IMF: Mideast loses $270B oil income amid virus, recession:
The Middle East’s energy producers are expected to earn $270 billion less in oil revenue compared to last year as the region’s economic heavyweight, Saudi Arabia, sinks deeper into recession amid the coronavirus pandemic, according to the International Monetary Fund’s outlook released Monday.
The international lender expects an overall economic contraction of 7.3% in Mideast oil exporting countries this year due to hits from the coronavirus outbreak and oil market turmoil. The contraction is 2% greater than the IMF’s initial projections in mid-April.
“We are in a year like no other and therefore developments are very fast and coping with them is challenging for everyone,” Jihad Azour, director of the IMF’s Middle East and Central Asia department, told The Associated Press.
The IMF had projected in April that Saudi Arabia’s economy would contract by about 2.3% this year. It has since revised that figure downward, saying the kingdom stands to see economic growth shrink by 6.8% before climbing to around 3% growth next year.
Monday, 13 July 2020
#UAE wants to see a return of Libya's oil production with safeguards: minister - Reuters
UAE wants to see a return of Libya's oil production with safeguards: minister - Reuters:
The United Arab Emirates wants to see a return of Libya’s oil production as soon as possible but with safeguards in place to prevent proceeds from fuelling further conflict in the north African country, a senior Emirati official tweeted on Monday.
Libya has been divided since 2015 between areas held by an internationally recognised government in Tripoli, backed by Turkey, and a rival administration linked to the Libyan National Army (LNA) in Benghazi, backed by the UAE, Russia and Egypt.
Anwar Gargash, UAE minister of state for foreign affairs, did not directly address accusations by Libya’s National Oil Corp (NOC) on Sunday that the Gulf state had instructed forces it backs in Libya’s civil war to reimpose a blockade of oil exports.
Oilfields and export facilities are mostly in territory held by the LNA of eastern commander Khalifa Haftar. But an international agreement says that oil can only be exported by the Tripoli-based NOC, with payments going to the Central Bank there.
The United Arab Emirates wants to see a return of Libya’s oil production as soon as possible but with safeguards in place to prevent proceeds from fuelling further conflict in the north African country, a senior Emirati official tweeted on Monday.
Libya has been divided since 2015 between areas held by an internationally recognised government in Tripoli, backed by Turkey, and a rival administration linked to the Libyan National Army (LNA) in Benghazi, backed by the UAE, Russia and Egypt.
Anwar Gargash, UAE minister of state for foreign affairs, did not directly address accusations by Libya’s National Oil Corp (NOC) on Sunday that the Gulf state had instructed forces it backs in Libya’s civil war to reimpose a blockade of oil exports.
Oilfields and export facilities are mostly in territory held by the LNA of eastern commander Khalifa Haftar. But an international agreement says that oil can only be exported by the Tripoli-based NOC, with payments going to the Central Bank there.
OPEC chief sees oil market moving closer to balance before key meeting - Reuters
OPEC chief sees oil market moving closer to balance before key meeting - Reuters:
The oil market is getting closer to balance as demand gradually rises, OPEC’s secretary general said on Monday, two days before the group and ally Russia meet to decide whether to ease output curbs from August.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, have been cutting output since May by 9.7 million barrels per day after the coronavirus crisis destroyed a third of global demand and caused a price collapse.
After July, the cuts are due to taper to 7.7 million bpd until December although a final decision has yet to be taken. A panel called the Joint Ministerial Monitoring Committee (JMMC) meets on Wednesday to recommend the next level of cuts.
“The gradual reopening of the economies and societies around the world has provided a much-needed resurgence in demand,” while the supply cuts “have helped reverse a rapidly rising trend in inventories,” OPEC’s Mohammad Barkindo said.
The oil market is getting closer to balance as demand gradually rises, OPEC’s secretary general said on Monday, two days before the group and ally Russia meet to decide whether to ease output curbs from August.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, have been cutting output since May by 9.7 million barrels per day after the coronavirus crisis destroyed a third of global demand and caused a price collapse.
