Goldman Sachs says commodities poised for bull market | Reuters
Goldman Sachs on Wednesday maintained its ‘overweight’ recommendations for commodities in 2021, reasoning the sector was possibly the best hedge against likely inflation and poised for another bull market.
The bank forecast a return of about 27% over a 12-month period on the S&P/Goldman Sachs Commodity Index (GSCI), with a 19.2% return for precious metals, 40.1% for energy, 3% for industrial metals and a negative 1% return on agriculture.
The bank maintained its 3, 6 and 12 month targets for gold and silver at $2,300 and $30 an ounce respectively, as it believes near-term inflation has further room to run, while an increase in solar installations supports silver demand.
“In metals, we have seen a sharp drop in maintenance capex and supply disruptions dragging into 2021. This suggests that, even if demand falters in coming weeks as winter exacerbates COVID, markets will likely continue to rebalance, barring an outright collapse in demand,” Goldman Sachs said in a note.
The bank said base metals and agriculture had more near-term upside than oil on recovering demand from China.
Last week, Goldman cut its 2021 Brent crude price forecast but said a surge in COVID-19 cases in Europe and the United States only represented a “speed bump” before a potential vaccine and continued supply cuts by top producers tightened market fundamentals.
Wednesday 18 November 2020
Oil gains 1% on potential OPEC+ rethink and vaccine hopes | Reuters
Oil gains 1% on potential OPEC+ rethink and vaccine hopes | Reuters
Oil prices firmed by about 1% on Wednesday on hopes OPEC and its allies will delay a planned increase in oil output and after Pfizer said its COVID-19 vaccine was more effective than previously reported.
The market was also supported by a smaller-than-expected increase in U.S. crude stockpiles last week.
Brent crude LCOc1 rose 59 cents, or 1.4%, to settle at $44.34 a barrel while U.S. West Texas Intermediate crude CLc1 gained 39 cents, or 0.9%, to end the session at $41.82.
Both contracts jumped by about $1 after Pfizer Inc PFE.N said that final results from late-stage trial of its vaccine showed it was 95% effective. Last week it had put the efficacy at more than 90%.
Moderna Inc MRNA.O on Monday said that preliminary data for its vaccine also showed it was almost 95% effective.
Oil prices firmed by about 1% on Wednesday on hopes OPEC and its allies will delay a planned increase in oil output and after Pfizer said its COVID-19 vaccine was more effective than previously reported.
The market was also supported by a smaller-than-expected increase in U.S. crude stockpiles last week.
Brent crude LCOc1 rose 59 cents, or 1.4%, to settle at $44.34 a barrel while U.S. West Texas Intermediate crude CLc1 gained 39 cents, or 0.9%, to end the session at $41.82.
Both contracts jumped by about $1 after Pfizer Inc PFE.N said that final results from late-stage trial of its vaccine showed it was 95% effective. Last week it had put the efficacy at more than 90%.
Moderna Inc MRNA.O on Monday said that preliminary data for its vaccine also showed it was almost 95% effective.
#UAE e-scooter start-up backed by Israeli venture capitalist - The National
UAE e-scooter start-up backed by Israeli venture capitalist - The National
A new UAE-based micro-mobility business has landed $3.8 million in seed funding from an Israeli venture capitalist.
Fenix, founded by former directors of e-scooter firm Circ Jaideep Dhanoa and IQ Sayed, will soon begin operations in Abu Dhabi. It is being backed by Maniv Mobility in what is the first venture investment into a UAE company by an Israel-based VC.
“As a result of the new friendship that has emerged since normalisation between the UAE and Israel, we were grateful to meet the team at Maniv Mobility and now benefit from working with some of the most talented and experienced global investors and tech entrepreneurs in the mobility space," Mr Dhanoa said. "We hope this investment is just the start of a cross-pollination of talent, capital and innovation between the nations that can only be an accelerant in the development of a true Middle Eastern tech ecosystem.”
Mr Dhanoa and Mr Sayed first met while working at Dubai-based Careem, where Mr Sayed worked in engineering and Mr Dhanoa was part of its strategy team. Mr Dhanoa subsequently worked at Singapore-based mobility firm Grab and Mr Sayed at Lyft's Autonomous Driving team in Munich, but the pair reunited as co-founders at Circ – a Berlin-based e-scooter hire firm that also operated in the UAE. Circ was acquired by US-based competitor Bird in January.
The shared micro-mobility market – offering e-scooters and electric bikes for hire – is growing rapidly and is expected to be worth between $300 billion and $500bn across the US, Europe and China by 2030, according to CBInsights. Start-ups in the sector have attracted about $5.3bn in funding since 2015, the US-based research firm said in a recent report.
