DUBAI (Reuters) – Saudi Aramco’s top executives have met officials of Kuwait’s sovereign wealth fund to convince them to invest in the oil giant’s initial public offering (IPO), which could raise as much as $25.6 billion, a source familiar with the matter said. The meeting, which was led by Aramco’s Chief Executive Amin Nasser, took place weeks ago, the source said, confirming an earlier report on Sunday in the Kuwaiti newspaper Alrai. The Kuwaiti newspaper said the Kuwait Investment Authority’s (KIA) decision to participate in the deal or not will depend on a “study” of the IPO. Aramco and KIA did not immediately respond to separate Reuters requests for comment. In late October, KIA’s managing director Farouk Bastaki had said Aramco had not approached the fund then, but KIA would look at the IPO like any other investment. Aramco has struggled to attract a major cornerstone or anchor investor for its IPO, which could be potentially the world’s biggest. Talks have taken place with sovereign investors including the Abu Dhabi Investment Authority, Singapore’s GIC and other funds, sources have told Reuters. The company has also canceled marketing roadshows for its listing outside of the Gulf because of the lack of interest from foreign institutional investors. Aramco plans to sell 1.5% of the company, giving it a potential market value of between $1.6 trillion and $1.7 trillion. The deal is the centrepiece of Crown Prince Mohammed bin Salman’s plans to diversify the Saudi economy away from its reliance on oil.
China attacks U.S. at G20 as the world’s biggest source of instability
Hong Kong could blow up China/US trade deal
BEIJING, Nov 23 (Reuters) – The United States is the world’s biggest source of instability and its politicians are going around the world baselessly smearing China, the Chinese government’s top diplomat said on Saturday in a stinging attack at a G20 meeting in Japan. Relations between the world’s two largest economies have nose-dived amid a bitter trade war – which they are trying to resolve – and arguments over human rights, Hong Kong and U.S. support for Chinese-claimed Taiwan. Meeting Dutch Foreign Minister Stef Blok on the sidelines of a G20 foreign ministers meeting in the Japanese city of Nagoya, Chinese State Councillor Wang Yi did not hold back in his criticism of the United States.m”The United States is broadly engaged in unilateralism and protectionism, and is damaging multilateralism and the multilateral trading system. It has already become the world’s biggest destabilising factor,” China’s Foreign Ministry cited Wang as saying. The United States has, for political purposes, used the machine of state to suppress legitimate Chinese businesses and has groundlessly laid charges against them, which is an act of bullying, he added. “Certain U.S. politicians have smeared China everywhere in the world, but have not produced any evidence.” The United States has also used its domestic law to “crudely interfere” in China’s internal affairs, trying to damage “one country, two systems” and Hong Kong’s stability and prosperity, he added. China was incensed this week after the U.S. House of Representatives passed two bills to back protesters in Hong Kong and send a warning to China about human rights, with President Donald Trump expected to sign them into law, despite delicate trade talks with Beijing. China runs Hong Kong under a “one country, two systems” model whereby the territory enjoys freedoms not enjoyed in mainland China like a free press, though many people in Hong Kong fear Beijing is eroding this. The government denies that. Wang said that China’s development and growth was an inevitable trend of history that no force could stop. “There is no way out for the zero-sum games of the United States. Only win-win cooperation between China and the United States is the right path.”
FERC Approved Four More LNG Projects
The U.S. Federal Energy Regulatory Commission (FERC) approved on Thursday another four liquefied natural gas (LNG) projects, which will add to the growing American LNG exports in coming years. FERC approved, with conditions, three projects planned to be located along the Brownsville Ship Channel in Brownsville, Texas—Texas LNG Brownsville, Rio Grande LNG Terminal, and Annova LNG Brownsville—as well as a fourth project to expand an operating facility near Corpus Christi, Texas. All four projects have applied before the U.S. Department of Energy to be authorized to export gas to countries that don’t have free trade agreements with the United States. Today’s approvals add to the approval of seven other LNG projects this year. “The Commission has now completed its work on applications for 11 LNG export projects in the past nine months, helping the United States expand the availability of natural gas for our global allies who need access to an efficient, affordable and environmentally friendly fuel for power generation,” FERC Chairman Neil Chatterjee said in a statement. The United States will be the global leader in newly built LNG liquefaction capacity between 2019 and 2023, data and analytics company GlobalData said last month. The increase in the U.S. of 157 million tons per year (mtpa) of liquefaction capacity will account for 73 percent of total global LNG capacity growth through 2023, according to GlobalData. In the first half of 2019, the U.S. saw its net natural gas exports more than double from the same period last year, thanks to more LNG export capacity coming online in recent months, according to the U.S. Energy Information Administration (EIA). The United States, which exports natural gas via pipelines to neighbors Canada and Mexico and exports LNG to several other countries, became a net natural gas exporter on an annual basis in 2017, for the first time in nearly 60 years. A large part of the recent increase in U.S. natural gas exports is due to a growing number of LNG facilities coming online. U.S. exports of LNG jumped by 37 percent in the first half of 2019 compared to the first half of 2018, according to EIA data. Nick Note: Think over invested, think over capacity, think the stupid money is rushing in!
