#Saudi Stocks Slump as Minister Warns of ‘Painful’ Measures Ahead, May 3, 2020 - Bloomberg

Middle Eastern Stock News for Sunday, May 3, 2020 - Bloomberg:

Saudi Arabian stocks dropped the most in almost eight weeks after the kingdom’s finance minister said “painful” measures -- including deep spending cuts -- were needed to respond to the coronavirus crisis and crash in oil prices.

The Tadawul All Share Index closed down 7.4%, the most since March 9. Oil giant Saudi Aramco retreated 5.2% to 30 riyals per share, while major lenders including Al Rajhi Bank, National Commercial Bank and Saudi British Bank plunged at least 6.7%.

The world’s biggest oil exporter hasn’t witnessed “a crisis of this severity” in decades, Mohammed Al-Jadaan said in an interview with Saudi television station Al-Arabiya on Saturday, adding that government spending will have to be cut “very deeply.” His comments were a sharp change in tone from more reassuring remarks he gave about the economy one week before.

Al-Jadaan “is the voice of the Saudi government and leadership,” said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital Ltd. in Abu Dhabi. Investors “took it as a warning of much higher spending cuts to come than the original 20%-30% expected earlier in the crisis.”

Distressed Debt Deals May Rise to 2009 Levels in Crisis-Hit Gulf - Bloomberg

Distressed Debt Deals May Rise to 2009 Levels in Crisis-Hit Gulf - Bloomberg:

The fallout of the coronavirus and oil-price collapse will offer a once-in-a decade opportunity for distressed debt investors in the Persian Gulf, according to Sancta Capital Group Ltd.

“2020 will present us with the most lucrative deep value and distressed debt investment opportunity set since the global financial crisis,” said Ahmad Alanani, chief executive officer of the company, which invests in the debt and equity of under-performing companies. “We have been refining an extensive target list of credits and equities in which to invest opportunistically and we expect that list to continue to grow.”

The retail, healthcare, education and real estate sectors will offer the most opportunities, he said.

The coronavirus is triggering waves of corporate stress and credit rating downgrades as multiple countries enforce nationwide lockdown.

The oil-rich Persian Gulf is facing a prolonged downturn as the pandemic and a historic crash in oil prices add to pressure on already strained finances.

#UAE's BPGIC leases oil storage tanks to France's Total in Fujairah - sources - Reuters

UAE's BPGIC leases oil storage tanks to France's Total in Fujairah - sources - Reuters:

Brooge Petroleum and Gas Investment Co (BPGIC) has leased oil storage facilities in the United Arab Emirates to France’s Total, industry sources familiar with the matter said, as global crude storage rapidly fills up.

The company is leasing six storage tanks in the UAE emirate of Fujairah for six months and this could be renewed for another six months, one of the sources said.

The tanks, which store oil products, have already received initial cargoes, two of the sources said.

BPGIC and Total did not respond to a request for comment.

#AbuDhabi's Mubadala in early talks for potential dollar bond issue - sources - Reuters

Abu Dhabi's Mubadala in early talks for potential dollar bond issue - sources - Reuters:

Abu Dhabi’s state fund Mubadala is in early discussions with banks for a potential dollar bond issue, two banking sources said, as the region seeks liquidity amid the double blow of historically low oil prices and the coronavirus pandemic.

Abu Dhabi, Qatar and Saudi Arabia last month raised a combined $24 billion to bolster their finances amid the low oil prices and lockdowns that could lead to a deep recession across the region.

Mubadala has not yet mandated banks for a debt sale but banks have been actively pitching for the potential deal, the sources said, one of them adding that 10 to 15 large banks were interested.

Mubadala declined to comment on a Reuters query regarding the talks.

#Saudi minister urges private sector to ease poor nations' debt burden -FT - Reuters

Saudi minister urges private sector to ease poor nations' debt burden -FT - Reuters:

Saudi Arabia Finance Minister Mohammed al-Jadaan on Sunday urged private creditors to match a move by the G20 major economies to suspend debt payments for the world’s poorest countries, freeing up funds to fight the coronavirus pandemic.

