MIDDLE EAST & TURKEY
The government of Oman has approached banks for an international bond issue with tranches of five and 10 years as the country plugs a budget deficit caused by lower oil prices, banking sources familiar with the situation told Reuters on Thursday. The U.S. dollar debt transaction is likely to be around US$1bn or more, with proposals expected to be submitted by the end of this week. Oman's budget deficit is forecast to be 3 billion rials ($7.8 billion) in 2017, according to the sultanate's budget plan, published this week. The finance ministry said it expects to cover this year's OMR3bn (US$7.8bn) deficit with OMR2.1bn of international borrowing, OMR400mn of domestic borrowing and the drawdown of OMR500mn from financial reserves.
Kuwait's Equate Petrochemical is expected to launch a U.S. dollar sukuk issue in the first quarter of 2017, as part of the company's US$2bn sukuk programme, and it would follow Equate's debut US$2.25bn conventional bond sale last October.
Activity in South Africa's private sector rose in December, bolstered by higher output and new orders, a survey showed on Thursday. The Standard Bank Purchasing Managers' Index (PMI), compiled by Markit, rose to 51.6 from 50.8 in November, remaining above the 50 mark dividing expansion from contraction. South Africa's rand firmed against the dollar on Thursday, hitting a four-week high of 13.49 before easing back slightly.
Ethiopia's year-on-year inflation dropped to 6.7% in December from 7% November, the statistics office said on Thursday. The agency said food inflation slowed to 5.3% in December from 6.1% in November. Non-food inflation was 8.2% in December, compared with 8.1% in November.
Venezuelan President Nicolas Maduro on Wednesday named lawmaker Ramon Lobo as the country's new economy czar and chose oil industry veteran Nelson Martinez, who has led U.S. owned refiner Citgo, to serve as oil minister. Eulogio Del Pino, who has been serving as both oil minister and president of state oil company PDVSA, will stay on as president of PDVSA.
Ecuador has barred government entities from awarding public works contracts to Brazil's Odebrecht after the company admitted to making US$33.5mn in bribes over the past decade.
It became the third country in the region to prohibit Odebrecht from signing contracts for new infrastructure projects, following Panama and Peru.
The Mexican peso strengthened on Thursday after the Central Bank sold dollars to support the ailing currency, which has been battered by uncertainty over U.S. President-elect Donald Trump. The peso firmed as much as 1.5% after dropping to a record low on Wednesday.
Syndicated loan volumes in Asia Pacific, excluding Japan, fell for the second consecutive year, slipping to a three-year low of US$462.8bn in 2016 as slower economic growth and geopolitical turbulence curtailed bank lending despite a surge in M&A activity from China that boosted North Asian loans.
China’s services PMI rose in December to a 17-month high as activity and new work expanded, giving a final quarter lift to the country’s economy. The Caixin-Markit China services PMI increased marginally to 53.4 from 53.1 in November, and well above the threshold of 50 separating expansion and contraction.
RUSSIA, CIS & EUROPE
The Central Bank of Belarus cut its reference rate by another 100bp to 17% and said further cuts would depend on a steady decline in inflation, forecasts of inflation and the country's balance of payments. The National Bank of the Republic of Belarus, which has now cut its rate by 800bp since March 2016, added today's rate cut was part of a strategy of reducing the level of dollarization in the economy.
Poland sold treasury bonds worth PLN5bn (US$1.20bn) from an offer of PLN3-5bn at a tender on Thursday, the finance ministry said in a statement.