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Oil prices steadied on Tuesday on optimism U.S.-China trade tensions will ease and hopes major economies will take stimulus measures to ward off a possible economic slowdown, after falling earlier on concerns over future demand.
Brent crude LCOc1 settled 29 cents, or 0.5%, higher at $60.03 a barrel, while U.S. crude CLc1 rose 13 cents to $56.34 a barrel. U.S. crude turned lower in post-settlement trade after U.S. President Donald Trump said he was not ready to make a trade deal with China.
The United States said it would extend a reprieve that permits China’s Huawei Technologies [HWT.UL] to buy components from U.S. companies, signaling a slight softening of the trade conflict between the world’s two largest economies.
The basic business of investment banking is advising companies on big financial transactions. If you are the chief executive officer of a big company, and the CEO of another big company calls you up and offers to buy your company, you will hire an investment bank or two to help you evaluate the offer and make sure you get the best deal. Or if your company wants to raise a billion dollars of outside financing, you will hire an investment bank or two to help you figure out the best ways to do that and to negotiate the best price with investors. The banks are repeat players; they know how this stuff works; they have negotiation skills and market knowledge and specialized expertise in structuring transactions.
The investment banks will generally charge a fee that is large compared to, like, the median family income, but small—on the order of one percent 1 —compared to the size of the deal. If you are raising a billion dollars, paying $10 million for advice just does not feel that material, and you may not be inclined to sweat the details that much. If the bankers can get you a meaningfully higher price on a billion-dollar transaction, it’s silly to quibble with them over a million dollars of fees.
The United States has removed nearly 2.7 million barrels of Iranian oil from global markets as a result of Washington’s decision to reimpose sanctions on all purchases of Iran’s crude, U.S. Secretary of State Mike Pompeo said on Tuesday.
In an interview with MSNBC, Pompeo said the U.S. government was confident it could continue with its strategy.
The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and six world powers. In May, Washington ended sanction waivers given to importers of Iranian oil, aiming to cut Tehran’s exports to zero.
Dubai has stayed all legal claims against Meydan, a government-owned developer facing a wave of litigation, in a response to growing financial distress in the Middle East’s commercial capital.
In June, the government ordered Dubai courts to suspend claims against Meydan City Corporation, its subsidiaries and affiliates, pending the formation of a special judicial committee, according to a copy of the directive seen by the Financial Times.
A government official said the committee would be finalised over the next week to adjudicate all cases against Meydan, which is developing land around Dubai’s 60,000-capacity racecourse grandstand, host to the world’s richest horse race.
The world’s most valuable company may not be Apple Inc. That crown could instead belong to Aramco, as Saudi Arabian Oil Co. is better known. The sprawling state-owned producer, sitting atop one-fifth of the globe’s petroleum reserves, pumps more crude than the top four publicly traded oil companies combined. Crown Prince Mohammed bin Salman, the Saudi king’s influential son, says the company is worth in excess of $2 trillion, almost double the size of Apple. A much-vaunted plan to sell shares of Aramco in 2018 got postponed, raising speculation that it might be dropped altogether, but Prince Mohammed insists that the biggest initial public offering “in human history” will go ahead.
The Situation
The kingdom’s original plan, announced in 2016, was to sell up to 5 percent of Aramco, either on the Saudi bourse and one or two overseas exchanges, or solely on the domestic exchange. That got pushed back to late 2020 or early 2021 to allow Aramco time to fund and complete the purchase of a $69 billion stake in Saudi Arabia’s biggest petrochemical company. Global investors had also balked at the valuation, with some banks pricing a 5 percent stake at $50 billion to $75 billion — way short of the $100 billion-plus foreseen by the Crown Prince. Even so, the lowest valuation would still dwarf the world record for an IPO of $25 billion by Alibaba Group Holding Ltd. The aim of the share sale is to create a war chest and prepare the country for the post-hydrocarbon age. The brutal killing of Saudi columnist Jamal Khashoggi, which a UN report said warranted an investigation of the crown prince, threatened to derail a political agenda crowded with social and economic reforms at home and an assertive foreign policy. Still, investors have returned to the kingdom and Aramco was said in August to have appointed two boutique investment banks to advise on its second attempt at the IPO.
