Oil prices steady as virus deaths rise, demand worries persist | Reuters
Oil prices were little changed on Tuesday as coronavirus deaths globally continued to rise and weighed on the demand outlook, but losses were capped by reports of a blast in Saudi Arabia.
Brent crude ended the session up 3 cents, or 0.05%, at $55.91 while U.S. crude fell 16 cents, or 0.3%, to settle at $52.61.
Indonesia, the world’s fourth-most-populous country, surpassed a million confirmed coronavirus cases on Tuesday while the death toll in Britain passed 100,000 people as the government battled to speed up vaccination delivery and keep variants of the virus at bay.
The number of cases in the United States crossed 25 million on Sunday, a Reuters tally showed.
Further dampening bullish sentiment, U.S. Democrats are still trying to convince Republican lawmakers of the need for more stimulus, raising questions over when and in what form a package will be approved.
Tuesday 26 January 2021
#Israel's Airobotics eyes Tel Aviv IPO, drone deal in #Dubai | Reuters
Israel's Airobotics eyes Tel Aviv IPO, drone deal in Dubai | Reuters
Israeli drone technology firm Airobotics is preparing for an initial public offering (IPO) in Tel Aviv this year and is also close to clinching deals in the United Arab Emirates (UAE), chief executive officer Ran Krauss said on Tuesday.
He declined to give specifics, citing regulatory issues.
“We are starting the process and we’re about to submit the (prospectus) to Tel Aviv Stock Exchange in the coming months,” he told Reuters.
A source close to the matter said Airobotics -- which has raised $120 million in private funding -- plans to raise $50 million through the IPO, based on a pre-float valuation of around $240 million. The source said the company was planning for an April listing after the prospectus is published in two weeks time.
Krauss, speaking virtually from Dubai, said Airobotics was engaged with a number of entities in the city and would “shortly” sign a first contract there for its smart city and other drone technology.
Israeli drone technology firm Airobotics is preparing for an initial public offering (IPO) in Tel Aviv this year and is also close to clinching deals in the United Arab Emirates (UAE), chief executive officer Ran Krauss said on Tuesday.
He declined to give specifics, citing regulatory issues.
“We are starting the process and we’re about to submit the (prospectus) to Tel Aviv Stock Exchange in the coming months,” he told Reuters.
A source close to the matter said Airobotics -- which has raised $120 million in private funding -- plans to raise $50 million through the IPO, based on a pre-float valuation of around $240 million. The source said the company was planning for an April listing after the prospectus is published in two weeks time.
Krauss, speaking virtually from Dubai, said Airobotics was engaged with a number of entities in the city and would “shortly” sign a first contract there for its smart city and other drone technology.
#Saudi Aramco may sell more shares if market is right - PIF | Reuters
Saudi Aramco may sell more shares if market is right - PIF | Reuters
Saudi Aramco may consider selling more shares if market conditions are right, the head of Saudi Arabia’s sovereign wealth fund told a news briefing on Tuesday.
The Saudi government sold more than 1.7% of Aramco in a 2019 initial public offering that raised a record $29.4 billion, triggering more IPOs in the kingdom, which is also seeking to deepen its capital markets to reduce its reliance on oil.
Yasir al-Rumayyan, who is governor of Saudi Arabia’s Public Investment Fund (PIF), made the comments during a media briefing to give details on the PIF’s five-year plan.
The PIF, whose holdings include a stake in Uber, plans to double its assets to 4 trillion riyals ($1.07 trillion) by 2025, Prince Mohammed bin Salman said on Sunday, making it one of the world’s biggest sovereign wealth funds.
Initially the government had wanted to list Aramco on the Saudi bourse and an international stock exchange, but an overseas listing plan was shelved.
Saudi Aramco may consider selling more shares if market conditions are right, the head of Saudi Arabia’s sovereign wealth fund told a news briefing on Tuesday.
The Saudi government sold more than 1.7% of Aramco in a 2019 initial public offering that raised a record $29.4 billion, triggering more IPOs in the kingdom, which is also seeking to deepen its capital markets to reduce its reliance on oil.
