Thursday trading: Tadawul index recorded its highest point since July 2019

Thursday trading: Tadawul index recorded its highest point since July 2019
Saudi Aramco declined more than 1 percent to close at SR35.20 on Thursday. (AFP file photo)
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Updated 17 December 2020

Thursday trading: Tadawul index recorded its highest point since July 2019

Thursday trading: Tadawul index recorded its highest point since July 2019
  • Tadawul All Share Index declines slightly by 0.1 percent

Saudi equities ended the session on Thursday, Dec. 17, with the benchmark Tadawul All Share Index (TASI) declining slightly by 0.1 percent, or 10 points, to close at 8,712.

Total turnover reached SR13.6 billion ($3.62 billion), with advance-decline ratio at 89:95.

The index recorded its highest point today at 8,766 points since July 2019, before rebounding and closing at the level mentioned above.

SAPTCO rose by more than 5 percent to close at SR18.16, amid heavy trading on the share, amounting to about 12 million, the highest in about six years.

Taiba rose by 1 percent to close at SR30.50, after the company announced cash dividends to shareholders.

Shares of Advanced, Baazeem and Thob Al-Aseel recorded the highest close since their listing on the market.

With regard to REIT funds, AlJazira REIT Fund rose 4 percent to close at SR23.02, amid trading of 4.3 million units.

On the other hand, Saudi Aramco declined more than 1 percent to close at SR35.20.

Shares of Samba, Banque Saudi Fransi, SABB, Maaden and Arab National Bank ended their trading today with a decline ranging between 1 percent and 3 percent.

SARCO led the declines today by 5 percent.

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SoftBank says deal reached with WeWork founder, directors

SoftBank says deal reached with WeWork founder, directors
Updated 3 min 20 sec ago

SoftBank says deal reached with WeWork founder, directors

SoftBank says deal reached with WeWork founder, directors
TOKYO: SoftBank Group Corp. has reached a settlement in a US legal dispute with directors of office space-sharing venture WeWork Inc. and its founder Adam Neumann, the Japanese technology company said Saturday.
The terms of the settlement in the Delaware Court of Chancery were not disclosed. The statement said the agreement was not yet final. Other details were not immediately available.
The wrangling began more than a year ago after SoftBank acquired shares in WeWork, which was suffering after its failed IPO. But some investors and Neumann were not satisfied with the monetary deals offered by SoftBank.
“With this litigation behind us, we are fully focused on our mission to reimagine the workplace and continue to meet the growing demand for flexible space around the world,” said Marcelo Claure, executive chairman of WeWork and SoftBank Group International chief executive.
Tokyo-based SoftBank is a majority shareholder in WeWork, whose bumpy results, especially amid the coronavirus pandemic, has dented SoftBank’s financial results.
SoftBank says WeWork holds potential, especially in markets like Japan, where office space is costly and workers’ commutes tend to be long. SoftBank also invests in artificial intelligence, Internet services, sustainable energy and IoT.

Investors weigh new stock leadership as broader market wobbles

Investors weigh new stock leadership as broader market wobbles
Updated 47 min 44 sec ago

