Samson: TRADE BANK OF IRAQ – the importance of e-payments and modern banking systems for the benefit of the Iraqi citizen
20th April, 2020
Hosting Iraqi channel for Mr. Fouad agent – Vice President of the Iraqi trade bank
Talks about the importance of e-payments and modern banking systems for the benefit of the Iraqi citizen.
Monday Night CC 4-21-2020
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Don961: The prime minister-designate presents his cabinet this evening
Tuesday 21, April 2020 17:03 Baghdad /
Nina / Political sources revealed that the Prime Minister-designate Mustafa Al-Kazimi will present, this evening, his ministerial formation to the Shiite political forces to inform them of the selected personalities and hear their reactions. / End 7 LINK
Don961: The first comment from Donald Trump on the collapse of US crude prices
2020.04.21 – 01:15 Baghdad – people
US President Donald Trump briefly commented on the collapse of US oil prices during his daily press conference at the White House, which he devotes to talking about developments in the Corona epidemic.
Trump said at his conference at dawn Tuesday Baghdad time (April 21, 2020) that he was “looking to put 75 million barrels in the American oil reserves that he plans to fill with excellent prices,” noting that his administration wants to “reopen America’s economy in a responsible manner.”
He added: “We hope to vote tomorrow in the Senate on an additional economic plan, and that the Americans continue to observe the rules of social separation.”
Trump devoted most of his speech to the developments of the Corona epidemic in his country, stressing that the United States has made excellent progress in providing respirators and that it will soon help Mexico and other countries.
And an Iraqi economist presented, on Monday, simplified explanations for the causes of the collapse of American crude, while determining the percentage of Iraq being harmed.
Professor of Economics Nabil Al-Marsoumi said in a post that was followed by “People”, (April 20, 2020) that “the collapse of West Texas crude to less than 6 dollars was not in the spot contracts or in the future contracts for the delivery of the month of June, which is still between 22 – 23 dollars, but it was Crude futures for the month of May are about to expire, and so the sale of these contracts worsened before the closing date, as they are due to officially expire when the prices are settled tomorrow, Tuesday, April 21, which contributed to the collapse of US crude.
He added that “the storage of US oil is occurring at a rapid pace, exceeding the levels of 70%, approaching the maximum storage.”
He continued, “It is expected that US crude prices will rise again after the May futures sale boom ends.”
He concluded by saying that “the damage to Iraq is not so great due to the collapse of American crude, due to the limited Iraqi exports to the United States, which are centered around 400,000 barrels per day, as well as that Iraq price Iraqi crude exported to US markets on the basis of ASCI crude (which also witnessed a significant decline ) It is not West Texas crude, as the price at which it sells Iraq depends on the rate of five bullet emissions for ASCII crude 15 days after the tanker is loaded and not on the basis of the one-day price rate.
Experts attributed the collapse of the American crude, Monday, to a number of factors that are not limited to the decline in demand for crude due to the state of closure in most regions of the world, due to the spread of the Corona virus, and the approach of American oil depots to fullness, while an Iraqi expert discussed the impact of the collapse of American oil prices, likely to Iraqi oil prices are relatively safe.
According to the latest developments, Reuters said that prices have reached -8, that is, after prices tumbled within hours from the limits of $ 20 a barrel of US oil to below zero, after having settled for several minutes at a few cents.
The collapse in the oil market comes amid a state of economic stagnation due to the repercussions of the spread of the Coruna virus, and the measures taken to combat it.
The International Monetary Fund warns that getting the world’s economies into a downward spiral will be the deepest since the Great Depression of the 1930s.
However, the sharp drop in crude prices is also due to technical reasons related to the approaching May deadline approaching Monday. June contract prices fell.
“The problem of an imbalance between supply and demand globally is beginning to materialize in prices,” said Bernard Tonhugen, an analyst at Restad Energy.
He added in his speech to the Russian agency, “As production continues as relatively normal, the stockpiles are filled more and more every day.”
Meanwhile, indicators that the emerging Corona virus appeared to have peaked in Europe and the United States did not succeed in raising Asian and European financial markets in general.
Instead, dealers are increasingly concerned that oil storage facilities may reach their maximum capacity, with stocks piled up due to the collapse in demand caused by the Covid-19 epidemic.
Analysts said that the agreement concluded this month between OPEC and its partners to reduce production by ten million barrels per day, does not affect significantly, because the comprehensive closures imposed and restrictions on travel forced billions of people around the world to adhere to their homes.
WTI was perhaps the most affected, as its main storage facilities in Cushing, Oklahoma, were full, while Traficat consultancy Sukrit Vijayakar pointed out that refineries did not process the crude quickly enough.
