HSBC Sees Oil and Virus Turmoil Boosting Middle East Deals - Bloomberg:
A historic crash in oil prices and fallout from the coronavirus pandemic will accelerate asset sales in the Middle East and open up a gap for sovereign wealth funds to make “opportunistic investments,” according to HSBC Holdings Plc.
“Corporates and sovereign entities will need to look at their portfolios more closely during challenging times and see what is core to them,” Nabil Lahham, head of advisory and corporate finance coverage for HSBC in the Middle East, North Africa and Turkey, said in an interview. “Some of them are also looking at gaps in their portfolio and seeking to do deals to fill those holes.”
The crisis may also trigger further consolidation across the Gulf, which has already seen some large-scale mergers and acquisitions in sectors such as banking and real estate, he said.
Governments across the oil-rich Middle East are looking at ways to shore up their finances that have been battered by a more than 50% slump in crude prices this year. Coupled with strict curfews to contain the coronavirus, most of the region is set for its deepest financial turmoil in decades.
Wednesday, 13 May 2020
#SaudiArabia, Russia See Oil Recovery While Cuts Take Effect - Bloomberg
Saudi Arabia, Russia See Oil Recovery While Cuts Take Effect - Bloomberg:
Saudi Arabia and Russia see signs that oil demand is recovering as countries around the world start to relax lockdowns imposed to fight the spread of the coronavirus outbreak.
The Saudi-Russia statement comes as oil traders and consultants notice an increase in oil demand, particularly in Asia, driven primarily by rising gasoline consumption as citizens emerging from lockdowns opt to drive rather than use public transport.
“We are also pleased with the recent signs of improvements in economic and market indicators, especially the growth in oil demand and the ease in concerns about storage limits as various countries around the globe begin to emerge from their stringent lockdowns,” Saudi Energy Minister Prince Abdulaziz bin Salman and his Russian counterpart Alexander Novak said Wednesday in a joint statement.
Riyadh and Moscow, which lead the OPEC+ alliance, said they were serious about mitigating the unprecedented collapse in oil consumption and prices via their production cuts. Only a month ago, the two countries were engaged in a destructive price war.
Saudi Arabia and Russia see signs that oil demand is recovering as countries around the world start to relax lockdowns imposed to fight the spread of the coronavirus outbreak.
The Saudi-Russia statement comes as oil traders and consultants notice an increase in oil demand, particularly in Asia, driven primarily by rising gasoline consumption as citizens emerging from lockdowns opt to drive rather than use public transport.
“We are also pleased with the recent signs of improvements in economic and market indicators, especially the growth in oil demand and the ease in concerns about storage limits as various countries around the globe begin to emerge from their stringent lockdowns,” Saudi Energy Minister Prince Abdulaziz bin Salman and his Russian counterpart Alexander Novak said Wednesday in a joint statement.
Riyadh and Moscow, which lead the OPEC+ alliance, said they were serious about mitigating the unprecedented collapse in oil consumption and prices via their production cuts. Only a month ago, the two countries were engaged in a destructive price war.
OPEC’s View of Oil Market Darkens While Gulf States Cut Deeper - Bloomberg
OPEC’s View of Oil Market Darkens While Gulf States Cut Deeper - Bloomberg:
OPEC presented a bleaker assessment of global oil markets for the second quarter as the coronavirus crisis continues to drain demand, days after some of the cartel’s biggest producers pledged to make even deeper production cutbacks.
The Organization of Petroleum Exporting Countries cut estimates for the amount of crude it will need to supply over the three-month period by just under 3 million barrels a day, or about 15%, in a report published on Wednesday.
Lockdowns aimed at containing the spread of the coronavirus are reducing demand for aviation and driving fuels, particularly in the U.S., Europe and India, the organization said.
The darker outlook comes after three of OPEC’s key Persian Gulf exporters -- Saudi Arabia, the United Arab Emirates and Kuwait -- said that next month they will deepen the supply curbs already agreed with fellow members and their allies. The Saudis aim to slash a further 1 million barrels a day in June, bringing their output to the lowest since 2002.
