Oman’s ruler approves fiscal plan to diversify revenue

Sultan Haitham is seeking to reduce high levels of government debt and bring down state spending. (Reuters)
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Updated 23 October 2020

Oman’s ruler approves fiscal plan to diversify revenue

DUBAI: Oman’s sultan has approved a medium-term fiscal plan to make government finances sustainable, state media said on Thursday, as the coronavirus crisis and low oil prices batter state coffers.

The country has long had plans to reform its economy, diversify revenues and introduce sensitive tax and subsidies reform, but they dragged under the late Sultan Qaboos, who died in January after half a century in power.

His successor, Sultan Haitham, approved a 2020-2024 fiscal plan that included increasing government income from non-oil sectors, state media reported, citing orders from the Sultan.

Oman will also accelerate the establishment of a social security system for low-income citizens who may be affected by the government’s drive to bring down the country’s debt and cut state spending, one of the orders said.

Haitham also ordered 371 million Omani rials ($964 million) of unspecified development projects to be carried out across the country.

Rated non-investment grade by all major credit agencies, Oman’s debt climbed to around 60 percent of gross domestic product at the end of 2019 from less than 5 percent five years earlier.

On Wednesday it raised $2 billion in its first international bond sale since July 2019.  People familiar with the plans had previously said Oman sought to raise between $3 billion and $4 billion in a three-part deal.

However, Oman scrapped a three-year tranche as it faces an aggressive debt repayment schedule between 2021 and 2023 and limited investor appetite for the offer, several bankers and fund managers said.

“Our estimate was that they wanted to do $3 billion. So I think the size might be a bit disappointing for them but I think they should be happier with the price,” Abdul Kadir Hussain, head of fixed income asset management at Arqaam Capital.

The country has begun preliminary discussions with some Gulf countries about financial support, according to a bond prospectus seen by Reuters. Bahrain, the only other “junk” rated Gulf country, averted a credit crunch in 2018 when it was bailed out with a $10 billion aid package from its wealthy neighbors.


Bitcoin heads for worst weekly loss in months

Updated 22 January 2021

Bitcoin heads for worst weekly loss in months

  • The world’s most popular cryptocurrency fell more than 5 percent to an almost three-week low of $28,800 early in the Asia session

SINGAPORE: Bitcoin wavered on Friday and was heading toward its sharpest weekly drop since September, as worries over regulation and its frothy rally drove a pullback from recent record highs.
The world’s most popular cryptocurrency fell more than 5 percent to an almost three-week low of $28,800 early in the Asia session, before steadying near $32,000. It has lost 11 percent so far this week, the biggest drop since a 12 percent fall in September.
Traders said a report posted to Twitter by BitMEX Research suggesting that part of a bitcoin may have been spent twice was enough to trigger selling, even if concerns were later resolved.
“You wouldn’t want to rationalize too much into a market that’s as inefficient and immature as bitcoin, but certainly there’s a reversal in momentum,” said Kyle Rodda, an analyst at IG Markets in Melbourne, in the wake of the BitMEX report.
“The herd has probably looked at this and thought it sounded scary and shocking and it’s now the time to sell.”
Bitcoin was trading more than 20 percent below the record high of $42,000 hit two weeks ago, losing ground amid growing concerns that it is one of a number of price bubbles and as cryptocurrencies catch regulators’ attention.
During a US Senate hearing on Tuesday, Janet Yellen, President Joe Biden’s pick to head the US Treasury, expressed concerns that cryptocurrencies could be used to finance illegal activities.
That followed a call last week from European Central Bank President Christine Lagarde for global regulation of bitcoin.
Still, some said the pullback comes with the territory for an asset that is some 700 percent above the 2020 low of $3,850 hit in March.
“It’s a highly volatile piece,” said Michael McCarthy, strategist at brokerage CMC Markets in Sydney. “It made extraordinary gains and it’s doing what bitcoin does and swinging around.”
Second-biggest cryptocurrency ethereum initially slipped to a one-week low on Friday before rising 6 percent late in the Asia session to $1,177.