Oil gains 1% as China pushes Trump for more tariff rollbacks - Reuters:
Oil prices rose more than 1% on Tuesday on hopes for a U.S.-China trade agreement and optimism that Washington could roll back some tariffs on Chinese imports.
Brent crude futures rose 83 cents, or 1.3%, to settle at $62.96 a barrel. U.S. West Texas Intermediate (WTI) crude futures ended 69 cents, or 1.2%, higher at $57.23 a barrel.
China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a so-called Phase 1 deal, which would ease the economic impact of the trade dispute between the world’s two biggest oil consumers.
Tuesday 5 November 2019
Clarify the narrative | Riyadh Bureau - #SaudiArabia Send your feedback to alomran@gmail.com or via Twitter: @ahmed
Clarify the narrative:
Saudi Arabia is finally moving ahead with the initial public offering of its state oil company after several delays. Saudi Aramco has officially kickstarted its IPO process on November 3 after the kingdom’s Capital Market Authority said it has approved an application to list the company in the local stock market Tadawul.
One of the main reasons for the delay has been the valuation: Crown Prince Mohammed bin Salman has pegged the company’s value at $2 trillion, but many analysts and bankers said investors were likely to buy below that price in the range of $1.5 trillion to 1.8 trillion. Estimates after the ITF announcement varied wildly from around $1.2 to $2.3 trillion.
Accepting a lower price suggests that the prince has decided to “put getting the deal done above being proved right” about the valuation, a rare compromise for the heir apparent whose rise to power has been marked by a decisive drive to achieve the goals of an ambitious economic and social reform programme known as “Vision 2030.”
Saudi Arabia is finally moving ahead with the initial public offering of its state oil company after several delays. Saudi Aramco has officially kickstarted its IPO process on November 3 after the kingdom’s Capital Market Authority said it has approved an application to list the company in the local stock market Tadawul.
One of the main reasons for the delay has been the valuation: Crown Prince Mohammed bin Salman has pegged the company’s value at $2 trillion, but many analysts and bankers said investors were likely to buy below that price in the range of $1.5 trillion to 1.8 trillion. Estimates after the ITF announcement varied wildly from around $1.2 to $2.3 trillion.
Accepting a lower price suggests that the prince has decided to “put getting the deal done above being proved right” about the valuation, a rare compromise for the heir apparent whose rise to power has been marked by a decisive drive to achieve the goals of an ambitious economic and social reform programme known as “Vision 2030.”
Aramco Analysts' $1.4 Trillion Spread Risks Pleasing Nobody - Bloomberg
Aramco Analysts' $1.4 Trillion Spread Risks Pleasing Nobody - Bloomberg:
Caught between a client seeking a $2 trillion valuation and skeptical foreign investors reluctant to pay anywhere near that amount, the banks working on Saudi Aramco’s initial public offering went for compromise: tell both sides they’re right.
The result risks pleasing nobody, however.
Aramco appointed more than 20 banks to advise on what could be world’s largest share sale, and their analysts -- who are supposed to work independently of the investment bankers advising Aramco -- put together reports on the company’s financial performance and outlook before the share sale kicked off. Consensus is in short supply.
Caught between a client seeking a $2 trillion valuation and skeptical foreign investors reluctant to pay anywhere near that amount, the banks working on Saudi Aramco’s initial public offering went for compromise: tell both sides they’re right.
The result risks pleasing nobody, however.
Aramco appointed more than 20 banks to advise on what could be world’s largest share sale, and their analysts -- who are supposed to work independently of the investment bankers advising Aramco -- put together reports on the company’s financial performance and outlook before the share sale kicked off. Consensus is in short supply.
#Qatar Airways Teams With IndiGo to Bolster Traffic From India - Bloomberg
Qatar Airways Teams With IndiGo to Bolster Traffic From India - Bloomberg:
Qatar Airways is planning a code-share partnership with IndiGo, a move that will funnel more traffic from the fast-growing Indian air-travel market to the Gulf carrier’s network.
