Saudi Crown Prince Says Reforms Saved Budget as Revenue Plunged - Bloomberg
Saudi Crown Prince Mohammed bin Salman said economic reforms he championed had saved the kingdom from even greater austerity as revenue plunged this year, as he released a rare statement touting his yearslong overhaul.
Oil income is expected to drop by nearly a third to 410 billion riyals ($109.3 billion) this year as the fall in crude prices takes a toll on the kingdom, Prince Mohammed said in a statement published by the official Saudi Press Agency on Thursday.
Yet non-oil revenue is expected to rise 14% to 360 billion riyals, he said, with domestically unpopular tax and fee hikes helping to lessen the blow to the budget. Increasing non-oil income has been a key component of the prince’s economic transformation plan, dubbed Vision 2030, announced in 2016.
He also underscored his commitment to tackling Saudi unemployment and said the “next goal will be improving citizens’ income.”
The promises were potentially a nod to discontent among many Saudis as government austerity measures cut deeply into the pockets of the poor and the middle class, already struggling during the pandemic-induced downturn.
Thursday 12 November 2020
Oil falls on coronavirus surge, unexpected U.S. crude stockpile rise | Reuters
Oil falls on coronavirus surge, unexpected U.S. crude stockpile rise | Reuters
Oil prices fell on Thursday, weighed down by the surge in coronavirus cases that is hampering the global economy, along with an unexpected rise in U.S. crude stockpiles.
Oil futures tracked with U.S. equities, which also fell on pandemic concerns. Europe is grappling with a sharp increase in infections and new social restrictions. In the United States, new cases have surpassed 100,000 per day for several days, and more than a dozen states have doubled their caseloads in the last two weeks.
Brent crude fell 27 cents to settle at $43.53 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 33 cents to settle at $41.12 a barrel.
“When stocks gave up gains, oil followed,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “It’s a very nervous market.”
U.S. government data added to the bearishness, as crude inventories rose by 4.3 million barrels last week, compared with an expected fall of 913,000 barrels.
Oil prices fell on Thursday, weighed down by the surge in coronavirus cases that is hampering the global economy, along with an unexpected rise in U.S. crude stockpiles.
Oil futures tracked with U.S. equities, which also fell on pandemic concerns. Europe is grappling with a sharp increase in infections and new social restrictions. In the United States, new cases have surpassed 100,000 per day for several days, and more than a dozen states have doubled their caseloads in the last two weeks.
Brent crude fell 27 cents to settle at $43.53 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 33 cents to settle at $41.12 a barrel.
“When stocks gave up gains, oil followed,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “It’s a very nervous market.”
U.S. government data added to the bearishness, as crude inventories rose by 4.3 million barrels last week, compared with an expected fall of 913,000 barrels.
#AbuDhabi's NMC Healthcare in recovery mode, expects 2020 revenues of Dh5b plus | Banking – Gulf News
Abu Dhabi's NMC Healthcare in recovery mode, expects 2020 revenues of Dh5b plus | Banking – Gulf News
The UAE’s biggest private healthcare operator NMC is showing signs of a clear revival, with revenues now back to pre-COVID-19 levels. If this trend continues, NMC is looking at revenues of Dh5 billion plus this year.
The gains are led by its specialty clinics for IVF, cosmetics and long-term home care services. More important, NMC’s network of multi-specialty hospitals are now recording revenues that are “in line” with last year. This in itself is the biggest positive for the Abu Dhabi company after a harrowing 10 months that saw it being placed under administration by the courts and most of its previous management being replaced.
Plus, there was, of course, the missing billions of dollars from the NMC accounts.
“Due to the faster than anticipated revenue recovery from COVID-19, revenue year-to-date is 10 per cent versus the business plan,” a statement from the administrators issued to NMC’s creditors confirms. “Tighter cost control and the acceleration of performance improvement initiatives has resulted in EBITDA being well ahead of the business plan.” (EBITDA is earnings before interest, tax, depreciation and amortisation)
The UAE’s biggest private healthcare operator NMC is showing signs of a clear revival, with revenues now back to pre-COVID-19 levels. If this trend continues, NMC is looking at revenues of Dh5 billion plus this year.
The gains are led by its specialty clinics for IVF, cosmetics and long-term home care services. More important, NMC’s network of multi-specialty hospitals are now recording revenues that are “in line” with last year. This in itself is the biggest positive for the Abu Dhabi company after a harrowing 10 months that saw it being placed under administration by the courts and most of its previous management being replaced.
