Covid Economies: Saudi Central Bank Sees No V-Shaped Rebound Yet - Bloomberg:
Saudi Arabia’s central bank governor said it’s “too early” to tell if the economy of the world’s largest oil exporter will bounce back with a V-shaped recovery as the government loosens coronavirus-related restrictions.
Officials “believe in the resilience of the Saudi economy,” and consumer spending data has seen a pickup since the kingdom’s reopening in late May, Saudi Arabian Monetary Authority Governor Ahmed Alkholifey said in an interview with Bloomberg TV. But there are still potential downside risks from a second wave of the virus or negative developments in the global economy, he said.
“We see light at the end of the tunnel yet we remain vigilant, to be honest,” Alkholifey said in the interview on Monday.
The oil-dependent kingdom is facing a double crisis this year from crude market turmoil and the global pandemic, pushing the government to roll out major austerity measures like a July 1 hike to the value-added tax. The International Monetary Fund is predicting a 6.8% contraction for Saudi Arabia this year, the deepest in decades, followed by a return to 3.1% growth in 2021.
Monday 6 July 2020
Fracking: From Revolution to Money Pit - video Bloomberg.com
Fracking: From Revolution to Money Pit video:
For most any nation, let alone a superpower, energy independence is considered the geopolitical holy grail. So when fracking lured in American investors, everyone had high hopes the country would finally break free of OPEC. But oil is a complex game, and 2020 saw sharp declines in demand caused by the cartel’s maneuvering, shale oil’s oversupply, and now the devastating effects of the coronavirus. What’s worse, the startup mentality of the U.S. fracking industry promised investors mythical growth and nonexistent returns. In the end, it burned a $340 billion hole in Wall Street’s pocket. (Source: Bloomberg)
For most any nation, let alone a superpower, energy independence is considered the geopolitical holy grail. So when fracking lured in American investors, everyone had high hopes the country would finally break free of OPEC. But oil is a complex game, and 2020 saw sharp declines in demand caused by the cartel’s maneuvering, shale oil’s oversupply, and now the devastating effects of the coronavirus. What’s worse, the startup mentality of the U.S. fracking industry promised investors mythical growth and nonexistent returns. In the end, it burned a $340 billion hole in Wall Street’s pocket. (Source: Bloomberg)
Investment opportunities exist in Covid-19 crisis, insists Ithmar Capital founder - Arabianbusiness
Investment opportunities exist in Covid-19 crisis, insists Ithmar Capital founder - Arabianbusiness:
The founder and managing partner of UAE-based Ithmar Capital Partners is confident there are opportunities to be had in the market, despite the economic downturn prompted by the Covid-19 pandemic, and likened the current climate to the financial crash just over ten years ago.
Faisal bin Juma Belhoul said that eyebrows were raised a decade ago when he invested over AED500 million in Al Noor Hospitals - now Mediclinic International.
“Everybody thought we must have lost our heads, making big commitments in the market,” he told Arabian Business.
However, the investment paid off and more, with the Abu Dhabi-based hospital group going on to be listed on the London Stock Exchange in 2013.
The founder and managing partner of UAE-based Ithmar Capital Partners is confident there are opportunities to be had in the market, despite the economic downturn prompted by the Covid-19 pandemic, and likened the current climate to the financial crash just over ten years ago.
Faisal bin Juma Belhoul said that eyebrows were raised a decade ago when he invested over AED500 million in Al Noor Hospitals - now Mediclinic International.
“Everybody thought we must have lost our heads, making big commitments in the market,” he told Arabian Business.
However, the investment paid off and more, with the Abu Dhabi-based hospital group going on to be listed on the London Stock Exchange in 2013.
#SaudiArabia's biggest pharmacy firm Nahdi in early talks for IPO: sources - Reuters
Saudi Arabia's biggest pharmacy firm Nahdi in early talks for IPO: sources - Reuters:
Saudi Arabia’s Nahdi Medical Co, the largest pharmacy retail chain in the kingdom, is weighing an initial public offering (IPO) and has begun early talks with potential advisors, two sources familiar with the talks told Reuters.
