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Oil futures rose on Tuesday and were near multi-year highs as an energy supply crunch continued across the globe, while falling temperatures in China revived concerns over whether the world's biggest energy consumer can meet domestic heating needs.
The Brent crude benchmark rose 75 cents to settle at $85.08 a barrel. U.S. West Texas Intermediate (WTI) futures rose 52 cents to settle at $82.96 a barrel.
Prices have been climbing the last two months. Since the start of September, Brent has risen by about 19%, while WTI has gained around 21%.
"Supply-demand balances show that the market is experiencing a supply deficit, which is spurring deep inventory draws and driving prices upwards," said Louise Dickson, senior oil markets analyst at Rystad Energy. "This market tightness is expected to extend into most of 2022, and crude oil demand will only catch up with crude supply by the fourth quarter of next year."
Former Qatar National Bank CEO Ali Al Kuwari was officially named finance minister, months after assuming the post on an acting basis in the midst of a corruption scandal that took down his predecessor.
He’s one of several new appointments Tuesday by the country’s ruling emir, according to state-run Qatar News Agency. Al Kuwari had been also minister of commerce and industry since November 2018, a post he’ll relinquish in the new cabinet.
Abu Dhabi’s new technology hub says it has seen a surge in interest from start-up firms in the United Arab Emirates and abroad despite the economic impact of the coronavirus pandemic last year, amid increased optimism from the sector.
Hub71, backed by Abu Dhabi state fund Mubadala Investment Co, the SoftBank Vision Fund, and Microsoft (MSFT.O), has accepted 100 start-up firms since its inception in 2019 after a selection process that drew about 3,500 applications, said Hub71 chief operating officer Jida Itani.
"Despite COVID and everything else, start ups continue to apply. In fact we have seen a surge in particular sectors that have been accelerated by the pandemic like health tech, education tech and fintech," Itani said.
Start-ups have become encouraged to base themselves in the UAE following a handful of successes by local technology companies, as investors search for potential tech unicorns - privately held start-ups with a valuation of more than $1 billion -- in the Middle East, she said.
Oil rose on Tuesday and was near multi-year highs as an energy supply crunch continued across the globe, while falling temperatures in China revived concerns over whether the world's biggest energy consumer can meet domestic heating needs.
The Brent crude benchmark was up 99 cents, or 1.2%, to $85.32 a barrel by 12:59 p.m. EDT (1659 GMT). U.S. West Texas Intermediate (WTI) futures rose $1.27, or 1.5%, to $83.71 a barrel.
Prices have been climbing the last two months. Since the start of September, Brent has risen by about 19%, while WTI has gained around 22%.
"Supply-demand balances show that the market is experiencing a supply deficit, which is spurring deep inventory draws and driving prices upwards," said Louise Dickson, senior oil markets analyst at Rystad Energy. "This market tightness is expected to extend into most of 2022, and crude oil demand will only catch up with crude supply by the fourth quarter of next year."
Saudi Arabia closed at a more than 15-year high on Tuesday as crude prices resumed gains, while the Egyptian bourse retreated as investors booked profits following a recent rally.
Brent crude was up 65 cents, or 0.8%, to $84.98 a barrel by 1206 GMT as a supply crunch in natural gas, electricity and coal continued across the globe while falling temperatures in China revived concerns.
Saudi Arabia's benchmark index (.TASI) rose 0.3%, reaching its highest since July 2006, with Al Rajhi Bank (1120.SE) climbing 3.1%, finishing at its highest in over 15 years.
Telecom firm Etihad Etisalat (7020.SE) gained about 3% after reporting a rise in quarterly profit.
The kingdom's crude oil exports in August rose for a fourth consecutive month to their highest since January 2021, the Joint Organisation Data Initiative said on Monday. read more
Outside the Gulf, Egypt's blue-chip index (.EGX30) fell 0.7%, snapping a 10-day winning streak with Commercial International Bank (COMI.CA) falling 1%.
In Abu Dhabi, the index (.ADI) eased 0.1%, weighed down by a 0.6% fall in top lender First Abu Dhabi Bank (FAB.AD) and a 0.4% fall in conglomerate International Holding (IHC.AD).
