Lebanon's central bank says dollar peg finished but floatation depends on IMF talks

Lebanon's central bank says dollar peg finished but floatation depends on IMF talks
Lebanon's Central Bank Governor Riad Salameh at the bank's headquarters in Beirut. (File/AFP)
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Updated 08 January 2021

Lebanon's central bank says dollar peg finished but floatation depends on IMF talks

Lebanon's central bank says dollar peg finished but floatation depends on IMF talks

BEIRUT: Lebanon's central bank governor Riad Salameh said on Friday the era of the dollar peg was finished but said any floatation of the currency would depend on negotiations with the International Monetary Fund.
Salameh made his comments in an interview with France24.
When asked in the interview whether the era of the dollar peg was finished, Salameh replied: "The peg is finished."
Asked whether this meant the currency would now be floated, Salameh told Reuters his comments were circulated "out of context".
"I said depending on the IMF, precision is important," he said.


Outlook for the Saudi market seems uncertain as first Saudi omicron case confirmed: Pre-market

Outlook for the Saudi market seems uncertain as first Saudi omicron case confirmed: Pre-market
Updated 25 sec ago

Outlook for the Saudi market seems uncertain as first Saudi omicron case confirmed: Pre-market

Outlook for the Saudi market seems uncertain as first Saudi omicron case confirmed: Pre-market

RIYADH: COVID’s new variant has left the Saudi stock market prone to volatility in response to adverse headlines.

On the confirmation of the first Saudi omicron case, Saudi’s main indexes, TASI and Nomu, are expected to see a decline in gains after increasing slightly yesterday.

Saudi Tadawul Group’s IPO subscription period ends today. Price ranges from SR95 ($25) to SR105 per share.

Sadr Logistics’ shareholders approved the board of directors’ recommendation to raise SR175 million through a rights issue worth SR150 million to expand its logistics services, according to a bourse filing.

Sadr’s announcement is expected to lead the shares even higher, after increasing by 8.66 percent yesterday.

Wafrah for Industry and Development Co. announced the submission of the increase of the Company’s capital SR154 million by offering rights issues to the Capital Market Authority.

Saudi Fransi Capital revised the terms and conditions of Bonyan REIT, allowing subscription of non-Saudi investors.

Al Gassim Investment Holding Co. announced the amendment of the company’s zakat returns for the years 2014 to 2018 to settle income disputes in Riyadh.

Saudi’s HSBC rebalanced the bank’s MSCI Tadawul 30 ETF Fund’s basket.

Saudi Paper Manufacturing Co.’s board of directors appointed Alinma Investment Company as the financial advisor for its previously announced right issues offering.

Al Sagr Insurance narrowed its net losses to SR69.2 million in the first 9 months of 2021, in contrast to SR80.9 million in the prior year.

Banan Real Estate signed a full lease contract worth SR10 million for a company-owned property in an effort to grow the company’s revenue.


Russia gas no quick fix for European spot market: Analysts

Russia gas no quick fix for European spot market: Analysts
Updated 02 December 2021