A new UAE-based micro-mobility business has landed $3.8 million in seed funding from an Israeli venture capitalist.
Fenix, founded by former directors of e-scooter firm Circ Jaideep Dhanoa and IQ Sayed, will soon begin operations in Abu Dhabi. It is being backed by Maniv Mobility in what is the first venture investment into a UAE company by an Israel-based VC.
“As a result of the new friendship that has emerged since normalisation between the UAE and Israel, we were grateful to meet the team at Maniv Mobility and now benefit from working with some of the most talented and experienced global investors and tech entrepreneurs in the mobility space," Mr Dhanoa said. "We hope this investment is just the start of a cross-pollination of talent, capital and innovation between the nations that can only be an accelerant in the development of a true Middle Eastern tech ecosystem.”
Mr Dhanoa and Mr Sayed first met while working at Dubai-based Careem, where Mr Sayed worked in engineering and Mr Dhanoa was part of its strategy team. Mr Dhanoa subsequently worked at Singapore-based mobility firm Grab and Mr Sayed at Lyft's Autonomous Driving team in Munich, but the pair reunited as co-founders at Circ – a Berlin-based e-scooter hire firm that also operated in the UAE. Circ was acquired by US-based competitor Bird in January.
The shared micro-mobility market – offering e-scooters and electric bikes for hire – is growing rapidly and is expected to be worth between $300 billion and $500bn across the US, Europe and China by 2030, according to CBInsights. Start-ups in the sector have attracted about $5.3bn in funding since 2015, the US-based research firm said in a recent report.
#Saudi, #Dubai shares gain; #AbuDhabi declines | Reuters
Saudi, Dubai shares gain; Abu Dhabi declines | Reuters
Saudi shares reversed course to end sharply higher on Wednesday as further positive news on COVID-19 vaccine development cheered investors, while the Abu Dhabi market posted losses on a day when most major Gulf markets logged gains.
U.S. drugmaker Pfizer Inc PFE.N said final results from the late-stage trial of its COVID-19 vaccine showed it was 95% effective, adding it had the required two months of safety data and would apply for emergency U.S. authorization within days.
Moderna Inc MRNA.O too came out with encouraging news earlier in the week on the effectiveness of its vaccine against the infection, boosting hopes of a faster-than-expected global economic recovery.
By the time Pfizer’s latest update was released, most Gulf markets including Dubai and Abu Dhabi had closed trading for the day.
Oil prices, a crucial factor for the region’s economies, firmed as hopes that producer group OPEC and its allies will delay a planned increase in oil output offset a bigger than expected build in U.S. crude inventories. [O/R]
Saudi Arabia's benchmark index .TASI added 0.6%, with lenders National Commercial Bank 1180.SE and Al-Rajhi Bank 1120.SE gaining 2% and 0.7 respectively.
Dubai's main share index .DFMGI added about 0.3%, with Dubai Islamic Bank DISB.DU and Dubai Investments DINV.DU leading gains, putting on 0.9% and 1.7% respectively.
However, the Abu Dhabi index .ADI logged losses for the first time in eight sessions, finishing 0.2% lower.
Telecom major Etisalat ETISALAT.AD was the top loser in the blue-chip index, shedding 0.7%, while major lender First Abu Dhabi Bank FAB.AD ended the session 0.3% down.
In Qatar, the index .QSI bounced back from the previous session's losses to gain about 0.4%.
Qatar National Bank QNBK.QA gained 0.7% while another finance stock, Qatar Insurance Co QINS.QA, tacked on 2.5%.
Saudi shares reversed course to end sharply higher on Wednesday as further positive news on COVID-19 vaccine development cheered investors, while the Abu Dhabi market posted losses on a day when most major Gulf markets logged gains.
U.S. drugmaker Pfizer Inc PFE.N said final results from the late-stage trial of its COVID-19 vaccine showed it was 95% effective, adding it had the required two months of safety data and would apply for emergency U.S. authorization within days.
Moderna Inc MRNA.O too came out with encouraging news earlier in the week on the effectiveness of its vaccine against the infection, boosting hopes of a faster-than-expected global economic recovery.
By the time Pfizer’s latest update was released, most Gulf markets including Dubai and Abu Dhabi had closed trading for the day.
Oil prices, a crucial factor for the region’s economies, firmed as hopes that producer group OPEC and its allies will delay a planned increase in oil output offset a bigger than expected build in U.S. crude inventories. [O/R]
Saudi Arabia's benchmark index .TASI added 0.6%, with lenders National Commercial Bank 1180.SE and Al-Rajhi Bank 1120.SE gaining 2% and 0.7 respectively.
