China yuan surges after central bank chief’s comments

China yuan surges after central bank chief’s comments
Updated 15 February 2016

China yuan surges after central bank chief’s comments

China yuan surges after central bank chief’s comments

SHANGHAI: China’s yuan currency surged more than one percent against the dollar, its biggest rise in over a decade, after the central bank chief said there was no reason the beleaguered unit should fall further.
The yuan stood at 6.4944 to $1.0 at 0830 GMT, up 1.14 percent from February 5 — the last trading day before a week-long holiday — according to the national foreign exchange market.
Bloomberg News said it was the biggest one-day advance since 2005.
In an interview with Caixin magazine published over the weekend, the People’s Bank of China (PBoC) head Zhou Xiaochuan blamed foreign speculators for volatility in the yuan and said there was no basis for it to fall further.
“There is no foundation for continued depreciation,” he told the magazine, according to a transcript posted on the bank’s website.
The Chinese economy grew 6.9 percent in 2015, the slowest rate since 1990. Capital has been flowing out of the country on worries about the flagging growth, causing the currency to weaken — which in turn drives withdrawals.
The central bank signalled a preference for a stronger currency on Monday by fixing its value higher by the biggest margin for more than three months.
China is seeking a greater role in global commerce for the yuan, but limits the currency to rising or falling two percent on either side of the daily fix.
The PBoC set the yuan at 6.5118 to $1.0 on Monday, strengthening 0.30 percent from the fix on February 5, according to data from the China Foreign Exchange Trade System. In January, Beijing guided the unit down by 1.4 percent by setting its daily fix lower for eight consecutive sessions — a move that raised worries of a creeping devaluation.
In mid-August China adjusted the yuan down nearly five percent over a week, spurring fears it was pursuing a currency war to help boost its flagging exports.
Exports dropped 11.2 percent year-on-year to $177.5 billion in dollar terms in January, Customs said on Monday, as feeble external demand dragged on the world’s second-largest economy.
Analysts said the yuan was still likely to depreciate more this year.
“His (Zhou’s) comments signal against the intention for a sharp one-off devaluation, but leave scope for possible further round(s) of gradual depreciation,” Goldman Sachs said in a research note.
UBS forecast the yuan would weaken to 6.8 to $1.0 by the end of the year but the movement would be gradual.
“The probability of China holding (US dollar/Chinese yuan) stable in the next few months is greater than a significant depreciation or a one-off adjustment,” it said.


King Salman Energy Park signs anchor tenants

King Salman Energy Park signs anchor tenants
Updated 9 min 47 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.


GRAPHIC: From Beirut to Damascus currencies take a battering

GRAPHIC: From Beirut to Damascus currencies take a battering
Updated 20 min 29 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 32 min 59 sec ago

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 2 min 2 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.


Abu Dhabi’s Etihad Airways reports $1.7 billion loss in 2020

Abu Dhabi’s Etihad Airways reports $1.7 billion loss in 2020
Updated 04 March 2021

Abu Dhabi’s Etihad Airways reports $1.7 billion loss in 2020

Abu Dhabi’s Etihad Airways reports $1.7 billion loss in 2020
  • Regional carriers hit hard by pandemic
  • CEO says airline stood firm in face of downturn

ABU DHABI: Etihad on Thursday reported core operating losses of $1.7 billion in 2020, reflecting the severe toll of the coronavirus pandemic on the long-troubled airline that has lost billions in recent years.
Etihad reported revenues of $2.7 billion in 2020 compared to $5.6 billion the year before, a precipitous decline it attributed to “drastically fewer people traveling” as the surging pandemic crippled air travel.
But the airline, one of the Middle East’s top carriers, struggled with financial losses long before the pandemic wiped out the global aviation industry. Since 2016, Etihad has lost a total of $5.62 billion as it has aggressively bought up stakes in airlines from Europe to Asia to compete against the region’s other leading airlines, Dubai-based Emirates and Qatar Airways.
With cost-cutting measures, the company was just starting to recover from the economic pain early last year. It announced the sale of 38 aircraft to an investment firm in an attempt to bolster profits, in a deal valued at $1 billion.
Then, the pandemic struck. Last March, the United Arab Emirates halted flights to stem the spread of the virus. Passenger traffic plummeted to just 4.2 million travelers from 17.5 million the year before, the airline said. Total passenger capacity on planes dropped 64 percent. The carrier lost $758 million over the first half of 2020 alone. The losses rippled across the company, forcing the airline to cut 33% of its workforce and slash salaries by 25-50 percent.
By comparison, Etihad lost $870 million in 2019. The airline reported losses of $1.28 billion in 2018 and $1.52 billion for 2017.
While rollout of coronavirus vaccines has stoked hopes for a global return to travel, the industry is not expected to see meaningful recovery for months, until vaccines are widely administered.
Still, Etihad CEO Tony Douglas struck an optimistic tone in the earnings announcement.
“While nobody could have predicted how 2020 would unfold,” he said, “Etihad stood firm and is ready to play a key role as the world returns to flying.”