S&P Global warns $40 oil could leave Gulf close to junk - Reuters:
A sustained drop in oil prices to $40 a barrel as the world weans itself of fossil fuels would cut Gulf exporters’ sovereign ratings by two notches over time, leaving the average credit score just above ‘junk’, S&P Global said on Sunday.
A report by the agency said a “hypothetical long-run stress test” where oil prices fell to below $40 by 2040 suggested the average rating of Gulf sovereigns could fall by two notches from ‘BBB+’ to ‘BBB-‘.
Hydrocarbons contribute, on average, 81% of central government revenues for Gulf sovereigns - the countries of the Gulf Cooperation Council plus Iraq - and the pace of economic diversification is expected to remain gradual.
Brent crude prices fell to almost $53 last week but have be averaging just over $60 since tumbling down from over $115 a barrel in 2014.
Sunday 16 February 2020
S&P downgrades #Sharjah to 'BBB', with stable outlook | ZAWYA MENA Edition
S&P downgrades Sharjah to 'BBB', with stable outlook | ZAWYA MENA Edition:
S&P Global Ratings lowered Sharjah’s rating, citing increasing debt and interest burdens.
The ratings agency lowered the emirate’s long-term foreign and local currency sovereign credit ratings to “BBB” from “BBB+” and kept the outlook stable.
Weak economic conditions in Sharjah since 2019 have led to lower revenues from government-related entities and land sales. These, combined with increased government grants and land compensation payments, as well as accelerated payments to contractors, have resulted in a wider-than-anticipated deficit, the ratings agency noted.
“Accelerated contractor payments related to infrastructure projects in the Emirate, as well as increased land compensation payments and grants to universities have resulted in higher-than-expected expenditure,” it said.
S&P Global Ratings lowered Sharjah’s rating, citing increasing debt and interest burdens.
The ratings agency lowered the emirate’s long-term foreign and local currency sovereign credit ratings to “BBB” from “BBB+” and kept the outlook stable.
Weak economic conditions in Sharjah since 2019 have led to lower revenues from government-related entities and land sales. These, combined with increased government grants and land compensation payments, as well as accelerated payments to contractors, have resulted in a wider-than-anticipated deficit, the ratings agency noted.
“Accelerated contractor payments related to infrastructure projects in the Emirate, as well as increased land compensation payments and grants to universities have resulted in higher-than-expected expenditure,” it said.
#Kuwait, #SaudiArabia start trial oil pumping from divided zone: Kuwait minister - Reuters
Kuwait, Saudi Arabia start trial oil pumping from divided zone: Kuwait minister - Reuters:
Kuwait and Saudi Arabia will start trial oil production from the jointly-operated Wafra and Khafji oilfields on Sunday, Kuwait’s oil minister said.
Khaled al-Fadhel said that trial production from the two fields in the Neutral Zone will increase gradually till it reaches its normal levels, Kuwait state news agency KUNA cited him as saying.
Fadhel said that he expects oil production from the Neutral Zone to reach 550,000 barrels per day before the end of the year. The production from the zone is divided between both Kuwait and Saudi Arabia.
The minister also said Kuwait now aims to boost its oil production capacity to 4 million bpd by 2040, after revising the country’s oil strategy.
Kuwait and Saudi Arabia will start trial oil production from the jointly-operated Wafra and Khafji oilfields on Sunday, Kuwait’s oil minister said.
Khaled al-Fadhel said that trial production from the two fields in the Neutral Zone will increase gradually till it reaches its normal levels, Kuwait state news agency KUNA cited him as saying.
Fadhel said that he expects oil production from the Neutral Zone to reach 550,000 barrels per day before the end of the year. The production from the zone is divided between both Kuwait and Saudi Arabia.
The minister also said Kuwait now aims to boost its oil production capacity to 4 million bpd by 2040, after revising the country’s oil strategy.
