Oil prices spike as US prepares end to Iran sanctions waivers

Oil prices spike as US prepares end to Iran sanctions waivers
The US reimposed sanctions on exports of Iranian oil in November after President Trump unilaterally pulled out of a 2015 nuclear accord. Above, an Iranian oil facility. (Reuters)
Updated 22 April 2019

Oil prices spike as US prepares end to Iran sanctions waivers

Oil prices spike as US prepares end to Iran sanctions waivers
  • US President Donald Trump wants to end the waivers to exert ‘maximum economic pressure’ on Iran
  • Global oil markets have also tightened this year because of supply cuts led by the OPEC

WASHINGTON/SINGAPORE: The United States is expected to announce on Monday that all buyers of Iranian oil will have to end their imports shortly or face sanctions, a source familiar with the situation told Reuters, triggering a 3 percent rise in crude prices.
The source confirmed a report by a Washington Post columnist that the administration will terminate the sanctions waivers it granted to some importers of Iranian oil late last year.
Benchmark Brent crude oil futures rose by as much as 3.2 percent to $74.30 a barrel, the highest since November 1, in early trading on Monday in reaction to expectations of tightening supply. US West Texas Intermediate (WTI) futures climbed as much as 2.9 percent to $65.87 a barrel, its highest since Oct. 30.
US President Donald Trump has made clear to his national security team over the last few weeks that he wants to end the waivers to exert “maximum economic pressure” on Iran by cutting off its oil exports and reducing its main revenue source to zero.
In November, the US reimposed sanctions on exports of Iranian oil after President Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers.
Washington, however, granted waivers to Iran’s eight main buyers — China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece — that allowed them limited purchases for six months.
On Monday, Secretary of State Mike Pompeo will announce “that, as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate,” the Post’s columnist Josh Rogin said in his report, citing two State Department officials that he did not name.
On April 17, Frank Fannon, US Assistant Secretary of State for Energy Resources, repeated the administration’s position that “our goal is to get to zero Iranian exports as quickly as possible.”
Peter Kiernan, lead energy analyst at the Economist Intelligence Unit (EIU) said “a severe loss in (Iranian) volumes will put pressure on the supply side, given the political uncertainty currently blighting other oil exporters, such as Venezuela and Libya.”
Global oil markets have also tightened this year because of supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
As a result, Brent prices have risen by more than a third this year, and WTI more than 40 percent over the same period.
Kiernan said he expected the “Trump administration to try to rely on Saudi Arabia ... to reverse policy and increase volumes to calm market fears of oil supplies quickly tightening.”
Saudi Arabia is the world’s biggest exporter of crude oil and OPEC’s de facto leader.
“If there is a time for the US to be able to take a hard line it is now, with the Saudis having over 2 million barrels (per day) of spare capacity,” said Tony Nunan, oil risk manager at Mitsubishi Corp. in Tokyo.
An end to the exemptions would hit Asian buyers the hardest. Iran’s biggest oil customers are China and India, who have both been lobbying for extensions to sanction waivers.
South Korea, a close US ally, is a major buyer of Iranian condensate, an ultra-light form of crude oil that its refining industry relies on to produce petrochemicals.
Government officials there declined to comment as well, but Kim Jae-kyung of the Korean Energy Economics Institute said the end of the sanction waivers “will be a problem if South Korea can’t bring in cheap Iranian condensate (for) South Korean petrochemical makers.”
Japan is another close US ally in Asia that is also a traditionally significant buyer of Iranian oil.
Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corporation (JOGMEC) said the end of the sanction waivers “is not a good policy for Trump.”
Nogami said he expected oil prices to rise further because of the US sanctions and OPEC-led supply cuts.
So far in April, Iranian exports were averaging below 1 million barrels per day (bpd), according to Refinitiv Eikon data and two other companies that track exports and declined to be identified.
That is lower than at least 1.1 million bpd estimated for March, and down from more than 2.5 million bpd before the renewed sanctions were announced last May.


Saudi Arabia dominates MENA IPO market in 2020

Saudi Arabia dominates MENA IPO market in 2020
Updated 25 min 18 sec ago

Saudi Arabia dominates MENA IPO market in 2020

Saudi Arabia dominates MENA IPO market in 2020
  • Kingdom had four listings totaling $1.45 billion, accounting for 78% of IPO issuances last year

RIYADH: Saudi Arabia continued to lead the initial public offering (IPO) market in the Middle East and North Africa (MENA) region with the Saudi Stock Exchange (Tadawul), representing 78 percent of MENA IPO issuances last year, according to the latest industry figures.

