The article Lever Style Announces Seventh Acquisition Since IPO, Continuing Group Expansion in the Global Apparel Supply Chain Sector appeared first on Arabian Post.

U. S. President Donald Trump has announced a sweeping 50 % tariff on copper imports, jolting commodity markets and triggering sharp moves across financial sectors. Copper futures in the United States surged to record highs, while international benchmarks in London and Shanghai retreated under mounting uncertainty surrounding shipment logistics and timing.

At a Cabinet meeting, Trump confirmed the unprecedented levy, citing national security and a desire to bolster domestic mining and smelting operations. Copper, vital for electric vehicles, defence systems, power infrastructure and electronics, lies at the heart of this strategic policy. He indicated that the tariff could be enacted by the end of July or by August 1, according to Commerce Secretary Howard Lutnick on CNBC.

U. S. Comex copper futures leapt over 12 %, reaching all-time highs—exceeding $5.64 per pound in intraday trading—the steepest single-day gain since 1968. This spike followed aggressive stockpiling by American manufacturers ahead of anticipated restrictions, resulting in a more than 40 % increase in U. S. copper futures year-to-date.

Global markets responded unevenly. London Metal Exchange and Shanghai copper futures pulled back, weighed down by logistical concerns over whether shipments can reach U. S. ports in time. The LME, meanwhile, has benefited from record trading volumes driven by the tariff turmoil, marking its busiest quarter since 2014.

Stock markets and currency markets have also felt the ripple effects. Asian equities remained mixed, with Japan and Australia dipping while South Korea and China made modest gains. U. S. futures showed slight weakness as the dollar strengthened to multi‑week peaks amid a broader risk-off sentiment.

A notable beneficiary has been Freeport‑McMoRan, the Phoenix‑based mining giant, whose shares jumped roughly 5–9 % intraday before settling up nearly 5 % on the day. Other copper producers saw similar gains, with Southern Copper Corp. briefly rising nearly 5 % before trimming gains. The United States Copper Fund hit record highs amid the surge.

Analysts warn that this policy shift could spark significant supply constraints and price volatility. RBC Capital Markets notes heightened short-term fluctuations in copper prices and stock valuations tied to tariff expectations. Ole Hansen of Saxo Bank emphasises that the United States remains dependent on copper imports and is years away from bridging that gap internally.

The tariff is part of a broader protectionist initiative. Earlier measures included 25 % to 50 % tariffs on steel and aluminum, alongside probes into semi-conductors, pharmaceuticals and autos under national security provisions. Trump has also floated the possibility of tariffs up to 200 % on select drug imports, reportedly allowing an 18-month window for US-based relocation. Letters warning of new reciprocal tariffs, ranging from 25–40 %, have been dispatched to 14 countries, including several in Asia and BRICS nations; most new duties are slated for August 1.

Global suppliers are bracing for impact. Chile, Canada and Mexico remain the top exporters of copper to the US and have protested that their shipments pose no national security risk—citing existing free trade agreements. Australia’s exposure is small, but its government expressed concerns over pharmaceuticals and potential downstream repercussions for its miners.

Market commentators suggest investors have grown accustomed to Trump‑era tariff brinkmanship. While headline risks persist, the relative calm of U. S. and European equity markets suggests markets are treating this as leverage in forthcoming trade negotiations, rather than a full retreat into protectionism. Futures traders are pricing in a 63 % chance of Federal Reserve interest rate reductions by September, which provides a cushion amid policy uncertainty.

Copper’s central role in clean‑energy technology, defence systems and infrastructure makes this move particularly impactful. Analysts note that constrained supply could reshape investment decisions in these strategic sectors. At the same time, elevated U. S. copper prices could disadvantage domestic manufacturers compared to overseas rivals.

The next few weeks will be pivotal, as markets watch for formal details of the tariff’s implementation schedule, completion of Section 232 investigations, and possible retaliatory actions by major trading partners. Until then, copper prices and global trade flows remain on tenterhooks.

The article Metal Markets Rocked by Surprise 50 % Copper Tariff appeared first on Arabian Post.

Striving to Promote Citybus’ New Energy Transportation Business Development and Achieve Business Diversification Aiming to Create Better Returns for Shareholders

HONG KONG SAR – EQS Newswire – 1 August 2024 – Hans Energy Company Limited (“Hans Energy” or the “Company“) and its subsidiaries (the “Group“) (stock code: 554.HK), the leading operator in the energy industry, is pleased to announce that, regarding the acquisition of 54.44% of equity shares of Citybus’ parent company, Bravo Transport Holdings Limited (“BTHL”), all the conditions precedent set out in the acquisition agreement have been fulfilled and the completion took place on 31 July 2024. Following the completion, Hans Energy owns 70% of the equity shares of BTHL, and BTHL becomes an indirect non-wholly owned subsidiary of the Company.

According to the acquisition agreement, the 278,915,965 consideration shares have been allotted and issued by the Company to Templewater Bravo Holdings Limited (“TWB Holdings”) . After completion of the acquisition, TWB Holdings will own 6.59% of the equity shares of Hans Energy. As part of the transaction, Hans Energy will have the right to exercise a call option to further acquire the remaining 30% of BTHL’s shares from TWB Holdings within the next five years. Additionally, Templewater will have the option to sell its shares to Hans Energy between 2029 and 2031. Anglo Chinese Corporate Finance acted as the sole financial adviser of Hans Energy for the transaction.

Hans Energy has actively transitioned from the traditional energy industry to the new energy sector in recent years, using BTHL as a foundation and launch platform to achieve a diversified strategy. Mr Yang Dong, CEO of Hans Energy said: “To align with government’s “Strategy of Hydrogen Development in Hong Kong” the Group will actively explore cooperation with major technology suppliers in the hydrogen energy industry. By participating in the investment in the construction of Hong Kong’s first hydrogen refueling station in West Kowloon, we are committed to promoting the application of hydrogen energy in public transportation in Hong Kong, China. At the same time, we will actively promote the green development of Citybus, accelerate the environmental upgrade of the operating fleet, and enhance operational efficiency.”

Mr Yang added, “In addition to actively expanding Citybus’ new energy transportation business, the Group will leverage its resources to assist Citybus in expanding into overseas transportation projects, thereby enhancing Citybus’ business advantages. Meanwhile, Bravo Media, a wholly owned subsidiary of BTHL Holdings engaged in the advertising business, has seen promising business development in recent years and has secured a contract with a Hong Kong railway operator to provide advertising sales agency services for certain railway lines and buses operated by this railway operator. Therefore, we firmly believe that this successful acquisition will inject strong momentum into the Group’s future development, pioneering hydrogen energy transportation solutions. This will elevate BTHL to become one of the world’s leading public transportation operators, create new business growth, and generate better returns for shareholders.”

Hashtag: #HansEnergy

The issuer is solely responsible for the content of this announcement.

About Hans Energy Company Limited (Stock code: 554.HK)

Hans Energy Company Limited is a leading operator in providing integrated facilities of jetties, storage tanks, warehousing and logistic services in south China for petroleum and liquid chemicals products and offering value-added services in its ports and storage tank farms, trading of oil and petrochemical products, and operating and leasing of a filling station related business.

The article Hans Energy Completes the Acquisition of 54.44% Equity Shares of BTHL appeared first on Arabian Post.

Three Highly Anticipated Flagship Upgraded Vaccines Filing for Market Listing; Significant Breakthrough Achieved in the International Market

HONG KONG SAR – Media OutReach Newswire – 28 March 2024 – AIM Vaccine Co., Ltd. (the “Company”, together with its subsidiaries, the “Group”) is pleased to announce the results for the year ended 31 December 2023 (the “Period”).

As of December 31, 2023, AIM Vaccine has obtained a total of 14 clinical approvals and conducted 21 clinical trials. Among them, 5 vaccine varieties have reached the final stage of Phase III clinical trials. The construction of the production workshops for these 5 vaccine products in Phase III is have been substantially completed, and various preparations for market launch are currently underway. In 2024, the company plans to submit market applications for 3 products and initiate clinical applications for 7 other products.

During the reporting period, the full course of vaccination in Phase III clinical trial of 13-valent pneumonia conjugate vaccine (PCV13) was completed, and we have submitted the pre-application for marketing registration to the NMPA; the full course of vaccination in the subjects in Phase III clinical trial of 23-valent pneumonia polysaccharide vaccine (PPSV23) and iterative serum-free rabies vaccine was completed; EV71-CA16 bivalent HFMD vaccine (HDC) as a global innovative vaccine which is being developed for the first time worldwide has obtained clinical approvals; and iterative mRNA rabies vaccine is the first nonCOVID-19 mRNA vaccine candidate accepted by relevant authorities in China.

According to the announcement, AIM Vaccine has maintained a high level of investment in research and development, with R&D expenses reaching RMB 636.4 million in 2023. This represents a 27.2% increase compared to the same period in 2022. The proportion of R&D revenue stands at 53.6%, positioning the company at the forefront of the industry.

Integrating Industry’s Finest Resources | Abundant Vaccine Pipeline | Multiple Game-Changing Flagship Products Entering Harvest Season

AIM Vaccine is an extremely rare comprehensive vaccine industry group that possesses advantages in four dimensions: pipeline, research and development, production, and sales. Currently, the company has commercialized 8 vaccines targeting 6 disease areas and is developing 21 vaccine candidates. Its pipeline covers the top 10 vaccine varieties worldwide. Notably, the recombinant HBV vaccines and freeze-dried human rabies vaccines are our key commercialized market-leading vaccine products, making AIM Vaccine the largest hepatitis B vaccine manufacturer and the second-largest rabies vaccine manufacturer globally.

Among them, the recombinant hepatitis B vaccine is and is expected to continue as a major type of commercialized product for AIM Vaccine. Currently, AIM is the first and only company in China with steady production and approved lot release of HBV vaccines using Hansenula Polymorpha for antigen expression. Since its approval, recombinant HBV vaccine series products have maintained a 100% pass rate in lot release quality audits of NIFDC. With the shift from universal newborn vaccination to vaccination for the entire population, hepatitis B vaccination presents a new growth opportunity for the company.

The freeze-dried human rabies vaccine (Vero cell), known for its high quality and stability, remains a key competitive factor in the market. Since its commercialization in 2007, AIM’s production of the lyophilized human rabies vaccine (Vero cell) has maintained a 100% approval rate in batch release inspections by the NIFDC for the past 16 years.

Following the established corporate strategy of the Company, AIM Vaccine proactively advance the development of the vaccine pipelines and accelerate the research and development of iterative pneumonia series vaccines through on-going technological innovation, achieving new productive forces at an accelerated pace. Leveraging the advantages of the polysaccharide conjugate vaccine technology platform, AIM Vaccine have developed a series of pneumonia vaccines, including: (1) the 13-valent pneumonia conjugate vaccine, which has completed on-site work for Phase III clinical trial and has submitted a pre-application for marketing; (2) the 23-valent pneumonia polysaccharide vaccine, which has also completed Phase III clinical trial and is expected to apply for marketing registration in 2024; (3) the 20-valent pneumonia conjugate vaccine, which has submitted a preapplication for clinical trials; and (4) the 24-valent pneumonia conjugate vaccine, which is being simultaneously developed globally for the first time and has completed preclinical research.

In the layout of the rabies vaccine series, AIM is leading the deep technological iteration and upgrade of global rabies vaccines, aiming to provide the market with upgraded and advanced rabies vaccine products that offer better quality, higher safety, and require fewer doses for administration. This will further strengthen the company’s competitiveness in the rabies vaccine market. The on-site work of the Phase III clinical trial of iterative serum-free rabies vaccine has been completed, and various preparatory work for the new drug marketing application is underway, which is planned to be completed in 2024; The CTA for the novel-process highly-effective human diploid rabies vaccine is expected to be submitted in 2024; and the iterative mRNA rabies vaccine is the first non-COVID-19 mRNA vaccine candidate accepted by relevant authorities in China.

Accelerating Efficient Vaccine Development through a Comprehensive Technological Platform. Rapid Advancement in the Pipeline Layout of mRNA Technology Platform

AIM Vaccine have five proven human vaccine platform technologies covering innovative technologies, such as mRNA vaccine, genetically engineered vaccine, and combination vaccine technologies, as well as traditional technologies, such as bacterial vaccine and viral vaccine technologies. Leveraging these platforms, we are well positioned to develop a steady and fit-for-purpose stream of vaccines that are efficient to manufacture. We have at least one approved product or one vaccine candidate at CTA or clinical stages under each platform. At the same time, the Company is currently designing the structure of antigens and mRNA sequence of vaccines leveraging artificial intelligence, and is trying to leverage artificial intelligence to assist in process research and development of vaccines. Looking forward, the Company expects to increase the depth of existing applications and expand its applications in clinical trial data analysis.

Notably, AIM Vaccine’s mRNA technology platform has been validated through clinical trial data from tens of thousands of subjects. The safety and efficacy of platform products have been thoroughly demonstrated. AIM Vaccine has developed several mRNA COVID-19 vaccines that have undergone clinical trials, allowing for accelerated development and registration of products. Within this platform, AIM has developed the mRNA iterative rabies vaccine, which is the first non-COVID mRNA vaccine product accepted domestically in China. Two other highly anticipated products, the mRNA respiratory syncytial virus (RSV) vaccine and mRNA herpes zoster vaccine, are expected to complete clinical trial applications in 2024.

Additionally, AIM Vaccine have submitted pre-applications to the NMPA for clinical trials of the Company’s 20-valent pneumonia conjugate vaccine (PCV20), haemophilus influenzae type b (Hib) conjugate vaccine, adsorbed tetanus vaccine, quadrivalent influenza virus vaccine (MDCK Cells) and novel-process highly-effective human diploid rabies vaccine. AIM Vaccine has also submitted a preclinical trial application for its quadrivalent MDCK cell-based influenza vaccine, which is currently under development.

Future Outlook: Strengthening Monopoly Advantage and Expanding International Market for Global Vaccine Shortages.

In recent years, the vaccine industry in China has strengthened the monopoly advantage of vaccines in disease prevention, elevated the status of vaccines in the overall biomedical industry, and facilitated the industrialization of new technologies for biotechnology and the implementation of related policies, establishing a foundation for the long-term development of the vaccine industry. The significant increase in exports of vaccines has greatly boosted the confidence of Chinese pharmaceutical companies in their international expansion.

Furthermore, in order to accelerate the promotion of internationalized business, the Company specifically set up an international business department to push forward the implementation of series of internationalized layout, and is ready in all aspects such as overseas marketing permission, product research and development and manufacturing. The Company’s vaccine products are entering the global market.

At present, the Company has various specific overseas markets and has begun the registration of marketed products in regions such as Southeast Asia, Africa, South America and the Middle East. The Company’s rabies vaccine has obtained the registration licenses in countries such as Pakistan.

In terms of products under development, the Company has set up product pipelines with close reference to the needs of the international market. In accordance with the latest World Health Organization’s vaccine prequalification list (2024-2026), the Company is rapidly promoting the research and development of the 13-valent pneumonia conjugate vaccine and the tetravalent meningococcal conjugate vaccine, both being high-priority qualified vaccines. In addition, the Company is proactively researching and developing the RSV vaccine and the shingles/herpes zoster vaccine, both of which are also the varieties in short supply in the international market. The Company is making efforts to promote the marketing registration and sale of these products within and outside China, and to achieve the World Health Organization’s prequalification for the vaccines.

