Most Gulf markets fall on lower oil prices; US debt ceiling vote in focus | Reuters

Most Gulf markets fall on lower oil prices; US debt ceiling vote in focus | Reuters

Most stock markets in the Gulf ended lower on Wednesday pressured by a decline in oil prices and a weaker-than-expected Chinese economic data, ahead of a crucial vote in Washington on the U.S. debt ceiling.

The U.S. House of Representatives is due to vote on Wednesday on a bill to lift the government's debt ceiling, a critical step to avoid a potential economically destabilizing default that could come early next week without congressional action.

Saudi Arabia's benchmark index (.TASI) fell more than 1%, with Al Rajhi Bank (1120.SE) and Riyad Bank (1010.SE) sliding 1.3% and 2.8%, respectively.

The Saudi stock market recorded losses with traders considering the impact of the weaker-than-expected Chinese manufacturing activity on the local economy, said Ahmed Negm, Head of Market Research MENA at XS.com.

"The main index could remain exposed to developments in energy markets."

China's manufacturing activity contracted faster than expected in May on weakening demand, with the official manufacturing purchasing managers' index (PMI) down to 48.8 from 49.2 in April. The outcome lagged a forecast of 49.4.

In Abu Dhabi, the index (.FTFADGI) closed 0.8% lower.

Separately, the United Arab Emirates said on Wednesday it was no longer taking part in operations by a U.S.-led task force protecting Gulf shipping, which has been subjected to renewed tanker seizures by Iranian naval forces in recent weeks.

The Qatari benchmark (.QSI) slid 1.8%, underperforming the region, with most stocks on the index trading in the red including petrochemical maker Industries Qatar (IQCD.QA), which shed 4.4%.

Oil prices - a key catalyst for the Gulf's financials - fell over 2% on a stronger U.S. dollar and as weak data from top oil importer China raised demand fears.

Mixed signals by major OPEC+ producers on whether or not the group will decide to further cut oil production also sparked the recent volatility in oil prices.

Dubai's main share index (.DFMGI), however, bucked the trend to finish 0.3% higher.

Outside the Gulf, Egypt's blue-chip index (.EGX30) lost 0.2%, with top lender Commercial International Bank (COMI.CA) falling 0.4%.

#Dubai Buy Now, Pay Later (BNPL) Firm Tabby Raises Debt to $350 Million - Bloomberg

Dubai Buy Now, Pay Later (BNPL) Firm Tabby Raises Debt to $350 Million - Bloomberg

Dubai-based Tabby increased its debt facility to $350 million as the buy now, pay later startup pushes ahead with growth plans.

The financing round was led by San Francisco-based Partners for Growth, New York-based Atalaya Capital Management and CoVenture, a Miami-based multi-strategy asset-management firm. The additional financing will allow Tabby to serve more customers, retailers and purchases, it said in a statement.

Tabby’s last funding round in January valued the company at $660 million. It has over 4 million active users in Saudi Arabia, the United Arab Emirates and Kuwait and has partnered with more than 15,000 businesses.

In an interview at the time, Tabby Chief Executive Officer Hosam Arab said although concerns over higher interest rates and a looming recession were impacting buy now, pay later companies in developed markets, Gulf-based consumers were less indebted and better-able to repay debts.

Russian Steel Tycoon Vladimir Lisin Joins Business Elite Opening in #AbuDhabi - Bloomberg

Russian Steel Tycoon Vladimir Lisin Joins Business Elite Opening in Abu Dhabi - Bloomberg

Russian steel tycoon Vladimir Lisin has become the latest high-profile businessman to set up in Abu Dhabi with a series of new offices and special purpose vehicles.

The billionaire chairman of Russia’s biggest steelmaker, Novolipetsk Steel PJSC, helped to register multiple offices in the oil-rich emirate this month and created two SPVs — Serenity II Holdings and Nebula II Holdings — in Abu Dhabi Global Market, according to the business hub’s registry.

The new firms add to four entities he set up in the financial free zone earlier this year. SPVs have become the preferred method for wealthy individuals to set up family offices and private assets in ADGM, although it’s not immediately clear what Lisin’s entities will do. Lisin isn’t sanctioned by the US, United Kingdom or European Union.

A representative for Lisin declined to comment. A representative for ADGM declined to comment on registered entities within its jurisdiction and referred questions to the company.

#UAE central bank issues AML/CTF guidance for dealing with virtual assets | Reuters

UAE central bank issues AML/CTF guidance for dealing with virtual assets | Reuters

The UAE Central Bank has issued new anti-money laundering and counter-terrorism financing guidance for financial institutions when dealing with virtual assets, such as cryptocurrencies and non-fungible tokens, it said on Wednesday.

The new guidance discusses the risks arising from dealing with virtual assets and virtual asset service providers, including on due diligence for licensed financial institutions when dealing with these customers and counterparties, the statement said.

The guidance, which will come into effect within a month, applies to banks, finance companies, exchange houses, payment service providers, registered hawala providers and insurance companies, agents and brokers.

The bank said the guidance takes Financial Action Task Force (FATF) standards into account.

The FATF in March 2022 included the UAE on a list of jurisdictions subject to increased monitoring, known as its "grey" list. The UAE responded by saying it was committed to working closely with FATF to improve.

#Dubai's road authority weighs possible IPO of taxi business -sources | Reuters

Dubai's road authority weighs possible IPO of taxi business -sources | Reuters

Dubai's transport regulator is in the early stages of exploring strategic options for its assets, including a possible initial public offering of its taxi business, two sources familiar with the matter told Reuters.

The emirate's Roads and Transport Authority (RTA) plans to invite investment banks to pitch for advisory work which may include a possible assessment for Dubai Taxi Corporation, said the sources, who sought anonymity as the matter is not public.

However, no final decisions have been made in the deliberations, still at very early stages, with any transaction subject to market conditions, one of the sources said.

The RTA did not immediately respond to a Reuters request for comment on Wednesday.

Last year, the RTA raised $1 billion and drew orders of $50 billion from selling a 24.9% stake in the public-share sale of its toll-road business Salik (SALIK.DU).

Most Gulf markets fall on lower oil prices; #Dubai gains | Reuters

Most Gulf markets fall on lower oil prices; Dubai gains | Reuters

Most major Gulf stock markets fell in early trading on Wednesday, as lower oil prices and weaker-than-expected Chinese economic data soured sentiment, while Dubai edged up.

Oil, which fuels the region's growth, was trading on the back foot as worries of slowing demand from top oil importer China after weak manufacturing data outweighed some positive progress on the U.S. debt ceiling bill.

