CORONA Market Bloodbath: Middle East Stocks Crater; Kuwait Halted; Aramco Below IPO; Dow Indicated Down 500

[CaryC]

Market Bloodbath: Middle East Stocks Crater; Kuwait Halted; Aramco Below IPO; Dow Indicated Down 500

www.zerohedge.com
3 mins read
In case a global viral pandemic wasn't enough of a concern, on Saturday Saudi Arabia launched a global oil price war, when Aramco announced unprecedented discounts on Brent shipments to clients around the globe, with Bloomberg later reporting that the OPEC nation was set to flood the world with excess production potentially to as much as a record 12 million barrels a day, which in a world where oil demand has cratered due to China's economy remaining paralyzed due to the pandemic, assures that when Brent reopens for trading tonight it will be in freefall, tumbling into the $30s if not lower as OPEC is no more and every producer now scrambles to undercut everyone else in price, unleashing another deflationary massacre and forcing central banks to pull another market-supporting rabbit out of their hat.
Until they do, however, traders in the Middle East where markets have already reopened, decided to sell first and ask questions later, as stocks cratered ahead of the first official oil price prints, which will come after what was already the biggest one day drop in Brent since 2008 on Friday after news that the OPEC+ alliance had fractured. And now oil will have a Saudi oil price war to deal with, prompting some to speculate that the price oil could drop into the high teens, if not lower.

Kuwait led the sell-off, halting trading of the biggest and most liquid shares after its index tumbled 10% and bringing its losses this year to 18%, while every stock index in the region plunged. Dubai’s DFM General Index and Saudi Arabia’s Tadawul All Share Index clocked up the sharpest drop for a session since the 2008 financial crisis.

And, as we noted last night when we pointed out that Aramco's IPO top-ticked the market in both Brent and global investor stupidity...

... oil giant Saudi Aramco fell below its IPO price for the first time, plunging down over 9% to a record low of SAR30.00.

Elsewhere, Dubai’s DFM General Index and Saudi Arabia’s Tadawul All Share Index all posted the biggest one-day drops since the 2008 financial crisis.

Bank shares were hit the hardest: in Riyadh, Al Rajhi Bank finished 7% lower. Emirates NBD PJSC, Dubai’s biggest bank, fell 9.6%, while First Abu Dhabi Bank PJSC and National Bank of Kuwait SAKP ended 6.7% and 9.3% lower, respectively.
Some more details from Bloomberg:

• Saudi Arabia’s Tadawul index was back to the level of November 2017, before its inclusion in the emerging-market gauges compiled by MSCI Inc. and FTSE Russell.
• Dubai’s DFM General Index finished 7.9% lower, with real estate bellwether Emaar Properties down 9.7% to the lowest since 2012.
• Kuwait’s main index extended losses this year to 18%, compared with a 32% gain in 2019 that was the best performance in the region.
• Indexes in Saudi Arabia, Dubai, Abu Dhabi, Kuwait, Bahrain, Qatar, Egypt and Israel all traded below a technical threshold that indicated they were oversold.

Commenting on the bloodbath, Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital said that mideast markets "are finding it difficult to cope with all these variables that have been happening over the past 10 days. That’s why we see this panic-selling across the board taking certain markets to lows not seen even during the financial crisis."
"The sharp decline in oil prices is becoming a bigger concern for regional investors amid adverse global headlines," said Iyad Abu Hweij, managing partner at Allied Investment Partners in Dubai, who expects “heightened anxiety” to persist in markets.
Meanwhile, ahead of Monday's US open, UK spreadbetting service IG was indicating Dow futures to be down more than 500 points, as last week's violent selloff was set to return with a bang and as traders hoped that the Fed would make another emergency announcement later on Sunday to help ease the pain.

read:Market Bloodbath: Middle East Stocks Crater; Kuwait Halted; Aramco Below IPO; Dow Indicated Down 500

Finance guys can comment (speak English) on this.

 

[Hfcomms]

I know you didn't write this but the dow futures don't open until 6pm tonight. This is from.....'Meanwhile, ahead of Monday's US open, UK spreadbetting service IG was indicating Dow futures to be down more than 500 points,'

 

[Dozdoats]

Blood in the streets already?

 

[CaryC]

I know you didn't write this but the dow futures don't open until 6pm tonight. This is from.....'Meanwhile, ahead of Monday's US open, UK spreadbetting service IG was indicating Dow futures to be down more than 500 points,'

Yeah, I was a little like, "Whaaat?" over that too. Am thinking that even though this article was just posted, the figures were from Sat.

