ECB’s Stournaras calls for increasing bond buying to calm markets

ECB’s Stournaras calls for increasing bond buying to calm markets
The headquarters of the European Central Bank (ECB) are pictured in Frankfurt, Germany, July 8, 2020. (REUTERS)
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Updated 27 February 2021

ECB’s Stournaras calls for increasing bond buying to calm markets

ECB’s Stournaras calls for increasing bond buying to calm markets
  • There is an unwarranted tightening of bond yields, so it would perhaps be desirable for the ECB to accelerate the pace of PEPP purchases.

FRANKFURT: Greece’s Yannis Stournaras became the first European Central Bank policymaker on Friday to openly call for increasing the pace of ECB bond purchases to stem a rise in borrowing costs.
With eurozone bond yields set for their biggest monthly rise in three years, the ECB is under some pressure to make good on its promise to keep borrowing costs easy for the coronavirus-stricken bloc through its Pandemic Emergency Purchase Programme (PEPP).
“In my view, there is an unwarranted tightening of bond yields, so it would perhaps be desirable for the ECB to accelerate the pace of PEPP purchases to ensure favorable financing conditions during the pandemic,” Stournaras told Reuters in an interview.
“In my view there’s fundamental justification for a tightening of nominal bond yields in the long end,” the Greek central bank governor said.
Stournaras said ECB policymakers should instruct the Executive Board, which runs day-to-day business including bond purchases, to intervene accordingly when they meet on March 11.
He added that they may also alter the ECB’s policy message “slightly,” although he said no material change was needed as the central bank still had almost €1 trillion left to spend in its PEPP arsenal.
Germany’s 10-year yield, the region’s benchmark, fell to its lowest for the day at -0.287 percent after Stournaras’ comments. It was still set for its biggest monthly gain since January 2018, however, with a 24 basis-point rise.
Earlier on Friday, ECB board members Philip Lane and Isabel Schnabel had said bond yields warranted monitoring but stopped short of calling for more purchases.
“At this stage, an excessive tightening in yields would be inconsistent with fighting the pandemic shock to the inflation path,” Lane said in an interview with Spanish newspaper Expansión.
“But at the same time, it is crystal clear that we are not engaged in yield curve control, in the sense that we want to keep a particular yield constant.”
Schnabel was even more cautious, saying that a gradual rise in bond yields would even be welcome if it reflected higher inflation expectations, showing that the ECB’s stimulus is working.
“Even gradual increases in real yields may not necessarily be a cause of concern if they reflect improving growth prospects,” Schnabel added.


Dubai Aerospace orders 15 Boeing 737 MAX jets

Dubai Aerospace orders 15 Boeing 737 MAX jets
Updated 9 min 45 sec ago

Dubai Aerospace orders 15 Boeing 737 MAX jets

Dubai Aerospace orders 15 Boeing 737 MAX jets
  • Follows 737 grounding after 2018/19 crashes
  • UAE lifted its ban on the aircraft this year

DUBAI: Dubai Aerospace Enterprise (DAE), one of the world’s biggest leasing companies, on Tuesday announced an order for 15 Boeing 737 MAX 8 jets worth $1.8 billion at list prices.
The order signals a further show of confidence in the narrow-body jet, which had its nearly two-year safety ban in the United States lifted late last year. The United Arab Emirates lifted their ban this year.
“We are confident in the success of these aircraft as domestic and regional air travel is seeing strong signs of recovery,” DAE CEO Firoz Tarapore said in a statement.
The 737 MAX jets were grounded globally following fatal crashes in 2018 and 2019.


Morocco to attract foreign renewable energy investment

Morocco to attract foreign renewable energy investment
Updated 18 min 33 sec ago

Morocco to attract foreign renewable energy investment

Morocco to attract foreign renewable energy investment
  • Morocco is working to attract investments in green hydrogen

RIYADH: More than 260 industrial projects have been supplied with new energy during the last three years in Morocco, Asharq Business reported, citing Energy Minister Aziz Rabbah.