Brent crude futures for August delivery fell 15 cents to $73.56 a barrel by 0656 GMT.

Saudi Arabia's benchmark stock index (.TASI) fell 0.8%, with almost all of its constituent stocks trading in the red. Banking stocks lead the losses.

Saudi National Bank (1180.SE), Kingdom's largest lender by assets, and Riyad Bank (1010.SE) slipped 1.9% and 2.1% respectively.

State oil giant and index heavyweight Saudi Aramco (2222.SE) was down 0.5%.

In Abu Dhabi, the benchmark index (.FTFADGI) retreated 0.2% and was poised to register a 3.3% monthly decline, dragged by a more than 2% slide in telecoms firm e& , formerly known as Emirates Telecommunications Group, and a 2.9% decline in Multiply Group (MULTIPLY.AD).

First Abu Dhabi Bank (FAB.AD) was up 0.6%. UAE's largest lender is set to raise $600 million from an offering of five-year green bonds, a bank document showed on Tuesday.

The Qatari benchmark stock index (.QSI) dropped 0.1%, extending losses to a seventh consecutive session, as losses in industrial stocks offset gains in financials. Chemical maker Industries Qatar (IQCD.QA) fell more than 1.5%, while Qatar National Bank (QNBK.QA), the Gulf's largest lender, was up 0.6%.

Dubai's main share index (.DFMGI) gained 0.3%, its fourth straight positive day, led by gains in financial property stocks. Dubai Islamic Bank (DISB.DU) climbed over 1%, while blue-chip developer Emaar Properties (EMAR.DU) was up 0.8%.

Elsewhere, Dubai's transport regulator is in the early stages of exploring strategic options for its assets, including a possible initial public offering of its taxi business, two sources familiar with the matter told Reuters.

Dubai, the region's financial hub, saw five IPOs rake in nearly $8.5 billion in proceeds last year, fuelled by a government privatisation plan to list 10 state-linked firms to boost stock market activity.

Bearish Oil Bets Slide After Saudis Tell Shorts to ‘Watch Out’ - Bloomberg

Bearish Oil Bets Slide After Saudis Tell Shorts to ‘Watch Out’ - Bloomberg

Saudi Arabia’s top energy official told short sellers to “watch out” last week. Traders of global benchmark Brent oil were listening.

Money managers boosted their net-long holdings in Brent by more than 30,000 contracts last week, the biggest increase in almost two months. The move was driven by a pullback in bearish bets and the addition of fresh bullish ones.

 

 

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said at a forum that speculators should “watch out,” echoing previous warnings that those who bet against the oil market will be left “ouching”. The OPEC+ coalition is scheduled to meet June 3-4 to discuss its output policy.

The producer group surprised the market in April by announcing an unexpected round of production cuts, but since then traders had been steadily ramping up fresh bearish bets on oil.

Speculators also slashed bets against Europe’s diesel benchmark — which had one of the largest concentrations of short positions across the oil market — by the most since August 2021.

Mideast Stocks: Most Gulf markets end higher on US debt deal hopes; #Qatar falls

Mideast Stocks: Most Gulf markets end higher on US debt deal hopes; Qatar falls

Most Gulf stock markets ended higher on Tuesday, as investors cheered the prospect of the world's largest economy averting a major debt default.

A weekend deal to lift the $31.4 trillion debt limit announced by the White House and House Republicans would avert a catastrophic U.S. default and boost overall appetite for risk. Dubai's main share index advanced 0.7%, with blue-chip developer Emaar Properties climbing 2.7% and toll-operator Salik Co closing 2% higher. The Abu Dhabi index concluded 0.8% higher. Saudi Arabi's benchmark index ended unchanged.

Oil prices - a key catalyst for the Gulf's financial markets - fell by about 3% as concerns about the U.S. debt ceiling pact cooled the market's risk-on sentiment and mixed messages from major producers clouded the supply outlook ahead of their meeting this weekend.

The Qatari benchmark, however, bucked the trend and fell 0.6%, with most of the stocks on the index ending lower including Masraf Al Rayan, which was down 3%.

The Qatari stock market remained under pressure, while natural gas prices recorded more volatility and could return to the downside, said George Pavel, general manager at Capex.com. "Local stocks were seeing mitigated performances, increasing uncertainty around the market's direction."

Outside the Gulf, Egypt's blue-chip index jumped 1.9%, with top lender Commercial International Bank gaining 1.5%. The Egyptian stock market continued to recover, supported by the buying volumes from local investors while international ones remained on a selling spree, Pavel said.

#Saudi Aramco's $2 Trillion Valuation Is an Illusion - Bloomberg

Saudi Aramco's $2 Trillion Valuation Is an Illusion - Bloomberg

Oil giant Saudi Aramco shares a couple of traits with Apple Inc. and Microsoft Corp.: a market capitalization measured in the trillions of dollars, and a stratospheric price-to-earnings ratio. Unlike those tech behemoths, though, Aramco’s valuation relies more on smoke and mirrors than the market’s collective wisdom.

That matters because the Saudi government, which directly and indirectly still controls 98% of the company’s equity after its 2019 initial public offering, is now mulling whether to sell more shares.

Technically, there’s nothing unreasonable about Aramco’s valuation, currently sitting just above $2 trillion and making it the world’s third-largest publicly traded company. After all, willing buyers and sellers set the price transparently on the stock market. That’s how companies are valued in a capitalist system.

The problem is the quality and breadth of that price discovery. The liquidity in Aramco shares is abysmal: a daily average of just $51 million worth of stock changed hands over the past year, according to data compiled by Bloomberg. Compare that with nearly $2 billion for Exxon Mobil Corp. For Apple and Microsoft, the figures are $11.2 billion and $7.5 billion, respectively.

#SaudiArabia First Milling's IPO Pulls in $18 Billion of Orders - Bloomberg

Saudi Arabia First Milling's IPO Pulls in $18 Billion of Orders - Bloomberg

Saudi Arabia’s First Milling Co. set the price for its initial public offering at the top of the marketed range after being swamped by institutional orders, the latest sign of a revival in the kingdom’s IPO market.

Big investors placed orders worth 68.8 billion riyals ($18 billion), almost 69 times more than was available to them, according to a statement.

At a price of 60 riyals a share, the IPO will raise raise 999 million riyals for selling shareholders, valuing the company at 3.33 billion riyals. First Milling will take orders from retail buyers from June 6 to June 7.

