UPDATE 2-GCC government debt to surge by record-high $100 bln this year - S&P - Reuters:
S&P Global Ratings said on Monday it expected Gulf countries’ government debt to increase by a record high of about $100 billion this year, as funding needs spike due to the coronavirus crisis and low oil prices.
The ratings agency estimates Gulf Cooperation Council (GCC) countries will register an aggregate central government deficit of about $180 billion, to be financed with $100 billion of debt and an $80 billion draw-down in government assets.
“Based on our macroeconomic assumptions, we expect to see GCC government balance sheets continue to deteriorate up until 2023,” it said in a statement.
It based its forecasts on an average Brent oil price of $30 per barrel for the rest of 2020, $50 in 2021 and $55 from 2022.
Monday 20 July 2020
Oil steady as virus infections rise but hopes for vaccine lends support - Reuters
Oil steady as virus infections rise but hopes for vaccine lends support - Reuters:
Oil prices were little changed on Monday as coronavirus cases increased in many countries, though a flurry of announcements about a potential COVID-19 vaccine and ongoing talks over a European Union fund to revive economies hit by the pandemic curbed losses.Brent crude LCOc1 settled up 14 cents, or 0.3%, at $43.28 per barrel, while U.S. West Texas Intermediate (WTI) CLc1 rose 22 cents, 0.5%, to $40.81.
“As things stand, prices are not likely to produce any sizeable gains very soon, until a signal that the pandemic slows down,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen.
“Even though in Europe the virus has been cornered, the Americas and some Asian states still have a long way to go.”
More than 14.5 million people have been infected by the novel coronavirus globally and more than 604,000 have died of COVID-19, the disease caused by the pathogen, according to a Reuters tally.
Oil prices were little changed on Monday as coronavirus cases increased in many countries, though a flurry of announcements about a potential COVID-19 vaccine and ongoing talks over a European Union fund to revive economies hit by the pandemic curbed losses.Brent crude LCOc1 settled up 14 cents, or 0.3%, at $43.28 per barrel, while U.S. West Texas Intermediate (WTI) CLc1 rose 22 cents, 0.5%, to $40.81.
“As things stand, prices are not likely to produce any sizeable gains very soon, until a signal that the pandemic slows down,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen.
“Even though in Europe the virus has been cornered, the Americas and some Asian states still have a long way to go.”
More than 14.5 million people have been infected by the novel coronavirus globally and more than 604,000 have died of COVID-19, the disease caused by the pathogen, according to a Reuters tally.
#Dubai’s Biggest Bank Profit Slumps After $1.1 Billion Provisions - Bloomberg
Dubai’s Biggest Bank Profit Slumps After $1.1 Billion Provisions - Bloomberg:
Emirates NBD PJSC first-half profit slumped 45% after it set aside $1.1 billion in provisions to cover an expected spike in bad loans brought on by the coronavirus pandemic.
Dubai’s biggest bank increased impairments allowances more than three times to 4.2 billion dirhams, according to a statement. Profit dropped to 4.1 billion dirhams due to the higher impairment charges and a gain on the sale of a stake in Network International Holdings Plc last year wasn’t repeated.
Emirates NBD joins regional competitors such as Qatar National Bank and Bank Muscat in increasing provisions as they face an “earnings shock” from the plunge in oil prices and the coronavirus pandemic. Pockets of existing vulnerabilities may yield rising nonperforming loans if the dual crises drag on, the International Monetary Fund said this month.
The crisis is also prompting a new wave of consolidation talk among banks in the Middle East, including potential mergers in Saudi Arabia and Qatar.
Emirates NBD PJSC first-half profit slumped 45% after it set aside $1.1 billion in provisions to cover an expected spike in bad loans brought on by the coronavirus pandemic.
Dubai’s biggest bank increased impairments allowances more than three times to 4.2 billion dirhams, according to a statement. Profit dropped to 4.1 billion dirhams due to the higher impairment charges and a gain on the sale of a stake in Network International Holdings Plc last year wasn’t repeated.