Yasir al-Rumayyan, who is governor of Saudi Arabia’s Public Investment Fund (PIF), made the comments during a media briefing to give details on the PIF’s five-year plan.
The PIF, whose holdings include a stake in Uber, plans to double its assets to 4 trillion riyals ($1.07 trillion) by 2025, Prince Mohammed bin Salman said on Sunday, making it one of the world’s biggest sovereign wealth funds.
Initially the government had wanted to list Aramco on the Saudi bourse and an international stock exchange, but an overseas listing plan was shelved.
MIDEAST STOCKS-Most Gulf markets ease in line with Asian stocks | Nasdaq
MIDEAST STOCKS-Most Gulf markets ease in line with Asian stocks | Nasdaq
Most Gulf markets ended lower on Tuesday, mirroring Asian shares, as concerns about potential roadblocks to new U.S. President Joe Biden's planned $1.9 trillion stimulus weighed on investor sentiment.
Saudi Arabia's benchmark index .TASI lost 0.7%, weighed down by a 1% fall in Al Rajhi Bank 1120.SE and a 2.2% decline in the country's largest lender National Commercial Bank 1180.SE.
The Dubai index .DFMGI declined 0.9%, its third loss in four sessions, hit by a 1.8% fall in the blue-chip developer Emaar Properties EMAR.DU and a 1.3% retreat in Emirates NBD Bank ENBD.DU.
Abu Dhabi's benchmark .ADI slipped 0.6%, pressured by a 1.7% drop in the United Arab Emirates' largest lender First Abu Dhabi FAB.AD.
The number of daily coronavirus cases in the UAE, a federation of seven emirates, has tripled in the past month. On Monday authorities registered 3,579 new infections and nine deaths. They do not provide a breakdown per emirate.
Forecasts for economic recoveries in the six-member Gulf Cooperation Council in 2021 have been trimmed while expectations for gross domestic product declines last year were mixed in a quarterly Reuters survey of analysts released on Tuesday.
Elsewhere, the Qatari benchmark .QSI, closed 0.3% down, extending losses for a fourth straight session.
The top decliners included Qatar National Bank QNBK.QA and Qatar Gas Transport Co QGTS.QA, which fell 1% and 1.8%, respectively.
Most Gulf markets ended lower on Tuesday, mirroring Asian shares, as concerns about potential roadblocks to new U.S. President Joe Biden's planned $1.9 trillion stimulus weighed on investor sentiment.
Saudi Arabia's benchmark index .TASI lost 0.7%, weighed down by a 1% fall in Al Rajhi Bank 1120.SE and a 2.2% decline in the country's largest lender National Commercial Bank 1180.SE.
The Dubai index .DFMGI declined 0.9%, its third loss in four sessions, hit by a 1.8% fall in the blue-chip developer Emaar Properties EMAR.DU and a 1.3% retreat in Emirates NBD Bank ENBD.DU.
Abu Dhabi's benchmark .ADI slipped 0.6%, pressured by a 1.7% drop in the United Arab Emirates' largest lender First Abu Dhabi FAB.AD.
The number of daily coronavirus cases in the UAE, a federation of seven emirates, has tripled in the past month. On Monday authorities registered 3,579 new infections and nine deaths. They do not provide a breakdown per emirate.
Forecasts for economic recoveries in the six-member Gulf Cooperation Council in 2021 have been trimmed while expectations for gross domestic product declines last year were mixed in a quarterly Reuters survey of analysts released on Tuesday.
Elsewhere, the Qatari benchmark .QSI, closed 0.3% down, extending losses for a fourth straight session.
The top decliners included Qatar National Bank QNBK.QA and Qatar Gas Transport Co QGTS.QA, which fell 1% and 1.8%, respectively.
#SaudiArabia Targets Deals to Expand Local Manufacturing to Diversify From Oil - Bloomberg
Saudi Arabia Targets Deals to Expand Local Manufacturing to Diversify From Oil - Bloomberg
Saudi Arabia aims to agree on deals this year or next to expand local manufacturing, the head of the kingdom’s wealth fund, Yasir Al-Rumayyan, told a briefing in Riyadh.
