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OPEC Monthly Report May 2010
May 20, 2010--Oil Market Highlights
Optimism about the global economic recovery and higher oil demand expectations supported the oil
market in April. The OPEC Reference Basket moved above $81/b in the second trading day of the
month for the first time since January and then followed an upward trend to end the month to reach
$84.13/b, the highest level since early October 2008. In monthly terms, the Basket averaged
$82.33/b, for a gain of $5.12 or 6.6%.
The oil market turned bearish in May amid concerns about the sovereign debt crisis in Greece with contagion risk and high oil inventories in the US. As a result, prices fell more than $10 over three days before recovering slightly to stand at $78.08/b on 10 May.
World economic growth is kept unchanged at 3.5% for 2010. While the US, Japan and China showed encouraging signs of a recovery, the Euro-zone has just managed to avoid a spillover of the sovereign debt crisis of Greece to other economies. OECD growth remains unchanged at 1.9%, as the US forecast was increased to 2.8% from 2.6% and the Euro-zone’s forecast was revised down to 0.6% from 0.7%. China is expected to grow by 9.5% in 2010 and India by 7.1%. The global economy is improving, but the challenges of sovereign debt in the developed countries, the ability of China to avoid overheating and persistently high unemployment levels need careful monitoring.
World oil demand estimate for 2009 remains broadly unchanged, showing a contraction of 1.5 mb/d. In 2010, global demand growth is expected at 0.9 mb/d, in line with the previous month’s forecast. Although the economic recovery shows signs of improving momentum, important risks remain that could impact demand growth expectations for this year. China has been among the main drivers behind oil demand growth so far this year, which should continue for the rest of the year despite the recent price increase in its gasoline and diesel retail sales by 4.5% and 5% respectively.
Source: OPEC
Dubai World creditors agree to debt deal
May 20, 2010--Dubai World said today it has agreed in principle with a group of creditor banks on terms to restructure $14.4bn of loans. The company will pay $4.4bn in five years and the remaining $10bn in eight years.
Banks will have the option to choose from combinations of loan maturities in dollar or dirhams that carry different interest rates, according to Bloomberg. Banks will be paid 1% interest on $4.4bn of the loans maturing in five years. The lenders have three options in the eight-year maturities covering about $10bn of debt with at least 1% interest and varying additional rates between 1.5% and 2.5% at maturity.
Source: AME Info
DFM gains 0.35%
May 20, 2010-The Dubai Financial Market rose 0.35% today to close on 1,697, with 17 stocks ending higher and 10 closing lower.
Among more heavily traded stocks, Emaar gained 0.81%, Arabtec rose 1.30%, and Aramex fell 2.01%. International Financial Adivors had the day's biggest loss, falling by 9.83%.
Source: AME Info
ADX nudges higher
May 20, 2010-The Abu Dhabi Securities Index moved up 0.19% today to 2,780, despite the fact that declines (21) outnumbered gainers (8) by almost three-to-one.
Among the stocks that ended higher today were National Bank of Abu Dhabi, which climbed 1.73%, and First Gulf Bank, which rose 1.40%.
Source: AME Info
The GCC Economies Are Returning to Solid Growth
IIF forecasts 4.4% rise in 2010 GDP and 4.7% in 2011 – substantial gains in oil revenues also seen
May 19, 2010-The economies of the member states of the Gulf Cooperation Council (GCC) - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) – are now recovering and growth this year is likely to average 4.4% and then rise to 4.7% in 2011, following just 0.3% growth in 2009, forecast the Institute of International Finance (IIF). It noted that prospects vary considerably across the region.
Dr. George Abed, IIF Senior Counsellor and Director of the Middle East- Africa Department, stated, “Underpinning the robust GCC recovery are higher oil prices, likely continued expansionary fiscal policies, and the normalization of global trade and capital flows. On oil, we forecast a rebound in production of around 3% in Kuwait, Saudi Arabia, and the UAE. We expect the GCC’s revenue from oil and gas to rise from $323 billion in 2009 to $419 billion in 2010 and to $457 billion in 2011. Accordingly, we anticipate that the net foreign assets of GCC countries will rise from $1,049 billion at the end-2009 to $1,340 billion by end-2011, equivalent to 125% of the regional GDP.”
IIF Managing Director, Mr. Charles Dallara, noted, “Despite recent challenges faced by some segments of the financial sector, banks in the GCC remain well capitalized and bank soundness indicators continue to exhibit stability across countries. The average capital adequacy ratio, defined as the ratio of capital and reserves to risk-weighted assets, was above 15 percent for every banking system in the region. Today, the IIF has about 90 of its more than 390 member institutions based in the Middle East and North Africa. We are seeing notable progress in the modernization of the banking systems in the region, in their engagement with the global financial system and in their contributions to the region’s economic development.”
view the May 2010 GCC Regional Overview (.pdf)
Source: Institute of International Finance (IIF)
Saudi not worried by drop in oil price
May 19, 2010--Saudi Arabia's finance minister, Ibrahim Al- Assaf has said the country is not worried about oil prices, which have fallen 17% this month, Bloomberg has reported.
