Pakistani rupee drops to record low at 173.2 against US dollar

Pakistani rupee drops to record low at 173.2 against US dollar
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Updated 18 October 2021

Pakistani rupee drops to record low at 173.2 against US dollar

Pakistani rupee drops to record low at 173.2 against US dollar

KARACHI: Pakistan’s rupee hit a record low on Monday of 173.20 in intraday trading against the US dollar before closing at 172.78, below the previous close of 171.18, after reports of a failure of talks with the International Monetary Fund, traders said.

The government's finance ministry on Monday dismissed reports by local media over the weekend that talks from October 4 to 15 for the release of a $1 billion loan tranche were inconclusive.

“Negotiations between Pakistan and IMF are moving forward positively. No timeframe was set at any stage for the conclusion of the talks,” a statement issued by Finance Ministry said.

In June, a similar round of talks between the two sides failed to bring agreement on conditions for the tranche.

“The uncertainty regarding the IMF program after news reports emerged that Pakistan and IMF have failed to agree on certain conditions has resulted in today’s depreciation of rupee,” Atif Zafar, chief economist and director at Topline Securities told Reuters.


Jadwa Investment revises up Saudi GDP growth in 2022, expects budget surpluses till 2023

Jadwa Investment revises up Saudi GDP growth in 2022, expects budget surpluses till 2023
Updated 12 sec ago

Jadwa Investment revises up Saudi GDP growth in 2022, expects budget surpluses till 2023

Jadwa Investment revises up Saudi GDP growth in 2022, expects budget surpluses till 2023
  • The Kingdom's GDP is expected to grow by 7 percent next year up from last month's forecast of 5.1 percent

CAIRO: Saudi investment bank, Jadwa Investment, revised its forecast for Saudi Arabia's GDP growth next year, while it expects the Kingdom's to report budget surpluses in 2022 and 2023 as the government will cut spending, according to a report today.

The Kingdom's GDP is expected to grow by 7 percent next year up from last month's forecast of 5.1 percent, it said.  

The surplus next year is expected at SR35 billion ($9.3 billion) while that of 2023 is estimated at SR37 billion. 


Saudi retailer Alhokair signs franchise deal to nearly double Subway outlets in Saudi Arabia

Saudi retailer Alhokair signs franchise deal to nearly double Subway outlets in Saudi Arabia
Updated 24 min 45 sec ago

Saudi retailer Alhokair signs franchise deal to nearly double Subway outlets in Saudi Arabia

Saudi retailer Alhokair signs franchise deal to nearly double Subway outlets in Saudi Arabia
  • The new agreement will nearly double Subway’s footprint of 210 restaurants over the next six years

RIYADH: Subway, one of the world’s largest restaurant brands, and Fawaz Abdulaziz Alhokair Co, a leading franchise retailer in Saudi Arabia, signed a new master franchise agreement to expand into the Kingdom.

The new agreement will nearly double Subway’s footprint of 210 restaurants over the next six years by adding a minimum of 145 new locations, Alhokair said in a filing. 

“Today’s announcement is another example of our refreshed approach to international growth,” said John Chidsey, Chief Executive Officer of Subway, in a statement. “Through partnering with companies that have deep regional knowledge and proven success in the industry, such as Alhokair, we are strategically expanding and strengthening our global footprint around the world.”


Middle East on close watch as omicron rattles recovery prospects: Daily Virus Update

Middle East on close watch as omicron rattles recovery prospects: Daily Virus Update
Updated 47 min 36 sec ago

Middle East on close watch as omicron rattles recovery prospects: Daily Virus Update

Middle East on close watch as omicron rattles recovery prospects: Daily Virus Update
  • Oil prices stumbled in their biggest decline since April 2020

DUBAI: Oil prices gave up gains on Tuesday, falling more than 2 percent along with broader financial markets, after a media report cast doubt on the efficacy of COVID-19 vaccines against the omicron coronavirus variant.

The head of drugmaker Moderna told the Financial Times that COVID-19 vaccines are unlikely to be as effective against the omicron variant of the coronavirus as they have been against the Delta variant.

Both benchmarks tumbled more than $1 on the news. Brent crude futures fell $1.82, or 2.5 percent, to $71.62 a barrel at 0605 GMT, US West Texas Intermediate crude futures dropped $1.61, or 2.3 percent, to $68.34 a barrel.

Oil plunged more than 12 percent on Friday along with other markets on fears the heavily mutated omicron would spark fresh lockdowns and dent global growth, hurting oil demand.

November 30

Amid speculations on the impact of omicron on oil demand, the Saudi energy minister said it was too early to tell, adding OPEC+ was keen to monitor the situation.

The group of oil-producing countries has rescheduled its meetings to later this week to have more time in assessing the impact, Prince Abdulaziz bin Salman, told Arab News in an Aramco ceremony in Dhahran on Monday.

Earlier, Russian Deputy Prime Minister Alexander Novak said, there is “no need for emergency measures in the oil market.”

He added OPEC+ partners did not call to review the current deal.

Oil prices rebounded on Monday after a huge slump last week, which was led by fears brought by the new coronavirus variant.

Brent crude futures climbed $3.11, or 4.3 percent, to $75.83 a barrel by 0355 GMT, after falling $9.50 on Friday.

U.S. West Texas Intermediate (WTI) crude was up $3.47, or 5.1 percent, at $71.62 a barrel, having tumbled $10.24 in the previous session.

Oil prices plunged more than 10 percent on Friday, their biggest one-day drop since April 2020,  as the new variant spooked investors across financial markets.

There are worries the new variant could derail the global economic recovery, potentially hurting oil demand, while it has also added to concerns that a supply surplus could swell in the first quarter.

