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2018-04-13 17:30:00

SAUDI'S FUNDING $11 BLN

SAUDI'S FUNDING $11 BLN

REUTERSSaudi Arabia has largely covered its hard currency funding needs for 2018 by completing this week's $11 billion international bond issue, the head of the kingdom's debt management office said.

Riyadh has become one of the biggest emerging market debt issuers since it started borrowing internationally in 2016 to finance a state budget deficit caused by low oil prices.

This week it issued its fourth international bond in tranches of seven, 12 and 31 years, attracting massive investor orders of $52 billion. That followed last month's $16 billion syndicated loan refinancing, which expanded the original facility by $6 billion.

Fahad al-Saif, speaking by telephone late on Wednesday, noted that together, the two exercises raised a net $17 billion — in the range of the $16 billion-$18 billion that Riyadh initially planned to borrow internationally this year.

As a result, Riyadh will focus on raising money domestically for the rest of this year, Saif said. It has said it wants about 65 percent of its debt to be domestic and 35 percent foreign, plus or minus 10 percent.

"We still have the local portion to finance. As you're aware we are obliged to find the best place to fund our issuances, and I think the focus from now going forward is the local market development."

Saudi Arabia has borrowed 18 billion riyals ($4.8 billion)domestically so far this year with monthly issues of riyal-denominated Islamic bonds, and plans to raise about 60 to 70 billion riyals in total in 2018, subject to market conditions, Saif said.

This month the Saudi stock exchange began listing domestic government bonds in a move that is expected to facilitate riyal issuance by encouraging secondary market trade.

But Saif said Riyadh would not neglect the international market because it was keen to ensure a stable yield curve. "We are very committed on being a regular issuer, a responsible borrower in this market."

He added, "We are focused on liquidity, and when I say liquidity I very much mean balancing between supply and demand, and obtaining further investor diversity.

"We are very much focused on secondary market behavior, on how exactly each point of the curve behaves, and we want our curve to become stable, reliable, and to become a benchmark for the region."

While the kingdom has no immediate plan to make an international issue of Islamic bonds, it might do so in the second half of 2018 to maintain its presence in the sukuk area and provide supply to sharia-compliant investors.

The potential sukuk issue would be smaller than Saudi Arabia's previous international sukuk transaction, which was $9 billion, Saif said.

Riyadh issued its latest international bond a few days before a planned global issue by Qatar, which would be Doha's first foreign bond sale since Saudi Arabia and allies cut diplomatic and transport links with Qatar last June, accusing it of backing terrorism, a charge which Doha denies.

Some bankers and fund managers told Reuters that by absorbing some demand in the market, the Saudi issue might complicate Qatar's funding plan, potentially forcing Doha to offer higher yields.

Asked if Qatar was a consideration in the timing of the Saudi deal, Saif said it was determined by market conditions.

"We are a sophisticated debt management office. We looked into market volatility, supply, reverse inquiries, and we looked into all of these circumstances."

Saif said the decision to issue maturities of seven, 12 and 31 years – while the common standards for large transactions are five, 10 and 30 years – was due to discussions with investors.

"We had empty buckets into these points and actually we wanted to add more points to continue building our yield curve where investors and other issuers can use the Saudi curve as a benchmark."

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Earlier:

 $70: INSUFFICIENT FOR INVESTMENTS
2018, March, 26, 07:55:00

$70: INSUFFICIENT FOR INVESTMENTS

BLOOMBERG - Oil’s recovery to almost $70 a barrel hasn’t been sufficient to stimulate the return of enough investment in the sector, according to Saudi Arabia’s energy minister.

 

 

 SAUDIS REVENUE WILL UP TO $280 BLN
2017, December, 29, 11:30:00

SAUDIS REVENUE WILL UP TO $280 BLN

BLOOMBERG - Under a six-year fiscal program, officials predict rising oil prices and output will push income from oil sales to 801.4 billion riyals ($214 billion) from 440 billion riyals this year, the people said on condition of anonymity because they aren’t authorized to share the data publicly. It assumes the price of oil will reach $75 a barrel. Non-oil revenue, excluding income from the Public Investment Fund, would increase 32 percent to 337 billion riyals, they said.