Dubai's main share index .DFMGI added about 0.3%, with Dubai Islamic Bank DISB.DU and Dubai Investments DINV.DU leading gains, putting on 0.9% and 1.7% respectively.
However, the Abu Dhabi index .ADI logged losses for the first time in eight sessions, finishing 0.2% lower.
Telecom major Etisalat ETISALAT.AD was the top loser in the blue-chip index, shedding 0.7%, while major lender First Abu Dhabi Bank FAB.AD ended the session 0.3% down.
In Qatar, the index .QSI bounced back from the previous session's losses to gain about 0.4%.
Qatar National Bank QNBK.QA gained 0.7% while another finance stock, Qatar Insurance Co QINS.QA, tacked on 2.5%.
Struggling airline Saudia got $7 billion of state help in 2019-2020: documents | Reuters
Struggling airline Saudia got $7 billion of state help in 2019-2020: documents | Reuters
The government has provided state-owned Saudi Arabian Airlines (Saudia) with at least $7 billion in direct payments and other financial support in 2019 and 2020, company documents show, as the carrier struggles with losses and the coronavirus pandemic.
The finance ministry approved a payment of 13.6 billion riyals ($3.6 billion) for Saudia in 2019, and a further 6.4 billion riyals in the first half of this year, according to the documents reviewed by Reuters.
Saudia has struggled for years and the pandemic, which has brought global aviation to its knees, has added more pressure on its finances.
The amounts, labelled as “government compensation”, include government payments for services.
The ministry has also taken charge of a 5.3 billion riyals loan provided by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), to the airline, and converted it to a “contribution in equity”, according to the documents.
The government has provided state-owned Saudi Arabian Airlines (Saudia) with at least $7 billion in direct payments and other financial support in 2019 and 2020, company documents show, as the carrier struggles with losses and the coronavirus pandemic.
The finance ministry approved a payment of 13.6 billion riyals ($3.6 billion) for Saudia in 2019, and a further 6.4 billion riyals in the first half of this year, according to the documents reviewed by Reuters.
Saudia has struggled for years and the pandemic, which has brought global aviation to its knees, has added more pressure on its finances.
The amounts, labelled as “government compensation”, include government payments for services.
The ministry has also taken charge of a 5.3 billion riyals loan provided by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), to the airline, and converted it to a “contribution in equity”, according to the documents.
Sovereign wealth funds rotate from U.S. stocks to bonds | Reuters
Sovereign wealth funds rotate from U.S. stocks to bonds | Reuters
Sovereign wealth funds pulled $4.1 billion from United States stocks in the third quarter, while adding to their U.S. bond holdings by the most in at least three years, data showed on Wednesday.
Around $4.5 billion was sucked into U.S. fixed income, with the bulk into short-duration instruments, according to the eVestment data on strategies managed by third-party fund managers.
The activity came ahead of the U.S. presidential election in November, which sparked volatility on Wall Street in the week prior to the vote as investors worried about the possibility of a contested outcome and as coronavirus cases soared globally.
The exodus from U.S. stocks, the most in at least three years, was likely not driven by the need for cash for governments at home, said Elliot Hentov, head of policy research at State Street Global Advisors, noting that recent debt issuance by sovereign funds’ governments was up massively and that they had a decent cash pile ahead of the coronavirus crisis.
“The U.S. election may partially have been a driver and expectations of an eventual non-U.S. recovery picking up, as well as the fact that markets had recovered a lot by Q3 and, if well timed, it was an opportune moment to sell,” Hentov said.
Sovereign wealth funds pulled $4.1 billion from United States stocks in the third quarter, while adding to their U.S. bond holdings by the most in at least three years, data showed on Wednesday.
Around $4.5 billion was sucked into U.S. fixed income, with the bulk into short-duration instruments, according to the eVestment data on strategies managed by third-party fund managers.
The activity came ahead of the U.S. presidential election in November, which sparked volatility on Wall Street in the week prior to the vote as investors worried about the possibility of a contested outcome and as coronavirus cases soared globally.
The exodus from U.S. stocks, the most in at least three years, was likely not driven by the need for cash for governments at home, said Elliot Hentov, head of policy research at State Street Global Advisors, noting that recent debt issuance by sovereign funds’ governments was up massively and that they had a decent cash pile ahead of the coronavirus crisis.
“The U.S. election may partially have been a driver and expectations of an eventual non-U.S. recovery picking up, as well as the fact that markets had recovered a lot by Q3 and, if well timed, it was an opportune moment to sell,” Hentov said.
