Lebanon resumes IMF 'interactions', committed to fair solution for creditors

Lebanon resumes IMF 'interactions', committed to fair solution for creditors
Beirut, Lebanon. (Shutterstock)
Short Url
Updated 04 October 2021

Lebanon resumes IMF 'interactions', committed to fair solution for creditors

Lebanon resumes IMF 'interactions', committed to fair solution for creditors
  • Lebanon has been in deep financial crisis since late 2019, since then the currency has lost some 90 percent of its value
  • An IMF program is widely seen as the only way Lebanon can obtain help from foreign donors

Lebanon has resumed "interactions" with the International Monetary Fund with a view to agreeing a recovery program that can harness international support, the government said on Monday.


Lebanon is also fully committed to a transparent and equitable debt restructuring process and welcomes bondholder interest in taking part in the process, the finance ministry said in a statement.


"The government reiterates its commitment to a fair and comprehensive solution for all creditors and will engage ... in good faith discussions with all its creditors as early as practicable," it said.


Lebanon has been in deep financial crisis since late 2019, since then the currency has lost some 90 percent of its value, poverty has soared, and the banking system has been paralysed.

Beirut defaulted on its sovereign debt in March 2020, saying it needed the foreign currency reserves to meet basic needs.


There was no immediate comment from the IMF, which has previously said it has had courtesy calls with members of Prime Minister Najib Mikati's government and stands ready to engage.


An adviser to the Association of Banks in Lebanon who requested anonymity said: "We welcome the government's commitment to good faith negotiations and look forward to engaging".


An IMF program is widely seen as the only way Lebanon can obtain help from foreign donors who want the government to carry out reforms to tackle the root causes of the crisis, including state corruption and waste.


IMF talks broke down last year largely because Lebanon's banking system and politicians couldn't agree with the previous government on the scale of the losses in the financial system.


Agreement in Lebanon on the losses is the starting point for more IMF talks, economists say.


The economy minister has said the banking sector, central bank and other players in the financial system are working to agree on the size of the losses and how they should be distributed.


Lazard, which helped Lebanon draft last year's disputed recovery plan, has been asked to resume its role as adviser in preparation for the resumption of IMF talks.


The previous plan identified a $90 billion hole in the financial system - a figure endorsed by the IMF.


The government has formed an IMF negotiation team led by Deputy Prime Minister Saade Chami and including the ministers finance, economy and trade, and the central bank governor.


Lebanon's foreign debt holders, including some of the world's biggest investment funds, have urged it to begin debt restructuring talks as soon as possible. 


Oil prices ease off highs as US factory data weighs on market: Energy market wrap

Oil prices ease off highs as US factory data weighs on market: Energy market wrap
Updated 13 sec ago

Oil prices ease off highs as US factory data weighs on market: Energy market wrap

Oil prices ease off highs as US factory data weighs on market: Energy market wrap

RIYADH: Oil prices pulled back after touching multiyear highs on Monday, trading mixed as US industrial output for September fell, tempering early enthusiasm about demand.

Brent crude oil futures were down 20 cents or 0.24 percent at $84.66 a barrel by 11:46 a.m. EST (1546 GMT) after hitting $86.04, their highest since October 2018.
US West Texas Intermediate crude futures were 17 cents higher, or 0.2 percent, at $82.46 a barrel, after hitting $83.87, their highest since October 2014.
Both contracts rose by at least 3 percent last week.

OPEC+ quota

OPEC+ compliance with oil cuts fell slightly to 115 percent in September, three sources from the alliance told Reuters on Monday.

The figure shows that some members continue to struggle to produce at their agreed quota levels due to various technical problems.

The Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+ as the alliance is known, raised its output targets by 400,000 barrels per day in September. 
It has also agreed to raise them by a further 400,000 bpd in October and in November.


Underinvestment and maintenance problems have stymied efforts by Angola and Nigeria to raise output, an issue that is expected to continue impacting the West African producers in the near future.

