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Saudi riyal peg not sustainable: Report

Saudi Arabia’s currency peg is no longer sustainable amid a slump in oil prices that threatens to further crimp government financing, according to Commerzbank AG. The cost of buying 12-month dollar-riyal forwards has risen almost 1 percent since early December to about 3.83 per dollar, Commerzbank said in a report on Tuesday. Upward pressure on the forwards will probably increase over the “coming weeks and months,” it said. Saudi […]

New tensions bad news for oil

At almost any other time, an escalating diplomatic conflict between OPEC members Iran and Saudi Arabia would mean a spike in oil prices. That the rally this time couldn’t be sustained shows just how abnormal things are in the oil market. Brent crude has fallen 0.5 percent this week as a global supply glut and the slowest Chinese growth in a generation trumped mounting strife between the […]

Saudi, Iran clash risks deeper conflict

Saudi Arabia’s move to isolate Iran raises the specter of deepening conflicts in the volatile Middle East after the biggest meltdown in relations between the two regional powers in almost three decades. The Saudi government and staunch ally Bahrain severed diplomatic ties, giving Iranian ambassadors 48 hours to leave after protesters set the Saudi embassy in Tehran on fire over the weekend following the execution of Saudi cleric […]

Oil rises as Saudis cut Iran ties

Oil gained for a second day as Saudi Arabia cut ties with Iran a day after its embassy in Tehran was attacked to protest the Saudis’ execution of a prominent Shiite cleric. Futures rose as much as 3.5 percent in New York, extending Thursday’s 1.2 percent advance. Iran’s Supreme Leader Ayatollah Ali Khamenei warned of repercussions and protesters armed with rocks and firebombs attacked the Saudi embassy […]

Indian rupee falls the most in 2 months

India’s rupee fell the most since November on speculation demand for riskier assets will be hurt as tensions in the Middle East intensify and poor Chinese economic data adds to concern over global growth. Emerging-market stocks and currencies dropped Monday as manufacturing in China weakened for a fifth straight month, the longest such streak since 2009. Saudi Arabia cut ties with Iran and expelled the Islamic Republic’s diplomats, […]

Iran warns Saudi of ‘divine’ retribution

Iran’s Supreme Leader Ayatollah Ali Khamenei said Saudi rulers will face repercussions after the kingdom executed an outspoken Shiite cleric. “The divine hand of revenge will take the Saudi politicians by the throat,” Khamenei, Iran’s highest authority, said on Sunday. Cleric Nimr al-Nimr “was neither encouraging people to armed protests, nor plotting secretly, all he did was to openly criticize,” said Khamenei, who frequently lashes out at […]

Saudi bourse plans 2018 IPO

Saudi Arabia’s stock exchange, the Arab world’s largest, aims to sell shares in an initial public offering in 2018. The Saudi Stock Exchange – Tadawul seeks to offer shares after completing a “readiness exercise and obtaining the necessary approvals,” according to a statement on its website on Thursday. One of the world’s biggest petrochemicals manufacturers, Saudi Basic Industries Corp., trades on the Tadawul All Share Index. The gauge closed […]

The Game Changer: Saudi Arabia And Oil

Saudi budget signals a new era

|By Arabian Post Staff|The 2016 Saudi budget marks a transformation, signaling the end of material overspending, introduces a medium-term fiscal strategy and sweeping subsidy changes, Bank of America-Merrill Lynch said in a special report. However, the budget does not signal any near-term changes to energy or Fx policy, in its view. The report says the 2016 budget announcement is a significant one for the Saudi Arabian economy. […]

Saudis cut spending, subsidies

Saudi Arabia released a more tightfisted budget for 2016, reflecting scaled-back revenue expectations and lower spending on subsidies because of sinking oil prices and its involvement in the war in neighboring Yemen. Here are some key points in the first spending plan under King Salman, released on Monday by the Ministry of Finance: DEFICIT The government forecasts the deficit will narrow to 326.2 billion riyals ($87 billion) […]

Saudi to review power, fuel subsidies as oil prices drop

Abu Dhabi: Saudi Arabia’s subsidy scheme is poised for a change as the country announced that they would be reviewing government support for energy, water and electricity prices in the next five years. A 2016 budget document by the Ministry of Finance said that reviewing government support is aimed at achieving efficiency in energy use, conserving natural resources, stopping waste and irrational use, and minimising negative effects […]

Saudi Arabia’s 840 billion riyal budget slashes spending

Gulfnews.com Dubai: Saudi Arabia’s economy, hit hard by a sharp decline in oil prices, on Monday an announced 840 billion riyal (Dh822 billion) spending plan for 2016. The budget deficits for 2015 soared to 367 billion riyals this year. The government plans to cut the deficits to 326 billion riyals (13 per cent of GDP) in 2016 through a combination of spending cuts and augmenting of additional […]

