Oil edges lower after settlement as U.S. stockpiles build, pandemic lockdowns loom | Reuters

Oil edges lower after settlement as U.S. stockpiles build, pandemic lockdowns loom | Reuters

Oil prices edged lower in post-settlement trade on Tuesday after an industry group reported a bigger build than expected in U.S. crude stockpiles, adding to worries that new coronavirus lockdowns could hit demand.

During the session, prices were narrowly mixed as the demand fears offset hopes for a vaccine and talk of tighter OPEC+ supply policies. Brent futures fell 7 cents, or 0.2%, to settle at $43.75 a barrel. U.S. crude gained 9 cents, or 0.2%, to settle at $41.43.

After settlement, U.S. crude edged lower to $41.19 a barrel when industry group the American Petroleum Institute (API) said crude inventories rose more 4.174 million barrels last week. That far exceeded the forecast increase USOILC=ECI of 1.7 million barrels, according to a Reuters poll. ENERGYUSAENERGYAPI.

Crude prices had pared losses ahead of settlement, after the Pentagon said President Donald Trump will sharply reduce U.S. forces in Afghanistan from 4,500 to 2,500.

Aramco tightens guidance by 15-20 bps for five-tranche bonds: document | Reuters

Aramco tightens guidance by 15-20 bps for five-tranche bonds: document | Reuters

Saudi Aramco 2222.SE has tightened the price guidance for its five-part U.S. dollar-denominated bond sale and received over $30 billion in orders for the debt sale, a document from one of the banks on the deal showed on Tuesday.

Aramco tightened the guidance by 15-20 basis points (bps) to around 125 bps over U.S. Treasuries (UST) for a three-year tranche, around 140 bps over UST for five-year bonds, around 160 bps over UST for 10-year notes, around 185 bps over UST for a 30-year tranche and around 210 bps over UST for 50-year bonds.

The deal is expected to close on Tuesday.

Gulf markets ride on vaccine optimism | Reuters

Gulf markets ride on vaccine optimism | Reuters

Most major Gulf markets ended higher for a third consecutive session on Tuesday as further positive news on COVID-19 vaccine development lifted optimism about a sooner-than-expected global economic recovery.

Investor sentiment got a major fillip for a second time in as many weeks when Moderna Inc MRNA.O on Monday became the second U.S. drugmaker after Pfizer PFE.N to announce promising trial data in the development of a vaccine against the pandemic.

Markets in the Gulf region were also helped by a rise in oil prices that benefited from expectations OPEC and its allies will extend production cuts for at least three months as well the encouraging news on the vaccine front. [O/R]

Saudi Arabia's benchmark index .TASI closed 0.5% higher, with lender Al-Rajhi Bank 1120.SE and Samba Financial Group 1090.SE putting on 1% and about 2%, respectively.

Dubai's main share index .DFMGI finished 0.8% higher, posting a third straight session of gains.

Real estate firms led the gains on the day, with Emaar Properties EMAR.DU gaining 2.4%, while Damac Properties DAMAC.DU put on 5.7%.

Financial stocks boosted the Abu Dhabi index .ADI, which firmed 0.2%. Index heavyweights First Abu Dhabi Bank FAB.AD and Abu Dhabi Commercial Bank ADCB.AD finished up 0.3% each.

Aldar Properties ALDAR.AD was the top gainer on the Abu Dhabi index, advancing about 3%. The benchmark now has gained for seven straight sessions.

The United Arab Emirates central bank said on Monday it had extended to June 2021 the applicability period of key components of a stimulus scheme to support retail and corporate banking customers and accelerate recovery from the pandemic.

Elsewhere, bucking the trend, the Qatar index .QSI finished 0.2% down, dragged mainly by Qatar National Bank QNBK.QA, which ended about 2% lower.

Oil falls back on tightening restrictions despite OPEC+ hopes | Reuters

Oil falls back on tightening restrictions despite OPEC+ hopes | Reuters

Oil prices eased on Tuesday as worries about the short-term impact on demand of a new surge in the coronavirus pandemic outweighed hopes for a vaccine and tighter OPEC+ supply policy.

Brent was down 29 cents, or 0.6%, at $43.53 a barrel by 1444 GMT while U.S. crude was down 27 cents, or 0.6%, at $41.07. Both had been up 40 cents earlier in the session.

“Developments with regards to a vaccine are constructive for oil demand in the medium to long term. However, for the near term it changes little, with still plenty of concern over the demand impact from the latest wave of COVID-19,” said ING commodity strategist Warren Patterson.

