Lebanon Steps Up Fiscal Engineering to Buy Time in Debt Crisis - Bloomberg

Lebanon Steps Up Fiscal Engineering to Buy Time in Debt Crisis - Bloomberg:

Lebanon’s worst economic crisis in decades is forcing authorities to wade deeper into the kind of fiscal engineering that the International Monetary Fund said risks undermining the central bank’s credibility.

The central bank bought 3 trillion pounds ($2 billion) of Treasury bills from the government at 1%, well below market rates, according to a person with knowledge of the matter. It’s expected to buy half as much again at the same rate by the end of the year to reduce the government’s rising debt costs, the person said on condition of anonymity because the issue is sensitive.

The deal helps offset higher interest rates incurred by the Finance Ministry, which last month sold $3 billion in Eurobonds to the central bank at as much as 12%.

Aramco’s Inclusion in Indexes Seen Underpinning Stock - Bloomberg

Aramco’s Inclusion in Indexes Seen Underpinning Stock - Bloomberg:

Saudi Aramco’s stock should get further support this week from global index compilers, potentially inflating a valuation that’s already seen by many investors as too high.

MSCI Inc., FTSE Russell and S&P Dow Jones Indices will begin to add Aramco to their benchmarks in an accelerated process due to the size of the offering, which could draw more than $1 billion to the Saudi stock market, according to analysts. The oil giant will also become part of the main Saudi gauge, the Tadawul All Share Index.

Buying from index-tracking funds could consolidate Aramco’s market value above $2 trillion, the level sought by Crown Prince Mohammed bin Salman. The stock briefly traded above that mark on its debut last week, and closed above it for the first time Monday.

#Qatar to Run Surplus, Keeps Brakes on Spending Before World Cup - Bloomberg

Qatar to Run Surplus, Keeps Brakes on Spending Before World Cup - Bloomberg:

Qatar will run a budget surplus for a second straight year in 2020 as infrastructure spending stagnates while it wraps up projects ahead of the soccer World Cup.

Next year’s fiscal plans foresee a surplus of 500 million Qatari riyals ($136.4 million), down from 4.4 billion riyals in 2019, according to a statement from the Ministry of Finance seen by Bloomberg News. The projection is based on average oil price of $55 per barrel, the same assumption the Gulf country used for this year’s budget.

• Spending on major projects, including those related to hosting the World Cup in 2022, will be little changed at 90 billion riyals, accounting for 43% of next year’s total. 
• Such major outlays also include roads and sewage networks. 
• Total projected expenditure seen at 210.5 billion riyals in 2020, the highest in the past five fiscal years. 
• Salaries and wages will rise 3.3% to 59 billion riyals, as the country hires more workers to staff newly built metro stations, schools and health-care centers.

GCC, Turkey non-financial corporates' 2020 outlook negative - Moody's | ZAWYA MENA Edition

GCC, Turkey non-financial corporates' 2020 outlook negative - Moody's | ZAWYA MENA Edition:

The 2020 outlook for non-financial corporates in the Gulf Cooperation Council (GCC), Turkey and South Africa is negative, Moody's Investors Service said.

The outlook for GCC non-financial corporates has changed to negative from stable, while it remained unchanged for Turkish and South African non-financial corporates.

According to Moody’s, GCC corporates were assigned a negative outlook due to : low non-oil GDP growth and heightened geopolitical tensions that weigh on investor sentiment and consumer confidence; volatile oil prices that limit governments’ ability to fund growth initiatives.

Factors that could change Moody’s rating on GCC corporates to stable are: supportive oil prices resulting in narrowing fiscal deficits; stronger commitment towards public spending; supportive stance towards government-related issuers. (GRIs)

#Qatar announces $58 bln 2020 budget, expects surplus - Reuters

Qatar announces $58 bln 2020 budget, expects surplus - Reuters:

Qatar announced a budget of 210.5 billion Qatar riyals ($57.83 billion) on Monday, a 1.9% increase in expenditure when compared to 2019, the ministry of finance said.

The Gulf Arab country expects a surplus of 500 million riyals next year compared to a surplus of 4.4 billion riyals this year, a ministry statement said. ($1 = 3.6400 Qatar riyals)

Israel signs Egypt gas permit, becomes major energy exporter

Israel signs Egypt gas permit, becomes major energy exporter:

Israel became a major energy exporter for the first time on Monday after signing a permit to export natural gas to Egypt. The announcement comes just days before a lucrative Israeli gas field in the Mediterranean Sea is expected to go online.