MIDEAST STOCKS- #Qatar leads most of Gulf lower, blue chips hurt Egypt - Agricultural Commodities - Reuters
MIDEAST STOCKS-Qatar leads most of Gulf lower, blue chips hurt Egypt - Agricultural Commodities - Reuters:
Most major Gulf bourses closed lower on
Sunday with Qatar leading the losses, dragged down by
heavyweight Industries Qatar, while Egypt retreated on a
sell-off of blue chips.
The Qatari index dropped 1%, extending losses for a
sixth straight session, as most stocks on the index declined.
Industries Qatar slid 2.7%. On Wednesday, the
heavyweight saw its biggest fall in six months as 2019 profits
almost halved from a year earlier.
Qatar's foreign minister also said on Saturday that efforts
to resolve its long-running dispute with other Gulf states had
been suspended since the start of January.
The UAE, Saudi Arabia, Bahrain and Egypt imposed a
political, trade and transport boycott on Qatar in June 2017
over charges it supports terrorism, which Doha denies.
Most major Gulf bourses closed lower on
Sunday with Qatar leading the losses, dragged down by
heavyweight Industries Qatar, while Egypt retreated on a
sell-off of blue chips.
The Qatari index dropped 1%, extending losses for a
sixth straight session, as most stocks on the index declined.
Industries Qatar slid 2.7%. On Wednesday, the
heavyweight saw its biggest fall in six months as 2019 profits
almost halved from a year earlier.
Qatar's foreign minister also said on Saturday that efforts
to resolve its long-running dispute with other Gulf states had
been suspended since the start of January.
The UAE, Saudi Arabia, Bahrain and Egypt imposed a
political, trade and transport boycott on Qatar in June 2017
over charges it supports terrorism, which Doha denies.
MIDEAST STOCKS- #Qatar leads most of Gulf lower, blue chips hurt Egypt - Agricultural Commodities - Reuters
MIDEAST STOCKS-Qatar leads most of Gulf lower, blue chips hurt Egypt - Agricultural Commodities - Reuters:
Most major Gulf bourses closed lower on
Sunday with Qatar leading the losses, dragged down by
heavyweight Industries Qatar, while Egypt retreated on a
sell-off of blue chips.
The Qatari index dropped 1%, extending losses for a
sixth straight session, as most stocks on the index declined.
Industries Qatar slid 2.7%. On Wednesday, the
heavyweight saw its biggest fall in six months as 2019 profits
almost halved from a year earlier.
Qatar's foreign minister also said on Saturday that efforts
to resolve its long-running dispute with other Gulf states had
been suspended since the start of January.
The UAE, Saudi Arabia, Bahrain and Egypt imposed a
political, trade and transport boycott on Qatar in June 2017
over charges it supports terrorism, which Doha denies.
Most major Gulf bourses closed lower on
Sunday with Qatar leading the losses, dragged down by
heavyweight Industries Qatar, while Egypt retreated on a
sell-off of blue chips.
The Qatari index dropped 1%, extending losses for a
sixth straight session, as most stocks on the index declined.
Industries Qatar slid 2.7%. On Wednesday, the
heavyweight saw its biggest fall in six months as 2019 profits
almost halved from a year earlier.
Qatar's foreign minister also said on Saturday that efforts
to resolve its long-running dispute with other Gulf states had
been suspended since the start of January.
The UAE, Saudi Arabia, Bahrain and Egypt imposed a
political, trade and transport boycott on Qatar in June 2017
over charges it supports terrorism, which Doha denies.
MIDEAST STOCKS- #Qatar leads most of Gulf lower, blue chips hurt Egypt - Agricultural Commodities - Reuters
MIDEAST STOCKS-Qatar leads most of Gulf lower, blue chips hurt Egypt - Agricultural Commodities - Reuters:
Most major Gulf bourses closed lower on
Sunday with Qatar leading the losses, dragged down by
heavyweight Industries Qatar, while Egypt retreated on a
sell-off of blue chips.
The Qatari index dropped 1%, extending losses for a
sixth straight session, as most stocks on the index declined.
Industries Qatar slid 2.7%. On Wednesday, the
heavyweight saw its biggest fall in six months as 2019 profits
almost halved from a year earlier.