OPEC presented a bleaker assessment of global oil markets for the second quarter as the coronavirus crisis continues to drain demand, days after some of the cartel’s biggest producers pledged to make even deeper production cutbacks.
The Organization of Petroleum Exporting Countries cut estimates for the amount of crude it will need to supply over the three-month period by just under 3 million barrels a day, or about 15%, in a report published on Wednesday.
Lockdowns aimed at containing the spread of the coronavirus are reducing demand for aviation and driving fuels, particularly in the U.S., Europe and India, the organization said.
The darker outlook comes after three of OPEC’s key Persian Gulf exporters -- Saudi Arabia, the United Arab Emirates and Kuwait -- said that next month they will deepen the supply curbs already agreed with fellow members and their allies. The Saudis aim to slash a further 1 million barrels a day in June, bringing their output to the lowest since 2002.
MIDEAST STOCKS-Ease in restrictions boosts #Dubai; lender FAB drags #AbuDhabi - Agricultural Commodities - Reuters
MIDEAST STOCKS-Ease in restrictions boosts Dubai; lender FAB drags Abu Dhabi - Agricultural Commodities - Reuters:
Dubai's stock market closed higher on
Wednesday after the emirate further eased coronavirus-related
restrictions, but the Abu Dhabi index was pressured by First Abu
Dhabi Bank on its exposure to in-liquidation agri-trader
Phoenix.
The United Arab Emirates business and tourism hub Dubai has
allowed public parks to reopen and hotel guests to access
private beaches, state media said, as the emirate gradually
lifts restrictions imposed to combat the coronavirus.
Dubai's main share index gained 1.5%, with Emirates
NBD Bank rising 4.1%. Sharia-compliant lender Dubai
Islamic Bank was up 2.4%.
The Abu Dhabi index declined 1.8%, weighed down by a
3.8% slide in First Abu Dhabi Bank (FAB). FAB, the
United Arab Emirates' largest bank, said on Wednesday it has
$73.2 million of exposure to agri-trader Phoenix Commodities and
related entities.
This was the biggest exposure so far disclosed by a UAE bank
to the group, which has entered liquidation after amassing more
than $400 million in potential trading losses, according a
document prepared by the liquidators and seen by Reuters.
Dubai's stock market closed higher on
Wednesday after the emirate further eased coronavirus-related
restrictions, but the Abu Dhabi index was pressured by First Abu
Dhabi Bank on its exposure to in-liquidation agri-trader
Phoenix.
The United Arab Emirates business and tourism hub Dubai has
allowed public parks to reopen and hotel guests to access
private beaches, state media said, as the emirate gradually
lifts restrictions imposed to combat the coronavirus.
Dubai's main share index gained 1.5%, with Emirates
NBD Bank rising 4.1%. Sharia-compliant lender Dubai
Islamic Bank was up 2.4%.
The Abu Dhabi index declined 1.8%, weighed down by a
3.8% slide in First Abu Dhabi Bank (FAB). FAB, the
United Arab Emirates' largest bank, said on Wednesday it has
$73.2 million of exposure to agri-trader Phoenix Commodities and
related entities.
This was the biggest exposure so far disclosed by a UAE bank
to the group, which has entered liquidation after amassing more
than $400 million in potential trading losses, according a
document prepared by the liquidators and seen by Reuters.
Oil falls 3% despite surprise U.S. crude stock drawdown - Reuters
Oil falls 3% despite surprise U.S. crude stock drawdown - Reuters:
Oil prices fell more than 3% on Wednesday despite the first decline in U.S. crude inventories since January, as markets were affected by a solemn address from the U.S. Federal Reserve chairman warning that economic recovery from the coronavirus pandemic would take many months.
The markets have rallied in the last several days on optimism that fuel demand destruction has bottomed out and producers have aggressively cut production to deal with the supply glut due to the pandemic. However, with governments signaling a long period before activity rebounds, risk assets like stocks and oil slipped on Wednesday.
Brent crude fell 85 cents a barrel, or 2.9% to $29.12 by 2:13 p.m. EDT (1813 GMT), after hitting a low of $28.92 a barrel earlier.
