Oil Rises After OPEC+ Agrees to Gradual Monthly Output Increases - Bloomberg close

Oil Rises After OPEC+ Agrees to Gradual Monthly Output Increases - Bloomberg

• West Texas Intermediate for May delivery gained $2.29 to settle at $61.45 a barrel
• Brent for June settlement rose $2.12 to end the session at $64.86 a barrel

Oil climbed the most in nearly a week with the OPEC+ alliance’s deal to gradually increase oil-supply affirming expectations that demand will continue to grow.

Futures rose 3.9% in New York after a choppy trading session. The Organization of Petroleum Exporting Countries and its allies agreed Thursday to add more than 2 million barrels a day to the market from May to July, which includes a phased rollback of Saudi Arabia’s previous 1 million barrel-a-day cut over the next three months.

“The [supply] deficit that we’re already in is likely to accelerate,” Jeff Currie, head of commodities research at Goldman Sachs Group Inc., said in a Bloomberg Television interview. The demand numbers are “rock solid in the U.S.,” and the lockdowns in Europe present only a “temporary speed bump,” he said.

Most major Gulf markets gain; #Saudi index dips | Reuters

Most major Gulf markets gain; Saudi index dips | Reuters

Most major stock markets ended higher on Thursday, while the Saudi index eased a day after it registered sharp gains triggered after the kingdom announced a private investment push.

Saudi Arabia’s crown prince said oil firm Aramco and petrochemical firm SABIC would lead 5 trillion riyals ($1.33 trillion) of investments by the local private sector by 2030 under a programme announced on Tuesday for economic diversification.

The kingdom’s benchmark index eased 0.1%, hit by a 1.5% fall in oil giant Saudi Aramco and 2% slide in Saudi Basic Industries Corp.

However, National Commercial Bank (NCB), the country’s largest lender, jumped 3.6%, despite the stock going ex-dividend.

On Thursday, NCB and Samba Financial Group announced the formal completion of their merger.

Dubai’s main share index added 0.3%, with Emaar Properties rising 0.9%.

Elsewhere, Emirates Integrated Telecommunications finished 1.3% higher, despite the stock going ex-dividend.

In Abu Dhabi, the index gained 0.4%, led by a 1.9% increase in telecoms firm Etisalat and 1.6% rise in International Holding.

International Holding has gone through rapid expansion across its major business sectors, resulting in a sharp growth in its financials, positioning it for long-term growth.

So far this year, International Holding has risen over 50%.

In Qatar, the benchmark closed 0.5% higher, with petrochemical maker Industries Qatar advancing 2.1%.

Qatar’s cabinet on Wednesday ordered a halt to non-urgent medical services at private health facilities as of April 2 as coronavirus cases rise in the Gulf Arab state, state news agency QNA said.

Qatar last week tightened restrictions to curb the spread of the virus, including closing leisure centres and further reducing operating capacity at shopping malls and cinemas.

Opec+ agrees to increase oil production gradually from May | Financial Times

Opec+ agrees to increase oil production gradually from May | Financial Times

The Opec+ oil alliance decided on Thursday to increase output gradually from May as pressure mounts from inside and outside the producers group to release more barrels on to the market and keep crude prices in check. 

The decision by the 24-member body comes despite Abdulaziz bin Salman, Saudi Arabia’s energy minister, warning Opec and allies including Russia earlier in the day that crude’s recovery was “far from complete” with the pandemic still wreaking havoc globally. 

“Until the evidence of the recovery is undeniable, we should maintain this cautious stance,” Prince Abdulaziz, son of the Saudi king, told reporters and ministers ahead of the formal virtual gathering of oil officials. 

Still, Alexander Novak, Russia’s deputy prime minister, said the market had improved substantially as vaccines to combat the virus were rolled out and Opec+ had to ensure the market did not “overheat”. 

Consumer countries are also watching the actions of Opec+ carefully, with those such as India wary about producers keeping too tight a hold on output that will only propel a surge in prices. 

Jennifer Granholm, US energy secretary, added another layer of uncertainty into the group’s decision-making. She had a call with Prince Abdulaziz on Wednesday and emphasised the importance of “affordable” energy.