He said that there are many supplies from the Middle East without buyers “due to the high shipping costs.”
“Nobody wants to take over oil with Cushing storage facilities full from one minute to the next,” Stephen Ennis of Axecorp said, adding that “It did not take long for the market to realize that the OPEC Plus agreement would not be sufficient in its current form to ensure a balance in the oil markets.” “.
Concurrently, most of the stock markets have retreated as well, although governments are beginning to think about how and when to ease the closing measures that have paralyzed the world economy.
And with the start of trading on Wall Street on Monday, stock indices fell to record Dow Jones Industrial decline by 1.8 percent at 23798.01 points in the first ten minutes of the trading session.
The S&P 500 index fell 1.3 percent to 2835.08 points, while the Nasdaq lost 0.7 percent to 8,588.66 points.
Italy, Spain, France and Britain recorded a decline in their daily number of deaths, accompanied by a slowdown in injury rates, while Germany began allowing some stores to reopen, while Norway reopened nurseries.
In the United States, New York State Governor Andrew Como said the epidemic was “receding,” but he cautioned that this was “not the time to brag.”
There is growing evidence that measures of closings and social estrangement slow down the spread of the virus.
On the other hand, economists say that the prices of the next fall payments may witness a noticeable improvement or even a recovery closer to the previous pre-crash rates, given the high expectations that global consumption may return to its levels by the fall, which will coincide with the recent OPEC + cuts package.
On Monday, Advisor to the Prime Minister, Mazhar Muhammad Salih, explained the collapse of the oil markets in the North American continent, returning to the world that he had entered into a “fatal price war.”
Saleh said in a statement, “People” received a copy of it, (April 20, 2020), that “the American market has played in recent years a dual role as an oligopoly sellers market and a monosopeny buyers market at the same time, especially during the past ten years gradually,” noting that ” The United States consumes about 19 million barrels of oil per day and represents 19% of the world’s production alone and is the largest consumer of oil in the world. “
Saleh added, “The United States is one of the largest oil producers in the world, with a production capacity of about 13 million barrels, whether from shale or conventional oil.” It is the Kingdom of Saudi Arabia, which contributed to dumping the market by nearly 12 million barrels per day.
And Saleh pointed out that “the whole oil world entered into a fatal price war and then turned the oil market into recession until it reached the point of collapse.” A buyers market leads the world oil market to constitute a price war, the collapse of OPEC’s strength as a sellers market, and the victory of the US-led buyers’ market.
The advisor to the Prime Minister added, “It is two chances of victory. The first is that the low demand for world oil, which is 30% less than the current supply, and the second is an additional surplus of 300 million barrels capacity in the futures market,” adding, “As this market formed the symbolic oil front or forward which He led the night’s collapses by turning the oil futures market.
And the appearance of Mohamed Saleh pointed out that “all speculators turned once to the short position, i.e. sell soon for futures contracts with the hope of cheaper purchase of the contracts themselves, but at a low point below the lowest breakpoint in the world, which did not lead to the collapse of the entire oil market.”
He pointed out that “the final buyer of the oversupply is the United States market, which seized the collapsed future oil contracts, extensible them, and turned them into an immediate market,” noting that “speculative oil companies in the United States are the ones who have the ability to receive the surplus supply and liquidate their contracts against storage capacities which are the largest In the world, in the future, the market will turn into a long position after that melting point or the breaking point above. “
Saleh concluded by saying: “It is the opportunity of the last winner who reaped the losses of the entire world of oil. The winner is the speculators who possess crude oil stocks in the United States of America, and according to a strategy the oil market will remain a buyers market forever.”
On Monday, the Sadrist leader Muqtada al-Sadr’s page called for taking a lesson from recent developments.
Minister of Al-Sadr Salih Al-Iraqi said in a post that was followed by “Nass” (April 20, 2020), “Oh God, occupy the oppressors with the oppressors, and bring us out from among them unscathed … and isolate them and what they worship without God.
And one of the followers published “Enough lessons, and kills kings and succeeds others”, to respond to Muhammad Salih al-Iraqi, “The one who tries the mighty is the man of the oppressors, the Great of His Majesty, the deceased of the corrupt and the disgrace of the worldliness, he is above them an authoritarian oppressor who does not show mercy except those who are humble, those who are faithful, obedient, those who seek forgiveness, and those who are disbelieving, and those who are disbelieving, and those who are disbelieving, and praising the disbelievers, and those who praise them. .