Many private creditors have indicated that they are seriously considering debt suspension, said current G20 chair al-Jadaan, adding that such a move has to be voluntary and the G20 countries should avoid imposing anything on private investors.

"Just as the world rallied to support the financial services industry in 2008 and 2009, financial institutions and other private creditors should follow the G20's example and consider what assistance and support they can now provide to the most vulnerable in the world," al-Jadaan wrote in an opinion piece here in the Financial Times.

The G20 economies agreed in April to suspend debt service payments for the world’s poorest countries through to the end of the year.

European, Middle Eastern & African Stocks - Bloomberg #UAE #SaudiArabia #Qatar close

European, Middle Eastern & African Stocks - Bloomberg:

Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.

MIDEAST STOCKS- #Saudi index sees biggest daily fall in nearly two months - Reuters

MIDEAST STOCKS-Saudi index sees biggest daily fall in nearly two months - Reuters:

Saudi Arabia's stock market fell sharply
on Sunday, snapping three sessions of gains as the prospect of
more stringent measures to cope with the coronavirus and Moody's
downgrading of the kingdom's outlook soured investor sentiment.

The kingdom's finance minister on Saturday said the country
will take strict and painful measures to deal with the economic
impact of the coronavirus pandemic and "all options for dealing
with the crisis are open."

One measure would be to slow down government projects,
including mega-projects, to reduce spending, he said.

Saudi Arabia's benchmark index plunged 5.7%, its
biggest intraday fall since March 09, weighed down by an 8% drop
in Al Rajhi Bank and a 5.2% fall in oil giant Saudi
Aramco.

Moody's Investors Service cut Saudi Arabia's outlook to
"negative" from "stable" on Friday, citing higher fiscal risks
due to the crash in oil prices, and uncertainty about the
government's ability to offset revenue losses and stabilize its
debt in the medium term.

#Oman’s sovereign wealth fund under pressure

Oman’s sovereign wealth fund under pressure:

In the aftermath of the 2014 oil bust, Oman repeatedly tapped international debt markets to finance unprecedented budget deficits. Thus, its debt to GDP spiked to nearly 60% last year. Assets held by Oman’s sovereign wealth funds, in contrast, were largely safeguarded.

But the double shock caused by the coronavirus pandemic and plunging oil prices is leaving the indebted Gulf state with fewer options to finance its soaring 2020 annual budget deficit.

“Oman does not want to pile up too much debt,” said Fabio Scacciavillani, former chief strategist at the Oman Investment Fund, the country’s second-largest sovereign wealth fund.

Oil's Recovery from Coronavirus Could Take Decades, Not Years - Bloomberg

Oil's Recovery from Coronavirus Could Take Decades, Not Years - Bloomberg:

Who knows what the new normal for oil demand will be once Covid-19 is firmly in the rear view mirror? Not me, that's for sure. But it is likely to be lower than it was in 2019, and it could be that way for many years. That’s going to create overcapacity throughout the oil supply chain and weigh on prices.

While signs are emerging that we might have passed the worst of this historic oil demand rout, they’re very tentative. No one is predicting a swift recovery to where we were before the pandemic struck. Some, including Royal Dutch Shell Plc’s chief executive officer, Ben van Beurden, suggest that oil demand may never recover fully.

Citigroup analysts don’t see jet fuel consumption back at last year’s level until well into 2022, and they’re at the optimistic end of the spectrum. Boeing’s CEO suggests passenger traffic might not get back to 2019 levels for three years, and even when the flying public does return, airlines will use their newest and most efficient planes to carry them, as my colleagues Liam Denning and Brooke Sutherland note here.

Middle East, #Dubai News: Emaar Malls to Extend Relief Measures - Bloomberg

Middle East, Dubai News: Emaar Malls to Extend Relief Measures - Bloomberg:

Dubai-based retail and mall operator Emaar Malls PJSC is taking further steps to ease the financial burden of tenants affected by the coronavirus pandemic, according to a document viewed by Bloomberg.