West Texas Intermediate crude futures fell 78 cents, or 3%, to $25.00.
U.S. Federal Reserve Chair Jerome Powell gave a solemn assessment of the U.S. economy and renewed his skepticism of negative interest rates.
Oil prices fell more than 3% on Wednesday despite the first decline in U.S. crude inventories since January, as markets were affected by a solemn address from the U.S. Federal Reserve chairman warning that economic recovery from the coronavirus pandemic would take many months.
The markets have rallied in the last several days on optimism that fuel demand destruction has bottomed out and producers have aggressively cut production to deal with the supply glut due to the pandemic. However, with governments signaling a long period before activity rebounds, risk assets like stocks and oil slipped on Wednesday.
Brent crude fell 85 cents a barrel, or 2.9% to $29.12 by 2:13 p.m. EDT (1813 GMT), after hitting a low of $28.92 a barrel earlier.
West Texas Intermediate crude futures fell 78 cents, or 3%, to $25.00.
U.S. Federal Reserve Chair Jerome Powell gave a solemn assessment of the U.S. economy and renewed his skepticism of negative interest rates.
NMC Administrators Start Dismantling Top Mideast Hospital Owner - Bloomberg
NMC Administrators Start Dismantling Top Mideast Hospital Owner - Bloomberg:
NMC Health Plc’s administrators have started selling off assets of the troubled Middle Eastern hospital operator as they seek funds to pay back creditors, people with knowledge of the matter said.
Officials overseeing the process at restructuring specialist Alvarez & Marsal Inc. have invited bids for NMC’s distribution business, according to the people, who asked not to be identified because the information is private. Potential acquirers have been asked to submit offers this month, the people said.
Administrators are planning to start a sale process for Abu Dhabi-based NMC’s lucrative fertility business as soon as June or July, the people said. They are considering eventually selling most of the company’s assets, potentially including the flagship hospital business, which is the biggest private health-care provider in the Middle East, the people said.
The moves mark the official beginning of the dismantling of NMC, once a member of London’s elite FTSE 100 index with a market value as high as $11 billion. NMC started unraveling in recent months after unearthing previously undisclosed debt and evidence of fraud, leading to the dismissal of top executives. Its downfall has roped in lenders including Barclays Plc, Standard Chartered Plc and the biggest banks in the United Arab Emirates.
NMC Health Plc’s administrators have started selling off assets of the troubled Middle Eastern hospital operator as they seek funds to pay back creditors, people with knowledge of the matter said.
Officials overseeing the process at restructuring specialist Alvarez & Marsal Inc. have invited bids for NMC’s distribution business, according to the people, who asked not to be identified because the information is private. Potential acquirers have been asked to submit offers this month, the people said.
Administrators are planning to start a sale process for Abu Dhabi-based NMC’s lucrative fertility business as soon as June or July, the people said. They are considering eventually selling most of the company’s assets, potentially including the flagship hospital business, which is the biggest private health-care provider in the Middle East, the people said.
The moves mark the official beginning of the dismantling of NMC, once a member of London’s elite FTSE 100 index with a market value as high as $11 billion. NMC started unraveling in recent months after unearthing previously undisclosed debt and evidence of fraud, leading to the dismissal of top executives. Its downfall has roped in lenders including Barclays Plc, Standard Chartered Plc and the biggest banks in the United Arab Emirates.
#AbuDhabi's FAB shares slide over exposure to fallen Phoenix Commodities | ZAWYA MENA Edition
Abu Dhabi's FAB shares slide over exposure to fallen Phoenix Commodities | ZAWYA MENA Edition:
First Abu Dhabi Bank’s (FAB) shares dropped on Wednesday after the lender revealed its exposure to Phoenix Commodities, a rice trading firm with offices in Dubai and Singapore.
Reuters reported that the commodities trader went into liquidation after amassing more than $400 million in potential trading losses.
FAB revealed a $73.2 million total exposure to the rice trading firm, consisting of $7.7 million to Phoenix Commodities in the form of a syndicated loan with other institutional lenders, $55.3 million to related company Phoenix Global DMCC in bilateral and syndicated loans with a group of international lenders and $10.2 million to related entity SMEG DMCC as bilateral facilities.