And he added, “Corruption appeared on land and at sea, as people gained hands so that some of them who had worked may harm them, so that they may return. LINK
Don961: Calls for sound monetary policies to control the financial market
April 20, 2020 10:27 PM Baghdad / Al-Zawraa:
The dollar price indices in all governorates of Iraq have returned to their normal levels after they recorded a noticeable rise a few weeks ago, confusing the market at the time.
A member of the Baghdad Economic Forum, Jassem Al-Aradi, said: “There is a group of reasons that led to the rise in the price of the dollar, along with another group that caused the price of the dollar to drop very close to the normal levels it had before the curfew due to corona.”
Al-Aradi added: In a press interview, Al-Zawraa followed: “The reasons that led to the rise in the exchange rate of the dollar came as a result of the drop in oil prices, accompanied by the effect of the Corona virus and the curfew, which caused the suspension of most economic activities, in addition to the temporary stoppage in the sale window.” Currency in the central bank. ”
And between “As for the most important reasons that led to the decline in the exchange rate, it is represented by the central bank re-operating the same window.”
and stressed that “the high dollar exchange rate was temporary and corrected, and this is not the first time that the exchange rate of the dollar has increased in Iraq because of speculators exploiting the conditions of the Iraqi market,” noting that this is a temporary situation and can always be controlled.
Al-Aradi pointed out that “monetary policies, if they deal with sound and correct mechanisms, can control the financial market, and this can only be done in cooperation with private banks through consulting with them on the general policy of markets, and the need for cooperation and coordination to pay the damage of the high price of the dollar to citizens.”
The private sector
Samson: Fitch Downgrades Outlook for Trade Bank of Iraq (TBI)
21st April, 2020
Fitch Ratings has revised the outlook for the Trade Bank of Iraq (TBI) from “Stable” to “Negative”.
In a statement, it says that TBI’s Issuer Default Rating (IDR)s are driven by the bank’s Viability Rating (VR) and underpinned by potential sovereign support.
“The revision of the Outlook to Negative from Stable follows a similar action on the sovereign rating (see “Fitch Revises Outlook on Iraq to Negative; Affirms at ‘B-‘” on http://www.fitchratings.com).
“This reflects the impact of the decline in oil prices on Iraq’s fiscal and external finances, near-term uncertainty concerning the sovereign’s financing plan and limitations on policymakers’ ability to respond to the fiscal crisis. Iraq’s budget revenue sensitivity to oil price and volume is significant, given dependence on oil that accounts for 85%-90% of fiscal revenue.
“We forecast that the budget deficit will widen to 19% of GDP in 2020 and government debt/GDP to an average of 80% in 2020-2021, versus 47% in 2019.
“TBI’s VR of ‘b-‘ is constrained by the operating environment in Iraq, which is volatile and challenging, and where TBI generates 70% of its business volume (on- and off-balance sheet exposure).
“Therefore, the operating environment and broader country risks influence TBI’s standalone risk profile. As a result, we see downside risks to the stability of TBI’s business model, the ability of the bank to execute its strategy, as well as earnings, capitalisation and funding and liquidity relative to when we last reviewed TBI’s ratings.” LINK
Samson: Economist: 50% of Iraqi oil prices will be affected by the drop in US crude prices
08:50 – 04/21/2020
The economic expert, Dr. Safwan Qusai, explained on Tuesday the reasons for the drop in American oil prices to levels not previously recorded in history, indicating that 50% of Iraqi oil prices will be affected, especially exported to Europe and America, while oil exports to Asia will remain at the level of 20 dollars For the barrel.
Qusai said in a statement to “Information”, that “the drop in US oil prices is the result of speculation in future contracts for the next month of May, as who can buy in the future can buy and sell during a limited period, and the last day for trading on the stock exchange was yesterday, so the US storage energy Oil has reached its highest levels, so it can no longer store more oil, especially as there are no oil importers in light of the Corona virus outbreak, which pushed prices down significantly.
He added that “the future contracts for the month of June next, the price of a barrel reached at $ 22,” noting that “there are more than 100 million barrels stored in the world, especially Europe, so some countries are forced to sell at a low price.”
And that “Iraqi oil is sold in three markets (Asia, Europe and America) and each market has its own price, but more than 50% of Iraqi oil goes towards Asia, especially China and India, where the Chinese economic movement began to return, which makes the price of Iraqi oil at 20 dollars. Per barrel, and the Chinese economy is expected to return to normal in next July, at which time the price of a barrel of oil will reach 40 dollars.
He explained that “50% of the Iraqi oil prices that go east will not be affected by the decline in American oil, and it could be strengthened if Iraq presents facilities for Chinese companies, and consequently, it is possible to increase oil exports to China after a portion of the oil exported to Europe is transferred to China. LINK