Dubai's main share index (.DFMGI) gave up early gains to close flat, with top lender Emirates NBD (ENBD.DU) losing 0.7% ahead of its earnings.
Logistic firm Aramex (ARMX.DU) advanced 1.9% after it resumed deliveries to and from the United Arab Emirates and Doha.
Saudi Arabia, the UAE, Bahrain and Egypt agreed in January to end a dispute that had led them to sever ties with Qatar in 2017 over accusations that Doha supported "terrorism" - a reference to Islamist groups. Doha denied the charges.
Dubai has signed an accord to build infrastructure in Jammu and Kashmir, the Indian government said on Monday, at a time when the Himalayan region is seeing a resurgence in violence. read more
The Qatari benchmark (.QSI) added 0.2%, supported by a 1% rise in Qatar National Bank (QNBK.QA), the Gulf's biggest lender.
The International Monetary Fund has turned more optimistic on economic growth prospects in the Middle East and North Africa this year and next as an uneven recovery takes shape in the region.
The Washington-based lender raised its economic growth projection for MENA to 4.1% this year from an earlier estimate of 4%. That’s mainly because of fast vaccine roll-outs in some parts of the region and financial measures taken at the start of the pandemic. Growth in 2022 is also seen at 4.1%, up from April’s estimate of 3.7%.
“Still, this recovery is uncertain and I think it’s important to highlight that, and it is uneven. Uneven because the levels of vaccination diverge still,” Jihad Azour, the IMF’s director for MENA and central Asia, said in an interview with Bloomberg. “Inflation is picking up and this is an issue for certain countries.”
The fund last week expressed concern that the global economic recovery had lost momentum. It now expects output to expand 5.9% worldwide this year, down 0.1 percentage point from its July prediction.
2022 GDP Forecasts
The world economy is predicted to expand 4.9% next year
Source: International Monetary Fund
Note: Mapped data show forecasts for distinct economies
The IMF has identified debt stabilization, elevated unemployment levels and the ongoing impact of the pandemic on small companies as some of the main risks for the region’s recovery. Medium-term gross domestic product is expected to average 2.4%, below pre-pandemic levels.
It has urged governments to ramp up vaccine distribution, boost fiscal and monetary support and reduce joblessness to keep up the growth momentum.
Chipmaker GlobalFoundries, owned by Abu Dhabi's sovereign wealth fund Mubadala Investment Co, is aiming for a valuation of about $25 billion in its initial public offering in the United States.
The IPO, one of the most hotly anticipated listings, is expected to cap a record year for flotations, after several big names such as Robinhood Markets Inc (HOOD.O), Coinbase Global Inc (COIN.O) and Roblox Corp (RBLX.N) capitalized on the stock markets boom earlier in 2021.
Alongside electric-vehicle maker Rivian's stock market debut, GlobalFoundries is expected to headline an unusually crowded year-end IPO schedule.
IPOs in the United States have already touched an all-time record of over $250 billion this year, according to data from Dealogic.
Dubai is set for a "modest" recovery this year on the back of a high vaccination rate in the United Arab Emirates and limited COVID-19 restrictions, but weak international tourism will drag on the economy until late 2022, S&P Global Ratings said.
The economy of the Middle East trade, finance, and tourism hub shrank 10.9% last year, with the coronavirus-driven drop in tourism contributing to 56% of the overall decline, the ratings agency said in a report on Tuesday.
"Tourism's contribution to real GDP fell to about 13% in 2020, from 18% in 2019. A further 30% of the 10.9% decline in 2020 came from the wholesale and retail trade sectors," it said.
S&P expects Dubai's economy to expand by 3.5% this year, mainly because of a high vaccination rate - with more than 85% of the UAE population having received two doses - and the easing of COVID-19 global restrictions.
The Dubai Expo 2020 world fair, which was delayed by a year because of the pandemic and started this month, is seen providing a weaker boost to the economy than that expected pre-COVID, said the agency.
"We forecast visitor arrivals to Dubai will not return to 2019 levels until at least late 2022. However, in our view, the six-month event will improve hotel occupancy and increase footfall in malls, benefitting the retail sector."