The UAE’s largest lender’s stock price was trading 3.61 percent lower on Wednesday at 12:22 GST.
First Abu Dhabi Bank’s (FAB) shares dropped on Wednesday after the lender revealed its exposure to Phoenix Commodities, a rice trading firm with offices in Dubai and Singapore.
Reuters reported that the commodities trader went into liquidation after amassing more than $400 million in potential trading losses.
FAB revealed a $73.2 million total exposure to the rice trading firm, consisting of $7.7 million to Phoenix Commodities in the form of a syndicated loan with other institutional lenders, $55.3 million to related company Phoenix Global DMCC in bilateral and syndicated loans with a group of international lenders and $10.2 million to related entity SMEG DMCC as bilateral facilities.
The UAE’s largest lender’s stock price was trading 3.61 percent lower on Wednesday at 12:22 GST.
JPMorgan sees more Gulf companies linking up but no liquidity crunch - Reuters
JPMorgan sees more Gulf companies linking up but no liquidity crunch - Reuters:
JPMorgan (JPM.N) expects more consolidation among Gulf companies this year in sectors such as banking, real estate and hospitality, but it sees no liquidity crunch in the region, despite the twin blow of the new coronavirus and low oil prices.
“We are going to continue to see consolidation themes building up on what we have witnessed in the previous years. I expect banking consolidation to continue its way through and to spill over in sectors such as real estate and hospitality,” said Karim Tannir, head of investment banking for the Middle East and North Africa and co-head of MENA at JPMorgan.
The economic downturn in the Middle East is expected to be worse than the 2008/09 financial crisis and the 2014/15 oil price crash, the International Monetary Fund has said.
But Tannir said the region had entered 2020 with strong finances and, after an initial phase of assessing liquidity needs, companies and governments are now looking more strategically at potential opportunities.
JPMorgan (JPM.N) expects more consolidation among Gulf companies this year in sectors such as banking, real estate and hospitality, but it sees no liquidity crunch in the region, despite the twin blow of the new coronavirus and low oil prices.
“We are going to continue to see consolidation themes building up on what we have witnessed in the previous years. I expect banking consolidation to continue its way through and to spill over in sectors such as real estate and hospitality,” said Karim Tannir, head of investment banking for the Middle East and North Africa and co-head of MENA at JPMorgan.
The economic downturn in the Middle East is expected to be worse than the 2008/09 financial crisis and the 2014/15 oil price crash, the International Monetary Fund has said.
But Tannir said the region had entered 2020 with strong finances and, after an initial phase of assessing liquidity needs, companies and governments are now looking more strategically at potential opportunities.
Emirates NBD, Mashreq declare exposure to Phoenix Commodities - Arabianbusiness
Emirates NBD, Mashreq declare exposure to Phoenix Commodities - Arabianbusiness:
Emirates NBD and Mashreq Bank have both declared exposure to the Dubai subsidiary of embattled Phoenix Commodities, according to filings posted to the Dubai Financial Market (DFM).
Phoenix, which was founded in 2001 as a rice trading business, eventually grew to a global commodities firm that dealt in grains, coal, metals and other commodities.
The company has gone into liquidation after amassing $400 million in potential trading losses as a result of currency hedges amid volatile markets in February and March as the Covid-19 pandemic struck, according to Reuters.
Emirates NBD and Mashreq Bank have both declared exposure to the Dubai subsidiary of embattled Phoenix Commodities, according to filings posted to the Dubai Financial Market (DFM).
Phoenix, which was founded in 2001 as a rice trading business, eventually grew to a global commodities firm that dealt in grains, coal, metals and other commodities.
The company has gone into liquidation after amassing $400 million in potential trading losses as a result of currency hedges amid volatile markets in February and March as the Covid-19 pandemic struck, according to Reuters.