After July, the cuts are due to taper to 7.7 million bpd until December although a final decision has yet to be taken. A panel called the Joint Ministerial Monitoring Committee (JMMC) meets on Wednesday to recommend the next level of cuts.
“The gradual reopening of the economies and societies around the world has provided a much-needed resurgence in demand,” while the supply cuts “have helped reverse a rapidly rising trend in inventories,” OPEC’s Mohammad Barkindo said.
Former Unaoil managers convicted in Britain of Iraq bribery - Reuters
Former Unaoil managers convicted in Britain of Iraq bribery - Reuters:
The verdict marks a milestone in the British arm of a four-year, global inquiry into how Unaoil, once run by the prominent Ahsani family, helped major Western companies secure energy projects across the Middle East, Central Asia and Africa over two decades.
A London jury found British-Lebanese Ziad Akle, Unaoil’s former Iraq territory manager, and Stephen Whiteley, a British former manager for Iraq, Kazakhstan and Angola, guilty of plotting to make corrupt payments to secure oil contracts between 2005 and 2010.
But after a marathon 19 days of deliberations, the jury was unable to reach a verdict in the case against Paul Bond, a British one-time Middle East sales manager for Dutch-based oil and gas services company SBM Offshore. He faces a retrial, the UK Serious Fraud Office (SFO) confirmed.
The three men denied any wrongdoing.
The verdict marks a milestone in the British arm of a four-year, global inquiry into how Unaoil, once run by the prominent Ahsani family, helped major Western companies secure energy projects across the Middle East, Central Asia and Africa over two decades.
A London jury found British-Lebanese Ziad Akle, Unaoil’s former Iraq territory manager, and Stephen Whiteley, a British former manager for Iraq, Kazakhstan and Angola, guilty of plotting to make corrupt payments to secure oil contracts between 2005 and 2010.
But after a marathon 19 days of deliberations, the jury was unable to reach a verdict in the case against Paul Bond, a British one-time Middle East sales manager for Dutch-based oil and gas services company SBM Offshore. He faces a retrial, the UK Serious Fraud Office (SFO) confirmed.
The three men denied any wrongdoing.
Oil slips on surge in COVID-19 infections, U.S.-China tension - Reuters
Oil slips on surge in COVID-19 infections, U.S.-China tension - Reuters:
Oil prices slipped about 1% on Monday after global coronavirus cases rose by a record daily amount, fanning fears of renewed government lockdowns, and on growing U.S. and European tension with China.
Prices moved lower in post-settlement trade as California’s governor on Monday clamped new restrictions on businesses as coronavirus cases and hospitalizations soared.
“The California news puts the demand recovery question back on the table,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. Equities and other asset classes also moved lower after the California shutdown was announced.
The World Health Organization reported more than 230,000 new cases of coronavirus on Sunday, a one-day record. Much of the growth is in the Western Hemisphere, particularly the United States and Latin America.
In the United States, infections surged over the weekend as Florida reported an increase of more than 15,000 new cases in 24 hours, a record for any state. Numerous states have rolled back the loosening of restrictions on business operations and now require mask-wearing to slow the spread of the virus, which has killed nearly 140,000 people in the United States.
Brent LCOc1 futures fell 52 cents, or 1.2%, to settle at $42.72 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 lost 45 cents, or 1.1%, to settle at $40.10.
Oil prices slipped about 1% on Monday after global coronavirus cases rose by a record daily amount, fanning fears of renewed government lockdowns, and on growing U.S. and European tension with China.
Prices moved lower in post-settlement trade as California’s governor on Monday clamped new restrictions on businesses as coronavirus cases and hospitalizations soared.
“The California news puts the demand recovery question back on the table,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. Equities and other asset classes also moved lower after the California shutdown was announced.