“Now we’re in the process of looking at electric appliances,” he said Tuesday. “In relation to cars, there is more than one project that we’re now looking at, and they will be executed this year or next year at the latest.”
Saudi Arabia is trying to become a Middle Eastern hub for manufacturing electric vehicles as it diversifies its economy from oil. Bloomberg reported earlier this month that Lucid Motors Inc. is in talks with the $400 billion Public Investment Fund to build a factory, potentially near the Red Sea city of Jeddah. The PIF, as the fund is known, is already a shareholder in Lucid.
Al-Rumayyan said the PIF is in a “very advanced stage” of negotiating joint ventures as part of a partnership that could ease the path for foreign companies.
“We would open and pave the way for them in dealing with regulations, laws, tax holidays or even off-takes -- either from us or from the government,” he said. “We negotiate a lot of things for them. So it makes perfect sense of those companies to come and really be with us in Saudi Arabia.”
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Yasir Al-Rumayyan said the PIF is in a “very advanced stage” of negotiating joint ventures as part of a partnership that could ease the path for foreign companies. Photographer: Mohammed Al-Nemer/Bloomberg |
“Now we’re in the process of looking at electric appliances,” he said Tuesday. “In relation to cars, there is more than one project that we’re now looking at, and they will be executed this year or next year at the latest.”
Saudi Arabia is trying to become a Middle Eastern hub for manufacturing electric vehicles as it diversifies its economy from oil. Bloomberg reported earlier this month that Lucid Motors Inc. is in talks with the $400 billion Public Investment Fund to build a factory, potentially near the Red Sea city of Jeddah. The PIF, as the fund is known, is already a shareholder in Lucid.
Al-Rumayyan said the PIF is in a “very advanced stage” of negotiating joint ventures as part of a partnership that could ease the path for foreign companies.
“We would open and pave the way for them in dealing with regulations, laws, tax holidays or even off-takes -- either from us or from the government,” he said. “We negotiate a lot of things for them. So it makes perfect sense of those companies to come and really be with us in Saudi Arabia.”
Norway Sovereign Wealth Fund Builds Tool to Fix Investment Errors - Bloomberg
Norway Sovereign Wealth Fund Builds Tool to Fix Investment Errors - Bloomberg
The world’s largest wealth fund is working on a tool it hopes will help its asset managers learn from their mistakes, by simulating the kind of extreme stress they’re otherwise only likely to experience a few times in their lives.
Nicolai Tangen, the chief executive officer of Norway’s $1.3 trillion sovereign investment vehicle, wants to apply methods used in the world of professional sports to help his staff cope better with crises.
The 54-year-old, who started as CEO in September after working as a London-based hedge-fund manager, has already hired a sports psychologist who trains military pilots to assist him in his new role. Tangen says part of the idea is to shape the culture at the fund, so staff never feel tempted to cover up their missteps.
“If you can’t talk about your mistakes in asset management, then you’ve got nothing to do here,” Tangen said in a podcast from the NHH Norwegian School of Economics. “That’s the only way to get better. Now, we’re going to put our mistakes into a system.”
The simulator will, among other things, be fed “hundreds of millions of data points from the various portfolio managers” to find out how they act under stress and how good they are at contrarian investments, Tangen said in comments published on NHH’s website on Jan. 21
The world’s largest wealth fund is working on a tool it hopes will help its asset managers learn from their mistakes, by simulating the kind of extreme stress they’re otherwise only likely to experience a few times in their lives.
Nicolai Tangen, the chief executive officer of Norway’s $1.3 trillion sovereign investment vehicle, wants to apply methods used in the world of professional sports to help his staff cope better with crises.
The 54-year-old, who started as CEO in September after working as a London-based hedge-fund manager, has already hired a sports psychologist who trains military pilots to assist him in his new role. Tangen says part of the idea is to shape the culture at the fund, so staff never feel tempted to cover up their missteps.
