Economic recovery seen key to Macron’s reelection

The French government plans to allow outdoor areas of restaurants and cafes, as well as museums and nonessential shops, to resume operating on May 19. (AFP)
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Updated 09 May 2021

Economic recovery seen key to Macron’s reelection

  • French president focusing on saving jobs, reviving pandemic-hit economy

PARIS: President Emmanuel Macron’s plans for bringing France out of the pandemic are not just about resuscitating long-closed restaurants, boutiques and museums. They are also about preparing his possible campaign for a second term.

A year before the next presidential election, Macron is focusing on saving jobs and reviving the pandemic-battered French economy as his country inches out of its third partial lockdown.

The centrist president’s ability to meet the challenge will be significant for his political future and for France. While he has not officially declared his candidacy, Macron has made comments suggesting he intends to seek reelection. And he has pushed recent legislation on issues that potential rivals on the right and the left hold dear, from security to climate change.

Pollsters suggest Macron, who four years ago became the youngest president in French history, has a good chance of winning the presidency again in 2022 despite his government’s oft-criticized management of the pandemic and earlier challenges to his policies.

The coronavirus reopening strategy Macron unveiled this month calls for most restrictions on public life to be lifted June 30, when half of France’s population is expected to have received at least one vaccine shot. 

With up to 3 million people in France getting vaccinated each week, the government plans to allow outdoor areas of restaurants and cafes, as well as museums and nonessential shops, to resume operating on May 19.

In an interview with French media, Macron said he would visit France’s regions over the summer “to feel the pulse of the country” and to engage with people in a mass consultation aimed at “turning the page of that moment in the nation’s life.” “No individual destiny is worthwhile without a collective project,” he said, giving the latest hint about a potential reelection bid.

At the moment, all opinion polls show Macron and Marine Le Pen, the far-right leader he beat in a presidential runoff election in 2017, again reaching the runoff next year. The polls also forecast that Macron would defeat National Rally leader Le Pen again, though by a smaller margin.

Macron was elected on a promise to make the French economy more competitive while preserving the country’s welfare system.

French politics expert Luc Rouban, a senior researcher at the National Center for Scientific Research, said the president’s immediate goal “is to show he is still able to continue implementing his project, which has more or less been stopped by the health crisis.”

Macron needs to show he is addressing inequality, economic mobility and other social justice issues that are important to France’s left wing, Rouban said.

In the French newspapers interview, Macron also praised the country’s benefits for low-income workers, who since 2019 have received up to additional €100 ($120) per month.

Macron’s public image appears to have partially recovered from drubbing it took at the height of the “yellow vest” movement, which started in late 2018 to oppose a fuel tax and grew into a weekly anti-government protest targeting alleged social and economic injustice. At the time, critics angry over Macron eliminating a wealth tax labeled him the “president of the rich.”

During the virus crisis, Macron applied a “whatever it takes” strategy based on state intervention to save jobs and businesses, including a massive partial unemployment program and subsidized child care leave. The government also approved a two-year €100 billion rescue plan to revive the economy.

Macron promised there would be no tax increases to repay the debt, which soared last year to 115.7 percent of gross domestic product.

Despite strong opposition from unions about planned changes to the pension system and unemployment benefits, he has pledged to keep reforming “until the last quarter of hour” of his five-year term, which runs out in May 2022.


Sterling set for worst week since Sept. 2020

Updated 19 June 2021

Sterling set for worst week since Sept. 2020

LONDON: Sterling extended its fall against the US dollar on Friday, dropping below $1.39, hurt by the US Federal Reserve’s hawkish surprise and an unexpected fall in Britain’s retail sales.
The pound dropped against a strengthening dollar on Thursday after the Fed surprised markets by signaling it would raise interest rates and end emergency bond-buying sooner than expected.
On Friday, it fell further against both the dollar and the euro. It was down 0.3 percent on the day at $1.389, having touched as low as $1.38555 — its weakest since May 4. It was on track for its worst week since September 2020.
Versus the euro, it was down around 0.3 percent at 85.78 pence per euro, on track for a small weekly fall.
“GBPUSD remains bogged down below the 1.39 handle by a confluence of broad USD strength and a slight deterioration in near-term data,” said Simon Harvey, senior FX market analyst at Monex Europe.
“The limited impact of the data on sterling is largely because retail sales volumes remain above pre-pandemic levels and a shift in consumption patterns toward services after the May 17th reopening was always likely.”
For cable, market participants are weighing up the Bank of England and the Fed’s relative pace of possible monetary policy tightening. The BoE next meets on June 24.
BofA strategists said in a note to clients that it changed its view on the central bank’s tightening trajectory.
and now expects a 15 basis point rate hike in May 2022, compared to previously expecting no hikes in 2022.
“Brussels’ patience with London’s having its cake and eating it is wearing thin. Indeed, there is a risk of protocols being triggered and tariffs being threatened more seriously,” wrote ING strategists in a note to clients.
“The next few weeks could thus be a vulnerable period for Cable, where a break of 1.3890 opens up 1.3800/3810 — the last stop before an extension to the March/April lows of 1.3675.”


