Global stocks head for worst January since 2008 financial crisis

Global stocks head for worst January since 2008 financial crisis
The pan-European STOXX 600 tumbled 1.5 percent in morning trading, on course for its fourth straight weekly drop. (Shutterstock)
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Updated 28 January 2022

Global stocks head for worst January since 2008 financial crisis

Global stocks head for worst January since 2008 financial crisis
  • MSCI’s 50-country main world index is now down over 8.1 percent for the month

LONDON: European stocks fell heavily again on Friday as worries about a sudden halt to central bank stimulus and rising tensions between Western powers and Moscow drove one of the worst ever starts to a year for world stock markets.
Strong earnings from Apple provided some encouragement for battered tech and US markets, but traders were struggling to draw a line under a global selloff that has now firmly taken root.
The pan-European STOXX 600 tumbled 1.5 percent in morning trading, on course for its fourth straight weekly drop, while US futures were pointing to more crimson screens on Wall Street later too..
MSCI’s 50-country main world index is now down over 8.1 percent for the month, which will be its worst January since the 2008 global financial crisis year.
The dollar, meanwhile, is on track for its best week in seven months on bets that US interest rates could now go up as many as five times this year.
“With the Federal Reserve sounding a lot more hawkish, it has shaken the markets,” said Jeremy Gatto, a multi-asset portfolio manager at Unigestion in Switzerland.
“Markets can live with rate hikes, but the main question remains around the balance sheet,” he added. Markets have been driven up by all the stimulus pumped in during the COVID-19 crisis, “so if it starts reducing liquidity, that changes the game.”
The Fed indicated this week that it is likely to raise rates in March, as widely expected, and reaffirmed plans to end its pandemic-era bond purchases that month before launching a significant reduction in its asset holdings.
The prospect of faster or larger US interest rate hikes, and possible stimulus withdrawal, lifted the dollar to a 20-month high of $1.1119 per euro and to 115.50 yen — close to a high of year so far of 116.35 yen.
In the big government bond markets that drive global borrowing costs, benchmark 10-year US Treasury yields rose to 1.84 percent compared with their US close of 1.80 percent on Thursday. The two-year yield, which is even more sensitive to rate hike expectations, touched 1.22 percent, having started the year at roughly 0.75 percent.
European bond yields also rose further. Germany’s 10-year yield, the benchmark for the euro zone, was up over half a bp to -0.02 percent although still not quite able to break through the zero threshold.
Focus was also on Italy, where bond yields were back up around 4 bps after a late afternoon rally on Thursday while its parliament struggled to elect a new president.

OIL PRESSURE
Oil prices remained strong, set for their sixth weekly gain, amid concerns of tight supplies as major producers continue their policy of limited output increases amid rising fuel demand.
Brent crude futures climbed 57 cents, or 0.6 percent, to $89.91 a barrel, just shy of the $91.04 hit earlier in the week that was the highest level since October 2014.
A sixth week of gains will also mark the longest weekly winning streak for Brent since October last year, when Brent prices climbed for seven weeks while US WTI gained for nine.
This year, prices have risen about 15 percent amid geopolitical tensions between Russia, the world’s second-largest oil producer and a key natural gas provider to Europe, and the West over Ukraine, as well as threats to the United Arab Emirates from Yemen’s Houthi movement that have raised concerns about energy supply.
“Where Brent crosses the $90 level, we see some selling from a sense of accomplishment, but investors start buying again when the prices fall a little as they remain cautious about possible supply disruptions due to rising geopolitical tensions,” said Tatsufumi Okoshi, senior economist at Nomura Securities.
“The market expects supply will stay tight as the OPEC+ is seen to keep the existing policy of gradual increase in production,” he said.
The market is focusing on a Feb. 2 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a group known as OPEC+. It is likely to stick with a planned rise in its oil output target for March, several sources in the group told Reuters.


Saudi stocks drop on mixed investor sentiment: Opening bell

Saudi stocks drop on mixed investor sentiment: Opening bell
Updated 12 sec ago

Saudi stocks drop on mixed investor sentiment: Opening bell

Saudi stocks drop on mixed investor sentiment: Opening bell

RIYADH: Saudi stocks open lower in the last trading session of the week on mixed earnings reports, which result in mixed investor sentiment.

