Deutsche Bank shares soar on bond-buying rumors

Deutsche Bank shares soar on bond-buying rumors
Updated 10 February 2016

Deutsche Bank shares soar on bond-buying rumors

Deutsche Bank shares soar on bond-buying rumors

FRANKFURT: Shares in Deutsche Bank rocketed up more than 16 percent on the Frankfurt stock exchange on Wednesday, swept up by speculation Germany’s biggest lender may launch a bond buyback to assuage concerns about its financial strength.
Deutsche Bank shares — which fell heavily earlier this week in line with the wider sector — shot up 16.6 percent to an intraday high of 15.43 euros on Wednesday, their steepest gain in more than four years.
The rally was driven by media reports that it might be considering a bond buyback to persuade investors that its finances are in good health.
Contacted by AFP, Deutsche Bank declined to comment on the information.
According to the Financial Times and Bloomberg Business News, both quoting unnamed sources, the repurchase program would focus on so-called senior bonds or debt that is secured by collateral and is repaid first if a company goes out of business.
The FT said Deutsche Bank had about 50 billion euros ($56 billion) of such bonds in issue.
But no firm decision had been taken as yet, both Bloomberg and FT reported.
There are a number of reasons why investors view the prospect of such a bond buyback positively.
It would provide a show of strength and make clear the bank has plenty of funds available.
It would also signal that Deutsche Bank believes the true value of the bonds is higher than where they are currently trading.
And the group would book a gain on the buyback, helping boost income and its capital position.
Like others in the sector, Deutsche Bank’s shares have taken a severe drubbing recently.
The Stoxx index of European banks shares fell by 20 percent in the last month in view of general signs of weakness in the eurozone economy and the challenges facing banks from ultralow interest rates and regulatory pressures.
But Deutsche Bank has taken an even bigger battering because investors are worried about its to ability to repay its debt.
In a bid to allay such concerns, Deutsche Bank’s new CEO John Cryan took the unusual step this week of issuing a public statement and writing to the group’s employees.
“Volatility in the fourth quarter impacted the earnings of most major banks, especially those in Europe,” Cryan argued.
But Deutsche Bank “remains absolutely rock-solid, given our strong capital and risk position,” he insisted.
One of the main headaches facing Deutsche Bank is a quagmire of as many as 6,000 different litigation cases, the provisions for which helped push it to a record loss of 6.8 billion euros last year.
But Cryan insisted that the bank’s legal provisions would be sufficient.
Analysts believe that the fears concerning both Deutsche Bank and the wider banking sector are exaggerated.
“Even if the current environment is anything but ideal for banks, we see no reason for a re-emergence of a new financial crisis,” said NordLB analyst Michael Seufert.
“Banks have significantly beefed up their capital buffers and diversified their balance sheet risks,” he said.
DZ Bank analyst Christian Koch agreed.
Deutsche Bank’s “liquidity reserves totalled 220 billion euros at the end of September. Its core capital ratio stood at 11.1 percent,” he said.
The completion of its stake in China’s Hua Xia Bank would strengthen the core capital ratio still further.
“The magnitude of the current uncertainty and drop in the share price is exaggerated,” Koch said, saying that DZ Bank currently had a “buy” recommendation on the stock.


King Salman Energy Park signs anchor tenants

King Salman Energy Park signs anchor tenants
Updated 20 min 14 sec ago

King Salman Energy Park signs anchor tenants

King Salman Energy Park signs anchor tenants
  • President and CEO of SPARK Saif Al-Qahtani: SPARK is proud to welcome TAQA and AMCO as they take the first step toward launching their operations
  • By 2035, the park is expected to contribute more than SR22 billion to the Kingdom’s gross domestic product

RIYADH: King Salman Energy Park (SPARK), the Dammam-based project backed by Saudi Aramco, added two new anchor tenants on Thursday, the Abu Dhabi National Energy Company (TAQA) and AMCO.

President and CEO of SPARK Saif Al-Qahtani said: “SPARK is proud to welcome TAQA and AMCO as they take the first step toward launching their operations. SPARK sits at the heart of the energy market, offering a world-class ecosystem that facilitates the growth of our tenants’ businesses and brings sustained value to our wider communities. SPARK is set to be a fully integrated city, bringing together major national and international companies and fuelling economic growth and job creation.”

TAQA will expand its local operations with the TAQA Industrial Park at SPARK, including a new facility for oilfield services, a specialist unit for engineering and manufacturing, and a wireline and perforation center of excellence.

The facilities will be constructed in two phases starting in the second quarter of 2021, with the design and developmental planning stages having already commenced.

TAQA CEO Khalid Nouh said: “With our plans for future acquisitions focused on cutting-edge technology and innovative solutions, we further cement our alignment with Vision 2030 and the government’s drive to diversify and localize services and manufacturing in the Kingdom.”

AMCO is investing over SR260 million ($69.33 million) in a new center at SPARK. Its plans include the development of facilities to enable the manufacturing and production of steel pipes, valves, pumps, turbines, and machine and rotary equipment.