Qatar's foreign minister also said on Saturday that efforts
to resolve its long-running dispute with other Gulf states had
been suspended since the start of January.
The UAE, Saudi Arabia, Bahrain and Egypt imposed a
political, trade and transport boycott on Qatar in June 2017
over charges it supports terrorism, which Doha denies.
Most major Gulf bourses closed lower on
Sunday with Qatar leading the losses, dragged down by
heavyweight Industries Qatar, while Egypt retreated on a
sell-off of blue chips.
The Qatari index dropped 1%, extending losses for a
sixth straight session, as most stocks on the index declined.
Industries Qatar slid 2.7%. On Wednesday, the
heavyweight saw its biggest fall in six months as 2019 profits
almost halved from a year earlier.
Qatar's foreign minister also said on Saturday that efforts
to resolve its long-running dispute with other Gulf states had
been suspended since the start of January.
The UAE, Saudi Arabia, Bahrain and Egypt imposed a
political, trade and transport boycott on Qatar in June 2017
over charges it supports terrorism, which Doha denies.
Stocks and Equities: Mideast Markets Are Mixed With Earnings - Bloomberg
Stocks and Equities: Mideast Markets Are Mixed With Earnings - Bloomberg:
Equity markets in the Middle East were mixed as investors reacted to earnings reports throughout the region.
The benchmark in Qatar led losses as it fell 1%, with 75% of its members declining. Gauges in Saudi Arabia, Bahrain, Kuwait and Egypt also finished lower, while those in Dubai, Abu Dhabi, Oman and Israel were higher.
In Dubai, construction company Arabtec Holding PJSC dropped as much as 8.6% after reporting a loss of 774 million dirhams ($211 million) for 2019, versus profit of 256 million dirhams the previous year. The company said that the slowing real estate sector resulted in limited new awards.
Earnings disclosed by Dubai real estate companies have been “soft” and provisioning within banks in the emirate are increasing, said Aarthi Chandrasekaran, a portfolio manager at Shuaa Capital. “The GCC banking sector outlook is a bit challenging for the near-term.”
Equity markets in the Middle East were mixed as investors reacted to earnings reports throughout the region.
The benchmark in Qatar led losses as it fell 1%, with 75% of its members declining. Gauges in Saudi Arabia, Bahrain, Kuwait and Egypt also finished lower, while those in Dubai, Abu Dhabi, Oman and Israel were higher.
In Dubai, construction company Arabtec Holding PJSC dropped as much as 8.6% after reporting a loss of 774 million dirhams ($211 million) for 2019, versus profit of 256 million dirhams the previous year. The company said that the slowing real estate sector resulted in limited new awards.
Earnings disclosed by Dubai real estate companies have been “soft” and provisioning within banks in the emirate are increasing, said Aarthi Chandrasekaran, a portfolio manager at Shuaa Capital. “The GCC banking sector outlook is a bit challenging for the near-term.”
#SaudiArabia’s Dar Al Arkan appoints banks for potential sukuk offering - The National
Saudi Arabia’s Dar Al Arkan appoints banks for potential sukuk offering - The National:
Dar Al Arkan Real Estate Development, the biggest publicly-traded real estate developer in Saudi Arabia, appointed a group of local and international banks for a potential sukuk deal, just months after it raised funds from the debt capital market to meet its corporate requirements.
The company mandated Alkhair Capital, Citi, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, Mashreq Bank, Nomura, Standard Chartered Bank and Warba Bank as joint lead managers and bookrunners for the new transaction, it said in a statement to the Tadawul stock exchange, where its shares trade.
The company from Monday will start meeting institutional investors in the UAE and London. A seven-year US dollar fixed rate benchmark senior unsecured sukuk may follow an investor roadshow, depending on the market conditions, it said, without specifying the size of the potential deal. A benchmark transaction refers to a deal worth $500 million (Dh1.84 billion) or more.