Emirates NBD joins regional competitors such as Qatar National Bank and Bank Muscat in increasing provisions as they face an “earnings shock” from the plunge in oil prices and the coronavirus pandemic. Pockets of existing vulnerabilities may yield rising nonperforming loans if the dual crises drag on, the International Monetary Fund said this month.
The crisis is also prompting a new wave of consolidation talk among banks in the Middle East, including potential mergers in Saudi Arabia and Qatar.
Oil trader GP Global to restructure as lenders scale back | ZAWYA MENA Edition
Oil trader GP Global to restructure as lenders scale back | ZAWYA MENA Edition:
GP Global will undergo financial restructuring, the UAE-based oil trader and marine fuel supplier announced on Monday.
"We were unable to get full support from a few financial institutions recently and therefore as a prudent decision, we have undertaken this restructuring exercise which is envisaged to be completed in the next few months," it said.
GP said it continues to execute trades and that its bunkering business "is performing well despite the current financial headwinds".
GP Global said market rumours questioning the company's financial condition were "blatant lies" being spread by "vested interests".
"The group strongly and vehemently denies all such rumours," it said.
GP Global will undergo financial restructuring, the UAE-based oil trader and marine fuel supplier announced on Monday.
"We were unable to get full support from a few financial institutions recently and therefore as a prudent decision, we have undertaken this restructuring exercise which is envisaged to be completed in the next few months," it said.
GP said it continues to execute trades and that its bunkering business "is performing well despite the current financial headwinds".
GP Global said market rumours questioning the company's financial condition were "blatant lies" being spread by "vested interests".
"The group strongly and vehemently denies all such rumours," it said.
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.
Mideast Wealth Funds Plan More European Bargain Hunting: Invesco - Bloomberg
Mideast Wealth Funds Plan More European Bargain Hunting: Invesco - Bloomberg:
Almost half of Middle Eastern sovereign wealth funds plan to buy more shares in mainly European companies battered by the market turmoil brought on by the coronavirus pandemic, according to Invesco Ltd.
Over the next 12 months, about 43% of sovereign funds in the region will buy equities with lower valuations, while 29% will cut those holdings, the asset manager said in a report published on Monday. Most will look in Europe for bargains, with 38% increasing their exposure to emerging Europe and 38% to developed Europe.
“The market turmoil in March and April saw asset prices fall considerably, especially as some investors sold securities to ensure liquidity,” Zainab Kufaishi, head of Middle East and Africa at Invesco, said in a statement. “This presented opportunities to gain exposure to blue chip companies at very good prices.”
Regional funds are more prepared to hunt for bargains than they were during the 2009 financial crisis after building up large cash reserves in recent years, Invesco said. About 57% of funds plan to invest more in fixed income, 43% in infrastructure and 50% in private equity.
Almost half of Middle Eastern sovereign wealth funds plan to buy more shares in mainly European companies battered by the market turmoil brought on by the coronavirus pandemic, according to Invesco Ltd.
Over the next 12 months, about 43% of sovereign funds in the region will buy equities with lower valuations, while 29% will cut those holdings, the asset manager said in a report published on Monday. Most will look in Europe for bargains, with 38% increasing their exposure to emerging Europe and 38% to developed Europe.
“The market turmoil in March and April saw asset prices fall considerably, especially as some investors sold securities to ensure liquidity,” Zainab Kufaishi, head of Middle East and Africa at Invesco, said in a statement. “This presented opportunities to gain exposure to blue chip companies at very good prices.”
Regional funds are more prepared to hunt for bargains than they were during the 2009 financial crisis after building up large cash reserves in recent years, Invesco said. About 57% of funds plan to invest more in fixed income, 43% in infrastructure and 50% in private equity.
#AbuDhabi Builders Face Less Problems Than #Dubai’s, Moody’s Says - Bloomberg
Abu Dhabi Builders Face Less Problems Than Dubai’s, Moody’s Says - Bloomberg:
Abu Dhabi real estate companies will face less severe headwinds from the double whammy of the coronavirus pandemic and lower oil prices than those in neighboring Dubai, Moody’s Investors Service said.