#SaudiArabia News: Oil Giant Aims Next to Be Largest Hydrogen Exporter - Bloomberg
Saudi Arabia News: Oil Giant Aims Next to Be Largest Hydrogen Exporter - Bloomberg
The world’s biggest oil exporter has set its sights on also becoming the largest supplier of hydrogen, a fuel seen as pivotal for curbing climate change.
Saudi Arabia has “ambitious” plans and “will not be challenged in its record of being the biggest exporter of hydrogen on earth,” Energy Minister Prince Abdulaziz bin Salman said at a news briefing in Riyadh.
The kingdom’s large natural gas reserves enable it to produce blue hydrogen, he said, referring to a form of the fuel that’s made when gas is reformed in a process that captures the carbon dioxide byproduct. In September, the country shipped the world’s first cargo of blue hydrogen, which was converted into ammonia.
The kingdom also plans to generate hydrogen from solar power -- so-called green hydrogen -- at a $5 billion facility in Neom, a futuristic city being built on the Red Sea, starting in 2025.
By adding hydrogen to the crude oil it already produces and sells, Saudi Arabia hopes to preserve its role as an important energy supplier, including to countries shifting away from pollution-emitting fossil fuels.
Yet, hydrogen requires plenty of energy to produce, making it expensive, and is also difficult to transport. Green hydrogen costs between 3.50 euros ($4.15) and 5.00 euros per kilogram, according to the International Energy Agency. That compares with around 1.5 euros for the conventional, dirtier process that produces so-called grey or brown hydrogen. The cost of producing blue hydrogen lies in between these two.
The world’s biggest oil exporter has set its sights on also becoming the largest supplier of hydrogen, a fuel seen as pivotal for curbing climate change.
Saudi Arabia has “ambitious” plans and “will not be challenged in its record of being the biggest exporter of hydrogen on earth,” Energy Minister Prince Abdulaziz bin Salman said at a news briefing in Riyadh.
The kingdom’s large natural gas reserves enable it to produce blue hydrogen, he said, referring to a form of the fuel that’s made when gas is reformed in a process that captures the carbon dioxide byproduct. In September, the country shipped the world’s first cargo of blue hydrogen, which was converted into ammonia.
The kingdom also plans to generate hydrogen from solar power -- so-called green hydrogen -- at a $5 billion facility in Neom, a futuristic city being built on the Red Sea, starting in 2025.
By adding hydrogen to the crude oil it already produces and sells, Saudi Arabia hopes to preserve its role as an important energy supplier, including to countries shifting away from pollution-emitting fossil fuels.
Yet, hydrogen requires plenty of energy to produce, making it expensive, and is also difficult to transport. Green hydrogen costs between 3.50 euros ($4.15) and 5.00 euros per kilogram, according to the International Energy Agency. That compares with around 1.5 euros for the conventional, dirtier process that produces so-called grey or brown hydrogen. The cost of producing blue hydrogen lies in between these two.
#Israel, #AbuDhabi markets regulators agree to cooperate on FinTech | Reuters
Israel, Abu Dhabi markets regulators agree to cooperate on FinTech | Reuters
The securities regulators of Israel and Abu Dhabi said on Wednesday they would cooperate in innovation and financial technologies, the latest collaboration after Israel and the United Arab Emirates agreed to normalise relations in September.
Under the memorandum of understanding, the Israel Securities Authority (ISA) and Abu Dhabi Global Market Financial Services Regulatory Authority (ADGM FSRA) said they would undertake initiatives to promote economic growth in financial services by adopting new technology and strengthening their respective FinTech sectors.
They also said the partnership would seek to achieve greater connectivity and market access for start-ups and investment between the two countries and promote the development of technologies, such as digital payments and blockchain, which are key elements for the growth of the FinTech sector.
The two regulators will consider cooperating in joint projects for companies and entrepreneurs involved in technology in fields such as artificial intelligence (AI), solar energy, automotive innovation, smart cities, water utilisation, desert agriculture, cyber and others, they said.
The securities regulators of Israel and Abu Dhabi said on Wednesday they would cooperate in innovation and financial technologies, the latest collaboration after Israel and the United Arab Emirates agreed to normalise relations in September.
Under the memorandum of understanding, the Israel Securities Authority (ISA) and Abu Dhabi Global Market Financial Services Regulatory Authority (ADGM FSRA) said they would undertake initiatives to promote economic growth in financial services by adopting new technology and strengthening their respective FinTech sectors.
They also said the partnership would seek to achieve greater connectivity and market access for start-ups and investment between the two countries and promote the development of technologies, such as digital payments and blockchain, which are key elements for the growth of the FinTech sector.
