Arab winter has become markets’ chief worry

January 15, 2016

Trouble brewing in the Middle East is fast turning into financial markets’ biggest anxiety. Sectarian divisions, the rise of radical Islam and plummeting oil prices are threatening to rip the region apart. International markets suffer too as Arab money is spirited back home.

Saudi Aramco IPO could herald a Riyadh garage sale

January 12, 2016

The IPO of a strategic stake in Saudi Aramco could be the start of a kingdom-wide selloff of state assets. The government owns stakes in locally listed firms worth $170 billion. By spinning these off to compensate for lower oil revenue, it could fund years of budget deficits.

Saudi Aramco IPO carries big investor risks

January 8, 2016

Saudi Arabia has whetted the appetite of potential shareholders with the prospect of listing shares in its state oil company. A sale would give investors access to 18 pct of the world’s oil reserves but little say in how the company is run. The risks could outweigh the rewards.

Oil will blow past $80 a barrel in 2016

December 30, 2015

Low-cost OPEC producers will win the hydrocarbon price war because they can fight harder for longer. For now, OPEC is flooding the market with cheap crude. But it is building power over prices by making rival output uneconomic. The next big move in the oil price will be up.

Arab sovereign wealth fund exodus just beginning

December 29, 2015

Oil-dependent Gulf sheikhdoms need money to shore up their budgets. They’ll hold on to trophy assets like stakes in VW or Barclays for as long as possible. But if the price of crude keeps sliding to $20, the region’s rulers might need to liquidate their rainy-day funds by 2020.

German open-door isolationism is unsustainable

November 26, 2015

Angela Merkel has ignored domestic calls to shut out refugees. But she will find it harder to brush off French calls for the same. Alienating a key ally would undermine the union Merkel wants to save, and threaten economic integration.

Oil market rests on Saudi-Iranian output deal

November 24, 2015

Saudi Arabia says it will work with the world’s biggest oil producers to maintain price stability. To be effective, the OPEC kingpin will also have to make room for Iran to add barrels to the flooded market. The geopolitics are fast moving. But logic points to a deal.

Luxury overexpansion pads against country risk

November 17, 2015

Labels like Gucci and Hermes tend to suffer after incidents like the Paris shootings because they rely on confidence and tourism. But years of runaway growth may leave luxury better positioned than before. Companies are now less exposed to any single region.

Paris attacks can both unify and cleave Europe

November 14, 2015

Deadly assaults across the French capital have sparked the sort of international solidarity which could help Europe surmount recent acrimony over issues such as migration. But the fears they generate may shape debates about security and cultural integration in ways that divide.

IEA history lesson makes $100 oil more likely

November 10, 2015

The Paris-based International Energy Agency says the world’s reliance on low-cost Middle East oil could return to 1970s levels. By cutting capex, oil majors are bolstering that dependence. Supply squeezes could feed through to higher crude sooner rather than later.