Plus, there was, of course, the missing billions of dollars from the NMC accounts.
“Due to the faster than anticipated revenue recovery from COVID-19, revenue year-to-date is 10 per cent versus the business plan,” a statement from the administrators issued to NMC’s creditors confirms. “Tighter cost control and the acceleration of performance improvement initiatives has resulted in EBITDA being well ahead of the business plan.” (EBITDA is earnings before interest, tax, depreciation and amortisation)
#Saudi Red Sea project plans 16 hotels by 2023, finalising $3.7 bln loan -CEO | Reuters
Saudi Red Sea project plans 16 hotels by 2023, finalising $3.7 bln loan -CEO | Reuters
Saudi Arabia’s flagship tourism project, The Red Sea Development Co (TRSDC), plans to have 16 hotels ready by the end of 2023, two more than initially planned in the first phase, as it expects a V-shape recovery in global tourism once the pandemic abates, Chief Executive John Pagano told Reuters.
Owned by a Saudi sovereign fund, and backed by Crown Prince Mohammed bin Salman, the multi-billion dollar project entails developing luxury resorts on 50 islands off the coral-fringed Red Sea coast, where tourists can go diving, and visit a nature reserve and heritage sites.
During the first phase, the project aims to attract 300,000 visitors annually, Pagano said, expecting demand to soar in the aftermath of the COVID-19 pandemic.
“There will be a lot of pent up demand to go and travel as soon as the restrictions are lifted, so I see a V-shape recovery certainly, in so far as tourism is concerned,” he said from Riyadh in a telephone interview.
Saudi Arabia’s flagship tourism project, The Red Sea Development Co (TRSDC), plans to have 16 hotels ready by the end of 2023, two more than initially planned in the first phase, as it expects a V-shape recovery in global tourism once the pandemic abates, Chief Executive John Pagano told Reuters.
Owned by a Saudi sovereign fund, and backed by Crown Prince Mohammed bin Salman, the multi-billion dollar project entails developing luxury resorts on 50 islands off the coral-fringed Red Sea coast, where tourists can go diving, and visit a nature reserve and heritage sites.
During the first phase, the project aims to attract 300,000 visitors annually, Pagano said, expecting demand to soar in the aftermath of the COVID-19 pandemic.
“There will be a lot of pent up demand to go and travel as soon as the restrictions are lifted, so I see a V-shape recovery certainly, in so far as tourism is concerned,” he said from Riyadh in a telephone interview.
MIDEAST STOCKS-Major Gulf markets log in weekly gains on COVID-19 vaccine hopes | Nasdaq
MIDEAST STOCKS-Major Gulf markets log in weekly gains on COVID-19 vaccine hopes | Nasdaq
Saudi and Dubai markets ended lower on Thursday, although all major Gulf markets posted weekly gains as positive developments in a COVID-19 vaccine spurred hopes of a faster-than-expected global economic recovery.
Global markets posted sharp gains after Pfizer PFE.N on Monday said its experimental vaccine was more than 90% effective in preventing COVID-19.
Saudi Arabia's benchmark index .TASI closed 0.2% lower, with oil behemoth Aramco 2222.SE leading the losses, with a 0.7% fall. The index rose 4.3% for the week.
Dubai's main share index .DFMGI finished the session down 0.9%, its first decline in seven sessions. It gained 4.7% for the week.
Emirates NBD Bank ENBD.DU closed 1.5% down, while Dubai's largest listed develop Emaar Properties EMAR.DU lost 1.4% as it reported a near halving in profit for the first nine months of the year on Wednesday.
The London Bullion Market Association is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.
Carrier Emirates lost $3.4 billion in the first six months of the year, tipping the Dubai state-owned airline's holding company into its first half-year loss in more than thirty years.
The economy of Dubai, a major gold trading centre and top tourist destination, has been badly hit by the coronavirus crisis due to travel restrictions in place world over and as consumers cut down on luxury spending.
The Abu Dhabi index .ADI closed 0.5% higher, driven by gains in First Abu Dhabi Bank FAB.AD and Abu Dhabi Commerical Bank ADCB.AD, which rose 1.3% and 0.8%, respectively.
The Abu Dhabi benchmark logged in weekly gain of about 3%.
