MIDDLE EAST & TURKEY
Saudi Aramco, working partnership with General Electric (GE), plans to commission its first wind turbine pilot project, the first in the kingdom, the state-owned oil company said. The project is expected to be completed in January 2017, and will generate 2.75MW once it is fully operational. The government said it hopes to generate 9.5GW of clean energy as part of its Vision3030 plans, a potentially significant driver of credit activity in the region.
Lebanon's President, Michel Aoun, and Prime Minister Saad al-Hariri have formed a new government of 30 ministers, ending a political crisis that has lasted for the past two and a half years – during which the government had a caretaker administration led by Prime Minister Tammam Salam.
Yields on Egypt's three and nine-month Treasury bills rose at an auction on Sunday, Central Bank data showed. Yields on the 91-day bill rose to an average of 18.92% from 18.51% at the previous action. Yields on the 266-day bill rose to 19.1% from 18.81%.
Turkey’s Central Bank meets Tuesday and is expected to keep the benchmark rate steady at 8.0%. The CBT has been under pressure from the country's President to reduce real interest rate.
South African Global Credit Ratings (SAGCR) has downgraded Kenyan retailer Nakumatt’s long-term rating to ‘BB-‘ from ‘BB’ citing concerns over its ability to meet outstanding financial obligations.
Brazil reports November current account and FDI data Tuesday. It then reports mid-December IPCA inflation Wednesday, which is expected to rise 6.77% year on year, down from 7.64% in mid-November.
BM&FBOVESPA has sold its inaugural debenture last week. Proceeds from the 3-year BRL3bn debentures issued in the local market will help fund the company's merger with Cetip S.A. alongside a US$125mn loan secured in November, the company said in a statement.
In a public address to the country's armed forces, Brazilian President Michel Temer warned that without passing austerity measures currently facing popular resistance, the government could become insolvent.
Brazil's state-controlled oil company Petrobras secured a US$5bn 10-year loan from the China Development Bank late last week. The loan signing coincided with another agreement that will see Petrobras supply 100,000 barrels of oil per day to three Chinese firms: China National United Oil Corporation, China Zhenhua Oil Co., and e Chemchina Petrochemical Co. Ltd. The company's CEO also said it would reduce production slightly in 2017.
Colombia's Central Bank cut its key policy rate by 25bp to 7.5%, the first rate cut since March 2013, adding that future policy decisions will depend on new data on inflation and the persistence of the economic slowdown. In August, the Central Bank paused after raising its rate by a total of 325bp since September.
Colombia's Magdalena River Waterway PPP, which is majority owned by embattled Brazilian engineering firm Odebrecht, secured financial support from Japanese lender SMBC to the tune of US$254mn. The move came at a pivotal time for the US$850mn project, which was close to seeing Odebrecht's concession cancelled due to failure to demonstrate requisite financial support.
Venezuelan President Nicolas Maduro has delayed the country's demonetisation initiative in the wake of significant protest from the population. The country was due to remove the 100 bolivar note, worth US$0.02, a move that will be postponed until the end of January.
RUSSIA, CIS & EUROPE
Russia’s oil giant Rosneft reported to the government on Monday that the proceeds from its partial privatization – the sale of a 19.7% government stake to Glencore and QIF – have been transferred to the budget of the Russian Federation. The announcement was made to the Russian leader Vladimir Putin by the company’s head Igor Sechin in a private meeting, the Kremlin announced.
Ukraine declared the country's largest lender PrivatBank insolvent on Monday and said bringing it under state ownership was the only way to protect the money of 20 million Ukrainian clients and stave off threats to the financial system. The Central Bank said in a statement that PrivatBank had not fulfilled its recapitalisation programme and 97% of its corporate loans had gone to insiders. As of December 1, the bank's capital shortfall stood at UAH148bn (US$5.65bn).
The Bank of Russia held its one-week auction rate at 10% for a second meeting and said easing may resume in the first half, in line with market expectations.
Japan and Russia have agreed to negotiate a “special system” for joint economic activity on the disputed Kuril Islands. An agreement would mark a big step for Tokyo, which has refused to do anything to acknowledge Russian sovereignty over the islands, but there was no obvious concession from Moscow in return. International observers have suggested that the current stalemate looks set to continue for now.
S&P has revised its outlook on Serbia to 'positive' from 'stable' and affirmed its 'BB-' sovereign credit rating citing improved fiscal performance.
S&P has revised its outlook on the Republic of Croatia to 'stable' from 'negative' and affirmed its 'BB' sovereign credit rating citing better than expected growth.
Poland reports November industrial and construction output, real retail sales, and unemployment Monday. Consensus forecasts are 1.7%, -18.9%, 5.3%, and 5.5% respectively
Kyrgyzstan has ratified a new capital markets law enabling the country's local entities to issue sukuk.
The Chinese government indicated that it would continue to curb speculation demand in the property market in the hopes of avoiding a bubble, including an increase in minimum downpayments for property purchases.
China Academy of Social Sciences (CASS) is forecasting China's GDP to rise by 6.5% in 2017, lower than the 6.7% seen this year - the country's lowest growth rate on record for nearly 25 years.
China’s capital outflows are accelerating and the Central Bank is selling larger amounts of FX, Goldman Sachs Group Inc warned as the yuan headed for its biggest annual decline in more than 20 years. A net US$69.2bn left the nation in November, compared with a monthly pace of around US$50bn since June, Goldman economists reported on Friday.
Mongolia will seek approval from the Import-Export Bank of India to build an oil refinery and pipelines with US$1bn in infrastructure funding negotiated last year, a project that could boost the nation’s gross domestic product by 10%. The government plans to use US$700mn for the refinery and US$264mn for associated midstream infrastructure, according to an official statement.
The Bank of Japan holds its final policy meeting of the year tonight into tomorrow morning, with the bank looking likely to leave its key benchmark rate at -0.10%.
ONGC Videsh Ltd (OVL) raised US$1bn in long and short-term dollar bonds issue to finance its acquisition of 15% stake in Russia's second biggest oil field Vankor. OVL raised US$600mn in 10-year notes paying a coupon of UST+220bp and US$400mn in 5.5-year notes paying 1.75%.