Wheat set for biggest weekly gain in 4 years on weather worries

Wheat set for biggest weekly gain in 4 years on weather worries
Reduced yield estimates in the U.S., Canada and Russia have coincided with a wet July in Europe. (Shutterstock)
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Updated 16 July 2021

Wheat set for biggest weekly gain in 4 years on weather worries

Wheat set for biggest weekly gain in 4 years on weather worries
  • CBOT wheat up 11 percent this week on parched U.S., Canada spring crop
  • Corn, soybeans steady as market assesses dry northern U.S.

PARIS/SINGAPORE, July 16 : Chicago wheat rallied again on Friday to head for its biggest weekly gain in four years as parched conditions for North American spring wheat and adverse weather in Europe stoked concern about global supplies.
Corn and soybeans edged higher and were also set for weekly gains as drought in the northern United States put the onus on other growing belts achieving bumper yields in order to replenish falling US stocks.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 1.6 percent at $6.83 a bushel by 11:08 a.m. GMT, after earlier hitting a two-week high. Over the week, wheat is up 11.1 percent, the biggest weekly gain since June 2017.
“You’ve got the US and Canada, Russia with reduced yield estimates and over here the July rain,” a European trader said of wheat crop concerns.
Weather forecasts showed hot weather and scant rainfall in the week ahead in northern US and Canadian spring wheat zones where crops have been struggling with dryness. In western Europe, torrential rain that has caused deadly floods in Germany and Belgium was raising concern about late yield loss and quality downgrades for ripening wheat crops.
In Russia, forecasters have reduced harvest estimates, partly because of lower than expected yields in the key southern export region that has this summer faced heavy rain followed by hot, dry weather. A heatwave in the Black Sea region was also raising concern about corn crops.
“As a result, more and more operators are questioning the ability of Ukraine to achieve a new corn production record this year,” consultancy Agritel said.
Alongside a large US crop, a bumper Ukrainian harvest has been seen as important for easing tight global supplies of the feed grain.
CBOT corn was up 0.5 percent at $5.58-3/4 a bushel and soybeans added 0.8 percent to $13.90-1/2.
Rain forecast this week in the Midwest curbed corn futures on Thursday, while soybeans also eased in the previous session after data showing the smallest monthly US soybean crush in two years in June.


Global markets regulators team up to keep watch on SPACs

Global markets regulators team up to keep watch on SPACs
Updated 27 July 2021

Global markets regulators team up to keep watch on SPACs

Global markets regulators team up to keep watch on SPACs
  • SPACS may raise regulatory concerns, said the International Organization of Securities Commissions

LONDON: Global securities markets regulators said on Tuesday they have begun monitoring special purpose acquisition companies, or SPACs, due to potential regulatory concerns.
SPACs are shell companies that list themselves on the stock market and use the proceeds to buy other companies.
It is a form of investment that soared last year on Wall Street, gathered steam in Europe this year and is now spreading into emerging markets.
“While SPACs may offer alternative sources of funding and provide opportunities for investors, they may also raise regulatory concerns,” the International Organization of Securities Commissions (IOSCO) said in a statement.
IOSCO, whose members include the US Securities & Exchange Commission (SEC), the Financial Conduct Authority in Britain and regulators in the European Union, Asia, Latin America and Africa, said its new SPAC network met for the first time on Monday to share information.
“I am pleased that so many members of IOSCO have joined the SPACs network to exchange experiences on non-traditional IPOs via SPACs and discuss emerging issues related to investor protection and fair, orderly and efficient markets,” said Jean-Paul Servais, chairman of Belgium’s markets watchdog and Vice-Chair of IOSCO’s board.
The markets watchdogs which are members of IOSCO have the power to take action to protect investors in their jurisdictions.