According to consultancy firm EY’s MENA IPO Eye Q4 2020 report, “Saudi Arabia continued to have the most active IPO market in the MENA region in terms of both issuances and proceeds. Tadawul was MENA’s top listing venue for the year with four listings totaling $1.45 billion, which represented 78 percent of the total amount raised by MENA IPO candidates in 2020.”

The fourth quarter of 2020 was the strongest for IPOs based on proceeds, primarily due to the listing of BinDawood Holding ($584 million), which was the second-largest listing of the year after Dr. Sulaiman Al-Habib Medical Services Group Company ($701 million), which listed in the first quarter of 2020. Both listings were on Tadawul’s main market.

Saudi Arabia also saw several new initiatives that have an important bearing on future IPO activity in the country, including the introduction of direct listings on the Nomu parallel market, as well as the launch of their derivatives market.

In the fourth quarter of 2020, additional updates related to disclosures becoming mandatory in both English and Arabic, as well as increases in daily price fluctuation limits for new listings on the main market were announced.

Commenting on the findings, Abdulrahman Moulay Al-Bizioui, KSA country leader at EY, said: “The capital markets in Saudi Arabia have shown their resilience during 2020, both in terms of liquidity and regulations. The outlook for the Kingdom’s markets remains positive for 2021 and as Tadawul continues its growth and status in the international capital markets, it proves to be an important avenue for investors looking to deploy domestic capital and foreign direct investments.”

The Kingdom is expected to see more than ten listings in 2021. In addition, Tadawul, which is the region’s largest exchange, is preparing for its own IPO, which is expected to be finalized in 2022. This would make it the third publicly listed stock exchange in the region after the Dubai Financial Market and Boursa Kuwait.

Gregory Hughes, EY MENA IPO and transaction diligence leader, commented: “Although MENA IPO activity remained relatively quiet in 2020, several regulators across the region announced positive regulatory changes during the year that bode well for future and existing public companies. As we start 2021, there are reasons for renewed optimism, and we see a strong IPO pipeline in key MENA markets. We have also seen some interest in mergers with US-listed special-purpose acquisition companies in recent months following some limited activity in this area in the last two years from the region.”

According to the EY report, the MENA region saw nine IPOs raise proceeds of $1.86 billion, a fall of 40 percent in total issuances and 94 percent in total proceeds when compared with 2019. Out of the nine issuances, six were in the real estate sector, of which two were real estate investment trusts, with the remaining in the health care, consumer staples and insurance sectors.

Despite a subdued annual picture, in the fourth quarter of 2020, four MENA IPOs raised $925 million in total, compared to one in the first quarter and none in the second. There were four IPOs in the first quarter of 2020, raising $814 million.

Looking to the future, Matthew Benson, EY MENA strategy and transactions leader, said: “As 2021 begins, we believe that continued fiscal stimulus measures, an abundance of liquidity and growing confidence in COVID-19 vaccination programs will sustain positive IPO momentum.”

Globally, IPO numbers continued to pick up with 1,363 listings in 2020, a 19 percent rise compared with 2019. Additionally, proceeds increased 29 percent year-on-year to $268 billion, the highest proceeds since 2010’s record of $290.2 billion raised by 1,361 IPOs.


Abu Dhabi fund, CVC said to be among suitors for $1bn NMC hospital business

Abu Dhabi fund, CVC said to be among suitors for $1bn NMC hospital business
Updated 21 min 23 sec ago

Abu Dhabi fund, CVC said to be among suitors for $1bn NMC hospital business

Abu Dhabi fund, CVC said to be among suitors for $1bn NMC hospital business
  • NMC hires advisers for possible sale
  • Pandemic boost to private hospital revenues

