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Gulf oil markets reduce prices
The major Gulf stock markets fell on Thursday morning, mainly due to persistently low oil prices and a series of disappointing corporate earnings reports. Oil prices, which are a major catalyst for Gulf financial markets, fell on Thursday. This was a continuation of the losses that were made in the previous session. A report showing increased crude inventories at the U.S. confirmed concerns that global supplies would be more than enough to meet the current fuel demand. OPEC's report on Wednesday showed that the world oil market would see a small excess in 2026, after OPEC+ production increased and other producers supplied more fuel. This is a change from their earlier projections, which predicted a deficit. Saudi Arabia's benchmark oil index fell 0.9%, mainly due to a drop of 0.9% in the Saudi Aramco. Salik Company's 1.8% decline weighed on Dubai's main stock index, which fell 0.5%. The toll operator posted a higher third-quarter profit year-over-year, but a decline sequentially from the previous quarter. Presight AI Holding, which reported a quarterly profit increase, plunged 9.8% despite the index falling 0.4% in Abu Dhabi. The Qatari Index fell 0.4% and the Qatar Islamic Bank lost 1.3%. (Reporting and editing by Topra Chopra in Bengaluru, Ateeq Sharif in Bengaluru)
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Brazil's ag exchange has completed the country's 1st physical grains derivative settlement for 15 years
The Brazilian Agricultural Exchange (BAB), announced on Thursday, had recorded the first physical settlement in Brazil of a grain derivative in over 15 years. Corn was delivered to a railroad terminal in Rondonopolis in Mato Grosso. Eric Cardoni, chief executive of BAB, a platform for agricultural trading that started operations in September, said that the volume of trading at BAB increased dramatically last month. Cardoni stated that the first delivery of corn was 1,800 metric tonnes, which is equivalent to three contracts. Cardoni also said that another 9,000 metric tons (15 contracts) will be delivered later this month. The market appreciated the physical delivery. "There's a lot of interest in using the settlement method for these first contracts," said Cardoni. He is a former grain, oilseed and trading director with Louis Dreyfus Company. BAB was created to connect the derivatives markets directly with the physical grain markets in the region. Its main investor is logistics firm Rumo. Cardoni stated that BAB is interested in physical deliveries, which are no longer available in grain derivatives traded at the B3 exchange. This is because participants can manage both risk and sales using the same instrument. He added that the other derivative contracts available for grains in Brazil were settled by financial settlement. Cardoni explained that BAB's platform allows for bilateral negotiations between buyers, sellers and removes the so-called basis risks -- the price difference between the Brazilian market versus Chicago Board of Trade Futures. BAB stressed the importance of local hedging tools in light of global volatility, such as Chinese tariffs on U.S. soya beans that impact Brazilian premiums. To simplify the hedging process in Brazil, the platform offers standard contracts that are traded in Reais. Cardoni added that other contracts are available for December delivery. After initial trades in Septembre, Cardoni noted, volume increased 14-fold by October. (Reporting and writing by Roberto Samora, Sao Paulo. Editing by Brad Haynes & Matthew Lewis.
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Sources say that the Orsk refinery in Russia was closed by a technical problem before the drone attack on Ukraine.
Three industry sources told Reuters that the Russian Orsknefteorgsintez refinery, which is a mid-sized refinery, was shut down due to an fire on November 10, a day before Ukrainian drones targeted it. According to one source, equipment caught on fire during Monday's upgrade work. Sources said that drones had attacked the plant on Tuesday, which is located 1,900 km (1,180 mi) east of Ukraine's border. The Ukrainian military has also confirmed that it hit the Russian oil refinery in Orsk, located in Orenburg Region, on Tuesday. Industry sources claim that the drone caused damage to some utility systems at the plant. Forteinvest, the company that owns this refinery, has not responded to a comment request. This year, Ukraine launched a wave of drone strikes deep into Russia, aiming to knock out refineries and depots as well as pipelines. The attacks targeted Moscow's main source of funding the Ukraine conflict. The nameplate capacity of Orsk refinery is 5.76 million metric tonnes per year or approximately 115,200 barges per day. According to industry sources, it processed 4.2 millions tons of crude oil last year, producing 1.8million tons of diesel and 600,000 tons gasoline. It also produced 500,000 tons bitumen, and 200,000 tonnes of fuel oil. Conor Humphries, Conor Humphries (Reporting)
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Source: India opens new military airbase near the border with China
A defence official confirmed that India's chief of air force made the first landing of a transport aircraft capable of fighting jet operations at a new base near the disputed Himalayan boundary with China. The move coincides with a warming of relations between the nuclear-armed neighbors, following an historic pact in October last year to ease tensions along their de facto borders and a trip to China this year by Prime Minister Narendra modi. The official who requested anonymity because the issue is sensitive added that Air Chief Marshall A. P. Singh landed his C-130J aircraft at Mudh-Nyoma, a station of the Ladakh air force perched at a distance of approximately 13,000 feet (4000 m). The Indian Air Force (IAF) and the Ministry of Defence did not respond immediately to a comment request. The new airbase is the third key station in the region, and it's only 30 km from the Line of Actual Control with China. "This new airfield, which is capable of fighter operations will present a new challenge to both our adversaries," wrote retired Air Marshal Sanjeev Kapoor on X. He was referring to China and Pakistan, two neighbouring countries. He added that China also has an airfield of similar height. Indian analysts and officials claim that despite the thaw in relations, there is still mistrust between China and India. The Indian Army chief pointed out this year the continued increase of both sides' troop presences and infrastructure along the border. India and China have a border of 3,800 km (2400 miles), which is poorly delineated. It has been disputed ever since the 1950s. In 1962, they fought a short but brutal war. After a border clash that resulted in death, the two countries' ties soured. Their 2024 agreement brought about a thaw, and some restrictions were eased, allowing direct flights and bi-directional visits to resume. (Reporting and editing by Clarence Fernandez in New Delhi)