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman called on fellow OPEC+ members on Tuesday to be flexible in responding to oil market needs as the kingdom builds the case for a tighter oil production policy in 2021.

National Bank of #Kuwait tightens guidance for $300mln bonds - sources | ZAWYA MENA Edition

National Bank of Kuwait tightens guidance for $300mln bonds - sources | ZAWYA MENA Edition

National Bank of Kuwait has tightened its guidance for $300 million 10-year bonds that are non-callable for five years to 2.5%-2.625% from 2.875% and received over $1 billion in orders for the debt sale, two sources said.

Citi and NBK Capital are arranging the deal, which is expected to close later on Tuesday, the sources said. Citi declined to comment and NBK did not respond to a request for comment.

European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #SaudiArabia #Qatar close

European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #SaudiArabia #Qatar close

Oil Prices for Nov. 17, 2020: Oil Near $41 With OPEC+ Set to Meet on Output Hike Delay - Bloomberg

Oil Prices for Nov. 17, 2020: Oil Near $41 With OPEC+ Set to Meet on Output Hike Delay - Bloomberg

Oil fluctuated near $41 a barrel as the dollar fell and traders weighed the potential for OPEC+ to delay a planned easing of output cuts.

While headline prices have gained on the growing prospect of an effective Covid-19 vaccine in recent days, an OPEC+ panel said the group, which meets again on Tuesday, should consider holding off on easing bumper production curbs by three to six months.

The producer alliance is wrestling with a bifurcated demand outlook. In Asia, where consumption has recovered strongly from Covid-19, refiners have been snapping up barrels from the Middle East, U.S. and Russia. The structure of Oman futures on the Dubai Mercantile Exchange has surged into a bullish backwardation -- indicating tight supplies -- in recent days, as strength in the region’s crude market has grown.



But in Europe and the U.S., it’s a different picture. Covid-19 cases are growing and movement indicators have been declining, particularly in Europe. With OPEC+ balancing those concerns against resurgent Asian demand, a technical committee said the group should delay an output hike of almost 2 million barrels a day in January.

#Kuwait’s Mezzan Looks for Acquisitions to Sustain Growth - Bloomberg

Kuwait’s Mezzan Looks for Acquisitions to Sustain Growth - Bloomberg

Kuwait-based food and beverage firm Mezzan Holding Co. is on the lookout for acquisitions to help sustain double-digit growth, according to its chief executive officer.

“We, like everybody else, would be actively on the lookout for the right bolt-on acquisitions,” Garry Walsh told Bloomberg TV in an interview. “We’re obviously more skewed toward manufacturing -- that has been our main driver over the last few years.”

Mezzan, one of the largest FMCG manufacturers and distributors in the Gulf, reported a 12% jump in nine-month profit to 10.3 million dinars ($34 million). The company also operates in Iraq, Jordan and Afghanistan, and its shares have gained 22% this year compared with a 13% drop for the benchmark Kuwait stock index.

“The rate of growth might be a bit slower next year as we see some population drain in the UAE and in Kuwait, and potentially in Qatar and Saudi as well,” said Walsh. But Mezzan is well-positioned to return to pre-Covid rates of growth, he said.

#Israel's Bank Leumi third quarter profit dips, loan loss provisions triple | Reuters

Israel's Bank Leumi third quarter profit dips, loan loss provisions triple | Reuters

Israel's Bank Leumi LUMI.TA reported a smaller-than-expected decline in third-quarter net profit, as higher net interest income and lower expenses offset a tripling of its loan loss provision due the coronavirus pandemic.

Leumi, the first of Israel’s banks to publish quarterly earnings, said on Tuesday it earned 750 million shekels ($223 million) in the July-September period, compared with 765 million a year earlier and 605 million shekels forecast in a Reuters poll of analysts.

Net interest income rose to 2.22 billion shekels from 2.09 billion a year earlier while loan loss expenses surged to 547 million shekels from 181 million a year earlier. Operating and other expenses fell nearly 10% in the quarter.

Leumi said the jump in its loan loss provision stemmed from “from the effect of the changes in the macroeconomic environment, on the back of a second substantial surge in Israel (in COVID infections) and the subsequent lockdown, which further deepened the effect of the economic crisis and the uncertainty regarding its effect of the Israeli and global economy.”