In terms of on-sale products, HAV vaccine, HBV vaccine and rabies vaccine launched by the Company are medium-priority qualified products by the Word Health Organization, all of which are welcomed in the international market.

In terms of production capacity construction, the Company has completed construction of GMP workshops for iterative pneumonia series vaccines and iterative rabies series vaccines in batches, and all of these workshops meet the international standards. Phase III clinical samples of 13-valent pneumonia conjugate vaccine and 23-valent pneumonia polysaccharide vaccine are produced in these workshops, helping the Company get fully ready for the quick entry into the overseas market of such products upon marketing.

With the increase in China’s economic strength, the biopharmaceutical industry, including the vaccine sector, has been identified as a strategic emerging industry and is encouraged and supported by the national government. Therefore, AIM Vaccine has entered a period of intense application for major upgraded products in 2024. Three significant products are expected to complete the application process and be launched within the year, which is projected to drive substantial revenue growth for the company.
Hashtag: #AIMVaccine

The issuer is solely responsible for the content of this announcement.

About AIM Vaccine Co., Ltd.

AIM Vaccine (stock code: 06660) is committed to manufacturing conscientious vaccines and promoting the health of the people. It is the second-largest vaccine group in China and the largest private-sector vaccine group, with a complete industry chain. AIM Vaccine is a leading company in the Chinese vaccine industry and one of the top players in the mRNA vaccine field. As one of the most strictly regulated industries in the country, China has over 40 vaccine production qualifications nationwide. Currently, AIM Vaccine owns four wholly-owned licensed vaccine production companies and three vaccine research institutes. It is one of the only two human vaccine companies in China with strategic resources such as P3 laboratories. AIM Vaccine is also the world’s largest manufacturer of hepatitis B vaccines and the second-largest manufacturer of rabies vaccines globally.

AIM Vaccine has a portfolio of eight commercialized vaccines and 21 vaccines under development, covering the top ten vaccine varieties globally. Its commercialized products have maintained a leading market position for a long time, with sales covering all 31 provinces, municipalities, and autonomous regions in China, reaching over 2,000 district and county-level disease control centers.

The article AIM Vaccine Announces 2023 Annual Results appeared first on Arabian Post.

The article CK Life Sciences Presenting Preclinical Data for Its Investigational Dual-Antigen Cancer Vaccines, Co-targeting PRAME and PD-L1, at the 2023 Society for Immunotherapy of Cancer (SITC) Annual Meeting appeared first on Arabian Post.

The article Lever Style Keeps Up the Momentum with Sixth Acquisition Since IPO and Continued Outperformance in the Apparel Supply Chain Sector appeared first on Arabian Post.

The article MIPIM Asia 2022 Awards reveals winners of top real estate sector accolades appeared first on Arabian Post.

• The World Economic Forum announced its selection of the 100 most promising Technology Pioneers of 2022 – companies that tackle issues from sustainability and climate change to healthcare and more.
• This year’s cohort includes representation from 30 economies on six continents with a reach far beyond traditional tech hubs like Silicon Valley.
• YesHeath Group, pioneer of Gelponic Vertical Farms, made it to the selection for its contributions in healthy and sustainable food production.
• The full list of Technology Pioneers can be viewed here.

TAIPEI, TAIWAN – Media OutReach – 10 May 2022 – YesHealth Group, a Taiwan-based green tech company and pioneer of Gelponic Vertical Farms, was selected among hundreds of candidates as one of the World Economic Forum’s “Technology Pioneers”. YesHealth Group was founded on the vision of inspiring the next generation of agriculture professionals to advance societal health and sustainability worldwide, through indoor vertical farming.

The World Economic Forum’s Technology Pioneers are early to growth-stage companies from around the world that are involved in the use of new technologies and innovations that are poised to have a significant impact on business and society.

With their selection as Technology Pioneer, Chief Commercial Officer of YesHealth Group, Jesper Hansen, will be invited to participate at World Economic Forum activities, events, and discussions throughout the year. YesHealth Group will also contribute to Forum initiatives over the next two years, working with global leaders to help address key industry and societal issues.

“We’re excited to welcome [YesHealth Group] to our 2022 cohort of Technology Pioneers,” says Saemoon Yoon, Community Lead, Technology Pioneers, World Economic Forum. “[YesHealth Group] and its fellow pioneers are at the forefront of industries that are critical to solving some of our world’s most complex issues today. We look forward to their contribution to the World Economic Forum in its commitment to improving the state of the world.”

“On behalf of everyone at YesHealth Group, including our founder and CEO Winston Tsai, I would like to express how proud we are to be recognized as a technology pioneer by the World Economic Forum”, says Jesper Hansen, Chief Commercial Officer, YesHealth Group. “Right now, vertical farms everywhere face the same challenge – to deliver on their promises of sustainability and profit. This is no small feat and both promises must be delivered on, conclusively. YesHealth Group has already achieved this in Taiwan, and now we’re partnering with the next generation of agriculture professionals in Asia, Europe, MENA and North America to build Gelponic Vertical Farms in their regions.”

For the first time, over one-third of selected Technology Pioneer firms are led by women, well above the industry average. The firms also come from regions all around the world, creating a truly global community. This year’s cohort includes start-ups from 30 countries, with Vietnam, Rwanda and the Czech Republic represented for the first time.

The diversity of these companies extends to their innovations as well. This year’s Tech Pioneer firms are shaping the future by advancing technologies such as AI, IoT, robotics, blockchain, biotechnology and many more. The full list of Technology Pioneers can be found here.

Technology Pioneers have been selected based on the community’s selection criteria, which include innovation, impact and leadership as well as the company’s relevance with the World Economic Forum’s Platforms.

All info on this year’s Technology Pioneers can be found here: http://wef.ch/techpioneers22

More information on past winners, information on the community and the application link can be found here.

About YesHealth Group

YesHealth Group is a mission-driven company, pioneering clean technology for sustainable and pesticide-free vertical farming since 2008. (www.yeshealthgroup.com).

About World Economic Forum
The World Economic Forum, committed to improving the state of the world, is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business, and other leaders of society to shape global, regional and industry agendas. (www.weforum.org).

About the Technology Pioneers
The World Economic Forum believes that innovation is critical to the future well-being of society and to driving economic growth. Launched in 2000, the Technology Pioneer community is composed of early to growth-stage companies from around the world that are involved in the design, development and deployment of new technologies and innovations, and are poised to have a significant impact on business and society.

The World Economic Forum provides the Technology Pioneers community with a platform to engage with the public- and private-sector leaders and to contribute new solutions to overcome the current crisis and build future resiliency.

#YesHealthGroup

The issuer is solely responsible for the content of this announcement.

The article YesHealth Group Awarded as Technology Pioneer by World Economic Forum appeared first on Arabian Post.

SINGAPORE – Media OutReach – 8 February 2022 – Zwipe, a biometric fintech pioneer, conducted a comprehensive consumer investigation in Singapore during Q4 2021 to study 150+ consumers’ payment preferences and feedback on biometric payment cards. Consumers’ feedback on biometric payment cards was extremely positive, indicating a strong demand for biometric payment cards.

Below are some interesting facts from the survey:

• 88% of consumers would prefer their next payment card to be biometric
• 70% of consumers are ready to switch to a new bank for a safer way to pay
• 80% of consumers have concerns on the risk of infection when paying in-store and touching the POS

The survey’s findings are consistent with data available from other worldwide studies undertaken in the Nordics, Canada, USA, UK, Germany and South Africa. Consumers across the world, just as in Singapore, want a payment solution that delivers world-class security and user experience and ensures 100% touch-less check out at all times.

Zwipe: A biometric fintech pioneer

Founded in 2009 with the mission to make “convenience safe and secure” through the use of biometric technologies, Zwipe has today emerged as a pioneer in NxtGen payment solutions. The company believes that the inherent uniqueness of every person is the key to a safer future. Zwipe works across networks of international organizations, industries and cultures to bring biometric payment solutions globally.

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­Headquartered in Oslo, Norway, Zwipe’s growing team is represented by 14 different nationalities in nine countries across five time zones – from Colorado Springs to Singapore.

Strong demand for Biometric Payment Cards

According to Claus Hansen, Zwipe’s newly appointed VP of Sales for APAC, “The payments market in Singapore is mature and sophisticated, with banks and fintechs offering highly digital services for retail, e-commerce and mobile financial services. The more-traditional smart card segment is the area where Singaporean consumers are now expecting card issuers to step up. The Zwipe Pay platform, which includes a single silicon biometric system on the card, is a game-changer in the payments sector as it has dramatically reduced the unit costs and improved the biometric performance ensuring an excellent user experience.”

He further highlights, “Consumers value convenience, security, and safety when selecting and using a payment method. As such, Zwipe is well positioned to provide cutting-edge card-based solutions that enable our clients in APAC to respond to market demands, while also establishing ourselves as the strategic technology partner of choice.”

Hansen has worked in payment technologies, cybersecurity, fintech, and smart cards for over 25 years. In the APAC region, he has held senior executive management positions with Entrust, NXP Semiconductors, Gemalto, dzcard, and Kona I.

About Zwipe:

Zwipe believes the inherent uniqueness of every person is the key to a safer future. We work with great passion across networks of international organizations, industries and cultures to make convenience safe and secure. We are pioneering next-generation biometric card and wearables technology for payment and physical & logical access control and identification solutions. We promise our customers and partners deep insight and frictionless solutions, ensuring a seamless user experience with our innovative biometric products and services.

Founded and headquartered in Oslo, Norway our growing team is represented by 14 different nationalities in nine countries across five time zones – from Colorado Springs to Singapore.

The issuer is solely responsible for the content of this announcement.

The article Singapore is ready for Biometric Payment Cards appeared first on Arabian Post.

The article SunMirror AG: Sampling Results Moolyella Field Campaign Feb 2022 appeared first on Arabian Post.

By Ole S. Hansen

Since the U.S. election this Tuesday, nearly all assets including most commodities have enjoyed a strong surge. The everything up and U.S. dollar down narrative unfolded despite the prospect of at least two years of political gridlock in Washington preventing U.S. fiscal stimulus from flowing into a Covid-19 hit economy, while also putting the brakes on the reflation trade.

Commodities nevertheless rallied hard as it became increasingly apparent that Joe Biden was heading to the White House despite Trump’s unfounded claims about foul play. While equities surged higher in response to collapsing volatility, it was the weaker dollar that gave precious and industrial metals as well as other commodities a boost. Following the election, the Bloomberg Commodity Index has risen by 1.4% with strong gains seen in silver, platinum, gold and copper.

The agriculture sector led by soybeans, coffee and corn traded higher, thereby adding to the prospect of rising food costs. Chicago soybeans reached a four-year high with local prices in China hitting record levels on supply shortages. Dry weather conditions in key production regions from the Black Sea area to South America and the U.S. Midwest together with strong demand from China and now the weaker dollar have all helped drive prices of key crops higher in recent weeks.

The UN FAO published its monthly Global Food Price index for October and it showed a continuation of the upward trend. While showing a year-on-year rise of 6%, the month-on-month 3.1% increase was driven by much firmer prices of sugar, dairy, cereals and vegetable oils with only meat prices showing a small drop.

Precious and industrial metals jumped as the dollar slumped to a two-and-a-half year low with gold breaking above previous resistance at $1930/oz and together with copper recording the biggest weekly gain since July. Silver, meanwhile, was the star performer with the price rallying close to 6% since Tuesday. With the gold-silver ratio breaking lower at the same time, silver could potentially be in for a period of outperformance with the ratio potentially heading back towards 70 (ounces of silver to one ounce of gold).

Combined with the weaker dollar, bond yields also softened as the risk of reflation faded with the divided U.S. Government. While the Fed kept its stimulus steady at its meeting this past week, they also said that more fiscal and monetary support may be needed. The market is now speculating that with Biden unable to spend money given resistance from a Republican controlled Senate, the Fed may have to step up and fill the gap soon. Hence the strong rally in precious metals, but also the stock market where TINA (There Is No Alternative) has been given renewed focus.

Gold may now take aim at our end of year target at $2000/oz, but in order to do so the metal needs to stay above the $1920 to $1930 area of support.

Energy: After hitting a five-month low at the beginning of the week on Covid-19 worries and rising production from Libya, crude oil made an abrupt turnaround in response to a big drop in U.S. crude oil stocks together with increased speculation that OPEC+ will step in to support the price. The rally, however, began to deflate once the attention turned from the U.S. election and back to the coronavirus pandemic, with record high case counts being recorded in both Europe and the U.S.

Overall, Brent crude remains stuck in a wide downtrend, currently with resistance at $42/b and support at $35.50/b. As we have said before, the only proper cure for crude oil at these relatively low levels are the removal of the virus threat through the discovery of a vaccine that can be rolled out globally. Only then can and will the market start to ponder how much the lack of investment in new discoveries will help boost the price over the coming years. For now, global demand remains challenged and by how much we should find out next week when monthly oil market reports will be published by the EIA on Tuesday, OPEC on Wednesday and the IEA on Thursday.

The article Metals-led commodity rally on US dollar slump appeared first on Arabian Post.

Ole Hansen

With turmoil on every side, gold has re-emerged as a preferred safe haven with further upside. Meanwhile, prospects for a further recovery in oil seem limited by signs of slowing global growth.

The direction of commodities in the early part of 2019 will continue to be influenced by decisions taken in Washington and by central banks last year. The economic fallout from US president Donald Trump’s trade war with China is beginning to be felt. Quantitative tightening by the US Federal Reserve and an end to quantitative easing by the European Central Bank have begun to remove some of the liquidity a heavily indebted world needs to support demand for riskier assets.

Gold, which recorded its best month in two years in December, has re-emerged as a safe haven amid the turmoil elsewhere. A drop in US 10-year bond yields to a near one-year low, reduced expectations for further rate hikes, a dollar that has stopped rising and, not least, the turmoil in global stocks have all supported renewed demand for gold as well as silver, given its historical cheapness to gold.

While a trade deal between the US and China could help counteract the current risk aversion, the end-of-cycle market dynamics and the risk of recession combined with the continued unwinding of a decade-long sugar rush of central banks’ liquidity injections will create formidable headwinds throughout the year. In this environment, we see upside to precious metals, pockets of opportunity in industrial metals and limited upside to oil as supply outstrips demand through most of the year.

Depressed prices across several key commodities and tightening fundamentals in others may still attract some buyers. In addition, support could emerge in response to a weaker US dollar, China stepping up its efforts to support its economy and, not least, the potential policy panic from central banks mentioned by Steen Jakobsen in his introduction.

Gold and silver

As the aforementioned themes roll over into 2019, we expect to see continued demand for gold as investors once again seek tail-end protection against increased volatility and uncertainty across other asset classes. Hedge funds only turned long gold in early December after having traded it from the short side for six months. This pickup in demand together with a continued accumulation from long-term investors through exchange-traded funds should provide enough support for gold to break higher towards the key area of resistance between $1,360 and $1,375/oz where consecutive highs were set between 2016 and 2018.

A friendly investment environment for precious metals should see silver, despite its link to industrial metals, regain some of its lost ground against gold. From an historically cheap level above 80, the gold-silver ratio, which measures the value of gold in ounces of silver, could turn lower towards the five-year average at 74, a 10% outperformance. Based on this assumption, we forecast an end-of-year price for gold at $1,350/oz and silver at $18/oz.

We would categorise the gold forecast as being relatively conservative. Please note that a break above $1,375/oz, the 2016 high, could signal additional strength towards $1,480/oz, the halfway mark of the 2011 to 2015 sell-off.