HSBC Is Said to Work on Possible IPO of #Saudi Arabian Cargo Firm - Bloomberg

HSBC Is Said to Work on Possible IPO of Saudi Arabian Cargo Firm - Bloomberg

Saudi Arabian Logistics Co., spun off after more than seven decades as the cargo arm of the kingdom’s flagship airline, is working with HSBC Holdings Plc’s local unit on a potential share sale that could come as soon as this year, according to people familiar with the matter.

No final decision has been made on the timing or size of an initial public offering but the listing would only be open to local and qualified investors, the people said, declining to be named as the discussions are private.

The Saudi unit of HSBC was hired late last year as a financial adviser to help SAL, as the company is known, explore its strategic options to raise funds, the people said. HSBC and SAL declined to comment.

OPEC+ to Choose Between Gradual Output Hikes or Keeping Cuts - Bloomberg

OPEC+ to Choose Between Gradual Output Hikes or Keeping Cuts - Bloomberg

The OPEC+ meeting on Thursday will discuss whether to resume a monthly schedule of modest and gradual production increases or maintain current output cuts, according to a delegate.

The choice between those two options could still go either way, the delegate said, asking not to be named because the information wasn’t public. Even if OPEC+ decided to resume phased increases, it would review each step every month, allowing it to hit pause if oil demand growth were to disappoint, the delegate said.

Many OPEC-watchers had been expecting the group to roll over its production quotas for at least one month, so any deviation from that could be bearish. Brent crude fluctuated in London, trading at $63.62 a barrel as of 1:55 p.m.

The cartel agreed in December to a monthly schedule of gradual output adjustments of as much as 500,000 barrels a day for the next three months, but after one collective supply hike in January it refrained from making any more due to doubts about the strength of demand. Now, there are growing internal and external pressures for the Organization of Petroleum Exporting Countries and its allies to pump more oil.

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

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

#Saudi calls for restrain as oil market recovery far from complete | Reuters

Saudi calls for restrain as oil market recovery far from complete | Reuters

OPEC+ oil producers have taken a cautious stance but the market’s recovery is far from complete, Saudi Arabia’s energy minister said on Thursday.

“Last month we called for a cautious and restrained approach and fortunately we were proved right by subsequent events,” Prince Abdulaziz bin Salman said as he opened an OPEC+ meeting.

“The market now realises that the OPEC+ cautious position was the correct course of action... The reality that remains (is the) global picture is far from even and the recovery is far from complete.”

#Qatar's Ooredoo sells $1 billion in 10-year bonds | Reuters

Qatar's Ooredoo sells $1 billion in 10-year bonds | Reuters

Qatari telecom operator Ooredoo launched a 10-year bond sale on Wednesday to raise $1 billion at 100 basis points over mid-swaps after receiving more than $3.2 billion in demand, a document showed.

Initial price guidance earlier on Wednesday was around 130 basis points over mid-swaps for 10-year U.S. dollar-denominated bonds, a separate document from one of the banks on the deal showed.

“Ooredoo’s pricing was at the upper end of expected range but the 100 bps spread is tighter than average emerging market A-rated bond spreads by circa 15 bps,” a fixed income strategist said.

Ooredoo last sold bonds in 2016, raising $500 million in 10-year bonds at a 3.75% coupon, roughly 100 bps wider than the new issuance.

Barclays, BNP Paribas, Citi, Credit Agricole, DBS, Mizuho, QNB Capital and Standard Chartered arranged the deal.

#Qatar's economy shrinks 3.9% in fourth quarter of 2020 | Reuters

Qatar's economy shrinks 3.9% in fourth quarter of 2020 | Reuters

Qatar’s economy contracted by 3.9% in the fourth quarter of 2020, government data showed, with transportation and storage activity plummeting 32.8% and construction down nearly 5%.

Gross domestic product, based on constant prices, also fell on a quarterly basis, decreasing by 0.5% in the fourth quarter, the Planning and Statistics Authority said in a statement.

GDP shrank 4.5% in the third quarter on annual basis but grew 5.6% compared to the previous three months.

In December, the International Monetary Fund projected Qatar’s GDP contraction in 2020 at 2.5%. It projected a rebound to growth of 2.7% in 2021.