Nahdi, founded by Abdullah Amer Al Nahdi in 1986 and is the Saudi equivalent of British health retailer Boots, has a network of more than 1,100 pharmacies. It is 50% owned by Jeddah-based Islamic investment firm Sedco Holding, according to information on its website.
The company is in early talks with advisors for its public share sale, which could happen next year, said the sources, declining to be named as the matter is not public.
The company’s value is more than 10 billion riyals ($2.67 billion) in equity, said two separate sources.
Saudi Arabia’s Nahdi Medical Co, the largest pharmacy retail chain in the kingdom, is weighing an initial public offering (IPO) and has begun early talks with potential advisors, two sources familiar with the talks told Reuters.
Nahdi, founded by Abdullah Amer Al Nahdi in 1986 and is the Saudi equivalent of British health retailer Boots, has a network of more than 1,100 pharmacies. It is 50% owned by Jeddah-based Islamic investment firm Sedco Holding, according to information on its website.
The company is in early talks with advisors for its public share sale, which could happen next year, said the sources, declining to be named as the matter is not public.
The company’s value is more than 10 billion riyals ($2.67 billion) in equity, said two separate sources.
Oil steady as hopeful economic data face spike in virus cases - Reuters
Oil steady as hopeful economic data face spike in virus cases - Reuters:
Oil futures ended largely steady on Monday as positive economic data supported prices, while a spike in coronavirus cases in the United States that could curb fuel demand pressured prices.
Brent crude LCOc1 settled at $43.10 a barrel, up 30 cents. U.S. West Texas Intermediate (WTI) crude CLc1 settled at $40.63 a barrel, down 2 cents.
“The competing forces in the oil market right now are the reopening of economies around the world, increasing oil demand, countered by concerns about economies closing around the world due to a resurgence in the number of virus cases,” Andy Lipow, president of consultants Lipow Oil Associates.
In the first five days of July, 16 states reported record increases in new cases of COVID-19, which has infected nearly 3 million Americans and killed more than 130,000, according to a Reuters tally.
Oil futures ended largely steady on Monday as positive economic data supported prices, while a spike in coronavirus cases in the United States that could curb fuel demand pressured prices.
Brent crude LCOc1 settled at $43.10 a barrel, up 30 cents. U.S. West Texas Intermediate (WTI) crude CLc1 settled at $40.63 a barrel, down 2 cents.
“The competing forces in the oil market right now are the reopening of economies around the world, increasing oil demand, countered by concerns about economies closing around the world due to a resurgence in the number of virus cases,” Andy Lipow, president of consultants Lipow Oil Associates.
In the first five days of July, 16 states reported record increases in new cases of COVID-19, which has infected nearly 3 million Americans and killed more than 130,000, according to a Reuters tally.
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.
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.
Sabic CEO Yousef Al-Benyan on G-20 Recommendations, Global Economy, Coronavirus - Bloomberg
Sabic CEO Yousef Al-Benyan on G-20 Recommendations, Global Economy, Coronavirus - Bloomberg:
Yousef Al-Benyan, vice chairman and chief executive officer at Saudi Basic Industries Corp. AB and chairman at B20, discusses the global economy, his recommendations to the G-20 and the impact of coronavirus on the economy. He speaks exclusively on “Bloomberg Daybreak: Europe.” (Source: Bloomberg)
Yousef Al-Benyan, vice chairman and chief executive officer at Saudi Basic Industries Corp. AB and chairman at B20, discusses the global economy, his recommendations to the G-20 and the impact of coronavirus on the economy. He speaks exclusively on “Bloomberg Daybreak: Europe.” (Source: Bloomberg)
#Kuwait’s Savings for Life After Oil May Be Needed a Lot Sooner - Bloomberg
Kuwait’s Savings for Life After Oil May Be Needed a Lot Sooner - Bloomberg:
Kuwait, one of the world’s wealthiest countries, is in a budget crunch so severe that it may have to soon begin leaning on a fund intended to prepare it for a future without oil.
Running a deficit that could reach 40% of its economy this year, and unable to borrow due to a showdown between the government and parliament, Kuwait is running out of options. The General Reserve Fund, essentially its Treasury, has been tapped so aggressively that its liquid assets could come close to being depleted within the current fiscal year, or by April 2021.