 

 SAUDIS EXPECTS +12%
2017, December, 20, 19:35:00

SAUDIS EXPECTS +12%

BLOOMBERG - Saudi Arabia expects oil revenue to jump 12 percent next year in a sign the world’s biggest crude exporter expects prices to keep rising in 2018.

 

 

 SAUDIS PROGRESS
2017, October, 30, 11:40:00

SAUDIS PROGRESS

IMF - Saudi Arabia had made good progress in initiating its ambitious reform agenda. Fiscal consolidation efforts are beginning to bear fruit. Progress with reforms to improve the business environment are gaining momentum, and a framework to increase the transparency and accountability of government is in place. Effective prioritization, sequencing, and coordination of the reforms is essential, and they need to be well-communicated and equitable to gain social buy-in to ensure their success.

 

 SAUDI ARAMCO IPO
2017, October, 16, 11:50:00

SAUDI ARAMCO IPO

Saudi Arabia is considering delaying the international portion of the giant initial public offering of its state oil company until at least 2019, according to people familiar with the situation, who said a domestic share sale in Riyadh could still happen next year.

 

 SAUDI'S BANKS ARE BETTER
2017, October, 16, 11:45:00

SAUDI'S BANKS ARE BETTER

But we expect a rise in the sector's NPL ratio and muted credit demand in the second half of 2017 and 2018, reflecting the slowing economy. GDP growth slowed to 1.4% in 2016 from 3.4% in 2015 and we expect it to be below 1% in 2017 and 2018.

 

 SAUDI'S DEFICIT DOWN
2017, August, 14, 14:20:00

SAUDI'S DEFICIT DOWN

Saudi Arabia's state budget deficit shrank by a fifth from a year earlier in the second quarter of this year as revenues rose moderately and spending fell marginally, finance ministry figures showed on Sunday.

 

 

Tags: SAUDI, FINANCE

Chronicle:

SAUDI'S FUNDING $11 BLN
2018, May, 21, 10:40:00

U.S. PETROLEUM DEMAND UP BY 750 TBD

API - American Petroleum Institute reported that the first four months of this year saw U.S. petroleum demand average 750 thousand barrels a day above the same period in 2017 despite higher prices, a sign of solid economic activity. April also saw the U.S. produce a record 10.5 million barrels per day (MBD) of oil.

SAUDI'S FUNDING $11 BLN
2018, May, 21, 10:35:00

IMF: EGYPT'S GROWTH UP

IMF - “Egypt’s growth has continued to accelerate during 2017/18, rising to 5.2 percent in the first half of the year from 4.2 percent in 2016/17. The current account deficit has also declined sharply, reflecting the recovery in tourism and strong growth in remittances, while improved investor confidence has continued to support portfolio inflows. In addition, gross international reserves rose to $44 billion by end-April, equal to 7 months of imports.

SAUDI'S FUNDING $11 BLN
2018, May, 21, 10:30:00

U.S. RIGS UP 1 TO 1,046

BAKER HUGHES A GE - U.S. Rig Count is up 1 rig from last week to 1,046, with oil rigs unchanged at 844, gas rigs up 1 to 200, and miscellaneous rigs unchanged at 2. Canada Rig Count is up 4 rigs from last week to 83, with oil rigs up 6 to 38 and gas rigs down 2 to 45.

SAUDI'S FUNDING $11 BLN
2018, May, 18, 09:20:00

OIL PRICE: ABOVE $79

REUTERS - Brent crude futures LCOc1 were at $79.57 per barrel at 0310 GMT, up 27 cents, or 0.3 percent from their last close. Brent broke through $80 for the first time since November 2014 on Thursday. U.S. West Texas Intermediate (WTI) crude futures were at $71.62 a barrel, up 13 cents, or 0.2 percent, from their last settlement.

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