Bloomberg is showing dow futures -271, am thinking that was the close Friday?

Oil which seems to be the trigger event is now at 41.?? I don't know if oil or gold trades over the weekend. So those figures also may be Friday's. Gold at 1673.

 

[AlfaMan]

Yikes, Aramco trading BELOW it's IPO price? Financially for a lot of investors the poop has hit the propellers. Aramco was pitched pre IPO as a stock as solid as Apple or Coca Cola. And the oil market bloodbath looks to be continuing-Friday I saw a retail gas station selling regular unleaded for $ 1.93 a gallon. Crude is about to crater. Especially with every OPEC man for himself sales wise. Ugh.

 

[hiwall]

Zombie company on top of zombie company. Corporations with more percentage of debt than ever before in history.
Interest rates on a steady fall. Do you really think banks can make enough money to stay alive when interest rates are this low? No wonder the Federal Reserve has to keep pumping in money to the banks.
An aging society that is relying heavily on pensions when pensions are way under-funded.
Do you really think all the airlines can absorb this huge loss in revenue due to the virus?
Cities and states already in financial trouble and now because of this virus countless events will soon be canceled causing even more revenue shortfalls.
You will live through the virus but can you live through the certain fall into a deep recession?

 

[223shootersc]

The dominoes have been lined up for years, the powers have been waiting for an opportunity like the Coronavirus

 

[twobarkingdogs]

It would be interesting to know why the Saudi's are starting this oil war while demand is lacking.

It can't be to put other companies out of business because the oil would still will be in the ground and pump-able and at least in the west if a company goes out of business another and usually stronger company will buy the assets on the cheap and thus lowering the new companies cost of production.

Could be the Saudi's are in need of cash but higher production at a lower price doesn't really raise much new revenue

Could be they are concerned about the virus and are attempting to pull in as many assets as possible before TSHTF. But it that were true they would be liquidating their other financial assets and selling huge blocks of stock. I have not be paying enough attention to see if volume and block sizes are up this last week or so.

Whatever. Oil in the teens is going to drag the rest of the financial markets down with it. At some point this is going to be a big buying opportunity. The question is when and where.

tbd

 

[Luddite]

PDJT'S apparent connections to MBS make this a curious event. Hard sayin' not knowin'

 

[CaryC]

It would be interesting to know why the Saudi's are starting this oil war while demand is lacking.

It can't be to put other companies out of business because the oil would still will be in the ground and pump-able and at least in the west if a company goes out of business another and usually stronger company will buy the assets on the cheap and thus lowering the new companies cost of production.

Could be the Saudi's are in need of cash but higher production at a lower price doesn't really raise much new revenue

Could be they are concerned about the virus and are attempting to pull in as many assets as possible before TSHTF. But it that were true they would be liquidating their other financial assets and selling huge blocks of stock. I have not be paying enough attention to see if volume and block sizes are up this last week or so.

Whatever. Oil in the teens is going to drag the rest of the financial markets down with it. At some point this is going to be a big buying opportunity. The question is when and where.

tbd

I'm just guessing but I think it looks like it's payback.

They (SA) wanted a uniform cut back by OPEC that fell through, so SA will go it alone to drive the price down and hurt those countries who didn't go along.

That's from an uninformed person on the internet, don't try that at home.

 

[doctor_fungcool]

It would be interesting to know why the Saudi's are starting this oil war while demand is lacking.

It can't be to put other companies out of business because the oil would still will be in the ground and pump-able and at least in the west if a company goes out of business another and usually stronger company will buy the assets on the cheap and thus lowering the new companies cost of production.

Could be the Saudi's are in need of cash but higher production at a lower price doesn't really raise much new revenue

Could be they are concerned about the virus and are attempting to pull in as many assets as possible before TSHTF. But it that were true they would be liquidating their other financial assets and selling huge blocks of stock. I have not be paying enough attention to see if volume and block sizes are up this last week or so.

Whatever. Oil in the teens is going to drag the rest of the financial markets down with it. At some point this is going to be a big buying opportunity. The question is when and where.

tbd

Buying opportunity??? Really?

What we're seeing here are a culmination of events that are so horrific that it will take years for things to 'right' themselves.

 

[Luddite]

The proverbial "reset" can't be discounted completely. Jmho

 

[Dozdoats]

SA will go it alone to drive the price down and hurt those countries who didn't go along

Somehow I can't see the Saudis being able to drive DEMAND - so I don't think we can lay this one at their feet. Lack of demand is driving down prices for oil, not lack of supply. That would be my evaluation anyway.