Saudi exports

Saudi Arabia’s crude oil exports rose in August to its highest level in seven months, according to data released by the Joint Organizations Data Initiative (Jodi) on Monday.

Some 6.45 million barrels per day (bpd) were shipped from the Kingdom in August, a rise from 6.327 million bpd recorded in July.

US coal-fire generation

The Energy Information Administration (EIA) said on Monday it expected the US coal-fired generation to increase in 2021 by 22 percent compared with 2020.

Green hydrogen

INEOS, Europe’s largest hydrogen producer, said on Monday it would invest more than $2.3 billion on electrolysis plants to make zero-carbon green hydrogen across Europe.

Emission cuts

South Korea aims to cut its greenhouse gas emissions to 40 percent below 2018 levels by 2030, for fighting climate change over the next decade.

Japan’s Mitsubishi Corp, a trading house and mineral resources company with energy and metals assets worldwide, will invest $17.54 billion by 2030 in alternative energies, to halve its greenhouse gas emissions on 2020 levels, and to achieve net zero emissions by 2050, it said in a statement.

Gas supply 

Russian gas giant Gazprom has booked 35 percent of total additional capacity, offered by the Polish operator Gas System for transit via the Kondratki transit point for the Yamal-Europe pipeline for November and has not booked any volumes via Ukraine, according to the auction results shown on Monday.

Germany does not see any gas supply shortages despite a slight drop in its storage levels from the week before, a spokesperson for the country’s Economy Ministry said.

Storage facilities are now filled to around 70 percent capacity compared with 75 percent last week, but the ministry still assumes that the facilities will continue to be filled as suppliers honor their contracts, he added.

Coal vs. renewable 

Global coal prices have jumped to record highs and top thermal coal exporter Indonesia has increased its 2021 output to 625 million tons, 11percent higher than 2020 output target to meet the demand.

The EU’s head of climate change policy said that returning to using dirty energy from coal during the current energy crunch is “not a smart move” and markets should seize the opportunity to transition into renewables.


Qatar leads talks to acquire British department store for $5.5bn

Qatar leads talks to acquire British department store for $5.5bn
Updated 18 October 2021

Qatar leads talks to acquire British department store for $5.5bn

Qatar leads talks to acquire British department store for $5.5bn

British Selfridges department store owner, the Weston family, is in talks with Qatar about a potential £4 billion ($5.5 billion) sale, which would change the ownership of the store for the first time in two decades, the Daily Mail reported. 

Meanwhile, The Times reported that the Kingdom's PIF is also among the parties rumored to be interested in Selfridges, as are Abu Dhabi's ADIA, and Lane Crawford, a department stores business based in Hong Kong.

The PIF has been asked to comment.

Sources told the Daily Mail that Qatar is leading talks to buy Selfridges, but the talks are not exclusive, which means the famous Oxford Street may be sold to another party.

According to The Times, the Westons are understood to be seeking a buyer not only for their UK stores, which also include a store at the Bullring in Birmingham, but also department stores Brown Thomas and Arnotts in Dublin, De Bijenkorf in the Netherlands and Holt Renfrew in Canada.

Qatar's sovereign wealth fund, the Qatar Investment Authority already owns the famous Harrods store, which it bought in 2010.


A rise in annual US industrial output; Canada's debt fears: Economic wrap

A rise in annual US industrial output; Canada's debt fears: Economic wrap
Updated 18 October 2021

A rise in annual US industrial output; Canada's debt fears: Economic wrap

A rise in annual US industrial output; Canada's debt fears: Economic wrap

US industrial production increased by a yearly rate of 4.6 percent in September, data from the Federal Reserve showed. 

This is the fifth consecutive month in which industrial output growth slowed after growing 17.8 percent in April due to last year's lower base effects.

On a monthly basis, industrial output declined by 1.3 percent in September. This is a larger decline than the one experienced in the previous month when industrial production fell by 0.1 percent.