Crude oil

Forecasting a price level, let alone the direction, of crude oil has not been getting any easier after a brutal end to 2018. The risk of a spike to $100/barrel at the beginning of October was followed by a collapse in Brent crude oil to $50/b just before year-end.

The moving parts in crude oil are many, both on the supply and the demand sides. Adding to this an increased degree of political interference, courtesy of President Trump and others, and it is no wonder that uncertainty is elevated as 2019 begins. Oil producers can support the price by cutting supply but, with global growth being called into question, they have been left struggling to respond to the recent collapse.

It is, however, our view that crude oil will recover further than what has already been achieved in early January. On the demand side, the market is already pricing in a sharp deterioration in global growth, and this has created the ”risk” of a positive surprise.

The Opec+ accord to cut production by 1.2 million barrels/day from January and six months forward will help stabilise the market. Additional support could be provided by the US signalling its unwillingness to extend further the waivers that back in November allowed eight countries to keep buying oil from Iran.

US production, meanwhile, remains a key point of interest as it was last year’s production surge together with the aforementioned waivers that helped reverse the bullish sentiment in the market. US shale oil production growth is likely to slow following the price slump but if the 2014 to 2016 selloff is anything to go by, it could take somewhere between three and six months before the impact becomes visible in the data, which for now, despite having stabilised into year-end, continue to show year-on-year growth close to 2 million b/d.

During the first quarter, we see WTI crude oil averaging just above $50/b as it settles into a $45/b to $55/b range while awaiting further developments on the trade front, weekly US rig count as a future guide to production and the ability of Opec+ to deliver the agreed production cut. Brent crude is likely to have already found a bottom at the key $50/b psychological and technical level, and we see it average $60/b as it settles into a $55/b to $65/b range.

Copper

After the initial selloff when the trade war erupted last June, copper spent the rest of the year within a range while taking a whole host of market-unfriendly news on the chin. Although fundamentals have started to improve, as seen in available stocks and the outlook for tightening supply, the headline risks associated with trade wars and weaker economic data have kept it locked.

An eventual de-escalation of the US-China trade war and further Chinese policy easing combined with a relatively tight supply outlook should, in our view, provide the support copper needs to yield a positive return in 2019. From its current level around $2.65/lb, we see high-grade copper during the first half of 2019 making a return to $3/lb, the equivalent of $6,600/tonne for LME Copper.

Needless to say, the biggest risk to this assumption remains the recessionary risks that could affect both housing activity and car sales. The Chinese car market suffered its steepest monthly decline in six years last month, resulting in the first annual decline in three decades.

(Writer is Head of Commodity Strategy at Saxo Bank)

The article Gold regains safe haven status appeared first on Arabian Post.

In a week that started with big oil and US shale producers trumpeting their ability to thrive in a world of $50 a barrel crude, the market had a very quick response: let’s see if you can do it at $45.

A brutal sell-off across commodity markets this week has quickly taken the shine off strong first-quarter results that would otherwise have been viewed as a triumph for the oil industry’s ability to adapt to lower prices.

Instead, the industry is staring at the threat posed by the latest price drop and questioning whether another leg lower beckons.

Opec and other big producers bailed out the market with supply cuts in the first quarter of 2017, allowing crude to recover above $50 a barrel and stoking hopes of a brighter future, not least among funds that placed record bets on oil’s recovery.

But persistently high oil stockpiles and growing evidence of the industry’s ability to keep pumping at relatively low prices has eroded confidence in a sustained rebound.

The pressure on oil comes when commodities from iron ore to copper have also slumped as investors fret about demand in China, where policymakers are attempting to tackle a huge credit bubble. The spot Bloomberg Commodity index, a basket of 22 futures contracts, fell to a five-month low on Friday as anxiety grows over China, the world’s biggest importer of raw materials.

While Opec is expected to extend supply cuts when it meets this month, there appears, at this point, to be little appetite or ability to do more. The last agreement took months of shuttle diplomacy to piece together, and members’ cohesiveness will not be helped by the drop in prices.

“Today, Saudi Arabia and many other Opec countries have lower oil revenues than a year ago,” says Olivier Jakob, analyst at Petromatrix in Zug, Switzerland, arguing they have cut volume for little price benefit.

“If oil prices do not quickly rebound there is a risk to see the start of a blame game.”

Goldman Sachs noted on Friday that while it still believes prices will recover in the second half of this year, with most forecasts still pointing to a slow drawdown in oil inventories, there was a danger oil is nearing “capitulation”.

Crude contracts for delivery several years in the future have also weakened sharply this week, with fewer investors willing to bet on future supply shortages now that shale producers have demonstrated they can raise output at lower prices.

“The most noteworthy move in oil prices over the past week and past year in our view remains the steady decline in long-term oil prices,” say Goldman analysts.

Brent for delivery in December 2020 dropped to just above $50 a barrel on Friday morning from above $60 a barrel just seven months ago. Energy is now the worst-performing sector on the S&P 500 in 2017 having been the biggest winner last year.

The sell-off in oil and other key commodities has also coincided with recent weak manufacturing surveys in China. Over the week, copper fell 4 per cent to $5,555 a tonne, nickel 5 per cent to $9,000 and iron ore — a key ingredient in steelmaking — 12 per cent to below $60 a tonne for the first time in six months.

China’s central bank has been draining cash from its banking system as part of an effort to tame financial risks by squeezing liquidity. The impact of tighter credit conditions is already starting to be felt with Chinese companies cancelling bond and short debt issuance.

“Chinese economic data, while not yet bearish, is in danger of topping,” note analysts at Barclays. “The collapse in steel prices that preceded the copper and iron ore sell-off was an early sign that the metals sectors of the Chinese economy were showing signs of a slowdown.”

The same hedge funds that had been betting on a recovery in oil might now hold clues to how big the sell-off could become. Earlier this year they had amassed a record net position of almost 1bn barrels of crude, which has been getting unwound.

“As we have entered a capitulation phase it is not the price but the size of the position held by those needing to reduce that will determine where we go from here,” says Ole Hansen at Saxo Bank, adding some funds may be tempted to buy back in.

“Two high-volume days are likely to have created a bigger balance between long and short positions.”

Late on Friday crude started to rebound, with Brent up 2 per cent on the day to $49.33 a barrel — a near $3 rally off its low of $46.64 a barrel hit earlier in the session.

Fidelity’s Kevin O’Nolan, who invests directly in crude oil as part of his management of nearly $600m in the company’s Multi Asset Allocator range of funds, argued that the extent of the sell-off was perhaps over done.

“There’s been a loss of patience in the rebalancing of the market then some technical elements laid on top of that,” Mr O’Nolan said.

“You’re about to come into a more seasonally positive period for oil demand and Opec production is down by more than the rebound in US production. These kind of prices are just not enough to sustain investment in the longer-term.”

Opec, analysts say, may still need to ride the latest drop and maintain the cartel’s commitment to supply management if it is to have any chance of the price edging back up.

“After the recent disappointments market participants are likely to require more than a few soothing comments,” say analysts at JBC Energy. “In other words, hard facts in terms of more meaningful stockdraws would be needed.”

With reporting by Anjli Raval and Henry Sanderson

Source link

The article Oil’s tumble tests hard-fought recovery at energy groups appeared first on Arabian Post.

Source link

The article Oil rises as US crude stocks retreat for third week appeared first on Arabian Post.

-Reuters

The article Germany's SPD endorses Schulz as leader and Merkel challenger appeared first on Arabian Post.

Via FT

The article Diamond joins Qataris to launch Panmure Gordon bid appeared first on Arabian Post.

Oil prices have fallen almost 10 per cent in the past week to their lowest level since Opec agreed to cut output in November.

Here are five factors contributing to the renewed bout of selling that could dictate whether Brent crude can hold above $50 a barrel.

1. Shale

The US shale industry has come back with a bang, with oil prices back above $50 a barrel. After two years of contraction, the US Energy Information Administration sees output rising 300,000 barrels a day to 9.2m b/d in 2017 before adding a further 500,000 b/d next year.

Those are already big numbers but only tell half the story. The industry has squeezed down costs during the two-year downturn and executives are talking up efficiency and production gains that lead many to forecast an even bigger rebound.

The speed of shale’s recovery is a reminder that the industry has to adapt to a big structural shift rather than just a short-term glut. Oil companies are directing spending towards the most productive plays such as the Permian Basin in Texas. Drilling rigs in the US are at the highest level in 18 months. Other producers, such as those focused on Canadian tar sands, have also squeezed down costs.

“Given the constant improvement in Permian production-type curves and strength in Canadian production of late, it would not be entirely inconceivable to see combined US and Canadian output rising by 1m b/d in 2017,” analysts at Energy Aspects said this week.

2. Opec

Stronger than expected North American production poses a serious threat to Opec. The 13-member cartel successfully boosted prices after they agreed supply cuts late last year, bringing other big producers from outside the group — such as Russia — onboard.

But after the initial rally in December prices flatlined above $50 a barrel for the first two months of 2017, despite signs the group was collectively coming close to its output target. The group faces a difficult decision when it next meets on May 25.

It could roll over the existing cuts, which many analysts believe will see inventories finally start to draw down in the second half of the year.

It could agree to cut deeper to give the price a further boost, but knowing it would almost certainly give up more market share to other producing countries.

Or it could abandon attempts to manage the market and revert to an all-out price war — a strategy the group only fully embraced during 2015 before the pain of low prices became too much for their oil-dependent economies to accept.

The first option may be most likely — unless cohesion among participating countries starts to unravel should the current price drop endure. Saudi Arabia, the world’s biggest exporter, has been consistent in saying it will not do all the heavy lifting on its own.

The kingdom rushed out a statement late on Tuesday saying it remains committed to the cuts and “stabilising the global oil market” with its partners, as Brent slipped towards $50 a barrel.

Russia, the largest crude exporter outside Opec, has however been lukewarm so far to the possibility of further action given the recovery in shale. Moscow said on Tuesday it was “too early” to decide, saying higher prices meant shale producers “are putting pressure on the oil market”.

3. Inventories

The biggest short-term problem for Opec is that US inventories keep on rising. The sell-off really got going last week after the EIA reported crude stocks had gone up for the ninth consecutive week to an all-time high of more than 528m barrels.

While some analysts argue stocks are tightening elsewhere in the world, the US has by far the best — and most timely — data, giving it an outsized influence over the market. The US also remains the world’s biggest oil consumer, making it the key battleground between shale and Opec.

4. Hedge funds

Investors had lined up to back Opec’s cuts, amassing the biggest ever bet on rising prices in the first two months of this year. Across Brent and US benchmark West Texas Intermediate their net long position — the difference between bets on rising and falling prices — had reached 951m barrels, or the equivalent of 10 days of oil demand, by February 21.

But oil’s failure to break higher in 2017 meant that position was getting more expensive to defend. Traders say it is not surprising funds have started to scale back their position — a move that probably accelerated after Wednesday’s drop.

“We saw a situation that speculative traders held almost 12 lots of longs per short,” said Ole Hansen, analyst at Saxo Bank. “Such a scenario reduces traders’ ability to provide a solid bid into a falling market with the majority being sellers.”

5. Demand

If the supply picture has many moving parts, demand should be easier to track, and may provide some comfort to Opec. The group raised its estimates and predicts growth at almost 1.3m b/d to average 96.3m b/d in 2017.

While the rise of electric cars has led some big players in the industry to warn of peak oil demand in the near future, others are far more sceptical.

Analysts at Morgan Stanley point out that the conventional global car fleet is increasing by 40m a year, net of scrapping. That alone should account for about 600,000 b/d of growth, or half the 10-year average. Higher use in planes, freight and petrochemicals will also boost consumption.

“Oil is a mature energy source and efficiency is improving,” said Martijn Rats at Morgan Stanley. “But ‘peak demand’ is still some time off.”

Source link

The article Five things to watch as oil prices fall appeared first on Arabian Post.

-Reuters

The article Schulz vows to shake up German elections with fight for more equality appeared first on Arabian Post.

Source link

The article Oil market’s fireworks fade in first week of 2017 appeared first on Arabian Post.

Last week ‘Dear Evan Hansen’ became the seventh new Broadway show of 2016 to pull in more than $1m at the box office in a single week, at the end of a year in which New York’s theatre takings have so far been roughly flat at $1.34bn.

Rising ticket prices and better models for variable pricing have made it easier for productions to hit seven figure weekly grosses. But even as Broadway’s “million-dollar club” becomes less exclusive, producers say the number is not losing its significance as an indicator of a show’s success and potential.

Unsurprisingly, because of increasing ticket prices and inflation, the number of shows grossing a million each year are on the rise. Between 1984 and 2000, only six shows joined the club; this year alone, seven shows have done so.

“The million dollar is a magic number, particularly for a new show,” said Elliott Masie, a Broadway producer who is involved in the musical ‘Natasha, Pierre & The Great Comet of 1812,’ which last month passed the $1m mark in its second week.

Membership of the club is often a leading indicator of longevity on the Great White Way and a sign to investors that a show may have a better guarantee of a profitable life after Broadway. At least 52 per cent of shows that grossed over $1m in at least one week have followed up a Broadway run with a national tour. Only 8 per cent did the same for shows that never grossed over $1m.

While the number of shows in the club has been rising and the biggest hits, like ‘Hamilton’, ‘Wicked’ and ‘The Lion King’, are breaking $2m or even $3m, the seven-figure milestone has not lost significance among producers. Broadway producer Ken Davenport calls it more of an “emotional” marker. “$1m will always be $1m,” he says: “There’s something about that number. For a while, it’ll be a very nice target.”

In recent years, better models for variable ticket pricing — pricing on demand — have helped shows hit that target more often. “Costs [of producing a show] are so much more now, so variable pricing is a counteractive measure,” Mr Davenport said.

The Broadway League, the trade association for the theatre industry, releases weekly grosses for every show and conducts industry-wide surveys to help producers better model their potential audiences and demand.

“I would say that the basic information hasn’t changed [over time], but I think we do go deeper into the information with various tools that technology has given us over the last few years,” said Charlotte St. Martin, president of the Broadway League.

That deeper insight is helping the industry understand its current audience and pull in new ticket buyers. “What are the demographics of who are attending? That’s where you have to go beyond the gross number of a million,” Mr Masie said.

These models have made it possible for shows in smaller theatres to make seven figure grosses. Apart from popularity and demand, grosses are closely linked to the size of a theatre — a show in a small theatre is limited by its number of seats, so its potential gross will be lower than a show in a larger theatre. “Ten years ago, it wouldn’t have been possible,” Mr Davenport said.

‘Dear Evan Hansen’ is one such beneficiary — the show is playing at the Music Box Theatre, one of ten theatres on Broadway with under 1,000 seats. It is capitalised at $9.5m and has a relatively small cast and orchestra.

If it continue on its current form, it could join the exclusive club of 39 shows that have sustained an average weekly gross of more than $1m over their entire run. Helped by positive reviews, the show has been over capacity since it opened and has already racked up more than $10m in advanced sales.

Via FT

The article More crowded $1m Broadway club retains its cachet appeared first on Arabian Post.

Source link

The article Strong dollar and rising rates take toll on gold appeared first on Arabian Post.

Source link

The article 10 things to do today: Attend the Festive market at Beach Rotana Abu Dhabi, see Bad Santa 2, and more appeared first on Arabian Post.

Here are the big questions we are asking at FT Markets into the week when the calendar flips over into December.

Will Opec deliver a meaningful production cut?

