Stock Market Today: Stock Rout Rolls Into Asia After Wall Street Crash: Markets Wrap- Bloomberg

Stock Market Today: Stock Rout Rolls Into Asia After Wall Street Crash: Markets Wrap - Bloomberg:

Stocks were primed for heavy losses across Asia after the worst Wall Street session since 1987, with investors spooked that emergency fiscal and monetary packages won’t be enough to stave off a recession.

Australian shares plummeted 7% at the open, bringing the slide from its peak last month to about 30%. Futures on the S&P 500 dipped after the index lost 9.5% on Thursday, and Japan’s Nikkei 225 contracts were down 7%. The global equities rout took Brazil’s benchmark down 15% on Thursday and Canada’s main gauge posted its worst day since 1940. Oil and precious metals fell, with palladium entering a bear market. The dollar surged.

“Markets remain in a free fall as uncertainty persists with no reliable anchor which can create near-term stability,” said Ben Emons, managing director of global macro strategy at Medley Global Advisors in New York.

Russia Explains Why It Killed The OPEC Deal | Seeking Alpha

Russia Explains Why It Killed The OPEC Deal | Seeking Alpha:

At the beginning of this week, I wrote about Russia's reasons for abandoning the OPEC deal in an article titled "Why Russia Killed The OPEC Deal". It did not take long for Russia to explain its reasons in an exclusive interview for Reuters. Those investors who are seriously interested in the oil space should definitely read the whole Reuters material (it is short), while I'll focus on the main points and provide my commentary. We'll also look at what this means for the various segments of the oil industry.

The interview was given by Russia's deputy energy minister Pavel Sorokin. It is very important to keep in mind that such high-level officials are not in the business of providing market analysis and forecasts. Instead, they are providing their signals to the market.

Without further ado, let's look at the key points:

1. Russia believes that it is impossible to combat a situation when the demand is constantly falling, and the bottom is unclear.
2. Moscow's initial position was to extend the agreement without additional cuts for the second quarter. Also, Moscow did not exclude the possibility of extending the OPEC deal even further.
3. For Russia, the new cuts would have meant cuts of additional 300,000 bbl/day, bringing the total cuts to 600,000 bbl/day, which is technologically challenging.
4. Sorokin stated that oil prices in the range of $45-55 per barrel are fair and will allow to invest in projects and keep supply coming.
5. He believes that oil prices will increase to $40-45 per barrel in the second half of 2020 and continue their upside to $45-50 in 2021.
6. In a Russian-language version of the interview (you can run it through Google translate), he added that while the ruble-denominated price of 3,000 per barrel is very comfortable, prices in the range of 2,100-2,500 rubles per barrel are satisfactory. I don't know why the authors of the interview decided to omit this information from the English version as I believe it also sends an important signal.

Oil Set for Worst Week Since 2008 With Virus Hitting Demand - Bloomberg

Oil Set for Worst Week Since 2008 With Virus Hitting Demand - Bloomberg:

Oil is on track for its biggest weekly decline since 2008 as the coronavirus pandemic wreaks havoc on fuel demand and threatens global economic stability.

Futures in New York tumbled 4.5% on Thursday and are on track for a 24% weekly drop. President Donald Trump’s restriction on travel from Europe for the next 30 days, in an attempt to contain the coronavirus, darkened the outlook for fuel demand. At the same time, Brent crude’s one-year structure collapsed into a supercontango for the first time since 2015, suggesting a large oversupply as responses by the U.S. and European policy makers have failed to stem the price rout.

The fear of an economic crisis reverberated across U.S. equities triggering a 15-minute New York Stock Exchange-mandated halt in trading for the second time this week. The S&P 500 plunged into a bear market and the Dow Jones Industrial Average fell 10% in its biggest rout since Black Monday in 1987.


“This is a downward spiral” said Michael Lynch, president of Strategic Energy & Economic Research Inc. “This collapse is inciting the fear this will be a full blown recession. The pain is going to be so sharp for everybody.”

More U.S. oil producers slash budgets amid price rout - Reuters

More U.S. oil producers slash budgets amid price rout - Reuters:

Devon Energy, Apache Corp and Murphy Oil Corp on Thursday became the latest North American oil producers to slash capital spending and drilling plans as crude prices tumble and pressure on businesses intensifies.