That has attention turning to its Future Generations Fund, the world’s oldest sovereign wealth fund and estimated to be the fourth-largest globally. As its name implies, the savings vehicle is meant to secure the wellbeing of future generations of Kuwaitis, who probably won’t be able to rely on oil to sustain one of the world’s most prosperous populations.
Kuwait, one of the world’s wealthiest countries, is in a budget crunch so severe that it may have to soon begin leaning on a fund intended to prepare it for a future without oil.
Running a deficit that could reach 40% of its economy this year, and unable to borrow due to a showdown between the government and parliament, Kuwait is running out of options. The General Reserve Fund, essentially its Treasury, has been tapped so aggressively that its liquid assets could come close to being depleted within the current fiscal year, or by April 2021.
That has attention turning to its Future Generations Fund, the world’s oldest sovereign wealth fund and estimated to be the fourth-largest globally. As its name implies, the savings vehicle is meant to secure the wellbeing of future generations of Kuwaitis, who probably won’t be able to rely on oil to sustain one of the world’s most prosperous populations.
MOVE: #Dubai's Arabtec appoints top Mubadala official as new chairman | ZAWYA MENA Edition
MOVE: Dubai's Arabtec appoints top Mubadala official as new chairman | ZAWYA MENA Edition:
Dubai’s Arabtec Holding has appointed a top executive of Abu Dhabi’s state fund as the new chairman of the board of directors.
Waleed Al Mokarrab Al Muhairi, who currently serves as Mubadala’s deputy group chief executive officer and chief executive officer of the Alternative Investments & Infrastructure platform, takes over the seat of Mohamed Thani Al Rumaithi, who recently tendered his resignation.
Al Muhairi holds a Master’s degree in public policy from Harvard University and a bachelor of science degree in foreign service from Georgetown University in the United States.
The Dubai-listed firm, which was involved in the building of the Louvre museum in Abu Dhabi, announced the new appointment in a filing to the Dubai Financial Market (DFM) on Monday. It came just weeks after reports that the construction group has laid off thousands of employees and imposed some salary cuts.
Dubai’s Arabtec Holding has appointed a top executive of Abu Dhabi’s state fund as the new chairman of the board of directors.
Waleed Al Mokarrab Al Muhairi, who currently serves as Mubadala’s deputy group chief executive officer and chief executive officer of the Alternative Investments & Infrastructure platform, takes over the seat of Mohamed Thani Al Rumaithi, who recently tendered his resignation.
Al Muhairi holds a Master’s degree in public policy from Harvard University and a bachelor of science degree in foreign service from Georgetown University in the United States.
The Dubai-listed firm, which was involved in the building of the Louvre museum in Abu Dhabi, announced the new appointment in a filing to the Dubai Financial Market (DFM) on Monday. It came just weeks after reports that the construction group has laid off thousands of employees and imposed some salary cuts.
Dual Shock: COVID-19, low oil price to hit GCC banks' profitability - Moody's | ZAWYA MENA Edition
Dual Shock: COVID-19, low oil price to hit GCC banks' profitability - Moody's | ZAWYA MENA Edition:
The dual shock from the coronavirus pandemic (COVID-19) and the collapse in oil prices will severely dent profits at banks in the Gulf Cooperation Council (GCC) countries this year. Economic contraction across all six GCC nations will depress credit growth and sap the banks' two main income streams; interest on loans, and fees and commissions, Moody's said in a note.
Provisioning charges for potential loan losses are expected to rise sharply. The Gulf banks' capital will remain adequate, however, underpinning their solvency. Narrower margins and contraction in lending will pressure revenue, the global ratings agency reported.
"We expect real non-hydrocarbon GDP in the GCC to contract between 3.5 percent and 5 percent in 2020. This will erode loan demand and banks' appetite to lend, resulting in an average loan contraction between 0 percent and 5 percent. Simultaneously, interest rate cuts and rising customer defaults will reduce banks' interest income, while funding costs will increase moderately," said Moody’s.
"Combined, these factors will narrow net interest margins. Increased government debt issuance (both bonds and sukuks) particularly in Saudi Arabia, Bahrain and Oman will help to offset the margin pressure as banks increase their exposure to these higher yielding instruments," the ratings agency said.