The IPO is set to be the second biggest in Saudi Arabia this year, after generic drugmaker Jamjoom Pharmaceuticals Factory Co.’s $336 million offering. That deal also priced at the top of the range last week and got institutional investor orders for 67 times the shares on offer.

Saudi IPOs are returning to life after their slowest start since 2014 amid concerns over falling oil prices and a global economic slowdown. The benchmark Tadawul All Share Index has rebounded about 12% from a March low, helping boost investor sentiment.

Just $72 million worth of IPOs have started trading in the kingdom so far this year, a sharp drop from the almost $4 billion seen a year ago, according to data compiled by Bloomberg.

SNB Capital is acting as financial advisor, lead manager and bookrunner on First Milling’s IPO. SNB Capital and GIB Capital are the underwriters.

#Saudi crown prince turns to ‘state capitalism’ after change in the guard | Financial Times

Saudi crown prince turns to ‘state capitalism’ after change in the guard | Financial Times

As Saudi Arabia enjoyed an unprecedented oil boom in the 1970s, the monarchy turned to a handful of merchant family companies to build the nation’s infrastructure. 

But almost 50 years and another oil windfall later, many have been sidelined by a rising cadre of businesses that have one thing in common: the state Public Investment Fund has taken a stake in each. 

The growing dominance of the $650bn sovereign wealth fund, chaired by Crown Prince Mohammed bin Salman, underscores the extent to which the country’s day-to-day ruler has upended the old order as he robustly asserts his control over the economy and seeks to diversify it away from oil revenues. 

“There’s definitely a change in the guard,” said Monica Malik, chief economist at the Abu Dhabi Commercial Bank and author of a book on the Saudi private sector. “Development is being driven by government-led entities, it’s very much more a centralised and public sector-led growth.”

Boards of Sohar International, HSBC Bank #Oman agree merger deal

Boards of Sohar International, HSBC Bank Oman agree merger deal

The boards of directors of Oman's Sohar International Bank and HSBC Bank Oman have approved their proposed merger on the terms and conditions approved in November 2022.

In separate statements to the Muscat Stock Exchange on Tuesday, the lenders said they will both continue to function as independent entities until the merger is completed. They have also each approved calling for an extraordinary general meeting of shareholders to consider the deal.

The merger is subject to regulatory approval, they added.

In November they agreed that HSBC Oman will be dissolved, and its shares cancelled. Its shareholders will be offered a consideration valuing HSBC Oman at 1.0X book value, and either Sohar International shares or a consideration in cash, not exceeding 70% of the total consideration.

Sohar shares that form a part of the consideration to HSBC Oman will be valued at 1.0X book value, which will be calculated for both lenders later.

Olam Group Faces Delay in IPO of Agri Unit in #SaudiArabia - Bloomberg

Olam Group Faces Delay in IPO of Agri Unit in Saudi Arabia - Bloomberg

Olam Group’s shares sank more than 7% after the agricultural commodities trader said the listing of its unit in Saudi Arabia won’t be completed in the first half of the year as planned.

The company hasn’t received all the regulatory approvals needed for its concurrent dual listing of Olam Agri in Saudi Arabia and Singapore, Olam said in a statement. It will continue to pursue the initial public offering of Olam Agri in the next practical window, it said.

Olam’s shares dropped as much as 7.5% in Singapore to S$1.35, the biggest loss since March 2022. The stock pared some of those losses but is still set for the lowest close since December.

 

 

The Singapore-based trader announced its IPO plan for Olam Agri in January, saying it would be the first listing of a global company in Saudi Arabia. It was targeting $600 million to $700 million in primary proceeds, and about $300 million to $400 million in secondary proceeds, it said in March.

BRICS Bank to Expand Membership as #SaudiArabia Looks to Join - Bloomberg

BRICS Bank to Expand Membership as Saudi Arabia Looks to Join - Bloomberg

The New Development Bank, the lender created by the BRICS group of nations, will widen its membership as it seeks to boost its capital and counter the influence of Western-dominated multilateral banks.

The lender — formed by Brazil, Russia, India, China and South Africa — will look at increasing the diversity of its members in terms of geography, development stages and on the size of the countries, Dilma Rousseff, the bank’s president, said at its annual meeting in Shanghai on Tuesday.

Saudi Arabia is the latest to discuss joining the bank, the Financial Times has reported, a move that would give the lender more financial muscle. The bank was created in 2014 as a counterweight to the International Monetary Fund and the World Bank.

The bank’s membership is open to any country within the United Nations. Bangladesh and the United Arab Emirates became members in 2021, while Egypt joined in February. Uruguay is a prospective member, according to the NDB’s website.

Canary Wharf Debt Downgrade Is Latest Sign of Real Estate Woes - Bloomberg

Canary Wharf Debt Downgrade Is Latest Sign of Real Estate Woes - Bloomberg

Moody’s has downgraded debt issued by owner of London’s Canary Wharf neighborhood, the latest sign of the difficulties facing real estate globally.

The financial district in the east of the capital, owned by Brookfield Asset Management Inc. and Qatar’s sovereign wealth fund, has more than £1.4 billion of debt coming due in 2024 and 2025. The company would probably be highly reliant on asset sales, and potentially shareholder support, to help it de-leverage and refinance, Moody’s said.

The ratings firm downgraded Canary Wharf Group Investment Holdings Plc to Ba3 from Ba1 previously, according to Tuesday’s statement, citing the “difficult operating and funding environment for real estate companies” that it expects to persist for at least the next year.

The landlord did not immediately reply to a request for comment. Its £300m bond due for repayment in 2028 is currently being quoted at 68.7 pence in the pound.

Major Gulf markets gain as US debt deal spurs optimism | Reuters

Major Gulf markets gain as US debt deal spurs optimism | Reuters

Major stock markets in the Gulf rose in early trade on Tuesday as investors cheered the prospect of the world's largest economy averting a major debt default.

A weekend deal to lift the $31.4 trillion debt limit announced by the White House and House Republicans would avert a catastrophic U.S. default and boost overall appetite for risk.

Saudi Arabia's benchmark index (.TASI) gained 0.6%, with Dr Sulaiman Al-Habib Medical Services (4013.SE) climbing 1.2% and Riyad Bank (1010.SE) advancing 1.5%.

Separately, Saudi Arabia's First Milling Company said on Tuesday it aimed to raise 999 million riyals ($266.39 million) from its initial public offering after it set the share price at the top end of a previously announced range.

The company was the first of several flour milling privatizations in Saudi Arabia, sold to Raha AlSafi consortium for $540 million in 2020.