#Dubai contractor Drake & Scull expects to win creditor approval for ambitious plan | Property – Gulf News

Dubai contractor Drake & Scull expects to win creditor approval for ambitious plan | Property – Gulf News

Selling of loss-making entities and a return to focus on its core MEP-related project work is helping with Drake & Scull’s revival, according to a top official. The company, in the midst of a major financial restructuring, is also pursuing new work – in the UAE and outside.

“We are making a continuous effort to win more projects were possible, whether in UAE or overseas, in addition to the on-going operations in Algeria, Tunisia, Palestine, India, Kuwait, Iraq, and Germany,” said Munir Mansour, CEO.

“The organizational restructuring is progressing well especially after the sale of a number of the loss-making civil-related entities.” Its current order backlog is valued at Dh398 million.

Last year, it recorded a one-off gain of Dh291 million from selling a subsidiary company. Total negative equity was reduced from Dh3.97 billion in 2019 to Dh3.90 billion. (Drake & Scull's issues came to light in 2019, when the company revealed that its actual losses were much bigger than stated in its previous year financials. It launched investigations into former executives' decisions and actions. These are still progressing at multiple levels.)

#SaudiArabia gets a new bank - and Saudi National Bank is already market leader | Banking – Gulf News

Saudi Arabia gets a new bank - and Saudi National Bank is already market leader | Banking – Gulf News

Saudi Arabia’s newest bank is now open…

Created from the merger of two banking giants, the Saudi National Bank immediately starts off as being the ‘largest’ in the Kingdom. It sure has the numbers.

• Total assets – 896 billion riyals ($239 billion)

• Combined net profit – 15.6 billion riyals ($4.2 billion)

• Shareholders’ equity – 127 billion riyals ($34 billion)

• Combined market share – 30 per cent

“With the legal completion of the merger, Saudi National Bank is in prime position to compete regionally and locally, ultimately creating a positive impact for all of our stakeholders,” said Ammar Alkhudairy, Chairman of Saudi National Bank.

'Black market' emerges to dodge unofficial Turkish- #Saudi trade blockade: sources | Reuters

'Black market' emerges to dodge unofficial Turkish-Saudi trade blockade: sources | Reuters

Some Turkish exporters are rerouting food, clothing and other goods to circumvent a months-long unofficial blockade by Saudi Arabia that has sent trade to record lows, exporters and traders said.

Production in nearby countries allows exporters to obtain customs documents and to ditch “Made in Turkey” product tags, allowing goods to enter the kingdom, exporters, traders and a diplomat told Reuters.

Riyadh has never formally acknowledged the boycott against Turkey, but last year top Saudi businessmen endorsed it as a response to what they called hostility by Ankara.

A review of official trade data shows that in the first two months of the year Turkey’s exports to Saudi Arabia plunged 93% annually to $38 million.

Exports of electronics, garments, jewellery and automotive goods were all down more than 90% from a year earlier, according to the Turkish Exports Assembly.

“A black market is now emerging where brokers take the Turkish goods to other ports and forge the documents so they appear to be coming from China or Europe for fees,” said one importer of building materials to Saudi Arabia, who requested anonymity.

Oil gains as OPEC+ meets to decide on production policy | Reuters

Oil gains as OPEC+ meets to decide on production policy | Reuters

Crude prices rose on Thursday, recouping some of the previous session’s losses as hopes grew that OPEC and its allies later on Thursday would decide to keep curtailing production in place in the face of resurgent COVID-19 infections in some regions.

Brent crude for June delivery was up by 71 cents, or 1.1%, at $63.45 a barrel by 0326 GMT after falling 2.2% overnight. U.S. oil was up 71 cents, or 1.2%, at $59.87 a barrel, having dropped 2.3% on Wednesday.

Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia and Kazakhstan, a group called OPEC+, meet later on Thursday to consider options that include an output roll-over and a gradual output increase.

“The most likely outcome of the ... meeting is no significant changes in production,” Eurasia Group said in a report on the gathering.