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Poste Italiane exceeds profit forecast and increases interim dividend
Poste Italiane, the state-backed financial conglomerate, announced on Thursday that its operating profit for the third quarter rose by 8.5%, exceeding analyst expectations, thanks to a strong performance from its financial services division. Poste has a number of divisions, including insurance, financial, and digital payments, in addition to its traditional mail-and-parcels business. Its adjusted earnings before tax and interest (EBIT), which is the profit earned before taxes and interest, rose from 856 million euro ($998 millions) during the period July through September. This was well above the 827 million euro analyst consensus that was compiled by a company. Poste has increased its interim dividend from 40 cents to 31% since it was listed on the bourse in 2015. Payment is due on November 26. The total revenues for the third quarter increased 3.9%, to 3.2 billion Euros. This is in line with analyst consensus. Poste Italiane has become the biggest single investor in Telecom Italia, the phone group. The two companies have partnered in a retail offer of energy and a cloud services partnership. Matteo Del Fante, CEO of Poste Italian, said that any future partnerships with TIM will be announced once they are finalised. Poste has tripled its market value in the last decade. Its shares are trading at record levels and have risen 58% this year. Italy owns still 65% of Poste. The government of Prime Minister Giorgia Melons considered, and then abandoned plans to sell an additional stake in the company. $1 = 0.8575 Euros (Reporting and Editing by Elvira pollina)
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Wizz Air predicts a fall in revenue despite a H1 operating profit beating
Wizz Air forecasted a single-digit drop in revenue for the full year and stated that winter capacity is a "short term challenge" even though its operating profit for the first half of 2018 jumped by almost 26%, to 439.2 millions euros ($512.20). The operating profit was substantially higher than analysts expected. Analysts surveyed by LSEG had predicted an operating profit 367 million Euros. In a recent statement, Chief Executive Jozsef Varradi stated that they are looking to manage their capacity for the winter season due to the anticipated drop in unit revenue. Wizz Air announced last week it would delay the delivery of 88 Airbus aircraft from 2030 to 2033 in order to reduce costs and improve profits. Varadi stated in a press release that "we will see the biggest changes in our delivery profile within 12 months". In recent years, the airline has struggled to recover its profits after a series of disappointing quarters. The airline has blamed external factors for its problems, such as an issue with Pratt and Whitney engine, a long repair schedule and geopolitical issues in the Middle East and Eastern Europe.
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SBM Offshore raises its profit forecast for 2025 for the second time
SBM Offshore, a Dutch oil and gas service company, increased its earnings forecast for the second time in a row on Thursday as its operating performance improved. The Amsterdam-listed firm reported a 26% rise in its directional revenues to $3.6 billion during the third quarter. This was aided by a 90% increase in turnkey business, which builds and sells vessels for oil and gas companies. It said that its core earnings (EBITDA), which are based on a directional basis, would be around $1.65bn this year. The company had raised It was over $1.6 billion in August. The company has not changed its revenue forecast for 2025, which is expected to exceed $5.0 billion. SBM reported that its fleet uptime had improved to 99.4%, and three new floating storage, production and offloading (FPSO) vessels were brought on stream, including Tamandare which broke the Brazil oil output record. This helped support the improvement in outlook. SBM Offshore uses directional reporting to record revenue before the leases start. (Reporting and editing by Anna Pruchnicka, Hugo Lhomedet)
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Hapag-Lloyd's half-year profit falls by 50% due to the continued volatility in the shipping market
Hapag-Lloyd, the German container shipping company, reported a 50% decline in its nine-month net profits to 846 millions euros ($986.61million) on Thursday. It also lowered its top-end earnings forecast for the full-year due to market volatility and increasing costs. The company has lowered its forecast for full-year profit before interest and tax (EBIT) to between 0.5 and 1.0 billion euro, down from the previous range of 0.2 to 1.1 billion euro announced in August's earnings. In a press release, Rolf Habben Jansen, Chief Executive Officer of the company said that "(We will) respond quickly to changes in global commerce and maintain strict discipline on costs." He added that despite previous investments, the company is seeing first cost savings from the new Gemini collaboration with rival Maersk. The Red Sea security concerns and the frequent changes in U.S. Trade Policy have led to an unstable demand, fluctuating freight rates and a lowering of profitability in the shipping industry, which is a key indicator for global economic activity. Hapag-Lloyd's EBIT for the nine months of 2009 fell 55% on an annual basis to 809 millions euros. This was due to rising costs that were not offset by a 10% increase in transport volume to 10,2 million twenty-foot-equivalent units (TEU). The average freight rate has dropped by 4.8% to $1,397 per container. Maersk reported on November 6, a better-than expected third-quarter. Results But warned of falling freight prices in the fourth quarter. Reporting by Vera Eckert and editing by FriederikeHeine and Louis Heavens.