Russia gas no quick fix for European spot market: Analysts

Russia gas no quick fix for European spot market: Analysts

MOSCOW: The longer the prices for natural gas remain at record high levels in Europe this year, the stronger the markets feel that Russian gas should not be seen as a quick fix to the problem, at least not before this winter ends.
“Overall gas production in Russia over the three quarters of 2021 was 12 percent and 2.6 percent higher than a year ago and in 2019. But it was not adequate to raise the supply to the EU immediately,” analysts at Bloomberg NEF said in a note dated Oct. 12.
The fundamentals have changed now. Ronald Smith, executive director and senior oil and gas analyst at Moscow-based BCS Global Markets, explained to Arab News in an emailed message: “In 2021, domestic demand in Russia has gone up substantially on a year-on-year basis. This is at least partially due to the weather, as 2020 was perhaps the warmest year on record, and 2021 has been pretty close to the 10-year norm.”
“There was a strong request to refill domestic storage in Russia before the heating season starts on Nov.1,” Smith added.
Given the pandemic circumstances, Putin’s administration didn’t want to take any chances. As a result, Russia turned up among “bottom 5" gas exporters whose shipments abroad in the third quarter of 2021 fell the most in absolute terms from the same quarter of 2019, according to a presentation by US-based Cheniere Energy, Inc. at an EIA event on Nov. 16.
Gazprom is also facing capacity constraints. “The company is currently producing 1.5 billion cubic meters per day. That is effectively 100 percent of the capacity. They might be able to manage 1.55 bcm/d, but not for very long, and that needs to be reserved for when the weather actually gets cold, say, -20C in Moscow and -5C in Frankfurt,” Smith told Arab News.
Responding to Arab News question how big the size of the increase in Gazprom shipments to Europe could have been over the next 3 months, had Nord Stream 2 regulatory issues been resolved, the analyst said: “Not much at this point unless Gazprom is willing to take gas out of Russian storage, which is full at this time.”
There seems to be a consensus view among industry experts that high gas prices in Europe this year is a result of a confluence of multiple things such as abnormal weather, a drop in European production, competition with Asia over the limited supply of LNG and the “green push.”
Spot prices for natural gas in Europe rose 41 percent during November. On Nov. 30, the front-month Dutch TTF Gas Futures, a European price benchmark, with delivery during January 2022, closed down 1 percent from the previous day at €92.5 after it jumped by more than 5 percent in early morning trading, according to data on Intercontinental Exchange, Inc. website.


US oil pares gains after weekly fuel stockpiles jump

US oil pares gains after weekly fuel stockpiles jump
Updated 01 December 2021

US oil pares gains after weekly fuel stockpiles jump

US oil pares gains after weekly fuel stockpiles jump
  • A new coronavirus variant triggered fresh travel restrictions that could dampen oil demand
  • White House was still studying proposals from Democratic lawmakers to ban crude oil exports to keep US prices down

DUBAI: West Texas Intermediate (WTI) crude oil futures slipped on Wednesday, reversing course from early gains after a US official said the country was still considering tools to lower energy prices, and as government data pointed to weaker gasoline demand.
Also pressuring oil prices, a new coronavirus variant triggered fresh travel restrictions that could dampen oil demand. Also, an OPEC+ document showed the group lifting its forecast for an oil surplus in the new year.
WTI US crude futures were down 51 cents, or 0.76 percent, at $65.77 a barrel at 1:49 p.m. ET (1849 GMT). During the session, they were up as much as 4 percent.
Global benchmark Brent crude was down 24 cents, or 0.36 percent, at $68.99 a barrel.
US Deputy Energy Secretary David Turk said the Biden administration could adjust the timing of its planned release of strategic crude oil stockpiles if global energy prices drop substantially.
He added that the White House was still studying proposals from Democratic lawmakers to ban crude oil exports to keep US prices down.
US gasoline stocks rose 4 million barrels last week to 215.4 million barrels, government data showed, far surpassing analysts’ expectations in a Reuters poll for 29,000-barrel rise. Distillate stockpiles increased 2.2 million barrels to 123.9 million barrels, versus expectations for a 462,000-barrel build.
Crude inventories fell 910,000 barrels in the week, data showed, compared with forecasts for a 1.2 million-barrel drop.
The Organization of the Petroleum Exporting Countries concluded its meeting without a decision on whether to release more oil into the market.
The OPEC+ alliance, which includes Russia and other producers, will likely take a policy decision on Thursday. Reports and analysts suggested that expectations were growing that the group will take a pause due to the threat from a new virus variant.
“There is much to suggest that OPEC+ will not initially step up its oil production any further in an effort to maintain current prices at around $70/bbl,” PVM analyst Stephen Brennock said.
OPEC+ sees the oil surplus growing to 2 million barrels per day (bpd) in January, 3.4 million bpd in February and 3.8 million bpd in March next year, an internal report seen by Reuters showed.
Several OPEC+ ministers, though, have said there is no need to change course. But even if OPEC+ agrees to go ahead with its planned supply increase in January, producers may struggle to add that much.
Both Brent and WTI front-month contracts in November posted their steepest monthly falls in percentage terms since March 2020, down 16 percent and 21 percent respectively.
Analysts at Goldman Sachs called the decline in oil prices “excessive,” saying “the market has far overshot the likely impact of the latest variant on oil demand with the structural repricing higher due to the dramatic change in the oil supply reaction function still ahead of us.”