Oil producers have been scaling back spending since the last crash in 2014, but the coronavirus outbreak and the launch this week of a price war between Saudi Arabia and Russia threatens to push U.S. crude to $30 a barrel and cripple U.S. players.

Apache on Thursday slashed its dividend by about 90%, cut its 2020 capital investment plan by more than 37% and reduced drilling activity in Egypt and the UK North Sea.

In a telling move, the company also plans to stop drilling in the Permian, America’s largest shale field that also has one of the lowest production costs.

Weaker Energy Companies to Fold Amid Price Spat, Francisco Blanch Says: Video - Bloomberg

Weaker Energy Companies to Fold Amid Price Spat, Francisco Blanch Says: Video - Bloomberg:



Francisco Blanch, head of global commodities at Bank of America Merrill Lynch, comments on the oil-price war between Saudi Arabia and Russia. He speaks with Bloomberg's Alix Steel and Sonali Basak on "Bloomberg Daybreak: Americas." (Source: Bloomberg)

Starved of dollars and drowning in debt, Lebanon's economy sinks fast - Reuters

Starved of dollars and drowning in debt, Lebanon's economy sinks fast - Reuters:

After importing medical supplies to Lebanon for 20 years, Hassan Hamdan shut his business in December. Sales were plummeting, clients couldn’t pay, and the dollars he needed to buy imports had dried up. Now he drives an Uber.

Businesses such as Hamdan’s have been shutting at a rapid rate since a financial crisis exacerbated by months of political instability has brought much of Lebanon’s economy to a halt.

“Everyone is in debt - even me - because of what’s happening. But I’m able to afford food for the house and a few bills. Without Uber, I would be begging,” said Hamdan, 37.

While Lebanon produces little hard, up-to-date economic data, interviews with two dozen business owners, union leaders, industry groups and traders paint a picture of an economic and financial crisis without precedent since independence in 1943.

#Kuwait central bank ready to provide cash to banks over coronavirus outbreak - Reuters

Kuwait central bank ready to provide cash to banks over coronavirus outbreak - Reuters:

Kuwait’s central bank said on Thursday it was ready to support its financial sector over the coronavirus outbreak, including by providing cash to commercial banks.

Other measures included suspending fees on point of sales devices and ATM withdrawals, increasing the limit for contactless payments to 25 dinars ($81.44) from 10 and providing “financial and moral compensation” to banking sector employees during a public holiday, which was declared until March 26.

All commercial passenger flights have been halted in the country and people are banned from going to restaurant and cafes.

Oil falls 6% after Trump surprises with travel curbs - Reuters

Oil falls 6% after Trump surprises with travel curbs - Reuters:

Oil prices fell more than 6% on Thursday after U.S. President Donald Trump unexpectedly announced restrictions on travel from Europe in an attempt to halt the spread of coronavirus after the World Health Organization described the outbreak as a pandemic.

The slump in oil is being compounded by the threat of a flood of cheap supply after Saudi Arabia and the United Arab Emirates said they would raise output in a stand-off with Russia.

Brent crude LCOc1 was down $2.29, or 6.4%, at $33.50 a barrel by 1501 GMT. U.S. crude CLc1 was down $1.66, or 5%, at $31.32.

Global equities were also hit after President Trump said the United States would suspend all travel from Europe, except Britain and Ireland, as he unveiled measures to contain the coronavirus.

MIDEAST STOCKS-UAE leads Gulf stock falls on coronavirus, U.S. travel ban

Equity indexes in the United Arab Emirates (UAE) hit
record lows as Gulf stocks tracked a sell-off in global shares on Thursday after
the United States restricted travel and the World Health Organization (WHO)
called coronavirus outbreak as a pandemic.
    

U.S. President Donald Trump banned all travel from Europe, except from
Britain, to the United States for 30 days starting on Friday, after the WHO
described the new coronavirus as a pandemic for the first time.
    

"All markets in the GCC (Gulf Cooperation Council) are at risk after the WHO
declared the coronavirus a pandemic, which triggered a sell-off across the board
in the U.S. market," said Marie Salem, head of institutions at Daman Securities.
    

"More losses are expected following President Trump's announcement to
suspend travel from Europe for 30 days."
    