"I'm not worried right now and we will push through with the development of projects that we committed to," Al-Assaf said at a Euromoney conference in Riyadh.
Source: AME Info
Although growing in global value, sukuk still lack liquidity
May 18, 2010--The global volume of sukuk crossed the symbolic level of $100bn in 2009, but will banks be able to raise Islamic Bonds at common sense levels? While the risk of defaults remains, the possibilities for a global sukuk "currency" are taking shape.
Global Islamic bond issuances last year more than doubled to $31bn compared to 2008. On March 7, Saudi real estate giant Dar Al-Arkan paid back a $600m sukuk. National Bank of Abu Dhabi, the largest bank in the oil-rich emirates, also sold a $750m five-year sukuk in March.
This is good news for the sector, and it comes after a tricky year. In 2009 two sukuk defaulted, one from Kuwait-based The Investment Dar (TID), and the other from Saudi Banking group Saad.
Source: AME Info
Lebanon GDP growth to slow to 4%
May 18, 2010--A draft budget from Lebanon's finance ministry has shown that the country's economy is projected to grow 4% in 2011, slowing from an expected 4.5% expansion this year, Reuters has reported.
Budget deficit is also expected to drop to 9.9% of gross domestic product next year, from an estimated 10.7% this year, while inflation will drop to 3.2% by the end of 2011, the ministry said.
Source: AME Info
UAE non-oil foreign trade at $17bn
May 17, 2010--The UAE's non-oil foreign trade reached AED53 billion in terms of value in February 2010, according to a preliminary report issued by the Federal Customs Authority (FCA). Out of this amount, imports amounted to AED 35.2 billion, exports were AED 4.9 billion, while re-exports reached AED12.9 billion.
The total non-oil foreign trade weighed 5.4 million tonnes, out of which 3.3 million were imports, 1.5 million were exports and 0.6 million tonnes were re-exports.
Khalid Ali Al Bustani, Acting Director General of the Authority, said a reading of the February figures in 2009 and 2010 indicated a sustained growth of exports at 1 per cent to AED 4.9 billion in February 2010 against AED 4.8 billion for February 2009, while re-exports grew at 2 per cent from AED 12.92 billion to AED 12.95 billion. Imports declined by 1 per cent from AED 35.6 billion to AED 35.2 billion for the month under review.
''The steep rise in exports and drop in imports indicate to the marked improvement in the balance of trade of the UAE with its foreign trade partners. It shows the growing strength of UAE competitive edge in global markets despite the impact of the world financial crisis which hit the global economies at that time", he added.
Regarding the geographic distribution of foreign trade, the authority's report said India, China, US, Germany, Japan, UK, Italy,South Korea, France and Switzerland were the top 10 countries the UAE imported from in February, with a total value of AED 22.1 billion amounting to 63 per cent of total imports.
Meanwhile, India , Saudi Arabia , Oman , Qatar , Iran , Switzerland , Turkey , Pakistan , Kuwait and Iraq were the top importing countries from the UAE for non-oil exports, which totalled AED 3.6 billion accounting for 74 per cent of the total exports.
India, Iran , Qatar , Saudi Arabia , Afghanistan , Bahrain , Belgium, Kuwait, and Hong Kong were the top re-export markets taking commodities valued at AED 9.1 billion or 70 per cent of total re-exports.
Non-oil foreign trade with GCC countries stood at AED 4.7 billion in February with Saudi Arabia having the lion' share of AED 1.7 billion, followed by Qatar at AED 1.2 billion, Oman at AED 809 million, Bahrain at AED 515 million and Kuwait at AED 498 million.
Source:UAE FCA
DFM records 98% compliance in Q1-2010 result disclosures of UAE companies
May 17, 2010--Dubai, May 17th 2010: Dubai Financial Market (DFM) announced today that its UAE listed companies have achieved a solid 98% compliance to disclose their quarterly results for the first quarter of 2010 ending on March 31st, within the 45 days deadline from the stated period end.
The total number of UAE public joint stock companies listed at DFM which disclosed their annual results stood at 40 companies out of 41 companies, with the exception of Amlak Finance and Tamweel, in addition to Al Firdous Holding with its financial year ending on March 31st .
DFM suspended trading on JEEMA Mineral Water due to not disclosing its results.
Furthermore, DFM suspended trading on 5 foreign listings that missed the deadline including: BAYAN Investment, GOLBAL, GRAND, IIG and KFIC. Foreign listings on DFM recorded a 77% compliance, as 17 out of 22 companies disclosed their results within the legal timeframe. DFM also submitted a detailed report to the UAE Securities and Commodities Authority (SCA) which covers the disclosure dates and its observations on the disclosures.
Source: Dubai Financial Market
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