“If you can’t talk about your mistakes in asset management, then you’ve got nothing to do here,” Tangen said in a podcast from the NHH Norwegian School of Economics. “That’s the only way to get better. Now, we’re going to put our mistakes into a system.”
The simulator will, among other things, be fed “hundreds of millions of data points from the various portfolio managers” to find out how they act under stress and how good they are at contrarian investments, Tangen said in comments published on NHH’s website on Jan. 21
#SaudiArabia Returns to Dollar-Debt Market to Boost Finances - Bloomberg
Saudi Arabia Returns to Dollar-Debt Market to Boost Finances - Bloomberg
Saudi Arabia launched the sale of a two-part dollar bond as countries in the Gulf Arab region raise cash buffers to weather low oil prices and the coronavirus pandemic.
The world’s largest crude exporter plans to price $5 billion in bonds on Tuesday, according to a person familiar with the matter, who asked not to be named.
The price of Brent crude is still below what most of the region’s economies need to balance their budgets. Saudi Arabia’s dollar bonds have lost 1% since the start of year, making them the worst performer among Gulf Arab peers.
“Coming into January, the entire Saudi curve has underperformed regional and EM peers in anticipation of today’s announcement,” said Angad Rajpal, head of fixed income at Emirates NBD Asset Management in Dubai. “It is a well-liked credit story underpinned by prudent response on public finances with a strong reform momentum.”
Saudi Arabia launched the sale of a two-part dollar bond as countries in the Gulf Arab region raise cash buffers to weather low oil prices and the coronavirus pandemic.
The world’s largest crude exporter plans to price $5 billion in bonds on Tuesday, according to a person familiar with the matter, who asked not to be named.
- The $2.75 billion 12-year notes launched at 130 basis points over 10-year U.S. Treasuries, compared with guidance of 140 basis points and initial price talk of 165 basis points, according to the person familiar
- The $2.25 billion 40-year security launched at 3.45%, versus guidance in the 3.55% area, compared with initial price talk of 3.75%
- The yield on its debt due 2060 was at 3.47% at 1 p.m. in New York
The price of Brent crude is still below what most of the region’s economies need to balance their budgets. Saudi Arabia’s dollar bonds have lost 1% since the start of year, making them the worst performer among Gulf Arab peers.
“Coming into January, the entire Saudi curve has underperformed regional and EM peers in anticipation of today’s announcement,” said Angad Rajpal, head of fixed income at Emirates NBD Asset Management in Dubai. “It is a well-liked credit story underpinned by prudent response on public finances with a strong reform momentum.”
#Saudi economy forecast to grow 2.6% this year - IMF | Reuters
Saudi economy forecast to grow 2.6% this year - IMF | Reuters
Saudi Arabia’s economy will grow 2.6% this year, the International Monetary Fund (IMF) said on Tuesday, after the economy of the world’s top oil exporter shrank last year due to low oil prices and the coronavirus crisis.
Saudi Arabia itself has estimated its economy could swing back to growth of 3.2% this year after a 3.7% contraction in 2020.
The IMF in October had forecast 3.1% growth in 2021 for the country, following a 5.4% contraction last year. The IMF is now predicting 2.6% expansion this year, from a 3.9% contraction last year, it said in its latest World Economic Outlook.
It expects the Saudi economy to expand by 4% next year.
The IMF said that multiple vaccine approvals and the launch of vaccinations in some countries in December had boosted hopes of an eventual end to the pandemic, but warned that the world economy continued to face “exceptional uncertainty”.
Saudi Arabia’s economy will grow 2.6% this year, the International Monetary Fund (IMF) said on Tuesday, after the economy of the world’s top oil exporter shrank last year due to low oil prices and the coronavirus crisis.
Saudi Arabia itself has estimated its economy could swing back to growth of 3.2% this year after a 3.7% contraction in 2020.
