-Gulf markets tumble after Fed dashes hopes for more rate cuts - Reuters:
Gulf stocks dropped on Thursday after the U.S. Federal Reserve cut interest rates by 25 basis points but, significantly, signalled the move may not mark the beginning of a long easing cycle.
Markets had been looking for the Fed to signal that more cuts were coming.
Central banks in Saudi Arabia, the United Arab Emirates and Qatar followed the move, cutting their rates by the same margin. Their currencies are pegged to the U.S. dollar and they follow the Fed on interest rate moves.
Gulf stocks dropped on Thursday after the U.S. Federal Reserve cut interest rates by 25 basis points but, significantly, signalled the move may not mark the beginning of a long easing cycle.
Markets had been looking for the Fed to signal that more cuts were coming.
Central banks in Saudi Arabia, the United Arab Emirates and Qatar followed the move, cutting their rates by the same margin. Their currencies are pegged to the U.S. dollar and they follow the Fed on interest rate moves.
The Firm That Wrecked Private Equity for the Middle East - Bloomberg #Abraaj
The Firm That Wrecked Private Equity for the Middle East - Bloomberg:
The collapse of Abraaj Group didn’t just kill the private equity firm Arif Naqvi built in Dubai. It ruined the entire market.
Since Abraaj’s swift and spectacular collapse was set in motion almost two years ago when investors like Bill Gates got suspicious, virtually no money has been raised by private equity firms based in the Gulf Cooperation Council despite strong performance almost everywhere else, according to Seattle-based data provider PitchBook and London-based Preqin.
“The collapse of Abraaj has eroded institutional investor confidence built over the past 15 years in emerging market-based private equity firms,” said Alex Gemici, the chairman and chief executive officer of Dubai-based Greenstone Equity Partners, which helps find investors for private equity funds. “We don’t see significant deployment of foreign institutional capital into fund managers based in the Middle East.”
The collapse of Abraaj Group didn’t just kill the private equity firm Arif Naqvi built in Dubai. It ruined the entire market.
Since Abraaj’s swift and spectacular collapse was set in motion almost two years ago when investors like Bill Gates got suspicious, virtually no money has been raised by private equity firms based in the Gulf Cooperation Council despite strong performance almost everywhere else, according to Seattle-based data provider PitchBook and London-based Preqin.
“The collapse of Abraaj has eroded institutional investor confidence built over the past 15 years in emerging market-based private equity firms,” said Alex Gemici, the chairman and chief executive officer of Dubai-based Greenstone Equity Partners, which helps find investors for private equity funds. “We don’t see significant deployment of foreign institutional capital into fund managers based in the Middle East.”
DIFC Courts charts new rules for wills of #UAE non-Muslim residents, investors | ZAWYA MENA Edition
DIFC Courts charts new rules for wills of UAE non-Muslim residents, investors | ZAWYA MENA Edition:
The Dubai International Financial Centre (DIFC) Courts is expanding its scope for will registrations by accommodating all resident and investor assets across the UAE, even those abroad.
Effective from July 1, 2019, the Courts’ Wills Service Centre also confirmed that existing wills registered with the Courts can be amended free of charge until August 31, 2019, to include UAE-wide assets and assets outside the UAE, DIFC Courts said in a statement.
DIFC Courts had previously accepted only wills with assets in Dubai and Ras Al Khaimah.
The Dubai International Financial Centre (DIFC) Courts is expanding its scope for will registrations by accommodating all resident and investor assets across the UAE, even those abroad.
Effective from July 1, 2019, the Courts’ Wills Service Centre also confirmed that existing wills registered with the Courts can be amended free of charge until August 31, 2019, to include UAE-wide assets and assets outside the UAE, DIFC Courts said in a statement.
DIFC Courts had previously accepted only wills with assets in Dubai and Ras Al Khaimah.
Fed to the Rescue as Gulf Central Banks Get to Cut Rates at Last - Bloomberg
Fed to the Rescue as Gulf Central Banks Get to Cut Rates at Last - Bloomberg:
More than four years after the oil-price crash, Gulf Arab policy makers can finally count on support from the Federal Reserve to add fuel to their fragile economic recovery.
Central banks in Saudi Arabia, the United Arab Emirates and Bahrain cut their benchmark interest rates on Wednesday by 25 basis points following a similar decision by the Fed. Kuwait kept its discount rate unchanged at 3%.
Gulf central banks largely move in lockstep with the U.S. to protect their currencies’ peg to the dollar. But as the Fed raised rates nine times since 2015, they were unable to lower borrowing costs to help weather the effect of lower oil prices on their economies.
More than four years after the oil-price crash, Gulf Arab policy makers can finally count on support from the Federal Reserve to add fuel to their fragile economic recovery.
Central banks in Saudi Arabia, the United Arab Emirates and Bahrain cut their benchmark interest rates on Wednesday by 25 basis points following a similar decision by the Fed. Kuwait kept its discount rate unchanged at 3%.
Gulf central banks largely move in lockstep with the U.S. to protect their currencies’ peg to the dollar. But as the Fed raised rates nine times since 2015, they were unable to lower borrowing costs to help weather the effect of lower oil prices on their economies.