All eyes are on Vienna and Opec’s annual gathering with a keenly awaited decision on production levels. An Opec deal on Wednesday that delivers a concrete supply reduction of at least 1m barrels a day, with non-members such as Russia on board could boost oil beyond its recent $40-$50 range.

While traders pushed Brent towards $50 a barrel earlier last week, news on Friday that Saudi Arabia would not attend a meeting with Russia and Kazakhstan on Monday, prompted a pullback in the crude benchmark below $48.

The price action underscores the high stakes for oil traders should Opec stumble in trying to distribute a production cut among members before ministers convene their meeting. A sticking point appears to be Iran, recovering after years under western sanctions, and which believes it should be treated as a special case without any output restraints.

‘’A successful solution is likely to see oil move above $50 a barrel while a weak deal could see oil return below $45,’’ says Ole Hansen, head of commodity strategy at Saxo Bank. However, that’s guarantee volatility will ease for crude he warns.

‘’Complying to agreed production limits has historical been a major challenge for Opec and the market is likely, once the initial rally has run its course, to adopt a wait-and-see approach while we wait for signs that the agreed cuts are being implemented.’’

Can a grand slam US equity market set fresh records?

Wall Street begins a new week after Thanksgiving, in a bullish frame, led by small-caps. Not surprisingly flow data last week showed more money leaving bonds and heading for shares. Equity bulls clearly like the prospect of a fiscal shot in the arm for the economy and a lower US tax rate boosting earnings in 2017. Hence an array of records being set with all four main US equity indices climbing into uncharted territory last week as investors for now ignore the prospect of corporate margins being eroded by higher wages and interest rates.

Mike Bell, global market strategist at JPMorgan Asset Management, says: “An improving growth outlook in the US but with potential political risks to trade argue for both US and international investors to favour US domestic focused equities which benefit from rate rises, such as financials.”

Andrew Milligan, head of global strategy at Standard Life Investments, says equities have scope to rally further so long as Trump focuses on his domestic agenda for boosting the US economy and does not recycle his campaign rhetoric about trade and immigration, topics that have the potential to rattle investors. ‘’A steady trickle of positive domestic news is good for US equities.’’

He adds that the prospect of rising wages as the economy strengthens may well squeeze corporate margins, especially for smaller companies. However there is a case for a virtuous cycle whereby higher wages spur greater spending and productivity rises as Capex is boosted.

Can the euro and yen hold the line against the dollar?

A dominant US dollar, supported by rising expectations for a more active policy response from the Federal Reserve in 2017, has registered far and wide across global foreign exchange. Among the majors, the euro has slid 4 per cent from $1.10 to $1.05 since the US presidential contest triggered a sell-off in bonds and propelled US equities into record territory. The yen has slumped more than 7 per cent from ¥105 towards ¥114 over the period.

While the dollar cooled its heels towards the of last week, the monthly US jobs report due on Friday could spur another strong run for the global reserve currency. Having priced in a Fed rate tightening next month, markets also expect a robust jobs number for November after a gain of 161,000 in October.

Marc Chandler at Brown Brothers Harriman says the forces that have driven the dollar higher remain. ‘’One of the most important of these drivers has been the increase in US interest rates.’’ With a two-year Treasury yield of 1.16 per cent, the highest level seen for the policy sensitive benchmark since April 2010, it’s tough to bet against the dollar.

Does an ETF steamroller crush gold bugs?

Back in July all was well in the gold market with the price topping $1,375 an ounce as investors pumped money into exchange traded funds such as GLD. A stronger dollar and rising bond yields since the US election have triggered a big reversal in sentiment for gold, with the potential for a much bigger slide. Gold has dropped below $1,200 a troy ounce for the first time since February as ETF outflows have risen to their highest level since July 2015. As holdings in the funds become unprofitable at current prices, analysts warn the market could see further liquidation as analysts estimate 100-200 tonnes of gold has been bought above current levels. For gold bugs, memories of a year-to-date gain of 30 per cent back in July are fading fast. Gold remains up 11 per cent for 2016.

Source link

The article Opec oil deal dominates market tone for the week appeared first on Arabian Post.

A declining gold market faces a major challenge as a $3.8bn outflow from exchange traded funds over the past 10 days is seen intensifying the liquidation of holdings by investors.

Gold has dropped below $1,200 a troy ounce for the first time since February as ETF outflows have risen to their highest level since July 2015.

A stronger dollar, higher US yields and a rallying stock market since the election of Donald Trump has made gold less attractive. The precious metal has fallen 7 per cent since the election earlier this month as traders have also cut their net holdings or longs on the Comex futures markets in New York.

“There’s been a very material correction in US interest rates, which is the main driver of the gold price at the moment,” said Atanas Djumaliev, head of commodities at Russia’s VTB. “A lot speculative positions are being unwound and net shorts in gold are increasing.”

The dominant role played by ETFs across markets was demonstrated for much of this year, as more than $60bn of inflows helped propel the gold price to $1,366.38 an ounce, a gain of 30 per cent for the year up to July.

As holdings in the funds become unprofitable at current prices, analysts warn of greater turmoil for the gold market. The amount held in gold ETFs fell 13.7 tonnes by Tuesday, putting total holdings at a five-month low of about 1,900 tonnes, according to Commerzbank.

“Investors are likely to liquidate more ETFs as the investment case for gold at the moment is not attractive — that makes gold prices quite vulnerable,” Georgette Boele, an analyst at ABN Amro, said. That could drive gold back down to $1,100 from the current price of $1,186 a troy ounce, she said.

With the potential of between 100 and 200 tonnes of gold having been bought above current levels, the risk of further liquidation “remains high”, according to Ole Hansen, head of commodity strategy at Saxo Bank.

Options on gold are also pointing to lower prices with buying this week of put options, which give the holder the right to sell at a specified price, at prices as low as $1,100 and $1,050, according to David Govett, head of precious metals at broker Marex Spectron.

The world’s largest gold-backed ETF, the SPDR Gold Shares, has seen 1.9m ounces of gold outflows since Trump’s election taking total holdings to $34bn, down from $43bn in July. Investors bought a total of $64.5bn in gold-backed ETFs this year as of the end of the third quarter, according to the World Gold Council.

Still, analysts at Société Générale, who lowered their gold forecast to $1,260 a troy ounce this year, said they were “cautiously bullish” due to political uncertainty in Europe, with upcoming elections in France, the Netherlands and Italy.

“While perceived higher uncertainty strengthens the case for holding gold as a diversifier and hedge, possible changes in fiscal policy could push real rates higher, offsetting safe-haven demand and creating downside risks for gold,” Robin Bhar, an analyst at Société Générale, said. “All-in-all, gold prices are at the mercy of risk appetite.”

Source link

The article Gold bugs face steamroller from fund outflows appeared first on Arabian Post.

Source link

The article Sweden's Henrik Stenson tops European Tour's money list appeared first on Arabian Post.

While the more than 5 meter long Greenland shark is one of the world’s largest sharks, it is also one of the least understood animals on our planet. The Greenland shark’s general biology and way of life have been a mystery to biologists for many years. However, marine biologists at the University of Copenhagen have now deployed an epoch-making method to unveil one of the greatest of the mysteries surrounding this enigmatic shark — and have come to an amazing revelation: with a life expectancy of at least 272 years, the Greenland shark has the longest life expectancy of all vertebrate animals known to science.

Let’s block ads! (Why?)

(via WSJ Blogs)

The article Greenland sharks live for hundreds of years appeared first on Arabian Post.

Some softness, however, has crept in during the past few weeks with some sectors, most notably energy, pausing after rallies in oil and natural gas ran out of steam.

Industrial metals found support from increased expectations that additional stimulus could be provided by central banks and from signs that China’s economy stabilised during the second quarter. Copper led the charge but data showed that the bulk of the rally was largely due to short-covering with traders hesitant about getting aggressively long.

 Heated cotton and strong coffee

Strong gains for coffee and cotton were the main drivers behind the strong performance in the soft sector. Cotton was boosted by the USDA’s downgrade of world inventories to a five-year low and was also helped by ongoing weather worries in the US cotton-growing regions. Coffee prices hit a 16-month high on adverse weather-related supply reductions of both Robusta and Arabica beans from key producing regions in Vietnam and South America. Additional support has come from a trucking strike in Columbia which could see July shipments slump by 50%.

Crude oil, which peaked some five weeks ago after almost doubling from the lows at the beginning of the year, traded close to unchanged on the week. In between, however, the market was left yo-yoing with the tug of war between the short-term and long-term outlooks creating some volatility. This is not helped by the fact that we are entering the peak summer holiday season where liquidity often comes at a premium  with dealing desks increasingly being left deserted.

Precious metals are taking a breather with gold trading lower for the first time in seven weeks. The run up to and the immediate aftermath of the Brexit vote triggered a strong surge in demand for precious metals and some of the drivers behind that move are now fading after some healthy consolidation has taken over.

Oil tug of war keeping it range-bound

Crude oil has been settling into a wide range since hitting a peak on June 9. The rebalancing process which was given additional support from multiple supply disruptions during May has since slowed. Currently, the market is caught in a tug of war between weak short-term and supportive long-term fundamentals.

The International Energy Agency highlighted these opposing forces in their latest monthly report. While seeing the market balancing they prompted concern that very high oil stocks could pose a threat to the recent stability. On the rising stock of products they said: “Although stocks are close to topping out, they are at such elevated levels, especially for products for which demand growth is slackening, that they remain a major dampener on oil prices.” 

US inventories of gasoline and diesel remain stubbornly high. Similar developments have been seen across the world, especially in Europe and now also in Asia. While importing less crude oil in June, China increased exports of refined petroleum by 10% to the second highest level on record.

Demand needs to remain strong in order to reduce the overhang of product stocks. Any negative surprise on demand could trigger a deeper than expected price correction over the coming months. 

However, the long-term fundamentals remain very price supportive as there is no doubt that the investment gap currently building up in the oil industry would worsen should crude remain below $50/barrel for a longer period. The longer it takes to reduce the overhang of supply the bigger the risk of a sharp move higher when that time comes.

Before reaching a peak at $51.6/barrel on June 9, hedge funds had already been active sellers of WTI (and Brent) crude oil since April. Following the Brexit vote, the reduction gathered pace and during the two weeks up until July 5 the combined net-long of WTI and Brent crude was cut by almost 100,000 lots. The increased short-based has made the market more prone to sharp recovery moves on the assumption that short sellers are much more short-term focused and more risk averse than those holding long positions.

Crude oil remains range-bound with the short-term risk skewed to the downside. A break below $44.50 could see WTI targeting support at $42.50 but a return to $40 and below we view as unfounded as weaker prices will be met by demand from longer-term investors.

A seven-week precious metals rally has come to a halt with gold and silver both correction lower. The fading Brexit risk and a stronger than expected US jobs report for June helped send stocks and bond yields higher. After creating a double top at $1,375/oz these developments, although somewhat offset by a weaker dollar, helped trigger a healthy consolidation in gold following the surge of recent weeks.

Hedge funds are likely to be have been the main sellers just like we saw back in May when a then record long was reduced by one third. During the following five weeks they once again became agressive buyers. The net-long reached 287,000 lots in the week to July 5, some 53,000 lots above the level from where reductions were seen back in May.

So far the retracement has been relatively shallow with gold having found some initial support at $1,328/oz, the 38.2% retracement of the post Brexit rally. Main support however is somewhat lower towards $1300 a break through which could trigger further weakness to $1275/oz.

The rapid and continued increase in demand for exchange-traded products backed by gold also came to a halt with total holdings falling by 6 tonnes. This, however, pales against the 132 tonnes increase of the previous four weeks.

The lack of accelerating profit-taking given the extensive increase of long positions since May is a sign that underlying demand for gold remains strong. A bigger correction than what we have seen so far will be required to shake investors out of their current bullish conviction.

We are entering the US earnings season and while traders look at equities as the new bonds in terms of chasing yield (dividend), we remain lukewarm on the sustainability of the recent equity rally. On the basis that bond yields will remain depressed for the foreseeable future we see no reason to change our bullish view on gold. Following a period of consolidation we still see gold meeting our target of $1,400/oz.

Note: This is the latest Weekly Commodity Update (WCU) by Ole S. Hansen, Head of Commodity Strategy at Saxo Bank.

Photo Caption: Ole S. Hansen, Head of Commodity Strategy / Saxo Bank

Click here to read the original article on Saxo’s www.tradingfloor.com.

This entry passed through the Full-Text RSS service – if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers.
Recommended article from FiveFilters.org: Most Labour MPs in the UK Are Revolting.

The article Most commodities up but oil plays yo-yo appeared first on Arabian Post.

Analysts are projecting prices will climb more than $15 by the end of 2016. New York crude will reach $46 a barrel during the fourth quarter, while Brent in London will trade at $48 in the same period, the median of 17 estimates compiled by Bloomberg this year show. A global surplus that fueled oil’s decline to a 12-year low will shift to deficit as U.S. shale output falls, according to Goldman Sachs Group Inc.

U.S. production will drop by 620,000 barrels a day, or about 7 percent, from the first quarter to the fourth, according to the Energy Information Administration. Meanwhile, the International Energy Agency forecasts total non-OPEC supply will fall by 600,000 barrels a day this year. That may pave the way for a rebound as lower prices have stimulated global demand. Oil is the “trade of the year,” according Citigroup Inc., which is among banks from UBS Group AG to Societe Generale SA that predict a gain in the second half.

West Texas Intermediate and Brent both closed at the lowest level since 2003 on Jan. 20. New York futures for March delivery closed at $29.88 a barrel on Tuesday and would need to gain 54 percent to reach the median estimate of $46 a barrel. The London contract for April delivery closed at $32.72 and needs a 47 percent boost to hit $48. The median price outlook was taken from estimates provided this year by 17 analysts who gave forecasts for both oil grades.

Shrinking Output

The oil price rout will shut sufficient production to erode the global glut and crude will turn into a new bull market before the year is out, analysts including Goldman Sachs’ Jeff Currie said in a Jan. 15 report. U.S. production hit a record high of 9.61 million barrels a day in June, according to weekly data from the EIA, and is forecast to average 9.11 million barrels a day in the first three months of the year. It may fall to average 8.49 million barrels a day during the fourth quarter, according to the agency.

“We’ll see higher oil prices” with “supply and demand tightening in the second half of the year,” Bob Dudley, chief executive officer of BP Plc, said in a Bloomberg Television interview Tuesday. The market will remain “tough and choppy” in the first half as it contends with a surplus of 1 million barrels a day, he said.

A worldwide oversupply contributed to a 30 percent slump in WTI and 35 percent decline in Brent last year. U.S. crude supplies have swelled to a record and the Organization of Petroleum Exporting Countries have effectively abandoned output targets as they seek to defend market share.

“We need to see supply giving up and I think that all falls to the U.S.,” Dominic Schnider, the head of commodities and Asia-Pacific foreign exchange at UBS’s wealth-management unit in Hong Kong, said Friday in a Bloomberg Television interview. Schnider at the beginning of this year correctly predicted Brent would drop near $30 a barrel. “We’re still oversupplied.”

Natixis SA lowered its forecasts for 2016 and 2017 over concerns that Iran will boost exports after sanctions were lifted and on the possibility a more stable Libyan government will increase production. The Paris-based bank projects WTI will average $38 a barrel in the fourth-quarter, the lowest of 17 estimates compiled by Bloomberg. And while the IEA sees supply outside OPEC sliding, it warned last month that “the oil market could drown in oversupply.”