Dubai's index fell 8% to its lowest since April 2013 with Emirates
NBD dropping 10%.

GCC stock markets will remain volatile as oil war unlikely to die down soon | ZAWYA MENA Edition

GCC stock markets will remain volatile as oil war unlikely to die down soon | ZAWYA MENA Edition:

GCC stock markets will see further volatility as a bearish outlook for oil prices emerged following a disagreement between OPEC and its allies. More than $300 billion was wiped off from Gulf bourses this month.

“The markets have a tendency to discount good and bad news ahead of time, hence we can expect the volatility to continue on GCC markets on the upside as well as downside,” Vijay Valecha, Chief Investment Officer, Century Financial, told Zawya.

OPEC failed on Friday to strike a deal with its allies, led by Russia, on oil production cuts. This means members can now pump what they like starting April 1.

Saudi Arabia slashed crude prices for April and planned output hikes after Russia refused to support deeper oil production cuts. Valecha referred to the latest development in the “oil war” between Saudi Arabia and Russia as “a new oil Armageddon that is unlikely to die down any time soon.”

COLUMN-Low-cost producers near Asia will suffer least in Saudi oil supply war: Russell - Reuters

COLUMN-Low-cost producers near Asia will suffer least in Saudi oil supply war: Russell - Reuters:

If you can’t beat the Saudis, join them.

That logic appears to be taking hold among allies and rivals of the world’s largest exporter of crude oil, but it may only work if you are a low-cost producer close to your major markets.

The latest example is the United Arab Emirates announcing that it will step up output to more than 4 million barrels per day (bpd) in April, which would be a leap of more than 1 million bpd from its February output of 2.99 million bpd.

State-owned Abu Dhabi National Oil Company (ADNOC) also said it would aim to boost its production capacity to 5 million bpd by the end of this year, a target it had previously only planned to reach by 2030.

#UAE's Mubadala, OMV ink $4.68bn deal for Borealis stake - Arabianbusiness

UAE's Mubadala, OMV ink $4.68bn deal for Borealis stake - Arabianbusiness:

Mubadala Investment Company and OMV, the oil and gas company headquartered in Vienna, on Thursday signed an agreement that will give OMV a majority stake in Borealis, one of Europe’s leading petrochemical companies.

OMV, which currently owns a 36 percent stake in Borealis, will acquire an additional 39 percent from Mubadala.

The transaction value amounts to $4.68 billion and represents the biggest acquisition in OMV’s history and the largest transaction ever for Mubadala, state news agency WAM reported.

Following completion, OMV will hold a 75 percent interest in Borealis and Mubadala will retain a 25 percent interest. The transaction is expected to close by the end of 2020 and is subject to regulatory approvals.

Gulf stocks tumble amid oil price, coronavirus impact - Arabianbusiness

Gulf stocks tumble amid oil price, coronavirus impact - Arabianbusiness:

Stock markets in energy-rich Gulf states tumbled Thursday with Saudi shares down more than 4 percent following worldwide losses amid fears over the coronavirus pandemic and an oil price war. 


Dubai Financial Market dived more than 7 percent at the open on the last trading day of the week. Abu Dhabi shares dropped 6 percent.

Stocks in gas-rich Qatar dropped 5.2 percent, while bourses in Bahrain and Oman were down 3.5 percent and 2.2 percent, respectively.

The stock market in Kuwait was closed as authorities announced a shutdown of government offices for two weeks and cancelled international flights in a bid to prevent the spread of the coronavirus.

Oil prices, the mainstay of Gulf economies, fell sharply on Thursday with Brent trading below $34 a barrel and WTI just above $31 a barrel.

Putin vs. the Crown Prince: Ruble Gives Russia Edge in Price War - Bloomberg

Putin vs. the Crown Prince: Ruble Gives Russia Edge in Price War - Bloomberg:

If the oil face-off between President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman turns on who has a stiffer fiscal backbone, it’s the ruble that could help carry Russia to the finish line.

Saudi Arabia may boast the lowest extraction costs and more spare capacity, but it has little to counter Russia’s shock-absorber in its floating currency. An anchor of stability that’s been pegged for over three decades to the dollar, the riyal becomes more a straitjacket when oil prices go bust.

“A flexible exchange rate puts Russia at an advantage versus other commodity exporters at times of oil-price swings,” said Elina Ribakova, deputy chief economist at the Institute of International Finance. “Saudi Arabia has its hands tied.”