Veteran investor Mark Mobius gave a blanket endorsement to buying gold, saying accumulating bullion will reap long-term rewards as leading central banks loosen monetary policy and the rise of cryptocurrencies serves only to reinforce demand for genuinely hard assets. Prices climbed.
“Gold’s long-term prospect is up, up and up, and the reason why I say that is money supply is up, up and up,” Mobius, who set up Mobius Capital Partners LLP last year after three decades at Franklin Templeton Investments, told Bloomberg TV. He added: “I think you have to be buying at any level, frankly.”
Gold hit a six-year high this month on prospects for easier monetary policy from the Federal Reserve and other central banks to support growth that’s been impacted by the prolonged trade war between the U.S. and China. With the U.S. Treasury market signaling that a recession may be on the horizon, investors have been swarming into bullion-backed exchange-traded funds.
Oil prices fell on Tuesday on persistent concerns over future demand, but losses were capped by optimism U.S.-China trade tensions will ease and hopes major economies will take stimulus measures to ward off a possible economic slowdown.
Brent crude LCOc1 was down 51 cents at $59.23 a barrel by 1339 GMT, while U.S. crude CLc1 was down 73 cents at $55.48 a barrel. Both contracts had traded in positive territory earlier in the session.
The United States said it would extend a reprieve that permits China’s Huawei Technologies to buy components from U.S. companies, signalling a slight softening of the trade conflict between the world’s two largest economies.
Most Middle Eastern stock markets closed
higher on Tuesday, reflecting market optimism that U.S.-China
trade tensions could ease and stimulus measures by major
economies to counter a possible global economic slowdown.
The United States said it would extend a reprieve that
permits China's Huawei Technologies to buy components from U.S.
companies, signalling a slight softening of the trade conflict
between the world's two largest economies.
China's new lending reference rate was set slightly lower on
Tuesday, while Germany's right-left coalition government has
said it would be prepared to ditch its balanced budget rule and
take on new debt to counter a possible recession.
Qatar's index rose 0.9% for the third straight day
with the Gulf's largest lender, Qatar National Bank
increasing 2% and Industries Qatar adding 1.7%.
Qatar's index, down 3.6% in the year-to-date, has steadied
since the central bank on Thursday said Qatari economic growth
would accelerate over the next two years amid expectations of
stable oil prices and continued strong exports.
U.S. sanctions are battering Iran’s economy. They have all but stopped Western companies from investing in the Islamic Republic, sent oil production crashing to its lowest level in more than three decades and led to a dire scarcity of foreign exchange. Inflation has accelerated to more than 50%, and some foods and medicines are running short. So far, Tehran is hunkering down rather than buckling to U.S. pressure to change its foreign policy, retreat from the region and renegotiate the 2015 nuclear accord abandoned by President Donald Trump. Iran’s latest attempt to ease the pain has been a reform of its currency system.
1. Why is Iran making changes to its currency?
The rial has come under severe pressure from tightening sanctions and the subsequent collapse in oil revenue. Iran has long kept a tight grip on its currency and has been reluctant to let it devalue, maintaining the official exchange rate at 42,000 per U.S. dollar since mid-2018. As supplies of foreign exchange in the banking system dried up, Iranians increasingly turned to the unregulated black market to pay for everything from imported cars to overseas college fees. From the start of 2019 to early May, the rial plumm
Saudi Aramco has picked Lazard Ltd. and Moelis & Co. to advise on the oil giant’s second attempt at the world’s largest initial public offering, people with knowledge of the matter said.
The boutique investment banks have started preparatory work on the offering, according to the people, who asked not to be identified because the information is private. They are expected to play a key role in the listing, including in the selection of underwriters and listing venues as well as working to ensure Aramco can secure its valuation expectations, the people said.
The selection is a boon particularly for Lazard, which wasn’t one of the advisers on Aramco’s first listing attempt. The oil producer was originally working with Evercore Inc. and Moelis, as well as HSBC Holdings Plc, JPMorgan Chase & Co. and Morgan Stanley. Lazard’s success working on the blockbuster Aramco bond sale this year put it in pole position to secure a role on the IPO.
