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Thursday, 5 August 2021

Aramco hikes prices in Asia and the US + Nvidia’s Arm purchase hits hiccup

Saudi Aramco raised September oil prices for buyers in Asia and the US, in a show of confidence for a continued recovery in demand despite a surge in coronavirus cases in key oil importers, Bloomberg reports. The national oil company raised the price of its oil grades for Asia — its key market as the recipient of 60% of Saudi oil — by 20 to 60 cents per barrel on August prices, and by 10 to 20 cents a barrel for shipments to the US.

The price hike could be risky as the delta variant starts to impact the oil markets, with the price of both global Brent and US crude falling sharply to two-week lows on Wednesday. That said, Brent is still up around 40% since the start of the year—and many analysts don’t consider the recent covid outbreaks to be more than a short-term blow, according to Bloomberg.

The Saudi and Russia-led OPEC+ group in July agreed to gradually increase production until the end of 2022, after tight supply led to a hike in prices. Output from OPEC countries hit its highest level in over a year in July following the pact, helping to soften the recent rally that had seen the price of Brent surge more than 50% year-to-date.

Siemens Energy sales drop. Gamesa to blame. Siemens Energy has slashed its earnings outlook after the company made a net loss in its third quarter, the company said in its earnings release (pdf). Overall orders fell 37% during the quarter after its wind arm Siemens Gamesa saw orders plunge 72% due to “volatility” in the offshore market.

Why should Egyptians care? Gamesa is a major player in Egypt’s wind energy sector, and is involved in the Ras Ghareb, West Bakr and Gabal El Zeit projects in the Gulf of Suez.

NON-M&A WATCH- The British government could be about to block Nvidia’s USD 40 bn takeover of the UK’s leading chipmaker Arm on national security grounds, Bloomberg reports, citing people familiar with the matter.

Down

EGX30

10,719

-0.1% (YTD: -1.2%)

None

USD (CBE)

Buy 15.65

Sell 15.75

None

USD at CIB

Buy 15.65

Sell 15.75

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

11,162

-0.41% (YTD: 28.5%)

Down

ADX

7,405

-0.38% (YTD: 46.8%)

Up

DFM

2,813

+0.63% (YTD: 12.9%)

Down

S&P 500

4,402

-0.46% (YTD: 17.2%)

Up

FTSE 100

7,123

+0.26% (YTD: 10.27%)

Up

Brent crude

USD 70.53

+0.21%

Up

Natural gas (Nymex)

USD 4.1

+0.22%

Down

Gold

USD 1,813

-0.06%

Up

BTC

USD 39,833

+4.2% (as of midnight)

THE CLOSING BELL-

The EGX30 fell less than 0.1% at yesterday’s close on turnover of EGP 1.75 bn (27.2% above the 90-day average). Local investors were net sellers. The index is down 1.2% YTD.

In the green: Pioneers Holding (+5.3%), Speed Medical (+4.3%) and MM Group (+2.9%).

In the red: CIRA (-2.2%), Fawry (-2.2%) and Cleopatra Hospital (-2.0%).

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