S&P expects Dubai's real gross domestic product growth to average about 2% between 2022 and 2024.
Oil prices rose on Tuesday as a supply crunch in natural gas, electricity and coal continued across the globe while falling temperatures in China revived concerns over whether the world's biggest energy consumer can meet domestic demand for heating.
The Brent crude benchmark rose 65 cents, or 0.8%, to $84.98 a barrel by 1206 GMT after falling 0.6% on Monday. The contract is still up nearly 7% this month.
U.S. West Texas Intermediate (WTI) futures gained 87 cents, or 1.1%, to $83.31, having risen 0.2% in the previous session and nearly 10% this month.
"In a bull market it is usually Brent that leads the way higher, but this time around (U.S.) domestic issues provide extra support for WTI," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
Sharjah Islamic Bank will raise foreign ownership to 40 per cent amid “strong” demand from investors.
“Investors from all over the world have shown strong confidence in the UAE’s financial markets and, in particular, the Sharjah Islamic Bank, which has witnessed a remarkable improvement in the performance of the share price since the beginning of this year,” said Mohamed Abdalla, CEO of Sharjah Islamic Bank. This “represents a new additional incentive to enhance the bank’s performance, as it also continues to keep pace with the accelerated recovery witnessed in the current economic environment.”
The results in the first-half of this year showed the bank’s resilience during the pandemic. “There has been a positive trend across all major metrics in terms of profitability, growth, capital and liquidity,” he said.
The move to raise the ceiling on foreign ownership will also contribute to enhancing the bank’s international classification. Sharjah Islamic announced an increase in its net profit by roughly 30 per cent year-over-year for the nine- month period ending September 30. Operating profits also increased by 29 per cent during the same period.
Qatar, the world's top exporter of liquefied natural gas, has created a new ministry for the environment and climate change under a government reshuffle announced on Tuesday by the emir of the Gulf state.
The decision comes as the UN climate change conference is due to convene in Glasgow, Scotland, at the end of the month.
The revisions are based on Moody's expectation that the operating environment for the banks will continue to improve. It has also changed the outlook on Ba3 Omani government's ratings to stable from negative. The higher oil prices have led to a large reduction in external vulnerability and government liquidity pressures and Moody's expects that oil prices will average above $60/barrel during the next several years, increasing the likelihood that these pressures will remain contained.
In addition, the "ongoing implementation of the government's medium-term fiscal adjustment program will also underpin a steady decline in the direct government debt burden to the pre-pandemic level," it said.
Moody's expects the government would step in to provide support to banks in case of need due to the importance of the country's banks in the domestic financial system and the significant government shareholdings and deposits in several banks.
Also, the conservative regulatory framework in Oman helps support the banks' governance practices, it added.
Saudi Arabian telecommunications operator Etihad Etisalat (Mobily) posted a 26 percent increase in third-quarter net profit on the back of higher revenue.
From June to September 2021, Mobily’s net profit reached 281 million riyals ($75 million), compared to 222 million riyals from the same period last year, according to a disclosure to the Saudi Stock Exchange (Tadawul).
The company said its earnings grew due to higher subscriber base and uptake of FTTH (fibre-to-the-home) connections.
Its total revenue for the same quarter hit 3.6 billion riyals, up by 7.48 percent from a year ago.
“This is mainly attributed to the growth in business unit revenues, the growth of FTTH active base, in addition to the growth of subscribers base,” the statement said.
Mobily is one of Saudi Arabia’s major telecom providers, capturing 30 percent of the market in 2006, two years after it was established.
Emirates Integrated Telecommunications Co., or Du, saw its third-quarter net profit plunge nearly 66 percent to 283 million dirhams ($77.05 million) as operating expenses rose, offsetting a rise in revenue.
Operating expenses during the period rose to 2.26 billion dirhams from 1.97 billion dirhams a year earlier, the company said in a statement on Tuesday on the Dubai Financial Market, where it is listed.
Revenue rose nearly 10 percent to 2.87 billion dirhams due to higher handset sales and on mobile revenue from the postpaid segment, the company said.
