Abu Dhabi fund suspends debt service repayments for countries, companies

Abu Dhabi Fund for Development said debt service repayments would be suspended for eligible countries and individual companies from Jan. 1 until Dec. 31. (AFP file photo)
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Updated 13 July 2020

Abu Dhabi fund suspends debt service repayments for countries, companies

  • Debt service repayments would be suspended for eligible countries and individual companies from Jan. 1 until Dec. 31

ABU DHABI: Abu Dhabi Fund for Development has suspended debt service repayments for some countries and companies for the year, the state-financed fund said on Sunday.

The fund provides financial assistance to companies in the UAE and to developing countries, which has included Pakistan, Egypt, Sudan and Ethiopia.

Debt service repayments would be suspended for eligible countries and individual companies in the developing world from Jan. 1 until Dec. 31, the fund said in a statement. Countries and companies would need to request to have repayments suspended, it said.

The fund did not say what the criteria would need to be met to be eligible for the scheme.

“At a time when the world is reeling under the effect of the pandemic ... it is imperative for us to support particularly those that need it most, especially the low-income countries,” the fund’s director general Mohammed Saif Al-Suwaidi, said. 

Sectors such as banking and aviation in the UAE are facing a tough time due to the outbreak of the coronavirus pandemic.

According to a report, Emirates airline has cut a tenth of its workforce in layoffs that could rise to 15 percent, or 9,000 jobs, its president said.

The Middle East’s largest carrier, which operates a fleet of 270 wide-bodied aircraft, halted operations in late March as part of global shutdowns to stem the spread of the virus.

It resumed two weeks later on a limited network and plans to fly to 58 cities by mid-August, down from about 157 before the crisis.

However, its president Tim Clark has said previously that it could take up to four years for operations to return to “some degree of normality,” and the airline has been staging rounds of layoffs, as recently as last week, without disclosing numbers.

Before the crisis hit, Emirates employed some 60,000 staff, including 4,300 pilots and nearly 22,000 cabin crew, according to its annual report.

Clark said in an interview with the BBC that the airline had already cut a tenth of its staff and that Emirates “will probably have to let go of a few more, probably up to 15 percent.”

A company spokeswoman told AFP the airline had nothing to add to the report.

The International Air Transport Association (IATA) has said that airlines are in line to make a combined net loss of more than $84 billion this year in the wake of the pandemic crisis, the biggest in the industry’s history.

Clark said in the interview that Emirates was “not as badly off as others” but that the crisis hit just as it was “heading for one of our best years ever.”

The Dubai-based airline had reported a bumper 21 percent rise in annual profits in March.


Oil climbs on positive China data, hopes for US stimulus package

Updated 11 August 2020

Oil climbs on positive China data, hopes for US stimulus package

  • Iraq to deepen supply cuts in August and September; China’s factory deflation slows in July

LONDON: Oil rose on Monday, supported by an improvement in Chinese factory data, rising energy demand and hopes for an agreement in the United States on more coronavirus-related economic stimulus.

Brent crude rose 75 cents, or 1.7. percent, to $45.15 a barrel, and West Texas Intermediate (WTI) US crude was up 94 cents, or 2.3 percent, to $41.16 a barrel.

Saudi Arabian Aramco CEO Amin Nasser said on Sunday that he sees oil demand rebounding in Asia as economies gradually open up.

China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back toward pre-coronavirus levels, adding to signs of recovery in the world’s second-largest economy.

“With oil demand still slowly grinding higher, and oil supply in check due to the OPEC+ production cut deal and prices too low to incentivise strong production growth in the United States, the oil market remains undersupplied,” UBS analyst Giovanni Staunovo said.

Iraq said on Friday it would cut its oil output by a further 400,000 barrels per day in August and September to compensate for its overproduction in the past three months.

The move would help it comply with its share of cuts by the Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+.

“This would send out a strong signal to the oil market on various levels. That said, this would also require the international companies operating in Iraq to join in with the cuts,” Commerzbank analyst Eugen Weinberg said.

Prices also found some support after US President Donald Trump said US House Speaker Nancy Pelosi and Chuck Schumer, the top Democrat in the Senate, wanted to meet with him to make a deal on coronavirus-related economic relief.

The talks between Democrats and members of Republican Trump’s administration broke down last week.

“The longer this drags on, the worse it is for the demand scenario,” said Michael McCarthy, market strategist at CMC Markets and Stockbroking.

However, uncertainty over rising tensions between the United States and China put some pressure on prices. Trump signed two executive orders banning WeChat and TikTok in 45 days’ time while announcing sanctions on Chinese and Hong Kong officials.

Markets will now keep an eye on a China-US meeting on trade scheduled for this weekend.