Oil: special focus
Euromoney's latest coverage of black gold.
|African Eurobond plans off the table after oil price plunge
Africa’s oil exporters are feeling the pressure after the crash in the oil price and fears of the coronavirus Covid-19, as investors pull money from international bond markets.
Oil vs coronavirus: How will Gulf economies fare?
A double shock of Covid-19 and falling oil prices brings the spectre of recession to the Gulf, while efforts to diversify economies are being derailed.
Nigeria could slip again on oil
The recent collapse in the oil price and Nigeria's (lack of) reaction to it echoes the way the country dealt with the crisis in 2015. Repetition of the same mistakes will only cause harm for Africa's largest economy.
Mexico: Banks free Pemex from bondage
HSBC, JPMorgan and Mizuho lend Mexico’s oil company $8 billion after investors show no interest in non-deal roadshow – and that’s the least of the firm’s problems.
Middle East: Leaders who guided a region through 50 turbulent years
Over 50 years, leaders of Middle East financial institutions have steered their businesses through very good and very bad times, including oil price crashes, rampant property and stock speculation, and war. Some key figures highlight the events they remember most and spell out lessons for the next generation.
Can the Gulf break the habit of half a century?
Less than five years after Euromoney began, the Arab oil embargo gave international finance a shot in the arm and provided an extraordinary windfall to the Gulf, but as the oil boom has repeatedly turned to bust, commodity cycles have laid bare the vacuity of the region’s diversification programmes. Today, with local populations expanding, harder and less stable times could lie ahead if the region does not take more drastic action – even when oil prices bounce back.
Gulf country risk: Qatar, Saudi Arabia on shakier ground
Prospects are improving, but the negative impact of Qatar’s isolation, given oil price volatility and the lack of diversification, has removed the cushion of safety the region took for granted.
Saudi Arabia gets MSCI recognition
Inclusion in the emerging market index is recognition of the country’s reforms and could bring $50 billion of foreign investment.
Country risk: Russia takes centre stage
When the World Cup fanfare is over, investors must gauge whether the country represents a better bet than other emerging markets – and there are still some nagging doubts.
Kazakhstan extremely risky despite oil-price recovery
Political uncertainty and over-reliance on external borrowing make the country more vulnerable than lower-rated sovereigns.
Southern Africa’s new leaders still have much to prove
The new presidents of Angola, South Africa and Zimbabwe could do better, but banks and investors will have plenty of due diligence to do when deciding whether or not and how to commit more resources to these countries.
Nigerian banks make a mint from a crisis
Oil prices and currency controls created opportunities for some banks, which reported bumper gains from FX and fixed income last year, but no one is expecting a repeat of that. Can lending keep them sweet?
Country risk: Debt-ridden Angola turns a corner
The new president has made the start required to ensure investors take notice, with higher oil prices increasing liquidity, corruption addressed and business regulation improving.
Baiduri Bank bemoans the burden of Brunei’s bounty
Financial markets are woefully underdeveloped in this oil- and gas-rich country. For Baiduri Bank, which is mulling a listing in Kuala Lumpur, that makes growing a tough proposition.
Nigeria is on a bumpy ride to better fortunes
The conservation conversation after Bears Ears
Ghana’s next oil boom is just around the corner
Oil has Oman over a barrel
Country risk: Russia is on the long road back
Azerbaijan’s risks are spiralling
Africa: Ghana’s power failure
Middle East: Saudi banks breathe as liquidity fears ease
New Kuwait highlights the same old problems
Despite the halving of the oil price and the fact that 90% of Kuwait’s fiscal revenues come from sales of oil, the emirate is still expected to have a budget surplus this year.
Asia: Singapore banks can’t shake oil services headache
Blighted by souring loans; boosted by wealth management.
Will ETF providers join the Church and save the planet?
Religious organizations are challenging corporations over climate change, while big investors stay mute.
FX: Opec finally reaches deal to cut oil production
After failing to reach agreement at its last two meetings, Opec agreed this week to cut oil output for the first time in eight years. The oil price responded favourably, but lingering doubts about the finer details could mean the impact is short lived.
Price pressures force change in oil and gas treasury strategy
The oil and gas sector has so far avoided making wholesale change to its treasury processes, but as the low price environment continues, firms are now being forced to explore cost cutting.
Mexico: Pemex woes deepen amid oil rout
Country risk: Oil crisis sharpens Nigeria’s investor risks
Energy: PE weighs risks as banks shun oil and gas
Crude oil prices dropped precipitously in the latter part of 2014, raising challenging questions about where they might go in 2015. Undershooting well below a mythical fundamental equilibrium price is a distinct possibility if history is any guide.