New word - PANDEMANIA

Pandemic Pandemania Causes Global Economic Crisis

Back in the oil-embargo recession of the early 70s when Boeing was Seattle’s economy and was laying off thousands of Seattleites, a billboard on the edge of town by Sea-Tac Airport read, &#82…

thegreatrecession.info

 

[CaryC]

SA will go it alone to drive the price down and hurt those countries who didn't go along

Somehow I can't see the Saudis being able to drive DEMAND - so I don't think we can lay this one at their feet. Lack of demand is driving down prices for oil, not lack of supply. That would be my evaluation anyway.

The prices I've been quoting is the WTI last noted at 41.??

SA/Amoco has an effect on Brent which is …….....45.??

And putting a glut on the market will drive the price down. They plan on 12 million barrels a day, new record. Both a glut, and lack of demand either by themselves will drive price down, or together is called a scorched earth policy.

The thing is now who can survive the low prices? That's the point the SA is making, from what I've read.

It should also be noted that the Crown Prince of SA just rounded up the rest of his family, and arrested them. There is now no one to challenge his rule. Happened.....yesterday????? Remember he did the same with the old ruling party when he took over.

 

[intothatgoodnight]

It would be interesting to know why the Saudi's are starting this oil war while demand is lacking.

It can't be to put other companies out of business because the oil would still will be in the ground and pump-able and at least in the west if a company goes out of business another and usually stronger company will buy the assets on the cheap and thus lowering the new companies cost of production.

Could be the Saudi's are in need of cash but higher production at a lower price doesn't really raise much new revenue

Could be they are concerned about the virus and are attempting to pull in as many assets as possible before TSHTF. But it that were true they would be liquidating their other financial assets and selling huge blocks of stock. I have not be paying enough attention to see if volume and block sizes are up this last week or so.

Whatever. Oil in the teens is going to drag the rest of the financial markets down with it. At some point this is going to be a big buying opportunity. The question is when and where.

tbd

Not sure of the minimum crude barrel price necessary for the CONUS fracking business model to remain profitable, but my understanding is that the shale oil/tar sands folks need a higher per barrel price to break even - due to the unavoidably higher extraction and processing costs of shale/tar sands compared to in-ground crude.


intothegoodnight

 

[CaryC]

From what I've been reading, and I'm just relating that, cuz I don't know spit about all this:

It needs to remain at 40 or above. Last time this happen, and I can't remember the time, but do remember the oil prices, when they got around 20.00 the banks had to step in and give loan extensions, and a bunch of other stuff to keep them afloat.

 

[Nancy in OK]

I read somewhere this weekend that Russia refused to join opec in cutting oil production and was going to sell how much they want. Supposedly this was payback for interference with Russia's gas line. Saudi may have seen the handwriting on the wall and decided to join Russia in an oil glut sale off. The article I read said opec is now obsolete. The idea was to break the US shale.

 

[Kris Gandillon]

Shale Oil Will Face Trouble As Oil Prices Fall Below The Magic Threshold

With oil prices now in the $40 range, the once indomitable shale oil industry looks vulnerable.

www.forbes.com

From what I've been reading, and I'm just relating that, cuz I don't know spit about all this:

It needs to remain at 40 or above. Last time this happen, and I can't remember the time, but do remember the oil prices, when they got around 20.00 the banks had to step in and give loan extensions, and a bunch of other stuff to keep them afloat.

Article explains it pretty well. It is not a single simple answer. It depends. On a lot of different things.

 

[Nancy in OK]

A lot of the drilling around here (6 rigs running within 10 mile area) is being drilled and completing and fracking at a later time. It used to be $50 minimum but the companies have improved so much that it probably is around $40. I don't think anyone can stand the teens!

 

[CaryC]

I would like to say at this point, Sunday Afternoon, MHO is that all this is speculation. Have to see what happens over the next few days.

 

[Squid]

Kick US fracking and kick Iran in the financial gonads why they are down with the Corona hit.

Maybe create some instability in Iran and knock out some over lever edged fracking production.

 

[twobarkingdogs]

Buying opportunity??? Really?

What we're seeing here are a culmination of events that are so horrific that it will take years for things to 'right' themselves.

When the dot-com bubble burst around 2000 it took 5 to 10 years for some big companies stock prices to go back to levels they were at in 1999.

I remember those years as being buying opportunities as I waited for the stock market to basically catch up to the stock prices. If the market drops from the high of 28k down to the low teens and then takes 20 years to recover back to 28 would you not say that a buying opportunity occurred?

