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Gulf markets ease due to soft oil and weak earnings
On Wednesday, the majority of major Gulf stock markets tracked lower oil prices while weak corporate earnings failed not to boost investor sentiment. The global trade war and mounting supply fears weighed on the oil prices, which are a major catalyst for Gulf financial markets. On Wednesday, the price of crude oil, an important factor in the Gulf, continued to fall and was set to experience its steepest monthly decline in over three years. Saudi Aramco, the oil giant, lost 0.6%. The benchmark index in Saudi Arabia slipped 0.1%. Americana Restaurants International, based in the UAE, retreated by 2.2% following a decline in profit for the first quarter. Abu Dhabi's Index fell 0.3% due to a 3.7% drop in Abu Dhabi Commercial Bank following a decline in operating income in the first quarter. The lender did report an increase in profits. Multiply Group, a laggard among other companies, fell 2.4%. The investment firm was also poised to continue its losses after Tuesday's announcement of a decline in quarterly profits. First Abu Dhabi Bank, the largest lender in the United Arab Emirates, saw its losses capped with a 1.8% increase. LSEG data shows that the bank's share price jumped by more than 3% on Tuesday after it reported a net profit exceeding analysts' expectations of 4,24 billion dirhams. Dubai's main stock index dropped 0.4% due to a 1.5% drop in blue-chip developer Emaar Properties. The Qatari Index gained 0.4%. This was led by an increase of 0.8% in the petrochemical company Industries Qatar. $1 = 3.6729 UAE Dirham (Reporting and editing by Ateeq Sharif in Bengaluru)
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Indian firms are preparing to raise debts of $1.5 billion after RBI liquidity boost.
Indian companies have increased their plans to borrow money from the market, led by the state-run companies. The central bank's new bond purchasing scheme has surprised the markets and driven borrowing costs down. Four Indian state-run companies - Power Finance Corp., NHPC. IREDA. and HUDCO – are set to raise a total of 125 billion Rupees ($1.5billion) and have invited offers on Wednesday and Friday. They didn't immediately respond to an email asking for comment. In the first week of this month, state-run companies raised 393 billion rupees through bonds. Suresh Darak is the founder of Bondbazaar.com, an online trading platform for bonds. He said: "The recent rush of state-run companies issuances looks like a timely move to take advantage of softening yields following Reserve Bank of India’s announcement of bond buying." The RBI announced on Monday night that it will buy bonds worth 1,25 trillion rupees via open market purchases. In April, they bought bonds worth 1,20 trillion rupees. Since then, AAA-rated corporate bonds yields across curves have eased around 5-10 basis point and spreads between government bond yields has shrunk. Darak stated that "by front-loading their borrowings, companies lock in lower funding costs. (It) reflects intelligent liability management." State-run companies have raised 518 billion rupees including these issuances. This is more than five-times the 100 billion rupees they raised in April 2024. In the first five weeks, the companies raised more than half of their total funding. "Issuers are eager to take advantage the falling yields and this is why they are so rushed to issue debt," Umesh Kahandelwal, chief executive officer of Tipsons Group, said. To put things in perspective, the total amount raised by debt fundraises during the first five weeks fiscal 2025 was 450 billion rupees. Non-banking finance firms such as Shriram Finance, Bajaj Finance, and others have been major issuers. PFC, one of the many borrowers to hit the market in the past week, is raising 35 billion rupees via zero-coupon deep discount bonds with a maturity of 10 years and 1 month. The traders are expecting a strong demand for this issue. $1 = 85,141 Indian Rupees
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Technip Energies shares drop after the first-quarter's net profit missed expectations
Technip Energies, a French energy infrastructure company, posted a first-quarter profit that was below market expectations on Wednesday. This helped to drive its shares down. The company's shares were down 7.6% at 0720 and ranked among the worst performers in France's SBF 120 mid-cap index SBF120. The group, which specializes in energy technology, reported a first-quarter profit of 101 million euros (114.9 million dollars), lower than the 109 million euro consensus estimate from analysts. Bernstein wrote in a client note that the performance of TPS, the company's Technology, Products and Services segment (TPS), was "disappointing". The TPS revenue fell by 5% on an annual basis to 450 millions euros. This was below analysts' expectations (522 million euros). The group reduced its revenue forecast for the division's bottom end, citing macroeconomic uncertainty. It expects TPS revenues of between 1.8 and 2.2 Billion Euros in 2025, as opposed to the previous expectation of between 2.0 and 2.2 Billion Euros. In a press release, CEO Arnaud Piette said that the uncertain macroeconomic and policy environment has led to a wider range of revenue for the shorter cycle segment – Technology, Products & Services. On a conference call with media, Chief Financial officer Bruno Vibert stated that the unit was more vulnerable to short-term fluctuations. He said that if there is uncertainty or volatility, this will always have a greater impact on TPS than the project business. The adjusted recurring profit before interest and taxes at the group increased 19% to 131.7 millions euros, exceeding analysts' expectations, which averaged 126 million euro, according to an internal consensus. When asked about the impact on the company of U.S. Tariffs, Vibert stated that the ongoing projects had not been affected. He added that the portfolio in the U.S. consisted mainly of service contracts.
