US reminds #UAE of vigilance to combat Russian sanctions evasion | Financial Times

US reminds UAE of vigilance to combat Russian sanctions evasion | Financial Times

The US has called on financial institutions in the United Arab Emirates to remain vigilant in combating Russian sanctions evasion as western states fret that their Gulf ally, and others such as Turkey, could emerge as havens for illicit cash linked to the Kremlin. 

Wally Adeyemo, deputy treasury secretary, welcomed UAE institutions’ commitment to preventing money laundering, but said the Gulf state — like other global financial hubs — faces the “threat of illicit financial flows”. He underscored the need “for vigilance and proactive action” in combating Russian sanctions evasion, including in the UAE. 

“We know that Russian banks have employed deceptive payment practices and used shell companies and other means to hide the true nature of their transactions,” according to a copy of his prepared address to a UAE banking roundtable released on Wednesday. 

“Financial institutions must be exceedingly cautious in handling any Russia-related businesses and in managing the risks associated with financial institutions that have exposure to the Russian financial system,” he added.

Oil falls around 3% as investors eye U.S. Fed rate hikes | Reuters

Oil falls around 3% as investors eye U.S. Fed rate hikes | Reuters

Oil prices tumbled around 3% on Wednesday as investors worried that rate hikes by the Federal Reserve could push the U.S. economy into recession, dampening demand for fuel.

Brent crude futures fell $2.91, or 2.5%, to settle at $111.74 a barrel. The global benchmark hit a session low of $107.03, its lowest since May 19.

U.S. West Texas Intermediate (WTI) fell $3.33, or 3%, to settle at $106.19 a barrel. The session low was $101.53, its lowest since May 11.

Investors assessed on Wednesday how interest rate hikes designed to cool soaring inflation might stall an economic recovery. read more

Oil prices pared losses, however, during the session after Fed Chair Jerome Powell pledged an "overarching focus" on bringing down inflation and reiterated that ongoing increases in the central bank's policy rate would be appropriate, with the pace depending on the economic outlook.

#Saudi Crown Prince’s Visit to #Turkey Marks Turning Point After Khashoggi Killing - WSJ

Saudi Crown Prince’s Visit to Turkey Marks Turning Point After Khashoggi Killing - WSJ

Saudi Crown Prince Mohammed bin Salman arrived in Turkey on Wednesday for the first time since the 2018 killing of journalist Jamal Khashoggi, as he looks to end years of international isolation ahead of a trip by President Biden to the kingdom.

Mr. Khashoggi, a critic of the Saudi leadership, was killed and dismembered inside the Saudi consulate in Istanbul by men close to Prince Mohammed. The U.S. intelligence community concluded that the prince likely ordered the killing of the Washington Post columnist. The Saudi government initially denied the incident but later acknowledged that government officials carried out the killing and said the crown prince wasn’t personally involved.

The murder evoked international condemnation of Saudi Arabia and led countries and businesses around the world to shun the crown prince and his government.

Now, major world leaders are once again beginning to embrace Prince Mohammed, who runs Saudi Arabia’s daily affairs on behalf of his aging father, King Salman. Next month, Mr. Biden is set to visit the kingdom to meet Prince Mohammed, having previously refused to deal with him directly as U.S.-Saudi relations sunk to their lowest point in decades.

#Qatar Hesitates on VAT, Will Wait for ‘Right Time’ Before Imposing the Tax - Bloomberg

Qatar Hesitates on VAT, Will Wait for ‘Right Time’ Before Imposing the Tax - Bloomberg

Qatar, one of only two Arab economies in the Gulf region without value-added tax, will likely wait longer before imposing the levy.

“We will look to the right time to apply such taxes,” Finance Minister Ali Al Kuwari said in an interview Wednesday with Bloomberg Television at the Qatar Economic Forum in Doha. “Tax reforms are part of our plans.”

More than half a decade since signing an agreement with neighboring states that requires all six members of the Gulf Cooperation Council to introduce VAT, Qatar and Kuwait are alone in not following through. By contrast, Saudi Arabia already tripled its VAT rate to 15% in 2020 to bolster state revenue when oil prices slumped.

Last year, Al Kuwari said his country hasn’t yet chosen when to go ahead and was wary of adding an extra burden on consumers in the midst of the pandemic. A KPMG report earlier this year said Qatar was expected to impose a VAT regime at a rate of 5% during 2022.

#Qatar Stock Exchange (QSE) Plans to Allow Short Selling, Draw Listings - Bloomberg

Qatar Stock Exchange (QSE) Plans to Allow Short Selling, Draw Listings - Bloomberg

The Qatar Stock Exchange is planning a slew of initiatives including allowing investors to lend and borrow securities and bet against shares, as the bourse looks to attract more investors and bolster valuations in its markets.

The exchange is “engaged with regulators and policy makers for market development by bringing in tools like short selling, securities lending and borrowing,” Mohsin Mujtaba, director of the product and market development department, said in an interview. Those offerings are expected to be introduced in the next quarter.

The QSE has also started working with London Stock Exchange Group Plc to offer “derivatives as a hedging and leverage solution for both retail and institutional investors” by the end of next year.