EU's airline offer requires fuel doubts over further attempts
It took a year of wrangling with the European Commission for Germany's Lufthansa to gain approval to purchase 41% of Italy's ITA Airways, and only after it accepted big concessions.
While the deal broadens Lufthansa's footprint in the rewarding southern European market, the combined group will have to cede some routes and slots to competitors for it to continue. Market executives, financiers and specialists say greater examination of such tie-ups by European regulators and demands for treatments might hinder major airlines from additional deals. British Airways-owner IAG has been in the crosshairs because 2019 when it revealed strategies to purchase Spanish carrier Air Europa, with an EU due date of Aug. 20 for concessions, while regulators are also expected to probe Air France-KLM's plan to purchase 19.9% of Scandinavian carrier SAS.
Airline executives have actually long said consolidation is required to aid balance out soaring operating costs, helping providers recover from the COVID-19 pandemic which brought worldwide travel to a stop and the travel sector to the verge.
But regulators fret Europe's three largest groups, IAG, Air France-KLM and Lufthansa, are ending up being too dominant, possibly hurting consumer choice and making flying less economical.
We can see that Europe is ending up being increasingly more careful about this wave of debt consolidation, stated Piotr Grobelny at aviation data analysis company IBA.
The next prospect for privatisation is Portugal's TAP. However Lisbon's plans have actually been thrown off course by political turmoil, in spite of interest from Air France-KLM, Lufthansa and IAG.
TAP CEO Luis Rodrigues said last month that the new centre-right government ought to not sell 100% of the airline company and need to likewise generate non-aviation investors, like private equity.
That could reduce issues in Brussels about the potential for a market dominated by a handful of big airline groups.
One banker dealing with mergers stated that airlines watch out for losing time, cash in legal charges and needing to give up important take-off and landing slots in order to get clearance for offers.
More complex deals can use up to two years to complete, stated Martina Farkas, M&A partner at Linklaters, adding: Offers. are taking longer and are ending up being more complicated and expensive.
It can not be ruled out that tactically important deals. attracting regulatory attention might have the potential to be. delayed and face more obstacles, Farkas told .
NO CONCESSIONS
Dealmaking can also be complicated due to the fact that governments often. hold stakes in national providers which they consider as tactical. assets too important to fail.
Britain's Monarch collapsed in 2017 and FlyBe has entered into. administration, however lots of other airlines were kept afloat with. taxpayer funds, particularly throughout the pandemic.
Previous EU antitrust commissioner Didier Reynders informed the. Financial Times in 2015 that regulators would look for harder. concessions from those looking to merge to ensure fair. competitors and decrease market concentration of the big 3. This has actually been at the heart of IAG's fight to buy Air Europa. It. has actually offered more concessions, such as making 52% of Air Europa's. flights available to competitors, to ease concerns over its Iberian. market supremacy, and assuring regulators it will not decrease. competitors on long-haul routes to South America.
IAG said on Wednesday it was glad that the Commission. acknowledged the advantages of airline company consolidation. Its shares. increased more than 5% on anticipation that the ITA offer approval. made its takeover of Air Europa more likely to be offered the. thumbs-up.
IAG has 50% of slots at Madrid's primary airport and 47% at. Barcelona's primary airport, according to an analysis of IBA data.
Executives stress that the Commission will make demands that. are almost impossible to fulfill, stopping dealmaking.
The alternative to debt consolidation happening is that. airline companies will continue to be funded by governments, and that's. simply even worse,? easyJet CEO Johan Lundgren informed .
BUDGET PLAN PROVIDERS
Other experts indicate the rise of affordable providers as an. location overlooked by competition authorities.
In Lufthansa's ITA purchase, numerous have actually indicated Ryanair's. supremacy in Italy, where it has a more than 40% market share.
But competition authorities had not factored the Irish. budget airline company into their evaluations because they do not. consider Lufthansa and ITA to be direct rivals.
Ryanair uses more flights than any other airline in Europe. with 11.49% of the overall, an IBA analysis programs. Lufthansa and. IAG are simply behind, with 9.54% and 8.2% respectively.
(source: Reuters)