Investors weigh new stock leadership as broader market wobbles

Investors weigh new stock leadership as broader market wobbles
NEW YORK: A shakeup in stocks accelerated by the past week’s surge in Treasury yields has investors weighing how far a recent leadership rotation in the US equity market can run, and its implications for the broader S&P 500 index.
Moves this week further spurred a shift that has seen months-long outperformance for energy, financial and other shares expected to benefit from an economic recovery, while a climb in Treasury yields weighed on the technology stocks that have led markets higher for years.
The two-track market left the benchmark S&P 500 down for the week, and sparked questions about whether it could sustain gains going forward if the tech and growth stocks that account for the biggest weights in the index struggle.
So far this year, the S&P 500, which gives more influence to stocks with larger market values, is up 1.5 percent, while a version of the index that weights stocks equally is up 5 percent.
“That just tells us the gains are less narrow, more companies are participating, and I think that’s healthy,” said James Ragan, director of wealth management research at D.A. Davidson.
The focus on market leadership comes as investors are weighing whether the S&P 500 is due for a significant pullback after a 70 percent run since March, with the rise in long-dormant yields the latest sign of trouble for equities as it means bonds are more serious investment competition. The yield on the 10-year US Treasury note this week jumped to a one-year peak of 1.6 percent before pulling back.
Economic improvement will be in focus in the coming weeks, including the monthly US jobs report due next Friday, as will the country’s ability to ensure widespread coronavirus vaccinations, especially as new variants emerge.
Tech and momentum stocks helped drive returns in 2020 “when everyone was locked down and all they had was their computer,” said Jack Ablin, chief investment officer at Cresset Capital Management. “Now it seems with the vaccines, the stimulus and the prospect of reopening that we are looking out toward a recovery phase.”
The shift in the market this week is building on one that was fueled in early November, when Pfizer’s breakthrough COVID-19 vaccine news generated broad bets on an economic rebound in 2021.
Among the moves since that point: the S&P 500 financial and energy sectors are up 29 percent and 65 percent, respectively, against a nearly 9% rise for the benchmark index and 7 percent rise for the tech sector. The Russell 1000 value index has gained 16.5 percent against a 4.3 percent climb for its growth counterpart, while the smallcap Russell 2000 is up 34 percent.
“You definitely are seeing the reopening trade that has pretty much come alive here,” said Gary Bradshaw, portfolio manager of Hodges Capital Management.
Despite the gains, there remains “plenty of room for the reflation trade to run from a valuation perspective,” Lori Calvasina, head of US equity strategy at RBC Capital Markets, said in a report this week. RBC is “overweight” the financials, materials and energy sectors.
Rising rates tend to be favorable for more cyclical sectors, David Lefkowitz, head of Americas equities at UBS Global Wealth Management, said in a note, with financials, energy, industrials and materials showing the strongest positive correlations among sectors with 10-year Treasury yields.
Still, how long the market’s reopening trade lasts remains to be seen. Investors may be reluctant to stray from tech and growth stocks, especially with many of the companies expected to put up strong profits for years.
Any setbacks with the economy or with efforts to quell the coronavirus could revive the stay-at-home stocks that thrived for most of 2020.
And with a GameStop-fueled retail-trading frenzy taking hold this year, banks and other stocks in the reopening trade may fail to draw the same attention from amateur investors as stocks such as Tesla, said Rick Meckler, partner at Cherry Lane Investments.
“There isn’t the pizzazz to those stocks,” Meckler said. “There rarely is a potential for stocks to make the kind of moves that big tech growth stocks have made.”

IMF urges Tunisia to cut wage bill and energy subsidies

IMF urges Tunisia to cut wage bill and energy subsidies
Updated 52 min 30 sec ago

IMF urges Tunisia to cut wage bill and energy subsidies

IMF urges Tunisia to cut wage bill and energy subsidies
  • The IMF said in statement that monetary policy should focus on inflation by steering short term interest rates, while preserving exchange rate flexibility

TUNIS: The International Monetary Fund urged Tunisia on Friday to cut its wage bill and limit energy subsidies to reduce a fiscal deficit, putting more pressure on the fragile government amid a severe financial and political crisis.
With the coronavirus pandemic, political infighting and protests since last month over social inequality, it is a time of unprecedented economic hardship in the North Africa country that ran a fiscal deficit of 11.5 percent of GDP in 2020.
The IMF said in statement that monetary policy should focus on inflation by steering short term interest rates, while preserving exchange rate flexibility.
Tunisia’s 2021 budget forecasts borrowing needs $7.2 billion including about $5 billion in foreign loans. It puts debt repayments due this year at 16 billion dinars, up from 11 billion dinars in 2020.
The IMF said the service salary bill is about 17.6% of GDP, among the highest in the world.


US House tees up vote on Biden’s $1.9tn COVID-19 relief plan

US House tees up vote on Biden’s $1.9tn COVID-19 relief plan
Updated 27 February 2021

US House tees up vote on Biden’s $1.9tn COVID-19 relief plan

US House tees up vote on Biden’s $1.9tn COVID-19 relief plan
  • Final passage appeared likely after the measure cleared a procedural hurdle by a partyline vote of 219 to 210.

WASHINGTON: The US House of Representatives moved on Friday toward a late-night vote on President Joe Biden’s $1.9 trillion coronavirus aid bill, as Democrats who narrowly control the chamber steered the sweeping measure toward approval.
Final passage appeared likely after the measure cleared a procedural hurdle by a partyline vote of 219 to 210.
With Republicans lining up in opposition, Democrats who hold a slim majority have few votes to spare.
“I am a happy camper tonight. This is what America needs,” Democratic Representative Maxine Waters said in debate on the House floor.
Democrats said the package was needed to fight a pandemic that has killed more than 500,000 Americans and thrown millions out of work, while Republicans criticized it as too expensive.
The measure would pay for vaccines and medical supplies and send a new round of emergency financial aid to households, small businesses and state and local governments.
Democrats aim to get the bill for Biden to sign into law before mid-March, when enhanced unemployment benefits and some other types of aid are due to expire.
But their path has been complicated by the Senate’s rules expert, who said on Thursday that they cannot include an increase in the minimum wage to $15 per hour in the package.
House Speaker Nancy Pelosi predicted the bill will pass Congress with or without the increase, but said Democrats would not give up on the matter.
“We will not stop until we very soon pass the $15 minimum wage,” she said at a news conference.
Opinion polls have found broad public support for the package.
Republicans who have broadly backed previous COVID-19 spending say another $1.9 trillion is simply too much. They said too much would go to Democratic priorities they called unnecessary, and only a fraction to directly fighting the virus.
“We need targeted tailored relief that actually helps the American people, not this $2 trillion boondoggle,” Republican Representative Debbie Lesko said.
The White House and some economists say a big package is needed to revive the world’s largest economy.
Biden has focused his first weeks in office on tackling the greatest public health crisis in a century, which has upended most aspects of American life.
Pelosi is counting on nearly all of her rank and file to get the bill passed before sending it to a 50-50 Senate where Democratic Vice President Kamala Harris holds the tie-breaking vote.