Into Balance

There are signs supply and demand will start to come back into balance this year, OPEC Secretary-General Abdalla El-Badri said Jan. 25 at a conference in London. Global demand is forecast to increase by about 1.3 million barrels a day while supply from outside the producer group is expected to contract by about 660,000 a day, he said.

Iraq, the second-biggest producer in OPEC, and Pierre Andurand, the founder of the $615 million Andurand Capital Management, predict oil may rise to $50 a barrel, while the United Arab Emirates sees the glut shrinking, even after Iran boosts exports.

While prices continue to fluctuate, buy the December 2016 WTI contract below $40 a barrel because prices are forecast to average $48 by the end of the year, according to Mark Keenan, the head of commodities research for Asia at Societe Generale in Singapore. There may be “meaningful signs” of shale production balancing in the second half, Keenan predicts.

“The combination of continued demand growth and falling U.S. production will eventually help create a floor in the market from where it will be able to rally back towards the $40 to $50 range by year-end,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by e-mail.-Bloomberg

The article Oil bulls see 50% rebound by 16-end appeared first on Arabian Post.

Following nine months of geo-political incidents in Europe and the Middle East, and widespread uncertainty catalysed by major economic crises in Greece, Russia and China, Hansen is optimistic the next three months will see a soothing of relentless turbulence across global markets going into 2016.

Speaking from Saxo Bank’s office in Dubai International Financial Centre (DIFC), Hansen said: “There is light at the end of a very long tunnel, not least for oil and precious metals. Gold has demonstrated its strength in recent weeks and oil markets have begun to stabilise as non-Opec supply drops and demand remains robust as the economic benefits of lower oil prices kick-in across many oil consuming nations.”

“Although commodity gains from the Chinese boom years have largely been wiped out, oil, gold and silver have proven their resilience multiple times in the past and will do so again. Rising supply has spawned low prices, but the best cure for low prices are low prices. There is genuine optimism that we’ll be sitting here looking at a very different picture for global commodities markets in 12 months’ time – the outlook is cautious but positive.”

While there are challenges ahead – specifically the impact of the much-anticipated rate hike by the US Federal Reserve – Hansen believes last week’s decision by the Federal Open Market Committee (FOMC) to delay any hike until December will ease volatility in the short-term.

“While US activity and employment data remains strong, the developments in commodities, extreme market volatility in late August and the Chinese exchange rate policy distracted, has distracted and sufficiently alarmed the Fed. It’s sitting on its hands – for now,” said Hansen.

“Failing oil prices and deflation are legitimate concerns and the last thing the Fed wants is to tighten its belt and then find it has to loosen it again a few months later. The anxiety means there is room for a marginal commodities recovery this year before uncertainty grows again in the run-up to the FMOC’s December meeting.”

During his Dubai visit, Hansen also outlined his thoughts on several major milestones achieved by the Danish investment specialists during 2015.

Top of Hansen’s list were the international launch and roll-out of the SaxoTraderGO platform – Saxo Bank’s new and intuitive, multi-asset trading platform – as well as the launch of a dedicated Arabic website, a key asset in the Bank’s drive to encourage and empower retailers and investors across the Middle East.

About Saxo Bank
Saxo Bank is an online multi-asset trading and investment specialist, offering private investors and institutional clients a complete set of tools for their trading and investment strategies. Its financial community portal, TradingFloor.com, is the first multi-asset social trading platform.

A fully licensed and regulated European bank, Saxo Bank enables clients to trade FX, CFDs, ETFs, Stocks, Futures, Options and other derivatives on our award-winning SaxoTrader platform, accessible on PCs, tablets or smartphones through a single account and available in more than 20 languages. The platform is white-labelled by more than 100 major financial institutions worldwide.

Saxo Bank also offers professional portfolio and fund management as well as traditional banking services through Saxo Privatbank. Founded in 1992, Saxo Bank is headquartered in Copenhagen and has offices in 26 countries throughout Europe, Asia, the Middle East, Latin America, Africa and Australia.

This entry passed through the Full-Text RSS service – if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers.

The article Light at the end of a very long tunnel for commodities appeared first on Arabian Post.

While US activity and employment data remains strong the extreme market volatility in late August and developments in commodities and the Chinese exchange rate policy distracted and alarmed the Fed sufficiently to tilt their preference to sitting on their hands for now.

When the FOMC is worried about economic developments outside the US, especially in China and other EM countries, it raises some concerns about the near-term outlook for demand of growth-sensitive commodities such as energy and industrial metals.

The market reaction was therefore not entirely surprising with precious metals once again receiving a bid while industrial metals gave back some of the recent strong gains. The energy sector was mixed with WTI crude oil outperforming Brent by quite a margin following a surprise drop in US inventories together with an overhang of supply from the Atlantic basin.

Silver was the star performer of the week after the break of a key technical level saw it outperform gold by almost two percent. The white metal, to the surprise of many, is currently the second best performing commodity in 2015 after cocoa which has resumed its rally as dryness continue to hurt West African crops. In a report, the World Bank sees the risk of an expanding global deficit for the 2015-16 season as the looming El Niño could trigger significant losses in West African yields.

Industrial metals, not least zinc and nickel went into reverse after the Fed’s delay signaled concern about growth prospects in EM countries. HG copper retraced after having rallied by more than 13% since the August low and the risk of a resumption of weakness has increased.

(By Ole Hansen is head of commodity strategy at Saxo Bank)

The article Spotlight on gold and silver after Fed halt appeared first on Arabian Post.

It is with that ever-changing caveat that Saxo Bank publishes its Q3 Outlook ahead of the Greek referendum on EU membership which, as things stand, will take place July 5.

The outlook for Q3, therefore hangs in the balance, depending on the degree of fallout and EU peripheral contagion should Greece vote ‘No’. On the one hand, optimists say that the European Central Bank can simply print more money to cover the enormous debts to creditors. But on the other, a Greek ‘No’ vote presents the significant risk of contagion across the EU periphery and even global uncertainty that could send markets into a tailspin on the usual trajectory of global risk-off events.

The Bank therefore stresses that much of what follows is contingent on the Greek “fire” burning out quickly and warns of a false start to the Fed’s rate hike cycle:

• We are entering the final phase of the multi-decade lows in yield and inflation, but a rise in both this year may prove a false start before the real deal in 2016.
• All eyes are on Janet Yellen Fed’s slow march to policy normalisation. Will Fed rate hikes be a case of “one-and-done” or the start of a “normal rate hike cycle”?

Saxo Bank says that while current economic data is not supportive of proposed rate hikes by the U.S. Federal Reserve, the Yellen Fed could hike anyway, a move that it may eventually regret. 

Meanwhile, for the GCC, the focus will remain on oil revenues.  Ole Hansen, Head of Commodity Strategy at Saxo Bank says: “The loss of revenues from oil will, according to the IMF, trigger a 23% decline in GCC exports from 2014 to 2015 and this impact is currently being felt across the region. But a stable oil price during the past couple of months has also brought a degree of calm back to the hydrocarbon-dependent economies of the Gulf.”

Opec’s expectations that demand will continue to rise thereby over time help remove the supply glut and trigger higher prices has driven the regions belief that a bounce back is coming, according to Ole Hansen. 

”Such a bounce however is according to our expectations not going to be seen before well into 2016 as the potential for rising supplies from Iran and Libya will prolong the time it will take before the market balances itself.

Ole Hansen forecasts a return to $100+ is not expected for the foreseeable future and this should help the region to focus on attracting and building other sources of revenue.

”Large scale infrastructure spending across the region not least in Saudi Arabia is required to transform these countries into a connected and modern economy. The Middle East’s ideal location as a hub for trading between Asia, Africa and Europe needs also to be exploited to the fullest extent while Dubai’s ability to attract financial institutions from around the world not least from emerging economies such as India and China could further increase the region’s importance as a centre for trade finance.

Against this backdrop, Saxo Bank key trading ideas for the next quarter are:

• Commodities

Oil prices and gold have settled into a range of late. But oil bears are hoping that rising Opec output and rising US inventories after the peak demand season will allow prices to move lower, while a rate hike in the US could be a buying opportunity for gold says Ole Hansen, Saxo’s Head of Commodity Strategy.

Hansen expects the third quarter will be when the Fed’s chair Janet Yellen begins to turn off the liquidity tap and maintains his call for gold to finish the year at $1,275/oz., somewhat above the current consensus.   

• Macro

The US economy is slowly but steadily getting back on track after the Q1 doldrums and the question is no longer if the Fed will hike rates, but when. The answer to that question depends on who you ask. The market seems to stand on two legs, more or less split between September and December  says Mads Koefoed, Saxo Bank’s Head of Macro Strategy.

Koefoed also considers Europe saying the European Central Bank president Mario Draghi also has a handful on his plate in Q3, but it is of a different nature as a Greek euro exit looms large while sovereign bond yields have surged with the German 10-year rising to more than 0.8% from less than
0.2% in Q2. He sees growth in the region staying robust in the second half of 2015 albeit without much pickup.

• FX

Head of Saxo Bank’s FX Strategy John Hardy says with the Eurozone still embroiled in difficulty, the USD may resume its upwards track – but this hinges on the numbers and whether the US recovery really is here to stay. After a quarter mostly spent consolidating previous heady gains, the US dollar will demand the market’s full attention in the third quarter of this year. It may rally afresh, provided US economic data and Federal Reserve rhetoric point towards a September rate move – in what would be the first rate hike in more than nine years.

• Fixed Income

Saxo Bank’s Head of Fixed Income Trading Simon Fasdal says the recent rise in global bond yields has already established itself as a major theme in financial markets. He also considers what could go wrong this quarter. Besides Greece, there are no real signs of any critical market triggers, and now with the holy trinity for Europe – a lower oil price, a weaker euro and ECB bond-buying – this should boost the economy and send inflation expectations and yields into an upwards spiral in Q3.

• Asia

There is a time for going on the attack in markets and there is a time for manning the defences says Kay Van-Petersen, Asia Macro Strategist at Saxo Bank. A likely highly volatile trading environment in Q3 definitely marks this out as a protect-what-you-have three months.

Kay Van-Petersen says the markets are entering a very challenging time with the first rate hike potentially coming through from the US which would be the first hike since 2006. He notes that the global economy is experiencing increased dislocations as the US raises rates while most of the rest of the world has an easing bias.

To access the full list of trade ideas produced by Saxo Bank analysts which accompany the Q3 2015 outlook, please click here: http://ae.saxobank.com/campaigns/essential-trades/2015-q3?cmpid=cee_pr_camp2015q3

Photo Caption: Ole Hansen, Head of Commodity Strategy at Saxo Bank

About Saxo Bank
Saxo Bank is an online multi-asset trading and investment specialist, offering private investors and institutional clients a complete set of tools for their trading and investment strategies. Its financial community portal, TradingFloor.com, is the first multi-asset social trading platform.

A fully licensed and regulated European bank, Saxo Bank enables clients to trade FX, CFDs, ETFs, Stocks, Futures, Options and other derivatives on both our award-winning SaxoTrader and newly launched SaxoTraderGO platform, accessible on PCs, tablets or smartphones through a single account and available in more than 20 languages.

The platform is white-labelled by more than 100 major financial institutions worldwide. Saxo Bank also offers professional portfolio and fund management as well as traditional banking services through Saxo Privatbank. Founded in 1992, Saxo Bank is headquartered in Copenhagen and has offices in 26 countries throughout Europe, Asia, the Middle East, Latin America, Africa and Australia.

This entry passed through the Full-Text RSS service – if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers.

The article The loss of revenues from oil will trigger a 23% decline in GCC exports from 2014 to 2015 appeared first on Arabian Post.

“When a product is serviced, a lot of time is lost during the transport between different facilities. Once maintenance work can be done locally, the operators can speed up this process and enhance the operational readiness of the Indian fleet,” said Harald Hansen, Director Business Development Sea at Airbus Defence and Space’s Optronics business unit. The maintenance facility contract demonstrates the firm’s commitment to not only supply systems and technologies to customers, but also to equip them with the necessary operational maintenance capability, a statement by the company said.

The establishment of the periscope maintenance facility and the training of technicians from the Indian Navy in Germany and India can be seen as a first step in establishing an in-country service capability for future naval operations, it said. For the implementation of the facility, Airbus Defence and Space is partnering with Tata Consultancy Services and H&H Precision Private Limited.

The company has previously established periscope maintenance facility in Germany, South Korea, Italy and Greece. The optronic products are used for land, air, sea and space missions on a variety of platforms. These include submarines and armoured vehicles as well as aircraft, satellites and UAVs.

(Source: DNA November 21, 2014)

INDIA LIKELY TO ORDER 106 MORE PILATUS AIRCRAFT TO TRAIN PILOTS

NEW DELHI: India is likely to go in for 106 more Swiss Pilatus PC-7 basic trainer aircraft (BTA), the bulk of which will be produced domestically, to help train rookie IAF pilots in a project worth around Rs 7,000 crore.

This comes after defence PSU Hindustan Aeronautics’ attempt to develop its own BTA called HTT-40 failed to pass muster with the defence ministry. First, it would have been much more expensive than the Pilatus BTA already being inducted by IAF. Second, it would have not met the timelines specified long ago.

So, the defence acquisitions council (DAC) is slated to consider the case for 106 additional Pilatus at the meeting to be chaired by Manohar Parrikar on Saturday, say sources.

One option is to buy 38 Pilatus off-the-shelf, with the rest 68 being produced by the 5 Base Repair Depot (BRD) of IAF at Sulur. Other options could include importing only 10 BTA, with 96 being made in India.

It was in September 2009 that the DAC had approved the urgent purchase of 75 BTA from the global market, while 106 BTA were to be made in India to meet the overall requirement for 181 such planes. Finally, after a global competition, India inked the Rs 2,896 crore deal for 75 Pilatus BTA in May 2012. IAF has inducted 53 of them till now.

IAF had then also strongly objected to HAL’s push for its still-to-developed HTT-40 on the ground that two types of BTA would be both “illogical” and “exorbitant” in terms of duplication in spares, maintenance, infrastructure and the like.

It’s a no-brainer that fighter pilots have to be properly trained to handle highly-demanding supersonic jets that necessarily have to undertake inherently dangerous combat maneuvres. Similar is true for helicopter and aircraft pilots.

“Human error (aircrew)” has been the reason for over 39% of the around 1,100 crashes recorded by IAF since 1970. The other equally big killer is “technical defects” caused by ageing machines and shoddy maintenance.

It took India 20 years to ink the first contract for 66 twin-seat Hawk advanced jet trainers (AJTs) in March 2004 — now used to train pilots in the intricacies of combat flying — despite losing hundreds of fighters and pilots in crashes. Another 57 Hawks were then ordered in July 2010, taking the total project cost to around Rs 16,000 crore,

The induction of Pilatus, in turn, was urgent since IAF training schedules for raw cadets had gone haywire after the entire fleet of the 114 old piston-engine HPT-32 aircraft, which long served as the BTA, was grounded in August 2009 after a crash killed the pilot.

The intermediate training for fighter pilots between the Pilatus and Hawk stages, however, still remains a big problem. HAL is yet to deliver on its Sitara intermediate jet trainer (IJT) despite a delay of 15 years.

(Source: Times of India November 21, 2014)

INDIA RESUMES SU-30MKI FLIGHTS FOLLOWING SAFETY CHECKS

The Indian air force has resumed flying activities with its Sukhoi Su-30MKI combat aircraft, after lifting a grounding order imposed following an uncommanded ejection involving the type on 21 October.