The IMF in October had forecast 3.1% growth in 2021 for the country, following a 5.4% contraction last year. The IMF is now predicting 2.6% expansion this year, from a 3.9% contraction last year, it said in its latest World Economic Outlook.
It expects the Saudi economy to expand by 4% next year.
The IMF said that multiple vaccine approvals and the launch of vaccinations in some countries in December had boosted hopes of an eventual end to the pandemic, but warned that the world economy continued to face “exceptional uncertainty”.
Perella Weinberg Bankers Break to Form Newcomer Boutique in Gulf - Bloomberg
Perella Weinberg Bankers Break to Form Newcomer Boutique in Gulf - Bloomberg
Perella Weinberg Partners LP’s Middle East team of bankers left to start its own advisory firm in Dubai to get a slice of the buoyant market for deals and restructurings in the region.
Tarek Anabtawi, until December the head of Perella’s Middle East operations, and Jameel Akhrass, a senior adviser at the New York-based firm, have founded Resonance Capital and started the process of applying for a license. Anabtawi said they will be joined by former Perella colleagues Hesham Sbayteh and Ayman Anwar.
Resonance won’t entirely cut its ties with Perella. The two firms are setting up a strategic partnership that allows the Dubai boutique to work on regional deals as well as on more complex cross-border transactions with the U.S. investment bank.
For Perella, which was founded in 2006 with the backing from wealthy Gulf investors, that means it will retain its access to clients as it pulls out of the region by closing its Abu Dhabi and Dubai offices. Resonance and Perella are currently working on a half-dozen deals, Anabtawi said.
Perella Weinberg Partners LP’s Middle East team of bankers left to start its own advisory firm in Dubai to get a slice of the buoyant market for deals and restructurings in the region.
Tarek Anabtawi, until December the head of Perella’s Middle East operations, and Jameel Akhrass, a senior adviser at the New York-based firm, have founded Resonance Capital and started the process of applying for a license. Anabtawi said they will be joined by former Perella colleagues Hesham Sbayteh and Ayman Anwar.
Resonance won’t entirely cut its ties with Perella. The two firms are setting up a strategic partnership that allows the Dubai boutique to work on regional deals as well as on more complex cross-border transactions with the U.S. investment bank.
For Perella, which was founded in 2006 with the backing from wealthy Gulf investors, that means it will retain its access to clients as it pulls out of the region by closing its Abu Dhabi and Dubai offices. Resonance and Perella are currently working on a half-dozen deals, Anabtawi said.
#SaudiArabia markets dual-tranche dollar bonds - document | Reuters
Saudi Arabia markets dual-tranche dollar bonds - document | Reuters
Saudi Arabia began marketing a dual-tranche benchmark U.S. dollar-denominated bond sale on Tuesday with tenors of 12 and 40 years, a document showed, as it seeks to plug a large fiscal deficit.
It gave initial price guidance of around 165 basis points over 10-year U.S. treasuries for the 12-year tranche and around 3.75% for the 40-year bonds, the document from one of the banks on the deal showed.
Saudi Arabia hired Goldman Sachs International, HSBC and JPMorgan as global coordinators for the sale, which is expected to close later on Tuesday.
BNP Paribas, Citi, NCB Capital and Standard Chartered join them as book runners and are also passive joint lead managers.
Saudi Arabia began marketing a dual-tranche benchmark U.S. dollar-denominated bond sale on Tuesday with tenors of 12 and 40 years, a document showed, as it seeks to plug a large fiscal deficit.
It gave initial price guidance of around 165 basis points over 10-year U.S. treasuries for the 12-year tranche and around 3.75% for the 40-year bonds, the document from one of the banks on the deal showed.
Saudi Arabia hired Goldman Sachs International, HSBC and JPMorgan as global coordinators for the sale, which is expected to close later on Tuesday.
BNP Paribas, Citi, NCB Capital and Standard Chartered join them as book runners and are also passive joint lead managers.