Dar Al Arkan Real Estate Development, the biggest publicly-traded real estate developer in Saudi Arabia, appointed a group of local and international banks for a potential sukuk deal, just months after it raised funds from the debt capital market to meet its corporate requirements.
The company mandated Alkhair Capital, Citi, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, Mashreq Bank, Nomura, Standard Chartered Bank and Warba Bank as joint lead managers and bookrunners for the new transaction, it said in a statement to the Tadawul stock exchange, where its shares trade.
The company from Monday will start meeting institutional investors in the UAE and London. A seven-year US dollar fixed rate benchmark senior unsecured sukuk may follow an investor roadshow, depending on the market conditions, it said, without specifying the size of the potential deal. A benchmark transaction refers to a deal worth $500 million (Dh1.84 billion) or more.
FAB issues bonds valued at over $860mln within 3 days | ZAWYA MENA Edition
FAB issues bonds valued at over $860mln within 3 days | ZAWYA MENA Edition:
First Abu Dhabi Bank, FAB, has issued bonds worth over AED3 billion via two separate public issuances in three days, marking its first ever Sterling bond and first Kangaroo bond since 2014.
FAB issued its inaugural three-year GBP450 million (AED2.15 billion) fixed rate bond, under its US$15 billion Euro Medium Term Note, EMTN, Programme. According to a statement released by the UAE's largest bank, "This marks the first and largest ever Financial Institution GBP issuance from the region."
"The book was 2.8 times oversubscribed with strong participation from high quality UK investors," it added, noting that the bond will be listed on the London Stock Exchange.
The bank also raised AU$350 million (AED860 million) through a Kangaroo issuance. The five-year floating-rate notes were priced at 110 basis points over the three-month bank bill swap rate, BBSW, and issued under its AU$2 billion Debt Issuance Programme. This marks FAB’s return to the Australian dollar market for the first time since 2014.
First Abu Dhabi Bank, FAB, has issued bonds worth over AED3 billion via two separate public issuances in three days, marking its first ever Sterling bond and first Kangaroo bond since 2014.
FAB issued its inaugural three-year GBP450 million (AED2.15 billion) fixed rate bond, under its US$15 billion Euro Medium Term Note, EMTN, Programme. According to a statement released by the UAE's largest bank, "This marks the first and largest ever Financial Institution GBP issuance from the region."
"The book was 2.8 times oversubscribed with strong participation from high quality UK investors," it added, noting that the bond will be listed on the London Stock Exchange.
The bank also raised AU$350 million (AED860 million) through a Kangaroo issuance. The five-year floating-rate notes were priced at 110 basis points over the three-month bank bill swap rate, BBSW, and issued under its AU$2 billion Debt Issuance Programme. This marks FAB’s return to the Australian dollar market for the first time since 2014.
#Qatar says talks to end Gulf dispute were suspended in January - Reuters
Qatar says talks to end Gulf dispute were suspended in January - Reuters:
Qatar’s foreign minister said on Saturday efforts to resolve a bitter Gulf dispute had not succeeded and were suspended at the start of January.
The discussions began in October on a row in which Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed political, trade and transport ties with Qatar in mid-2017.
“It’s been almost three years,” Mohammed bin Abdulrahman Al-Thani said at the Munich Security Conference. “We were not perpetrators and are open to any offer to resolve this problem.”
“Unfortunately efforts did not succeed and were suspended at the beginning of January and Qatar is not responsible for this,” he said.
Qatar’s foreign minister said on Saturday efforts to resolve a bitter Gulf dispute had not succeeded and were suspended at the start of January.
The discussions began in October on a row in which Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed political, trade and transport ties with Qatar in mid-2017.
“It’s been almost three years,” Mohammed bin Abdulrahman Al-Thani said at the Munich Security Conference. “We were not perpetrators and are open to any offer to resolve this problem.”
“Unfortunately efforts did not succeed and were suspended at the beginning of January and Qatar is not responsible for this,” he said.