The World Health Organization reported more than 230,000 new cases of coronavirus on Sunday, a one-day record. Much of the growth is in the Western Hemisphere, particularly the United States and Latin America.
In the United States, infections surged over the weekend as Florida reported an increase of more than 15,000 new cases in 24 hours, a record for any state. Numerous states have rolled back the loosening of restrictions on business operations and now require mask-wearing to slow the spread of the virus, which has killed nearly 140,000 people in the United States.
Brent LCOc1 futures fell 52 cents, or 1.2%, to settle at $42.72 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 lost 45 cents, or 1.1%, to settle at $40.10.
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.
IMF slashes Middle East and Central Asia growth forecasts - Reuters
IMF slashes Middle East and Central Asia growth forecasts - Reuters:
The International Monetary Fund (IMF) has revised downwards its growth projections for the Middle East and Central Asia as economies were hurt worse than expected by the double blow of lower oil prices and the coronavirus crisis.
The region, which includes around 30 countries spanning from Mauritania to Kazakhstan, will see real, or inflation-adjusted, gross domestic product (GDP) fall by 4.7% this year, 2 percentage points lower than IMF forecasts in April, the fund said in a report on Monday.
The pandemic has hit sectors such as tourism and trade, while low oil prices and crude production cuts have strained the finances of regional oil exporters and impacted remittances.
“These factors have led to a stronger-than-anticipated impact on activity in the first half of 2020, and the recovery is expected to be more gradual than previously forecast, in line with a weaker global recovery,” the IMF said.
The International Monetary Fund (IMF) has revised downwards its growth projections for the Middle East and Central Asia as economies were hurt worse than expected by the double blow of lower oil prices and the coronavirus crisis.
The region, which includes around 30 countries spanning from Mauritania to Kazakhstan, will see real, or inflation-adjusted, gross domestic product (GDP) fall by 4.7% this year, 2 percentage points lower than IMF forecasts in April, the fund said in a report on Monday.
The pandemic has hit sectors such as tourism and trade, while low oil prices and crude production cuts have strained the finances of regional oil exporters and impacted remittances.
“These factors have led to a stronger-than-anticipated impact on activity in the first half of 2020, and the recovery is expected to be more gradual than previously forecast, in line with a weaker global recovery,” the IMF said.
COVID-19 in #Kuwait: Private businesses, workers hit by economic downturn | ZAWYA MENA Edition
COVID-19 in Kuwait: Private businesses, workers hit by economic downturn | ZAWYA MENA Edition:
Almost 80 percent of companies in Kuwait have been severely impacted by the plunge in business due to the pandemic, the country's financial and economic affairs committee said in a report submitted to the national assembly.
Revenues have dropped by as much as 80 percent on average, the report said, pushing 26 percent of firms to the brink of collapse.
According to the report, the number of customers dropped by 75 percent in May, which hit revenues badly and made as many as 80 percent of companies unable to cover their expenses for six months.
The draft law, which has been under debate for months in the Assembly, allows companies to reduce the salary of their employees by 50 percent provided that the new salary is not below minimum wage.
Almost 80 percent of companies in Kuwait have been severely impacted by the plunge in business due to the pandemic, the country's financial and economic affairs committee said in a report submitted to the national assembly.
Revenues have dropped by as much as 80 percent on average, the report said, pushing 26 percent of firms to the brink of collapse.
According to the report, the number of customers dropped by 75 percent in May, which hit revenues badly and made as many as 80 percent of companies unable to cover their expenses for six months.
The draft law, which has been under debate for months in the Assembly, allows companies to reduce the salary of their employees by 50 percent provided that the new salary is not below minimum wage.
Oil dips on surge in COVID-19 infections - Reuters
Oil dips on surge in COVID-19 infections - Reuters:
Oil prices dropped on Monday on a record daily rise in global coronavirus cases with big spikes in infections over the weekend in the United States while traders await an OPEC technical meeting expected to recommend an easing of supply cuts.