#Kuwait Projects $40 Billion Deficit As Infighting Delays Reform - Bloomberg
Kuwait Projects $40 Billion Deficit As Infighting Delays Reform - Bloomberg
Kuwait forecast its eighth consecutive budget deficit for the year starting April 1, unveiling a fiscal plan that sees a near-7% rise in spending as political bickering delays reforms and stymies borrowing.
The shortfall is projected at 12.1 billion dinars ($40 billion), 13.8% below the current year’s estimate of 14 billion dinars, according to the finance ministry. Kuwait won’t be transferring 10% of total revenue to the Future Generations Fund, or wealth fund, in line with a law passed by parliament last year to halt such transfers in years of deficit. The move was part of a series of urgent measures aimed at preserving liquidity in the General Reserve, or treasury, which is being rapidly depleted due to a drop in the price of crude, the main source of income for the Gulf Arab state.
The budget “is not immune to the global challenges brought on by the Covid-19 pandemic and lower oil prices,” Finance Minister Khalifa Hamada said in a statement Monday. “We are in a transitional phase that requires concerted efforts for economic recovery and growth.” Budgeted capital expenditure is up 20% on the current year’s estimate, he said.
The minister didn’t say how the budget gap will be financed. Kuwait still doesn’t have a public debt law enabling it to borrow and hasn’t been to the market since a debut Eurobond in 2017. Lawmakers have opposed borrowing to cover the deficit and say the government should better manage finances before resorting to debt. That’s left investors facing uncertainty.
Kuwait forecast its eighth consecutive budget deficit for the year starting April 1, unveiling a fiscal plan that sees a near-7% rise in spending as political bickering delays reforms and stymies borrowing.
The shortfall is projected at 12.1 billion dinars ($40 billion), 13.8% below the current year’s estimate of 14 billion dinars, according to the finance ministry. Kuwait won’t be transferring 10% of total revenue to the Future Generations Fund, or wealth fund, in line with a law passed by parliament last year to halt such transfers in years of deficit. The move was part of a series of urgent measures aimed at preserving liquidity in the General Reserve, or treasury, which is being rapidly depleted due to a drop in the price of crude, the main source of income for the Gulf Arab state.
The budget “is not immune to the global challenges brought on by the Covid-19 pandemic and lower oil prices,” Finance Minister Khalifa Hamada said in a statement Monday. “We are in a transitional phase that requires concerted efforts for economic recovery and growth.” Budgeted capital expenditure is up 20% on the current year’s estimate, he said.
The minister didn’t say how the budget gap will be financed. Kuwait still doesn’t have a public debt law enabling it to borrow and hasn’t been to the market since a debut Eurobond in 2017. Lawmakers have opposed borrowing to cover the deficit and say the government should better manage finances before resorting to debt. That’s left investors facing uncertainty.
POLL-Gulf's 2021 rebound likely to be slower than previously forecast | Reuters
POLL-Gulf's 2021 rebound likely to be slower than previously forecast | Reuters
Forecasts for economic recoveries in the six-member Gulf Cooperation Council in 2021 have been trimmed while expectations for gross domestic product declines last year were mixed in a quarterly Reuters survey of analysts released on Tuesday.
Economists in the Jan. 11-25 poll maintained their views that the hydrocarbon-dependent region’s economic fortunes would turn around this year after it was hammered by the pandemic and an historic slide in the price of the GCC’s main commodity.
But growth forecasts for 2021 were cut for all six countries - to varying degrees - with the UAE, Kuwait and Oman’s GDP growth projections scaled back the most. Expected growth in Saudi Arabia and Qatar remained the GCC’s highest.
Saudi Arabia, the region’s largest economy, is expected to see GDP growth of 2.8% this year, down from 3.1% expected three months ago. The median forecast for its GDP contraction in 2020 improved to 4.4% from 5.1%. The economy is expected to grow 3.2% next year and 3.1% in 2023.
Forecasts for economic recoveries in the six-member Gulf Cooperation Council in 2021 have been trimmed while expectations for gross domestic product declines last year were mixed in a quarterly Reuters survey of analysts released on Tuesday.