Energy Minister Yuval Steinitz called the permit a “historic landmark” for Israel. He said it’s the most significant economic cooperation project between the neighboring countries since they signed a peace deal in 1979.

The European Union, seeking to reduce its dependence on Russian gas, has encouraged the formation of new delivery routes, including through the eastern Mediterranean. These routes could also curtail Iranian ambitions to use Syria as a gateway to the Mediterranean.

“The natural gas revolution turns us into an energy power and affords us not just huge income for the country but also a dramatic decrease in air pollution,” Steinitz said. Israel is planning to wean itself off coal, thanks to the expected gas boon.

U.S. shale oil output to rise 29,000 bpd to record 9.14 mln bpd in Jan -EIA - Reuters

U.S. shale oil output to rise 29,000 bpd to record 9.14 mln bpd in Jan -EIA - Reuters:

U.S. oil output from seven major shale formations is expected to rise about 29,000 barrels per day (bpd) in January to a record 9.14 million bpd, the U.S. Energy Information Administration said in a monthly forecast on Monday.

Output at the largest formation, the Permian Basin of Texas and New Mexico, is expected to rise 48,000 bpd to a new record 4.74 million bpd, the smallest increase since July.

Production from North Dakota and Montana’s Bakken region is expected to rise by about 3,000 bpd to a fresh peak of about 1.53 million bpd. That would be the smallest increase since production from the region declined in September, the data showed.

The agency forecast production declines in the Eagle Ford and Anadarko basins.

#SaudiArabia's NCB, Riyad Bank pull plug on merger plan - Reuters

Saudi Arabia's NCB, Riyad Bank pull plug on merger plan - Reuters:

Saudi Arabia’s biggest lender by assets, National Commercial Bank (NCB) and Riyad Bank, the kingdom’s fourth largest, said on Monday they had ended merger talks, without giving a reason. 

“The boards of both banks have decided to end preliminary merger talks and not to continue with the merger study,” the two said in separate stock exchange filings. 


The merger was expected to create a combined bank holding $183 billion in assets and to further extend NCB’s lead over its closest rivals, including Al Rajhi Bank, by boosting its assets by almost a third to 685 billion riyals.

Consolidation has increased in Saudi Arabia in the past two years as profit margins have been squeezed by lower government and consumer spending in the face of weak oil prices.

RPT-COLUMN-Bullish oil bets surge after OPEC+ reaches deal on cuts: Kemp - Reuters

RPT-COLUMN-Bullish oil bets surge after OPEC+ reaches deal on cuts: Kemp - Reuters:

Hedge fund managers piled back into petroleum last week after Saudi Arabia and its allies in the OPEC+ group of major oil exporters announced deeper-than-expected cuts to their production in the first quarter of 2020.

Hedge funds and other money managers bought futures and options equivalent to 154 million barrels in the six most important contracts linked to petroleum prices in the week to Dec. 10.

Purchases were the largest in any one week for more than two years, according to position records published by ICE Futures Europe and the U.S. Commodity Futures Trading Commission on Friday.

In recent weeks, portfolio managers have struggled to form a consistent view about production and consumption next year, amid conflicting signals about the intentions of OPEC+ and prospects for a U.S.-China trade deal.

Oil rises on U.S.-China trade hopes, still below three-month highs - Reuters

Oil rises on U.S.-China trade hopes, still below three-month highs - Reuters:

Oil prices rose slightly Monday on hopes energy demand will benefit from the trade deal between the United States and China announced last week, but prices remained below the previous session’s three-month highs.

Brent crude oil futures LCOc1 settled up 12 cents, or 0.2%, at $65.34 a barrel, a session after hitting their highest since Sept. 17 at $65.79.

West Texas Intermediate crude CLc1 settled up 14 cents, or 0.2%, at $60.21 a barrel.

On Friday, Washington and Beijing announced a “phase one” agreement. U.S. officials said some tariffs would be reduced in exchange for a big jump in Chinese purchases of American farm products and other goods.