The main index, TASI, fell 2.52 percent to reach 12,393, while the parallel market, Nomu, lost 1.51 percent at 22,487, as of 10:08 a.m. Saudi time.

United Wire Factories Co. dropped 2.35 percent, after announcing that it had extended its agreement with A-1 Fence Arabia Co.

Tabuk Cement Co. slumped 0.95 percent, after reporting it swung into losses of SR7 million ($2 million) in its first-quarter earnings as sales dropped.

United Cooperative Assurance Co. slipped 1.38 percent, after reporting its net loss was trimmed by 26 percent to SR19.9 million last quarter.

Saudi Real Estate Co. increased 3.34 percent to lead the gainers, after it received shareholder approval to increase capital to SR3.7 billion.

Rabigh Refining and Petrochemical Co. slipped 5.65 percent to lead the fallers.

Saudi Aramco, the largest player on the Saudi oil market, opened today’s trading down 2.70 percent.

In the financial sector, the Kingdom’s largest valued bank Al Rajhi edged down 2.81 percent, and Alinma Bank fell 4.76 percent.

Brent crude settled at $110.43 a barrel, and US WTI crude traded at $110.34 a barrel, as of 10:16 a.m. Saudi time.


Commodities Update — Gold flat; Wheat extends gain; Copper buoyed by easing China curbs

Commodities Update — Gold flat; Wheat extends gain; Copper buoyed by easing China curbs
Updated 4 min 33 sec ago

Commodities Update — Gold flat; Wheat extends gain; Copper buoyed by easing China curbs

Commodities Update — Gold flat; Wheat extends gain; Copper buoyed by easing China curbs

RIYADH: Gold prices were flat on Thursday, as an elevated US dollar and rising Treasury yields weighed on greenback-priced bullion, with the metal’s outlook already dampened by an aggressive Federal Reserve stance on inflation.

Spot gold held its ground at $1,813.96 per ounce, as of 0512 GMT. US gold futures were flat at $1,813.40. 

Platinum drops

Spot silver was flat at $21.40 per ounce, while platinum dropped 0.8 percent to $927.78.

Palladium rose 0.5 percent to $2,027.38. 

Grains up

US wheat extended gains on Thursday, after India unexpectedly banned wheat exports last week, while the Russia-Ukraine war kept underpinning global grains markets.

The most-active wheat contract on the Chicago Board of Trade was up 0.89 percent at $12.41-3/4 a bushel.

CBOT wheat had climbed more than 8 percent over the past two days, following India’s wheat ban and reports showing bad condition of US winter crop.

CBOT soybeans edged up 0.95 percent to $16.78-1/2 bushel, extending gains, while corn rose 0.48 percent to $7.85-1/4 a bushel.

Copper inches higher

London copper prices inched higher on Thursday, buoyed by easing COVID-19 restrictions in top metals consumer China, although mounting worries over a global economic slowdown limited gains.

Benchmark three-month copper on the London Metal Exchange was up 0.2 percent at $9,254 a ton, as of 0702 GMT, after dropping 1.4 percent in the previous session. 

The most-active June copper contract on the Shanghai Futures Exchange ended daytime trading down 0.3 percent at $10,576.04 a ton.

LME aluminum was down 0.1 percent at $2,853.50 a ton.

(With input from Reuters)


Crypto Moves — Bitcoin, Ether down; Russia to legalise cryptocurrency; Coinbase establishes think tank; Bitso launches in Colombia

Crypto Moves — Bitcoin, Ether down; Russia to legalise cryptocurrency; Coinbase establishes think tank; Bitso launches in Colombia
Updated 13 min 6 sec ago

Crypto Moves — Bitcoin, Ether down; Russia to legalise cryptocurrency; Coinbase establishes think tank; Bitso launches in Colombia

Crypto Moves — Bitcoin, Ether down; Russia to legalise cryptocurrency; Coinbase establishes think tank; Bitso launches in Colombia
  • Coinbase, the largest cryptocurrency exchange in the US, is launching a global think tank to shape the policy debate around digital assets

RIYADH: Bitcoin, the leading cryptocurrency internationally, traded lower on Thursday, down 1.73 percent to $29,293 as of 10:10 a.m. Riyadh time.