#Saudi Wealth Fund Making Another Splash, This Time at Home - Bloomberg

Saudi Wealth Fund Making Another Splash, This Time at Home - Bloomberg

Saudi Arabia’s sovereign wealth fund is turning homeward.

Handed $40 billion earlier this year to buy global stocks, the Public Investment Fund will plow the same amount into the domestic economy next year and again in 2022. Some of the local investments could be funded by liquidating existing assets, Crown Prince Mohammed bin Salman said in a rare statement last week.

The $347 billion sovereign investor is a key lever for the kingdom’s de facto ruler to revive growth and get his economic master plan, known as Vision 2030, back on track after what may be the deepest recession the world’s largest crude exporter has experienced since 1987. The PIF declined to provide further details on the planned investments.

The fund intends to play a leading role in refocusing the economy toward underdeveloped industries like tourism and diversifying away from oil. The amount it’s set to invest is equivalent to more than 10% of government expenditure in 2021 -- and nearly equal to what the PIF, chaired by the crown prince, spent locally in the previous two years combined.

Coronavirus News: Morgan Stanley Turns Bullish on #UAE Stocks Citing Vaccine Hope - Bloomberg

Coronavirus News: Morgan Stanley Turns Bullish on UAE Stocks Citing Vaccine Hope - Bloomberg

Stocks in the United Arab Emirates are highly exposed to a broad recovery, with positive virus vaccine news “far from priced,” according to Morgan Stanley.

Dubai and Abu Dhabi-listed shares, which are lagging emerging-market peers this year, got a double-upgrade to tactical overweight as their exposure to cyclical sectors including tourism, leisure and financials -- a burden during the pandemic so far -- stands to benefit from upcoming vaccines, strategists including Marina Zavolock and Regiane Yamanari wrote in a note.

Morgan Stanley had previously double-upgraded UAE shares to overweight in Feb. 2019, citing an early recovery in the property sector and appealing valuations. That view was reversed this year as the coronavirus pandemic triggered a slump in oil price, the main source of revenue for economies in the Gulf, and hit the country’s tourism and real estate industries.

“The UAE’s cyclical recovery has already begun,” Zavolock and Yamanari write, noting stronger third-quarter spending as local residents consumed at home rather than abroad during the hot summer. They also consider the country’s handling of the pandemic to be among the strongest in the eastern Europe, the Middle East and Africa (EEMEA) region, and believe the winter tourism season will be better than expected.

#Dubai's Drake & Scull to halt work on some projects as losses top $1.3bln | ZAWYA MENA Edition

Dubai's Drake & Scull to halt work on some projects as losses top $1.3bln | ZAWYA MENA Edition

Dubai-based Drake & Scull International (DSI) has confirmed its plans to stop work on existing projects and acquire new ones as it reported accumulated losses of $1.3 billion.

The construction giant also revealed that its restructuring plan has “progressed considerably” and that negotiations with banks and creditors are still ongoing.

In a bourse filing to the Dubai Financial Market (DFM) that was published on Tuesday, the company stated that the value of its accumulated losses as of September 30, 2020 has reached 4.875 billion UAE dirhams ($1.3 billion), equivalent to 455.6 percent of its capital.

“The losses are mainly a product of significant provisioning of… work in progress and contract receivables in legacy projects in Oman, India and UAE. These receivables and work in progress were kept on the balance sheet despite audit qualification since 2016 on the recoverability of these receivables,” the firm said.

“As a result of poor performance on legacy projects, costs to hand over projects went far beyond budgets whereby several bonds were liquidated, increasing the accumulated losses,” it added.

#Saudi wealth fund cut U.S. stocks by $3 billion last quarter, reduced ETFs | Reuters

Saudi wealth fund cut U.S. stocks by $3 billion last quarter, reduced ETFs | Reuters

Saudi Arabia's sovereign wealth fund cut its exposure to North American equities by $3 billion in the third quarter, offloading some exchange traded funds (ETF) and stocks including Berkshire Hathaway BRKa.N, a regulatory filing showed.

The Public Investment Fund (PIF) was holding $7.05 billion worth of U.S. equities as of Sept. 30, compared with nearly $10.12 billion in the second quarter, the filing showed late on Monday. The fund cut its holdings of ETFs to $1.96 billion by Sept. 30, from nearly $4.7 billion in the second quarter.

In recent months, the sovereign wealth fund had bulked up minority stakes in companies worldwide, including oil companies, taking advantage of market weakness caused by the COVID-19 pandemic.