ABU DHABI: Abu Dhabi state-owned holding company ADQ and private equity firm CVC Capital Partners are among the suitors that have shown interest in NMC Health’s core hospital business, sources told Reuters.
Hospital operators in the region have reported higher profits for last year as the COVID-19 pandemic led to higher in-patient occupancy.
NMC has hired advisers for the sale of NMC’s health care business in the UAE and Oman, which sources said could generate around $1 billion.
ADQ is serious about the transaction, which would make sense for the nascent wealth fund, whose portfolio includes Abu Dhabi Health Services Co. (Seha), two sources said. They declined to be named as the matter is not public.
Saudi Arabian health care operator Sulaiman Al Habib Medical Group (HMG) has been invited to the process, said one of the two sources and a third source.
Hospital chain operator Mediclinic is also in the running, one of the sources said.
An NMC spokesman said: “A process to explore the possibilities of a sale was launched last month and, while it is understandably attracting considerable interest, it is at an early stage.”
ADQ and HMG were unavailable to comment when contacted by Reuters. CVC declined to comment. Mediclinic said it cannot comment on market speculation.
The deal is active and investor talks with management have started, but the candidates have yet to submit non-binding bids and there is no guarantee it will lead to a sale, the sources said.
NMC, founded in the 1970s, became the largest private health care provider in the UAE, but ran into trouble.
Last year, the disclosure of more than $4 billion in hidden debt left some UAE and overseas lenders with heavy losses that prompted legal battles to try to recover money owed.
But NMC said in February that gross revenues from its UAE and Oman business was $1.12 billion, 11 percent ahead of the business plan, while EBITDA of $87.6 million was also significantly ahead of its plan.
Banking sources said the transaction was a price discovery exercise to determine whether NMC’s business can get the value its creditors seek, or whether the business should keep the assets, complete the restructuring, and sell when they can achieve the value they want.


Anghami to be first Arabic tech firm to list on Nasdaq New York

Anghami to be first Arabic tech firm to list on Nasdaq New York
Updated 57 min 32 sec ago

Anghami to be first Arabic tech firm to list on Nasdaq New York

Anghami to be first Arabic tech firm to list on Nasdaq New York
  • UAE-headquartered music streaming service plans to rival Spotify, Deezer with US IPO

DUBAI: Arabic music streaming service Anghami is set to become the first technology company from the region to list on New York’s Nasdaq stock exchange as part of a merger deal valuing the platform at up to $230 million.

Anghami – my tunes, in Arabic – is set to merge with Vistas Media Acquisition Co. Inc., a publicly traded special-purpose acquisition company. Often referred to as “blank check companies” in the industry, the merger is seen as a quicker and cheaper route to a Nasdaq listing.

The listing is expected to close at the end of May, early June and Vistas Media Acquisition Co. Inc. has already gathered $40 million in advance commitments, with $10 million from parent company, Singapore’s Vista Media Capital, and $30 million from the UAE asset management firm SHUAA Capital.

Eddy Maroun, co-founder and CEO of Anghami, told Arab News the transaction was likely to value the company at between $220 million and $230 million.

Founded in 2012 by Maroun and fellow Lebanese entrepreneur Elie Habib, Anghami is the first music-streaming platform in the Middle East and rivals global brands such as Spotify and Deezer.

With more than 57 million Arabic and international songs and around 70 million registered users, it generates approximately 10 billion streams a year.

Maroun said: “Elie and I co-founded the company in 2012 with a vision for Anghami to be a first of its kind, digital media entertainment technology platform in the MENA (Middle East and North Africa) region.

“Today, we have taken a significant step forward in our growth plans in seeking to become the region’s first Arab technology company to list on Nasdaq. Being a US-listed public company gives us access to growth capital and a global platform that is the best in the world.”

Headquartered in Abu Dhabi since early 2021, following a partnership with the Abu Dhabi Investment Office, it also has offices in Beirut, Dubai, Cairo, and Riyadh. The duo of founders currently own 32 percent of the company, with the remaining 68 percent backed by regional venture capital funds and major media and telecommunications companies.

According to Anghami, its revenue has grown 80 percent over the last three years and is forecast to increase five-fold over the next three years.

Rabih Khoury, managing partner of Middle East Venture Partners (MEVP), said: “As the largest institutional investor in Anghami, we at MEVP are delighted that one more of our top portfolio companies will list on Nasdaq, the leading global market for technology.

“We have partnered with Eddy and Elie from the outset in 2012 and continuously supported Anghami starting with its seed round and all its subsequent funding rounds.”

Sam Barnett, CEO of MBC, said his company was “honored” to be a part of Anghami’s success and how it was “revolutionizing the Arabic music industry through innovation.”