This was driven by a 3.6 percent drop in utilities production and a 2.3 percent fall in mining output. Moreover, manufacturing production decreased by 0.7 percent in September as motor vehicles output slumped by 7.2 percent.

Canada’s debt fears

The Canadian government intends to impose new taxes which will help in financing some campaign promises. However, the new stream of revenues will prove to be insufficient to pay off the country’s mounting debts. According to analysts, this will leave Canadians at risk of a potential economic crisis in the near future.

Notably, the country accumulated debt at a faster rate than any other member of the G7. Piling debts could hamper efforts that require sizable finances such as the transition to a green economy.

Central banks and governments clash in Eastern Europe

Rising inflation in Eastern Europe has prompted central banks to raise their interest rates despite a backlash from governments that want to defend strong output growth.

The situation is most visible in Hungary and the Czech Republic as their central banks raised interest rates by more than 1 percent since June.

Capital Economics expects that the Eastern Europe will be one of the regions where inflation will have far-reaching effects in the next year.


Egypt signs deal with Nokia to build IoT infrastructure

Egypt signs deal with Nokia to build IoT infrastructure
Updated 18 October 2021

Egypt signs deal with Nokia to build IoT infrastructure

Egypt signs deal with Nokia to build IoT infrastructure

CAIRO: Egyptian Minister of Communications and IT Amr Talaat oversaw the signing of a deal between Telecom Egypt and Nokia International to build Internet of Things infrastructure in the country.

The ministry said Telecom Egypt’s network enables the provision IoT services to companies on a global scale, based on Nokia’s multi-service model. 

The agreement will contribute to the automation of projects and help companies reduce their operating expenses, enhance productivity, and provide new services to markets faster.

It includes establishment of a global IoT infrastructure and a Pay As You Grow business model, and Nokia will enable Telecom Egypt to provide IoT services at low prices.

The deal was signed by Adel Hamed, managing director and CEO of Telecom Egypt, and Henrik Fall, head of cloud services and networks in the Middle East and Africa at Nokia.

Talaat attended the signing ceremony during his visit to Dubai to attend the 41st GITEX Global Exhibition and Conference.

He also met Ram Ramachandran, senior vice president and head of Middle East and Africa for Tech Mahindra. Tech Mahindra is an Indian multinational subsidiary of the Mahindra Group.

The Egyptian minister discussed ways to increase Tech Mahindra’s contribution to the digital transformation of Egypt.


TASI down by 0.1% as petrochemicals fall: Market wrap

TASI down by 0.1% as petrochemicals fall: Market wrap
Updated 18 October 2021

TASI down by 0.1% as petrochemicals fall: Market wrap

TASI down by 0.1% as petrochemicals fall: Market wrap

RIYADH: The Tadawul All Share Index declined on Monday by 0.1 percent, or 15 points, to 11.758 points. 

Petrochemical shares, led by SABIC falling by 1.5 percent, pushed the market down.

Some 193.5 million of shares changed hands in 337.000 deals, with heavy trading in ACWA Power, Kayan, and SABIC. 

Yansab's share fell by 4.8 percent, after the company announced a decline in its Q3 profits  by more than 8 percent. 

Leejam also recorded the highest close since listing at SR106.80.

Other News: 

Arabian Centers and Fawaz Al Hokair companies announced an agreement to acquire 51 percent of an e-commerce platform, VogaCloset, at a value of SR138 million.

VogaCloset also transferred 25.5 percent of its share capital to Arabian Centers Company, following a capital increase .

However, insurance companies topped the gains today, led by Arabia Insurance reaching SR41.60.

Amana Insurance, Saudi Enaya and Salamarose gained between 5 percent, and 9 percent. 

Saudi Arabia’s parallel stock market index, Nomu, gained 228.70 points, down by 0.95 percent, closing at 23,835.75 points.