Charles Schwab to buy TD Ameritrade for $26 billion
Charles Schwab Corp. is buying TD Ameritrade Holding Corp. for $26 billion, with a deal expected to be announced Thursday morning, Fox Business reports, citing unidentified people familiar with the situation. Shares in Charles Schwab reversed an earlier decline in premarket trading and are up 2.4%, while TD Ameritrade reduced some of the earlier gains and is up 17%. Neither company responded immediately to emails and phone calls seeking comment. A deal would create a firm with roughly $5 trillion in combined assets, consolidating an industry under pressure from a price war that escalated last month when Schwab announced plans to eliminate commissions for U.S. stocks, exchange traded funds and options.
The move forced other brokerages to follow suit and triggered a slump in the shares of such firms, with TD Ameritrade among the hardest hit.
TD Ameritrade has lost 11% since then, valuing the company at $22 billion. Schwab gained 7% in the same period, giving it a stock market value of $57 billion. Just weeks after Schwab stunned competitors by letting customers trade stocks for free, the talks to acquire TD Ameritrade shows the company is moving to tighten its grip on the industry, according to a person familiar with the matter. The deal would give Schwab, America’s original discount broker, even more sway over the industry it pioneered nearly a half-century ago — and an edge in the intensifying battle for ordinary investors’ dollars, and the investment adviser business. But analysts say the tie-up, and the $5 trillion titan that would result, could attract antitrust scrutiny. “An acquisition of TD Ameritrade would expand Schwab’s roster of active traders and solidify its leading position serving independent advisers,” said David Ritter, a financials analyst with Bloomberg Intelligence. Shares of ETrade Financial Corp., which analysts had speculated TD Ameritrade might want to buy, fell 9%. A deal between its two rivals could leave smaller brokerage ETrade contending with a more formidable competitor than ever. Schwab’s move to zero commissions forced other brokerages to follow suit and triggered a slump in the shares of firms, with TD Ameritrade among the hardest hit. Eliminating commissions swept away a revenue stream and rekindled speculation that online brokerages might have to cut deals to survive the increased industry pressure.TD Ameritrade has relied more on commissions than some competitors, drawing 36% of its net revenue from commissions in 2018, compared to 7% at Schwab and 17% at ETrade. For founder Charles Schwab, ending commissions has been a longtime goal. “I hated commissions,” he said at the Impact 2019 conference in San Diego. “I hated them then. I hate ’em now. I took ’em away.” A deal between the two companies could face antitrust scrutiny, Keefe, Bruyette & Woods analyst Kyle Voigt wrote in a client note Thursday. Schwab and TD Ameritrade are both top custody service providers to independent financial advisers, which could give authorities pause. Mr. Voigt estimates Schwab has about a 50% market share of registered investment adviser custody assets, while TD Ameritrade may have up to 20%. An acquisition would come at a time of transition for TD Ameritrade. The Omaha-based brokerage said in a surprise announcement in July that CEO Tim Hockey would leave no later than the end of February 2020, which rekindled questions of whether the company would pursue a deal. Mr. Hockey denied that his departure had anything to do with a potential deal at the time. Toronto-Dominion Bank, Canada’s second-largest lender by assets, owns a 43% stake in TD Ameritrade.
Bridgewater Associates bets over $1 billion on market drop
(Reuters) – Bridgewater Associates LP, a hedge fund founded by billionaire Ray Dalio, has bet more than $1 billion that stock markets around the world will fall by March, the Wall Street Journal reported on Friday, citing people familiar with the matter. The bet, assembled over a span of months and executed by a handful of Wall Street firms, including Goldman Sachs Group Inc (and Morgan Stanley , would pay off for the world’s biggest hedge fund if either the S&P 500 .SPX or the Euro Stoxx 50 .STOXX50E — or both — declines, the report said. The bet is made up of put options, contracts that give investors the right to sell stocks at a specific price by a certain date. The options expire in March and currently represent one of the largest bearish bets against the market, the report added. Bridgewater Associates was not immediately available for comment.