A massive water scheme launched by Morocco, which extends over the next five years with investments exceeding $13 billion, will include a number of desalination plants powered by renewables, he said.
Rabbah said that the ministry was also working to attract investments in green hydrogen.
“This investment is accompanied by the development and diversification of the electric power network at the national level and the electrical connection with neighboring markets, based on the open market for electricity, which receives annual investments of about $1 billion,” he said.
Two laws related to the energy sector have been issued, he said — one for hydrogen investments and the other for self-production that allows citizens to produce the electricity they need.
“The legislative reforms that have taken place in the Moroccan energy sector are part of a comprehensive system of reform adopted by the Kingdom of Morocco to create an attractive business environment for investment in all sectors,” he explained.
“Taxes were reviewed, and administrative procedures related to investment were simplified and digital technology has been introduced to boost investors confidence,” he added.
The minerals sector has been restructured and over 3,300 licenses have been issued, with strong demand from local and international companies, Rabbah said.


Emirates NBD profits rise as it expands Saudi branch network

Emirates NBD profits rise as it expands Saudi branch network
Updated 42 min 36 sec ago

Emirates NBD profits rise as it expands Saudi branch network

Emirates NBD profits rise as it expands Saudi branch network
  • The bank reported a net profit of 2.32 billion dirhams ($599 million) in the first quarter of 2021

DUBAI: Emirates NBD, Dubai’s biggest lender, reported a 12 percent increase in first-quarter net profit amid an improving economic outlook.

The bank reported a net profit of 2.32 billion dirhams ($599 million) in the first quarter of 2021, it said in a statement on Tuesday.
Patrick Sullivan, group chief financial officer said the bank was able to deliver a 12 percent rise in profit, "with the significant impact of lower interest rates being more than offset by significantly lower credit impairment, and good cost discipline."
The bank said it increased its branch network in Saudi Arabia to six and became the first foreign bank to be granted permission to open branches in Madinah and Makkah.
The bank highlighted the improving economic outlook in Saudi Arabia with the Kingdom's economy expected to grow by 0.7 percent this year after contracting 4.1 percent in 2020.  
"Higher oil prices will help to reduce the budget deficit to just 1.4% of GDP this year, and a number of initiatives have been announced to boost domestic investment," it said.

 


Saudi Arabia is biggest 5G adopter in the Gulf, report shows

Saudi Arabia is biggest 5G adopter in the Gulf, report shows
Updated 51 min 5 sec ago

Saudi Arabia is biggest 5G adopter in the Gulf, report shows

Saudi Arabia is biggest 5G adopter in the Gulf, report shows
  • Saudi Arabia’s 5G speed was “much faster than the global average”

DUBAI: Saudi Arabia has recorded the highest adoption of 5G technology compared to its Gulf neighbors, a new report showed.
Ookla, an Internet intelligence firm, revealed that the Kingdom had the most number of devices connected to 5G since its commercial release in 2019.
It was measured by looking at the ratio of samples from devices connected to 5G to the number of samples from all 5G-capable devices, which the firm said is an indicator of the maturity of a country’s 5G market.
Qatar came second, followed by the UAE. Oman, which only launched 5G early this year, was at the bottom of the list.
The report also noted Saudi Arabia’s 5G speed was “much faster than the global average.”
Its median download speed was 127 percent faster at 322.42 Mbps.
The Saudi Telecom Company emerged as the fastest operator in the Kingdom, but Mobily recorded the highest rating from customers.


NADEC consortium submits bid for privatized Saudi flour mill

NADEC consortium submits bid for privatized Saudi flour mill
Updated 20 April 2021

NADEC consortium submits bid for privatized Saudi flour mill

NADEC consortium submits bid for privatized Saudi flour mill
  • Saudi Arabia is accelerating plans to privatize key infrastructure in an effort to modernize the economy

DUBAI: Saudi Arabia's National Agricultural Development Company (NADEC) is part of a consortium that has bid for a privatized flour mill in the Kingdom.
It has teamed up with OLAM International Limited, Al Rajhi International for Investment and Abdulaziz Alajlan & Sons Company for Commercial and Real Estate Investment, to bid for one of two mills being privatized, the company said in a stock exchange filing.
The two mills are being offered for privatization by the Saudi Grains Organization.
NADEC said  it has agreed a "term sheet" relating to the creation of a limited liability company to acquire the mill should its bid be successful.
The potential acquisition would be financed through a combination of self-financing by the consortium members and borrowing from local banks, it said.
Saudi Arabia is accelerating plans to privatize key infrastructure in an effort to modernize the economy, speed major infrastructure works and develop its financial services sector.