The two regulators will consider cooperating in joint projects for companies and entrepreneurs involved in technology in fields such as artificial intelligence (AI), solar energy, automotive innovation, smart cities, water utilisation, desert agriculture, cyber and others, they said.
#AbuDhabi's ADQ eyes around $1 billion loan to back Louis Dreyfus deal: sources | Reuters
Abu Dhabi's ADQ eyes around $1 billion loan to back Louis Dreyfus deal: sources | Reuters
Abu Dhabi state-owned ADQ is in talks with banks for a loan of about $1 billion that would back its acquisition of a 45% stake in commodities trader Louis Dreyfus Co (LDC), three sources said.
ADQ said last week it had signed an agreement to acquire an indirect 45% equity stake in LDC, in what would be the first outside investment in the family-owned commodity merchant’s 169-year-old history.
ADQ has been in talks with a group of lenders including Abu Dhabi and European banks for a loan of up to around $1 billion to back the proposed acquisition, two of the sources said.
Discussions have revolved around the structure of the financing, with the company initially looking to raise the loan on a non-recourse basis, said the two sources.
Abu Dhabi state-owned ADQ is in talks with banks for a loan of about $1 billion that would back its acquisition of a 45% stake in commodities trader Louis Dreyfus Co (LDC), three sources said.
ADQ said last week it had signed an agreement to acquire an indirect 45% equity stake in LDC, in what would be the first outside investment in the family-owned commodity merchant’s 169-year-old history.
ADQ has been in talks with a group of lenders including Abu Dhabi and European banks for a loan of up to around $1 billion to back the proposed acquisition, two of the sources said.
Discussions have revolved around the structure of the financing, with the company initially looking to raise the loan on a non-recourse basis, said the two sources.
G20 nearing IMF funding boost for poorer nations, says #Saudi minister | Financial Times
G20 nearing IMF funding boost for poorer nations, says Saudi minister | Financial Times
The world’s richest countries are edging towards a consensus on unlocking additional IMF funds for poorer nations whose economies have been battered by the coronavirus crisis, according to a leading G20 official.
Mohammed al-Jadaan, the finance minister of Saudi Arabia, which holds the G20 presidency this year, told the Financial Times that he was “optimistic” that the group of nations and the IMF could agree on a new allocation of the fund’s special drawing rights — or SDRs — “soon”.
SDRs are an international reserve asset allocated to IMF members in proportion to their share of the global economy; they can be used to provide cash injections to countries with diminishing foreign exchange reserves.
During the 2008 financial crisis the IMF issued $270bn in SDRs in a bid to help boost countries’ financial resilience. The question of whether it should make a similar move in response to the economic consequences of the pandemic has been a hotly-debated topic as the coronavirus outbreak and global recession have hit low-income countries, which are struggling with high debts and plummeting revenues.
Column: Vaccine trials temper hedge funds' oil pessimism | Reuters
Column: Vaccine trials temper hedge funds' oil pessimism | Reuters
Hedge funds raced to buy back short positions in crude and products last week after Pfizer’s announcement of a successful coronavirus vaccine trial prompted hope for a recovery in consumption next year.
Fund managers purchased the equivalent of 114 million barrels in the six most important petroleum futures and options contracts in the week to Nov. 10, position records from regulators and exchanges showed.
Purchases were at the fastest rate since the middle of April, when Saudi Arabia and Russia agreed to end their volume war, causing funds to buy 122 million barrels (tmsnrt.rs/3f8LIJE).
For the most part, portfolio managers last week purchased crude and products to close out previous bearish short positions (+89 million barrels) rather than initiating new bullish long positions (+25 million).
Buying was broadly spread across Brent (+36 million barrels), NYMEX and ICE WTI (+23 million), U.S. gasoline (+18 million), U.S. diesel (+15 million) and European gasoil (+22 million).
Hedge funds raced to buy back short positions in crude and products last week after Pfizer’s announcement of a successful coronavirus vaccine trial prompted hope for a recovery in consumption next year.
Fund managers purchased the equivalent of 114 million barrels in the six most important petroleum futures and options contracts in the week to Nov. 10, position records from regulators and exchanges showed.
Purchases were at the fastest rate since the middle of April, when Saudi Arabia and Russia agreed to end their volume war, causing funds to buy 122 million barrels (tmsnrt.rs/3f8LIJE).
For the most part, portfolio managers last week purchased crude and products to close out previous bearish short positions (+89 million barrels) rather than initiating new bullish long positions (+25 million).