The moves are part of a “larger playbook” focused on “building more liquidity and attracting more investors,” Mujtaba said. The QSE was established in 1995 but a lack of liquidity and trading has long stymied valuations.

Oil slumps over 6% as Biden set to cut fuel costs for drivers | Reuters

Oil slumps over 6% as Biden set to cut fuel costs for drivers | Reuters

Oil prices tumbled on Wednesday on news of a plan by U.S. President Joe Biden to cut fuel costs for drivers and amid concerns over a potential economic recession after recent central bank rate hikes, which also weighed on equities.

Brent crude futures were down $7.49, or 6.5%, by 1313 GMT at $107.16 a barrel, their biggest fall in percentage terms in three months. U.S. West Texas Intermediate (WTI) futures fell $7.74, or 7.1%, to $101.78, its biggest daily drop in percentage terms since March 9.

Both contracts hit their lowest since May 19 and 11, respectively.

Oil prices often move in tandem with stocks, which also took a hit as investors assessed how interest rate hikes designed to cool soaring inflation might stall an economic recovery as pandemic restrictions have eased. read more

Biden on Wednesday is expected to ask Congress to consider a three-month suspension of the 18.4 cents per gallon federal tax on gasoline and call on states to suspend their fuel taxes, a senior administration official said. read more

Gulf bourses retreat on lower oil prices, inflation fears | Reuters

Gulf bourses retreat on lower oil prices, inflation fears | Reuters

Stock markets in the Gulf retreated on Wednesday, tracking crude prices, and as global sentiment was weighed by persistent worries that rising interest rates would trigger a global recession.

Saudi Arabia's benchmark index (.TASI) slid 2.9%, posting broad-based declines, dragged down by Al Rajhi Bank (1120.SE) a 4.3% drop and a 2.9% decline in Saudi National Bank (1180.SE), the country's largest lender.

Oil prices, a key catalyst for the Gulf's financial markets, tumbled on news of a plan by U.S. President Joe Biden to cut fuel costs for drivers.

The White House asked the chief executive officers of seven oil companies to a meeting this week to discuss ways to increase production capacity and reduce fuel prices of around $5 a gallon as they make record profits.

Dubai's main share index (.DFMGI) closed 0.9% lower, with blue-chip developer Emaar Properties (EMAR.DU) losing 1.9%.

In Abu Dhabi, equities (.FTFADGI) declined 1.8%, with the United Arab Emirates' biggest lender First Abu Dhabi Bank (FAB.AD) retreating 2.5%.

The Qatari benchmark (.QSI) was down 1.1%, with petrochemical maker Industries Qatar (IQCD.QA) dropping 2.5%.

U.S. Federal Reserve chair Jerome Powell is due to start his testimony to Congress on Wednesday, with investors looking for further clues about whether another 75-basis-point rate hike is on the cards in July.

Economists polled by Reuters expect the Fed will deliver a 75-basis-point interest rate hike next month, followed by a half-percentage-point rise in September, and won't scale back to quarter-percentage-point moves until November at the earliest. read more

Investors focused on the impact of the tightening monetary policy on economic growth and the Federal Reserve's next steps could cause a sharp slow down, said Farah Mourad, senior market analyst of XTB MENA.

Outside the Gulf, Egypt's blue-chip index (.EGX30) lost 0.8%.

According to Mourad, the Egyptian market remains exposed to the developments in Ukraine as well the selling pressure from international investors.

Emirates Weighs New Airbus A350 Order as Boeing Deliveries Drag Out - Bloomberg

Emirates Weighs New Airbus A350 Order as Boeing Deliveries Drag Out - Bloomberg

Gulf carrier Emirates is weighing more Airbus SE A350 jetliner orders to help fill gaps in its fleet in coming years as Boeing Co. struggles to bring its wide-body models to market.

Following strong freight demand during the pandemic, Emirates converted 10 Boeing 777s into cargo planes, depleting its passenger capacity, and a still-robust market might prompt it to switch another 10, President Tim Clark said.

That could open a potential hole in the Dubai-based company’s operations sometime between 2024 and 2027, with the gap hard to fill through existing order commitments, Clark said. Service entry for Boeing’s new 777X model has slipped to 2025, while Emirates wouldn’t get 787 Dreamliners until the same year at least should it hold the US manufacturer to a contract, he said.

“That’s kind of too late for us,” Clark told journalists in Germany on Wednesday. “This is why we’re getting a bit wary and we’re looking at the A350. We really only have one place to go.”

Oil slumps 4% as Biden set to cut fuel costs for drivers | Reuters

Oil slumps 4% as Biden set to cut fuel costs for drivers | Reuters

Oil prices tumbled on Wednesday on news of a plan by U.S. President Joe Biden to cut fuel costs for drivers and amid concerns over a potential economic recession after recent central bank rate hikes, which also weighed on equities.

Brent crude futures were down $4.62, or 4%, at $110.03 a barrel while U.S. West Texas Intermediate (WTI) futures fell $4.96, or 4.5%, to $104.56 by 1040 GMT.