Ether, the second most traded cryptocurrency, was priced at $1,965, down 3.03 percent, according to data from Coindesk.

Russia to legalize cryptocurrency sooner or later: Minister

Russia will sooner or later legalize cryptocurrencies as a means of payment, Industry and Trade Minister Denis Manturov said on Wednesday, suggesting that the government and central bank may be moving closer to settling their differences.

Manturov was asked at a forum whether he believed cryptocurrencies would become legal as a means of payment.

“The question is, when this happens, how it will be regulated, now that the central bank and government are actively working on it,” he replied.

“But everyone tends to understand that, sooner or later this will be implemented, in some format or other.”

Russia has plans to issue its own digital rouble, but the government has only recently come round to supporting the use of private cryptocurrencies, having argued for years that they could be used in money laundering or to finance terrorism.

Coinbase establishes think tank to push policy goals

Coinbase, the largest cryptocurrency exchange in the US, is launching a global think tank to shape the policy debate around digital assets as regulators and Congress explore how crypto-assets should be governed.

The Coinbase Institute will accelerate research on cryptocurrency and Web3 — a decentralized version of the Internet — and spearhead discussions with policymakers and academics on the intersection of technology and finance, said Hermine Wong, director of policy at Coinbase and the director of the institute.

“We’re interested in every area of research that involves the crypto economy and how it is interdisciplinary, how it is connected to our global economy, and so there’s nothing that’s going to be off limits,” she said.

Mexican cryptocurrency platform Bitso launches in Colombia

Mexican cryptocurrency exchange platform Bitso has begun operating in Colombia, its fourth market, where it hopes to accumulate 1 million clients just this month, Co-Founder and Chief Executive Daniel Vogel said.

Bitso is among Latin America’s growing collection of “unicorns” — companies with a valuation of at least $1 billion — and is worth some $2.2 billion, following a 2021 funding round where it raised $250 million.

Bitso will offer customers instant transfers via the PSE payment system, sales of cryptocurrencies such as Bitcoin and Ether, as well as use of its new investment platform Bitso+.

Bitso currently has 4 million customers in Mexico, Brazil and Argentina.

“With our launch in Colombia we hope to hit 5 million customers and we think we can do that this month,” Vogel told Reuters in a phone interview.

“We see Colombia as a key market for us, which we are entering with this expansion plan from the point of view of our products, hiring people (and) growing in the country — it is a very dynamic market in terms of cryptocurrencies,” he added, though he declined to say how much Bitso would invest in the Andean country.

(With input from Reuters) 


Oil Updates — Crude recovers; Russian firms halt publishing data; SCOR tightens oil sector cover

Oil Updates — Crude recovers; Russian firms halt publishing data; SCOR tightens oil sector cover
Updated 22 min 3 sec ago

Oil Updates — Crude recovers; Russian firms halt publishing data; SCOR tightens oil sector cover

Oil Updates — Crude recovers; Russian firms halt publishing data; SCOR tightens oil sector cover
  • SCOR, the world’s fourth-biggest reinsurer, said on Wednesday it would stop covering new oil field production projects from 2023

RIYADH: Oil prices rose on Thursday, recovering from early losses, on hopes that the planned easing of restrictions in Shanghai could improve fuel demand while lingering concerns over tight global supplies outweighed fears of slower economic growth.

Brent crude futures for July were up $1.53, or 1.4 percent, at $110.64 a barrel at 0447 GMT, after falling by more than $1 earlier in the session.

US West Texas Intermediate crude futures for June rose 93 cents, or 0.8 percent, to $110.52 a barrel, recovering from an early loss of more than $2. 

Russian firms, entities halt publishing data amid sanctions

Oil pipeline monopoly Transneft has joined other Russian entities in curbing access to trade and financial data, sources told Reuters.

In the wake of Western sanctions imposed on Russia after it sent troops into Ukraine, the central bank said it would allow companies to withhold financial results.