In the previous quarter, it moved part of those investments into real estate, materials and utilities ETFs. In the third quarter, it was holding only the utilities ETF.

“In terms of strategy, there has always been a sense that PIF is trying to play catch-up with regional peers, but wants to fast-track the kind of returns that investments by sovereign funds of Abu Dhabi or Kuwait and even Qatar have generated over many years,” said Rachna Uppal, director of research at Azure Strategy, a Middle East-focused consultancy.

Oil prices edge up as market eyes OPEC+ meeting, vaccine hopes | Reuters

Oil prices edge up as market eyes OPEC+ meeting, vaccine hopes | Reuters

Oil prices edged up on Tuesday on expectations OPEC and its allies will extend oil production cuts for at least three months, while sentiment was bolstered by news of another promising coronavirus vaccine.

Brent crude futures for January LCOc1 rose 18 cents, or 0.4%, to $44.00 a barrel by 0737 GMT and U.S. West Texas Intermediate crude for December CLc1 added 8 cents, or 0.2%, to $41.42 a barrel.

Equity markets gained on hopes of a quicker economic recovery after Moderna Inc MRNA.O said its experimental COVID-19 vaccine was 94.5% effective in preventing infection based on interim late-state data.

“Moderna’s vaccine announcement had probably its largest effect on oil out of the main asset classes,” said Jeffrey Halley, senior market analyst at OANDA, adding that positive vaccine news has “almost certainly put a long-term floor under oil prices”.

Aramco markets five-tranche bonds, seeking cash amid cheap oil | Reuters

Aramco markets five-tranche bonds, seeking cash amid cheap oil | Reuters

Saudi Aramco 2222.SE began marketing a five-tranche U.S. dollar-denominated bond sale on Tuesday, as the world's largest oil producer seeks cash after low oil prices dented its finances.

The move is part of an onslaught on international debt markets by Gulf issuers seeking to plug finances hit by the pandemic and weak oil prices, which has pushed regional issuance past last year’s record to surpass $100 billion again.

Aramco needs the money to pay dividends of $37.5 billion for the second half of 2020 and fund its $69.1 billion purchase of 70% of Saudi Basic Industries (SABIC) 2010.SE.

It raised a loan of $10 billion this year, to be paid by installments until 2028, to back that acquisition.

Aramco gave initial price guidance of around 140 basis points (bps) over U.S. Treasuries (UST) for a three-year tranche, around 155 bps over UST for five-year bonds, around 175 bps over UST for 10-year notes, around 205 bps over UST for a 30-year tranche and around 230 bps over UST for 50-year bonds, the document showed.

There has been no official indication of size but Aramco’s second foray into the international debt markets is expected to be sizeable, after raising $12 billion in its debut bond issuance last year.

MIDEAST STOCKS- #Dubai leads wide gains on vaccine optimism | Nasdaq

MIDEAST STOCKS-Dubai leads wide gains on vaccine optimism | Nasdaq

Major Gulf markets gained in early trade on Tuesday, in line with wider Asia shares, as further positive news on COVID-19 vaccine development kept the momentum going, lifting optimism about a sooner-than-expected global economic recovery.

Investor sentiment got a major fillip for a second time in as many weeks when Moderna Inc MRNA.O on Monday became the second U.S. drugmaker after Pfizer PFE.N to announce promising trial data in the development of a vaccine against the pandemic.

Markets in the Gulf region were also helped by a rise in oil prices on expectations OPEC and its allies will extend production cuts for at least three months. O/R

OPEC and allies including Russia are leaning towards postponement of a planned January increase in oil output to support prices as the COVID-19 pandemic continues its second wave, sources told Reuters on Monday.

Saudi Arabia's benchmark index .TASI traded 0.3% higher, with consumer firm Savola Group 2050.SE gaining about 2%. Al-Rajhi Bank 1120.SE was the top gainer on the Saudi index, adding about 0.6%.

Dubai's main share index .DFMGI was up 0.8%, on track to post a third consecutive session of gains.

Real estate firm Emaar Properties EMAR.DU advanced 1.3%, while Dubai Islamic Bank DISB.DU tacked on nearly a percent.

Financial stocks boosted the Abu Dhabi index .ADI, which gained 0.7%. First Abu Dhabi Bank FAB.AD and Abu Dhabi Commercial Bank ADCB.AD tacked on 1.5% and 1.4%, respectively.

In Qatar, the index .QSI edged up 0.1%, with Commercial Bank COMB.QA leading the gains, trading 1.6% higher.