Dubai's main share index (.DFMGI) added 0.2%, helped by a 2.1% rise in blue-chip developer Emaar Properties (EMAR.DU) and a 1.7% increase in toll-operator Salik Co (SALIK.DU).

In Abu Dhabi, the index (.FTFADGI) rose 0.7%.

The Qatari benchmark (.QSI) edged 0.1% higher in a choppy trade, with Vodafone Qatar (VFQS.QA) adding 0.1%.

Meanwhile, crude - a key catalyst for the Gulf's financial markets - fell, giving up earlier gains as concerns about the viability of the U.S. debt ceiling pact cooled investors' risk-on sentiment and mixed messages from major producers clouded the supply outlook ahead of their meeting this weekend.

China’s Baoshan Iron & Steel Enters #Saudi Economic Enclave With New Plant - Bloomberg

China’s Baoshan Iron & Steel Enters Saudi Economic Enclave With New Plant - Bloomberg

Saudi Arabia has unveiled a flurry of new investment projects led by the world’s biggest steelmaker as the kingdom dangles incentives for companies willing to operate in its special economic enclaves.

China’s Baoshan Iron & Steel Co. will commit 15 billion riyals ($4 billion) to build a plant for steel plate manufacturing in a new economic zone in Ras Al-Khair on the kingdom’s eastern coast, according to an announcement made at an event in Riyadh on Monday.

Domestic names such as Himmah, which is establishing an auto-parts export hub catering to Africa and the Middle East, will drive capital into some of the other special areas that authorities are setting up across the country and which already attracted the likes of Lucid Group Inc. as anchor investors.

Saudi Arabia wants to turn the areas into gateways for investment by offering preferential corporate tax rates, exempting companies based there from many customs duties and allowing for full foreign ownership of businesses.

Mideast Stocks: Gulf stock markets volatile on US debt deal, economic worries

Mideast Stocks: Gulf stock markets volatile on US debt deal, economic worries

Stock markets in the Gulf ended in different directions on Monday after U.S. lawmakers reached a tentative agreement on the debt ceiling, while concerns about more Federal Reserve interest rate hikes weighed on sentiment. U.S. President Joe Biden and House Speaker Kevin McCarthy forged an agreement at the weekend to suspend the $31.4 trillion debt ceiling and cap government spending for two years. Both leaders expressed confidence that members of the Democratic and Republican parties would vote to support the deal.

Dubai's main share index edged 0.1% higher, supported by a 1.2% rise in sharia-compliant lender Dubai Islamic Bank. In Abu Dhabi, the index dropped 0.4%.

The Abu Dhabi bourse remained on a downtrend as sentiment remained cautious and energy markets were under pressure, said Farah Mourad, senior market analyst at XTB MENA. "The market could see some support thanks to ADNOC Logistics initial public offering's success. At the same time, companies like DANA Gas could attract more foreign investors as they open their capital to foreign ownership further," Mourad said.

Saudi Arabia's benchmark index gave up early gains to finish flat as gains in financials were offset by losses in healthcare shares. United Electronics gained 3.4% after Reuters cited two sources familiar with the matter as saying the firm was planning an initial public offering of its Islamic consumer finance business, Tasheel Finance.

Among losers, oil giant Saudi Aramco shed 0.6%. Crude prices - a key catalyst for the Gulf's financial markets - slipped as economic worries over further interest rate hikes trumped the U.S. debt ceiling deal.

Outside the Gulf, Egypt's blue-chip index rose 0.5%, with tobacco monopoly Eastern Company jumping 2.7%.

#Dubai Financial Market launches futures contract on General Index

Dubai Financial Market launches futures contract on General Index

The Dubai Financial Market (DFM) today announced the offering of futures contracts on its General Index (DFMGI), which includes the most liquid and largest companies listed on the DFM. The listing and trading of DFMGI futures will commence today.

Trading futures contracts on the DFMGI offers investors the opportunity to access one of the best performing indices in the world comprising DFM’s largest and most liquid stocks, including the recently successfully listed Empower, Dewa, Salik, and others, as well as the region's leading blue-chip companies such as Emaar and Aramex.

DFMGI will provide strong diversification and hedging opportunities for both retail and institutional investors and drive more professional investors' participation in the marketplace.

DFMGI futures are DFM's latest innovative offering to internationalize Dubai's financial markets and promote market liquidity and depth. They allow investors to make gains when the index falls and rises and magnify gains through the use of leverage.

Hamed Ali, CEO of DFM, said, "The launch of DFMGI Future is further evidence of our commitment to diversify products and provide investors with unique investment and hedging opportunities. This is in line with our concerted efforts to bring innovative products to market to increase retail and institutional investor participation while increasing the depth and breadth of the market."

The DFMGI has posted robust performance of 4.4% last year, followed by a strong growth of 6.14% from the beginning of 2023 till May 2023.

The DFMGI futures closely track the underlying price performance of the DFM General Index, which in turn provides a benchmark for the overall performance of the Exchange. The futures contract will help investors effectively hedge against market volatility and make profitable trades.

The DFMGI tracks key sectors such as Financials, Industrials, Real Estate, Utilities, Communication Services, Transportation, among others.

Most Gulf markets gain on US debt ceiling deal; #AbuDhabi falls | Reuters

Most Gulf markets gain on US debt ceiling deal; Abu Dhabi falls | Reuters

Most stock markets in the Gulf rose in early trading on Monday after lawmakers in Washington reached a tentative agreement on the U.S. debt ceiling deal, although concerns about more Federal Reserve interest rate hikes capped gains.

U.S. President Joe Biden and House Speaker Kevin McCarthy forged an agreement at the weekend to suspend the $31.4 trillion debt ceiling and cap government spending for two years. Both leaders expressed confidence that members of the Democratic and Republican parties will vote to support the deal.

Saudi Arabia's benchmark index (.TASI) gained 0.2%, helped by a 1.8% rise in Riyad Bank (1010.SE) and a 0.9% increase in Alinma Bank (1150.SE).

Among other gainers, United Electronics (4003.SE) climbed about 4% after Reuters cited two sources familiar with the matter as saying the firm is planning an initial public offering of its Islamic consumer finance business, Tasheel Finance.

Dubai's main share index (.DFMGI) added 0.5%, with sharia-compliant lender Dubai Islamic Bank (DISB.DU) putting on 1.4%.

In Qatar, the index (.QSI) was up 0.2%, with Qatar Navigation (QNNC.QA) rising 1.9%.