Buying was broadly spread across Brent (+36 million barrels), NYMEX and ICE WTI (+23 million), U.S. gasoline (+18 million), U.S. diesel (+15 million) and European gasoil (+22 million).
Aramco Can Do Whatever It Likes With Money Raised From Bond Sale - Bloomberg
Aramco Can Do Whatever It Likes With Money Raised From Bond Sale - Bloomberg
Is it wise to lend money to a company that’s simply going to use it to pay its equity holders a fat dividend? If it’s one of the world’s largest and most profitable businesses, the answer is probably yes.
Saudi Aramco is making its second big foray into the international bond markets with a bumper slab of five new bonds, ranging from three to 50 years in maturity. Expectations are that the giant oil producer will only raise about $6 billion, half the size of its hugely oversubscribed inaugural debt offering in April 2019. (My colleagues at Bloomberg Intelligence think a follow-up sale may be needed.)
It will pay a slight premium to investors compared with what they get for the bonds of its majority owner, the Kingdom of Saudi Arabia. Last year Aramco debt priced at the same level as the sovereign. Regardless, it’s showing the market it can raise money easily.
Is it wise to lend money to a company that’s simply going to use it to pay its equity holders a fat dividend? If it’s one of the world’s largest and most profitable businesses, the answer is probably yes.
Saudi Aramco is making its second big foray into the international bond markets with a bumper slab of five new bonds, ranging from three to 50 years in maturity. Expectations are that the giant oil producer will only raise about $6 billion, half the size of its hugely oversubscribed inaugural debt offering in April 2019. (My colleagues at Bloomberg Intelligence think a follow-up sale may be needed.)
It will pay a slight premium to investors compared with what they get for the bonds of its majority owner, the Kingdom of Saudi Arabia. Last year Aramco debt priced at the same level as the sovereign. Regardless, it’s showing the market it can raise money easily.
World’s Biggest Oil Firm #Saudi Aramco Raises $8 Billion Bond - Bloomberg
World’s Biggest Oil Firm Saudi Aramco Raises $8 Billion Bond - Bloomberg
Saudi Aramco returned to the debt markets for the first time since April of last year, selling $8 billion of bonds to help fund the world’s biggest dividend.
The state oil and gas firm issued the debt on Tuesday after slumping crude prices caused profit to fall by 45% in the third quarter. That’s left it unable to generate enough cash to fund shareholder payouts it’s promised will reach $75 billion this year. Almost all of those will go to the Saudi Arabian government, which needs the money to plug a widening budget deficit and prop up a slumping economy.
Aramco’s deal was the largest from a company in emerging markets this year, according to data compiled by Bloomberg. The firm sold tranches maturing in three, five, 10, 30 and 50 years. Investors placed more than $50 billion of orders, according to people with knowledge of the matter. Pricing ranged from 1.32% for the shortest notes to 3.65% for the 50-year portion. The spreads over U.S. Treasures were between 110 basis points and roughly 200.
Benchmark Brent oil has dropped almost 35% this year to around $44 a barrel, with the coronavirus pandemic and lockdowns sapping demand for energy. Still, yields in the developed world are so low that investors have rushed to buy highly-rated emerging-market assets, including those of Aramco, the world’s biggest oil company. The yield on the firm’s $3 billion of bonds due in 2029 has dropped to 2.11% from 3.04% at the start of 2020. That’s only slightly higher than the rates on the Saudi government’s equivalent bonds.
Saudi Aramco returned to the debt markets for the first time since April of last year, selling $8 billion of bonds to help fund the world’s biggest dividend.
The state oil and gas firm issued the debt on Tuesday after slumping crude prices caused profit to fall by 45% in the third quarter. That’s left it unable to generate enough cash to fund shareholder payouts it’s promised will reach $75 billion this year. Almost all of those will go to the Saudi Arabian government, which needs the money to plug a widening budget deficit and prop up a slumping economy.
Aramco’s deal was the largest from a company in emerging markets this year, according to data compiled by Bloomberg. The firm sold tranches maturing in three, five, 10, 30 and 50 years. Investors placed more than $50 billion of orders, according to people with knowledge of the matter. Pricing ranged from 1.32% for the shortest notes to 3.65% for the 50-year portion. The spreads over U.S. Treasures were between 110 basis points and roughly 200.
Benchmark Brent oil has dropped almost 35% this year to around $44 a barrel, with the coronavirus pandemic and lockdowns sapping demand for energy. Still, yields in the developed world are so low that investors have rushed to buy highly-rated emerging-market assets, including those of Aramco, the world’s biggest oil company. The yield on the firm’s $3 billion of bonds due in 2029 has dropped to 2.11% from 3.04% at the start of 2020. That’s only slightly higher than the rates on the Saudi government’s equivalent bonds.
