Russia Blames Sanctions for Pushing It Toward First Default Since 1998 - WSJ
Russia’s finance minister said the country paid what it owed on its foreign debts on Wednesday but wasn’t sure if the payments would go through, blaming U.S. sanctions for setting the country on the path toward default.The Russian government is required to pay $117 million in interest payments on two dollar-denominated government bonds Wednesday. Failure to pay, or attempting to pay in rubles instead of dollars as required by the bonds, would set the stage for Russia to be placed in default by its creditors.The bonds have a 30-day grace period, meaning creditors can’t declare an official default until April 15.“The possibility or impossibility of fulfilling our obligations in foreign currency does not depend on us,” Finance Minister Anton Siluanov said in an interview with state-owned Russia Today. “We have the money, we paid the payment, now the ball is on the side, first of all, of the American authorities.” Earlier this week, he indicated that the payment might end up being made in rubles.
Saudi prince, rebuked by West, faces dilemma over Russia and China | Reuters
The United States and Britain are ramping up pressure on Saudi Arabia to pump more oil and join efforts to isolate Russia, while Riyadh has shown little readiness to respond and has revived a threat to ditch dollars in its oil sales to China.
British Prime Minister Boris Johnson flew into the world's biggest crude oil exporter on Wednesday, a day after U.S. security advisor Brett McGurk arrived with a U.S. delegation.
Saudi Arabia and its neighbour the United Arab Emirates, which are among just a handful of producers with spare capacity, have snubbed Western calls for more crude to cool red-hot prices and have stuck to an OPEC+ supply pact with Russia and others.
Crown Prince Mohammed bin Salman, the kingdom's de facto ruler, has faced sharp Western criticism over the 2018 murder of Saudi journalist Jamal Khashoggi, Riyadh's human rights record and the Yemen war. U.S. President Joe Biden has, so far, refused to deal directly with the prince, who is widely known as MbS.
Gulf central banks follow Fed to raise key rates by 25 bps | Reuters
Gulf central banks on Wednesday raised their main interest rates by a quarter percentage point in lockstep with the U.S. Federal Reserve as it began a monetary tightening cycle in a newly aggressive stance against rising inflation.
The six Arab nations of the Gulf Cooperation Council typically follow the Fed's lead on interest rates as their currencies are pegged to the U.S. dollar - except Kuwait's, which is pegged to a basket of currencies including the dollar.
"If policymakers in the Gulf did not allow interest rates to follow those in the U.S., capital would flow out of their economies and this would put downwards pressure on their currencies," James Swanston, Middle East and North Africa economist at Capital Economics, wrote in a research note.
The Central Bank of the UAE raised its base rate, which is on its overnight deposit facility, by 25 basis points (bps) to 0.4%. CBUAE maintained the rate on borrowing short-term liquidity from it through all standing credit facilities at 50 bps above the base rate.
Oil dips on Russia-Ukraine talks, U.S. inventory data | Reuters
Oil lost ground for the fifth time in the last six days on Wednesday as traders reacted to hoped-for progress in Russia-Ukraine peace talks and a surprising increase in U.S. inventories.
The oil market has been on a roller-coaster for more than two weeks, and both major benchmarks have traded in their largest high-to-low range over the last 30 days than at any time since the middle of 2020.
Wednesday was no different, as global benchmark Brent traded in a $6 range, between $97.55 and $103.70 before settling at $98.02, down $1.89 a barrel, or 1.9%. U.S. West Texas Intermediate (WTI) crude ended down $1.40, or 1.5%, at $95.04 a barrel.
Last week's frenzied rally pushed Brent briefly past $139 a barrel on worries about extended disruption to Russian supply. Brent is now more than $40 below that point, and some analysts have warned that this reflects too much optimism that the war will end soon.
Binance Deepens Mideast Push After Getting License for Dubai - Bloomberg
Binance Holdings Ltd. has been granted a license to operate in Dubai, days after getting approval in Bahrain, further bolstering its presence in the Middle East.
The virtual asset license allows the world’s largest cryptocurrency exchange to operate its regional business from Dubai, the firm said in a statement on Wednesday. Binance will be permitted to extend limited exchange products and services to pre-qualified investors and professional financial service providers under an initial regulatory phase.
The United Arab Emirates is trying to attract some of the world’s biggest crypto companies and may issue federal licenses for virtual asset service providers by the end of the first quarter, Bloomberg reported last month. Binance is among firms considering a bigger presence in the UAE, and its Chief Executive Officer Changpeng “CZ” Zhao has become a fixture in the country’s crypto scene.
Founded in China in 2017, Binance hasn’t set up a global base yet. In recent months, company executives talked to regulators in the UAE about setting up a headquarters in the country, Bloomberg previously reported. Other crypto companies are also looking to expand their local presence.
The UAE is the Middle East’s third-largest crypto market, trailing Turkey and Lebanon, with transaction volumes of about $26 billion from July 2020 to June 2021, according to data compiled by Chainalysis.