President Putin says five men died trying to create a weapon that ‘has no equal in the world’
- President awarded widows during a decoration ceremony today at the Kremlin
- It has been reported the explosion happened while testing a Burevestnik missile
- Known as Skyfall by NATO, the missile is said to have a virtually unlimited range
- He expressed condolences but said Russia will continue to develop the weapon
Russian President Vladimir Putin has told widows of the five scientists who died in a nuclear explosion earlier this year that their husbands were working on ‘the most advanced and unmatched technical’ weaponry. Putin’s comments came during a ceremony of state decorations at the Kremlin today where he awarded the deceased employees of Russia’s state nuclear company with the Order of Courage, posthumously. ‘They led a very difficult, responsible and critical direction, we are talking about the most advanced and unmatched technical ideas and solutions,’ he said. On August 8, five employees of the Russia’s nuclear company, Rosatom, were blown up while testing a nuclear rocket propulsion system. On August 8, five employees of the Russia’s nuclear company, Rosatom, were blown up while testing a nuclear rocket propulsion system at the Nyonoska testing site in the White Sea. The blast caused a brief radiation spike in the nearby city of Severodvinsk. Putin said that they made ‘an indispensable contribution to the strengthening of the Russian state.’ He expressed his condolences to the widowed but maintained that Russia would go on developing this type of advanced weaponry. ‘The fact of possessing such unique technologies is today the most important reliable guarantee of peace on the planet. And no matter what, we will certainly improve this weapon,’ he said. The August explosion raised concerns that a prototype of a weapon, called Burevestnik by Russia and known as Skyfall by NATO, is being developed by the Kremlin. Experts said they suspected an explosion and radiation release came from an accident during the testing of a nuclear-powered cruise missile at a facility outside the village of Nyonoksa It has not been confirmed a Burevestnik cruise missile was being tested during the explosion but US experts claim the deadly blast was from a ‘Skyfall’ rocket It has not been confirmed whether a Burevestnik cruise ‘Doomsday’ missile was being tested when the explosion occurred. But US nuclear experts at the James Martin Center for Nonproliferation Studies in California insist the blast did come from a Skyfall test. Anne Pellegrino, a research associate at the James Martin Center, told German broadcaster Deutsche Welle: ‘Our operating theory is that there was a catastrophic failure of some kind during the testing of Russia’s nuclear powered cruise missile. They call it Burevestnik but NATO refers to it as Skyfall.’ The mysterious incident led to a ‘radiation spike’ in the nearby city Severodvinsk, according to reports in the aftermath of the explosion. Three injured testers are reported to be recovering. They were named for the first time as engineers Dmitry Abanin and Aleksander Manyukhin along with another specialist Sergey Grishin. The five killed in the explosion were Vyasheslav Yanovsky, 71, one of Russia’s most senior nuclear scientists, Vyacheslav Lipshev, 40, director of a secret research institute, Evgeny Korotaev, 50, a leading electronics engineer, Alexey Vyushin, 43, who had developed a high-energy photon spectrometer, and Sergey Pichugin, 45, a testing engineer.
Pound struggles to break through $1.30 after Labour election manifesto
LONDON, Nov 21 (Reuters) – The pound struggled to break through the $1.30-mark yet again on Thursday, as a rebound in the dollar and an election manifesto from the opposition Labour Party that fuelled some profit-taking on the British currency.
In its fourth attempt to break through $1.30 in nearly two months, the pound struggled to gain momentum as investors moved to the sidelines before the Dec. 12 election.
Labour leader Jeremy Corbyn unveiled his party’s election manifesto on Thursday, setting out radical plans to transform Britain with public sector pay rises, higher taxes on companies and a sweeping nationalisation of infrastructure. “Sterling yet again found profit takers up at 1.2970, but gave up more ground than most would have expected as the USD rallied against all majors,” said John Marley, a senior currency consultant at FX risk management specialist, SmartCurrencyBusiness. “Support likely in the low 1.29’s, and very hard to see a break of this tight range ahead of the election.” Voters face a stark choice at the country’s Dec. 12 election: opposition leader Corbyn’s socialist vision, including widespread nationalisation and free public services, or Prime Minister Boris Johnson’s drive to deliver Brexit within months and build a “dynamic market economy”.Sterling has gained more than 8% from a Sept. 3 low as markets cut the risks of a no-deal Brexit. But gains have stalled in the past month as election uncertainty has risen, including the prospect of victory for the Labour Party that has pledged tax hikes for the wealthy and a swathe of nationalisations. Jasper Lawler, head of research at London Capital Group, said sterling and shares in UK-focused companies were pricing risks attached to Brexit and a Labour government. “The more extreme the Labour manifesto, the more volatility we’d expect to see in the pound and UK shares when the polls tighten closer to election day,” he said, speaking before the manifesto launch, though he did not expect an immediate reaction. “We still favour a break above 1.30 in sterling but stand ready to reverse that call if Labour’s manifesto can capture the public’s imagination.” The currency had slipped to a five-day low of $1.2888 after Tuesday’s televised debate in which Corbyn was seen to have performed better than expected. While bearish positions on sterling have been cut in recent weeks, they remain high, and on derivatives markets too there are signs of nervousness. One-month implied volatility, a contract capturing the election date, has risen 5 percentage points in the past two weeks to 11.7%.