Brent crude fell 53 cents, or 1.2%, to $42.71 a barrel by 0946 GMT, though prices have been hovering around $42 for a couple of weeks. U.S. crude was down 64 cents, or 1.6%, at $39.91.
“Pricing pressures are locked in a holding pattern and will remain so until the coronavirus pandemic is brought under control. Until then, there will continue to be a lack of conviction in upside potential,” said Stephen Brennock of oil broker PVM.
The World Health Organization reported a record daily increase in global coronavirus cases on Sunday, with the total up by more than 230,000.
Oil prices dropped on Monday on a record daily rise in global coronavirus cases with big spikes in infections over the weekend in the United States while traders await an OPEC technical meeting expected to recommend an easing of supply cuts.
Brent crude fell 53 cents, or 1.2%, to $42.71 a barrel by 0946 GMT, though prices have been hovering around $42 for a couple of weeks. U.S. crude was down 64 cents, or 1.6%, at $39.91.
“Pricing pressures are locked in a holding pattern and will remain so until the coronavirus pandemic is brought under control. Until then, there will continue to be a lack of conviction in upside potential,” said Stephen Brennock of oil broker PVM.
The World Health Organization reported a record daily increase in global coronavirus cases on Sunday, with the total up by more than 230,000.
#AbuDhabi Commercial Bank's Luciano Jannelli Is Bullish on Tech Over 12 Month Horizon - Bloomberg
Abu Dhabi Commercial Bank's Luciano Jannelli Is Bullish on Tech Over 12 Month Horizon - Bloomberg:
Luciano Jannelli, head of investment strategy at Abu Dhabi Commercial Bank PJSC, discusses market volatility and his investment strategy. He speaks on “Bloomberg Daybreak: Middle East.” (Source: Bloomberg)
Luciano Jannelli, head of investment strategy at Abu Dhabi Commercial Bank PJSC, discusses market volatility and his investment strategy. He speaks on “Bloomberg Daybreak: Middle East.” (Source: Bloomberg)
Middle East Deals News: PJT Partners Hires #Dubai Firm deNovo - Bloomberg
Middle East Deals News: PJT Partners Hires Dubai Firm deNovo - Bloomberg:
PJT Partners Inc. signed an accord with a Dubai-based boutique as the U.S. investment bank seeks to win a slice of Middle East deal-making and restructuring work.
The advisory firm, founded by Paul J. Taubman, will work with deNovo Corporate Advisors on cross-border transactions for the region’s biggest companies, sovereign wealth funds and family offices, according to deNovo executive chairperson May Nasrallah.
PJT and deNovo will also advise global firms looking to invest in the Middle East and North Africa region. The companies are currently working on between six and 12 deals, she said.
Middle Eastern deal-making has seen a surge in activity in recent weeks despite the impact of lower oil prices and the coronavirus pandemic on regional economies. Restructuring work is also likely to increase as many firms and state-owned entities face debt repayments they may struggle with.
PJT Partners Inc. signed an accord with a Dubai-based boutique as the U.S. investment bank seeks to win a slice of Middle East deal-making and restructuring work.
The advisory firm, founded by Paul J. Taubman, will work with deNovo Corporate Advisors on cross-border transactions for the region’s biggest companies, sovereign wealth funds and family offices, according to deNovo executive chairperson May Nasrallah.
PJT and deNovo will also advise global firms looking to invest in the Middle East and North Africa region. The companies are currently working on between six and 12 deals, she said.
Middle Eastern deal-making has seen a surge in activity in recent weeks despite the impact of lower oil prices and the coronavirus pandemic on regional economies. Restructuring work is also likely to increase as many firms and state-owned entities face debt repayments they may struggle with.