However, EBITDA (earnings before interest, taxes, depreciation, and amortization) fell by 4.9 percent on year to 1.1 billion dirhams.
Fahad Al Hassawi, chief executive of Du, said he saw corporate demand for fixed services returning while commercial initiatives in mobile services are bearing fruits. Du's 5G network is now accessible to 90 percent of the population, he said.
"This quarter is an inflection point for mobile service revenues: we renewed with nominal growth (+0.7 percent quarter-on-quarter) after three consecutive quarters of decline," he said.
Qatari Emir Tamim bin Hamad al-Thani has appointed Ali Bin Ahmad Al-Kuwari as finance minister in a government reshuffle, according to a statement issued by the emiri court on Tuesday, following the previous minister's arrest in May.
Al-Kuwari had been serving as commerce and industry minister and as acting finance minister before the reshuffle.
His predecessor in the finance ministry, Ali Sherif al-Emadi, was arrested over embezzlement allegations and stripped of his duties in May. Reuters has previously been unable to contact him while he is in police custody.
Saudi stocks scaled a more than 15-year high on Tuesday, rising for a fifth session in six and leading gains in the Gulf as crude oil prices reversed earlier losses.
Oil prices recouped earlier losses as falling temperatures in China, the world's biggest energy consumer, revived concerns about its ability to meet heating demand needs amid power and coal shortages.
Saudi Arabia's benchmark stock index (.TASI) rebounded 0.4%, touching its highest since July 2006, bolstered by a 2.2% gain in Al Rajhi Bank (1120.SE) and a 0.5% rise in top lender Saudi National Bank (1180.SE).
Telecom firm Etihad Etisalat (7020.SE) advanced 1.8% after reporting a rise in quarterly profit.
The kingdom's crude oil exports rose in August for a fourth consecutive month to the highest since January 2021, the Joint Organisation Data Initiative said on Monday.
Dubai's main share index (.DFMGI) added 0.3%, helped by a 0.8% rise in sharia-compliant lender Dubai Islamic Bank (DISB.DU) and a 0.5% increase in blue-chip developer Emaar Properties (EMAR.DU).
However, Emirates NBD Bank (ENBD.DU) eased 0.4% ahead of its earnings announcement.
Dubai has signed an accord to build infrastructure in Jammu and Kashmir, the Indian government said on Monday, at a time when the Himalayan region is seeing a resurgence in violence. read more
In Abu Dhabi, the index (.ADI) fell 0.2%, hit by a 0.3% drop in First Abu Dhabi Bank (FAB.AD), the country's largest lender, and a 1.4% decline in Alpha Dhabi Holding (ALPHADHABI.AD).
Index publisher FTSE Russell has added ADNOC Drilling (ADNOCDRILL.AD) to three of its global equity indexes, according to a statement from ADNOC Drilling.
Shares of ADNOC Drilling were trading flat.
The Qatari benchmark (.QSI) gained 0.2%, with the Gulf's biggest lender Qatar National Bank (QNBK.QA) adding 1%.
Among others, Islamic lender Masraf Al Rayan (MARK.QA) inched 0.1% higher in choppy trade, following a slight decrease in its third-quarter profit.
Masraf Al Rayan's third-quarter earnings came broadly in-line with estimates and the results were somewhat lacklustre, QNB Financial Services said in a research note.
Oil prices rose on Tuesday, recouping earlier losses, as falling temperatures in China, the world's biggest energy consumer, revived concerns about its ability to meet heating demand needs amid power and coal shortages.
Brent crude rose 24 cents, or 0.3%, to $84.57 a barrel by 0541 GMT after falling 0.6% on Monday. The contract is still up nearly 7% this month.
U.S. West Texas Intermediate futures gained 35 cents, or 0.4%, to $82.79 a barrel, having risen 0.2% in the previous session and nearly 10% this month.
Brent fell on Monday after China released growth figures that disappointed the market but with temperatures falling as the northern hemisphere winter approaches and heating demand increasing, prices of oil, coal and natural gas are likely to remain elevated, traders and analysts said.