Crude prices - a key catalyst for the Gulf's financial markets - rose on the U.S. debt ceiling deal, possibly averting a default in the world's largest economy and oil consumer.

Prices gained following the U.S. debt ceiling talks and after Saudi energy minister Abdulaziz bin Salman warned short-sellers betting that oil prices will fall to "watch out" for pain.

The Abu Dhabi index (.FTFADGI) bucked the trend, trading 0.2% lower.

#Oman posts $2.97 billion budget surplus in 2022, state news agency says | Reuters

Oman posts $2.97 billion budget surplus in 2022, state news agency says | Reuters

Oman posted a budget surplus of 1.144 billion rials ($2.97 billion) to the end of 2022, the Omani state news agency said.

Budget revenues were 14.473 billion rials, a 37% increase from estimated revenues, while expenditures were recorded at 13.329 billion Rials, the news agency added on Sunday.

#Saudi Net Reserves Fall to $410 billion, Lowest Since 2010 - Bloomberg

Saudi Net Reserves Fall to $410 billion, Lowest Since 2010 - Bloomberg

Saudi Arabia’s net foreign assets fell to 1.538 trillion riyals ($410 billion) in April, the lowest since January 2010, even as the government forecasts a second annual budget surplus this year.

Foreign reserves fell from 1.572 trillion riyals the previous month, according to the central bank’s monthly report published on Sunday. It’s the fifth month that reserves have declined, the longest falling streak since early 2019.

Saudi Arabia returned to the debt market earlier this month by selling $6 billion of Islamic bonds. The kingdom already reported a deficit of 2.91 billion riyals in the first quarter of the year.

The International Monetary Fund forecasts the world’s top crude exporter will run a budget deficit of 1.1% of gross domestic product this year, a view that’s at odds with the government’s expectation for a second straight surplus it last estimated at 16 billion riyals ($4.3 billion).

The Washington-based lender hiked its estimate of the oil price Saudi Arabia needs to balance its budget this year to over $80 a barrel. The kingdom doesn’t reveal an oil price assumption in its budget.

Most Gulf markets end lower, Egypt ekes out gains | Reuters

Most Gulf markets end lower, Egypt ekes out gains | Reuters

Most stock markets in the Gulf ended lower on Sunday as investors focus in on the prospects of more Federal Reserve interest rate hikes as the U.S. closes in on a deal to raise its debt ceiling.

Most Gulf Cooperation Council countries, including Saudi, have their currencies pegged to the dollar and generally follow the Fed's policy moves, exposing the region relatively directly to any monetary tightening there.

Saudi Arabia's benchmark index (.TASI) lost 0.4%, with Al Rajhi Bank (1120.SE) declining 1% and Dr Sulaiman Al-Habib Medical Services (4013.SE) finishing 1.4% lower.

However, oil giant Saudi Aramco (2222.SE) added 0.2%.

Prices of oil - a key catalyst for the Gulf's financial markets - ticked up on Friday as U.S. officials appeared close to striking a debt-ceiling deal, and as the market weighed conflicting messages about oil supply from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting.

In Qatar, the index (.QSI) eased 0.3%, hit by a 2.6% slide in telecoms firm Ooredoo (ORDS.QA).

Outside the Gulf, Egypt's blue-chip index (.EGX30) gained 0.5%, led by an 11.3% jump in Edita Food Industries (EFID.CA).

On the other hand, Egypt has deferred payments for its large wheat purchases, in some cases by months, according to a government official and traders, as the country grapples with a shortage of hard currency.

Egypt is one of the world's biggest wheat importers and uses the purchases to make heavily subsidised bread available to tens of millions of people. Any changes to its system of subsidies are politically very sensitive.

Omani banks set to benefit from improved conditions: Fitch

Omani banks set to benefit from improved conditions: Fitch

Omani banks’ reasonable credit fundamentals and improved operating conditions will support lending growth and profitability in 2023, according to global credit rating agency Fitch Ratings.

In a new report released on Thursday, Fitch noted that Omani banks emerged from the Covid-19 pandemic with reasonable credit fundamentals which place the sector in a good position for improving profitability in 2023.

Fitch said that Oman’s high oil revenues will continue to support economic activity and drive business generation for the sultanate’s banks. The rating agency expects a credit growth of 4.0 per cent in 2023, underpinned by high oil prices, healthy economic growth, a low inflationary environment and positive employment prospects.

Fitch revised the outlook on Omani banks’ operating environment factor score to ‘positive’ from ‘stable’ to reflect improved operating conditions, as well as the recent revision of the outlook on the sultanate’s sovereign rating to ‘positive’ from ‘stable’.

‘Omani banks are highly exposed to the sovereign through lending to government and government-related entities (GREs), holdings of Omani government securities, and high reliance on government and GRE deposits. Exposure to the sovereign also considers banks’ exposures to public-sector employees through their retail loan books,’ Fitch said.

JPMorgan Appoints New Head of Investment Banking in #SaudiArabia - Bloomberg

JPMorgan Appoints New Head of Investment Banking in Saudi Arabia - Bloomberg

JPMorgan Chase & Co. has appointed Omar El Amine Fichtali as head of investment banking in Saudi Arabia, according to an internal memo seen by Bloomberg News.

The move comes weeks after one of the lender’s top bankers in the kingdom, Fahad Al-Deweesh, left to join Citigroup Inc. as competition for banking talent in the region’s biggest economy heats up.

El Amine Fichtali joined JPMorgan’s London office in 2007 with a focus on technology, media and telecommunications investment banking and has worked in various roles with the Middle East and North Africa investment banking team in Dubai and Riyadh.

He will work closely with Bader Alamoudi, senior country officer for Saudi Arabia, and Khalid Fayez, head of corporate banking for JPMorgan in the kingdom.

A spokeswoman for the bank confirmed the contents of the memo.

Saudi Arabia is becoming an increasingly important market for global banks as the kingdom embarks on a plan to diversify its economy away from oil by selling stakes in state-owned companies and investing in new industries.

Even as the global financial community contends with layoffs and lower bonuses, banking jobs remain plentiful in the kingdom and salaries are surging. State vehicles such as the Public Investment Fund are also actively recruiting.

JPMorgan is working on Saudi Arabia’s biggest initial public offering of the year so far, the $336 million float of generic drugmaker Jamjoom Pharmaceuticals Factory Co.

#UAE stocks rise as oil prices rise on US debt deal optimism | Reuters

UAE stocks rise as oil prices rise on US debt deal optimism | Reuters

Stock markets in the United Arab Emirates closed higher on Friday as oil prices rose following progress in talks over increasing the U.S. debt limit.