Saudi Arabia suspends desalination and power plant privatization amid strategy review

Saudi Arabia suspends desalination and power plant privatization amid strategy review
Updated 27 July 2021

Saudi Arabia suspends desalination and power plant privatization amid strategy review

Saudi Arabia suspends desalination and power plant privatization amid strategy review
  • New strategy for Saline Water Conversion Corporation to be announced soon

RIYADH: Saudi Arabia has suspended the privatization of Ras Al Khair Desalination and Power Plant as it reviews its strategy.
This decision was made to capitalize on knowledge and capacity built in the Kingdom as a result of many years of experience in the areas of water desalination, new technologies, R&D and supply chains, the Privatization Supervisory Committee for the Environment, Water and Agriculture said in a statement on Monday.
A new engagement strategy and plan for the Saline Water Conversion Corporation (SWCC) assets such as Ras Al Khair plant will be announced shortly.
“It is either that the outcome was not aligned with the government spending efficiency goals or it’s not a top priority for the time being, as there is price control on water services in the country that doesn’t allow room for enough profits to the private operators, that the government may need to offer significant subsidies to make the PPP project attractive to the private sector, ” Razeen Capital CEO Mohamed Alsuwayed told Arab News.
The Privatization Committee said it will continue to engage investors in future PPP and privatization transactions in the water sector, and new greenfield investment opportunities will be launched in due course.
Saline Water Conversion Corporation (SWCC) invited seven pre-qualified companies and strategic alliances to submit their bids (RFP) to participate in the Ras Al-Khair desalination and power plant’s privatization process, last January.
SWCC said in a statement that the winning consortium will own 60 percent of the project company, and will handle management, operation, and maintenance works. For now, SWCC will continue to manage it, according to the statement.


Kuwait loosens COVID restrictions for vaccinated, allows some direct flights

Kuwait loosens COVID restrictions for vaccinated, allows some direct flights
Updated 27 July 2021

Kuwait loosens COVID restrictions for vaccinated, allows some direct flights

Kuwait loosens COVID restrictions for vaccinated, allows some direct flights
  • 8 pm commercial curfew to end today
  • Unvaccinated only allowed to food markets, pharmacies, co-ops

KUWAIT CITY: The Kuwaiti cabinet cancelled its decision to close commercial activities at 8 pm, starting Tuesday, the state news agency KUNA reported on Monday.
All activities will be allowed except for large gatherings, such as conferences, weddings, and social events, starting from Sept. 1. Special activities for children will also be allowed.
Kuwait will allow only those who are vaccinated to take part in all activities, while the unvaccinated will be only allowed to pharmacies, consumer cooperative societies, and food and catering marketing outlets, starting from Aug. 1, the cabinet added.
Kuwait will also allow direct flights to Morocco and Maldives starting Aug. 1, the cabinet said in a statement.


Gulf rebound set as Saudi Arabia, UAE seen topping 4% growth in 2022 - Reuters poll

Gulf rebound set as Saudi Arabia, UAE seen topping 4% growth in 2022 - Reuters poll
Updated 27 July 2021

Gulf rebound set as Saudi Arabia, UAE seen topping 4% growth in 2022 - Reuters poll

Gulf rebound set as Saudi Arabia, UAE seen topping 4% growth in 2022 - Reuters poll
  • Saudi 2022 growth seen at 4.3 percent, 2023 at 3.3 percent
  • UAE expected to grow 4.2 percent next year and 3.4 percent in 2023