Kuwait central bank decides to keep discount rate unchanged - Reuters
Kuwait central bank decides to keep discount rate unchanged - Reuters:
Kuwait’s central bank said on Wednesday that it had decided to maintain its discount rate unchanged at its current level of 3%.
Earlier, the U.S. Federal Reserve cut rates by 25 basis points.
Kuwait’s central bank said on Wednesday that it had decided to maintain its discount rate unchanged at its current level of 3%.
Earlier, the U.S. Federal Reserve cut rates by 25 basis points.
Oil slips 1% after Fed disappoints, U.S. crude output rises - Reuters
Oil slips 1% after Fed disappoints, U.S. crude output rises - Reuters:
Oil prices skidded on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of interest rate cuts and Sino-U.S. talks ended without apparent progress towards resolving a bitter trade dispute.
Brent crude futures, LCOc1 the international benchmark, fell 62 cents, or 1%, to $64.43 a barrel by 0405 GMT, having fallen more than $1 earlier in the session. U.S. West Texas Intermediate (WTI) CLc1 crude was down 67 cents, or 1.2%, at $57.91 a barrel, also having dropped more than a $1 earlier.
The drops came despite a bigger-than-expected decline in inventories in the U.S. and a drop in crude production among OPEC members, along with Libya cutting exports, typically bullish drivers for the market. But U.S. output rose in a market that remains well supplied.
Oil prices skidded on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of interest rate cuts and Sino-U.S. talks ended without apparent progress towards resolving a bitter trade dispute.
Brent crude futures, LCOc1 the international benchmark, fell 62 cents, or 1%, to $64.43 a barrel by 0405 GMT, having fallen more than $1 earlier in the session. U.S. West Texas Intermediate (WTI) CLc1 crude was down 67 cents, or 1.2%, at $57.91 a barrel, also having dropped more than a $1 earlier.
The drops came despite a bigger-than-expected decline in inventories in the U.S. and a drop in crude production among OPEC members, along with Libya cutting exports, typically bullish drivers for the market. But U.S. output rose in a market that remains well supplied.
Shell profit drops in volatile second quarter | Financial Times
Shell profit drops in volatile second quarter | Financial Times:
Royal Dutch Shell reported a 26 per cent slide in second-quarter earnings, which came well below expectations, after a volatile period that saw lower energy prices coincide with weaker performance in its refining and chemicals businesses.
The Anglo-Dutch oil group said its earnings in the three months to June 30 fell to $3.5bn on a current cost of supply basis, the measure tracked most closely by analysts, and adjusted for exceptional items. This was down from $4.7bn reported in the same period a year ago and far under analysts' consensus estimates of $4.9bn.
Ben van Beurden, Shell’s chief executive, said “we have delivered good cash flow performance, despite earnings volatility, in a quarter that has seen challenging macroeconomic conditions in refining and chemicals as well as lower gas prices.”
Royal Dutch Shell reported a 26 per cent slide in second-quarter earnings, which came well below expectations, after a volatile period that saw lower energy prices coincide with weaker performance in its refining and chemicals businesses.
The Anglo-Dutch oil group said its earnings in the three months to June 30 fell to $3.5bn on a current cost of supply basis, the measure tracked most closely by analysts, and adjusted for exceptional items. This was down from $4.7bn reported in the same period a year ago and far under analysts' consensus estimates of $4.9bn.
Ben van Beurden, Shell’s chief executive, said “we have delivered good cash flow performance, despite earnings volatility, in a quarter that has seen challenging macroeconomic conditions in refining and chemicals as well as lower gas prices.”
The three forces pinching emerging market equity returns | Financial Times
The three forces pinching emerging market equity returns | Financial Times:
Emerging market equities are behaving very oddly this year, but anyone betting on a bout of mean reversion could instead end up with burnt fingers.
The MSCI World index of developed market equities has enjoyed a splendid 2019, chalking up a 19 per cent gain in total return terms, despite a backdrop of doom and gloom over everything from trade wars to slowing global growth.
Despite this, the equivalent index for emerging market stocks — generally perceived as a “high beta” asset class that should excel in risk-on environments — has returned just over 10 per cent. If this pattern persists for the rest of the year, it would be only the third time since the Asian financial crises of the 1990s that EM has lagged behind DM in rising markets — an example last seen in 2013 and 2014 when the Federal Reserve provoked the so-called “taper tantrum”, in which US Treasury yields surged on news that loose monetary policy would be gradually tightened.
Emerging market equities are behaving very oddly this year, but anyone betting on a bout of mean reversion could instead end up with burnt fingers.
The MSCI World index of developed market equities has enjoyed a splendid 2019, chalking up a 19 per cent gain in total return terms, despite a backdrop of doom and gloom over everything from trade wars to slowing global growth.
Despite this, the equivalent index for emerging market stocks — generally perceived as a “high beta” asset class that should excel in risk-on environments — has returned just over 10 per cent. If this pattern persists for the rest of the year, it would be only the third time since the Asian financial crises of the 1990s that EM has lagged behind DM in rising markets — an example last seen in 2013 and 2014 when the Federal Reserve provoked the so-called “taper tantrum”, in which US Treasury yields surged on news that loose monetary policy would be gradually tightened.
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