Economists in the Jan. 11-25 poll maintained their views that the hydrocarbon-dependent region’s economic fortunes would turn around this year after it was hammered by the pandemic and an historic slide in the price of the GCC’s main commodity.
But growth forecasts for 2021 were cut for all six countries - to varying degrees - with the UAE, Kuwait and Oman’s GDP growth projections scaled back the most. Expected growth in Saudi Arabia and Qatar remained the GCC’s highest.
Saudi Arabia, the region’s largest economy, is expected to see GDP growth of 2.8% this year, down from 3.1% expected three months ago. The median forecast for its GDP contraction in 2020 improved to 4.4% from 5.1%. The economy is expected to grow 3.2% next year and 3.1% in 2023.
Financial performance of #Saudi banks will remain under pressure: S&P | ZAWYA MENA Edition
Financial performance of Saudi banks will remain under pressure: S&P | ZAWYA MENA Edition
The financial performance of rated Saudi banks will remain under pressure in 2021, on the back of lower interest rates and higher cost of risk, S&P Global Ratings said in a new report.
As regulatory forbearance measures are gradually phased out and the economy adjusts to the new normal, the cost of risk will remain elevated in 2021, increasing to 140 bps (from 80 bps in 2019), before starting to gradually normalize in 2022, the ratings agency said in the report “Banks In Emerging Markets: 15 Countries, Three Main Risks”
“Compared with other emerging markets, in our view Saudi banks have showed some resilience thanks to support from the Central Bank and minimal reliance on external funding. We see the banks as vulnerable to a spike in geopolitical risk.”
S&P analysts expect that banking systems in emerging markets (Argentina, Brazil, Chile, China, Colombia, India, Indonesia, Malaysia, Mexico, the Philippines, Russia, Saudi Arabia, South Africa, Thailand, and Turkey) will face three common risks in 2021: The expected deterioration in asset quality indicators as regulatory forbearance measures are lifted; a volatile geopolitical environment or domestic policy uncertainty; and vulnerability to abrupt movements in capital flows for a few.
The financial performance of rated Saudi banks will remain under pressure in 2021, on the back of lower interest rates and higher cost of risk, S&P Global Ratings said in a new report.
As regulatory forbearance measures are gradually phased out and the economy adjusts to the new normal, the cost of risk will remain elevated in 2021, increasing to 140 bps (from 80 bps in 2019), before starting to gradually normalize in 2022, the ratings agency said in the report “Banks In Emerging Markets: 15 Countries, Three Main Risks”
“Compared with other emerging markets, in our view Saudi banks have showed some resilience thanks to support from the Central Bank and minimal reliance on external funding. We see the banks as vulnerable to a spike in geopolitical risk.”
S&P analysts expect that banking systems in emerging markets (Argentina, Brazil, Chile, China, Colombia, India, Indonesia, Malaysia, Mexico, the Philippines, Russia, Saudi Arabia, South Africa, Thailand, and Turkey) will face three common risks in 2021: The expected deterioration in asset quality indicators as regulatory forbearance measures are lifted; a volatile geopolitical environment or domestic policy uncertainty; and vulnerability to abrupt movements in capital flows for a few.
Oil falls as U.S. stimulus squabbles, coronavirus surges sour mood | Reuters
Oil falls as U.S. stimulus squabbles, coronavirus surges sour mood | Reuters
Oil prices dropped on Tuesday as the prospects for the rapid approval of new U.S. economic stimulus waned while increasing new coronavirus infections raised questions over the pace of any recovery in demand.
Brent crude was down 28 cents, or 0.5%, at $55.60 by 0747 GMT, while U.S. crude fell 26 cents, or 0.5%, to $52.51. Both rose nearly 1% on Monday.
Having recently hit 11-month highs, oil is caught between lingering doubts over any recovery in demand as the pandemic continues to rage, offset by optimism for more stimulus from the newly installed Biden administration in the United States to support economic growth as vaccines are rolled out.
But Biden administration officials are still trying to convince Republican lawmakers of the need for more stimulus, raising questions over when it will be approved.