The new set of policies include waivers for tenants whose stores have been forced to shut by the government. Dubai restricted movement since mid-March, culminating in a full, three-week lockdown through most of April.

The city started easing the restrictions just over a week ago, allowing malls and restaurants to resume operating under certain conditions, and limiting the curfew to eight hours overnight.

Goldman Says #Saudi Fiscal Adjustment Preferable to a Devaluation - Bloomberg

Goldman Says Saudi Fiscal Adjustment Preferable to a Devaluation - Bloomberg:

A currency devaluation would be too costly for Saudi Arabia and the better option is to adapt to the oil shock through fiscal changes, according to Goldman Sachs Group Inc.

“Unlike a devaluation, fiscal policy can shift the burden of adjustment on those more capable of bearing it through, for example, taxes on luxury goods,” Farouk Soussa, a Goldman Sachs economist, said in a report. “This is not to say there would be no economic or sociopolitical costs, but we believe these would be lower than in the case of a devaluation.”

Saudi Arabia tethers its currency to the dollar and tends to move in lockstep with the U.S. Federal Reserve. While Goldman argues that the policy “has been of significant benefit to the Saudi economy over the years,” the arrangement comes under strain during oil downturns, since declines in foreign-exchange reserves erode confidence in the peg.

#Saudi Stocks Slump as Minister Warns of ‘Painful’ Measures Ahead - Bloomberg

Middle Eastern Stock News for Sunday, May 3, 2020 - Bloomberg:

Middle Eastern stocks slumped on Sunday, with Saudi Arabia’s falling the most in almost eight weeks after the kingdom’s finance minister said “painful” measures -- including deep spending cuts -- were needed to respond to the coronavirus and crash in oil prices.

The Tadawul All Share Index lost as much as 7.6%, the most since March 9. Oil giant Saudi Aramco retreated 6% as of 11:01 a.m. local time to trade below 30 riyals per share.

The world’s biggest oil exporter hasn’t witnessed “a crisis of this severity” in decades, Mohammed Al-Jadaan said in an interview with Saudi television station Al-Arabiya on Saturday, adding that government spending will have to be cut “very deeply.” His comments were a sharp change in tone from more reassuring remarks he gave about the economy one week before.

Al-Jadaan “is the voice of the Saudi government and leadership,” said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital Ltd. in Abu Dhabi. Investors “took it as a warning of much higher spending cuts to come than the original 20%-30% expected earlier in the crisis.”

Outlook: Reasons why #Dubai's real estate will remain slumped until 2021 | ZAWYA MENA Edition

Outlook: Reasons why Dubai's real estate will remain slumped until 2021 | ZAWYA MENA Edition: Dubai’s real estate sector will remain in the doldrums at least until 2021, with the coronavirus likely to spur further price declines despite wide-ranging government initiatives to limit the economic impact of what could be the worst global pandemic in a century.

Dubai’s residential property prices fell for a fifth successive year in 2019. Prices then dropped a further 7 percent year-on-year in the first quarter of 2020, according to consultants JLL. As of March 2020, the average price was 929 dirhams per square foot, ValuStrat estimates, which is 52 percent below 2008’s all-time peak.

Many investors had bet that Dubai’s staging of Expo 2020 would inspire another real estate boom and its postponement until October 2021 has added to the gloom.

Yet Lynnette Abad, Director of Data and Research at Property Finder Group, believes the delay will actually benefit Dubai real estate, citing the extra time this will allow to get the site and supporting infrastructure ready.

Rakbank sees 43% drop in Q1 profit due to Covid-19 impact - Arabianbusiness

Rakbank sees 43% drop in Q1 profit due to Covid-19 impact - Arabianbusiness:

The National Bank of Ras Al-Khaimah (RAKBANK) has witnessed a 43.2 percent drop in net profit in Q1 2020 at AED153.5 million compared to Q1 2019 as a result of higher IFRS 9 provisions that are set as precautionary measures to combat the economic impact of Covid-19.