OPEC Underestimates China Virus's Impact On Oil Demand - Bloomberg
OPEC Underestimates China Virus's Impact On Oil Demand - Bloomberg:
The Covid-19 virus is a human tragedy for many who have been affected by it and it’s having a profound impact on the lives of a large part of the Chinese population. The impact on the rest of the world of the disease’s dislocation of the Chinese economy is yet to be fully felt. Forecasts of only a modest impact on oil demand worldwide are far too optimistic.
A comparison of the latest forecasts from the world’s three big oil agencies — the International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries — highlights the huge uncertainty that exists over the virus’s repercussions for oil demand. As may be expected for a body representing oil producers, OPEC sees the impact as minimal, having just cut its first-quarter forecast for global oil demand by only 400,000 barrels a day. That looks like wishful thinking. The IEA’s revision is three times as big, and if its forecast bears out, it’s deep enough to tip the world into its first year-on-year drop in demand in more than a decade.
The Covid-19 virus is a human tragedy for many who have been affected by it and it’s having a profound impact on the lives of a large part of the Chinese population. The impact on the rest of the world of the disease’s dislocation of the Chinese economy is yet to be fully felt. Forecasts of only a modest impact on oil demand worldwide are far too optimistic.
A comparison of the latest forecasts from the world’s three big oil agencies — the International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries — highlights the huge uncertainty that exists over the virus’s repercussions for oil demand. As may be expected for a body representing oil producers, OPEC sees the impact as minimal, having just cut its first-quarter forecast for global oil demand by only 400,000 barrels a day. That looks like wishful thinking. The IEA’s revision is three times as big, and if its forecast bears out, it’s deep enough to tip the world into its first year-on-year drop in demand in more than a decade.
Stocks and Equities: Mideast Markets Are Mixed With Earnings - Bloomberg
Stocks and Equities: Mideast Markets Are Mixed With Earnings - Bloomberg:
Equity markets in the Middle East were mixed as investors reacted to earnings reports throughout the region.
The benchmark in Qatar led losses as it traded 0.7% lower, with about two-thirds of its members declining. Gauges in in Dubai, Saudi Arabia and Kuwait also traded lower, while those in Abu Dhabi and Oman were higher.
In Dubai, construction company Arabtec Holding PJSC dropped as much as 8.6% after reporting a loss of 774 million dirhams ($211 million) for 2019, versus profit of 256 million dirhams the previous year. The company said that the slowing real estate sector resulted in limited new awards. Union Properties also fell after posting a yearly loss that compares to a profit the previous year.
Earnings disclosed by Dubai real estate companies have been “soft” and provisioning within banks in the emirate are increasing, said Aarthi Chandrasekaran, a portfolio manager at Shuaa Capital. “The GCC banking sector outlook is a bit challenging for the near-term.”
Equity markets in the Middle East were mixed as investors reacted to earnings reports throughout the region.
The benchmark in Qatar led losses as it traded 0.7% lower, with about two-thirds of its members declining. Gauges in in Dubai, Saudi Arabia and Kuwait also traded lower, while those in Abu Dhabi and Oman were higher.
In Dubai, construction company Arabtec Holding PJSC dropped as much as 8.6% after reporting a loss of 774 million dirhams ($211 million) for 2019, versus profit of 256 million dirhams the previous year. The company said that the slowing real estate sector resulted in limited new awards. Union Properties also fell after posting a yearly loss that compares to a profit the previous year.
Earnings disclosed by Dubai real estate companies have been “soft” and provisioning within banks in the emirate are increasing, said Aarthi Chandrasekaran, a portfolio manager at Shuaa Capital. “The GCC banking sector outlook is a bit challenging for the near-term.”
Equities investment outlook: More consistent returns possible in MENA | ZAWYA MENA Edition
Equities investment outlook: More consistent returns possible in MENA | ZAWYA MENA Edition:
MENA equities should provide good investment opportunities as key merger and consolidation activities have increased the potential size of the market and more consistent returns seem possible going forward, an investment outlook by First Abu Dhabi Bank on Sunday noted.