U.S. President Joe Biden and top congressional Republican Kevin McCarthy are closing in on a deal that would raise the government's $31.4 trillion debt ceiling for two years while capping spending on most items, a U.S. official told Reuters.

Meanwhile, oil prices, a major driver for Gulf economies, rose on Friday, as the market weighed conflicting messages on supply from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting, with Brent crude up 54 cents at $76.80 a barrel at 1159 GMT.

Stock markets in the UAE were stable as traders adjust their expectations following optimism over global economic conditions amid progress in U.S. debt ceiling deal, said Ahmed Negm, Head of Market Research MENA at XS.com.

In Abu Dhabi, the benchmark index (.FTFADGI) added 0.6%, after a third consecutive session of decline, bolstered by a 1.6% jump in Telecoms firm e& (EAND.AD), formerly known as Emirates Telecommunications Group.

E& said in a bourse filing it had completed forming a joint venture with Bespin Global to offer public cloud managed and professional services in the Middle East, Turkey, Africa and Pakistan. The company has also invested $60 million in Bespin Global in exchange for about 10% stake.

First Abu Dhabi Bank (FAB.AD), the United Arab Emirates' largest lender was also up 0.8%.

In Dubai, the main share index (.DFMGI) rose 0.4%, ending three straight days of losses, with blue-chip developer Emaar Properties (EMAR.DU) advancing 0.7% and Mashreqbank (MASB.DU) climbing 3.3%.

Investors in #UAE hospital chain Aster eye $300 million India stake sale | Reuters

Investors in UAE hospital chain Aster eye $300 million India stake sale | Reuters

Investors in Aster DM Healthcare (ATRD.NS) are in talks to sell a 30% stake in the company's India business for about $300 million, two sources with direct knowledge said, the latest potential deal in India's booming healthcare sector.

UAE-based and Mumbai-listed Aster runs 32 hospitals, 127 clinics and 521 pharmacies in India and the United Arab Emirates. The current talks are related to the India business and come just as Aster tries to demerge its Gulf business and sell a majority stake in that, Reuters reported last month.

Aster and its advisors have reached out to private equity giant KKR & Co Inc (KKR.N) and Max Healthcare Institute (MAXE.NS) - one of India's largest hospital chains - to hold preliminary talks to take up the investors' stake, the sources said.

Aster's investors considering the sale are Olympus Capital, which has a 19% stake in the company, and Mauritius-based investment firm Rimco, which holds an 12% stake.

Aster has appointed New York-based investment bank Moelis & Company to manage the deal, said the two sources, who declined to be named as the discussions are private.

#Dubai Financial Watchdog Warns on Crypto Regulation Gaps - Bloomberg

Dubai Financial Watchdog Warns on Crypto Regulation Gaps - Bloomberg

Dubai’s financial regulator warned that global watchdogs need to step up talks with each other to avoid “bad actors” exploiting gaps in crypto rules, according to an official.

The Dubai Financial Services Authority plans an update to rules on crypto tokens, in force since November for the city’s business hub, that may come out later this year, said Elisabeth Wallace an associate director at the regulator.

“A lot of crypto businesses tend to operate a significant number of activities within one umbrella and that really concerns us,” Wallace said at a virtual conference on Friday. “They are across the whole world and as regulators we need to talk to each other a lot more in this area because there can be quite a few gaps and we have seen a lot of bad actors trying to plug some of those gaps,” she said.

Regulators globally are grappling with ways to handle the crypto industry. Jurisdictions like Hong Kong and Dubai are trying to attract crypto-related investment. Singapore plans curbs on retail-investor participation. US regulators, however, have been clamping down on crypto firms following the collapse of digital-asset exchange FTX and a deep market rout last year.

#SaudiArabia’s Biggest IPO of Year Jamjoom Pharma Prices at Top of Range - Bloomberg

Saudi Arabia’s Biggest IPO of Year Jamjoom Pharma Prices at Top of Range - Bloomberg

The Riyadh initial public offering of generic drugmaker Jamjoom Pharmaceuticals Factory Co. will raise 1.26 billion riyals ($336 million) after shares were priced at the top of a marketed range, ending a drought in listings in Saudi Arabia.

The owners of Jamjoom Pharma are selling 21 million shares in the IPO. They priced them at 60 riyals each, the top of a range that started at 56 riyals, according to a statement on May 25. Jamjoom Pharma will take orders from retail investors from May 30 to June 1, while a listing date will be determined later.

Jamjoom Pharma’s IPO is set to be the largest in the kingdom since Saudi Aramco Base Oil Co.’s $1.3 billion listing in December and is serving as a gauge of investor appetite as the IPO market in Saudi Arabia slowly comes back to life.

Before Jamjoom, just $72 million had been raised through Saudi IPOs in the slowest start since 2014, data compiled by Bloomberg show, a fraction of the almost $4 billion seen this time last year. Potential Saudi issuers have been cautious in 2023 after a rush of listings last year, with some of those underperforming on their first day of trading.

Mideast Stocks: Most Gulf markets lower as US debt-ceiling talks drag on

Mideast Stocks: Most Gulf markets lower as US debt-ceiling talks drag on

Most stock markets in the Gulf ended lower on Thursday tracking global shares after U.S. debt-ceiling talks dragged on without a deal, while lower oil prices also weighed. MSCI's broadest index of world shares was down 1%.

U.S. President Joe Biden's administration and congressional Republicans are at an impasse over raising the $31.4 trillion debt ceiling. Ratings agency Fitch put the United States' credit on watch for a possible downgrade on Wednesday.

Saudi Arabia's benchmark index declined 0.5%, with Riyad Bank losing 2.2% and Al Rajhi Bank finishing 0.7% lower. Separately, Canada and Saudi Arabia have agreed to restore full diplomatic ties and appoint new ambassadors, both countries said on Wednesday, bringing to a close a 2018 dispute that damaged relations and trade.

Dubai's main share index eased 0.1%, falling for a third session, with utility firm Dubai Electricity and Water Authority losing 2%.

The Dubai stock market continued to see some volatility as traders monitored the developments in Europe and the U.S., said Daniel Takieddine, CEO MENA at BDSwiss. "In this regard, the main index could remain under pressure if international conditions deteriorate further."

In Abu Dhabi, the index retreated 0.7%. Oil prices fell after Russian Deputy Prime Minister Alexander Novak played down the prospect of further OPEC+ production cuts at its meeting next week.

