#SaudiArabia passes four domestic football teams to sovereign fund | Financial Times

Saudi Arabia passes four domestic football teams to sovereign fund | Financial Times

The Saudi government has handed ownership of four top domestic football teams to its deep-pocketed sovereign wealth fund, putting increased financial firepower behind the country’s ambitious plans in the sport. 

The Public Investment Fund said on Monday that Al Ittihad, Al Ahli, Al Hilal and Al Nassr — where Portuguese star Cristiano Ronaldo plays — had been converted into corporate entities, having previously been run by the state. The $600bn fund will own 75 per cent of each of the four clubs, with the remaining shares held by new non-profit foundations. 

The move to change the ownership structure of the biggest domestic clubs coincides with a push to bring more top players to the country. Since Ronaldo arrived in January, lucrative offers have reportedly been made to Argentina’s World Cup winning captain Lionel Messi, and Karim Benzema, winner of the 2022 Ballon d’Or. The trio are among the greatest footballers of the past 20 years, although all of them are nearing the end of their careers. Messi already has a promotional deal with Visit Saudi, the country’s tourism board. 

The Saudi Press Agency said the changes at the four clubs were aimed at enticing investment into the sport, improving competitiveness in the league, and making the game more professional and financially sustainable. Riyadh wants the Saudi Pro League to be one of the top 10 leagues in the world and hopes the privatisation project will help quadruple annual revenue in the league to 1.8bn rials ($480mn), SPA said.

Analysis: #SaudiArabia's 'icing on the cake' oil cut could feed US producers | Reuters

Analysis: Saudi Arabia's 'icing on the cake' oil cut could feed US producers | Reuters

Saudi Arabia has crafted a complex OPEC+ deal with a view to punishing investors that have bet on falling oil prices but could inadvertently lend long-term support to the rival U.S. energy industry, OPEC+ insiders and market watchers said.

On Sunday, Saudi Arabia pledged to cut its oil output by 1 million barrels per day (bpd), or 10%, in July on top of existing output cuts from OPEC and its allies. With the new Saudi reduction, the group has agreed to take some 4.6 million bpd off the market in July, equivalent to 4.6% of global demand of 100 million bpd.

OPEC+ also agreed on Sunday to extend the group's existing supply cuts of 3.66 million bpd into 2024.

In response, oil prices rose nearly $2 a barrel early on Monday to $78 per barrel . Analysts said the gains are only the beginning and the cuts will steadily deepen a global supply shortfall that could push prices towards $100 a barrel.

"This market needs stabilisation," Saudi Energy Minister Prince Abdulaziz bin Salman said on Sunday, calling his surprise decision to deepen Saudi production cuts "the icing on the cake" for the deal.

Riyadh Air competing Airbus, Boeing for new jet order -CEO | Reuters

Riyadh Air competing Airbus, Boeing for new jet order -CEO | Reuters

Saudi Arabia's new airline Riyadh Air is in talks with planemakers Airbus (AIR.PA) and Boeing (BA.N) to buy a significant number of narrow-body jets - part of what may become a trio of inaugural orders, Chief Executive Tony Douglas said.

The creation of a second Saudi national airline, with industry veteran Douglas as its CEO, was announced alongside an order for up to 72 Boeing 787s in March, as the kingdom moves to diversify its economy and serve over 100 destinations by 2030.

Interviewed on the sidelines of a global airlines meeting in Istanbul, Douglas declined to give the size of the planned second order for narrowbody jets, but told Reuters: "It's not going to be insignificant by any stretch of the imagination."

He added: "That might not be our last order either".

#SaudiArabia's Oil Output Cut, #Dubai Real Estate Boom, Erdogan's Turkey Team - Bloomberg

Saudi Arabia's Oil Output Cut, Dubai Real Estate Boom, Erdogan's Turkey Team - Bloomberg

The weekend’s OPEC+ meeting ended with a pledge from Saudi Arabia to cut its oil production by an extra 1 million barrels a day in July, while other members merely extended their existing curbs by 12 months.

Saudi Arabia’s bold move means ceding market share to other oil producers including Russia, which has been aggressively targeting buyers in Asia since Europe banned most imports of its oil following Moscow’s invasion of Ukraine.