Saudi and Dubai markets ended lower on Thursday, although all major Gulf markets posted weekly gains as positive developments in a COVID-19 vaccine spurred hopes of a faster-than-expected global economic recovery.
Global markets posted sharp gains after Pfizer PFE.N on Monday said its experimental vaccine was more than 90% effective in preventing COVID-19.
Saudi Arabia's benchmark index .TASI closed 0.2% lower, with oil behemoth Aramco 2222.SE leading the losses, with a 0.7% fall. The index rose 4.3% for the week.
Dubai's main share index .DFMGI finished the session down 0.9%, its first decline in seven sessions. It gained 4.7% for the week.
Emirates NBD Bank ENBD.DU closed 1.5% down, while Dubai's largest listed develop Emaar Properties EMAR.DU lost 1.4% as it reported a near halving in profit for the first nine months of the year on Wednesday.
The London Bullion Market Association is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.
Carrier Emirates lost $3.4 billion in the first six months of the year, tipping the Dubai state-owned airline's holding company into its first half-year loss in more than thirty years.
The economy of Dubai, a major gold trading centre and top tourist destination, has been badly hit by the coronavirus crisis due to travel restrictions in place world over and as consumers cut down on luxury spending.
The Abu Dhabi index .ADI closed 0.5% higher, driven by gains in First Abu Dhabi Bank FAB.AD and Abu Dhabi Commerical Bank ADCB.AD, which rose 1.3% and 0.8%, respectively.
The Abu Dhabi benchmark logged in weekly gain of about 3%.
#Dubai Islamic Bank sells $1 billion in perpetual sukuk | Reuters
Dubai Islamic Bank sells $1 billion in perpetual sukuk | Reuters
Dubai Islamic Bank DISB.DU, the United Arab Emirates' largest Islamic lender, on Thursday sold $1 billion in Additional Tier 1 sukuk, or Islamic bonds, at 4.625%, a document from one of the banks arranging the deal showed.
Overall debt issuance from the Gulf so far this year has already surpassed last year’s total, again topping $100 billion and setting a new record as borrowers - especially governments - seek to bolster their finances amid the coronavirus crisis and weak oil prices.
Several more debt sales are expected before year-end, banking sources said.
DIB began marketing the notes at around 5.25% earlier on Thursday and received over $5.5 billion in orders for the debt sale, the document showed.
Overall debt issuance from the Gulf so far this year has already surpassed last year’s total, again topping $100 billion and setting a new record as borrowers - especially governments - seek to bolster their finances amid the coronavirus crisis and weak oil prices.
Several more debt sales are expected before year-end, banking sources said.
DIB began marketing the notes at around 5.25% earlier on Thursday and received over $5.5 billion in orders for the debt sale, the document showed.
Analysis: State investors help plug #Saudi's yawning deficit | Reuters
Analysis: State investors help plug Saudi's yawning deficit | Reuters
Saudi Arabia is increasingly relying on state-owned investors to finance itself amid the coronavirus pandemic, a strategy that raises questions about how exposed ordinary Saudis could be to a sovereign shock.
The government-backed institutions - namely the pension fund and insurance agency - have seen their domestic debt holdings nearly double in the first six months of this year as Riyadh finances a yawning budget deficit through bond sales.
Their ultimate exposure to Saudi Arabia Inc, however, remains under wraps because the government does not provide comprehensive and up-to-date breakdowns of their investment holdings or their returns.
“In normal times the funding of the government from its own related entities may cause concern over transparency of the ultimate debt figure and over the autonomy of those related entities,” said Hasnain Malik, head of equity strategy at Tellimer.
“However, this concern over the total liabilities of all government entities has existed for some time in other parts of the GCC (Gulf Cooperation Council) and funding very large fiscal deficits probably requires some unorthodox tactics.”
Saudi Arabia is increasingly relying on state-owned investors to finance itself amid the coronavirus pandemic, a strategy that raises questions about how exposed ordinary Saudis could be to a sovereign shock.
The government-backed institutions - namely the pension fund and insurance agency - have seen their domestic debt holdings nearly double in the first six months of this year as Riyadh finances a yawning budget deficit through bond sales.
Their ultimate exposure to Saudi Arabia Inc, however, remains under wraps because the government does not provide comprehensive and up-to-date breakdowns of their investment holdings or their returns.
“In normal times the funding of the government from its own related entities may cause concern over transparency of the ultimate debt figure and over the autonomy of those related entities,” said Hasnain Malik, head of equity strategy at Tellimer.