Earlier in the session, both contracts had shed over $6 each to hit their lowest since May 19 and 12, respectively.

Oil prices often move in tandem with stocks, which also took a hit as investors assessed how interest rate hikes designed to cool soaring inflation might stall an economic recovery as pandemic restrictions have eased. read more

Biden on Wednesday is expected to ask Congress to consider a three-month suspension of the 18.4 cents per gallon federal tax on gasoline and call on states to suspend their fuel taxes, a senior administration official said. read more

Bahrain's Mumtalakat eyes possible IPO for McLaren in next few years | Reuters

Bahrain's Mumtalakat eyes possible IPO for McLaren in next few years | Reuters

Bahrain's sovereign wealth fund, Mumtalakat, which has a 60% stake in McLaren, expects the British racing team and supercar maker to go public in two to three years, its chief executive told Reuters on Tuesday.

"The racing team has benefited from the growth and viewership so that side of the business has been doing fantastically well," Mumtalakat's chief executive Khalid Al Rumaihi said in an interview.

"The automotive side clearly has challenges, but we believe in the company and we think this will be a prime candidate, obviously not at the moment, but in 2 to 3 years for an IPO (initial public offering)," he said.

McLaren did not immediately respond to a request for comment when contacted by Reuters on Tuesday.

Mumtalakat, which has just north of $18 billion in assets under management, released its standalone annual results on Tuesday, which showed it swung to profit in 2021 from a loss in 2020.

#Dubai Becomes New Switzerland for Traders of Russian Commodities - Bloomberg

Dubai Becomes New Switzerland for Traders of Russian Commodities - Bloomberg

Traders of Russian commodities are rushing to set up businesses in Dubai as Switzerland makes it increasingly challenging for them to deal with Moscow.

Switzerland has for decades been home to middlemen helping to match Russian producers with buyers all over the world. Now, a ratcheting up of sanctions is prompting a migration to the emirate in the Persian Gulf.

Russia’s three largest oil producers are in the process of evaluating Dubai for trading operations, and several other firms have already relocated there. For Switzerland, some kind of exodus appears inevitable after the country followed European Union bans targeting exports from Russia.

“The trade will go on,” said Wouter Jacobs, director of the Erasmus Commodity & Trade Center at Erasmus University in Rotterdam. “Middle Eastern and Eastern jurisdictions will gain in importance relative to the rather euro-centric situation of the commodities business up to now.”

Major Gulf bourses in red on revived inflation fears | Reuters

Major Gulf bourses in red on revived inflation fears | Reuters

Major stock markets in the Gulf fell in early trade on Wednesday, tracking Asian shares as persistent worries about interest rates and inflation remained a key focus for investors.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 1.39%.

Saudi Arabia's benchmark index (.TASI) dropped 1.5%, dragged down by a 2.4% fall in Al Rajhi Bank (1120.SE) and a 2.9% decline in Sahara International Petrochemical Company (2310.SE).

Oil prices, a key catalyst for the Gulf's financial market, skidded more than $6 a barrel amid a push by U.S. President Joe Biden to bring down soaring fuel costs.

Seven oil companies are set to meet Biden on Thursday, under pressure from the White House to drive down fuel prices as they make record profits.

The energy index (.TENI) in Saudi Arabia was down 0.6%.

The main share index (.DFMGI) in Dubai, the Middle East's travel and tourism hub, retreated 1.4%, with blue-chip developer Emaar Properties (EMAR.DU) declining 2.8%.

In Abu Dhabi, the index (.FTFADGI) fell 1.2%, hit by a 1.1% drop in First Abu Dhabi Bank (FAB.AD), United Arab Emirates' biggest lender.

Economists polled by Reuters expect the U.S. Federal Reserve will deliver another 75-basis-point interest rate hike next month, followed by a half-percentage-point rise in September, and won't scale back to quarter-percentage-point moves until November at the earliest. read more

The Qatari index (.QSI) lost 0.2%, with Commercial Bank (COMB.QA) trading 1.1% lower.

Oil slumps by more than $5 as Biden expected to cut U.S. fuel cost | Reuters

Oil slumps by more than $5 as Biden expected to cut U.S. fuel cost | Reuters

Oil prices tumbled by more than $5 a barrel on Wednesday amid a push by U.S. President Joe Biden to cut fuel costs for drivers in the latest episode to aggravate relations between the White House and the U.S. oil industry.

Brent crude futures were down $5.10, or 4.5%, to $109.55 a barrel while U.S. West Texas Intermediate (WTI) futures were down $5.37, or 5.9%, at $104.15 as of 0800 GMT.

The contracts earlier hit their lowest levels since May 19 and 12, respectively.

Biden on Wednesday is expected to call for temporarily suspending the 18.4 cents per gallon federal tax on gasoline, a source said, as the United States, the world's largest oil consumer, struggles to tackle soaring gasoline prices and inflation. read more

"The latest in a long line of attempts to temper surging prices at the pumps is having the desired effect. Yet whether this knee-jerk reaction will stand the test of time is by no means guaranteed," said PVM's Stephen Brennock, pointing to an expected summer demand surge.