Twilight of easy money

|By Matein Khalid| In retrospect, the last six years were a unique period in global central banking, an epic monetary experiment that averted a Great Depression after Lehman’s failure and interbank/credit contagion plunged the world into recession in 2008-9. Yet the Fed (and later Bank of Japan, ECB and even PBOC) quantitative easing also led to asset bubbles, credit market excesses, currency wars and the mispricing of […]

Stocks sell off after oil at 7-year low

Almost every Middle Eastern stock index declined after oil, the region’s main source of income, sank to the lowest in seven years, damping the outlook for government spending. Dubai’s DFM General Index ended its longest winning streak in almost three months, sliding 1.5 percent, the most in a week, to close at 3,026.05. Emirates NBD PJSC’s 4 percent retreat was the biggest contributor. The Tadawul All Share […]

GCC central banks raise rates

|By Arabian Post Staff| Central banks in the Gulf raised the interest rates within 24 hours of the US Fed announcing a quarter percent rate hike as their currencies are linked to the dollar. At least four central banks announced the hike.    “We have an advantage over other emerging markets because the currencies are pegged,” so there are fewer foreign exchange risks, said Nabil Farhat, an […]

King dollar trend is down, but not out

|By Matein Khalid| The plunge in crude oil after OPEC’s Vienna conclave, Dr. Draghi’s failure to resist Bundesbank pressure not to fire another ECB easy money bazooka, Wall Street’s junk bond debacle and an imminent rise in the Fed Funds rate for the first time since 2006 will all shape the next big trades in Planet Forex. The Euro has risen to 1.10 on Draghi’s failure to […]

Saudi billions entice Asian customers

At the heart of Korea’s Onsan Refinery lies a street called “A.I. Naimi Road,” an homage to Saudi Arabia’s oil minister. The reason: state-owned Saudi Arabian Oil Co. holds a 65 percent stake in the complex. Taking a controlling interest last year in South Korea’s third-largest refinery highlights the shifting dynamics of the oil business. With crude prices down by more than half in the past two […]

Low-grade oil already close to $20

As oil crashes through $35 a barrel in New York, some producers are already living with the reality of much lower prices. A mix of Mexican crudes is already valued at less than $28, an 11-year low, according to data compiled by Bloomberg. Iraq is offering its heaviest variety of oil to buyers in Asia for about $25. In western Canada, some producers are selling for less […]

Trump unfazed by widespread criticism

Republican presidential contender Donald Trump said his call to ban Muslims from entering the U.S. sparked a useful discussion about radicalism within that community, and he’s not daunted by polls showing most Americans oppose the idea. “I didn’t do this for polls so I don’t even care what the polls say,” Trump said in an appearance Sunday on CNN’s “State of the Union With Jake Tapper.” “My polls […]

Dubai’s Google-backed startup promoter starts work

|By Arabian Post Staff| AstroLabs, Google -backed technology hub, is helping regional entrepreneurs to grow their startups. AstroLabs opened in October, with 42 startups picked from among 250. The facility features a device lab designed by Google is equipped with iPhones, Android smartphones, tablets and computers, which can be used by startups to test their mobile applications and content. One of the aspiring entrepreneurs is Lamia Tabbaa-Bibi, creator of IReadArabic.com, […]

Oil hits post-2008 lowest

Oil declined to the lowest level since 2008 in London amid estimates that OPEC’s decision to scrap production limits will keep the market oversupplied. Brent futures capped the biggest weekly decline in more than a year. The global surplus will persist at least until late 2016 as demand growth slows and the Organization of Petroleum Exporting Countries shows “renewed determination” to maximize production, the International Energy Agency said Friday. […]

An open letter to Thomas Friedman

|By Dr Alaa Alghamdi| Dear Mr. Friedman, While I would like nothing better than to thank you for your concern for our youth and our country, as expressed in your Nov. 25 piece in the New York Times, I find I cannot in good conscience do so. You made certain observations during your stay in Riyadh, observations which no doubt may sound fresh and even enlightened to […]

Landmark dumps Trump products

|By Arabian Post Staff| Dubai-based Landmark Group said it was pulling Donald Trump products off its shelves in response to the Republican presidential front-runner’s call for a ban on Muslims entering the United States. Landmark and DT Home Marks International LLC have an exclusive deal to sell Trump Home products – including lighting, mirrors, and jewellery boxes – in their Lifestyle department stores in Kuwait, the UAE, […]

Peg debate back with a bang

|Arabian Post Special| The relentless plunge in oil price, which analysts are likening to the crash of 1990s, and its serious implications on spending plans are putting the focus back on the Gulf currencies’ dollar peg, including that of the UAE dirham. Despite consistent backing for the dollar peg from all possible channels, including the monetary authorities, the debate is back with a bang. And the market […]