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Droughts threaten buffalo and farmer's livelihoods in Iraq
Iraq's buffalo populations has been reduced by more than half in the last decade, as both the Tigris River and the Euphrates suffer from severe droughts, which threaten the livelihoods of many farmers. Sabah Ismail (38), a farmer who raises buffaloes in Dhi Qar, a province located south of the country, said: "People have gone. We only have a few houses left." "The situation is very difficult" I used to have 120-130 buffalo, but now I'm down to 50-60. Ismail said, "Some died and we sold others because of the drought." In ancient Sumerian texts, the area has been raising buffalo for their milk for centuries. According to Iraqi marshland specialists, climate change, upstream damming of Turkey and Iran, outdated irrigation techniques at home, and a lack long-term plans are the main causes of water shortages that drive farmers from the countryside. From the conflict with Iran during the 1980s to two Gulf Wars and the rise and fall of Islamic State, the country has endured decades worth of war. Iraqi farmers have suffered due to upstream damming and reduced rainfall. This has led to a decline in the quality of life for many, including Ismail. Jassim Al-Assadi, an Iraqi marshland specialist, said that since 2015 the number of Buffalo in Iraq has fallen from 150.000 to less than 65,000. Al-Assadi stated that the decline was "mostly due natural reasons, such as lack of green pastures needed, pollution, illness, and farmers not farming buffalos because of scarcity of income". Farmers are also struggling to feed animals due to a drastic drop in crop production, and an increase in the price of fodder. Abdul Hussain Sbaih (39), an Iraqi buffalo farmer, said: "God only knows, this summer the mortality rate could reach half." Maher Nazeh reported the story. Elwely Elwelly is the writer. Editing by Freya Whiworth
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RWE is facing growing criticism from investors as the returns on renewable energy are declining
RWE's shareholders will increase the pressure on Germany’s top power company on Wednesday. They'll demand bolder measures to close a gap in valuation with competitors, including larger share buybacks or even a special distribution. The German utility is also the second largest developer of offshore wind farm in the world. It has come under increasing criticism for its capital allocation policy, most notably by activist investor Elliott. The U.S. investor disclosed last month a stake worth around 1.28 billion euro ($1.46 billion) and urged the group to increase its existing share buyback program by up to 1.5 billion euro. RWE has been forced to reduce ambitious investment programs and look for alternatives to increase value due to lower returns in the clean energy industry. This is partly because of higher interest rates. RWE's competitors, such as Enel Iberdrola Endesa have announced or implemented buybacks. High inflation, geopolitical tensions and uncertainty about renewable energy regulations in certain markets have all put pressure on the development of renewable projects. According to the text of the speech that will be delivered at the annual general meeting of the RWE group, Ingo Speich is the head of sustainability and corporate Governance at Deka. He said that the reduction in RWE's expenditure plans had freed up cash to buybacks between 1 billion and 1.5 billion euros each year. This was a better way to increase shareholder value, he added, than chasing after projects with uncertain returns. RWE trades today at an EV/EBITDA multiplier of 7.4, LSEG data shows. This is lower than Iberdrola’s 9.6 multiple and SSE’s 8.8. RWE said that buybacks will remain a part of their future strategy but they have not yet changed the current program. Henrik Pontzen, of Union Investment, called for a special distribution. He said that shareholders would directly benefit. In prepared remarks, he stated that "if capital can't be invested profitably at this time, it should be divided." Elliott declined to comment. Reporting by Christoph Steitz, editing by Philippe Fletcher.
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China's steel production could be cut by reducing the iron ore output, according to a third-month decline in iron ore.
The price of iron ore futures fell on Wednesday. This was the third consecutive monthly decline, as the steel production in China, the world's largest consumer, could be cut. Meanwhile, demand has slowed before the Labour Day holiday. The daytime trading price of the most traded September iron ore contract at China's Dalian Commodity Exchange was 703.5 yuan (96.81 dollars) per metric ton. This contract has lost 3.96% in the last month. As of 0711 GMT the benchmark May iron ore traded on the Singapore Exchange had fallen 0.67% to $97.8 per ton. This represents a loss of 3.16% for this month. Leading Chinese industry figures have indicated that a reduction in steel production is likely, despite the absence of an official government directive. This will put pressure on prices for steelmaking ingredients. Luo Tiejun urged last week for a united response to the steel production cuts, citing the severe pressures on the domestic industry caused by the persistent downturn and the international trade friction. Baoshan Iron & Steel (China's largest listed steelmaker) said on Monday that a reduction in output across the country was likely to occur this year. ANZ reported that "Iron Ore extended recent losses due to a weakening of market sentiment ahead of the Labour Day Holiday period", adding that Chinese steel plants have slowed down their restocking. The Chinese financial markets will close from May 1 to 5 for Labour Day. Trading will resume May 6. A factory survey released on Wednesday showed that China's manufacturing activity in April contracted at its fastest rate in 16 months, after Donald Trump's "Liberation Day", package of tariffs, ended two months of growth. Coking coal and coke, which are both steelmaking ingredients, have also lost ground. They fell by 0.59% each and 0.97% respectively. The benchmark steel prices on the Shanghai Futures Exchange are stagnant. The price of rebar, hot-rolled coil and wire rod were all down. Stainless steel was also down 0.24%. $1 = 7.2665 Chinese Yuan (Reporting and editing by Varun H. K. and Rashmi. Aich).