“However, this concern over the total liabilities of all government entities has existed for some time in other parts of the GCC (Gulf Cooperation Council) and funding very large fiscal deficits probably requires some unorthodox tactics.”
IEA Cuts Oil-Demand Outlook as Vaccines Won’t Rescue Market - Bloomberg
IEA Cuts Oil-Demand Outlook as Vaccines Won’t Rescue Market - Bloomberg
The International Energy Agency cut forecasts for global oil demand amid new lockdown measures and cautioned that the vaccine breakthrough won’t quickly revive markets.
While crude prices rallied to a 10-week high above $45 in London this week on news of Pfizer Inc.’s progress, fuel use won’t experience any “significant” boost from vaccines until the second half of next year, the agency said.
The Paris-based IEA, which advises most major economies, reduced oil-demand projections for this quarter sharply, by 1.2 million barrels a day.
Brent crude steadied on Thursday after three days of gains, and was unchanged at $43.80 at 10:39 a.m. London time.
The International Energy Agency cut forecasts for global oil demand amid new lockdown measures and cautioned that the vaccine breakthrough won’t quickly revive markets.
While crude prices rallied to a 10-week high above $45 in London this week on news of Pfizer Inc.’s progress, fuel use won’t experience any “significant” boost from vaccines until the second half of next year, the agency said.
The Paris-based IEA, which advises most major economies, reduced oil-demand projections for this quarter sharply, by 1.2 million barrels a day.
Brent crude steadied on Thursday after three days of gains, and was unchanged at $43.80 at 10:39 a.m. London time.
Outlook: #SaudiArabia's economic recovery will be gradual, with high uncertainty - NBK | ZAWYA MENA Edition
Outlook: Saudi Arabia's economic recovery will be gradual, with high uncertainty - NBK | ZAWYA MENA Edition
An economic recovery in Saudi Arabia is expected to be gradual with an elevated level of uncertainty and it may take until the second half of 2022 for all the lost private-sector output in 2020 to be recouped, National Bank of Kuwait (NBK) said in a report.
Like many other countries worldwide, GCC states too were hit hard due to shocks stemming from the impact of the coronavirus pandemic as well as its impact on the demand of oil.
Saudi Arabia's fiscal position came under pressure in H1 2020 as revenues dropped by 36 percent and spending decreased 8 percent resulting in a deficit of SAR 143 billion. The government dealt with its finances by tripling the VAT, increased customs, and discontinued the cost of living allowances.
“We forecast non-oil growth to drop by 2.6 percent in 2020 before rebounding to 2 percent in 2021 with GDP growth at -4.1 percent this year and +2.8 percent next year given that the oil sector should start supporting growth in 2021,” the report said.
An economic recovery in Saudi Arabia is expected to be gradual with an elevated level of uncertainty and it may take until the second half of 2022 for all the lost private-sector output in 2020 to be recouped, National Bank of Kuwait (NBK) said in a report.
Like many other countries worldwide, GCC states too were hit hard due to shocks stemming from the impact of the coronavirus pandemic as well as its impact on the demand of oil.
Saudi Arabia's fiscal position came under pressure in H1 2020 as revenues dropped by 36 percent and spending decreased 8 percent resulting in a deficit of SAR 143 billion. The government dealt with its finances by tripling the VAT, increased customs, and discontinued the cost of living allowances.
“We forecast non-oil growth to drop by 2.6 percent in 2020 before rebounding to 2 percent in 2021 with GDP growth at -4.1 percent this year and +2.8 percent next year given that the oil sector should start supporting growth in 2021,” the report said.
#Dubai's DAMAC loses $148.3 million in third quarter | Reuters
Dubai's DAMAC loses $148.3 million in third quarter | Reuters
Dubai developer DAMAC Properties DAMAC.DU on Thursday reported a 544.6 million dirham ($148.3 million) third-quarter loss, warning a recovery from the coronavirus crisis was possibly still some time away.
The pandemic is adding pressure to Dubai’s already weakened property market that for years has seen supply outstrip demand for new houses and apartments.
While revenue climbed 43% to 1.3 billion dirhams in the July-September period, the owner of the only Trump-branded golf course in the Middle East swung to a quarterly loss from a 60 million dirham profit in the same period a year ago.
It was the company’s fourth consecutive quarterly loss, according to Refinitiv data.