“Flying with the Su-30MKIs has resumed from 14 November”, and the air force is “satisfied with the changes that have been carried out on all aeroplanes across the entire fleet”, the service says. “The court of inquiry set up to probe the accident is expected to have its report finalised and submitted by this weekend,” it adds.

India operates an estimated 200 Su-30MKIs, with the example lost in the recent mishap – SB 050 – having been acquired directly from Russia. Production of the type continues at Hindustan Aeronautics’ Nasik facility, wheremore than 150 of a planned 222 of the aircraft have already been delivered. The remaining on-contract strike aircraft will be handed over by 2018-2019.

(Source: Flight Global November 21, 2014)

DEFENCE MINISTRY AGREES TO FREE UP 5 MHZ OF HIGH-SPEED BANDWIDTH OF 3G SPECTRUM FOR COMMERCIAL USE

NEW DELHI: The telecom and defence ministries have made a partial breakthrough in their talks on 3G spectrum, with the latter agreeing to free up 5 MHz of high-speed bandwidth for commercial use in 17 of India’s 22 circles, enough to accommodate one more telecom operator in those regions. The DoT, however, isn’t in favour of auctioning the freed-up 3G airwaves along with the 2G bandwidth due to be sold next February, dashing the hopes of the industry which has been seeking multi-band auctions.

“The department will only auction 3G once it achieves a breakthrough in its negotiations with defence for a swap of 15 MHz (three more slots) of 3G airwaves with that of the (2G) spectrum in 1900 MHz band (held by the telecom ministry),” a top DoT official told ET. “There are a lot of procedural issues and there won’t be enough time for holding simultaneous auctions.” The two ministries started discussions on swapping 15 MHz each of 3G and 2G bandwidth way back in 2009 but have been unsuccessful on reaching a consensus so far.

According to an agreement between the defence and the telecom departments in 2009, the former had assured release of another slot of 5 MHz subject to some milestones being achieved, including notification of the defence interest zone and the defence band. The DoT is working on a Cabinet note notifying the two. While the defence ministry has now decided to release the 5 MHz as agreed in 2009, no decision has been made on swapping 15 MHz of airwaves in all the 22 circles.

Defence Ministry agrees to free up 5 MHz of high-speed bandwidth of 3G spectrum for commercial useThe partial breakthrough came after arecent meeting between telecom minister Ravi Shankar Prasad and defence minister ManoharParrikar. DoT now expects to resolve the issue and sell 20 MHz of 3G bandwidth in 17 service areas and 15 MHz in the remaining four by next May.

Explaining why the discussions over the swap proposal were taking time, the official told ET: “It is linked to the larger issue of harmonisation of spectrum and we are hopeful that this will be swapped once we can sort harmonisation out”. Harmonisation refers to making spectrum in the 1800 MHz contiguous, or continuous, for both the defence as well as the telecom services. Contiguity increases the spectral efficiency without any added costs. As reported earlier by ET, contrary to the recommendation of the telecom regulator and the plea of the operators, DoT is planning to hold a two-stage auction, first auctioning the 2G airwaves in February (800 MHz, 900 MHz and 1800 MHz) followed by another auction of 3G and the 4G airwaves in May.

“It doesn’t make economic sense for the government to auction one slot of 3G spectrum in February and then another three slots in May. This will distort the price of the airwaves,” the official told ET. He said the process of deciding on a price for 3G and then taking Cabinet’s approval would require time and would overshoot schedule set for 2G auctions. “The government has fiscal compulsions to hold the 2G auctions this fiscal (year ending in March). We can’t postpone it beyond the fiscal (year) to hold a simultaneous auction as suggested by the regulator,” he said.

The government has budgeted revenue of Rs 9,355 crore from the sale of 2G bandwidth this fiscal year. It has also factored in another Rs 5,000 crore from selling one slot, or 5 MHz, of 3G airwaves. The DoT had written to the telecom regulator last month, seeking a floor price for 3G airwaves. The regulator, however, has asked the department to communicate the quantum of spectrum it wanted to auction.

DoT, in turn, said it wasn’t sure on that and called for the regulator to review its proposal of a multi-band auction in February. For harmonisation, streamlining the use of spectrum in the 1800 or the 2G spectrum band, the government has decided that 55 of the total 75 MHz falling between 1710 and 1765 as well as 1805 and 1860 MHz should be made available for use of telecom services. The balance 20 MHz between 1765 and 1785, and 1860 and 1880 has been identified for defence. However, certain portions of the band earmarked for telecom is currently being used by defence and vice versa. Defence will now have to shift out from the band designated for telecom and similarly telecom operators will have to vacate spectrum from the defence band.

(Source: Economic Times November 21, 2014)

AIR FORCE DRILL WITH RUSSIA IN SECOND LEG

New Delhi, Nov. 20: The first India-Russia air force exercises began a second innings at Halwara in Punjab this week, following up on drills hosted by Russia in its Astrakhan region in August-September.

With “Avia Indra 2014”, all three military services of India are now in regular drills with the Russians. The navies exercised with each other in the Sea of Japan earlier this year and an Indian army contingent was hosted in Russia last year.

In the Russian phase of the exercise from August 25 to September 5, an 18-member team of the Indian Air Force was involved in counter-terrorism training with Mi35 helicopter gunships. The IAF fighter pilots also flew in the aircraft of the Russian Federation Air Force (RFAF).

The IAF combat fighters are mostly of Soviet/Russian origin. In the second phase that began this week, the Indians and Russians were exchanging notes on symbols and languages. Although they operate similar aircraft, the language spoken and written are very different. IAF sources said the Russians would fly in the IAF’s Sukhoi 30Mki fighter aircraft next week. The drills include ground attack manoeuvres at the S.K. Range in Punjab.

The Russian delegation is headed by Major General Alexander N, Lyapkin. It includes an air defence crew who will demonstrate anti-aircraft missile firing. The exercise will continue till November 28.

Apart from the Sukhoi 30Mki fighter aircraft, which were certified fit for flying after an accident last month, the IAF has deployed Mi-17 and Mi-35 helicopters for the exercise.

Since 2003, Russian and Indian forces have participated in 11 Indra series exercises involving the armies and the navies. With Avia Indra, the air forces have also joined the series of drills.

(Source: Telegraph November 21, 2014)

AKASH MISSILE TEST-FIRED AGAIN

BALASORE: Indian Air Force (IAF) personnel test-fired medium range surface-to-air missile Akash from the Chandipur-based test range off the Odisha coast for the third consecutive day on Wednesday. The missile destroyed an aerial target at low lying altitude successfully.

Defence sources said the indigenously developed sophisticated missile with a dummy payload was launched in full operational configuration from the launching complex-III of the Integrated Test Range (ITR) at about 11.20 am.

While on Monday two rounds of the missile were fired from the same test range at two separate para-barrels, on Tuesday one missile was fired at a paraflare dropped from a fighter aircraft. Both the missions were successful.

The tests were a part of IAF’s practice and evaluation exercise for a new squadron. The repeat performance of the medium range missile proved the readiness of the weapon system and its reliability.

A defence official said all mission parameters were validated during the test and the IAF was likely to carry out more such tests in the coming days.

Akash, India’s first indigenously designed missile, is capable of engaging aerial threats upto a distance of approximately 25 km. The missile, which has a launch weight of 720 kg, a length of 5.8 metres and a diameter of 35 cm, can carry a pay load of 50 kg.

(Source: New Indian Express November 21, 2014)

CX-1 CRUISE MISSILE BETTER THAN BRAHMOS, NOT A COPY: CLAIMS CHINA

After China’s CX-1 supersonic cruise missile, displayed at the recent Zhuhai Airshow, was noted to resemble India’s BrahMos missile, the Beijing-based Sina Military Network undertook a comparison between the Chinese and Indian missiles on Nov. 18.

The Chaoxun-1 missile designed by China Aerospace Science and Technology Corporation has earned the nickname Cahoxi 1 (“Copy 1” in English) because of its uncanny similarity to the BrahMos missile jointly developed by Russia and India. However, Wang Hongpo, the chief designer of the missile, said the CX-1 is a completely new design. Wang said it has different wings, aerodynamic guidance and jet vane.

Under the restrictions of the Missile Technology Control Regime, the attacking range of cruise missiles like the CX-1 and BrahMos can not exceed 300 kilometers. Wang said this is the main reason the CX-1 shares many similar characteristics with the BrahMos. Sina Military Network noted that the CX-1 flies faster than the Indian missile. It is capable of reaching a speed of Mach 3 at 17,000 meters, whereas the BrahMos can only reach Mach 2.6 at an altitude of 14,000 meters.

Launched against targets in low altitude, the speed of the CX-1 is Mach 2.3., while the Russian-built P-800 Oniks on which the BrahMos is designed can only reach Mach 2. Sina Military Network said the CX-1’s ramjet engine may be better than the solid rocket motor of the P-800. However, it pointed out that the attack range of CX-1 can be reduced to 40 kilometers at low trajectories while the Russian missile can travel 120 kilometers.

Since the BrahMos is designed to conduct attacks below an altitude of 500 meters, the Sina Military Network said the Indian missile is unsuitable for actual combat situations. Though India plans to produce 2,000 BrahMos, only 200 of them have been produced, the report said, adding that the proof of the CX-1’s superiority will rest in how many nations wish to purchase it.

(Source: Want China Times November 21, 2014)

REPORT ON INDIA’S INDIGENOUS CRUISE MISSILE DEFENCE (CMD) PROGRAM

The Defence Research and Development organisation has finally disclosed that is is currently working on a Cruise Missile Defence Interceptor Missile Program for the past few years. The Interceptor will be able to detect and destroy low flying long range and air launched cruise missiles.

The DRDO with its successful experience in the Ballistic Missile Defence (BMD) Program will be able to further develop the technology to intercept any low flying incoming missile. It is currently putting together the technology that it has developed in the BMD program and developing the Interceptor Missile.

The development in this field will also enahnce India’s knowledge in low level radar technology and the ability to search and destroy small flying hostile objects.

DRDO claims that the Interceptor when ready will be able to detect and track a Cruise Missile right from the launch phase with the help of the Akshadeep Aerostat system which is currently being developed by Aerial Delivery Research & Development Establishment (ADRDE) and other low ground based low level radars which will keep track of the cruise missiles trajectory. Upon detection of the incoming missile by the radars, the Interceptor will be auto-activated and an interceptor missile will be fired to seek and destroy. The interceptor missile will be fired when the enemy cruise missile will begin its final descent and will be destroyed before it reaches its target.

The Interceptor Program will be able to provide India the much needed shield to its high value strategic assets against enemy attacks while the Army can move in to neutralise enemy forces. DRDO has said that the Interceptor will be ready in a few years and it will be able to neutralise all Pakistani cruise and short range ballistic missiles like the NASR.

(Source: Defence News November 21, 2014)

UNMISTAKABLE CHINESE NAVAL PRESENCE IN INDIA’S BACKYARD

In early September, two Chinese naval ships docked in the Colombo International Container Terminals (CICT) in which China has invested $500 million, indicating the possibility of China using its commercial infrastructure assets in Sri Lanka for military purposes.

Despite India expressing its concerns to Sri Lanka, another Chinese submarine – this time a nuclear-propelled one – ‘Changzheng-2’ along with a PLA Navy (PLAN) escort warship ‘Chang Xing Dao’ docked in Colombo on November 6, 2014. The growing presence of China in the Indian Ocean is now unmistakable.

Pakistan has already openly invited China to construct a naval base at the strategically located port of Gwadar once again underlines widespread anxiety in India and beyond about Beijing’s Indian Ocean objectives. Gwadar is a predominantly Chinese-funded commercial port about 500 km from the Strait of Hormuz and is considered by many as the most significant of ‘pearl’ in Beijing’s ‘string’ of facilities around the Indian Ocean littoral. Though the Pakistani request has not been entertained by China, at least for now, Indian Ocean is fast emerging as the main front in the struggle between China and India.

The Indian government has been explicitly acknowledging for the last few years what many have been warning for almost a decade now: China’s role in the Indian Ocean is growing at a rate that underlines much more than a normal expansion of capabilities. Former External Affairs Minister S M Krishna informed the Indian Parliament in 2011 that “the Government of India has come to realise that China has been showing more than the normal interest in the Indian Ocean affairs.”

He went on assert that the government is “closely monitoring the Chinese intentions.” But monitoring intentions of a state is a fool’s errand. Intentions cannot be empirically verified and even if one could determine China’s intentions today, there is no way to know what they will be in the future. What India should instead focus on is China’s rapidly rising naval capabilities in and around the Indian Ocean. Though China may have rebuffed Pakistan’s overtures on Gwadar, Beijing’s growing influence in Pakistan doesn’t make it any less of a headache.

For some time now, Indian naval expansion has been undertaken with an eye on China, but despite some positive developments, India has nautical miles to go before it can catch up with its powerful neighbour, which has made some significant advances in the waters surrounding India.

China’s growing naval capability was on full display as it paraded its nuclear-powered submarines for the first time as part of the celebrations to mark the 60th anniversary of the People’s Liberation Army (PLA) navy in 2009. Gone was the reticence of yore when China was not ready to even admit that it had such capabilities. Chinese commanders are now openly talking about the need for nuclear submarines to safeguard the nation’s interests, and the Chinese navy, once the weakest of the three services, is now the focus of attention of the military modernisation programme that is being pursued with utmost seriousness.

China’s navy is now considered the third largest in the world, behind only the US and Russia and superior to the Indian navy in both qualitative and quantitative terms. The PLA navy has traditionally been a coastal force, and China has had a continental outlook to security. But with a rise in its economic might since the 1980s, Chinese interests have expanded and acquired a maritime orientation with intent to project power into the Indian Ocean.

Senior Chinese officials have now openly acknowledged that China is ready to launch its first aircraft carrier with tests starting later this year, a capability that is viewed as being indispensable to protecting Chinese interests in oceans. China is acquiring naval bases along the crucial choke-points in the Indian Ocean, not only to serve its economic interests but also to enhance its strategic presence in the region.

Yet, China is consolidating power over the South China Sea and the Indian Ocean with an eye on India – something that comes out clearly in an oft-cited secret memorandum issued by the PLA General Logistic Department director: “We can no longer accept the Indian Ocean as only an ocean of the Indians… We are taking armed conflicts in the region into account.”

Geographical advantages

Given the immense geographical advantages that India enjoys in the Indian Ocean, China will find it challenging to exert as much sway in the Indian Ocean as India can. But all the steps that China will take to protect and enhance its interests in the Indian Ocean region will generate apprehensions in India about Beijing’s real intentions, thereby engendering a classic security dilemma between the two Asian giants.

Tensions are inherent in such an evolving strategic relationship as was underlined in an incident in 2012 when an Indian kilo class submarine and Chinese warships, on their way to the Gulf of Aden to patrol the pirate-infested waters, reportedly engaged in rounds of manoeuvring as they tried to test for weaknesses in each others’ sonar systems. The Chinese media reported that its warships forced the Indian submarine to the surface, which was strongly denied by the Indian navy.

“Chinese warships are deployed in the Indian Ocean Region and we are continuously monitoring them and see what is their deployment. Along with it, our aircraft, submarines and warships are always deployed to face any challenge…IOR is our area of operations and we see what is Chinese deployment in IOR and how it can create challenges for us and how we can face them…We are always ready,” the Indian Naval chief Admiral Robin Dhowan has suggested.

Despite the naval chief’s assertion, it is not readily evident if the Indian government can effectively manage the Chinese onslaught in the Indian Ocean in the short to medium term.