Saudi Arabia’s supply drop will result in real barrels coming off the market since the kingdom has a track record of delivering on its pledges, RBC Capital Markets analysts wrote.

Chart of the Week 

Dubai is driving a rebound in luxury real estate sales. It now accounts for about 17% of global sales, up from 2% in 2019, according to Knight Frank. In that same period,  London ranked second at 14%.

Dubai Leads Super-Prime Property Market

Number of homes sold for over $10 million between January and March

Source: Knight Frank

This boom is also bringing life to the largest of the city’s famous palm-shaped artificial islands. Dubai approved a new development plan to revive the Palm Jebel Ali project that was halted amid the global credit crisis of 2008 and left hundreds of buyers in limbo.

The emirate’s top-tier office space is also in focus. The owners of ICD Brookfield Place, an office tower in the heart of Dubai’s financial district whose tenants include JPMorgan Chase and Bank of America, are considering selling a stake in the skyscraper.

Most Gulf markets in black on rising oil prices, Fed rate pause optimism | Reuters

Most Gulf markets in black on rising oil prices, Fed rate pause optimism | Reuters

Most stock markets in the Gulf ended higher on Monday on optimism the U.S. Federal Reserve would pause its rate hikes this month, while rising oil prices cheered investors.

Most Gulf currencies are pegged to the dollar and any monetary policy change in the United States is usually mimicked by Saudi Arabia, the United Arab Emirates and Qatar.

Saudi Arabia's benchmark index (.TASI) gained 0.6%, with Dr Sulaiman Al-Habib Medical Services (4013.SE) advancing 2% and oil giant Saudi Aramco (2222.SE) finishing 1.2% higher.

Prices of crude — a key catalyst for the Gulf's financial markets — rose by more than $1 a barrel after top exporter Saudi Arabia pledged to cut production by a further 1 million barrels per day from July to counter macroeconomic headwinds.

Meanwhile, the kingdom intends to offer several sports clubs for privatisation starting in the fourth quarter, state news agency SPA said on Monday, breathing new life into a plan that forms part of an ambitious economic agenda to reduce reliance on oil.

Dubai's main share index (.DFMGI) closed 1.4% higher, with utility firm Dubai Electricity and Water Authority (DEWAA.DU) climbing 6.4%.

New business activity, driven largely by domestic demand, continued to support non-oil business activity in the United Arab Emirates in May, a survey showed, although the pace of growth eased from the previous month.

In Qatar, the index (.QSI) added 0.4%, with Qatar Islamic Bank (QISB.QA) gaining 1.4%.

The Abu Dhabi index (.FTFADGI), however, bucked the trend, falling 0.3%.

Outside the Gulf, Egypt's blue-chip index (.EGX30) dropped 0.6%, hit by a 0.4% fall in top lender Commercial International Bank (COMI.CA).

Non-oil private sector activity in Egypt contracted for the 30th straight month in May, weighed down by continued high inflation and weak demand, a survey showed on Monday.

#Qatar records budget surplus of $5.4 bln in Q1 - state news agency | Reuters

Qatar records budget surplus of $5.4 bln in Q1 - state news agency | Reuters

Qatar recorded a budget surplus of 19.7 billion Qatari riyals ($5.4 billion) in the first quarter of 2023, its state news agency said on Monday, citing the finance ministry.

Total revenues for Q1 stood at 68.6 billion riyals, of which 63.4 billion were oil and gas revenues, the Qatar News Agency statement said, while non-oil revenues amounted to 5.2 billion riyals.

The Gulf state, among the world's top exporters of liquefied natural gas, had forecast a budget surplus of 29 billion riyals for the entire 2023.

Qatar based its budget for this year on an oil price of $65 per barrel, but the actual average oil price over the first quarter was $82.2 per barrel, resulting in higher revenue.

Spending in Q1 stood at 48.9 billion riyals.

The budget surplus is expected to go towards repaying Qatar's public debt, boosting central bank reserves, and increasing the capital of the Qatar Investment Authority, the state sovereign wealth fund.

Qatar has seen rising demand for gas from Europe to replace Russian pipeline gas, previously almost 40% of the continent's imports. Amid rising competition for LNG, Asia has been ahead in securing gas from Qatar's massive production expansion project.