AMCO’s facilities will be developed in three phases, allowing for the gradual build-up of manufacturing capabilities and onboarding of local talent.

By 2035, the park is expected to contribute more than SR22 billion to the Kingdom’s gross domestic product, provide up to 100,000 direct and indirect jobs and localize more than 350 new industrial and service facilities.


Saudi Arabia to ship gas to South Korea and take CO2 back

Saudi Arabia to ship gas to South Korea and take CO2 back
Updated 23 min 54 sec ago

Saudi Arabia to ship gas to South Korea and take CO2 back

Saudi Arabia to ship gas to South Korea and take CO2 back
  • Hyundai to take LPG cargoes
  • CO2 sent back to use in oil fields

RIYADH: Saudi Arabia plans to ship gas to South Korea where it will be used to make hydrogen, and the carbon dioxide produced in the process will be transported straight back to the Kingdom, Asharq reported, citing Bloomberg.

Hyundai Oil Bank Co. will take liquefied petroleum gas cargoes from Saudi Aramco and convert them into hydrogen, to use for chemical and power solutions, the Korean energy company’s parent Hyundai Heavy Industries Holdings Company said.

Aramco and Hyundai OilBank Co. agreed in the deal signed on Wednesday, that the carbon dioxide emitted in the hydrogen-making process will be transported back to Aramco, to use it in its oil production facilities, according to a Hyundai Heavy spokesman.

“It seems the project will bank on the idea that shipping LPG to Korea and carbon dioxide back to Saudi Arabia will be cheaper than shipping hydrogen to Korea,” said Martin Tengler, BloombergNEF’s lead hydrogen analyst.

Saudi Aramco has huge quantities of natural gas, which it has identified as a key area of expansion for domestic supply and export in the form of liquefied natural gas (LNG).

“We basically look at natural gas as an area for growth for the company,” Khalid Al-Dabbagh, Aramco’s chief financial officer, said in an investor call in the run-up to its successful IPO back in 2019.


GRAPHIC: From Beirut to Damascus currencies take a battering

GRAPHIC: From Beirut to Damascus currencies take a battering
Updated 55 min 32 sec ago

GRAPHIC: From Beirut to Damascus currencies take a battering

GRAPHIC: From Beirut to Damascus currencies take a battering

Lebanon’s president this week ordered the central bank governor to open an investigation into currency speculation, after the Lebanese pound plunged to record lows on the black market.
But the battered Lebanese pound is not alone among regional currencies that have been decimated by the impact of the pandemic and other factors.
The Syrian pound also fell to a record low on the black market this week, dragged down by its close commercial and banking ties with Lebanon.
“Businessmen and traders are fretting over fears of a free-fall in coming days and watching if unrest grows in Lebanon and its impact on dealings since Lebanon is our lifeline to the outside world,” said one Damascus-based trader told Reuters, who requested anonymity.


Oil prices rise after Saudi minister urges caution on market

Oil prices rise after Saudi minister urges caution on market
Updated 04 March 2021

Oil prices rise after Saudi minister urges caution on market

Oil prices rise after Saudi minister urges caution on market
  • OPEC and allies meet today
  • Oil price rises ahead of meeting

LONDON Oil prices rose more than $1 per barrel on Thursday after Saudi Energy Minister Prince Abdul Aziz bin Salman urged caution and vigilance at the beginning of a meeting of OPEC ministers and their allies about the future of supply cut
Brent crude futures were up $1.11, or 1.7 percent, at $65.18 a barrel while U.S. West Texas Intermediate (WTI) crude rose $1.07, or 1.8 percent to $62.35.
Ministers from OPEC members and their allies started a meeting to discuss the future of an oil output cut at 1300 GMT.
Analysts and traders say a four-month price rally from below $40 a barrel is now out of step with demand and that physical sales are not expected to match supply until later in 2021.
In the United States, despite a record surge of more than 21 million barrels in crude oil stockpiles last week, gasoline stocks fell by the most in 30 years as refining plunged to a record low because of the Texas freeze.


Saudi energy minister: Recovery in oil demand related to speed of COVID-19 vaccine distribution

Saudi energy minister: Recovery in oil demand related to speed of COVID-19 vaccine distribution
Updated 37 min 5 sec ago

Saudi energy minister: Recovery in oil demand related to speed of COVID-19 vaccine distribution

Saudi energy minister: Recovery in oil demand related to speed of COVID-19 vaccine distribution

LONDON: The recovery in oil demand is related to the speed of COVID-19 vaccine distribution, Saudi Arabia’s energy minister said on Thursday.

Speaking at the opening of a meeting of the Organization of the Petroleum Exporting Countries, Russia and its allies, a group known as OPEC+, Prince Abdulaziz bin Salman said that the Kingdom has “contingency and backup plans in case unforeseen things happen,” Al-Ekhbariya reported. 

He added that the situation in the oil market had improved but the outlook for a recovery in demand remained uncertain.

Ministers from OPEC members and their allies started a meeting to discuss the future of an oil output cut at 01:00 P.M. GMT.