(Source: Deccan Herald November 21, 2014)

TALKS WITH KASHMIR LEADERS FIRST, THEN INDIA: SHARIF

Pakistan Prime Minister Nawaz Sharif Thursday said his government would talk to separatist leaders in Kashmir before entering any dialogue with India.

The remarks were made during his speech to a Kashmir council in Muzaffarabad, PoK — days ahead of the Saarc summit in Nepal, where he is bound to run into Prime Minister Narendra Modi.

“It is our fundamental belief that the Kashmir issue should be resolved through dialogue. My government started dialogue with India but it cancelled scheduled talks between the foreign secretaries… Before starting dialogue with India, I have decided to consult Kashmiri leaders,” he said.

India had cancelled secretary-level talks in August to protest the Pakistan high commissioner’s meeting with Hurriyat leaders.

Sharif said it was India that was delaying talks. He also accused India of “violating the ceasefire” and shunned repeated accusations from Delhi of Pakistan harbouring militants on its soil. “India spins propaganda against us… to cover up its wrongdoings in Kashmir.”

(Source: Hindustan Times November 21, 2014)

CUT IAF RESTRICTED ZONE TO 300M: PANEL

GURGAON: A high-level committee under the cabinet secretary has suggested to the ministry of defence that the restricted area of the IAF ammunition depot be reduced from the existing 900-metre to 300-metre radius. According to the report submitted by the committee, the storage capacity of the depot will also have to be reduced by 15%.

The committee, comprising experts from the ministry of defence (MoD), ministry of urban development, Indian Air Force officers apart from the commissioner of the Municipal Corporation of Gurgaon (MCG), was formed in March this year at the instance of the Punjab and Haryana high court to discuss and suggest a conclusive solution in the IAF Ammunition depot case in both Gurgaon and Faridabad.

The committee’s report dated October 24 (a copy of which is with TOI) has been submitted to the ministry of defence for consideration and will be discussed in the next hearing in the high court. The report has dwelt at length on the woes of those residing in the restricted area and other concerns raised by the MoD over the strategic importance of the depot.

According to the suggestions of the committee, the most effective solution to bring relief to the residents of the area as well as satisfy concerns of the IAF is to reduce the restricted area of the ammunition depot.

The report says, “The committee is not in favour of shifting the AF stations to Tilpat range in view of the strategic locational advantages of the current locations. The 300-metre distance stipulation for safety purpose should suffice for the AF station in Gurgaon which will take care of the security issue of civilians as well. Although it would lead to a marginal decrease of storage capacity by 15%, the layout of the facility may be reworked through ‘igloo’ constructions.” The experts on the committee have concluded that in event of a mishap, the blast radius will not exceed 300 metrea from the depot and will have only a minimal impact. “In the event of a mishap, at a distance of 500-600 metres, it will create a pressure of 1.7 psi in which residential buildings will not collapse but will suffer damage to the extent of 10% replacement cost. People will not suffer fatal injuries,” claims the report. There are a total of 14,154 structures within the 900-metre radius and 3,414 structures within the 300-meter radius.

The report suggests that it is not feasible to rehabilitate and compensate for all 14,154 structures as it amounts to an ‘astronomical figure’ that cannot be borne by IAF. Rather, it observed that in reducing the restricted area to 300 metres, 10,740 owners of structures will benefit and will not have to relocate, leaving 3414 structures to be relocated which is affordable.

The committee claimed that relocating and compensating the 17,000 families thriving in the area as per present circle rates is not possible and is a big burden. Moreover the committee has out rightly rejected the proposal to shift the Ammunition depot to Tilpat firing range in Faridabad in their report as reaction time in case of a war would increase to one and a half hours from the existing 20 minutes apart from affecting connectivity via rail and roadways.

The report claims, ” 54 ASP, Gurgaon(depot) has strategic importance in the northern region, ideal for transportation of stores(read armaments) in case of a two front war. It is most convenient for foreign receipts due to availability of air bridging facility in the vicinity, which has proved very convenient during the Kargil operations.”

(Source: Times of India November 21, 2014)

The article INDIA INKS EURO 13 MILLION DEAL WITH AIRBUS DEFENCE AND SPACE appeared first on Arabian Post.

The Fed is weighing the timing of interest-rate increases as other central banks add to stimulus to bolster their economies. The Bank of Japan today raised its annual target for enlarging the monetary base to 80 trillion yen ($723 billion), up from 60 trillion to 70 trillion, sending the yen to a six-year low against the dollar. Gold yesterday erased the year’s advance after U.S. gross domestic product beat estimates.

“Japan basically pushed gold over the edge as it triggered a major risk-on move,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail today. Japanese stimulus, the Fed decision to stop bond buying and dollar strength have “been more than the market could cope with this week,” he said.

Gold futures for December delivery fell 2.3 percent to $1,171.60 an ounce at 1:50 p.m. on the Comex in New York, after touching $1,160.50, the lowest for a most-active contract since July 2010. Silver futures for the same delivery month dropped as much as 4.8 percent to $15.635, the lowest since February 2010.

Gold dropped 4.9 percent this week, the most since September 2013. The metal also declined 3.3 percent in October to post consecutive monthly losses for the first time this year. Prices have lost 2.6 percent in 2014.

Gold rose 70 percent from December 2008 to June 2011 as the Fed bought debt and held borrowing costs near zero percent. Prices slumped 28 percent last year, the most in three decades, on expectation that the central bank would scale back its bond-buying program that was put in place to fuel growth while failing to stoke inflation.

The U.S. central bank, which has held its key rate at zero to 0.25 percent since 2008, this week cited an improving job market in deciding to end bond buying, while maintaining a commitment to keep rates low for a considerable time. It also said inflation is running below its 2 percent target.

“Precious metals cratered, hit by a double-whammy of the rather hawkish Fed policy statement, coupled with a stronger-than-expected U.S. GDP report,” Edward Meir, an analyst at INTL FCStone Inc., wrote in a note. “Gold is again confronting the specter of a stronger dollar, rising equity prices and tame inflation, a trifecta that does not bode well for price prospects going into 2015.”

Gold for immediate delivery in London tumbled 2.3 percent to $1,171.41, according to Bloomberg generic pricing. The precious metal earlier touched $1,161.35, the lowest since July 2010. Silver slid as much as 4.3 percent to $15.7908, the lowest since February 2010.

On the New York Mercantile Exchange, palladium futures for delivery in December rose 1.4 percent to $791.80 an ounce, advancing for the 10th time in 11 sessions. Prices are up 10 percent this year.

Platinum futures for January delivery declined 0.9 percent to $1,235.20 an ounce, extending the week’s drop to 1.3 percent. The metal is down 10 percent this year.

Concern that gold demand may falter in the world’s largest users also hurt prices. China asked investigators to probe a sevenfold surge in September’s precious-metals exports. In India, the biggest consumer after China, imports are set to drop in October after a more than fourfold jump last month.

The collapse of oil prices into a bear market amid rising global supplies has also cut inflation concerns. The chances of bullion dropping to $1,000 are increasing as cheaper energy “means lower inflation and adds to the bearish gold story,” said Michael Haigh, head of commodities research at Societe Generale SA, who correctly forecast the metal’s 2013 rout.

The bank isn’t alone in predicting more losses for gold, which is Morgan Stanley’s least preferred metal. Jeffrey Currie, Goldman Sachs Group Inc.’s head of commodities research who also correctly forecast 2013’s slump, said last month that the worst isn’t over yet for gold. He expects prices to drop to $1,050 by the end of year.

Holdings in the SPDR Gold Trust shrank for a third day to 741.2 tons yesterday, the least since October 2008. The Bloomberg Dollar Spot Index, a gauge against 10 major trading partners, rose today to the highest since 2009.

“People are generally looking at the direction of the dollar,” said Wallace Ng, a Shanghai-based trader at Gemsha Metals Co. “A higher dollar depresses prices, and sentiment in the gold market was already weak because of the Fed.”-Bloomberg

The article Gold falls to lowest since 2010 appeared first on Arabian Post.

Oil Minister Bijan Namdar Zanganeh has consulted with Iranian President Hassan Rouhani about political and economic reasons for the collapse in prices, the ministry’s news website Shana reported today. No emergency meeting of the Organization of Petroleum Exporting Countries is necessary to discuss the price slide, Shana said. Rouhani told Zanganeh to use the “oil diplomacy tool” to try to prevent a further decrease, the state-run Mehr news agency said yesterday, without elaborating.

“They have their wings clipped a bit at the moment because they can’t really produce any more than they do,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said in an interview in Dubai today. “It’s difficult for them to call for any strict action when they know that when sanctions are lifted, they’re the ones that are going to ramp up production.”

OPEC, supplier of about 40 percent of the world’s oil, is scheduled to meet on Nov. 27 in Vienna to assess production and market conditions. Brent crude, a global benchmark, has tumbled more than more than 23 percent since June and was trading near $86 a barrel today in London. The decline has prompted speculation that OPEC may decide to cut production to eliminate surplus supply and led Venezuela to call for the group to convene earlier in an emergency session.

Iran, with Venezuela, was for years a vocal advocate for reducing OPEC’s collective output as a response to falling prices. The Persian Gulf producer isn’t concerned about the latest decrease, Roknoddin Javadi, deputy oil minister and managing director of the National Iranian Oil Co., told the Mehr agency in an Oct. 14 report.

International sanctions imposed on Iran over its nuclear program are choking crude exports, the nation’s main source of income. The government in Tehran is negotiating with the U.S. and five other world powers for an agreement that would lift the curbs and revive its economy. The countries have set themselves a Nov. 24 deadline for a final agreement, three days before OPEC meets.

“Iran is constrained by sanctions,” Mehdi Varzi, a former Iranian diplomat and director of Varzi Energy Ltd., an energy-consulting company, said by telephone Oct. 16. “They may have made the calculation that if a nuclear deal can be struck, they will be permitted to increase their exports, so why talk about an OPEC cut right now?”

The International Energy Agency, an adviser to advanced industrialized countries, projects that demand for crude this year crude will grow by the least since 2009. OPEC boosted production to a 13-month high in September, pumping 30.66 million barrels a day, the IEA said Oct. 14.

Saudi Arabia, the world’s biggest exporter, has “appeared determined to defend its market share” in Asia, even at the expense of lower prices, the IEA said. Kuwait’s oil minister said Oct. 12 there may be “no room” to restore prices by trimming supply.-Bloomberg

The article Iran says no need for emergency Opec meet appeared first on Arabian Post.

Futures were little changed in New York after falling 0.3 percent yesterday. Crude inventories probably shrank by 1.8 million barrels to 360.7 million last week, a Bloomberg survey shows before an Energy Information Administration report tomorrow. Stockpiles have risen to the highest level for this time of the year since 1990 amid increased U.S. production. Money managers cut bullish bets on WTI by 14 percent in the week ended Aug. 19, Commodity Futures Trading Commission data show.

“The focus on ample crude supply has been dominating the market,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by phone. “Now that net-long positions have come down again, that’s helping stabilize things.”

WTI for October delivery was at $93.63 a barrel in electronic trading on the New York Mercantile Exchange, up 28 cents, at 1:52 p.m. London time. The contract slid 30 cents to $93.35 yesterday, the lowest close since Jan. 14. The volume of all futures traded was about 43 percent below the 100-day average. Prices have declined 4.7 percent this year.

Brent for October settlement was unchanged at $102.65 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $9.01 to WTI. The spread closed at $9.30 yesterday, the widest since March 14.

Speculators are the least bullish on U.S. crude prices in 16 months. Net-longs for WTI slipped by 30,225 to 188,589 futures and options, the lowest level since the seven days ended April 23, 2013, CFTC data show. Bullish bets on Brent are at the lowest level in two years, data released yesterday by the ICE exchange show.

U.S. crude production will reach 8.46 million barrels a day this year and 9.28 million in 2015, the highest annual average since 1972, according to the EIA, the Department of Energy’s statistical arm.

U.S. gasoline inventories probably dropped by 1.73 million barrels in the week ended Aug. 22, according to the median estimate in the Bloomberg survey of eight analysts. Distillate stockpiles, including heating oil and diesel, are forecast to have decreased by 300,000 barrels, the survey shows.

The American Petroleum Institute in Washington is scheduled to release separate supply data today. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.

Crude stockpiles were at 362.5 million barrels through Aug. 15, the government data show. U.S. production climbed to 8.5 million barrels a day in July, the most since April 1987, the EIA said in its monthly Short-Term Energy Outlook on Aug. 12.

Libya’s output has fallen because of power outages at some fields, according to state-run National Oil Corp. Daily production fell to 630,000 barrels today, according to Mohamed Elharari, a spokesman at National Oil. Output was at 656,000 barrels a day on Aug. 24.

The Waha field, which supplies Es Sider port, isn’t producing and should start next week, Elharari said.

Iraq’s semi-autonomous Kurdistan Regional Government can bring $100 million of crude ashore in Texas after a U.S. judge threw out a court order that would have required federal agents to seize and hold the cargo for the Iraqi Oil Ministry until a court there decided which government owns it.

Acceptance of Kurdish crude by international buyers and by the country’s central government would boost the nation’s total exports by about 12 percent, according to Julian Lee, a strategist at Bloomberg First Word whose views are his own.-Bloomberg

The article Crude trades at seven-month low appeared first on Arabian Post.

|By Ole Sloth Hansen |February was a strong month for commodities, with the broad-based DJ-UBS Commodity index returning more than 5 percent. This was more than the S&P 500 Index, which reached even a new record high thereby moving in the opposite direction of bond yields and the macro data. Some of the major themes and factors behind this performance were:

• Adverse weather in Brazil and the US supporting multiple commodities from coffee and sugar to soybeans and WTI Crude.

• Concerns that growth in the world’s two biggest commodity consuming nations, US and China, are losing momentum.

• Risk adversity related to turmoil in emerging markets, not least Ukraine.

• Traders having to deal with the implications of the biggest weekly drop in China’s Yuan on record.

Several of these themes will continue to drive commodities into March but as the US winter steps aside to allow spring to take hold, some of the weather-related factors may ease. US and Chinese economic data continue to be important variables, together with worries over the wider implications of the situation in Ukraine.

The agriculture sector rose by more than 10 percent, not least driven by a spectacular rally in Arabica coffee. Sugar had a double digit return as the extreme drought in Brazil threatened crop yields from the world’s biggest producer and exporter of the two commodities. In the US, the cold weather lifted the price of wheat after concerns that the winter crop could be damaged while brisk export demand for soybeans was driven by a delay to the Brazilian harvest.

Precious metals continued their strong performance from January with many traders being forced to change their negative expectations, not least when resistance at the important technical 200-day moving average on both metals was broken. Falling bond yields on the back of disappointing US economic data and the first, albeit small, monthly rise in ETP holdings since December 2012 are lending support. Signs of slowing physical demand at current higher levels may limit the upside potentials.

The energy sector was mixed, with natural gas receiving much of the attention considering the extreme volatility witnessed during February. In the end, the price ended up almost unchanged on the month but not before jumping by more than one quarter and then collapsing the most it has ever done in one week since 1996. WTI Crude received support from the unseasonable cold weather, which raised refinery demand above the seasonal norm. Improved pipeline infrastructure from the US Midwest to the Gulf of Mexico led to a 14 percent reduction in inventories at Cushing, the delivery hub for WTI Crude futures in New York, and this supported the relative outperformance over Brent with the spread narrowing by more than USD.