Oil Shock: #SaudiArabia Is Taking the Market Back to the Future - Bloomberg

Oil Shock: Saudi Arabia Is Taking the Market Back to the Future - Bloomberg

There’s a very 1980s feel about the oil market right now. If you’re hoping the 2020s are going to see the peak and slump in carbon emissions that we need to avert catastrophic global warming, that’s very good news.

Saudi Arabia’s decision at the weekend to cut one million barrels of crude production echoes a pattern that we’ve not seen since before the birth of the country’s de facto ruler, Prince Mohammed bin Salman. “We will do whatever is necessary to bring stability to this market,” his half-brother, the country’s energy minister, Prince Abdulaziz bin Salman, said after a weekend meeting of the Organization of the Petroleum Exporting Countries, which also extended other nations’ existing cuts through 2024.

That invocation of stability calls to mind the rhetoric pioneered by Prince Abdulaziz’s most celebrated predecessor, Sheikh Ahmed Zaki Yamani. During his 24-year career as the kingdom’s oil minister until 1986, Yamani promoted price stability as the key goal of global energy policies — with his country using its unparalleled reserves of crude to guarantee that objective.

Rarely was that task harder than in the wake of the second oil shock in the early 1980s. On one hand, European countries caught out by the 1973 crude embargo were experiencing a surge in output, as investments in domestic fields such as the North Sea started to come to fruition. The UK alone increased output by more than a million daily barrels between 1979 and 1985.

#UAE non-oil private sector growth dips in May, but outlook is positive: PMI

UAE non-oil private sector growth dips in May, but outlook is positive: PMI

While the UAE's non-oil private sector grew at a slightly slower pace in May, improved operating conditions drove business confidence among firms to their strongest level since October 2021, according to a latest business survey.

The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) posted 55.5 in May, dropping from 56.6 in April to a three-month low. The index remained above the 50.0 no-change mark and its long-run average (54.2), the report noted on Monday.

The upturn reflected strengthening demand conditions in the domestic economy, as well as a sharp improvement in supply chains which helped to keep cost pressures subdued, the report said.

David Owen, Senior Economist at S&P Global Market Intelligence, said the latest headline reading signalled a robust improvement in business conditions, driven by marked upturns in activity and new work.

"Moreover, rising new work intakes and strengthening demand conditions gave firms greater confidence for the year ahead. The Future Output Index showed optimism rising to the highest level since October 2021, with firms pinning their hopes on projections that the strong run of demand momentum will continue."

However, the rising new order inflows exerted great pressure on business capacity in May, extending the current sequence of backlog accumulation to almost two years. Notably, employment levels also grew at the second-fastest pace since July 2016.

Purchasing activity at non-oil firms increased sharply, although to a lesser extent than in the previous month.

Meanwhile, expectations for output over the next 12 months rose improved for the fifth consecutive month to the highest level since late-2021 as firms grew more confident about economic prospects.

Mideast Stocks: Most Gulf markets gain on rising oil prices, Fed rate pause optimism

Mideast Stocks: Most Gulf markets gain on rising oil prices, Fed rate pause optimism

Most stock markets in the Gulf rose in early trade on Monday on optimism the U.S. Federal Reserve would pause its rate hikes this month, while rising oil prices cheered investors.

Currencies in most Gulf Cooperation Council countries, including Saudi Arabia, are pegged to the dollar and central banks generally follow the Fed's policy moves, meaning the region feels a direct impact from monetary tightening in the United States.

Saudi Arabia's benchmark index advanced 1%, buoyed by a 2.2% rise in oil giant Saudi Aramco.

Oil prices - a key catalyst for the Gulf's financial markets - were up $1 a barrel after top global exporter Saudi Arabia pledged to cut production by another one million barrels per day from July, counteracting the macroeconomic headwinds that have depressed markets. Dubai's main share index added 0.2%, with Emirates Central Cooling Systems Corp rising 1.7%.

Meanwhile, new business activity, driven largely by domestic demand, continued to support non-oil business activity in the United Arab Emirates in May, a survey showed, although the pace of growth eased from the previous month.

In Abu Dhabi, the index bucked the trend to trade 0.2% lower.

The Qatari benchmark added 0.1%.

Analysts have said Saudi Arabia's latest production cuts are likely to push the price of Brent crude towards $100 a barrel by the end of the year.