What Bluford H Putnam and Lee Thomas said about the falling oil price in 1983.
Oh the markets outside are frightful, but the dollar is so delightful, add oil for a rosy glow, let it flow, let it flow, let it flow.
Some parts of the US market are ‘carnage’; energy bond maturity wall is not due until after 2017.
"At the current price of oil, India will practically eliminate its current-account deficit, for the first time in a decade, which should mitigate pressure on the rupee."
|Sponsored by VTB Capital; December 2014
There is an elevated risk of a global recession in 2015 given eurozone stagflation, setbacks in Japan, a debt-ridden China, the risk of the oil-price collapse triggering geopolitical risk and diminishing returns from G7 monetary stimulus.
December 2014 euromoney.com
Economists have been downgrading oil exporters’ risk scores in recent weeks, but there might be worse to come if spot prices and petro-currencies continue to fall.
The recent dramatic fall in the crude oil price poses the question: is this just a blip due to temporary fears about global economic growth, or is it the start of a longer-term shift in market dynamics?
Low oil prices have put Oman’s government under pressure, while regional political turmoil could make life even more uncomfortable. A new economic model is called for, but can the leaders in Muscat find one quickly enough?
The country is vulnerable to a continuing low oil price, but that doesn’t seem to be stopping it from keeping up the pace of capital projects. And there are still plenty of reforms to make if the state is to develop the economy.
December 2014The sovereign’s risk score has fallen in recent days as lower oil prices add to the Kingdom’s existing economic, political and structural weaknesses.
The fall in the oil price and the de-dollarization of the economy has done even more to highlight Angola’s over-dependence on oil. As a result, the diversification of the economy is higher-up on the government’s agenda than ever before.
Chief executive admits concerns; equity trading planned for 2016.
Like everything else in Nigeria, investment banking will be hit by weak oil prices. Local players may struggle more than their global counterparts.
Commodity price drop will drive NPLs; difficulties could help local capital markets.
Depressed oil prices mean that government revenue in Nigeria is sliding but raising revenue without alienating Nigeria’s most vulnerable will be a difficult feat.
Inspired by the previous government’s agenda, Nigeria’s banks loaded up on loans to local oil and gas companies. The rapid decline in the price of oil has put many of the companies they lent to in distress. Can the banks cope with the potential fall-out?
Peaceful elections in Nigeria herald a new era for the country, but will the elation last while depressed oil prices hold back the country’s development?
The falling oil price has hit oil exporters hard, especially in Africa. But the region has three strengths that should protect its capital markets from the current crisis.
The Angolan government could provide greater financial support to its fledgling $5 billion sovereign wealth fund (SWF), according to its chairman, amid rising concerns over the impact falling oil prices will have on the country's economy.
Executives from Diamond Bank and Carlyle reveal the rationale for the latter's investment in the lender, citing the long-term investment horizon despite the oil-driven volatility in Nigeria’s economy.
Following the global financial crisis, Angola’s economy took another blow and further delayed the opening of the exchange. With heavy reliance on oil exports, the crisis saw prices for Angola’s crude plummet from around $140 per barrel to $60. Unable to pay back loans secured by oil revenue, construction came to a halt. Angola was forced to turn to the IMF for support.
Sovereign highly exposed to oil price drop; default still not fully priced into bonds.
Parallel FX rate rockets; default more and more likely.
Growth rates revised downwards; investors still 'cautiously’ optimistic.
No short-term response to price shift; fiscal discipline key to economy.
"Mexico is going to be a new player and a strong player and it has tremendous potential. Oil companies are going to be interested in investing in Mexico...But Colombia will remain competitive"
If oil prices remain low for a prolonged period and, simultaneously, Russian companies’ and banks’ access to foreign funding is severely curtailed, "we are likely to see a significant uplift in sovereign and banks’ credit risk."
Russia incentive to implement difficult reforms has an inverse correlation to the oil price, and oil-price surges back to $100-per-barrel levels could further delay fiscal efforts.
Technocrat Bambang Brodjonegoro has plans to turn the country’s state-owned enterprises into regional, if not global, leaders. But the fall in the oil price could quickly scupper his ambitions, unless he can improve Indonesia’s terrible record on tax collection.
The yen has been quietly strengthening in recent days, amid renewed concerns about global demand pushing down the price of oil and fresh fears over Europe. If this trend persists, it could be problematic for Japanese prime minister Shinzo Abe, who is closely associated with a policy of yen weakness.