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TotalEnergies Q1 profit falls on lower oil prices and weak refining margins
By America Hernandez PARIS, 30 April - TotalEnergies, the French oil giant, reported an 18% decline in adjusted net profit for the first three months to $4.2 billion. This was slightly below expectations as earnings declined across all segments, except LNG. According to a LSEG Refinitiv consensus, analysts had predicted $4.3 billion. The lower oil price has resulted in a 6% drop in upstream profits despite a 4% increase of oil and gas production over a year earlier. TotalEnergies, however, said that it would continue to buy back shares up to $2 billion during the second quarter despite Brent crude falling below $70 a barrel this month. At 0919 CET, the shares of this company were down by 3.7%. Total's segment of refining chemicals and lubricants saw a 69% drop in revenue compared to the same period the previous year. This was slightly less than the company had predicted earlier in the month when it released its trading update. The margins for refining crude oil into fuels have increased in Europe over the last six months, but they are still 59% below what they were a year earlier. This is mainly due to a weaker demand and competition from Asian refineries and African refineries. TotalEnergies attributes the seasonality to the business for the 34% decline in earnings from the fourth quarter 2024. The fourth quarter of 2020 will see a 10% drop in integrated LNG earnings. BP, a British competitor, reported a profit decline of 48% due to weaker refining. Galp in Portugal posted a drop of 29% for the first quarter earnings citing lower refining margins as well as falling oil prices. TotalEnergies, unlike BP, Shell and Equinor has stuck with its strategy to increase its renewable energy holdings while it grows its legacy business of oil and gas. (Reporting and editing by Louise Heavens, Aidan Lewis, and America Hernandez in Paris)
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Fontana, EDF: New investment must be focused on the domestic nuclear fleet
The new boss of the state-owned energy company EDF has said that investment must be prioritized to maintain France's nuclear fleet. He also stated his intention to increase nuclear production from 360 terawatt hour (TWh), which is what it is now, to 400 TWh per year by 2030. Bernard Fontana Nominated Chief Executive Officer In March, President Emmanuel Macron’s government lost patience after Luc Remont's former chief Luc Remont and his team disagreed over the best way to simultaneously provide cheap energy and build new capital intensive reactors. Fontana's priority will be to strike new deals with EDF’s largest industrial clients. Fontana told the lawmakers who must still approve his nomination that he was aiming for long-term industrial contracts totaling 40 Terawatt Hours (TWh). EDF's inability to reach new agreements with Remont businesses had been a source for frustration to a government desperate to support a struggling industrial sector that was suffering from high energy prices during a period of intense competition with China and other countries. The cost of operating EDF's reactor nuclear is estimated by the energy regulator CRE to be lower than the price of electricity in 2026. This presents an additional obstacle in negotiations for the next chief.
Iraq announces it will update its Overproduction Compensation Plan
Iraq reaffirmed Monday its commitment to the OPEC+ Agreement and said that it would present an update plan to compensate any overproduction from previous periods.
Baghdad said that its oil minister Hayan Abdul-Ghani spoke with Saudi Arabian Energy Minister Prince Abdulaziz bin Salman and OPEC Secretary-General Haitham Al-Ghais.
Iraq has said that it will continue to make efforts to compensate for the overproduction, while also taking into consideration the expected handover of oil from the Kurdistan Regional Government.
OPEC+, a grouping of members of the Organization of Petroleum Exporting Countries (OPEC) and their allies, such as Russia is scheduled to increase its supply in April.
OPEC+ has agreed to reduce its output by 5,85 million barrels a day (bpd), which is about 5.7%, in a series steps that have been taken since 2022.
The group has extended its most recent layer of cuts until the first quarter 2025. This is the latest delay due to weak demand, and increased supply outside of the group.
Baghdad awaits the approval of Turkey to resume oil flow from the Iraqi Kurdistan Region after a two year halt that began in March 2022, when the International Chamber of Commerce ordered Ankara pay Baghdad damages of $1.5 billion for unauthorised exports in the period between 2014 and 2018.
Sources have confirmed that the Trump administration has put pressure on Iraqi officials to allow Kurdish exports of oil to resume or else face sanctions along with Iran. Later, an Iraqi official denied the pressure and threat of sanctions.
A senior Iraqi official in the oil ministry told reporters earlier that around 185,000 barrels of oil per day will be exported through the Iraq-Turkey oil pipeline from Kurdistan once oil shipments resume.
Iraq and Kazakhstan both promised compensation cuts in order to compensate for overproduction. Reporting from Jana Choukeir, Baghdad; Ahmed Rasheed, Dubai; writing by Mahal Dahan; editing by Kirby Donovan
(source: Reuters)