#UAE unveils two-phase strategy to reopen economy, backed by $79bn stimulus plans - Arabianbusiness
UAE unveils two-phase strategy to reopen economy, backed by $79bn stimulus plans - Arabianbusiness:
The UAE has unveiled a two-phase plan to reopen the country’s economy and strengthen it in the wake of the Covid-19 pandemic, UAE Minister of Economy Sultan bin Saeed Al Mansouri announced on Tuesday.
During a virtual meeting with government representatives on Tuesday, Al Mansouri said that the first stage of the plan – which is focused on the short-term – includes the gradual reopening of businesses, supported by stimulus plans that so far total AED 282.5 billion ($79 billion).
According to Al Mansouri, the second-phase is designed to accelerate recovery and advance growth, with a high focus on the digital economy and technologies such as Artificial Intelligence, 5G networks, the Internet of Things (IoT) and smart cities.
The second phase of the strategy will also focus on blockchain, the ‘green economy’ and renewable energy, electric cars, 3d printing, biotech, genetic engineering and robotics.
The UAE has unveiled a two-phase plan to reopen the country’s economy and strengthen it in the wake of the Covid-19 pandemic, UAE Minister of Economy Sultan bin Saeed Al Mansouri announced on Tuesday.
During a virtual meeting with government representatives on Tuesday, Al Mansouri said that the first stage of the plan – which is focused on the short-term – includes the gradual reopening of businesses, supported by stimulus plans that so far total AED 282.5 billion ($79 billion).
According to Al Mansouri, the second-phase is designed to accelerate recovery and advance growth, with a high focus on the digital economy and technologies such as Artificial Intelligence, 5G networks, the Internet of Things (IoT) and smart cities.
The second phase of the strategy will also focus on blockchain, the ‘green economy’ and renewable energy, electric cars, 3d printing, biotech, genetic engineering and robotics.
#Saudi Aramco's stock trades on a different planet - Arabianbusiness
Saudi Aramco's stock trades on a different planet - Arabianbusiness:
Don’t worry if you missed Saudi Aramco’s earnings call: There wasn’t one.
Now the sticklers and bores among you might raise a hand and suggest that, what with the global pandemic, oil crash and assorted what-have-yous, it might be advisable for the biggest oil major in the world to spare an hour for an update. But honestly, does it really matter? I mean, look at this:
So how are things?
Shares in Saudi Arabian Oil Co., to give the company its full name, closed on Tuesday 2% below where they floated in December. You remember December, right? Possibly it’s the last time you had a haircut or felt completely safe getting on a plane.
It just so happens that on the same day Aramco released its first-quarter results, BP Plc’s new CEO Bernard Looney was quoted in a Financial Times interview saying he couldn’t rule out the possibility Covid-19 had ushered in peak oil demand. Now that’s BP, you might say, which is a fraction the size of Aramco and has just announced a big peak-oil-demand-ish long-term strategy.
Don’t worry if you missed Saudi Aramco’s earnings call: There wasn’t one.
Now the sticklers and bores among you might raise a hand and suggest that, what with the global pandemic, oil crash and assorted what-have-yous, it might be advisable for the biggest oil major in the world to spare an hour for an update. But honestly, does it really matter? I mean, look at this:
So how are things?
Shares in Saudi Arabian Oil Co., to give the company its full name, closed on Tuesday 2% below where they floated in December. You remember December, right? Possibly it’s the last time you had a haircut or felt completely safe getting on a plane.
It just so happens that on the same day Aramco released its first-quarter results, BP Plc’s new CEO Bernard Looney was quoted in a Financial Times interview saying he couldn’t rule out the possibility Covid-19 had ushered in peak oil demand. Now that’s BP, you might say, which is a fraction the size of Aramco and has just announced a big peak-oil-demand-ish long-term strategy.
Built for a global economy, Dubai now threatened by virus
Built for a global economy, Dubai now threatened by virus:
Dubai built a city of skyscrapers and artificial archipelagos on the promise of globalization, creating itself as a vital hub for the free movement of trade, people and money worldwide — all things that have been disrupted by the coronavirus pandemic.
Now, with events canceled, flights grounded and investment halted, this sheikdom in the United Arab Emirates is threatened both by the virus and a growing economic crisis. Under pressure even before the outbreak, Dubai and its vast web of state-linked industries face billions of dollars in looming debt repayments.
