Iran forgoes plans to transfer funds from Germany after US opposition

Iran holds €300 million in funds at the Hamburg-based Europaeisch-Iranische Handelsbank (eihbank). (Reuters)
Updated 05 September 2018

Iran forgoes plans to transfer funds from Germany after US opposition

  • The US ambassador to Germany has been urging Berlin to stop Iran withdrawing large sums of cash from bank accounts in Germany
  • Washington has announced new sanctions on Iran and ordered all countries to stop buying Iranian oil by November

FRANKFURT: Iran is forgoing plans for now to transfer about €300 million ($347 million) in funds held in Germany to Iran after strong opposition from the United States, two sources with knowledge of the matter said on Wednesday.
The funds are held at the Hamburg-based Europaeisch-Iranische Handelsbank (eihbank). The bank was not immediately available for comment.
The US ambassador to Germany had been urging Berlin to stop Iran withdrawing large sums of cash from bank accounts in Germany to offset the effect of new US sanctions imposed after Washington withdrew from a 2015 nuclear deal.
“Iran is the world’s leading state sponsor of terrorism. We must be vigilant,” Ambassador Richard Grenell said on Twitter on Wednesday in reaction to news that Iran was dropping its bid to move the money.
The development was earlier reported by the German daily Sueddeutsche Zeitung and the broadcasters NDR and WDR.
Washington has announced new sanctions on Iran and ordered all countries to stop buying Iranian oil by November and foreign firms to stop doing business there or face US blacklists.
Iran argues it needs the cash for Iranian citizens traveling abroad since they cannot access recognized credit cards.


Investment and energy experts welcome ‘sensible’ Saudi Aramco IPO valuation

Updated 12 min 38 sec ago

Investment and energy experts welcome ‘sensible’ Saudi Aramco IPO valuation

  • Price regarded as a sensible compromise and that it will sell the IPO
  • Experts said the Aramco valuation was justified by the financial metrics

DUBAI: Investment professionals and energy experts delivered a mainly enthusiastic response to the pricing of shares in Saudi Aramco and the overall valuation of the biggest oil company in the world at between $1.6 trillion and $1.7 trillion.

Al Mal Capital, a Dubai-based investment bank, said that it was positive on the Aramco initial public offering (IPO) on that kind of valuation, which it said was justified by the financial metrics.

“We believe Aramco’s IPO is a central pillar of Saudi Arabia’s Vision 2030. In our view, the broader privatization of state assets will likely accelerate the flow of foreign capital into the Kingdom, improve liquidity and transparency as well as continue to help diversify its economy away from its dependency on oil. While many investors were skeptical about the ability of Saudi Arabia to roll out its ambitious agenda, they seem to be right on track.”

Tarek Fadhallah, chief executive officer of Nomura Asset Management in the Middle East, said via Twitter: “My first impression is that the price is a sensible compromise and that it will sell the IPO. Aramco should easily raise the $8.5bn from retail investors but the 29 global coordinators, managers and financial advisers will need to find the other $17 billion. A few billion from China would help.”

Robin Mills, chief executive of the Qamar Energy consultancy, said; “I think it’s a reasonable compromise. The price is well above most independent valuations but well below the aspirational price. It implies dividend yields a bit lower than the super-majors (the independent oil companies), but a similar price earnings ratio (the measure of the share price rated according to profits). Retail and local investors should be sufficient. We’ll have to see about the foreign investors.”

Ellen Wald, energy markets consultant and author of the book Saudi, Inc., said American investor would still be undecided on the IPO. 

“Remember, investors don’t put money in because they think the value is accurate. Smart investors put money in because they think the value will rise. It all depends on whether they see signs the price will rise during their time frame.”

American oil finance expert David Hodson, managing director of BluePearl Management, said: “This valuation seems to be more reasonable based on the fundamentals. Potential investors in Western markets will base their decision on cold hard facts like dividends and growth prospects. From what we now know, Aramco is offering them a compelling investment proposition to consider.”