Kuwait’s Ali Alghanim Plans Rare Family-Owned Local Listing - Bloomberg
Ali Alghanim & Sons has filed to list on Boursa Kuwait in what will be the first share sale by a family-owned business in seven years, people familiar with the matter said.
The company will sell a 45% stake in the listing, the first by an auto retailer on the local market, the people said, asking not to be named while discussing confidential matters. The IPO may come as soon as early June and the company will target a high dividend yield, they said.
National Investments Co. is the global coordinator for the IPO, the people said. Kuwait’s Al-Qabas had reported Alghanim’s listing plans earlier.
The company declined to comment.
Alghanim is among Kuwait’s leading merchant families. Its businesses include car dealerships, construction and electronics, and the firm also holds contracts for major government projects. Ali Alghanim & Sons already has a presence in Iraq and is planning further regional expansion.
The last family-owned business to list in Kuwait was Mezzan Holding Co., in June 2015. Boursa Kuwait expects more firms to list soon, followed by government-controlled companies, its chief executive officer said last month.
U.S. Companies Warn Saudi Arabia New Data Law Could Hit Investment - Bloomberg
The largest business lobbying group in the U.S. has warned Saudi Arabia that a new privacy and data law will raise the cost of doing business in the kingdom and complicate efforts to attract foreign investors and wean its economy off a dependence on oil sales.
Saudi Arabia in September issued a draft of its personal data protection law, known as PDPL, which in its current form prevents the transfer of personal data outside the kingdom without any individual exemptions. Companies that don’t comply face criminal sanctions, according to a letter sent by the U.S. Chamber of Commerce earlier this year and seen by Bloomberg.
“There are several aspects of this law that pose not only significant problems for the private sector but will be significant barriers to helping the Kingdom achieve its goal to become a digital hub,” the group, which represents more than 3 million businesses, said in the letter. “It will have a major impact on the cost and ability to do business in the Kingdom.”
Saudi Arabia’s Crown Prince Mohammed bin Salman is looking to attract more foreign investors as part of an ambitious plan to diversify the economy away from oil. It’s vying with other financial centers in the region such as Dubai and Abu Dhabi to become the Gulf’s premier business hub.
Gulf bourses rise, strong economic data propels Saudi 2% higher | Reuters
Gulf markets ended higher on Wednesday, with Saudi Arabia's main index marking a gain after five straight sessions of losses as its gross domestic product rate rose.
Saudi Arabia's gross domestic product rose by 6.7% in the fourth quarter, while overall growth last year increased by 3.2%, official statistics showed, which were largely in line with earlier government estimates. read more
"Economic output for Saudi Arabia remains strong and in line with forecasts, which could help support the stock market overall," said Farah Mourad, senior market analyst of XTB MENA.
Saudi currently has "strong fundamentals" favouring the stock market's direction, he said.
Saudi Arabia's benchmark index (.TASI) rose 2%, with Etihad Etisalat (Mobily) (7020.SE) jumping 9.9% after United Arab Emirates telecoms group e& (ETISALAT.AD) made an offer to increase its stake in Mobily to 50% and one share. read more
Oil giant Saudi Aramco (2222.SE) lifted sentiment, rising 5.5%.
Outside the Gulf, Egypt's blue-chip index (.EGX30) ended 2.6% higher, with real estate companies Heliopolis (HELI.CA) and Medinet Nasr (MNHD.CA) advancing 9.2% and 6%, respectively.
On Tuesday, Egyptian President Abdel Fattah al-Sisi has asked the government to set a price for unsubsidized bread following recent bread price increases.
Mourad said this move to alleviate the effect of rising wheat prices could help stabilize Egypt's stock market.
Dubai's main index (.DFMGI) gained 2% aided by a 14% jump in Islamic Arab Insurance Co (SALAMA.DU).
In Abu Dhabi, the index (.FTFADGI) ended 1.2% higher, with e& putting on 1.9%.
The Qatari index (.QSI) rose 0.3%, boosted by heavyweights Qatar International Islamic Bank and Qatar Gas Transport (QGTS.QA).
Oil holds near $100 as Ukraine talks, demand concerns limit gains | Reuters
Oil steadied above $100 a barrel in a volatile session on Wednesday, as it came under pressure from signs of progress in Russia-Ukraine peace talks and a closely-watched report that cut its forecast of world demand.
Ukraine's president said the positions of Ukraine and Russia were sounding more realistic, but time was needed. read more Russia's foreign minister said some deals with Ukraine were close to being agreed. read more
"Fears of a supply disruption have been tempered by tentative signs of progress in ceasefire talks between Russia and Ukraine," said Stephen Brennock of oil broker PVM.
"That said, an end to hostilities still seems like a long way off."
