Oil market will take time to stabilize, says Al-Naimi

Updated 18 January 2016

Oil market will take time to stabilize, says Al-Naimi

RIYADH: Minister of Petroleum and Mineral Resources Ali Al-Naimi said on Sunday it would take “some time” to restore stability to the global oil market in the midst of a glut, but he remained optimistic about the future.
Al-Naimi's comments come at a time when OPEC member Iran is preparing to raise oil exports after international sanctions were lifted on Saturday. Brent plunged to $28.94 a barrel on Friday, its lowest in 12 years, on the prospect of additional Iranian barrels.
“As you know, the oil market has witnessed over its long history, periods of instability, severe price fluctuations and petro-economic cycles,” Al-Naimi said in a speech at an energy event in Riyadh attended by the Mexican president and energy minister.
“This is one of them. Market forces as well as the cooperation among the producing nations always lead to the restoration of stability. This, however, takes some time,” he said.
“I am optimistic about the future, the return of stability to the global oil markets, the improvement of prices and the cooperation among the major producing countries,” he added.
Al-Naimi made a reference to the Asian financial crisis of 1998-1999 when oil crashed and Riyadh helped organize a production cut with other non-OPEC producers, including Mexico, to support prices, according to Reuters.


$8bn blow to Erdogan as investors flee Turkey

Updated 09 July 2020

$8bn blow to Erdogan as investors flee Turkey

  • Overseas holdings in Istanbul stock exchange are at lowest in 16 years

ANKARA: Foreign capital is flooding out of Turkey in a massive vote of no confidence in President Recep Tayyip Erdogan’s economic competence.
Overseas investors have withdrawn nearly $8 billion from Turkish stocks since January, according to Central Bank statistics, reducing foreign investment in the Istanbul stock exchange from $32.3 billion to $24.4 billion.
As recently as 2013, the figure was $82 billion, and foreign investors now own less than 50 percent of stocks for the first time in 16 years.
“Foreign investment has left Turkey for several reasons, both internal and external,” Win Thin, global head of currency strategy at Brown Brothers Harriman, told Arab News.
“Externally, investors fled riskier assets like emerging markets during the height of the coronavirus pandemic. Some of those flows are returning, but investors are being much more discerning and Turkey does not seem so attractive.”
In terms of internal factors, Thin said that Turkish policymakers had made it hard for foreign investors to transact in Turkey. “This includes real money clients, not just speculative.
“By implementing ad hoc measures to try and limit speculative activity, Turkey has made it hard for real money as well. Besides these problems, Turkey’s fundamentals remain poor compared to much of the emerging markets.”
Erdogan allies claim international players are manipulating the Istanbul stock exchange through automated trading, and have demanded action to make it difficult for them to trade in Turkish assets.
Goldman Sachs, JPMorgan, Merrill Lynch, Barclays and Credit Suisse were banned this month from short-selling stocks for up to three months, and this year local lenders were briefly banned by the banking regulator from trading in Turkish lira with Citigroup, BNP Paribas and UBS
JPMorgan was investigated by Turkish authorities last year after the bank published a report that advised its clients to short sell the Turkish lira.
MSCI, the provider of research-based indexes and analytics, warned last month that it may relegate Turkey from emerging market status to frontier-market status because of bans on short selling and stock lending.
With the market becoming less transparent, overseas fund managers, especially with short-term portfolios, are unenthusiastic about the Turkish market and are becoming more concerned about any forthcoming introduction of other liquidity restrictions.
The exodus of foreign capital is likely to undermine Turkey’s drive for economic growth, especially during the coronavirus pandemic when employment and investment levels have gone down, with the Turkish lira facing serious volatility.