“It is not something about buying a stake, it’s commercial,” Chief Executive Officer Akbar Al Baker said in an interview in Kuwait on Tuesday, referring to an announcement planned for Nov. 7.
Qatar Airways has been looking to expand in the fast-growing Indian market, yet plans to start a new carrier there have been frustrated over rules surrounding foreign ownership. Instead, the airline has asked local authorities to temporarily allow it to add more seats on high-volume routes to fill the gap left by Jet Airways, a partner of rival Etihad Airways, which went bust in April.
Qatar Airways is planning a code-share partnership with IndiGo, a move that will funnel more traffic from the fast-growing Indian air-travel market to the Gulf carrier’s network.
“It is not something about buying a stake, it’s commercial,” Chief Executive Officer Akbar Al Baker said in an interview in Kuwait on Tuesday, referring to an announcement planned for Nov. 7.
Qatar Airways has been looking to expand in the fast-growing Indian market, yet plans to start a new carrier there have been frustrated over rules surrounding foreign ownership. Instead, the airline has asked local authorities to temporarily allow it to add more seats on high-volume routes to fill the gap left by Jet Airways, a partner of rival Etihad Airways, which went bust in April.
OPEC Sees Its Market Share Shrinking for Years as Shale Triumphs - Bloomberg
OPEC Sees Its Market Share Shrinking for Years as Shale Triumphs - Bloomberg:
OPEC slashed estimates for the amount of oil it will need to pump in coming years, projecting that its share of world markets will shrink until the middle of the next decade amid a flood of U.S. shale supplies.
The producer group expects that demand for its oil will slide by about 7% over the next four years, slumping to an average of 32.7 million barrels a day in 2023, according to its annual report.
That could compel the Organization of Petroleum Exporting Countries and its partners -- who have already curbed output this year to prevent a glut -- to reduce supplies even further, or at least compete more fiercely among themselves for a diminishing portion of global markets.
OPEC slashed estimates for the amount of oil it will need to pump in coming years, projecting that its share of world markets will shrink until the middle of the next decade amid a flood of U.S. shale supplies.
The producer group expects that demand for its oil will slide by about 7% over the next four years, slumping to an average of 32.7 million barrels a day in 2023, according to its annual report.
That could compel the Organization of Petroleum Exporting Countries and its partners -- who have already curbed output this year to prevent a glut -- to reduce supplies even further, or at least compete more fiercely among themselves for a diminishing portion of global markets.
OPEC chief says oil market may have upside potential in 2020 - Reuters
OPEC chief says oil market may have upside potential in 2020 - Reuters:
The oil market outlook for next year may have upside potential, the secretary-general of producer group OPEC said on Tuesday, appearing to downplay any need to cut output more deeply.
The Organization of the Petroleum Exporting Countries and its allies led by Russia meet in December. The so-called OPEC+ alliance, seeking to boost oil prices, has since January implemented a deal to cut output by 1.2 million barrels per day until March 2020.
OPEC’s Mohammad Barkindo said he was more optimistic about the market outlook for next year than he had been in October, when he had said all options were open including a deeper cut to oil output amid forecasts of oversupply.
The oil market outlook for next year may have upside potential, the secretary-general of producer group OPEC said on Tuesday, appearing to downplay any need to cut output more deeply.
The Organization of the Petroleum Exporting Countries and its allies led by Russia meet in December. The so-called OPEC+ alliance, seeking to boost oil prices, has since January implemented a deal to cut output by 1.2 million barrels per day until March 2020.
OPEC’s Mohammad Barkindo said he was more optimistic about the market outlook for next year than he had been in October, when he had said all options were open including a deeper cut to oil output amid forecasts of oversupply.
Aramco share sale curb rules out overseas listing for at least a year - Reuters
Aramco share sale curb rules out overseas listing for at least a year - Reuters:
The Saudi government plans to sell 2% of state oil giant Aramco in a domestic listing on Dec. 11, three sources familiar with the matter said, but restrictions on future share sales mean an international IPO is ruled out for at least a year.