The Best And Worst Oil Predictions Of 2019 | OilPrice.com

The Best And Worst Oil Predictions Of 2019 | OilPrice.com:

There’s nothing like wild volatility to destroy the integrity of those high-end bankers and analysts who are brave enough to make oil price predictions year in and year out.

But the forecasting nightmare doesn’t stop them, even at the worst of times.  

In the final month of last year, banks and analysts were brave enough to divulge their predictions for 2019. 

At that time, the second year of the OPEC agreement was coming to a close; the U.S. had re-imposed sanctions on Iran four months earlier with waiver extensions; and the average price of a Brent barrel for December was changing hands at $56.50, compared to the month earlier average of $65.20. WTI averaged $49 in December 2018. OPEC had agreed to cut production again for 2019.

So who should we look for when it’s time to forecast what oil prices will do in 2020? That depends on their track record the last time around.

MIDEAST STOCKS-Banks boost #Saudi market as Aramco continues rally - Reuters

MIDEAST STOCKS-Banks boost Saudi market as Aramco continues rally - Reuters:

Saudi Arabia's stock market rose on
Monday, led by banking shares and Aramco, as the oil giant
climbed for the fourth straight day since listing. Most other
major Gulf bourses were also higher.

Riyadh's benchmark index increased 1.1%, with Al
Rajhi Bank and Arab National Bank gaining
1.9% and 3.3%, respectively.

Saudi Aramco closed up 1.6% at 38 riyals.

The state-owned firm will join the Tadawul index and global
benchmarks such as MSCI and FTSE this week, likely leading to
"passive" inflows from investors who track such indexes.

China’s State Grid to buy 49% stake in #Oman Electricity | Financial Times

China’s State Grid to buy 49% stake in Oman Electricity | Financial Times:

China’s State Grid has agreed to buy a 49 per cent stake in Oman’s Electricity Holding Company, signalling a renewed push by the world’s largest utility to strike big-ticket deals for overseas assets.

State Grid said in a statement on Monday that the purchase — by far the largest Chinese investment on record in the small Middle Eastern country — would promote China’s Belt and Road Initiative, a controversial $1tn plan to build and invest in infrastructure across the Eurasian landmass and on to the fringes of Europe.

The Beijing-based electricity provider did not give any financial details, but people familiar with the matter said that the company would pay about $1bn for the stake in the state-owned Omani group, known as Nama.

State Grid was once one of China’s most aggressive state-backed overseas investors.

Aramco’s Inclusion in Indexes Seen Underpinning Stock This Week - Bloomberg

Aramco’s Inclusion in Indexes Seen Underpinning Stock This Week - Bloomberg:

Saudi Aramco’s stock should get further support this week from global index compilers, potentially inflating a valuation that’s already seen by many investors as too high.

MSCI Inc., FTSE Russell and S&P Dow Jones Indices will begin to add Aramco to their benchmarks in an accelerated process due to the size of the offering, which could draw more than $1 billion to the Saudi stock market, according to analysts. The oil giant will also become part of the main Saudi gauge, the Tadawul All Share Index.

Buying from index-tracking funds could consolidate Aramco’s market value above $2 trillion, reached briefly last week and widely seen as desired by Crown Prince Mohammed bin Salman.

International investors balked at the stock during the initial public offering.

They pointed to, among other things, Aramco’s dividend yield, which now is just 3.75%, based on the $75 billion a year the company has promised to pay shareholders. That’s lower than peers such as Exxon Mobil Corp.’s 5% and Royal Dutch Shell Plc’s at 6.9%.

#Qatar Free Zones Authority Chairman Ahmad Al-Sayed on New Investment - Bloomberg video

Qatar Free Zones Authority Chairman Ahmad Al-Sayed on New Investment - Bloomberg:

H.E Ahmad Bin Mohammed Al-Sayed, Qatar Free Zones Authority chairman, discusses new investment totaling 1.5 billion Qatari riyals by a group of companies. He spoke with Bloomberg's Simone Foxman at Doha Forum. (Source: Bloomberg)

Oil prices near three-month highs on U.S.-China trade deal - Reuters

Oil prices near three-month highs on U.S.-China trade deal - Reuters:

Oil prices on Monday held near three-month highs, supported by last week’s announcement that an initial trade deal had been reached between the United States and China. 

