mideast

MASSABOOK

Mideast Stocks Sink With Oil as Saudis Pin Crude Halt on Others

Tadawul All Share Index drops to lowest level in five weeks

Planned Aramco IPO seen taking liquidity from regional markets

Saudi Arabian stocks declined to a five-week low, leading losses across most Middle Eastern equities, after the deputy crown prince triggered 

a slump in crude prices by placing the onus of reducing oil output on other countries.

The Tadawul All Share Index decreased 1.6 percent to close at 6,126.12, nearing the 50-day moving average it’s traded above for more than

 a month. Saudi Telecom Co. led the retreat in the first day of the exchange’s new trading hours. Dubai’s DFM General Index fell 1.6 percent 

and Kuwait’s SE Price Index slipped 0.4 percent.

Brent crude, a pricing benchmark for half the world’s oil, declined to $38.67 per barrel on Friday after Mohammed bin Salman told Bloomberg News

 that cutbacks in Saudi Arabia’s oil production must be coupled with that of other major producers, including Iran. His comments come weeks before

 a meeting in Doha this month to help limit output. Equities in the six-member Gulf Cooperation Council are closely correlated to the price of crude, 

which accounts for the bulk of government revenue.

“Saudi Arabia’s plan to freeze oil output on the condition that Iran does the same suggests to the market that the meeting in Doha this month will probably

 go nowhere, and that has weighed on stocks,” Sanyalak Manibhandu, the Abu Dhabi-based head of research at NBAD Securities LLC, said in a telephone

 interview. “Saudi Arabia is going to protect its market share, and they’re certainly not going to give it to Iran.”

While Iran will attend the talks, it has ruled out capping its oil output as it restores exports after sanctions were lifted in January. The commodity fell 4.4 percent

 last week, the biggest decline since the period ending Jan. 15.

Saudi Aramco IPO

The plunge in oil prices has strained government finances in the kingdom, leading to cuts in spending as well as lower domestic consumption.

 Three of the index’s four biggest decliners were banks that had their credit ratings downgraded by Standard & Poor’s on Thursday. 

Al Rajhi Bank, which has the largest weighting on the gauge, fell 0.7 percent. National Commercial Bank lost 2.6 percent and

 Saudi British Bank tumbled 6.4 percent, the most since December.

In a plan to diversify its economy away from oil, Saudi Arabia is seeking to sell a stake of Saudi Aramco on the stock exchange and create 

the world’s largest sovereign wealth fund, Salman said. The steps are intended to make the kingdom more reliant on income from investment

 rather than oil within 20 years.

“If Saudi Aramco does list, it’s going to suck liquidity from the region’s markets,” said Manibhandu. “Money managers will have to have a weighting

 in the company, and that will mean that they’ll need to reduce positions elsewhere.”

About 212 million Saudi Arabian shares were exchanged, 20 percent less than the 12-month daily average. Saudi Telecom dropped 4.2 percent.

Abu Dhabi’s Taqa

Abu Dhabi’s ADX General Index lost 0.7 percent, led by Aldar Properties PJSC’s 2.6 percent retreat. Trading volumes on the gauge were less then

 half the six-month daily average, according to data compiled by Bloomberg.

Abu Dhabi National Energy Co., the government-controlled utility otherwise known as Taqa, slid 6.1 percent on almost four times the three-month

 average trading volume. In addition to selling assets and reducing capital expenditure, the company plans to refinance $1 billion of debt due this

 year as lower oil prices hurt revenue.

Qatar’s QE Index dropped 1.2 percent and Bahrain’s BB All Share Index declined 0.4 percent. Egypt’s EGX 30 Index fell 0.1 percent. Oman’s 

MSM 30 Index bucked the trend, rising 0.4 percent.

Israeli Dollar Buys

The TA-25 Index retreated 0.1 percent. Bezeq Israeli Telecommunication Corp. led the decline, dropping 2.5 percent to 8.26 shekels, the lowest

 level in seven weeks. Citigroup last week said the regulatory reform that would save the country’s largest telecommunications operator millions of

 shekels remains a highly-charged political issue.

“There is some nervous sentiment that Bezeq’s regulatory overhang won’t dissipate as quickly as previously thought,” said Adi Babani, a Tel Aviv-based

 trader at Bank of Jerusalem. “Despite the more favorable tone adopted by the ministry of communications, it’s not a done deal until it’s done.”

Meanwhile, Bank of Israel Governor Karnit Flug pledged to keep intervening in the foreign exchange market if needed to tame the shekel, which gained 

more in March than any other month since 2011. The currency weakened 0.5 percent to 3.7753 per dollar on Friday as the central bank reportedly 

bought a “medium” amount of dollars. The shekel had risen to a record high against a basket of currencies a day earlier, according to data compiled

 by Bloomberg.

Israel’s benchmark government bonds due 2025 climbed 0.38 agora, the most since Feb. 24, to 100.55 agorot on the shekel on Sunday. 

The yield fell four basis points to 1.81 percent

MASSABOOK

oil prices

oil prices

SINGAPORE (Reuters) - FACTS Global Energy, the company said (Av.ja.ba) specializes in energy consulting on Thursday that it is unlikely that the Organization of Petroleum Exporting Countries (OPEC) to cut production to support prices before you see a reduction of production in the United
States, Russia and Iraq
oil prices.

Oil rose about fifty percent of the lowest level in 12 years struck less than two months after Saudi Arabia, Qatar, Venezuela and Russia pledged to freeze supplies at January levels if others cooperate. The United States, Russia and Iraq are among the top five oil-producing countries in the world.

Said Fereidun Fesharaki of Av.ja.ba company in the event organized by Thomson Reuters, "Everybody knows that at some time will have to reduce production, but this has not come too soon after and highly unlikely to happen in the near future."

"What they want to achieve is to see production cut in several areas.

"The three most important from my perspective is to see some cuts in production in the United States and Russia ... and seeing the commitment of Iraqis also limit the increase in production."

Fesharaki said that it is expected that the descent of oil prices lead to reduced production in the United States, including at least 500 thousand barrels per day in the current year.

For Russia, he said, "I do not see any room to move thoughtfully, but may result in the development of the economy and rates of reduction that we see in multiple fields to cut production in the end to be between 200 thousand and 300 thousand barrels per day."

He pointed out that Iraq does not have little incentive to cut production, while the Iranians studying the timing of production of 500 thousand barrels per day extra to avoid getting into a dispute with the Saudis.

It is expected that the world's excess oil production is declining in the current year due to the decline of production in the United States, Russia and in the light of expectations that strong demand growth remains at 1.3 million barrels per day. By the end of 2016, the consulting firm predicts that oil stocks go down 50 percent from its level at the beginning of the year.

Fesharaki said "It's hard to imagine the descent of the price from $ 50 a barrel by the end of the year

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