 The disintegration of the production pact between OPEC and Russia last week jolted the oil market and turned the spotlight on the finances of commodity producers. Saudi Arabia escalated a price war with a move to flood the market with crude, taking advantage of its ability to drop prices and grab m

#AbuDhabi News: NMC Health Says Review Finds Suspected Fraud - Bloomberg

Abu Dhabi News: NMC Health Says Review Finds Suspected Fraud - Bloomberg:

NMC Health Plc said a probe of financial irregularities discovered evidence of suspected fraud after the hospital operator disclosed a hidden $2.7 billion debt pile.

The company earlier this week said the debt facilities had been used for unknown purposes and had not been disclosed to the board, pushing the largest private health-care company in the United Arab Emirates into a full-blown accounting scandal.

In January, NMC put former U.S. Federal Bureau of Investigation Director Louis Freeh in charge of a review, which reported the evidence of fraud on Thursday. The revelation comes after Freeh told the company last month he’d turned up details of supply-chain financing arrangements with affiliated companies that the board said it was unaware of.

“NMC is fully committed to investigating these activities and has notified the relevant authorities in the U.K. and U.A.E. to determine what action they also consider to be appropriate,” the company said in a statement.

Oil Market News: Prices Under Pressure From OPEC, Russia War - Bloomberg

Oil Market News: Prices Under Pressure From OPEC, Russia War - Bloomberg:

Oil’s 24% slump this week might be the start of a prolonged period of pain for some in the market, according to several key indicators.

As Saudi Arabia and Russia prepare to pump-at-will in a battle for market share, oil timespreads, tanker rates and other indicators are showing that an industry already struggling with weak demand is about to be drowned in supply. Here are three charts that illustrate what’s happening.

UPDATE 2-Payments group Finablr slides 56% on news of financial investigation - Reuters

UPDATE 2-Payments group Finablr slides 56% on news of financial investigation - Reuters:

Shares in Travelex owner Finablr plunged by 56% on Thursday after it launched an internal investigation into its financial situation and said it will take steps to address a liquidity squeeze.

A Finablr spokesman declined to elaborate on the exact nature of what the company described as “an independent investigation” into its “financial arrangements” and which comes after its Travelex business was hit by a damaging ransomware attack and as it contends with disruption from the coronavirus pandemic.

NMC Health, which shares the same founder, issued a short statement an hour later saying that a review by external advisers had shown evidence pointing to suspected fraud related to some of its previous financial activities.

The financial difficulties of founder BR Shetty appear to be spreading to other companies of his portfolio and London-listed Finablr said it was taking urgent steps to assess its current liquidity and cashflow situation.

Coronavirus to hurt GCC's real estate, hospitality, banking sectors - S&P | ZAWYA MENA Edition

Coronavirus to hurt GCC's real estate, hospitality, banking sectors - S&P | ZAWYA MENA Edition:

The coronavirus outbreak will have a widespread impact on the UAE and the rest of the Gulf Cooperation Council (GCC) states, affecting the hospitality, real estate, banking and export sectors, according to the latest analysis.

S&P Ratings Agency said on Wednesday that if the virus, which has now infected more than 115,000 people worldwide, is not contained soon, the GCC economies will have to grapple with lower oil prices, exports, consumer spending, property sales and lending growth.  


“COVID-19 will weigh on the economies of the [GCC] region, as weakening global demand drags down oil prices and hampers important industries, such as tourism and real estate,” the ratings agency said.

“As global financing conditions deteriorate, funding costs for more-leveraged borrowers are rising and investor appetite for less-creditworthy issuers could fade. The high level of uncertainty regarding the duration and eventual severity of the crisis will increase downside risks,” S&P added.

Oil falls $2 as Trump surprises with travel ban - Reuters

Oil falls $2 as Trump surprises with travel ban - Reuters:

Oil prices fell on Thursday following surprise travel restrictions imposed by U.S. President Donald Trump in an attempt to halt the spread of coronavirus after the World Health Organization described the outbreak as a pandemic.

The slump in oil is being compounded by the threat of a flood of cheap supply after Saudi Arabia and United Arab Emirates said they would raise output in a standoff with Russia.