Final pricing for the IPO (initial public offering) is scheduled for Dec. 5 and the world’s most profitable company is expected to start trading on the Riyadh bourse six days later, the sources said.
The Saudi government will face a one-year restriction on selling more Aramco shares following the domestic listing, according to the sources, meaning any overseas IPO is unlikely to be held in 2020.
The Saudi government plans to sell 2% of state oil giant Aramco in a domestic listing on Dec. 11, three sources familiar with the matter said, but restrictions on future share sales mean an international IPO is ruled out for at least a year.
Final pricing for the IPO (initial public offering) is scheduled for Dec. 5 and the world’s most profitable company is expected to start trading on the Riyadh bourse six days later, the sources said.
The Saudi government will face a one-year restriction on selling more Aramco shares following the domestic listing, according to the sources, meaning any overseas IPO is unlikely to be held in 2020.
Oil gains 1% as China pushes Trump for more tariff roll-backs - Reuters
Oil gains 1% as China pushes Trump for more tariff roll-backs - Reuters:
Oil prices rose more than 1% on Tuesday on hopes for a U.S.-China trade agreement and optimism that Washington could roll back some of the tariffs it has imposed on Chinese imports.
Brent crude LCOc1 futures for January delivery rose 88 cents, or 1.4%, to $63.01 a barrel by 10:51 a.m. EST (1551 GMT). U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 76 cents, or 1.3%, to $57.30 a barrel.
China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a so-called Phase 1 deal, which would help to ease the broad economic impact of the trade dispute between the world’s two biggest oil consumers.
Oil prices rose more than 1% on Tuesday on hopes for a U.S.-China trade agreement and optimism that Washington could roll back some of the tariffs it has imposed on Chinese imports.
Brent crude LCOc1 futures for January delivery rose 88 cents, or 1.4%, to $63.01 a barrel by 10:51 a.m. EST (1551 GMT). U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 76 cents, or 1.3%, to $57.30 a barrel.
China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a so-called Phase 1 deal, which would help to ease the broad economic impact of the trade dispute between the world’s two biggest oil consumers.
#Qatar central bank sells 600 million riyals of T-bills - Reuters
Qatar central bank sells 600 million riyals of T-bills - Reuters:
Qatar’s central bank sold 600 million riyals ($164.84 million) of Treasury bills in an auction, it said in a statement on Tuesday.
A total of 300 million riyals worth of three-month T-bills were sold at 1.73%, 200 million riyals worth of six-month T-bills were sold at 1.76% and 100 million worth of nine-month T-bills were sold at 1.81%.($1 = 3.6400 Qatar riyals)
Qatar’s central bank sold 600 million riyals ($164.84 million) of Treasury bills in an auction, it said in a statement on Tuesday.
A total of 300 million riyals worth of three-month T-bills were sold at 1.73%, 200 million riyals worth of six-month T-bills were sold at 1.76% and 100 million worth of nine-month T-bills were sold at 1.81%.($1 = 3.6400 Qatar riyals)
#AbuDhabi groups #UAE defense firms under one roof to cut costs - Reuters
Abu Dhabi groups UAE defense firms under one roof to cut costs - Reuters:
Abu Dhabi plans to group more than 25 state-owned and private entities in the UAE defense sector, with combined annual revenues of $5 billion, into a single defense company.
The United Arab Emirates, of which Abu Dhabi is the oil-wealthy capital, is one of the top buyers of Western arms and defense systems, mostly from its key ally the United States, and to a lesser extent from Russia and China.
In a further consolidation after a 2014 merger of state-run defense firms, Abu Dhabi said on Tuesday it was forming EDGE to invest in technology, including artificial intelligence, as well as research and development.
Abu Dhabi plans to group more than 25 state-owned and private entities in the UAE defense sector, with combined annual revenues of $5 billion, into a single defense company.
The United Arab Emirates, of which Abu Dhabi is the oil-wealthy capital, is one of the top buyers of Western arms and defense systems, mostly from its key ally the United States, and to a lesser extent from Russia and China.