Dubai developer DAMAC Properties DAMAC.DU on Thursday reported a 544.6 million dirham ($148.3 million) third-quarter loss, warning a recovery from the coronavirus crisis was possibly still some time away.
The pandemic is adding pressure to Dubai’s already weakened property market that for years has seen supply outstrip demand for new houses and apartments.
While revenue climbed 43% to 1.3 billion dirhams in the July-September period, the owner of the only Trump-branded golf course in the Middle East swung to a quarterly loss from a 60 million dirham profit in the same period a year ago.
It was the company’s fourth consecutive quarterly loss, according to Refinitiv data.
Exclusive: Gold market authority threatens to blacklist #UAE and other centres | Reuters
Exclusive: Gold market authority threatens to blacklist UAE and other centres | Reuters
The world’s most influential gold market authority is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.
In the letter dated Nov. 6 addressed to countries with large gold markets, the London Bullion Market Association (LBMA) laid out standards they must meet on issues such as money laundering and where they source their gold - or be blacklisted.
The move by the LBMA is the first time a market or state authority trying to tackle the illegal or unethical production and trading of gold has raised the prospect of cutting off the bullion industry in a major financial centre.
“Our goal is to work jointly with these key markets to advance global standards, not to disengage from them. However, we are also committed to act if there is not meaningful and effective improvement,” LBMA Chief Executive Ruth Crowell told Reuters when asked about the letter.
The world’s most influential gold market authority is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.
In the letter dated Nov. 6 addressed to countries with large gold markets, the London Bullion Market Association (LBMA) laid out standards they must meet on issues such as money laundering and where they source their gold - or be blacklisted.
The move by the LBMA is the first time a market or state authority trying to tackle the illegal or unethical production and trading of gold has raised the prospect of cutting off the bullion industry in a major financial centre.
“Our goal is to work jointly with these key markets to advance global standards, not to disengage from them. However, we are also committed to act if there is not meaningful and effective improvement,” LBMA Chief Executive Ruth Crowell told Reuters when asked about the letter.
Analysis: Fear on the wild frontier as riskier stock markets left trailing | Reuters
Analysis: Fear on the wild frontier as riskier stock markets left trailing | Reuters
Frontier stocks have trailed bigger emerging markets in recovering from the coronavirus-induced crash as liquidity has dried up and investors beat a hasty retreat.
BMO Global Asset Management shut a $78 million fund and Aberdeen Standard Investments wound up an investment trust, both invested in frontier stocks, in recent months after fellow fund manager Barings took a similar step last year.
Money managers say assets under management in dedicated frontier funds have tumbled to close to $4 billion from around $15 billion in 2014, when from Nigeria to Lebanon, markets once seen as too risky saw an influx of money, with investors betting on fast-growing economies and idiosyncratic investment stories.
“Flows have been negative for the last three years,” Fergus Argyle, assistant manager of frontier at Somerset Capital Management, told Reuters.
“On the one hand it’s a bit alarming, but on the other hand it’s also quite encouraging .. there’s a lot of pain in the market already and a lot of capital has left the market and we don’t see a significant need for change for sentiment to really improve,” Argyle added.
The draining of cash reflects disappointment with an asset class that has frequently failed to compensate for the added risk of markets prone to crises or capital controls.
Since the COVID-19 pandemic triggered global market falls in late February, investor disappointment has intensified.
Frontier stocks have trailed bigger emerging markets in recovering from the coronavirus-induced crash as liquidity has dried up and investors beat a hasty retreat.
BMO Global Asset Management shut a $78 million fund and Aberdeen Standard Investments wound up an investment trust, both invested in frontier stocks, in recent months after fellow fund manager Barings took a similar step last year.
Money managers say assets under management in dedicated frontier funds have tumbled to close to $4 billion from around $15 billion in 2014, when from Nigeria to Lebanon, markets once seen as too risky saw an influx of money, with investors betting on fast-growing economies and idiosyncratic investment stories.
“Flows have been negative for the last three years,” Fergus Argyle, assistant manager of frontier at Somerset Capital Management, told Reuters.
“On the one hand it’s a bit alarming, but on the other hand it’s also quite encouraging .. there’s a lot of pain in the market already and a lot of capital has left the market and we don’t see a significant need for change for sentiment to really improve,” Argyle added.
The draining of cash reflects disappointment with an asset class that has frequently failed to compensate for the added risk of markets prone to crises or capital controls.