Copper struggled and ended near the lowest in more than two months after concerns over China’s slowing growth. The recent weakness of the Yuan may reduce demand for the metal, both from commercial buyers and those using the metal to obtain finance from sources other than regular banks from which lending has become much more difficult to obtain.

Hedge funds raise bullish commodity bets to a 34-month high

The strong performances and multiple technical breakouts during February triggered a rush into commodities by hedge funds. Since the first week of January, bullish bets on 24 US traded commodities have risen by 59 percent. These culminated during the week of February 18 when the total net-long position rose to the highest since April 2011 and an unprecedented 23 out of 24 commodities were bought. The strong buying may eventually leave several commodities exposed to long liquidation on any signs of falling momentum or changing fundamentals, not least WTI Crude where the net-long is just a few thousand contracts short of the record from last summer. As a percentage of total open interest, the position

becomes even more extreme as we have reached levels not seen since recent periods of geo-political risk, such as the Libyan war in 2011, Iran nuclear sanctions in 2012 and last summer’s Syria chemical war crisis and Libyan supply disruptions.

Gold consolidating as physical demand eases after the rally

The yellow metal reached a four months high this past week before taking time off to consolidate after a second monthly gain. The metal has been supported this year firstly by strong physical demand out of Asia and then by the investment community, such as hedge funds who found themselves underweight the metal on the expectations that gold would fall even farther this year. The recent move above the 200-day moving average, currently at USD 1,300/oz., triggered a one-third weekly rise in net-long futures position held by hedge funds. Although it is showing signs of slowing momentum, it remains positive and some further support could arise from the current crisis in Ukraine. On the flip side, we have seen physical demand from China and Japan begin to slow following the recent rise above USD 1,300/oz. and this confirms the continued price sensitivity when it comes to physical demand. The Chinese Yuan saw the biggest weekly drop on record this past week and that may also dent what, up until now, have been very strong Chinese gold imports. The speculative community is happy to hold onto long positions at the moment, and it would probably require some renewed weakness below USD 1,300 to change that sentiment.

(The writer is Commodity Strateggy Head at Saxo Bank)

The article March unlikely to repeat February surge appeared first on Arabian Post.

|By Ole Hansen| Commodities showing strong gains for a third week with positive performances seen across all sectors, not least agriculture where coffee and sugar were strong performers followed by precious metals. Growth-dependent commodities such as energy and industrial metals also showed a positive return but were held back by another decline to a seven-month low in Chinese manufacturing confidence.

Adverse weather across the Americas continues to be one of the main contributors to the current gains with extended and very cold winter in the US supporting natural gas, heating oil and, as a consequence also, WTI crude. The cold weather across the US Midwest has also raised concerns about reduced production of wheat due to winter kill. Turning the attention to Brazil, the extraordinary rally in Arabica coffee continued for a second week and the hottest January ever. The least rain for the period in 20 years has led to the lowering of production forecasts for coffee, sugar and soybeans.

Coffee reached a 16-month high after rallying more than 50 percent this year. The ICE exchange where Arabica coffee futures are traded responded by raising the margin on holding coffee futures by 65 percent in order to encourage speculative traders to liquidate positions or take profit. The current combination of technical and fundamental support has made it easy for speculative traders to drive the price higher but even if we should see a sizable drop in production, the market is still not tight thanks to the very good crops we have seen in recent years.

We should not forget that coffee until November had been in a downward spiral lasting more than two years. The price during this time the price lost more than two-thirds in value primarily on the back of increased production. The first technical target on this move is 180.4 cents/pound which represents a 38.2 percent retracement of the sell-off from 2011 to last November.

Gold and silver spent the week consolidating their recent strong gains. Momentum and technical traders have returned to the buy side and are waiting for the driver to carry the metals higher. A failure to find such a driver leaves both metals exposed to some long liquidation should the 200-day moving averages at 1,302 and 21.02 respectively give way. The news during the week has been mixed with the impact from the US Federal Open Market Committee supporting continued tapering offset by weaker economic data. Consumer demand which has been the key driver at the beginning of the year has begun to slow in respond to higher prices. Recent data points towards a softening in demand from China and Japan with the premium paid for taking delivery on the Shanghai Gold Exchange dropping to 2 USD/oz after some days rising above 15 USD/oz during the early parts of January.

Holdings in Exchange Traded Products have failed to pick up despite the much improved sentiment lately and this does not bode to well for a sustained move higher at this stage. Until we see that change, gold will struggle to find enough support to move decisively higher leaving the most likely outcome for 2014 to be a year of range-bound consolidation following the dramatic sell-off last year. Technical levels to look out for are support at 1,302 USD/oz the 200-daily moving average remains the first line of defense. Resistance is at 1,337.8 USD/oz, the 61.8 percent retracement of the August to December sell-off.

Spot gold 

WTI crude broke above 100 USD/barrel for the first time this year as it headed for a sixth weekly gain and in the process narrowed the discount to Brent crude to USD 7/barrel. Colder-than-usual US weather continues to support strong refinery production due to increased demand for heating oil and the ongoing removal of the supply glut at Cushing, Oklahoma due to improved pipeline infrastructure has given WTI and edge over Brent.

The North Sea variety and current global benchmark is caught between the potential negative impact of a slowing China on one side and what continues to look like chronic supply disruptions in Libya, Nigeria and South Sudan. The escalating violence and tension in Venezuela is currently just below the radar and could become an additional supporting factor if it begins to impact the country’s ability to export its crude oil.

The refinery maintenance season which normally reduces demand for US crude this time of year has yet to emerge due to the continued demand for distillate products but as we move towards March, things should begin to normalise and potentially cap further advances unless the geo-political situation continue to deteriorate.

Hedge funds were behind the curve at the beginning of the year and since then, they have been an important driver of the current rally. In just six weeks, the speculative net-long position across 24 major commodities has jumped by 28 percent. During this time, the grain sector exposure has gone from a net-short of 11,000 contracts to a net-long of 202,000 contracts, softs from 86,000 to 113,000, and energy from 798,000 to 840,000. The metal sector has seen a reduction from 106,000 to 98,000 contracts but this been caused by 51,400 contracts net-selling of copper while precious metals has risen strongly.

Ole Hansen, Saxo Bank’s head of Commodity Strategy, is a specialist in traded futures with a particular focus on commodities.

The article Adverse weather helps commodities stay strong appeared first on Arabian Post.

Emerging Asia will become the world’s primary weak spot in 2014, but we have reached the beginning of the end of this crisis, according to Saxo Bank’s investment outlook for the first quarter of 2014

 Global overview

Having maintained world growth at acceptable levels throughout the current crisis, emerging Asia will become the world’s primary weak spot in 2014. Investment in that region has reached a staggering 43% of GDP while growth has fallen to barely 6%; the easy part of the growth cycle is long gone, and some emerging market governments are now proactively trying to slow their economies down. This is not necessarily a bad thing for Asia, which needs to cool off and reconsider its economic model; Europe, however, will be hit by the fallout of the troubles facing its best growth market for exports.

Beyond emerging Asia, Saxo Bank expects the global economy to accelerate from 2% growth in 2013 to 2.8% in 2014. This uptick will be led by the US where private consumption and private investment will prove key drivers, pushing growth close to 3%. Tapering will continue as the economy strengthens, which would imply an exit from QE in the second half of 2014.

The Eurozone is on the mend and likely to see growth move into positive territory of 0.8% in 2014, but the outlook for Germany and particularly France remains bleak, the latter having failed to spur growth outside increases in public spending. The two year decline in inflation across the Eurozone is unlikely to reverse meaningfully this year and the argument for additional ECB easing is valid, most likely through a new LTRO.

Steen Jakobsen, Chief Economist at Saxo Bank, comments: “It’s been a long time since the stars of macro indicators have aligned so perfectly. The good news? This is the beginning of the end of this crisis. The 2014-2015 period will see a transition away from quantitative easing and easy money towards better quality growth and, hopefully, a mandate for real change. The world has become so out of balance that things can only improve from here.”

Equities

Peter Garnry, Head of Equity Strategy, underlines the continuing importance of holding equities to see any meaningful capital growth. The relative repricing between equities and bonds will continue in 2014 as total return in equities relative to bonds remains below the equity risk premium line since 1995. He comments: “Don’t pay any heed to those who say equities are in a bubble. If you really want to make the most of your portfolio in 2014, the biggest risk is not being long enough on risky assets. ”

Saxo Bank forecasts a 10 percent overall rise in global equities over 2014. Its top equity picks for 2014 include General Electric, Microsoft and BNP Paribas.

FX

The market is assuming that the Fed will adopt a slow and steady approach to decreasing purchases, and as such the anticipated path is towards a higher USD. However, if markets lose their nerve the USD strength could shift more prominently against the less liquid G10 and emerging-market currencies rather than the JPY and other majors.

John J. Hardy, Head of FX Strategy, adds: “Q1 will see a concerted effort to wean the FX market off QE. The Eurozone could prove a flashpoint, with the peripheral economies ready to rebel if the ECB doesn’t take stronger steps to expand its balance sheet.”

Saxo Bank’s top FX trading themes for Q1 2014 include long USDCAD, long USDJPY and long GBPNZD.

Commodities

Another tough year lies ahead for commodities, with the risk of even lower prices still a possibility. Demand growth has stabilised as economic growth rates in emerging economies, not least China, have declined.

The energy market will have to deal with the possibility of global crude oil supply exceeding demand for the first time in recent memory, thanks in part to the rise in non-OPEC production, and the average price of Brent crude is likely to move lower towards USD 105/barrel. After 2013 saw gold’s first annual loss in 13 years, Saxo Bank is cautiously optimistic for its prospects later in 2014 after averaging 1,225 USD/oz during the first quarter.

Ole S. Hansen, Head of Commodity Strategy, adds: “Raised growth expectations at the beginning of the year carry the risk that investors will once again become too optimistic about the prospects for higher prices, especially in crude oil and industrial metals. Strong January performances over the past three years could therefore be repeated only to be retracted later in the quarter.”

Link to the report: http://storage.saxobank.com/TradingFloor/TradingFloor_Insights_Q1_2014.pdf

The article Emerging Asia will be 2014’s primary weak spot appeared first on Arabian Post.

Commodities moved lower during the course of the week as the diverging outlook between emerging and developed economies continued to raise uncertainty about the demand outlook for commodities. The weakness was primarily driven by losses in both metal sectors with industrial metals being hurt by weak China manufacturing data together with a slowdown in activity ahead of the Lunar New Year shutdown in several Asian markets.

Precious metals failed to find support from the emerging-market turmoil and as result went looking for support. The energy sector was mostly driven by the near-term outlook for US weather which created some extreme volatility in natural gas and supported heating oil.

The agriculture sector was mixed with continued weakness in key crops such as wheat while while rising cocoa and coffee prices ensured a strong week for soft commodities.

Coffee had the best weekly performance since December following two consecutive weeks of losses. Arabica coffee found support from above normal temperatures and dry weather in Brazil which has raised the risk of the upcoming crop being lower than current market forecasts. Robusta coffee found spill-over support from Arabica but also from reduced supplies from Vietnam and Indonesia. Vietnam is sitting on a very large coffee crop which could indicate the current strength may not continue with exports eventually expected to pick up.

The most active Cocoa contract for delivery in March rose the most since 2011 but stabilised after reaching USD 2,900 per ton. Increased demand from the three major regions of Europe, North America and Asia helped support the price while increased supply from the Ivory Coast may help stabilise the price, not least due to its current near overbought condition.

After a steady climb for natural gas throughout the first half of January a return of extreme levels of volatility left many traders battered and bruised. A daily trading range of more than 12 percent was seen on three occasions this past week resulting in volatility spiking to almost 100 percent. The price reached USD 5.5 per therm two days in a row before quickly retracing below USD 5. The rally was driven by the speedy reduction in inventory levels which was triggered by rising demand at a time of weather-inflicted lower production. A forecast for milder weather into February resulted in a sharp reversal with the NGH4 contract seeing its biggest two day decline in more than four years.

Gold returned to the lower end of its current range with the near-term outlook very much depending on the direction of the US stock market and the dollar. The positive pull from risk aversion related to the emerging-market turmoil gave support early on but solid US economic data and the ongoing tapering of the US Federal Reserves asset purchase program together with slowing Chinese demand sent the metal looking for support once again. The failure to gain a proper foothold above resistance at 1,272 USD /oz triggered another bailing out of long positions but with stock markets still not showing any signs of finding the gear that drove them higher last year, gold may find enough support from this weakness to stay above important support at 1,231 USD/ounce.

Despite the current rangebound nature, gold nevertheless had a good January which yielded a positive return for the first time since August and in the process, the yellow metal outperformed both bonds, stocks and the dollar. Compared with the beginning of the year, the investor attitude towards gold has been on the mend, but so far institutional investors continue to stay clear while hedge funds are only engaging on a relatively small scale. Continued stock market weakness and a prolonged emerging-market crisis may alter the outlook for global growth and eventually persuade investors back into gold, but until such time, a bearish approach by many investors will continue to limit the upside.

Strong dollar and falling stocks putting a brake on oil’s further advance

WTI crude oil reached the highest level since early January as declining product inventories and the US winter lend support. Further upside beyond USD 99/barrel seems limited at this stage considering the impact the current turmoil may have on future demand and also considering the current strength of the dollar and stock market weakness. The discount to Brent crude moved below USD 10 for the first time since November as rising Libya production ensured increased availability of Opec oil while US demand was supported by the cold weather. As we approach February and March, further contraction of the spread could be hard to achieve as demand for crude oil from US Gulf Coast refineries may ease as the spring maintenance season kicks off.-Commodity Weekly by Ole Hansen, Saxo Bank

The article Commodities weaken on emerging market worries appeared first on Arabian Post.

The commodities sector looks set for a relatively benign near-term future according to Saxo Bank, the multi-asset trading and investment specialist.

Gold and silver should see a mild recovery over the next quarter and oil looks set to remain at current levels, struggling to push past previous highs. Any expectation that WTI crude will re-establish its historical premium over Brent looks improbable.

Saxo Bank believes that changing supply and demand fundamentals are creating strong headwinds for commodities. Due to optimal growth conditions across Europe and the US the Bank expects agricultural sector prices to fall, which is consistent with a growing supply.

The global oil outlook looks stable and a trend towards retrenchment in emerging markets and the risk of geopolitical disruption remains. However any upside potential from smaller supply side disruptions should be mitigated by the spare capacity achieved from declining demand growth and increasing supply from countries such as the US, Canada and Brazil.

Ole Sloth Hansen, Head of Commodity Strategy at Saxo Bank, said: “Elevated speculative positioning in crude oil poses a more substantial risk, particularly with uncertainty over the economic strength of the US and China. Any worsening of growth outlooks for either country may trigger long-term liquidation.”

A strong sell-off in precious metals happened in the last few quarters as investors sought greater returns, but Saxo Bank sees the potential for gold to reach USD 1,450 per ounce over the coming months. With physical demand from Asia and emerging economies remaining robust, there is potential for some investors to take advantage of lower prices, especially if opportunities in other asset classes prove harder to find.

Hansen commented: “At the beginning of the year, gold was still regarded as a potential strong performer in 2013. The sharp reversal that followed caught most off-guard, resulting in some painful losses and lack of appetite to re-enter the market.”

The strong performance of USD in the months ahead poses some additional downside risk to precious metals.

Hansen added: “Supporting gold is the fact that most of the selling has probably been seen already, which leaves the price in a better position to react to market-friendly news.”

The article Commodity markets headed for mild recovery appeared first on Arabian Post.