#Oman talks to banks about new loan of at least $1 billion: sources | Reuters
Oman talks to banks about new loan of at least $1 billion: sources | Reuters
Oman is discussing a loan of at least $1 billion with a group of banks, sources said, as the oil-producing Gulf state seeks more funding ahead of heavy debt redemptions over the next two years.
Rated below investment grade by all major credit agencies, Oman issued $2 billion in bonds last month in a deal which saw lacklustre demand partly because of investor concerns over the country’s worsening credit trajectory.
It is now in talks with banks for a loan that would refinance $1 billion of existing bank debt due in January, said one of the three sources familiar with the matter. A second source said the new facility could exceed $1 billion.
Oman’s ministry of finance did not immediately respond to a request for comment.
Oman has $1.5 billion in international bonds due in June, in addition to the $1 billion loan due in January, which it took out in 2016 after oil prices plummeted, Refinitiv data showed.
Oman is discussing a loan of at least $1 billion with a group of banks, sources said, as the oil-producing Gulf state seeks more funding ahead of heavy debt redemptions over the next two years.
Rated below investment grade by all major credit agencies, Oman issued $2 billion in bonds last month in a deal which saw lacklustre demand partly because of investor concerns over the country’s worsening credit trajectory.
It is now in talks with banks for a loan that would refinance $1 billion of existing bank debt due in January, said one of the three sources familiar with the matter. A second source said the new facility could exceed $1 billion.
Oman’s ministry of finance did not immediately respond to a request for comment.
Oman has $1.5 billion in international bonds due in June, in addition to the $1 billion loan due in January, which it took out in 2016 after oil prices plummeted, Refinitiv data showed.
2021 to be 'toughest test for banks'; #UAE lenders face weaker profits, asset quality | ZAWYA MENA Edition
2021 to be 'toughest test for banks'; UAE lenders face weaker profits, asset quality | ZAWYA MENA Edition
Next year may be more challenging for banks in the UAE, as their asset quality and profitability are forecast to weaken on the back of continued slowdown in the economy and real estate sector.
Low oil prices, coupled with ongoing mitigating measures, such as the postponement of debt payments, could also result in more bad debts piling up, S&P said in its latest analysis.
“The fall in oil prices and economic slowdown will prompt a rise in problem loans and the cost of risk, at a time when the real estate sector was already under significant stress,” the ratings agency said in a report.
“Because of ongoing regulatory forbearance measures, we anticipate that non-performing loans will reach a peak in 2021,” it added.
The picture is no different in other markets. The ratings agency has predicted a more difficult year ahead for banks around the world, citing that 2021 “could turn out to be the toughest test” for lenders since the aftermath of the 2009 global financial crisis.
Next year may be more challenging for banks in the UAE, as their asset quality and profitability are forecast to weaken on the back of continued slowdown in the economy and real estate sector.
Low oil prices, coupled with ongoing mitigating measures, such as the postponement of debt payments, could also result in more bad debts piling up, S&P said in its latest analysis.
“The fall in oil prices and economic slowdown will prompt a rise in problem loans and the cost of risk, at a time when the real estate sector was already under significant stress,” the ratings agency said in a report.
“Because of ongoing regulatory forbearance measures, we anticipate that non-performing loans will reach a peak in 2021,” it added.
The picture is no different in other markets. The ratings agency has predicted a more difficult year ahead for banks around the world, citing that 2021 “could turn out to be the toughest test” for lenders since the aftermath of the 2009 global financial crisis.
Oil rises on hopes for delay in OPEC+ supply increase | Reuters
Oil rises on hopes for delay in OPEC+ supply increase | Reuters
Oil prices edged higher on Wednesday as hopes that OPEC and its allies will delay a planned rise in oil output offset demand fears stoked by a bigger-than-expected build in U.S. crude stocks and weaker U.S. retail sales.
Brent crude futures for January LCOc1 rose 22 cents, or 0.5%, to $43.97 a barrel by 0733 GMT, while U.S. West Texas Intermediate crude for December CLc1 climbed 6 cents, or 0.1%, to $41.49 a barrel.
To tackle weaker energy demand amid a new wave of the COVID-19 pandemic, Saudi Arabia called on fellow members of the OPEC+ grouping - OPEC and other producers including Russia - to be flexible in responding to oil market needs as it builds the case for a tighter production policy in 2021.