The Qatari benchmark dropped 0.7%, with petrochemicals maker Industries Qatar falling 2.1%. Outside the Gulf, Egypt's blue-chip index closed 0.3% lower, ending two sessions of gains.

The Egyptian stock market remained on a downtrend for the month despite a rebound during the last few days and could be exposed to new price corrections, Takieddine said.

#UAE's Brands For Less Group plans sale of minority stake to investors -sources | Reuters

UAE's Brands For Less Group plans sale of minority stake to investors -sources | Reuters

The owners of UAE-based budget retailer Brands For Less Group (BFL Group) are considering selling a minority stake in the business to investors, two sources with direct knowledge of the matter said.

BFL Group is working with deNovo Corporate Advisors, the sources said, a Dubai-based boutique led by ex-Morgan Stanley Banker May Nasrallah.

BFL Group did not respond to a Reuters request for comment. deNovo declined to comment on Thursday.

Founded by Lebanese entrepreneurs Toufic Kreidieh and Yasser Beydoun, Brands For Less opened its first store in Beirut in 1996 and four years later expanded the business to the United Arab Emirates and moved its headquarters to Dubai.

The group has several lines including Brands for Less, which consists of retail fashion stores, in addition to Toys For Less, Homes For Less, and Luxury For Less. It follows an off-price retail model, selling branded products at discounted prices.

Analysis: #UAE steps up pace of solo trade deals in regional economic race | Reuters

Analysis: UAE steps up pace of solo trade deals in regional economic race | Reuters

The United Arab Emirates is increasingly pursuing bilateral trade deals outside of the Saudi-headquartered regional Gulf Cooperation Council (GCC), as competition with Riyadh intensifies for economic dominance in the oil-rich region.

Since 2021, the UAE has initiated a raft of trade, investment and cooperation deals on it own - called Comprehensive Economic Partnership Agreements (CEPAs) - bypassing the GCC, a customs union, common market and negotiating bloc.

Abu Dhabi and Riyadh are both accelerating their post-oil economy plans to reduce their dependence on fossil fuels, but the UAE has first mover advantage over its bigger neighbour as the Middle East's existing business and tourism hub. Building on its existing trade infrastructure, it now wants to become a global supply chain leader.

The GCC has concurrently stepped up its game, holding new rounds of Free Trade Agreement (FTA) talks with major trading partners including China, South Korea, and post-Brexit Britain. The GCC Secretariat also appointed a lead trade negotiator in 2022.

Gulf affairs specialist at Waseda University, Abdullah Baabood, said the UAE's unilateral trade push indicates some members are not necessarily happy with the way the GCC handles FTA negotiations.

Podcast: Why the Middle East Is Calling the Shots on Big Deals - Bloomberg

Podcast: Why the Middle East Is Calling the Shots on Big Deals - Bloomberg

With In the City hosts David Merritt and Francine Lacqua in Doha for the annual Qatar Economic Forum, this week’s podcast focuses on the growing influence of the Middle East—and whether it will come at the expense of Western financial hubs. Indeed, reporter Dinesh Nair says the Middle East is currently the only region that can “call the shots on big transactions.”

Bankers in the Middle East find themselves more relevant now than ever thanks to a massive pickup in deal activity, both locally and as the region deploys more capital worldwide. People like billionaire Ken Moelis, founder of Investment bank Moelis & Co., are saying the Middle East has a very bright future.

“It’s one of the few places in the world where ambition is married with capital,” Nair explains. And when those two things are combined, interesting things can happen. Like London traders relocating and the United Arab Emirates and Saudi Arabia emerging as IPO hotspots.

Even moves like Saudi Arabia offering Lionel Messi $400 million for each of his final years as a player are part of it, creating buzz to sell the region to transplants, Nair says. Riyadh may also hope that outlay will excite its burgeoning younger generation and supercharge tourism.

Still, the Middle East hasn’t matched London when it comes to establishing a strong ecosystem to support a serious financial center. But it’s certainly the ambition, Nair says, and the region is catching up fast. What’s more, the situation in the UK is smoothing the way.

“In London, ambition is arguable,” Nair says. “But there’s definitely no capital.”

Adnoc Logistics IPO Gets $125 Billion in Orders for $769 Million IPO - Bloomberg

Adnoc Logistics IPO Gets $125 Billion in Orders for $769 Million IPO - Bloomberg

Adnoc Logistics & Services drew orders worth $125 billion for its $769 million initial public offering in Abu Dhabi, as investors flocked to the share sale amid a dearth in deals in other regions.

Abu Dhabi National Oil Co. sold 1.41 billion shares — or a 19% stake — in its maritime logistics unit at 2.01 dirhams each, the top of a narrow range that started at 1.99 dirhams, according to a statement on Thursday. That values the company at $4.05 billion.

The demand for the IPO is the highest globally this year and implies an oversubscription level of 163 times in aggregate, Adnoc said.

The size of the float had already been increased by over a quarter on strong investor demand. That’s been a recurring theme in Middle Eastern IPOs, which have stood out against a global slump in listings, as high oil prices buoy the region.

Exclusive: From #Russia with gold: #UAE cashes in as sanctions bite | Reuters

Exclusive: From Russia with gold: UAE cashes in as sanctions bite | Reuters

The United Arab Emirates has become a key trade hub for Russian gold since Western sanctions over Ukraine cut Russia's more traditional export routes, Russian customs records show.

The records, which contain details of nearly a thousand gold shipments in the year since the Ukraine war started, show the Gulf state imported 75.7 tonnes of Russian gold worth $4.3 billion - up from just 1.3 tonnes during 2021.

China and Turkey were the next biggest destinations, importing about 20 tonnes each between Feb. 24, 2022 and March 3, 2023. With the UAE, the three countries accounted for 99.8% of the Russian gold exports in the customs data for this period.

In the days after the Ukraine conflict started, many multinational banks, logistics providers and precious metal refiners stopped handling Russian gold, which had typically been shipped to London, a gold trading and storage hub.

The London Bullion Market Association banned Russian bars made from March 7, 2022, and by the end of August, Britain, the European Union, Switzerland, the United States, Canada and Japan had all banned imports of Russian bullion.

Russia Is Bigger Problem for Saudis Than Oil Short-Sellers, Sankey Says - Bloomberg

Russia Is Bigger Problem for Saudis Than Oil Short-Sellers, Sankey Says - Bloomberg

As Saudi Arabia blames US short-sellers for weighing down oil prices, its bigger concern should be competition from OPEC+ ally Russia, said veteran industry analyst Paul Sankey.