Since the COVID-19 pandemic triggered global market falls in late February, investor disappointment has intensified.
OPEC+ Focuses on Delay to Oil-Output Hike of Three to Six Months - Bloomberg
OPEC+ Focuses on Delay to Oil-Output Hike of Three to Six Months - Bloomberg
Talks between OPEC and its allies are zeroing in on a delay to next year’s planned oil-output increase of three to six months, according to several delegates.
Saudi Arabia and Russia, leaders of the 23-nation coalition, have already indicated publicly that they are thinking twice about easing production cuts in January as the resurgent pandemic hits fuel demand.
The presidents of both Russia and the Organization of Petroleum Exporting Countries have even mentioned the option of cutting production deeper. This idea hasn’t garnered widespread support so far among other members, one delegate said.
Less than three weeks before members meet to take a final decision, the alliance is instead increasingly focused on maintaining the current cutbacks into early 2021, the delegates said, asking not to be identified as the talks are private. The alliance is keeping about 7.7 million barrels a day off-line right now, or 8% of global output.
Talks between OPEC and its allies are zeroing in on a delay to next year’s planned oil-output increase of three to six months, according to several delegates.
Saudi Arabia and Russia, leaders of the 23-nation coalition, have already indicated publicly that they are thinking twice about easing production cuts in January as the resurgent pandemic hits fuel demand.
The presidents of both Russia and the Organization of Petroleum Exporting Countries have even mentioned the option of cutting production deeper. This idea hasn’t garnered widespread support so far among other members, one delegate said.
Less than three weeks before members meet to take a final decision, the alliance is instead increasingly focused on maintaining the current cutbacks into early 2021, the delegates said, asking not to be identified as the talks are private. The alliance is keeping about 7.7 million barrels a day off-line right now, or 8% of global output.
#UAE Gets First Rating From Fitch Ahead of Federal Bond Sale - Bloomberg
UAE Gets First Rating From Fitch Ahead of Federal Bond Sale - Bloomberg
The United Arab Emirates was assigned the fourth-highest investment grade at Fitch Ratings as the Gulf nation prepares to issue a federal bond for the first time.
The company ranked the sovereign AA- with a stable outlook. It cited moderate consolidated public debt levels, a solid external asset position, and the likelihood of support from the nation’s capital Abu Dhabi if needed. Moody’s Investors Service rates the UAE at Aa2, its third-highest investment grade.
“The UAE’s fiscal and external balance sheets benefit from Abu Dhabi’s large sovereign net foreign assets,” the agency said on Wednesday. “However, although Abu Dhabi is committed to the financial stability and health of the UAE, it demonstrated in 2009-10 that support is selective.”
Abu Dhabi is rated one level above the UAE at Fitch, which now sees the federation’s budget shortfall widening to 3.8% of gross domestic product in 2020 from a surplus of 3.8% in 2019.
“This whole exercise is driven much less by some urgent financing need and need to finance a deficit,” Jan Friederich, a Hong Kong-based senior director for sovereign ratings at Fitch, said in an interview on Bloomberg TV on Thursday. “Instead, it is much more about developing a yield curve that allows government-related entities and the private sector to issue easily in domestic markets.”
The United Arab Emirates was assigned the fourth-highest investment grade at Fitch Ratings as the Gulf nation prepares to issue a federal bond for the first time.
The company ranked the sovereign AA- with a stable outlook. It cited moderate consolidated public debt levels, a solid external asset position, and the likelihood of support from the nation’s capital Abu Dhabi if needed. Moody’s Investors Service rates the UAE at Aa2, its third-highest investment grade.
“The UAE’s fiscal and external balance sheets benefit from Abu Dhabi’s large sovereign net foreign assets,” the agency said on Wednesday. “However, although Abu Dhabi is committed to the financial stability and health of the UAE, it demonstrated in 2009-10 that support is selective.”
Abu Dhabi is rated one level above the UAE at Fitch, which now sees the federation’s budget shortfall widening to 3.8% of gross domestic product in 2020 from a surplus of 3.8% in 2019.
“This whole exercise is driven much less by some urgent financing need and need to finance a deficit,” Jan Friederich, a Hong Kong-based senior director for sovereign ratings at Fitch, said in an interview on Bloomberg TV on Thursday. “Instead, it is much more about developing a yield curve that allows government-related entities and the private sector to issue easily in domestic markets.”