Brent crude rose 46 cents or 0.5% to $100.37 a barrel by 1225 GMT, having traded as high as $103.70 earlier. U.S. West Texas Intermediate (WTI) crude added 59 cents or 0.6% to $97.03.
Etisalat Offers to Boost Stake in Mobily in $2.12 Billion Deal - Bloomberg
Saudi Arabia’s Mobily surged after Etisalat, the biggest phone operator in the United Arab Emirates, proposed to boost its shareholding in the firm in a deal that could be valued at $2.12 billion.
Etisalat offered 47 riyals a share for a higher stake in Mobily, a 22.2% premium to its Tuesday’s closing price, according to regulatory filings. The offer values Mobily at 36.2 billion riyals ($9.65 billion).
Mobily shares jumped 9.9% to 42.25 riyals in Riyadh, touching the 10% daily fluctuation limit in Saudi Arabia. Etisalat gained 1.4% in Abu Dhabi.
Etisalat hasn’t made a firm offer and the companies are only in discussions at this time. The UAE phone operator already holds 28% of Mobily and is seeking to raise it to 50% plus one share.
Saudi Arabia is the biggest Gulf economy, and the potential purchase is part of Etisalat’s plans to expand in the rapidly growing telecom market in the kingdom. Etisalat “aims to deepen the strong existing ties with Mobily, with the potential for further collaboration and realization of greater synergies,” according to the company.
Etisalat is being advised by HSBC Saudi Arabia, while JPMorgan Saudi Arabia and Riyad Capital are joint financial advisers to Mobily.
UAE remains committed to OPEC+ deal - source | Reuters
The United Arab Emirates remains committed to the OPEC+ agreement, a source with knowledge of the matter told Reuters on Wednesday.
The source made the comments ahead of a planned visit later on Wednesday by British Prime Minister Boris Johnson to the UAE and Saudi Arabia, part of efforts to secure additional oil flows and increase pressure on Russia. read more
Saudi Arabia’s Economy Expanded 1.6% in the Fourth Quarter - Bloomberg
Saudi Arabia’s gross domestic product expanded 1.6% in the fourth quarter compared to the previous three months, as high oil prices help the kingdom recover from the impact of the pandemic.
The non-oil sector -- the engine of job creation -- grew 1.2% on a quarterly basis, according to data released by the General Authority for Statistics. On an annual basis, non-oil growth hit 5.1%, with the overall economy expanding 6.7%. The figures were in line with preliminary estimates released last month.
Most Gulf markets gain, Saudi snaps five-day losing streak | Reuters
Most stock markets in the Gulf region traded higher in early trade on Wednesday, with the Saudi index gaining after five straight sessions of losses.
Oil prices, a key catalyst for the Gulf's financial markets, rose over $1, bouncing back after earlier declines, as Russia's invasion of Ukraine continues to stoke volatile trading with ceasefire talks the latest market trigger.
Brent futures were up 97 cents, or 1%, at $100.88 a barrel at 0503 GMT.
Ukrainian President Volodymyr Zelenskiy said in a video address released earlier in the day that the positions of Ukraine and Russia at peace talks were sounding more realistic, but more time was needed. read more
Saudi Arabia's benchmark index <>TASI> advanced 0.6%, with Etihad Etisalat (Mobily) (7020.SE) jumping nearly 10%.
The jump in Mobily's stock comes after the United Arab Emirates telecoms group e& (ETISALAT.AD) made an offer to increase its stake in Mobily to 50% and one share. read more
Shares of e& were up more than 1%.
Other telecoms companies including Mobile Telecommunications Company Saudi Arabia (7030.SE) and Atheeb Telecom (7040.SE) also boosted the kingdom's main index.
Dubai's main share index (.DFMGI) edged 0.2% higher, helped by a 4% increase in Islamic Arab Insurance Co (SALAMA.DU) and a 2% increase in Amlak Finance (AMLK.DU).
The Abu Dhabi index (.ADI) added 0.3%.
Qatar stocks (.QSI) dipped 0.4%, with petrochemical maker Mesaieed Petrochemical (MPHC.QA) falling 5.1% after shareholders approved an amendment raising 100% foreign ownership.
Oil prices climb as Russia-Ukraine ceasefire talks stoke volatility | Reuters
Oil prices rose as much as $3 on Wednesday, bouncing back after earlier declines, as Russia's invasion of Ukraine continues to stoke volatile trading with ceasefire talks the latest market trigger.
Brent futures were last up $2.64, or 2.6%, at $102.55 a barrel by 0730 GMT.
U.S. West Texas Intermediate (WTI) crude rose $1.91, or 2%, to stand at $98.35 a barrel. Both contracts earlier declined more than $1 a barrel, with Brent falling to $98.86 a barrel and WTI easing to $94.90 a barrel earlier in the session.
Ukrainian President Volodymyr Zelenskiy said in a video address released early on Wednesday that the positions of Ukraine and Russia at peace talks were sounding more realistic, but more time was needed. read more