You also need to remember that a companies stock price is not always a reflection on its underlying business. So if a company like JNJ drops down from $140 to $40 it is still a good investment assuming the business is healthy.

tbd

 

[mzkitty]

The proverbial "reset" can't be discounted completely. Jmho

People here have been saying it's gonna happen for years now. It's the world, virus or not, full of hanky-panky.

 

[doctor_fungcool]

When the dot-com bubble burst around 2000 it took 5 to 10 years for some big companies stock prices to go back to levels they were at in 1999.

I remember those years as being buying opportunities as I waited for the stock market to basically catch up to the stock prices. If the market drops from the high of 28k down to the low teens and then takes 20 years to recover back to 28 would you not say that a buying opportunity occurred?

You also need to remember that a companies stock price is not always a reflection on its underlying business. So if a company like JNJ drops down from $140 to $40 it is still a good investment assuming the business is healthy.

tbd

Dow futures are indicating a early morning bloodbath.

 

[mzkitty]

I upped the size of the tweets a little. Does it need more?

 

[mzkitty]

 

[doctor_fungcool]

I upped the size of the tweets a little. Does it need more?

View attachment 185464

If we are facing a severe recession/depression
expect demand destruction along with lots of political instability EVERYWHERE on the planet




Z

 

[Hfcomms]

If we are facing a severe recession/depression
expect demand destruction along with lots of political instability EVERYWHERE on the planet




Z

Perfect storm we’ve been warning about for years. It’s here and it’s now.

 

[mzkitty]

If we are facing a severe recession/depression
expect demand destruction along with lots of political instability EVERYWHERE on the planet


Z

I know. You always make me crazy, Doc F.

 

[JF&P]

Dow futures are down -979 at the moment.

 

[mzkitty]

Dow futures are down -979 at the moment.

Oh, that's cute.

 

[vector7]

https://twitter.com/i/web/status/1236785518127370241

View: https://twitter.com/JaehyunEom/status/1236785518127370241

https://twitter.com/i/web/status/1236785757764943877

View: https://twitter.com/Biotech_Homer/status/1236785757764943877

 

[mzkitty]

 

[Dozdoats]

And gold knocking on the door at $1700. Straight up on the open almost $25.

Chart at 3 2 1 g o l d ... Welcome!

 

[The Snack Artist]

I read somewhere this weekend that Russia refused to join opec in cutting oil production and was going to sell how much they want. Supposedly this was payback for interference with Russia's gas line. Saudi may have seen the handwriting on the wall and decided to join Russia in an oil glut sale off. The article I read said opec is now obsolete. The idea was to break the US shale.

Saw this as well. Russia!

 

[The Snack Artist]

When the dot-com bubble burst around 2000 it took 5 to 10 years for some big companies stock prices to go back to levels they were at in 1999.

I remember those years as being buying opportunities as I waited for the stock market to basically catch up to the stock prices. If the market drops from the high of 28k down to the low teens and then takes 20 years to recover back to 28 would you not say that a buying opportunity occurred?

You also need to remember that a companies stock price is not always a reflection on its underlying business. So if a company like JNJ drops down from $140 to $40 it is still a good investment assuming the business is healthy.

tbd

BUY MOAR!

 

[twobarkingdogs]

If we are facing a severe recession/depression
expect demand destruction along with lots of political instability EVERYWHERE on the planet

That is the problem with a large stock market drop in that it impacts consumer spending which feeds upon itself and causes the stock market to drop further.

And when folks feel less secure about their futures that leads to political instability. I've been saying to my friends that I think that a lot of the rise of the socialist like Bernie in this country is that lack of a secure future seen by a lot of young adults in their 20's and 30's who are basically working dead end jobs. A lot of their issues are self inflected by choosing useless college degrees for which they came out of college owing big bucks.

BUY MOAR!

Not at these levels you don't.

tbd

 

[Dozdoats]

FRN$ down hard too - off .55 to 96.10

Gold up, dollar down - that's almost back to normal.

 

[Hfcomms]

10 year treasury at .707 for a yield and at the beginning of the year it was around 1.8%. This is simply unprecedented.

 

[Jaybird]

A lot of the drilling around here (6 rigs running within 10 mile area) is being drilled and completing and fracking at a later time. It used to be $50 minimum but the companies have improved so much that it probably is around $40. I don't think anyone can stand the teens!

they Will finish the wells and cap them. The only place really still going strong with our service company is the Permian basin out around midland and Hobbs. Everywhere else has slowed significantly.