In a further consolidation after a 2014 merger of state-run defense firms, Abu Dhabi said on Tuesday it was forming EDGE to invest in technology, including artificial intelligence, as well as research and development.
Breakingviews - SoftBank debt burden may stoke an asset fire sale - Reuters
Breakingviews - SoftBank debt burden may stoke an asset fire sale - Reuters:
Masayoshi Son’s SoftBank Group is a giant tech-investment machine whose gears are greased by generous dollops of debt. Borrowing worked well for the $80 billion company as asset values rose; it could become a problem as they go into reverse.
On Son’s preferred measures, SoftBank’s debt burden seems manageable. The Japanese billionaire wants to keep borrowing below one-quarter of the value of its assets, which include stakes in e-commerce group Alibaba, two telecom operators, chipmaker Arm and a chunk of the $100 billion Vision Fund. On that count he has a comfortable margin of safety: net debt was $45 billion at the end of June, or just 17% of his portfolio’s $260 billion worth, using market prices for the listed stakes and SoftBank’s estimates for its private holdings. Cash on hand covers at least two years of bond repayments, while cash flows were more than twice annual interest payments in the 12 months to June.
Masayoshi Son’s SoftBank Group is a giant tech-investment machine whose gears are greased by generous dollops of debt. Borrowing worked well for the $80 billion company as asset values rose; it could become a problem as they go into reverse.
On Son’s preferred measures, SoftBank’s debt burden seems manageable. The Japanese billionaire wants to keep borrowing below one-quarter of the value of its assets, which include stakes in e-commerce group Alibaba, two telecom operators, chipmaker Arm and a chunk of the $100 billion Vision Fund. On that count he has a comfortable margin of safety: net debt was $45 billion at the end of June, or just 17% of his portfolio’s $260 billion worth, using market prices for the listed stakes and SoftBank’s estimates for its private holdings. Cash on hand covers at least two years of bond repayments, while cash flows were more than twice annual interest payments in the 12 months to June.
MIDEAST STOCKS- #Saudi leads Gulf higher, COMI supports Egypt - Agricultural Commodities - Reuters
MIDEAST STOCKS-Saudi leads Gulf higher, COMI supports Egypt - Agricultural Commodities - Reuters:
Most major Gulf markets closed higher on
Tuesday, boosted by financial stocks and mirroring a rally in
global markets amid hopes for a U.S.-China trade agreement.
China is pushing U.S. President Donald Trump to remove more
tariffs imposed in September as part of a so-called Phase 1
trade deal, which would help to ease the broad economic damage
inflicted by the trade dispute.
Saudi Arabia's index added 1.7%, with National
Commercial Bank, the kingdom’s largest lender, jumping
4.4% and Al Rajhi Bank up 1.9%.
The latter said it had received central bank approval for
the appointment of Walid Bin Abdullah Al-Moqbel as its chief
executive.
Most major Gulf markets closed higher on
Tuesday, boosted by financial stocks and mirroring a rally in
global markets amid hopes for a U.S.-China trade agreement.
China is pushing U.S. President Donald Trump to remove more
tariffs imposed in September as part of a so-called Phase 1
trade deal, which would help to ease the broad economic damage
inflicted by the trade dispute.
Saudi Arabia's index added 1.7%, with National
Commercial Bank, the kingdom’s largest lender, jumping
4.4% and Al Rajhi Bank up 1.9%.
The latter said it had received central bank approval for
the appointment of Walid Bin Abdullah Al-Moqbel as its chief
executive.