GCC corporate earnings: Lower revenue, higher provisions to hit most sectors - experts | ZAWYA MENA Edition
GCC corporate earnings: Lower revenue, higher provisions to hit most sectors - experts | ZAWYA MENA Edition:
GCC corporate earnings will take a hit in Q2 2020 as lockdown measures to stem the spread of the coronavirus hurt business activity during the quarter.
“Given the breadth and depth of the restrictions we saw in April and May, we expect GCC Q2 earnings to reflect the full impact of the lockdown,” Salah Shamma, Head of Investment, MENA, Franklin Templeton Emerging Markets Equity told Zawya.
“We anticipate most sectors to announce a material drop in quarterly earnings on the back of lower revenue and higher provisions,” Shamma said.
GCC net profits declined by more than 25 percent in Q1 2020. With companies given exemption to file quarterly earnings, many chose not to publish their results, KAMCO Invest said in a recent report.
GCC corporate earnings will take a hit in Q2 2020 as lockdown measures to stem the spread of the coronavirus hurt business activity during the quarter.
“Given the breadth and depth of the restrictions we saw in April and May, we expect GCC Q2 earnings to reflect the full impact of the lockdown,” Salah Shamma, Head of Investment, MENA, Franklin Templeton Emerging Markets Equity told Zawya.
“We anticipate most sectors to announce a material drop in quarterly earnings on the back of lower revenue and higher provisions,” Shamma said.
GCC net profits declined by more than 25 percent in Q1 2020. With companies given exemption to file quarterly earnings, many chose not to publish their results, KAMCO Invest said in a recent report.
UPDATE 1-Government of #Sharjah hires banks for 30-yr Formosa bonds - document - Reuters
UPDATE 1-Government of Sharjah hires banks for 30-yr Formosa bonds - document - Reuters:
Sharjah, the third-largest emirate of the United Arab Emirates, has hired banks to arrange the issuance of U.S. dollar-denominated 30-year Formosa bonds, a document showed on Monday.
Sharjah has hired Citi, Emirates NBD Capital, HSBC, Invest Bank, JPMorgan and Standard Chartered to arrange an investor call on Monday, to be followed by the issuance, subject to market conditions, the document from one of the banks arranging the deal showed.
It would be Sharjah’s first Formosa, first long-dated and first conventional benchmark bond, said a source close to the deal. Benchmark generally means at least $500 million.
The government issued a conventional Panda bond - yuan-denominated debt issued by foreign borrowers - in 2018, but the size was about 2 billion yuan ($286 million), the source said.
Sharjah, the third-largest emirate of the United Arab Emirates, has hired banks to arrange the issuance of U.S. dollar-denominated 30-year Formosa bonds, a document showed on Monday.
Sharjah has hired Citi, Emirates NBD Capital, HSBC, Invest Bank, JPMorgan and Standard Chartered to arrange an investor call on Monday, to be followed by the issuance, subject to market conditions, the document from one of the banks arranging the deal showed.
It would be Sharjah’s first Formosa, first long-dated and first conventional benchmark bond, said a source close to the deal. Benchmark generally means at least $500 million.
The government issued a conventional Panda bond - yuan-denominated debt issued by foreign borrowers - in 2018, but the size was about 2 billion yuan ($286 million), the source said.
UPDATE 1- #SaudiArabia's Red Sea mega project awards contracts for international airport - Reuters
UPDATE 1-Saudi Arabia's Red Sea mega project awards contracts for international airport - Reuters:
Saudi Arabia’s Red Sea Development Company said on Monday it had awarded infrastructure contracts for an international airport that is due to open in 2022.
The company, which is developing a huge Red Sea tourism project, said the contracts were awarded to Nesma & Partners Contracting Co. Ltd and Almabani General Contractors.
Saudi Arabia plans to develop resorts on 50 islands off the Red Sea coast, offering a nature reserve, coral reef diving and heritage sites.
Red Sea Development Co, backed by Saudi Arabia’s sovereign fund, the Public Investment Fund (PIF), plans to build the first phase by 2022. It aims to attract 300,000 tourists a year in the first phase and 800,000 to 1 million once the development is complete.