#UAE’s Largest Developer on the Prowl for Assets to Boost Income - Bloomberg
UAE’s Largest Developer on the Prowl for Assets to Boost Income - Bloomberg
Aldar Properties PJSC is looking into buying assets that would boost its management units as the largest listed developer in the United Arab Emirates aims to take advantage of strains in the market.
“Times of crisis and dislocation always give rise to opportunities for corporate action or combination,” Chief Financial Officer Greg Fewer said on a conference call Thursday. “When you’re a landlord, the cost of capital is one of your most important attributes. We have the lowest cost of capital.”
UAE developers often suffer from slumping demand for properties when oil prices are low and job creation lags. Growing their asset management businesses helps secure a steady stream of income at times of market downturn.
Aldar, which primarily operates in Abu Dhabi, has the benefit of a stronger market in the UAE capital compared with neighboring emirates. Oversupply in Abu Dhabi is less severe than in Dubai, where a six-year slump has driven values lower by 30%.
Last month, a rally in Aldar shares on the back of a deal with a state-owned entity in Abu Dhabi took its market value past Burj Khalifa developer Emaar Properties PJSC.
Aldar Properties PJSC is looking into buying assets that would boost its management units as the largest listed developer in the United Arab Emirates aims to take advantage of strains in the market.
“Times of crisis and dislocation always give rise to opportunities for corporate action or combination,” Chief Financial Officer Greg Fewer said on a conference call Thursday. “When you’re a landlord, the cost of capital is one of your most important attributes. We have the lowest cost of capital.”
UAE developers often suffer from slumping demand for properties when oil prices are low and job creation lags. Growing their asset management businesses helps secure a steady stream of income at times of market downturn.
Aldar, which primarily operates in Abu Dhabi, has the benefit of a stronger market in the UAE capital compared with neighboring emirates. Oversupply in Abu Dhabi is less severe than in Dubai, where a six-year slump has driven values lower by 30%.
Last month, a rally in Aldar shares on the back of a deal with a state-owned entity in Abu Dhabi took its market value past Burj Khalifa developer Emaar Properties PJSC.
Emirates turns to #Dubai to see it through crisis after $3.4 billion loss | Reuters
Emirates turns to Dubai to see it through crisis after $3.4 billion loss | Reuters
State-owned Emirates said on Thursday that Dubai would help it through the coronavirus crisis after losses of $3.4 billion tipped the airline’s holding company into its first half-year loss in more than thirty years.
Emirates said global travel restrictions meant revenue dropped by 75% to $3.2 billion as passenger traffic fell by 95% to 1.5 million in the six months to the end of September.
“We have been able to tap on our own strong cash reserves, and through our shareholder and the broader financial community, we continue to ensure we have access to sufficient funding to sustain the business and see us through this challenging period,” Chairman Sheikh Ahmed bin Saeed al-Maktoum said.
The Dubai government would support the airline on its recovery path, said Sheikh Ahmed, who is also a senior member of Dubai’s ruling family and holds senior positions in government.
State-owned Emirates said on Thursday that Dubai would help it through the coronavirus crisis after losses of $3.4 billion tipped the airline’s holding company into its first half-year loss in more than thirty years.
Emirates said global travel restrictions meant revenue dropped by 75% to $3.2 billion as passenger traffic fell by 95% to 1.5 million in the six months to the end of September.
“We have been able to tap on our own strong cash reserves, and through our shareholder and the broader financial community, we continue to ensure we have access to sufficient funding to sustain the business and see us through this challenging period,” Chairman Sheikh Ahmed bin Saeed al-Maktoum said.
The Dubai government would support the airline on its recovery path, said Sheikh Ahmed, who is also a senior member of Dubai’s ruling family and holds senior positions in government.
Oil gains as possible supply curbs could offset weak demand | Reuters
Oil gains as possible supply curbs could offset weak demand | Reuters
Oil prices edged higher on Thursday, taking the week’s gains so far to more than 10% on growing hopes that the world’s major producers will hold off on a planned supply increase as soaring cases of COVID-19 dent fuel demand.
U.S. West Texas Intermediate (WTI) crude CLc1 futures climbed 17 cents, or 0.4%, to $41.62 a barrel at 0732 GMT, while Brent crude LCOc1 futures rose 7 cents, or almost 0.2%, to $43.87 a barrel.