“I don’t know why they’re so obsessed with speculators,” the founder of Sankey Research LLC said during a Bloomberg Television interview. “The real issue is: Can the Saudis corral Russia?”

Saudi Energy Minister Prince Abdulaziz bin Salman on Tuesday issued a warning to short-sellers, prompting some investors to exit bearish bets and sending prices for the US oil benchmark surging. But “the real problem is the overall oil balance,” not speculators, Sankey said, adding that Saudi Arabia’s focus on traders is like “crying wolf.”

Instead, it’s the export of Russian crude to Asia that’s eroding Saudi Arabia’s long-term premium in the region, he said. “This is a much bigger deal than people appreciate between Russia and Saudi here in terms of market share and competition,” he said.

Mideast Stocks: Gulf stocks slide as impasse over US debt talks weigh; Egypt gains

Mideast Stocks: Gulf stocks slide as impasse over US debt talks weigh; Egypt gains

Most major Gulf stock markets ended lower on Wednesday, tracking weakness in global peers as an impasse over U.S. debt ceiling negotiations weighed on investor sentiment.

Saudi Arabia's benchmark stock index fell 0.4%, in its fourth consecutive session of declines, as the index was pulled down by losses in almost all sectors, led by financials and healthcare stocks. Al Rajhi Banking & Investment Corp, Saudi Arabia's second-largest lender by assets, fell over 1% and Mouwasat Medical Services Co plummeted 4.3%, its worst day in nearly three months.

Representatives of President Joe Biden and congressional Republicans ended another round of debt ceiling talks on Tuesday with no signs of progress, as the deadline to raise the government's $31.4 trillion borrowing limit or risk default ticked closer.

Traders in GCC stock markets reacted to the developments in global markets as debt ceiling issue in the U.S. remained a focal point for many, said Farah Mourad, senior market analyst at XTB MENA.

Dubai's main share index eased 0.1%, led by a decline in almost all sectors, with utilities and financials leading the losses. District cooling provider Emirates Central Cooling Systems Corp dropped 1.7% while Dubai Islamic Bank was down nearly 1%.

In Abu Dhabi, the benchmark index was down 0.3%, led by a decline of nearly 1% in First Abu Dhabi Bank, the United Arab Emirates' biggest lender, and a 2.6% dive in Abu Dhabi Islamic Bank.

The Qatari benchmark stock index declined 0.8%, extending losses for a third straight session, as financials were among the top losers. Most banks traded in negative territory, including Qatar Islamic Bank QPSC and Commercial Bank PSQC, which fell 1.3% and 1.6% respectively, while Qatar National Bank QPSC, the Gulf's biggest lender, was down nearly 0.8%.

Outside the Gulf, Egypt's blue-chip index climbed 1.8% as 26 of the 31 constituent stocks moved in positive territory, boosted by a 6.5% surge in country's lone cigarette maker Eastern Company and a 0.9% leap in Commercial International Bank, Egypt's biggest private bank.

Egyptian stock market rebounded to a certain extent after a series of losses as local investors flocked to the market, while international investors maintained their selling spree in the face of currency risks and increasing risk aversion, added Farah Mourad.

UK bureaucracy holding back renewable investments, #AbuDhabi power boss says | Financial Times

UK bureaucracy holding back renewable investments, Abu Dhabi power boss says | Financial Times

Slow grid connections and delays over the issuing of permits risk holding back the development of renewable energy in the UK and further afield, the boss of Abu Dhabi renewable energy group Masdar has warned. 

Mohamed Al Ramahi, chief executive of the state-backed company, said the group faced a struggle to “execute as fast as we want to” as it eyes new wind, solar and battery projects around the world. 

His comments echo other developers, such as National Grid, that have warned about practical and bureaucratic hurdles getting in the way of new infrastructure such as electricity cables and wind turbines. 

Masdar has set a target of growing its portfolio of clean energy projects from 20GW at the end of last year to 100GW by 2030 — potentially enough to power as many as 100mn homes.

Bank Dhofar makes offer to acquire 100% of competitor Ahli Bank

Bank Dhofar makes offer to acquire 100% of competitor Ahli Bank

Oman’s second-biggest lender by market value, Bank Dhofar, has withdrawn its merger offer for Ahli Bank and put a new deal on the table to acquire 100 per cent of its rival.

The lender is offering the same terms for the complete takeover of Ahli Bank that it laid out in its revised merger offer submitted last week, Bank Dhofar said in a statement to the Muscat Securities Exchange, where its shares are traded.

“Having considered its options, the board of directors of Dhofar bank … resolved to make an offer to acquire 100 per cent of issued share capital … and to therefore withdraw our merger offer,” the lender said.

On May 17, Bank Dhofar submitted a non-binding revised offer for its merger with Ahli Bank, just a day after Oman International Development and Investment Company announced its intention to bid for the lender.

Crude Oil Prices Rise for Third Day as Saudis Tell Short Sellers ‘Watch Out’ - Bloomberg

Crude Oil Prices Rise for Third Day as Saudis Tell Short Sellers ‘Watch Out’ - Bloomberg

Oil rose for a third day after Saudi Arabia’s latest warning to short-sellers suggested OPEC+ could reduce output further to buoy prices.

West Texas Intermediate futures climbed toward $74 a barrel after adding almost 2% over the previous two days. Saudi Arabian Energy Minister Prince Abdulaziz bin Salman told speculators on Tuesday to “watch out,” just over a week before the Organization of Petroleum Countries and its allies meet to review their output policy for the second half of the year.

“Hard-hitting talk from the OPEC kingpin” is dominating the market, said Stephen Brennock, an analyst at PVM Oil Associates Ltd. “The producer group might have another surprise cut up its sleeve.”

That offset a lack of progress in resolving an impasse over the US debt ceiling, which is weighing on broader financial markets and has influenced oil futures in recent days. House Speaker Kevin McCarthy said late Tuesday the two parties had yet to reach a deal to avert a first-ever default.

The oil market also received bullish impetus from an American Petroleum Institute report showing US nationwide crude inventories declined by 6.8 million barrels last week. If confirmed by government figures later Wednesday, it would be the biggest drop since late March.

Oil is still down for the year as traders grapple with China’s lackluster post-Covid economic recovery, interest-rate hikes from the US Federal Reserve and the US debt conundrum. Russian exports have also remained robust, despite sanctions.

PRICES:
WTI for July delivery rose 1.4% to $73.92 a barrel at 9:46 a.m. in London. Brent for the same month gained 1.2% to $77.76.