The provisions are the International Accounting Standards Board's (IASB) response to a financial crisis.

The bank’s total income of AED1.0 billion remained flat year-on-year and increased by 2.1 percent compared to Q4 2019, while its total assets stood at AED59.8bn as of March 31, 2020, having increased 11.7 percent year-on-year and 4.6 percent year-to-date.

Wizz Air's #AbuDhabi joint venture to start flights this year - Reuters

Wizz Air's Abu Dhabi joint venture to start flights this year - Reuters:

Wizz Air’s planned Abu Dhabi-based joint venture carrier is expected to start flying this year, the European budget airline said in a statement on Sunday.

The joint venture with Abu Dhabi state holding company ADQ, announced in December, aims to start flights to Europe, the Indian subcontinent, Middle East and Africa, Wizz Air said.

Wizz Air will also start flights from European cities to Abu Dhabi from June, which it said would supplement the launch of the joint venture.

European, Middle Eastern & African Stocks - Bloomberg #UAE #SaudiArabia #Qatar mid-session

European, Middle Eastern & African Stocks - Bloomberg:

Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.

MIDEAST STOCKS-Major Gulf stocks slide as U.S.-China trade tensions simmer - Agricultural Commodities - Reuters

MIDEAST STOCKS-Major Gulf stocks slide as U.S.-China trade tensions simmer - Agricultural Commodities - Reuters:

Most major bourses in the Gulf fell sharply on Sunday with Saudi Arabia falling the most, mirroring Friday’s slide in global shares after President Donald Trump’s revived threat of new U.S. tariffs against China dampened risk appetite.

Trump’s threat to impose new tariffs in retaliation for China’s handling of the novel coronavirus outbreak soured investor sentiment.

Saudi Arabia’s benchmark index sank 5.7%, dragged down by a 5.6% slide in Al Rajhi Bank and a 5.7% fall in oil giant Saudi Aramco.

Amongst others, Saudi Electricity Company retreated 4.3% as quarterly loss widened.

Following #Dubai, more #UAE malls, restaurants reopen - Reuters

Following Dubai, more UAE malls, restaurants reopen - Reuters:

Malls in the United Arab Emirates’ capital Abu Dhabi began reopening to a restricted number of customers this weekend as the UAE eases lockdown measures imposed more than a month ago to combat the novel coronavirus.

Three Abu Dhabi malls reopened on Saturday at 30% customer capacity after adopting safety measures, including installing thermal inspection devices, the government media office tweeted and Sharjah emirate said it would reopen malls on Sunday.

Malls, dine-in restaurants and cafes in Dubai, the UAE’s business and tourism hub, had earlier resumed operations with limited capacity. Shoppers must wear face masks and gloves and keep their distance.

Sharjah emirate’s media office said malls, salons and dine-in restaurants could resume operations on Sunday.

#SaudiArabia Looks at ‘Painful’ Measures, Deep Spending Cuts - Bloomberg

Saudi Arabia Looks at ‘Painful’ Measures, Deep Spending Cuts - Bloomberg:

A deserted street sits in the coastal city of Jeddah, Saudi Arabia, on April 21.

 

Photographer: Bandar Aldandani/AFP via Getty Images

Saudi Arabia will need to take “painful” measures and look for deep spending cuts as the kingdom faces a double crisis caused by the coronavirus pandemic and the meltdown in global oil markets, its finance minister said on Saturday.

 “The kingdom hasn’t witnessed a crisis of this severity over the past decades,” Mohammed Al-Jadaan said in an interview with Saudi television station Al-Arabiya. “It’s very important that we take very tough and strong measures, and they might be painful, but they’re necessary.”

Already under a strict curfew to contain the spread of the coronavirus pandemic, the world’s largest oil exporter is bracing for a second impact from the oil price rout and production cuts negotiated by OPEC and its allies. The price of Brent crude crashed by more than 50% in March, contributing to a record $27 billion monthly drop in the Saudi central bank’s net foreign assets.

State oil revenue has decreased by more than half, and non-oil revenue will decrease as well, he said.