Brent crude oil futures LCOc1 rose 17 cents or 0.3% to $65.39 a barrel by 0940 GMT, while West Texas Intermediate crude CLc1 was up 10 cents or 0.2% to $60.17 a barrel.

The United States and China announced on Friday a “phase one” agreement that will reduce some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of U.S. farm products and other goods.

“What the market needs now, though, is clarity around exactly what the deal entails,” analysts from ING Economics said. “The longer we have to wait for this detail, the more likely market participants will start to question how good a deal it actually is.”

#Dubai property prices fall to seven-year low as deal volumes rocket - Arabianbusiness

Dubai property prices fall to seven-year low as deal volumes rocket - Arabianbusiness:

Property prices in Dubai fell to AED895 per sq ft on average in November, representing their lowest level for seven years, according to new research.

The Dynamic Price Index (DPI) from Property Monitor, the UAE-based data platform, covers property price movement in Dubai across 42 geographic communities and is indexed to a base period of January 2008.

While property prices have declined, the volume of sales transactions has risen, with November marking one of the strongest months for sales in the past decade.

A total of 5,025 transactions were recorded with off-plan (Oqood) registrations representing 60.8 percent, Property Monitor said.

Breakingviews - Why didn’t #Qatar support #Saudi Aramco’s big deal? - Reuters

Breakingviews - Why didn’t Qatar support Saudi Aramco’s big deal? - Reuters:

Why did Qatar pass up the chance to invest in Saudi Aramco? It’s the question on nobody’s lips, at least publicly, at the Doha Forum, the emirate’s annual bash for international politicians and investors taking place in its capital this weekend. That’s a pity. Unpacking why Doha didn’t buy into the Saudi kingdom’s stock offering of its $1.7 trillion oil giant helps show why an ongoing spat between two Gulf petroleum-states still has a bit further to run.

In fairness to Doha Forum attendees, there are far more pressing questions to obsess about. While Abu Dhabi’s Aramco investment was always on the cards given Saudi’s status as a close ally, and Kuwait’s was mildly surprising given its neutral position on regional beefs, a contribution from the Qatar Investment Authority would have had jaws dropping.

Relations between Doha and Riyadh have been icy ever since June 2017, when Saudi and allies including the UAE and Egypt blockaded routes representing 90% of domestic trade and stopped Qataris from visiting or even using their airspace. Yet Saudi officials still approached Qatar about investing, Bloomberg reported on Dec. 11.

#Qatar FM says early talks with #SaudiArabia have broken stalemate: CNN - Reuters

Qatar FM says early talks with Saudi Arabia have broken stalemate: CNN - Reuters:

Qatar’s foreign minister said recent talks have broken a protracted stalemate with Saudi Arabia and that Doha was open to studying demands by its rivals in a Gulf dispute but would not turn its back on ally Turkey.

The row between U.S.-allied Arab states saw Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and trade links with Qatar in June 2017 over allegations that it backs terrorism. Doha denies the charge and says the embargo aims to undermine its sovereignty.

“We have broken the stalemate of non-communication to starting a communication with the Saudis,” Sheikh Mohammed bin Abdulrahman al-Thani told CNN on Sunday. 


“We want to understand the grievances. We want to study them and to assess them and to look at the solutions that can safeguard us in the future from any other potential crisis,” he said without mentioning what concessions, if any, were possible.

MIDEAST STOCKS-Financials lifts #Saudi up as Aramco extends gains - Agricultural Commodities - Reuters

MIDEAST STOCKS-Financials lifts Saudi up as Aramco extends gains - Agricultural Commodities - Reuters:

Saudi Arabia’s stock market rose on Monday, extending gains from the previous session helped by banking shares, while most other major Gulf markets were also up.

Saudi’s benchmark index gained 0.6%, with Al Rajhi Bank gaining 1% and Saudi Aramco up 1.1% on its fourth day of trading.

Saudi state oil company Aramco is due to join the Tadawul index and global benchmarks such as MSCI and FTSE this week, which according to analysts should fuel further demand, particularly from “passive” investors who track such indexes. 


Aramco raised $25.6 billion on Dec. 5 through its IPO and plans to exercise a 15% greenshoe option in whole or part during the first 30 days of trading. If the option is exercised in full, the total raised from the IPO would amount to $29.4 billion.