MINIMUM WAGE HIKE
The House bill would raise the national hourly minimum wage for the first time since 2009, to $15 from $7.25. The increase is a top priority for progressive Democrats.
That is unlikely to win approval in the Senate.
The chamber’s parliamentarian ruled on Thursday that, unlike other elements of the sweeping bill, it could not be passed with just a simple majority of 50 senators plus Harris, rather than the 60 needed to advance most legislation in the 100-seat chamber.
At least two Senate Democrats oppose the $15 hourly figure, along with most Republicans. Some are floating a smaller increase, in the range of $10 to $12 per hour.
Senate Majority Leader Chuck Schumer might add a provision to penalize large corporations that do not pay a $15 minimum wage, a Senate Democratic aide said.
The bill’s big-ticket items include $1,400 direct payments to individuals, a $400-per-week federal unemployment benefit through Aug. 29, and help for those in difficulty paying rents and home mortgages during the pandemic.
An array of business interests also has weighed in behind Biden’s “America Rescue Plan” Act, as the bill is called.
Efforts to craft a bipartisan coronavirus aid bill fizzled early on, shortly after Biden was sworn in as president on Jan. 20, following a series of bipartisan bills enacted in 2020.

Related


BA owner calls for COVID health passes after record $9 billion loss

BA owner calls for COVID health passes after record $9 billion loss
In this Tuesday, Jan. 10, 2017, file photo, British Airways planes are parked at Heathrow Airport in London. (AP)
Updated 27 February 2021

BA owner calls for COVID health passes after record $9 billion loss

BA owner calls for COVID health passes after record $9 billion loss
  • Tighter travel restrictions have threatened to ruin Europe's critical summer season

LONDON: British Airways owner IAG is counting on digital health passes to help spur a travel recovery this summer, after the pandemic pushed it to a record €7.4 billion ($9 billion) loss last year, when it ran just a third of normal flights.

Tighter travel restrictions over the last two months have threatened to ruin Europe’s critical summer season and leave some airlines needing more funding, analysts have warned.
But after taking on new loans, IAG said it had €10.3 billion of liquidity and was well set to ride out the crisis.
“We’ve got very strong liquidity going into 2021 ... so no, we will not need additional funding,” finance chief Steve Gunning told reporters on a call.
European airlines hope travel restrictions will soon be eased to allow them to make money again. Britain on Monday laid out plans for travel markets to possibly reopen from mid-May, prompting a flood of bookings.
IAG chief executive Luis Gallego said if the UK plans went ahead, it would be a “positive summer,” but digital health passes were needed to unlock the market.
“Health passes are going to be the key to restart the aviation and the travel,” said Gallego, who is six months into the job, calling for a digital system that could include test results and proof of vaccination.
Several countries are considering health passports to help revive travel, but are worried about risks to civil liberties. However, Britain’s Heathrow Airport warned this week that dealing with a big rise in passengers would not be possible with current paper-based checks.
IAG shares were up 4 percent at 194 pence in morning trading. They have jumped 13 percent in the last five days, after Britain’s announcement on a travel restart, but over the last 12 months have lost half their value.

Cash burn
The pandemic has already crippled airlines like Norwegian Air, and left major players such as Air France-KLM and Lufthansa relying on state support.
While a recovery is now in sight, there is still much uncertainty.
IAG, which also owns Aer Lingus, Iberia and Vueling, said it could not give profit guidance for 2021, and asked how many flights it might run this year, Gallego said: “To be honest nobody knows what’s going to happen.”
For January-March, IAG said it expected to fly about 20 percent of 2019’s capacity, compared to the whole of 2020 when it flew at 34 percent of capacity.
IAG’s focus for now is on cutting costs to reduce cash burn. Weekly cash burn fell to €185 million in the first quarter, down 30 million from the previous quarter.
Last October, IAG secured shareholder backing for a €2.74 billion capital hike and Goodbody analysts said it might have to call on investors again.
“With further losses expected this year ... another rights issue can’t be ruled out in the medium term,” they said.
IAG’s operating loss before exceptional items, its preferred measure, came in at €4.37 billion, slightly better than analysts’ consensus forecast for a 4.45 billion loss.