“Hopes that OPEC+ will keep existing cuts further into 2021, or even increase the cuts, underpinned prices,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Oil prices edged higher on Wednesday as hopes that OPEC and its allies will delay a planned rise in oil output offset demand fears stoked by a bigger-than-expected build in U.S. crude stocks and weaker U.S. retail sales.
Brent crude futures for January LCOc1 rose 22 cents, or 0.5%, to $43.97 a barrel by 0733 GMT, while U.S. West Texas Intermediate crude for December CLc1 climbed 6 cents, or 0.1%, to $41.49 a barrel.
To tackle weaker energy demand amid a new wave of the COVID-19 pandemic, Saudi Arabia called on fellow members of the OPEC+ grouping - OPEC and other producers including Russia - to be flexible in responding to oil market needs as it builds the case for a tighter production policy in 2021.
“Hopes that OPEC+ will keep existing cuts further into 2021, or even increase the cuts, underpinned prices,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Most Gulf markets decline; #Dubai gains | Reuters
Most Gulf markets decline; Dubai gains | Reuters
Most major Gulf shares struggled for momentum on Wednesday as euphoria in the markets over positive news on COVID-19 vaccine development fizzled out after a string of gaining sessions, while Dubai bucked the trend in morning trade.
Two U.S. drugmakers - Pfizer Inc PFE.N and Moderna Inc MRNA.O - within a gap of a week came out with encouraging news on the effectiveness of the vaccine against the pandemic, boosting hopes of a faster-than-expected global economic recovery.
Oil prices, a crucial impact factor for the financial markets in the region, were mixed as a bigger-than-expected build in U.S. crude stocks and weaker U.S. retail sales stoked fears over fuel demand, although hopes that OPEC and its allies will delay a planned rise in oil output lent support. [O/R]
Saudi Arabia's benchmark index .TASI retreated 0.2%, with lender and index heavyweight Al-Rajhi Bank 1120.SE and Samba Financial Group 1090.SE declining 0.4% and about 1.5%, respectively.
Saudi Arabia called on fellow OPEC+ members on Tuesday to be flexible in responding to oil market needs as it builds the case for a tighter oil production policy in 2021 to tackle weaker demand amid a new wave of the coronavirus pandemic.
Dubai's main share index .DFMGI added about 0.6%, with Dubai Islamic Bank DISB.DU and Emaar Properties EMAR.DU leading the gains, putting on 1.4% and 1.7%, respectively.
The Abu Dhabi index .ADI, which has gained for seven straight sessions, traded 0.2% lower.
Losses in financial stocks dragged the benchmark, with lenders First Abu Dhabi Bank FAB.AD and Abu Dhabi Islamic Bank ADIB.AD falling 0.6% and 1%, respectively.
Elsewhere, in Qatar, the index .QSI fell 0.6%, with Qatar Commercial Bank COMB.QA dragging the benchmark with a 2.4% fall.
Most major Gulf shares struggled for momentum on Wednesday as euphoria in the markets over positive news on COVID-19 vaccine development fizzled out after a string of gaining sessions, while Dubai bucked the trend in morning trade.
Two U.S. drugmakers - Pfizer Inc PFE.N and Moderna Inc MRNA.O - within a gap of a week came out with encouraging news on the effectiveness of the vaccine against the pandemic, boosting hopes of a faster-than-expected global economic recovery.
Oil prices, a crucial impact factor for the financial markets in the region, were mixed as a bigger-than-expected build in U.S. crude stocks and weaker U.S. retail sales stoked fears over fuel demand, although hopes that OPEC and its allies will delay a planned rise in oil output lent support. [O/R]
Saudi Arabia's benchmark index .TASI retreated 0.2%, with lender and index heavyweight Al-Rajhi Bank 1120.SE and Samba Financial Group 1090.SE declining 0.4% and about 1.5%, respectively.
Saudi Arabia called on fellow OPEC+ members on Tuesday to be flexible in responding to oil market needs as it builds the case for a tighter oil production policy in 2021 to tackle weaker demand amid a new wave of the coronavirus pandemic.
Dubai's main share index .DFMGI added about 0.6%, with Dubai Islamic Bank DISB.DU and Emaar Properties EMAR.DU leading the gains, putting on 1.4% and 1.7%, respectively.
The Abu Dhabi index .ADI, which has gained for seven straight sessions, traded 0.2% lower.
Losses in financial stocks dragged the benchmark, with lenders First Abu Dhabi Bank FAB.AD and Abu Dhabi Islamic Bank ADIB.AD falling 0.6% and 1%, respectively.
Elsewhere, in Qatar, the index .QSI fell 0.6%, with Qatar Commercial Bank COMB.QA dragging the benchmark with a 2.4% fall.
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