#AbuDhabi's Mubadala to invest in German eyecare firm Rodenstock - Arabianbusiness

Abu Dhabi's Mubadala to invest in German eyecare firm Rodenstock - Arabianbusiness

Mubadala Investment Company has announced that it will invest in Rodenstock Group, a leading manufacturer of premium ophthalmic lenses, as a minority investor alongside funds advised by Apax.

Founded in 1877, Rodenstock has been a global leader in prescription lenses for over 140 years, and is headquartered in Munich, Germany.

Rodenstock employs around 4,900 people worldwide and is represented by sales subsidiaries and distribution partners in more than 85 countries.

Camilla Macapili Languille, head of Life Sciences at Mubadala, said: “Rodenstock is the leading pure play lens manufacturer in the European market, with a strong reputation for innovation and a consistent focus on offering a differentiated customer proposition.

Most markets rise, #Saudi extends gains on large private investment push | Reuters

Most markets rise, Saudi extends gains on large private investment push | Reuters

Most major stock markets rose in early trade on Thursday, with the Saudi index extending gains from the previous session following a behemoth private investment push by the kingdom.

The kingdom’s crown prince said oil firm Aramco and petrochemical firm SABIC would lead 5 trillion riyals ($1.33 trillion) of investments by the local private sector by 2030 under a programme announced on Tuesday for economic diversification.

This is part of 12 trillion riyals worth of investments planned by 2030, Crown Prince Mohammed bin Salman said.

Saudi Arabia’s benchmark index added 0.2%, supported by a 3% rise in the country’s largest lender National Commercial Bank.

However, oil giant Saudi Aramco retreated 1%, a day after gaining sharply.

Saudi Arabia’s bourse, Tadawul, has invited banks to pitch for roles in its highly-anticipated flotation, three sources told Reuters on Wednesday.

With a market capitalisation of $2.5 trillion, Tadawul is the Arab world’s largest stock exchange.

The bourse has benefited from Aramco’s listing, welcoming a slew of companies since the pandemic, including healthcare firm Suleiman Al Habib and Riyadh-based vehicle rental company Theeb Rent-a-Car.

In Dubai, the benchmark index lost 0.3%, hit by a 1.3% fall in Emirates NBD Bank and a 0.3% decrease in blue-chip developer Emaar Properties.

The Abu Dhabi index gained 0.4%, buoyed by a 5.1% jump in International Holding.

The firm has gone through rapid expansion across its major business sectors, resulting in a sharp growth in its financials, positioning it for long-term growth.

So far this year, International Holding has risen about 60%.

The Qatari benchmark increased 0.4%, with Qatar Islamic Bank gaining 0.9%.

Qatar’s cabinet on Wednesday ordered a halt to non-urgent medical services at private health facilities as of April 2 as coronavirus cases rise in the Gulf Arab state, state news agency QNA said.

#SaudiArabia Mohammed Bin Salman Turns Sights on Local Firms for Transformation - Bloomberg

Saudi Arabia Mohammed Bin Salman Turns Sights on Local Firms for Transformation - Bloomberg

Saudi Arabia’s Crown Prince Mohammed bin Salman has a new target in his sights as he looks to press on with his unprecedented economic transformation plan: the country’s largest listed companies.

Six weeks after saying foreign entities must move their regional headquarters to the kingdom or lose business, Prince Mohammed, the nation’s de facto ruler, announced Tuesday that companies from oil giant Saudi Aramco to dairy producer Almarai will be encouraged to reduce their dividends and redirect the money back into the economy.

“We’ve seen the government using a stick to get foreign investors to come into Saudi Arabia, and now they are using it on domestic investors,” said Tarek Fadlallah, the Dubai-based chief executive officer of the Middle East unit of Nomura Asset Management. “I’m not a fan of government intervention in the private sector, but Saudi has limited ways to incentivize companies, so partnering in this way could help encourage more investment.”

The stakes are high. The crown prince’s vision entails combined public- and private-sector spending of 27 trillion riyals ($7 trillion) over the next 10 years in an effort to diversify an economy that got 54% of its revenue from oil last year. And all at a time when foreign direct investment is a fraction of what it used to be, the budget deficit is swelling and the nation is struggling with the after-effects of last year’s slump in crude prices amid the Covid-19 pandemic.