Qatar Petroleum concluded a five-year agreement to supply condensate feedstock to ExxonMobil Trading Asia Pacific Pte. Ltd. in Singapore, the Doha-based company said in a statement published on Tuesday.
Global oil consumption is falling at the fastest rate for almost five years as manufacturing activity and trade flows slip around the world and vehicle production tumbles.
Demand in the top 18 consuming countries, each using more than 1 million barrels per day (bpd), fell by almost 0.2% in the three months between March and May compared with the same period a year earlier.
Oil use is falling at the fastest rate since the third quarter of 2014, according to national government data submitted to the Joint Organizations Data Initiative.
Major Gulf stock markets rose in early trade on Tuesday, buoyed by financial shares amid steady oil prices on optimism that U.S.-China trade tensions could ease and stimulus measures by major economies to counter a possible global economic slowdown.
The United States said it would extend a reprieve that permits China’s Huawei Technologies to buy components from U.S. companies, signalling a slight softening of the trade conflict between the world’s two largest economies.
China’s new lending reference rate was set slightly lower on Tuesday, while Germany said on Sunday Berlin could make available up to 50 billion euros ($55 billion) of extra spending, adding that Germany has the fiscal strength to counter any future economic crisis “with full force”.
Lazard Ltd.’s success working on the blockbuster Saudi Aramco bond sale this year has put it in pole position to secure a coveted spot on the oil giant’s second attempt at the world’s largest initial public offering.
Several rival bankers seeking a role on the IPO expect Lazard to get an advisory mandate, thanks to its work on the debut bond sale by Aramco that attracted more than $100 billion of orders, people with knowledge of the matter said.
The boutique advisory firm has been pushing hard in recent weeks to win a role on the planned share sale, sending some of its top global dealmakers from London, Paris and Houston to woo Aramco officials at meetings in the Middle East, the people said. Lazard, run by Ken Jacobs, is likely to replace one of the original advisers that previously worked on the listing plans, the people said, asking not to be identified because the information is private.
Sales prices for apartments in Dubai in the first half of 2019 are 11.7 percent cheaper than in 2017 and villa prices are 12.1 percent cheaper than they were two years ago.
Apartment prices in Dubai dropped 3.9 percent compared to H2 2018 and villa prices in the emirate dropped 4.3 percent to an advertised median price of AED 855 per square foot compared to the same time last year, according to a report, Property Finder Trends.
Dubai apartments have a median advertised price of AED 1,163 per sq ft.
Crude oil prices edged up on Tuesday on optimism U.S.-China trade tensions will ease and on hopes major economies will take stimulus measures to ward off a potential economic slowdown that could hit oil demand.
Brent crude LCOc1 had risen 8 cents to $59.82 a barrel by 0652 GMT, after climbing 1.88% on Monday.
U.S. crude CLc1 was up 9 cents at $56.30 a barrel, after gaining 2.44% in the previous session.
The United States said it would extend a reprieve that permits China’s Huawei Technologies to buy components from U.S. companies, signaling a slight softening of the trade conflict between the world’s two largest economies.
United Arab Emirates-based payment solutions business Finablr (FINF.L), which listed in London in May, on Tuesday posted a 9.1% rise in half-year group income, saying earnings were at the upper end of its guidance.
Finablr reported adjusted group income of $742 million for the period ended June 30, up from $680.5 million in the same period a year earlier.
The company, whose brands include UAE Exchange, Travelex Holdings and Xpress Money, raised $400 million in an initial public offering on the London Stock Exchange earlier this year. Half of that amount was raised selling new shares.
Saudi Aramco’s biggest asset could also be a liability.
The state energy giant’s vast oil reserves – it can sustain current production levels for the next 50 years – make it more exposed than any other company to a rising tide of environmental activism and shift away from fossil fuels.
In the three years since Saudi Crown Prince Mohammed Bin Salman first proposed a stock market listing, climate change and new green technologies are putting some investors, particularly in Europe and the United States, off the oil and gas sector.