“The negative sentiment sweeping Asia today, as the reality of U.S. stimulus politics dawns, has seen both contracts move lower,” said Jeffrey Halley, senior market analyst at OANDA.
Oil prices dropped on Tuesday as the prospects for the rapid approval of new U.S. economic stimulus waned while increasing new coronavirus infections raised questions over the pace of any recovery in demand.
Brent crude was down 28 cents, or 0.5%, at $55.60 by 0747 GMT, while U.S. crude fell 26 cents, or 0.5%, to $52.51. Both rose nearly 1% on Monday.
Having recently hit 11-month highs, oil is caught between lingering doubts over any recovery in demand as the pandemic continues to rage, offset by optimism for more stimulus from the newly installed Biden administration in the United States to support economic growth as vaccines are rolled out.
But Biden administration officials are still trying to convince Republican lawmakers of the need for more stimulus, raising questions over when it will be approved.
“The negative sentiment sweeping Asia today, as the reality of U.S. stimulus politics dawns, has seen both contracts move lower,” said Jeffrey Halley, senior market analyst at OANDA.
MIDEAST STOCKS- #Dubai leads major Gulf markets lower | Nasdaq
MIDEAST STOCKS-Dubai leads major Gulf markets lower | Nasdaq
Most stock markets in the Gulf traded lower on Tuesday, with the United Arab Emirates (UAE) leading the way as rising coronavirus cases in the country dented sentiment.
The number of daily coronavirus cases in the UAE, a federation of seven emirates, has tripled in the past month. On Monday authorities registered 3,579 new infections and nine deaths. They do not provide a breakdown per emirate.
Dubai's main share index .DFMGI declined 1.4%, dragged down by a 2% fall in blue-chip developer Emaar Properties EMAR.DU and a 1.6% drop in sharia-compliant lender Dubai Islamic Bank DISB.DU.
In Abu Dhabi, the index .ADI fell 0.9%, hit by a 0.9% decline in the country's largest lender First Abu Dhabi Bank FAB.AD and a 2.1% drop in Aldar Properties ALDAR.AD.
Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum appointed Awad Saghir al-Ketbi as the new director general of the Dubai Health Authority, replacing Humaid al-Qutami, according to a statement issued on Sunday. No reason for the change was given.
Saudi Arabia's benchmark index .TASI fell 0.3%, with Al Rajhi Bank 1120.SE down 0.7% and top lender National Commercial Bank 1180.SE falling 0.9%.
The Qatari index .QSI edged down 0.2%, on course to extend losses for a fourth session. Qatar Insurance QINS.QA retreated 1.9%, while Qatar Islamic Bank QISB.QA was down 0.4%.
Most stock markets in the Gulf traded lower on Tuesday, with the United Arab Emirates (UAE) leading the way as rising coronavirus cases in the country dented sentiment.
The number of daily coronavirus cases in the UAE, a federation of seven emirates, has tripled in the past month. On Monday authorities registered 3,579 new infections and nine deaths. They do not provide a breakdown per emirate.
Dubai's main share index .DFMGI declined 1.4%, dragged down by a 2% fall in blue-chip developer Emaar Properties EMAR.DU and a 1.6% drop in sharia-compliant lender Dubai Islamic Bank DISB.DU.
In Abu Dhabi, the index .ADI fell 0.9%, hit by a 0.9% decline in the country's largest lender First Abu Dhabi Bank FAB.AD and a 2.1% drop in Aldar Properties ALDAR.AD.
Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum appointed Awad Saghir al-Ketbi as the new director general of the Dubai Health Authority, replacing Humaid al-Qutami, according to a statement issued on Sunday. No reason for the change was given.
Saudi Arabia's benchmark index .TASI fell 0.3%, with Al Rajhi Bank 1120.SE down 0.7% and top lender National Commercial Bank 1180.SE falling 0.9%.
The Qatari index .QSI edged down 0.2%, on course to extend losses for a fourth session. Qatar Insurance QINS.QA retreated 1.9%, while Qatar Islamic Bank QISB.QA was down 0.4%.