Residential oversupply isn’t as pronounced in Abu Dhabi, which supports the credit quality of Aldar Investment Properties and Emirates Strategic Investment Co., Moody’s analyst Lahlou Meksaoui wrote in a note on Monday. In Dubai, job losses, salary cuts and travel restrictions are slashing demand for new property.
“The economic contraction and its fiscal implications will be most acute in Dubai, where the economy is very reliant on tourism and transportation,” Meksaoui wrote. Still, there will be a credit-quality erosion of real estate companies in the United Arab Emirates, he said.
As the coronavirus wreaked havoc on the global economy, it also aggravated Dubai’s property slump where oversupply has pushed prices lower for the past six years. Now, with companies like Emirates airline laying off staff and some estimating Dubai’s population could shrink by 10%, the downturn is likely to further reduce rents and the value of homes.
Abu Dhabi real estate companies will face less severe headwinds from the double whammy of the coronavirus pandemic and lower oil prices than those in neighboring Dubai, Moody’s Investors Service said.
Residential oversupply isn’t as pronounced in Abu Dhabi, which supports the credit quality of Aldar Investment Properties and Emirates Strategic Investment Co., Moody’s analyst Lahlou Meksaoui wrote in a note on Monday. In Dubai, job losses, salary cuts and travel restrictions are slashing demand for new property.
“The economic contraction and its fiscal implications will be most acute in Dubai, where the economy is very reliant on tourism and transportation,” Meksaoui wrote. Still, there will be a credit-quality erosion of real estate companies in the United Arab Emirates, he said.
As the coronavirus wreaked havoc on the global economy, it also aggravated Dubai’s property slump where oversupply has pushed prices lower for the past six years. Now, with companies like Emirates airline laying off staff and some estimating Dubai’s population could shrink by 10%, the downturn is likely to further reduce rents and the value of homes.
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.
#Oman Investment Authority restructures boards of 15 state-owned companies - Arabianbusiness
Oman Investment Authority restructures boards of 15 state-owned companies - Arabianbusiness:
Oman Investment Authority (OIA) has restructured the boards of directors of 15 companies it now manages as part of a comprehensive review of state-owned entities.
The OIA, which holds assets valued at about $17 billion, was created earlier this year when the sultanate’s two wealth funds - State General Reserve Fund and the Oman Investment Fund – were merged into one body.
All government companies, except Petroleum Development Oman and the nation’s international investments, now fall under the new entity.
In its update on Sunday, OIA said 79 experts and specialists in various governmental and private sectors had been appointed as new heads and members of the boards of directors of its subsidiaries.
Oman Investment Authority (OIA) has restructured the boards of directors of 15 companies it now manages as part of a comprehensive review of state-owned entities.
The OIA, which holds assets valued at about $17 billion, was created earlier this year when the sultanate’s two wealth funds - State General Reserve Fund and the Oman Investment Fund – were merged into one body.
All government companies, except Petroleum Development Oman and the nation’s international investments, now fall under the new entity.
In its update on Sunday, OIA said 79 experts and specialists in various governmental and private sectors had been appointed as new heads and members of the boards of directors of its subsidiaries.
UPDATE 2-Emirates NBD quarterly profit slumps 58% as pandemic impairments jump - Reuters
UPDATE 2-Emirates NBD quarterly profit slumps 58% as pandemic impairments jump - Reuters:
Dubai’s biggest bank Emirates NBD on Monday posted a 58% fall in second-quarter profit, as it set aside over $1.1 billion so far this year to cover bad loans in anticipation of a worsening impact from the coronavirus crisis.
Net profit slumped to 2 billion dirhams ($544.54 million) in the three months ended June 30, from 4.74 billion dirhams a year earlier, when it booked a gain of 2.1 billion dirhams from an asset sale.
“We are acting to manage costs to reflect lower levels of economic activity, albeit cost reduction will not entirely offset lower levels of income,” Group Chief Financial Officer Patrick Sullivan said in a statement.