“Risk-adjusted returns are likely to be more consistent following a correction in the second and third quarter of 2019, given that valuations in some markets in the region are now closer to historically low levels,” according to Global Investment Outlook 2020.
The economic backdrop is also improving with Saudi Arabia and the UAE increasing government spending. Oil prices are likely to remain stable, and the geopolitical backdrop is improving, with signs that strains among some of the countries in the Gulf are easing.
“Henceforward the pricing of MENA equity securities should revert to fundamentals, rather than being driven principally by index tracking-related passive inflows, which are now abating. This is an improved environment for stock picking, as investors will be able to operate in more normal markets.”
MENA equities should provide good investment opportunities as key merger and consolidation activities have increased the potential size of the market and more consistent returns seem possible going forward, an investment outlook by First Abu Dhabi Bank on Sunday noted.
“Risk-adjusted returns are likely to be more consistent following a correction in the second and third quarter of 2019, given that valuations in some markets in the region are now closer to historically low levels,” according to Global Investment Outlook 2020.
The economic backdrop is also improving with Saudi Arabia and the UAE increasing government spending. Oil prices are likely to remain stable, and the geopolitical backdrop is improving, with signs that strains among some of the countries in the Gulf are easing.
“Henceforward the pricing of MENA equity securities should revert to fundamentals, rather than being driven principally by index tracking-related passive inflows, which are now abating. This is an improved environment for stock picking, as investors will be able to operate in more normal markets.”
#Dubai-listed Arabtec swings to annual loss, blames real estate slowdown - Reuters
Dubai-listed Arabtec swings to annual loss, blames real estate slowdown - Reuters:
Dubai-listed Arabtec Holding swung to a 774.5 million dirham ($210.9 million) net loss in 2019 from a profit of 256.3 million dirham in 2018, the construction company reported on Sunday.
Arabtec, which was involved in the construction of the Louvre Abu Dhabi, posted its first annual loss since 2016, according to Refinitiv data.
The company blamed the loss on its core construction business, citing a slowing real estate sector where there have been limited new projects launched.
Dubai has faced a slowing real estate market for most of the previous decade, with the exception of a brief pick up more than six years ago.
Dubai-listed Arabtec Holding swung to a 774.5 million dirham ($210.9 million) net loss in 2019 from a profit of 256.3 million dirham in 2018, the construction company reported on Sunday.
Arabtec, which was involved in the construction of the Louvre Abu Dhabi, posted its first annual loss since 2016, according to Refinitiv data.
The company blamed the loss on its core construction business, citing a slowing real estate sector where there have been limited new projects launched.
Dubai has faced a slowing real estate market for most of the previous decade, with the exception of a brief pick up more than six years ago.
MIDEAST STOCKS-Stocks slip in early trade, Aramco weighs on #Saudi - Reuters
MIDEAST STOCKS-Stocks slip in early trade, Aramco weighs on Saudi - Reuters:
Most major Gulf stock markets fell in early trade on Sunday, with Saudi Arabia pulled lower by losses in Saudi Aramco and banking shares, while Abu Dhabi was up in response to positive corporate earnings.
Saudi Arabia’s benchmark index inched down 0.2%, led by a 0.8% fall in Saudi Aramco. The stock was trading at 32.85 riyals, below its initial public offering price of 32.
The oil giant said on Friday it would report 2019 full-year results on March 16.
Among banking shares, National Commercial Bank and Riyad Bank banks were down 0.7% and 0.4% respectively.
Most major Gulf stock markets fell in early trade on Sunday, with Saudi Arabia pulled lower by losses in Saudi Aramco and banking shares, while Abu Dhabi was up in response to positive corporate earnings.
Saudi Arabia’s benchmark index inched down 0.2%, led by a 0.8% fall in Saudi Aramco. The stock was trading at 32.85 riyals, below its initial public offering price of 32.
The oil giant said on Friday it would report 2019 full-year results on March 16.
Among banking shares, National Commercial Bank and Riyad Bank banks were down 0.7% and 0.4% respectively.