Brent crude LCOc1 was down $2.01, or 5.6%, at $33.78 by around 0930 GMT. U.S. crude CLc1 was down $1.77, or 5.4%, at $31.21.

“Failure to stop a market-share war will fill global oil storage and Brent prices again will trade with a $20 handle by year-end,” said Robert Ryan, chief energy strategist at BCA Research.

Gulf states bonds plunge, Aramco shares weaken further | ZAWYA MENA Edition

Gulf states bonds plunge, Aramco shares weaken further | ZAWYA MENA Edition:

International bonds issued by governments in the Gulf extended losses and regional stocks fell on Thursday after oil prices sank as the United States banned travel from Europe.

The U.S. move follows a World Health Organization declaration that the coronavirus outbreak is now a pandemic.

Saudi Aramco  shares declined nearly 4% in early trade on Thursday. Brent crude fell over 5% amid an escalating price war between Saudi Arabia and Russia. 

"It's a bloodbath," a Dubai-based fund manager said, adding that the debt sell-off that started on Monday intensified during the week as concerns grew over the economic outlook of the oil-dependent region.

The Saudi stock index fell nearly 5%, while Saudi government dollar bonds due in 2046 shed 2.8 cents and Aramco bonds maturing in 2049 lost 1 cent, Refinitiv data showed. Other Gulf stocks also plunged while the Kuwait bourse suspended trading for Thursday.

Aramco's shares were trading at 28.50 Saudi riyal ($7.6) in morning trade, nearly 11% below their initial public offering (IPO) price. The shares dropped below the December 2019 IPO price of 32 riyals for the first time on Sunday after the collapse of OPEC+ talks on oil output.

#SaudiArabia suspends travel, flights to EU, several other countries over coronavirus - Reuters

Saudi Arabia suspends travel, flights to EU, several other countries over coronavirus - Reuters:

Saudi Arabia has temporarily suspended travel of citizens and residents and halted flights with several states due to coronavirus fears, state news agency SPA said on Thursday citing an official source at Interior Ministry.

The decision includes the European Union, Switzerland, India, Pakistan, Sri Lanka, Philippines, Sudan, Ethiopia, South Sudan, Eritrea, Kenya, Djibouti, and Somalia, source added, saying the Kingdom also suspended entry to those coming from these countries.

Saudi Arabia also suspended passenger traffic through all land crossings with Jordan , while commercial and cargo traffic is still allowed, and the passage of exceptional humanitarian cases.

The decision excludes health workers in the Kingdom from Philippines and India, and evacuation, shipping and trade trips taking necessary precautions. Saudi Arabia has 45 coronavirus cases.

Stock Market Today: Dow, S&P Live Updates for Mar. 12, 2020 - Bloomberg

Stock Market Today: Dow, S&P Live Updates for Mar. 12, 2020 - Bloomberg:

Asian stocks and U.S. equity futures extended declines, the yen climbed and bond yields slid after President Donald Trump suspended all travel from Europe and stopped short of offering a detailed U.S. economic rescue package.

S&P 500 futures slumped over 2% after the index tanked almost 5% Wednesday. Trump announced a number of stimulus measures, including urging Congress to approve an undefined payroll tax relief measure, saying he is confident the U.S. will reduce the threat to people. Shares in Japan sank and Australian equities extended recent losses, getting little respite from that nation’s stimulus package.

Russian Oil Producers Are Ready to Survive Flood of #Saudi Crude - Bloomberg

Russian Oil Producers Are Ready to Survive Flood of Saudi Crude - Bloomberg:

A flood of discounted Saudi crude is heading for Europe, but Russia might just have the only producers in the world equipped to compete with it.

With some of the world’s lowest production costs, a flexible tax system and a free-floating ruble, Russian companies can keep pumping, even in an extremely bearish price scenario, analysts from Bank of America Corp. to Raiffeisenbank say.

“Russian companies can ensure sustainable production until oil hits $15 to $20 per barrel,” Karen Kostanian, BofA’s Moscow-based oil and gas analyst, said.

Saudi Arabia has escalated a battle for industry dominance after the collapse of the OPEC+ alliance last week. The kingdom has slashed prices and announced a massive production increase. Russia’s Energy Minister Alexander Novak said his country’s industry will remain competitive “at any forecast price level.”