RIYADH: The six economies in the Gulf Cooperation Council (GCC) are set to rebound and grow 2 percent to nearly 3 percent this year while the region’s two largest economies, Saudi Arabia and the UAE, are forecast to grow over 4 percent next year, a quarterly Reuters survey showed.
That outlook follows steep declines last year following an oil price crash and the impact of the COVID-19 pandemic, while analysts expected Saudi Arabia, the UAE and Kuwait to benefit from an OPEC+ deal to boost oil production.
“Our core assumption was that a longer-term deal would be secured, and we raise our 2022 forecasts on the back of the baseline adjustments, which will enable the UAE, Kuwait and Saudi Arabia to raise oil output and their global market share from May 2022,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Medians in the July 5-26 poll pegged Saudi Arabia’s growth at 2.3 percent this year, down slightly from a forecast of 2.4 percent in a similar poll three months ago.
In 2022, the Middle East’s largest economy and world’s largest oil exporter’s gross domestic product was seen growing 4.3 percent, an upward revision of 100 basis points (bps). Growth for 2023 was revised up 30 bps to 3.3 percent.
The UAE was expected to grow 2.3 percent this year, unchanged, and 4.2 percent next year and 3.4 percent in 2023, revised up 60 bps and 10 bps respectively.
Expectations for Kuwait’s 2021 GDP growth were lifted 60 bps to 2.4 percent, while growth next year was boosted 110 bps to 4.6 percent. Growth was seen 10 bps higher in 2023 at 3.0 percent.
Qatar’s 2021 growth forecast was scaled back 30 bps to 2.5 percent. The expectation for growth next year was unchanged at 3.6 percent and down 40 bps to 2.7 percent for 2023.
Oman was revised up 20 bps to 2.1 percent expected growth this year, up 10 bps to 3.3 percent next year and down 20 bps in 2023 to 2.2 percent. Bahrain’s outlook was unchanged for this year and next at 2.9 percent, while 2023 growth was seen 30 bps lower at 2.4 percent.
At least half of the GCC’s state revenues come from hydrocarbons, and diversification away from that will “likely take many years to achieve,” with fiscal diversification likely to follow with additional lag, Moody’s said in a report last month.
“The announced plans to boost hydrocarbon production capacity and government commitments to zero or very low taxes make it unlikely that this reliance will diminish significantly in the coming years, even with some progress in economic diversification, which we expect.”


Saudi resilient as emerging markets shares hit 7-month lows on China rout

Saudi resilient as emerging markets shares hit 7-month lows on China rout
Updated 27 July 2021

Saudi resilient as emerging markets shares hit 7-month lows on China rout

Saudi resilient as emerging markets shares hit 7-month lows on China rout
  • China blue-chip index drops 3.5 percent to 8-month low
  • Saudi Arabia's Tadawul rose 0.2 percent, while Abu Dhabi is up 0.5 percent

RIYADH: Emerging market stocks slid 2 percent to a seven-month low on Tuesday, extending heavy losses to a third session, as a sharp sell-off in Chinese stocks continued.
Saudi Arabia's Tadawul rose 0.2 percent, while the Dubai Financial Market Index was little changed and Abu Dhabi's Securities Exchange General Index was up 0.6 percent.
China’s blue-chip index dropped 3.5 percent to its lowest in nearly eight months as worries lingered about regulatory crackdowns in the education and property sectors.
Hong Kong’s benchmark sank almost 4.5 percent, with losses over the past three days pushing the index more than 8 percent into the red for the year.
The Chinese yuan hit its lowest since April, weakening 0.4 percent to trade at 6.504 to the dollar.
“The question for investors is whether the sell-off presents an attractive opportunity to bottom fish,” said analysts at BCA Research.
“We argue otherwise and expect further pressure from regulators to continue to weigh down on Chinese stocks over a six- to 12-month horizon,” they said, adding that the medical industry could be the next target.
Adding to worries around China, profit growth at industrial firms slowed for a fourth straight month in June, while a surge in the Delta variant COVID-19 cases centered on the eastern city of Nanjing.
MSCI’s index of Asia shares excluding Japan hit its lowest so far this year, as did a broader index of EM equities as China stocks have the biggest weightage on both. Western European bourses traded well in the red, while US stock indexes looked set to retreat from all-time highs.
South Africa’s main index lost 1.7 percent, moving sharply away from 1-1/2-month highs, while Turkey’s index extended losses to day four. Polish stocks led losses across eastern Europe.
Tunisian bonds stabilized after their worst slide in a month on Monday following the government’s ouster by President Kais Saied.
Saied extended existing COVID-19 restrictions on movement on Monday and vowed any violent opposition would be met with force.
In currency markets, the South African rand slid 0.7 percent against a strengthening dollar ahead of the US Federal Reserve’s policy decision on Wednesday.
Investors are hoping to get clues on the world’s largest economy’s standing, as well as any hints on the timeline for stimulus tapering and interest rate hikes.
Massive support from major central banks and ultra-loose monetary policy to stimulate economic activity and growth has helped inflows into riskier assets of emerging markets.
Turkey’s lira and Russia’s rouble were broadly flat. Hungary’s forint was steady against the euro, staying near three-month lows ahead of a central bank meeting. An extension of a hiking cycle with a 20 basis-point increase in its base rate to 1.1 percent is expected.