Bahrain’s Batelco could be first stock to be dual listed on Tadawul

Updated 18 June 2021

Bahrain’s Batelco could be first stock to be dual listed on Tadawul

  • Samba has been hired as an adviser on the deal

RIYADH: Bahrain Telecommunications Co. (Batelco) is planning to become the first company to have a dual listing of shares on Saudi Arabia’s stock exchange (Tadawul), Bloomberg reported citing people familiar with the matter.

The investment arm of Samba Financial Group has been hired as an adviser on the deal, the people said, asking not to be identified for information privacy.

No decision has been made and the company may decide against the dual listing, they said.

A spokesperson at Batelco declined to comment, while Samba Capital didn’t respond to messages seeking comment, Bloomberg said.

Tadawul has been trying to encourage Middle Eastern firms to dual list for years, without success. Aluminium Bahrain had considered a dual listing in 2014, but it never occurred.


Saudi Arabia’s National Debt Management Center wins global awards for second year

Updated 18 June 2021

Saudi Arabia’s National Debt Management Center wins global awards for second year

  • Saudi office won Middle East and emerging market awards

RIYADH: Saudi Arabia won the Best Sovereign Public Debt Office in the Middle East and the Most Impressive Emerging Market Issuer Award at the 2021 Global Capital Bond Awards, for the year 2021, for the second year in a row, SPA reported.

The Global Capital Bond Awards honors the achievements of governments and companies of all sizes in the field of sovereign and regional finance, banking services, hedge funds, and many other areas within the financial services sector.

It also highlights the most prominent innovations and achievements within the financial services sector, globally.

Saudi Arabia sold SR8.27 billion ($2.20 billion) of riyal-denominated sukuk in June, up from $941 million in May, bunt down from $3.1 billion April, National Debt Management Center data show.

“Driving growth of the Kingdom’s capital markets will be an increase in bond issuance to help fund the SR12 trillion Vision 2030," said Khalid Al-Bihlal, head of S&P Global Ratings KSA. "We project a gradual rise in the use of Saudi Arabian riyal-denominated bond issuance as the local capital markets develop. The US dollar is currently the currency of choice for such bonds."


Saudi MoF electronically linked to SAMA

Updated 18 June 2021

Saudi MoF electronically linked to SAMA

RIYADH: The Saudi Central Bank (SAMA) announced the completion of an electronic link with the Ministry of Finance to process requests relating to the bank accounts of government agencies held at Saudi commercial banks through the online portal Hesaab.

SAMA is seeking to improve and accelerate the procedures related to requests of government agencies’ bank accounts received from the Ministry of Finance, by implementing technical solutions with minimal human intervention, it said in a statement on Thursday.

The Hesaab portal is one of the National Transformation Program 2020 initiatives that improves the level of financial services, in line with Vision 2030.


Oil falls amid dollar strength; demand picture still bullish

Updated 18 June 2021

Oil falls amid dollar strength; demand picture still bullish

  • Prices remain close to multi-year highs
  • Dollar jumped since Fed moved rate-hike forecast forward

LONDON: Oil prices fell for a second straight session on Friday as the US dollar soared on the prospect of interest rate hikes in the United States, but they were on track to finish the week little changed and only slightly off multi-year highs.
Brent crude futures were down 64 cents, or 0.9 percent, at $72.44 a barrel as of 9:00 a.m. GMT, extending a 1.8 percent decline on Thursday. The contract is set to be largely steady for the week.
US West Texas Intermediate (WTI) crude futures were down 53 cents, or 0.8 percent, at $70.51 a barrel, after retreating 1.5 percent on Thursday and is also set to be flat on the week.
On Wednesday, Brent settled at its highest price since April 2019 while WTI settled at its highest since October 2018.
“Oil markets retreated sharply overnight as a stronger US dollar and falling commodity prices elsewhere saw the overbought technical correction continue,” said Jeffrey Halley, senior market analyst at OANDA.
The dollar has rocketed in the two sessions since the US Federal Reserve projected possible rate hikes in 2023, earlier than market watchers previously expected. A rising dollar makes oil more expensive in other currencies, curbing demand.
The prospect of rate hikes also weighed on the longer-term growth outlook, which would eventually hurt oil demand, in contrast to the near-term outlook for growth in demand as COVID-19 related curbs on movement and business activity ease and road and air travel pick up, said Westpac senior economist Justin Smirk.
“The near term’s all very positive. The question is how much further can it rise, how much scope is there if you’re looking at an environment where interest rates are going to rise,” Smirk said.
Oil prices also fell after Britain on Thursday reported its biggest daily rise in new cases of COVID-19 since Feb. 19, with government figures showing 11,007 new infections versus 9,055 a day earlier.
Adding to negative sentiment were remarks from Iran’s top negotiator on Thursday saying talks between Tehran and Washington on reviving the 2015 Iran nuclear deal have come closer than ever to an agreement.