DUBAI: The price of Brent crude is forecast to reach $60 per barrel by analysts at Citi, the big US bank, as global economic demand recovers and high stock levels are used up.
Max Layton, Citi’s head of regional commodity research, said that the $60 figure was made more likely by a “collapse” in capital expenditure in the oil industry. “No new oil projects are incentivized at $40,” he told the bank’s global media summit.
The Citi forecast is among the most optimistic for oil prices as they recover from the most volatile period in the industry’s history. Brent began the year above $60, but fell below $20 in early April. It was trading Thursday above $42 per barrel.
Layton also ruled out the possibility of a new “price war” in oil markets while prices remained around present levels. “At current price levels and with the future structure of the industry we are not anticipating further price wars.
“But at $55-$60 that could be the case. Higher prices increase the possibility of Russia breaking away from the Opec+ deal.” Citi’s longer term forecast for the oil price remained at the lower end of a range from $45-$60, he added.
Grant Carson, head of Citi’s business in several Central Asian countries, said that even with oil at $20 per barrel, Russia could cover its national budget for more than two years. Lower oil prices could speed diversification away from energy sector dependency, he added.
Atiq Rehman, head of Citi emerging markets, said that Gulf Cooperation Council countries had low debt-to-GDP ratios and high levels of sovereign wealth, and had the capacity to deal with the challenges presented by relatively low oil prices.
“They have big public sectors where the governments own a lot of assets,” he said.
Mike Corbat, Citigroup CEO, said the economic recovery from the pandemic lockdowns would be uneven, and would depend to a great extent on the response from governments. “There have been some truly extraordinary actions by financial authorities around the world, not least the US.”
He said that US financial markets had responded and were “encouraged by the resilience” of government policy.
Optimistic Citi predicts oil at $60 per barrel in 2021
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Optimistic Citi predicts oil at $60 per barrel in 2021
New Saudi draft project to regulate direct market entry of listed companies’ subsidiaries
RIYADH: The Saudi Capital Market Authority has launched a draft regulation for the direct listing of subsidiaries of companies already listed on the main market, inviting stakeholders to provide feedback over a 30-day period, according to a statement issued Feb. 26.
The proposed framework aims to allow subsidiaries of main-market companies to list their shares directly on the main market without undergoing an initial public offering, thereby shortening timelines, streamlining procedures, and reducing the costs associated with listing on the Saudi stock market.
It also seeks to create more investment opportunities in the Saudi financial market, contributing to market depth and product diversification, while maintaining high levels of transparency and protecting investors’ rights.
The proposals enable the issuer and its financial advisor to share information about the company and its financial statements with a select group of potential investors before obtaining CMA approval for the share registration request, allowing them to assess their interest in a direct listing on the main market.
They also allow a specific group of licensed financial advisory firms to prepare research and financial reports, provided these are not published before CMA approval.
The proposed framework emphasizes the importance of proper disclosure by setting out requirements for registering shares on the main market, including submitting a registration document to the CMA.
It also specifies the information that must be included in the registration document, such as the method for determining the reference share price and the risks associated with this method.
Under the draft regulation, securities offering rules, ongoing obligations, and the CMA’s glossary of terms and regulations will be updated to allow this type of listing.
This approach is expected to bring multiple benefits, including maximizing the overall value of the main market with lower risk by listing companies that have greater knowledge and experience of market regulations, as well as deepening the market by increasing the number of listed companies across multiple sectors.