GLOBAL LNG-Asian prices continue downward trend as supply floods
SINGAPORE, Nov 22 (Reuters) – Asian spot prices for liquefied natural gas (LNG) fell this week as a supply glut continued to weigh, while demand growth was muted by signs of a mild winter in Northeast Asia. Prices for January delivery to Northeast Asia LNG-AS are estimated to be about $5.70 per million British thermal units (mmBtu), down 20 cents from last week for the same period, said several sources who are market participants.With European gas storage nearly full, cargoes may struggle to find a home, traders said. Singapore’s Pavilion Energy has taken the unusual step of cancelling the loading of a cargo from the United States, but has agreed to pay for it, several industry sources said. A company spokeswoman said Pavilion evaluated scheduling and other commercial matters and took the decision not to lift the cargo in coordination with the supplier. Supply was ample with several LNG plants offering cargoes this week.Angola’s LNG project offered a cargo for delivery in January to as far as Indonesia, while Australia’s Ichthys and Papua New Guinea LNG plants offered a cargo each for December, sources said. Indonesia’s Tangguh LNG plant, which is operated by oil major BP BP.L, also offered five cargoes for delivery over the first quarter of next year, sources added. Some buy tenders from Thailand were finalised with PTT’s Singapore trading unit awarding a tender to buy more than 10 LNG cargoes for delivery over a year from March, 2020, a company official said. Low spot prices also attracted some demand from India, with Indian Oil Corp seeking a cargo for delivery on Dec. 17, industry sources said. “The low prices may be creating some end-user demand in India which is attracting purchase interest in the international market,” a source familiar with the Indian market said.
Saudi Aramco order book reaches 73 billion riyals so far
RIYADH/DUBAI (Reuters) – Saudi Aramco’s initial public offering (IPO) has attracted approximately 73 billion riyals ($19.47 billion) in institutional and retail orders so far, Saudi Arabia’s Samba Financial Group said on Thursday. Some 1.8 million retail subscribers have injected more than 14 billion riyals into the IPO so far, Samba, one of the banks managing the deal, said in a statement sent to Reuters. Institutional subscriptions amounted to 58.4 billion riyals and 1.82 billion subscribed shares, it added. “Retail and Institutional subscription levels for the first five days of the offering have reached an unprecedented scale, demonstrating the confidence of investors in Saudi Aramco,” said Rania Nashar, vice chairman of Samba Capital, the investment arm of the bank, in the statement.“We anticipate further increases in subscription levels during the remainder of the offering period.” A banking source told Reuters earlier that the institutional tranche of the IPO was oversubscribed. However, the preliminary estimates do not show that it is oversubscribed. “Receiving banks send their statistics (by) the end of the day, some are late for technical or bureaucratic reasons, that is what makes the different figures,” the source said.“The order book shows very good signs the IPO will be oversubscribed.”Aramco, which did not immediately respond to a request for comment, plans to sell 1.5% of the company, or about 3 billion shares, at an indicative price range of 30 riyals to 32 riyals, valuing the IPO at as much as 96 billion riyals and giving the company a potential market value of between $1.6 trillion and $1.7 trillion. Representatives of the state-owned oil giant plan meetings with investors in Dubai next week, sources have said, for what is expected to be the world’s biggest share sale. Aramco has said at least one-third of the sale is expected to be covered by retail investors, who have until Nov. 28 to sign up for the IPO. Institutional investors can subscribe until Dec. 4. Aramco kicked off the sale process on Nov. 3 after a series of false starts. The deal is crucial for Crown Prince Mohammed bin Salman’s plans to raise billions of dollars to invest in non-oil industries, create employment and diversify the world’s top crude exporter away from oil.
Beijing monitoring Trump’s response to US HK bill
China is monitoring closely the situation in the United States regarding the Hong Kong Human Rights and Democracy Act, which was approved by the Senate and House of Representatives, and the potential signing of the bill into law by the American president Donald Trump. The bill presents another cause for pessimism in trade negotiations between Washington and Beijing, South China Morning Post reported on Thursday, citing unnamed sources.
One of the sources was quoted as saying that China would “have to respond” if the controversial bill gets the approval of the US president, while others suggested that Beijing would “fight and talk alternatively.”
Earlier today, the adoption of the Hong Kong bill by the US Congress was criticized by the Chinese Foreign Ministry.