The dual shock from the coronavirus pandemic (COVID-19) and the collapse in oil prices will severely dent profits at banks in the Gulf Cooperation Council (GCC) countries this year. Economic contraction across all six GCC nations will depress credit growth and sap the banks' two main income streams; interest on loans, and fees and commissions, Moody's said in a note.
Provisioning charges for potential loan losses are expected to rise sharply. The Gulf banks' capital will remain adequate, however, underpinning their solvency. Narrower margins and contraction in lending will pressure revenue, the global ratings agency reported.
"We expect real non-hydrocarbon GDP in the GCC to contract between 3.5 percent and 5 percent in 2020. This will erode loan demand and banks' appetite to lend, resulting in an average loan contraction between 0 percent and 5 percent. Simultaneously, interest rate cuts and rising customer defaults will reduce banks' interest income, while funding costs will increase moderately," said Moody’s.
"Combined, these factors will narrow net interest margins. Increased government debt issuance (both bonds and sukuks) particularly in Saudi Arabia, Bahrain and Oman will help to offset the margin pressure as banks increase their exposure to these higher yielding instruments," the ratings agency said.
UPDATE 1-Production resumes at two oilfields shared with #SaudiArabia -Kuwait oil ministry - Reuters
UPDATE 1-Production resumes at two oilfields shared with Saudi Arabia -Kuwait oil ministry - Reuters:
Crude oil production resumed early July at the Wafra oilfield, shared by Kuwait and Saudi Arabia, after a five-year halt, the Kuwaiti oil ministry said on Twitter on Monday.
The Wafra and Khafji oilfields are located in the Neutral Zone on the boundary of the two countries.
Saudi Arabian Chevron (SAC), which jointly operates the Wafra field with Kuwait Gulf Oil Company (KGOC), said in a statement in June that the two companies were making preparations to resume operations.
Initial output at the Wafra oilfield is seen at 10,000 bpd, before rising to 70,000 bpd at the end of August, and then up to 145,000 bpd by the end of 2020, Abdullah al-Shammari, deputy chief executive for finance and management at Kuwait Gulf Oil Company, which operates the field, told Reuters in June.
Crude oil production resumed early July at the Wafra oilfield, shared by Kuwait and Saudi Arabia, after a five-year halt, the Kuwaiti oil ministry said on Twitter on Monday.
The Wafra and Khafji oilfields are located in the Neutral Zone on the boundary of the two countries.
Saudi Arabian Chevron (SAC), which jointly operates the Wafra field with Kuwait Gulf Oil Company (KGOC), said in a statement in June that the two companies were making preparations to resume operations.
Initial output at the Wafra oilfield is seen at 10,000 bpd, before rising to 70,000 bpd at the end of August, and then up to 145,000 bpd by the end of 2020, Abdullah al-Shammari, deputy chief executive for finance and management at Kuwait Gulf Oil Company, which operates the field, told Reuters in June.
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.
Oil up on tighter supply, expectations for positive data - Reuters
Oil up on tighter supply, expectations for positive data - Reuters:
Oil prices rose on Monday, supported by tighter supplies and a string of data expected to show economic recovery across the globe and despite a spike in coronavirus cases in the United States and other countries.
Brent crude LCOc1 was up 73 cents, or 1.7%, to $43.53 per barrel by 0808 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 was up 28 cents, or 0.7%, at $40.93.
“The market appears to be shrugging off the surge in COVID-19 cases in the United States,” ING said, adding that data for several cities in affected states did not show a significant reduction in road traffic week on week.
Market sentiment was also positive as investors expected a string of improving economic data.
Oil prices rose on Monday, supported by tighter supplies and a string of data expected to show economic recovery across the globe and despite a spike in coronavirus cases in the United States and other countries.
Brent crude LCOc1 was up 73 cents, or 1.7%, to $43.53 per barrel by 0808 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 was up 28 cents, or 0.7%, at $40.93.
“The market appears to be shrugging off the surge in COVID-19 cases in the United States,” ING said, adding that data for several cities in affected states did not show a significant reduction in road traffic week on week.
Market sentiment was also positive as investors expected a string of improving economic data.
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