Saudi Arabia’s Red Sea Development Company said on Monday it had awarded infrastructure contracts for an international airport that is due to open in 2022.
The company, which is developing a huge Red Sea tourism project, said the contracts were awarded to Nesma & Partners Contracting Co. Ltd and Almabani General Contractors.
Saudi Arabia plans to develop resorts on 50 islands off the Red Sea coast, offering a nature reserve, coral reef diving and heritage sites.
Red Sea Development Co, backed by Saudi Arabia’s sovereign fund, the Public Investment Fund (PIF), plans to build the first phase by 2022. It aims to attract 300,000 tourists a year in the first phase and 800,000 to 1 million once the development is complete.
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-Major Gulf markets ease in early trade as financial shares drag - Reuters
MIDEAST STOCKS-Major Gulf markets ease in early trade as financial shares drag - Reuters:
Major Gulf stock markets were subdued in early trade on Monday, mostly hurt by losses in financial shares, while property shares weighed on Dubai’s index.
Saudi Arabia’s benchmark index slipped 0.1%, with oil giant Saudi Aramco and National Commercial Bank both falling 0.3%.
Amongst others, Saudi Real Estate retreated 0.9% a day after the company signed debt restructuring agreement of 2.07 billion riyals ($551.90 million).
Dubai’s main share index lost 0.4%, with Emaar Properties falling 1.1% and sharia-compliant lender Dubai Islamic Bank was down 0.5%.
On Friday, S&P Global downgraded the blue-chip developer to a BB+ “junk” rating from an investment grade BBB- score.
Major Gulf stock markets were subdued in early trade on Monday, mostly hurt by losses in financial shares, while property shares weighed on Dubai’s index.
Saudi Arabia’s benchmark index slipped 0.1%, with oil giant Saudi Aramco and National Commercial Bank both falling 0.3%.
Amongst others, Saudi Real Estate retreated 0.9% a day after the company signed debt restructuring agreement of 2.07 billion riyals ($551.90 million).
Dubai’s main share index lost 0.4%, with Emaar Properties falling 1.1% and sharia-compliant lender Dubai Islamic Bank was down 0.5%.
On Friday, S&P Global downgraded the blue-chip developer to a BB+ “junk” rating from an investment grade BBB- score.
Oil slips as traders expect OPEC+ to ease supply cuts - Reuters
Oil slips as traders expect OPEC+ to ease supply cuts - Reuters:
Oil slipped nearly 1% on Monday as traders eyed an OPEC technical meeting this week which is expected to recommend an easing in supply cuts that have been propping up crude prices.
Brent crude LCOc1 fell 32 cents, or 0.7%, to $42.92 a barrel by 0646 GMT while U.S. West Texas Intermediate crude CLc1 was at $40.22 a barrel, down 33 cents, or 0.8%.
Oil was little changed last week as a resurgence of coronavirus cases prompted several U.S. states to impose tighter travel restrictions that could dampen oil demand recovery at the world’s largest consumer.
However, prices climbed more than 2% on Friday after the International Energy Agency raised its 2020 oil demand forecast by 400,000 barrels per day.
Oil slipped nearly 1% on Monday as traders eyed an OPEC technical meeting this week which is expected to recommend an easing in supply cuts that have been propping up crude prices.
Brent crude LCOc1 fell 32 cents, or 0.7%, to $42.92 a barrel by 0646 GMT while U.S. West Texas Intermediate crude CLc1 was at $40.22 a barrel, down 33 cents, or 0.8%.
Oil was little changed last week as a resurgence of coronavirus cases prompted several U.S. states to impose tighter travel restrictions that could dampen oil demand recovery at the world’s largest consumer.
However, prices climbed more than 2% on Friday after the International Energy Agency raised its 2020 oil demand forecast by 400,000 barrels per day.