Iraq denies ‘baseless’ reports about OPEC+ cuts

Iraq denies ‘baseless’ reports about OPEC+ cuts
Iraq has formally denied “baseless” reports that it was seeking to opt out of some of the terms of the OPEC+ agreement to limit oil supplies. (File/AFP)
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Updated 02 September 2020

Iraq denies ‘baseless’ reports about OPEC+ cuts

Iraq denies ‘baseless’ reports about OPEC+ cuts
  • A spokesman said the reports, based on quotes attributed to Oil Minister Ihsan Abdul Jabbar, were false
  • Iraq remains fully committed to the April OPEC+ Declaration of Cooperation, and the compensation mechanism agreed to in June,” the spokesman said

DUBAI: Iraq has formally denied “baseless” reports that it was seeking to opt out of some of the terms of the OPEC+ agreement to limit oil supplies.
In an official statement from the country’s Oil Ministry, a spokesman said the reports, based on quotes attributed to Oil Minister Ihsan Abdul Jabbar, were false.
“The Ministry of Oil would like to categorically deny this baseless statement, and affirm that, to the contrary, Iraq remains fully committed to the April OPEC+ Declaration of Cooperation, and the compensation mechanism agreed to in June, and will continue to work with all of the other signatories in our collective efforts to enhance the stability of global petroleum markets,” the spokesman said.
“Furthermore, Iraq’s conformity has exceeded 100 percent in August, and will continue to perform at this elevated level, while compensating in August and September for the previous overproduction of 850,000 barrels per day, in accordance with the OPEC+ agreement.”
Iraq, along with some other countries that have failed to meet agreed output limits, has agreed to deeper cuts in coming months to compensate.
“If the full compensation volumes cannot be made by the end of September, Iraq will request the Joint Ministerial Monitoring Committee (JMMC) to seek an expedited decision from the OPEC+ countries, immediately after the committee’s meeting on Sept. 17, for an extension of the compensation period to the end of November,” the spokesman said.
The JMMC — the ministerial-level body that meets monthly to monitor compliance with the OPEC+ agreement that is credited with rebalancing global oil markets — meets on Sept. 17 to discuss compliance.
Brent crude, the global benchmark, fell back to $44.25 yesterday.


Jack Ma video reappearance fails to soothe all investor concerns

Jack Ma video reappearance fails to soothe all investor concerns
Updated 18 min 17 sec ago

Jack Ma video reappearance fails to soothe all investor concerns

Jack Ma video reappearance fails to soothe all investor concerns
  • Ma had not appeared in public since Oct. 24, after he blasted China’s regulatory system
  • Chinese regulators have set about reining in Ma’s financial and e-commerce empires

HONG KONG: Billionaire Jack Ma’s 50-second video reappearance has done little to resolve Alibaba Group’s troubled relationship with regulators that is making some investors hesitate about owning the Chinese e-commerce giant’s stock.

Relief at Ma’s first public appearance added $58 billion in market value on Wednesday as Alibaba’s Hong Kong-listed stock soared, though doubts crept in a day later and the stock fell more than 3 percent as the broader market steadied near two-year highs.

Ma had not appeared in public since Oct. 24, when he blasted China’s regulatory system. That set him on a collision course with officials and led to the suspension of Alibaba fintech affiliate Ant Group’s blockbuster $37 billion IPO.

A source familiar with the matter said Ma cleared his schedule late last year to keep a low profile, prompting discussion at Alibaba about when and how he should reappear to assure investors.

It was decided he should do something that would appear as part of his normal routine, rather than anything overt that could irk the government.

While Ma has stepped down from corporate positions, he retains significant influence over Alibaba and Ant, and the regulatory crackdown on his business empire coupled with his absence was a concern for some investors.

There was skepticism that Ma’s brief reappearance meant all was well with his businesses.

“The coast is not all clear for Alibaba and it is a judgment call whether you believe the company can still thrive in the changing environment,” said Dave Wang, a portfolio manager at Singapore’s Nuvest Captial, which owns Alibaba stock.

“Without some skepticism, the price would be a lot higher,” he said, adding his firm had increased exposure to China and with it Alibaba, which he believes can prosper over the medium to longer term.

Two of the company’s investors in the US who have sold out or reduced positions in Alibaba said they needed more reassurance about the company and the regulatory environment before reconsidering the stock.

“One of our top criteria is leadership and we were investing in Alibaba because I really respect Jack Ma as a leader,” said William Huston, founder and director of institutional services at independent investment advisory firm Bay Street Capital Holdings in Palo Alto, CA, with assets under management of $86 million.

“We all know that just because he showed up ... doesn’t necessarily explain what is going on.”

Huston, whose firm cut its holding in the Chinese firm last year from 8 percent of its portfolio to less than 1 percent, said the halting of the Ant IPO in November had caused uncertainty, and that Alibaba was “not a prudent investment” for it going forward.

David Kotok, chairman and chief investment officer at Cumberland Advisers, Florida, which has about $4 billion in assets, said he held Alibaba last year but also sold as the Ant IPO was pulled.

“When you don’t know what to do in an evolving situation like this you can’t use traditional securities analytics to reach decisions. We are standing aside and watching,” Kotok said.

Chinese regulators have set about reining in Ma’s financial and e-commerce empires since the Ant IPO suspension, which has weighed on its stock that remains below levels prior to the cancelation of the Ant IPO.

“What his actual state is will be completely up to Beijing to reveal to us,” Leland Miller, CEO of US-based consultancy China Beige Book.

“What we do know is whether Jack is running around, Jack is hiding or something else, Alibaba is not in the clear. There is a lot more of the story still to see.”

Some investors are, however, betting on long-term potential for Alibaba in the world’s second-largest economy.

Dennis Dick, a proprietary trader at Bright Trading, who holds Alibaba shares, said he had protected against a potential fall when speculation about Ma’s whereabouts began by buying put options.

He covered those puts earlier in January on a report that Ma was OK and retains a long position in the stock.

“We have been investors for many years ... there’s a very strong team of executives and Alibaba is bigger than just one person,” said a Hong Kong based long-only investor, declining to be named as he was not authorized to speak to the media.