And though it was bailed out a decade earlier, Dubai may not be able to count on another cash infusion, given the crash in global oil prices.
“They facilitate the transport and the buying of things and the movement of people,” said Karen E. Young, a scholar at the American Enterprise Institute who studies Gulf Arab economies. “That’s not the world we’re living in right now.”
Dubai built a city of skyscrapers and artificial archipelagos on the promise of globalization, creating itself as a vital hub for the free movement of trade, people and money worldwide — all things that have been disrupted by the coronavirus pandemic.
Now, with events canceled, flights grounded and investment halted, this sheikdom in the United Arab Emirates is threatened both by the virus and a growing economic crisis. Under pressure even before the outbreak, Dubai and its vast web of state-linked industries face billions of dollars in looming debt repayments.
And though it was bailed out a decade earlier, Dubai may not be able to count on another cash infusion, given the crash in global oil prices.
“They facilitate the transport and the buying of things and the movement of people,” said Karen E. Young, a scholar at the American Enterprise Institute who studies Gulf Arab economies. “That’s not the world we’re living in right now.”
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.
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-Ease in restrictions buoys #Dubai, #Saudi extends gains - Agricultural Commodities - Reuters
MIDEAST STOCKS-Ease in restrictions buoys Dubai, Saudi extends gains - Agricultural Commodities - Reuters:
Shares in Saudi Arabia rose on Wednesday, extending gains from the previous session after the kingdom committed to deeper oil output cuts, while a further easing in coronavirus-related restrictions cheered Dubai’s index.
On Monday, the kingdom said it would deepen output cuts in June beyond its quota under the latest OPEC+ deal to help drain a supply glut.
Saudi Arabia’s benchmark index advanced 1.1% in early trade, led by a 2.6% increase in petrochemical maker Saudi Basic Industries (SABIC).
Oil giant Saudi Aramco has closed a $10 billion one-year loan provided by a group of 10 banks, LPC, a fixed income news service which is part of Refinitiv, reported.
Shares in Saudi Arabia rose on Wednesday, extending gains from the previous session after the kingdom committed to deeper oil output cuts, while a further easing in coronavirus-related restrictions cheered Dubai’s index.
On Monday, the kingdom said it would deepen output cuts in June beyond its quota under the latest OPEC+ deal to help drain a supply glut.
Saudi Arabia’s benchmark index advanced 1.1% in early trade, led by a 2.6% increase in petrochemical maker Saudi Basic Industries (SABIC).
Oil giant Saudi Aramco has closed a $10 billion one-year loan provided by a group of 10 banks, LPC, a fixed income news service which is part of Refinitiv, reported.
Oil falls as fears of second coronavirus wave take hold - Reuters
Oil falls as fears of second coronavirus wave take hold - Reuters:
Oil prices fell on Wednesday as potential OPEC+ plans to deepen supply cuts were overshadowed by demand concerns exacerbated by a possible second wave of coronavirus infections as countries ease lockdown.
Brent crude LCOc1 dropped 56 cents, or 1.9%, to $29.42 a barrel by 0855 GMT, having risen 1.2% on Tuesday.
West Texas Intermediate crude futures fell 23 cents, or 0.9%, to $25.55 after gaining 6.8% in the previous session.
“Fears are running rife that easing lockdown measures will trigger a second wave of coronavirus infections,” said Stephen Brennoc at oil brokerage PVM.
Oil prices fell on Wednesday as potential OPEC+ plans to deepen supply cuts were overshadowed by demand concerns exacerbated by a possible second wave of coronavirus infections as countries ease lockdown.
Brent crude LCOc1 dropped 56 cents, or 1.9%, to $29.42 a barrel by 0855 GMT, having risen 1.2% on Tuesday.
West Texas Intermediate crude futures fell 23 cents, or 0.9%, to $25.55 after gaining 6.8% in the previous session.
“Fears are running rife that easing lockdown measures will trigger a second wave of coronavirus infections,” said Stephen Brennoc at oil brokerage PVM.
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