Economists at Goldman Sachs outlined four scenarios that could happen as the world cautiously navigates the situation. 

If omicron turns out to transmit faster than its predecessor, Delta, it will result in first-quarter global growth slowing to a 2 percent quarter-on-quarter annual rate.

The economists said if both the disease severity and immunity against hospitalizations are worse than for Delta, global economic growth will take a more substantial hit, but inflation impact will be “ambitious.”

On a slightly positive note, if omicron spreads slower than delta, it will have no significant effect on global growth and inflation, Goldman Sachs said.

If the new variant is more transmissible, but causes less severe disease, global growth could be higher than Goldman’s baseline.

November 29

Most Gulf stock markets ended lower on Sunday, with the Saudi and Dubai indexes suffering their biggest single-day fall in nearly two years as fears of a potentially vaccine-resistant coronavirus variant spooked investors.

Opinion

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The World Health Organization on Friday designated the omicron coronavirus variant detected in South Africa as being “of concern” — the fifth variant to be given that designation

Saudi Arabia’s benchmark index slid 4.5 percent, dragged down by a 5.4 percent fall for Al Rajhi Bank and a 6.2 percent decline for Saudi Basic Industries.

The Kingdom halted flights from and to Malawi, Zambia, Madagascar, Angola, Seychelles, Mauritius and the Comoros Islands on Sunday owing to concerns related to the spread of the new COVID-19 strain, state news agency SPA reported on Twitter.

The latest pandemic developments also sent oil prices, a key catalyst for the Gulf’s financial markets, plunging by $10 a barrel on Friday for their largest one-day drop since April 2020. The new variant added to concerns that an oil supply surplus could swell in the first quarter.

“It’s obvious that traders are concerned about the implications of the newly mutated virus which brings back the lock-down memories from last year. If Saudi decides to impose more restrictive measures the economy will be impacted significantly and the growth prospects next year will vanish”, Mohammed Al-Suwayed, chief executive officer of Razeen Capital, said. He said the time is now suitable for investors to reinvest in the market since the share prices are relatively low.

Dubai’s main share index declined 5.2 percent, its biggest intraday fall since March 2020, with most stocks in negative territory.

Blue-chip developer Emaar Properties plunged 9.4 percent and budget carrier Air Arabia retreated by 7.1 percent.

In Abu Dhabi, the index fell 1.8 percent, weighed down by a 3.3 percent drop for telecoms company Etisalat and a 1.4 percent decline for First Abu Dhabi Bank, the country’s largest lender.

The UAE has suspended entry for travelers from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe, Botswana and Mozambique from Nov. 29 over concerns about the new coronavirus variant, the state news agency reported on Friday.

In Qatar, the index slipped by 2.8 percent as investors shunned stocks across board, with petrochemicals group Industries Qatar leading the losses.

Egypt’s blue-chip index lost 1.3 percent, with top lender Commercial International Bank retreating by 0.8 percent.

(With Reuters)


Aramco deploys first $10bn to local, international firms to kickstart Jafurah project

Aramco deploys first $10bn to local, international firms to kickstart Jafurah project
Updated 53 min 20 sec ago

Aramco deploys first $10bn to local, international firms to kickstart Jafurah project

Aramco deploys first $10bn to local, international firms to kickstart Jafurah project
  • The company said it signed 16 subsurface and Engineering, Procurement, and Construction (EPC) contracts

DUBAI: Saudi Arabia’s oil giant Aramco has signed $10 billion worth of contracts to kickstart the development of its massive Jafurah unconventional gas field.

The company said it signed 16 subsurface and Engineering, Procurement, and Construction (EPC) contracts with local and international companies, including US-based Schlumberger and Halliburton. 

Other companies that signed contracts with Aramco include Baker Hughes, NESR, Saudi Taqa, Sinopec, Larsen and Toubro, and Saipem. 

A total of $68 billion is expected to be spent over the first 10 years of the project’s development, Aramco said, as it anticipates more than $100 billion total lifecycle investment. 

By 2030, the Saudi oil giant expects the Jafurah site to produce up to two billion standard cubic feet per day of sales gas, 418 million scfd of ethane, and around 630,000 barrels per day of gas liquids and condensates.


Oil rebounds above $76 on speculation virus fear overrated

Oil rebounds above $76 on speculation virus fear overrated
Updated 30 November 2021

Oil rebounds above $76 on speculation virus fear overrated

Oil rebounds above $76 on speculation virus fear overrated

LONDON: Oil rebounded by more than 5 percent on Monday to above $76 a barrel as some investors viewed Friday’s slump in oil and financial markets as overdone while the world awaits more data on the omicron coronavirus variant.

Brent crude was up $3.66, or 5 percent, at $76.38 a barrel by 1444 GMT, having slid by $9.50 on Friday. US West Texas Intermediate crude was up $4.36, or 6.4%, at $72.51, having tumbled by $10.24 in the previous session.

“We saw some correction as Friday’s plunge in oil prices has been overdone,” said Tatsufumi Okoshi, a senior economist at Nomura Securities.

Friday’s slide, the biggest one-day drop since April 2020, reflected fears that travel bans would hammer demand. The plunge was exacerbated by low liquidity owing to a US holiday and the expected demand hit does not justify such a fall, analysts said.

“The fear factor had its grip on financial markets on Friday,” said Norbert Ruecker of Swiss bank Julius Baer. “Fundamentally, the announced and enacted international air travel constraints cannot explain such a sharp slump.”

A semblance of calm also returned to wider markets on Monday as investors awaited more information about the new variant. European and Wall Street shares rose while safe haven bonds lost ground.

“I can’t help but feel that Friday’s lows were probably the bargain of the year if you were an oil buyer, speculative or physical,” said Jeffrey Halley of brokerage OANDA.