Dubai’s Property Problem - Bloomberg
Dubai’s Property Problem - Bloomberg:
Dubai’s property market is still in a slump. Chronic oversupply has seen property prices fall around 30% in the last 5 years. Bloomberg’s Zainab Fattah reports on “Bloomberg Daybreak: Middle East.” (Source: Bloomberg)
Dubai’s property market is still in a slump. Chronic oversupply has seen property prices fall around 30% in the last 5 years. Bloomberg’s Zainab Fattah reports on “Bloomberg Daybreak: Middle East.” (Source: Bloomberg)
Strongest #Saudi Non-Oil Pickup in Years Can't Break Jobless Funk - Bloomberg
Strongest Saudi Non-Oil Pickup in Years Can't Break Jobless Funk - Bloomberg:
The wait for new jobs in Saudi Arabia drags on even though its non-oil economy hasn’t felt better in years.
While business conditions in the kingdom’s non-oil private sector improved last month at the fastest pace since August 2015, employment gains were slower compared with September and average staff pay even showed a “marginal fall,” according to IHS Markit.
By contrast, IHS Markit’s Purchasing Managers’ Index for the neighboring United Arab Emirates was unchanged at its lowest level in almost a decade, but employment actually rose for the second consecutive month in October.
The wait for new jobs in Saudi Arabia drags on even though its non-oil economy hasn’t felt better in years.
While business conditions in the kingdom’s non-oil private sector improved last month at the fastest pace since August 2015, employment gains were slower compared with September and average staff pay even showed a “marginal fall,” according to IHS Markit.
By contrast, IHS Markit’s Purchasing Managers’ Index for the neighboring United Arab Emirates was unchanged at its lowest level in almost a decade, but employment actually rose for the second consecutive month in October.
Oil gains on optimism over U.S.-China trade deal - Reuters
Oil gains on optimism over U.S.-China trade deal - Reuters:
Oil prices rose on Tuesday on positive economic data and hopes for a Washington-Beijing trade deal that will lead to a de-escalation in tensions between the world’s top economies.
Brent crude LCOc1 was up 66 cents, or 1%, at $62.79 a barrel at 1016 GMT.
U.S. crude CLc1 rose 48 cents, or 0.8%, to $57.02 a barrel.
Oil has been supported by hopes for a trade deal between the United States and China, the two biggest oil consumers, that could boost demand.
China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a “phase one” U.S.-China trade deal.
Oil prices rose on Tuesday on positive economic data and hopes for a Washington-Beijing trade deal that will lead to a de-escalation in tensions between the world’s top economies.
Brent crude LCOc1 was up 66 cents, or 1%, at $62.79 a barrel at 1016 GMT.
U.S. crude CLc1 rose 48 cents, or 0.8%, to $57.02 a barrel.
Oil has been supported by hopes for a trade deal between the United States and China, the two biggest oil consumers, that could boost demand.
China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a “phase one” U.S.-China trade deal.
#Qatar, Turkey to scale up cooperation: Qatar foreign ministry - Reuters
Qatar, Turkey to scale up cooperation: Qatar foreign ministry - Reuters:
Regional allies Qatar and Turkey plan to scale up their cooperation into a “comprehensive strategic partnership”, Qatar’s foreign ministry said on Tuesday, as Doha deals with a prolonged boycott by fellow Gulf Arab states.
The decision was taken at a ministerial meeting of the Qatari-Turkish Higher Strategic Committee held in Doha on Monday, the ministry tweeted.
Ankara threw its support behind Doha after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed all ties with Qatar in mid-2017, accusing it of funding militant groups.
Regional allies Qatar and Turkey plan to scale up their cooperation into a “comprehensive strategic partnership”, Qatar’s foreign ministry said on Tuesday, as Doha deals with a prolonged boycott by fellow Gulf Arab states.
The decision was taken at a ministerial meeting of the Qatari-Turkish Higher Strategic Committee held in Doha on Monday, the ministry tweeted.
Ankara threw its support behind Doha after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed all ties with Qatar in mid-2017, accusing it of funding militant groups.
OPEC sees its oil market share shrinking, lowers demand view - Reuters
OPEC sees its oil market share shrinking, lowers demand view - Reuters:
OPEC will supply a diminishing amount of oil in the next five years as output of U.S. shale and other rival sources expands, the exporter group said, despite a growing appetite for energy fed by global economic expansion.