Sources told Reuters in June that the bank had started a new round of job cuts, laying off hundreds of employees.
Dubai’s biggest bank Emirates NBD on Monday posted a 58% fall in second-quarter profit, as it set aside over $1.1 billion so far this year to cover bad loans in anticipation of a worsening impact from the coronavirus crisis.
Net profit slumped to 2 billion dirhams ($544.54 million) in the three months ended June 30, from 4.74 billion dirhams a year earlier, when it booked a gain of 2.1 billion dirhams from an asset sale.
“We are acting to manage costs to reflect lower levels of economic activity, albeit cost reduction will not entirely offset lower levels of income,” Group Chief Financial Officer Patrick Sullivan said in a statement.
Sources told Reuters in June that the bank had started a new round of job cuts, laying off hundreds of employees.
Oil falls on worries over fuel demand setback as infections rise - Reuters
Oil falls on worries over fuel demand setback as infections rise - Reuters:
Oil prices dropped on Monday, amid concerns that a recovery in fuel demand could be derailed by a rise in the pace of coronavirus infections around the world.
Brent crude LCOc1 was down 36 cents, or 0.8%, at $42.78 a barrel by 0653 GMT, after dropping slightly last week. U.S. oil was off by 34 cents, or 0.8%, at $40.25 a barrel, after gaining 4 cents last week.
More than 14.5 million people have been infected by the novel coronavirus globally and more than 604,000 have died of COVID-19, the disease caused by the pathogen, according to a Reuters tally.
“The never-ending coronavirus pandemic may force countries to reinstitute lockdown measures that will slow economic growth and curb energy demand,” said Avtar Sandu, commodities manager at Phillip Futures.
Oil prices dropped on Monday, amid concerns that a recovery in fuel demand could be derailed by a rise in the pace of coronavirus infections around the world.
Brent crude LCOc1 was down 36 cents, or 0.8%, at $42.78 a barrel by 0653 GMT, after dropping slightly last week. U.S. oil was off by 34 cents, or 0.8%, at $40.25 a barrel, after gaining 4 cents last week.
More than 14.5 million people have been infected by the novel coronavirus globally and more than 604,000 have died of COVID-19, the disease caused by the pathogen, according to a Reuters tally.
“The never-ending coronavirus pandemic may force countries to reinstitute lockdown measures that will slow economic growth and curb energy demand,” said Avtar Sandu, commodities manager at Phillip Futures.
MIDEAST STOCKS- #Saudi shares slip after news of king's admission to hospital - Reuters
MIDEAST STOCKS-Saudi shares slip after news of king's admission to hospital - Reuters:
The Saudi Arabian stock market fell slightly in early trade on Monday after news that King Salman bin Abdulaziz had been admitted to hospital.
Other major Gulf markets were mixed.
The king, who is suffering from inflammation of the gall bladder, is undergoing medical checks, state news agency SPA said on Monday.
Saudi Arabia’s benchmark index dropped 0.5%, with petrochemical firm Saudi Basic Industries shedding 1.1% and oil giant Saudi Aramco losing 0.3%.
Amongst others, Yanbu National Petrochemicals slid 2.3%, a day after it reported a fall in second-quarter-net profit.
Dubai’s main share index dropped 0.3%, driven down by a 0.9% decline in Emirates NBD Bank.
The Saudi Arabian stock market fell slightly in early trade on Monday after news that King Salman bin Abdulaziz had been admitted to hospital.
Other major Gulf markets were mixed.
The king, who is suffering from inflammation of the gall bladder, is undergoing medical checks, state news agency SPA said on Monday.
Saudi Arabia’s benchmark index dropped 0.5%, with petrochemical firm Saudi Basic Industries shedding 1.1% and oil giant Saudi Aramco losing 0.3%.
Amongst others, Yanbu National Petrochemicals slid 2.3%, a day after it reported a fall in second-quarter-net profit.
Dubai’s main share index dropped 0.3%, driven down by a 0.9% decline in Emirates NBD Bank.