Maroun revealed that he planned to use the new funding to tap into more of the 450 million Arabic-speaking population and to expand into new markets outside the Middle East.

“In our region we believe that there is a lot of untapped potential still in the Middle East and North Africa, meeting Gulf and Levant or in North Africa. And we also have a direction to go bigger with the Arab diaspora, which is a huge addressable market.

“We never spent any marketing dollars on diaspora, although there’s big potential there. And we believe that we have the capabilities to grow into other emerging markets given the learnings we had in our region,” he added.


UAE’s ADNOC to remove all destination restrictions for all its crudes

UAE’s ADNOC to remove all destination restrictions for all its crudes
Updated 54 min 19 sec ago

UAE’s ADNOC to remove all destination restrictions for all its crudes

UAE’s ADNOC to remove all destination restrictions for all its crudes
  • Intercontinental Exchange Inc will launch ICE Futures Abu Dhabi (IFAD) and trade in Murban futures contracts this month

DUBAI: Abu Dhabi National Oil Company (ADNOC) will remove all destination restrictions for all its crudes, and has signed deals to explore use of Murban futures with Chinese end users, a senior ADNOC executive said on Wednesday.
Intercontinental Exchange Inc will launch ICE Futures Abu Dhabi (IFAD) and trade in Murban futures contracts this month.

The oil company said that it expects Murban crude to contribute about half of its 5 million barrels per day  (bpd) production capacity by 2030.


Abu Dhabi-owned GlobalFoundries may bring forward IPO as it pours $1.4bn into fab expansion

Abu Dhabi-owned GlobalFoundries may bring forward IPO as it pours $1.4bn into fab expansion
Updated 03 March 2021

Abu Dhabi-owned GlobalFoundries may bring forward IPO as it pours $1.4bn into fab expansion

Abu Dhabi-owned GlobalFoundries may bring forward IPO as it pours $1.4bn into fab expansion
  • Global semiconductor shortage boosts demand for chips
  • Shortage has hit automaker output worldwide
WASHINGTON: Abu Dhabi’s GlobalFoundries will invest $1.4 billion this year to raise output at three factories in the United States, Singapore and Germany, as a global shortage of semiconductors has boosted demand for chips, its chief executive said.
The US-based company, a unit of Abu Dhabi’s state-owned fund Mubadala, may also bring forward its initial public offering to late 2021 or the first half of next year, from a previous target of late 2022 or early 2023.
It is aiming for revenue growth of 9 percent to 10 percent from just over $5.7 billion last year.
Automakers and electronics producers are facing a global shortage of chips which has fueled manufacturing delays.
“The adoption of technology that would normally have taken a decade happened in one year in 2020 because of COVID-19,” GlobalFoundries CEO Thomas Caulfield told Reuters.
Before the pandemic, the chip industry was projected to grow 5 percent over a five-year horizon and now it has accelerated to grow at twice that rate, he said.
While the supply crunch has resulted in car makers such as Volkswagen, Ford and General Motors cutting output, an increase in supply would create further demand.
GlobalFoundries said the $1.4 billion, which will be divided evenly among its fabs in Dresden, Germany, Malta, New York and Singapore, will begin to ramp up output through 2022 to produce chips from 12 to 90 nanometers.
About a third of the investment will come from clients seeking to lock in supply over several years, Caulfield said, forecasting a 20% rise in production next year following an expected 13 percent increase in 2021.
If demand continues to rise GlobalFoundries could build a new plant adjacent to its Malta, New York, plant after securing a purchase option agreement for about 66 acres of undeveloped land last year.
But a decision to break ground there would hinge on the US Congress funding a set of measures to incentivise chip manufacturing in the US known as the Chips Act, which was approved last year.
“It’s not a question of ‘if,’ it’s just a question of ‘when,’... And a key element of going forward will be the funding of the Chips Act,” Caulfield said.
US President Joe Biden, who took office in January, has pledged to support the effort, and senators are looking at providing emergency funding for the law as part of a bigger package to counter China’s rise, as chipmaking has shifted to Asia.
GlobalFoundries is the world’s third-largest foundry by revenue behind Taiwan Semiconductor Manufacturing and Samsung Electronics but ranks second when factoring out the part of Samsung’s foundry business that makes chips for other elements of the South Korean firm.