Algeria’s energy minister said on Wednesday that OPEC+ - grouping the Organization of the Petroleum Exporting Countries (OPEC) and other suppliers including Russia - could extend current production cuts of 7.7 million barrels per day (bpd) into 2021, or deepen them further if needed.
The weakening outlook has piled pressure on OPEC+ to hold back a supply increase of 2 million bpd scheduled for January, with the market now pricing in a delay, analysts said.
Oil prices edged higher on Thursday, taking the week’s gains so far to more than 10% on growing hopes that the world’s major producers will hold off on a planned supply increase as soaring cases of COVID-19 dent fuel demand.
U.S. West Texas Intermediate (WTI) crude CLc1 futures climbed 17 cents, or 0.4%, to $41.62 a barrel at 0732 GMT, while Brent crude LCOc1 futures rose 7 cents, or almost 0.2%, to $43.87 a barrel.
Algeria’s energy minister said on Wednesday that OPEC+ - grouping the Organization of the Petroleum Exporting Countries (OPEC) and other suppliers including Russia - could extend current production cuts of 7.7 million barrels per day (bpd) into 2021, or deepen them further if needed.
The weakening outlook has piled pressure on OPEC+ to hold back a supply increase of 2 million bpd scheduled for January, with the market now pricing in a delay, analysts said.
MIDEAST STOCKS-Most Gulf markets retreat; #Dubai leads declines | Nasdaq
MIDEAST STOCKS-Most Gulf markets retreat; Dubai leads declines | Nasdaq
Most major Gulf markets traded lower in early trading on Wednesday and are set to break the winning run spurred by the news on the progress in the development of COVID-19 vaccine and subsequent potential global economic recovery.
The Saudi, Dubai and Abu Dhabi markets have all gained in three successive sessions after the vaccine news on Monday, but now are on track to close the week with a session of losses.
Saudi Arabia's benchmark index .TASI lost about 0.3%, with lender Al-Rajhi 1120.SE and oil behemoth Aramco 2222.SE shedding 0.4% and 0.3%, respectively.
Elsewhere, Dubai's main share index .DFMGI fell 1.2%, with property stocks among major decliners. Emirates NBD Bank ENBD.DU, however, was the top loser, shedding about 2% in the morning.
Blue chip developer Emaar Properties EMAR.DU dropped 1.7%, while its unit Emaar Malls EMAA.DU retreated 3.5%.
Dubai's largest listed developer Emaar Properties on Wednesday's after-market reported a near halving in profit for the first nine months of the year.
The London Bullion Market Association, the world's most influential gold market authority, is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.
Carrier Emirates lost $3.4 billion in the first six months of the year, tipping the Dubai state-owned airline's holding company into its first half-year loss in more than thirty years.
The Abu Dhabi index .ADI edged down about 0.1%, dragged mainly by a 0.3% fall in telecom operator Etisalat ETISALAT.AD.
In Qatar, the index .QSI inched down about 0.1%, with financial stock Masraf Al Rayan MARK.QA losing nearly a percent.
Most major Gulf markets traded lower in early trading on Wednesday and are set to break the winning run spurred by the news on the progress in the development of COVID-19 vaccine and subsequent potential global economic recovery.
The Saudi, Dubai and Abu Dhabi markets have all gained in three successive sessions after the vaccine news on Monday, but now are on track to close the week with a session of losses.
Saudi Arabia's benchmark index .TASI lost about 0.3%, with lender Al-Rajhi 1120.SE and oil behemoth Aramco 2222.SE shedding 0.4% and 0.3%, respectively.
Elsewhere, Dubai's main share index .DFMGI fell 1.2%, with property stocks among major decliners. Emirates NBD Bank ENBD.DU, however, was the top loser, shedding about 2% in the morning.
Blue chip developer Emaar Properties EMAR.DU dropped 1.7%, while its unit Emaar Malls EMAA.DU retreated 3.5%.
Dubai's largest listed developer Emaar Properties on Wednesday's after-market reported a near halving in profit for the first nine months of the year.
The London Bullion Market Association, the world's most influential gold market authority, is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.
Carrier Emirates lost $3.4 billion in the first six months of the year, tipping the Dubai state-owned airline's holding company into its first half-year loss in more than thirty years.
The Abu Dhabi index .ADI edged down about 0.1%, dragged mainly by a 0.3% fall in telecom operator Etisalat ETISALAT.AD.
In Qatar, the index .QSI inched down about 0.1%, with financial stock Masraf Al Rayan MARK.QA losing nearly a percent.