OPEC+ Focuses on Fragile Demand Before Talks on Oil Output - Bloomberg

OPEC+ Focuses on Fragile Demand Before Talks on Oil Output - Bloomberg

OPEC’s top official warned that oil demand remains fragile as the cartel and its partners headed for talks on whether to prolong their vast production curbs.

“We should not be out smelling the flowers just yet,” Secretary-General Mohammad Barkindo told a committee of ministers that lays the ground for their main meeting, scheduled for Thursday.

The oil market is “surrounded by uncertainties, including the prevalence of Covid-19 variants, the uneven rollout of vaccines, further lockdowns and third waves in several countries,” Barkindo said.

The Organization of Petroleum Exporting Countries and its allies are widely expected to maintain their output curbs for at least another month. Bolstering that view, the coalition’s technical experts lowered their demand estimates on Tuesday.

But there’s still the potential for surprises at Thursday’s gathering of the 23-nation group, which is jointly led by Saudi Arabia and Russia. The possibility of increasing production is among the options that may be considered, according to two delegates who asked to speak anonymously.

#Dubai's Gulf Navigation eyes 10% share buyback | ZAWYA MENA Edition

Dubai's Gulf Navigation eyes 10% share buyback | ZAWYA MENA Edition

Dubai’s Gulf Navigation Holding plans to buy back 10 percent of its shares, even as it managed to narrow its 2020 net loss.

In a bourse statement, the company said the buyback “will lead to more stability and improve the market profitability for the stock in the future.” It will use the insurance settlement (on its vessel “Gulf Livestock 1” which sank in September 2020 during its trip from New Zealand to China), and the liquidity resulting from the debt refinancing process, for buying back shares.

Gulf Navigation, the only crude shipper listed on the Dubai Financial Market, said its net loss for the year amounted to 279 million dirhams compared to the net loss of 327 million dirhams in 2019.

The company is planning to complete debt restructuring and refinancing deal this year. It has already reached an initial agreement “with a majority of lenders on new and flexible terms that will allow the company to adapt to current market conditions and achieve better growth".

Gulf Navigation has begun proceedings for a mandatory convertible Islamic sukuk with a maximum value of up to $50 million. This issuance aims to convert part of the company's debt into shares, thus increasing the paid-up capital and reducing the ratio of accumulated losses to the capital.

GCC banking provisions reached record highs of $20bln last year - Kamco Invest | ZAWYA MENA Edition

GCC banking provisions reached record highs of $20bln last year - Kamco Invest | ZAWYA MENA Edition

The COVID-19 pandemic had a deep impact on the GCC banking sector resulting in record provisions being booked for fiscal 2020.

Not only was economic activity hit by the pandemic-induced lockdowns and restrictions in movement among GCC countries, the lower oil prices for most of the year saw state revenues slashed for the oil producing members.

The 62 listed banks in the GCC reported loan loss provisions (LLP) of $20.3 billion during 2020 with increases seen in all the six countries of the bloc, said Kamco Invest in a report on Wednesday.

Banks in the UAE saw the biggest spike in LLP during the year with an increase of 3.4 billion, or 72 percent, to reach 8.2 billion. On the other hand, Saudi Arabian banks booked the lowest percentage increase in LLP at 37.6 percent, or 1.3 billion, to reach $4.6 billion during the year.

Banks in the region set aside $6.4 billion for doubtful credit during Q4-2020, the highest for a quarter ever recorded in the region.

UPDATE 1-Oil gains as OPEC+ meets to decide on production policy | Reuters

UPDATE 1-Oil gains as OPEC+ meets to decide on production policy | Reuters

Crude prices rose on Thursday, recouping some of the previous session’s losses as hopes grew that OPEC and its allies later on Thursday would decide to keep curtailing production in place in the face of resurgent COVID-19 infections in some regions.

Brent crude for June delivery was up by 71 cents, or 1.1%, at $63.45 a barrel by 0326 GMT after falling 2.2% overnight. U.S. oil was up 71 cents, or 1.2%, at $59.87 a barrel, having dropped 2.3% on Wednesday.

Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia and Kazakhstan, a group called OPEC+, meet later on Thursday to consider options that include an output roll-over and a gradual output increase.