OPEC’s production of crude oil and other liquids is expected to decline to 32.8 million barrels per day (bpd) by 2024, the group said in its 2019 World Oil Outlook published on Tuesday. That compares with 35 million bpd in 2019.
Rising climate activism in the West and widening use of alternative fuels are putting the strength of long-term oil demand under more scrutiny. The Organization of the Petroleum Exporting Countries cut its medium- and long-term oil demand forecasts in the report.
OPEC will supply a diminishing amount of oil in the next five years as output of U.S. shale and other rival sources expands, the exporter group said, despite a growing appetite for energy fed by global economic expansion.
OPEC’s production of crude oil and other liquids is expected to decline to 32.8 million barrels per day (bpd) by 2024, the group said in its 2019 World Oil Outlook published on Tuesday. That compares with 35 million bpd in 2019.
Rising climate activism in the West and widening use of alternative fuels are putting the strength of long-term oil demand under more scrutiny. The Organization of the Petroleum Exporting Countries cut its medium- and long-term oil demand forecasts in the report.
UPDATE 2-India's IndiGo, #Qatar Airways to announce strategic deal - Reuters
UPDATE 2-India's IndiGo, Qatar Airways to announce strategic deal - Reuters:
India’s largest airline, IndiGo , and Qatar Airways will make a strategic business announcement on Thursday, which media reports said would involve a codeshare agreement.
IndiGo shares, which rose as much as 5% early in the day, pared those gains to trade up 1% in the afternoon.
Qatar has in the past shown interest in investing in IndiGo but the Indian airline has resisted.
India’s largest airline, IndiGo , and Qatar Airways will make a strategic business announcement on Thursday, which media reports said would involve a codeshare agreement.
IndiGo shares, which rose as much as 5% early in the day, pared those gains to trade up 1% in the afternoon.
Qatar has in the past shown interest in investing in IndiGo but the Indian airline has resisted.
MIDEAST STOCKS- #Saudi stocks gain on corporate announcements while Gulf peers fall - Reuters
MIDEAST STOCKS-Saudi stocks gain on corporate announcements while Gulf peers fall - Reuters:
Saudi Arabian shares rose on Tuesday buoyed by positive corporate announcements, while other major Gulf markets moved lower.
Saudi Arabia’s index was up 0.3% led by a 0.7% rise in Al Rajhi Bank . The lender said it received central bank’s approval for appointment of Walid Bin Abdullah Al-Moqbel as CEO. Abdullah Al Othaim Markets jumped 5.3% after reporting a 38.8% rise in the third-quarter profit, while Company For Cooperative Insurance (Tawuniya) gained 3.5% as it swung to pre-zakat profit in third-quarter.
City Cement surged 7.2% after its board proposed to reduce its capital saying it had more than it required. On Sunday, the cement maker reported 50.5 million riyals ($13.47 million) of profit in the third quarter against a 2.4 million riyal loss a year earlier.
Elsewhere, Saudi Arabia’s non-oil private sector growth rate rose to a four-year high in October as new business rose at its highest pace in four months, a survey showed on Tuesday.
Saudi Arabian shares rose on Tuesday buoyed by positive corporate announcements, while other major Gulf markets moved lower.
Saudi Arabia’s index was up 0.3% led by a 0.7% rise in Al Rajhi Bank . The lender said it received central bank’s approval for appointment of Walid Bin Abdullah Al-Moqbel as CEO. Abdullah Al Othaim Markets jumped 5.3% after reporting a 38.8% rise in the third-quarter profit, while Company For Cooperative Insurance (Tawuniya) gained 3.5% as it swung to pre-zakat profit in third-quarter.
City Cement surged 7.2% after its board proposed to reduce its capital saying it had more than it required. On Sunday, the cement maker reported 50.5 million riyals ($13.47 million) of profit in the third quarter against a 2.4 million riyal loss a year earlier.
Elsewhere, Saudi Arabia’s non-oil private sector growth rate rose to a four-year high in October as new business rose at its highest pace in four months, a survey showed on Tuesday.