China closes loophole used by tech firms for offshore IPOs

China closes loophole used by tech firms for offshore IPOs
Updated 01 December 2021

China closes loophole used by tech firms for offshore IPOs

China closes loophole used by tech firms for offshore IPOs

RIYADH: China plans to ban companies from going public on foreign stock markets through entities with different interests.

It will close a loophole that the country’s technology industry has long used to raise capital from foreign investors, according to Bloomberg.

People familiar with the matter, who asked not to be identified while discussing private information, said the ban, aimed in part at addressing concerns about data security, is among the changes included in a new draft of China’s overseas listing rules that may be finalized as soon as this month. 

Companies using what is called the VIE (variable interest entity) structure would still be allowed to pursue initial public offerings in Hong Kong, subject to regulatory approval, the sources said.

VIE refers to a business structure in which an investor has a controlling interest despite not having a majority of voting rights. A business that is the primary beneficiary of a VIE must disclose the holdings of that entity as part of its consolidated balance sheet.

China Securities Regulatory Commission said on its website on Wednesday that a media report about banning offshore listings of companies using the VIE structure was incorrect, without giving further details.

Companies currently listed in the US and Hong Kong that use VIEs will need to make adjustments so that their ownership structures are more transparent in regulatory reviews, especially in sectors where foreign investment is prohibited, the sources added.

The reform would mark one of Beijing’s biggest moves to crack down on offshore listings. 

Authorities have since moved quickly to halt the flow of companies seeking to go public in the US, shutting down a path that has generated billions of dollars for tech companies and their Wall Street backers.

While a global ban on the VIE structure is not being contemplated, a halt to foreign listings and a further review of Hong Kong's initial public offerings will mean the model will not be a viable way for many startups to tap into the capital markets. 

A person familiar with the matter said that some investment banks had already been advised by regulators to stop working on new deals involving VIEs.

The demise of VIE would also threaten the lucrative business streak of Wall Street banks, which has helped nearly 300 Chinese companies raise around $82 billion through first-time share sales in the US over the past ten years.

VIEs have been a constant source of concern for global investors due to their unstable legal position. Sina Corp. and its investment bankers led the way during an initial public offering in 2000, and the VIE framework has not been formally adopted by Beijing.


Rayyan Nagadi replaces Hasan Aljabri as CEO of SEDCO

Rayyan Nagadi replaces Hasan Aljabri as CEO of SEDCO
Updated 01 December 2021

Rayyan Nagadi replaces Hasan Aljabri as CEO of SEDCO

Rayyan Nagadi replaces Hasan Aljabri as CEO of SEDCO

RIYADH: Saudi’s investment group SEDCO Holding has appointed Rayyan Mohammed Nagadi as its new chief executive officer, replacing Hasan Aljabri.

The appointment, announced on Wednesday, comes as the group is expanding its investment and economic growth contribution in the Kingdom. 

Before joining SEDCO Holding, Nagadi was the CEO of the National Center for Privatization & PPP, with over 20 years of experience in management and structured financing in both the public and private sectors. 

“With his expertise and extensive network, he is well positioned to accelerate our ambitions as a partner of choice supporting the government in achieving the goals of Vision 2030,” chairman of SEDCO, Saleh Salem Bin Mahfouz, said.

Through its subsidiaries, SEDCO Holding provides investment and construction services.