Russian authorities are also allowing companies and banks to conceal information on securities issued and on their contractors.

Apart from Transneft, other companies that have stopped publishing data include Aeroflot, Alrosa, Gazprom, and Lukoil. 

Reinsurer SCOR tightens oil sector cover over carbon emissions

SCOR, the world’s fourth-biggest reinsurer, said on Wednesday it would stop covering new oil field production projects from 2023 unless the company involved had an acceptable plan to reach net-zero emissions by mid-century.

The move is the latest by a leading insurer to impose tighter policy conditions on coverage for the oil and gas sector, the main driver of man-made greenhouse gas emissions, as scientists warn faster action is needed on climate change.

It also follows an International Energy Agency report last year which said expansion of the oil and gas industry needed to cease if the world wanted to cap global warming at 1.5 degrees Celsius above the pre-industrial average.

SCOR said in a statement accompanying results of the French company’s annual general meeting that it aimed to double the amount of insurance coverage for low-carbon energies by 2025.

“SCOR believes that reaching net-zero can only be achieved by combining climate mitigation and climate adaptation measures, supported by strong engagement with clients and partners, and an active approach to transition,” it said.

(With input from Reuters) 


Here’s what you need to know before Tadawul trading on Thursday

Here’s what you need to know before Tadawul trading on Thursday
Updated 45 min 10 sec ago

Here’s what you need to know before Tadawul trading on Thursday

Here’s what you need to know before Tadawul trading on Thursday
  • In line with the Saudi index, stock exchanges of Abu Dhabi, Qatar, Bahrain, Egypt, and Kuwait all advanced in the previous session, led by a 2.1 percent gain for Kuwait’s BKP

RIYADH: Saudi stocks nudged higher on Wednesday in line with a rise in oil prices.

TASI the main index added 0.2 percent to close at 12,713, while the parallel Nomu market gained 0.6 percent to 22,832.

Shares of state-owned Saudi Electricity shed 8 percent after posting a drop in first-quarter profit.

In line with the Saudi index, stock exchanges of Abu Dhabi, Qatar, Bahrain, Egypt, and Kuwait all advanced in the previous session, led by a 2.1 percent gain for Kuwait’s BKP.

However, Dubai and Oman bucked the trend to close lower, down 0.9 and 0.2 percent, respectively.

Crude prices extended gains on Thursday, with Brent crude up 1.4 percent to $110.68 and US West Texas Intermediate trading 0.8 percent higher at $110.41 as of 9:13 a.m. Saudi time.

Stock news

Gulf Union Alahlia Cooperative Insurance Co. managed to narrow its net loss before Zakat by 64 percent to SR20.4 million ($5.44 million)

Saudi Real Estate Co. received shareholders’ nod to raise capital to SR3.7 billion

United Cooperative Insurance Co.’s net loss before Zakat was trimmed by 26 percent to SR19.9 million last quarter

Aljazira Takaful Taawuni Co. saw its net profit drop 32 percent to SR9.4 million in the first quarter of this year

Shareholders of Alujain Holding Corp. approved a dividend payout of SR1 per share to be paid for 2022 and 2023

Al-Hammadi Co. for Development and Investment got the Capital Market Authority’s approval to increase capital to SR1.6 billion

Tabuk Cement Co. swung into losses of SR6.92 million in its first-quarter earnings as sales dropped

SABB Takaful Co. turned into losses of SR957,000 before Zakat during the first quarter of 2022

Saudi Co. for Hardware’s shareholders approved a dividend freeze for 2021 after posting a 92 percent drop in quarterly profit to SR1.11 million

MBC Group-backed advertising firm Al Arabia more than doubled profits to SR64.9 million in the first quarter of 2022

Alkhorayef Water and Power Technologies Co.’s quarterly profit fell from SR26.9 million to SR25.3 million

Calendar

May 22, 2022

Start of Amwaj International Co.’s IPO subscription

Start of Ladun Investment Co.’s IPO subscription

May 25, 2022

End of Amwaj International Co.’s IPO subscription

May 26, 2022

End of Ladun Investment Co.’s IPO subscription