Iran says it has discovered oilfield with 53 billion barrels

Iran’s President makes the announcement

Iran's President makes the announcement

Iran has discovered an oilfield containing 53 billion barrels in the southwest of the country, according to President Hassan Rouhani.

“Despite America’s sanctions… Iranian workers have found an oil field with 53 billion barrels of reserves,” Rouhani said in a televised speech on Sunday.

For scale, Venezuela’s oil reserves are the largest in the world at 297 billion barrels while Russia’s reserves stand at 80 billion barrels.

It would be a massive discovery but there’s no word on how recoverable or economic the barrels are; nevermind that sanctions are making exports extremely difficult. As for the market, expect some curiosity but certainly not any market reaction on Monday.

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Exclusive: Sudan needs up to $5 billion in budget support to prevent collapse

© Reuters. Sudan's Finance Minister Ibrahim Elbadawi speaks during an interview with Reuters in Khartoum © Reuters. Sudan’s Finance Minister Ibrahim Elbadawi speaks during an interview with Reuters in Khartoum

By Khaled Abdelaziz, Ulf Laessing and Michael Georgy

KHARTOUM (Reuters) – Sudan needs up to $ 5 billion in budget support to avert economic collapse and launch reforms after the ouster of veteran ruler Omar al-Bashir, its finance minister told Reuters.

The country, in crisis since losing most of its oil wealth with South Sudan’s secession in 2011, has only enough foreign currency reserves to fund imports for a few weeks, said Ibrahim Elbadawi, part of a transitional government formed in August.

Sudan has had some support for fuel and wheat imports but about 65 percent of its 44 million people live in poverty and it needs up to $ 2 billion in development funding along with a hoped-for $ 2 billion from Arab development funds, he said.

Outlining reform plans in detail for the first time, Elbadawi said public salaries would need to be increased and a social support network established to prepare for the painful removal of fuel and food subsidies.

Months of demonstrations over price hikes for fuel and bread and cash shortages triggered the uprising against Bashir, who was toppled in April by the military. Protests have continued since, with people killed in clashes with security forces.

“We have started the process (of reforms),” Elbadawi said in an interview on Thursday. “The people of Sudan deserve to be seen in a radically different prism than the international community used to see Sudan, as a country ruled by a pariah state.”

“Now we have a revolution,” he said. Asked how much budget support was needed for 2020 he said: “Some estimates say between three to four billion (US dollars), maybe even five billion.”

The civilian government Elbadawi is part of has taken over for three years under a power-sharing deal with the military. It has drawn slightly more than half of $ 3 billion in support for imports of wheat and fuel offered by Saudi Arabia and United Arab Emirates in April, he said.

A “friends of Sudan” donor meeting is planned for December and the government had agreed with the United States it could start engaging with international institutions while still on a list of countries deemed sponsors of terrorism, Elbadawi said.

The designation, which dates from allegations in 1993 that Bashir’s Islamist government supported terrorism, makes it technically ineligible for debt relief and financing from the IMF and World Bank. Congress needs to approve a removal.

CURRENCY

The first experts from international institutions had arrived in Khartoum to help with reforms and a delegation of the International Monetary Fund (IMF) would come this month for Chapter IV discussions, Elbadawi said. There was no immediate comment from the IMF, World Bank or U.S. State Department.

Part of a roadmap agreed with the IMF and World Bank was that Sudan did not have to pay back $ 3 billion in arrears from international institutions.

“We don’t need to pay anything. What we need to … deliver really is policy,” he said. Sudan is one of the most indebted countries, owing $ 60 billion, which needs to be settled separately.

Sudan would start to increase its tax base and overhaul the civil sector, Elbadawi said. Salaries — eroded by double digit inflation rates — could be raised as much as 100 percent by April.

In the second half of next year a social support network would be set up to allow the lifting of subsidies by June or later. Some donor funding would be used to collect data to allow cash transfers for the needy.

Sudan also wanted to produce bread based on sorghum, a local cereal, to import less wheat. He said he hoped a spread between official and black market would be ended by June. But this week the local pound dropped to 80 for a dollar on the black market versus the official rate at 45.

He said the 2020 budget would have sustainable development targets for education, health care and social spending, suggesting Sudan might move away from the dominant military spending choking development.

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SoftBank Reportedly Aims to Invest Several Billion Dollars in WeWork 

© Reuters.  © Reuters.

Investing.com – Japan-listed Softbank (T:) is reportedly looking to take more control of WeWork through a financing package worth several billion dollars, according to The Wall Street Journal, which cited people familiar with the matter.

SoftBank already owns one-third of WeWork. The potential deal, which would involve several billion dollars in equity and debt, would further dilute the influence of WeWork co-founder Adam Neumann and give voting power to the Japanese company, the Journal said, and noted that there is no guarantee that a deal will be reached.

WeWork delayed its initial public offering plan last month amid concerns over its governance and valuation.

“WeWork has retained a major Wall Street financial institution to arrange a financing,” a WeWork spokeswoman said. “Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”

The company lost $ 1.9 billion in 2018 and spent $ 2.36 billion in cash in the first half 2019, according to filings.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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China Plans $90 Billion Cut in VAT for Manufacturers

(Bloomberg) — China is planning to cut the value-added tax rate that covers the manufacturing sector by 3 percentage points as part of measures to support the slowing economy, a person familiar with the matter said.

The reduction in the highest of the nation’s three VAT brackets could be announced as soon as this week, when political leaders are gathering in Beijing for the annual National People’s Congress, the person said, who declined to be named as the matter isn’t public.

Premier Li Keqiang is due to deliver his annual report on economic policy on Tuesday, a detailed document that sets targets for gross domestic product expansion as well as objectives for fiscal and monetary policy. A 3 percentage-point cut to VAT could deliver a boost worth up to 600 billion yuan ($ 90 billion) or 0.6 percent of GDP, according to estimates by Morgan Stanley.

The move helps corporate profits at a time when the economy is facing pressure from the U.S. trade standoff and the impact of a domestic debt cleanup. Officials have increasingly turned to tax policy in their efforts to support growth, as debt-fueled spending and monetary policy become increasingly constrained.

The tax cut is also part of broader, more “proactive” fiscal support. The budget deficit target is said to be widened to 2.8 percent of GDP from 2.6 percent in 2018, and the quota for special bonds is said to be set to 2.15 trillion yuan, a significant rise from 1.35 trillion yuan in 2018.

The Finance Ministry didn’t respond to faxed request for comment on the VAT reduction plans.

To contact Bloomberg News staff for this story: John Liu in Beijing at jliu42@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, Sharon Chen

©2019 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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China pulls out of $5 billion deal to develop Iranian natural gas

Trade war signal?

China’s state oil company has pulled out of a $ 5 billion deal to develop offshore Iranian natural gas deposits, the oil minister said Sunday.

The deal had been struck after the 2015 Iran nuclear deal.

Oil Minister Bijan Zangeneh, quoted by the ministry’s SHANA news agency, said Sunday that the China National Petroleum Corp. was “no longer in the project.”

This could be a sign that China is looking to curry favor with the US but I would warn against that line of thought. Just last month, China updated a comprehensive strategic partnership with Iran that includes $ 280 billion for developing Iran’s oil, gas and petrochemicals sectors and another $ 120 billion to upgrade transport and manufacturing infrastructure.

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Vietnam’s $5 Billion Plan to Neutralize Trump’s Tariff Threats

(Bloomberg) — Follow Bloomberg on LINE messenger for all the business news and analysis you need. And subscribe to Terms of Trade, our daily newsletter that untangles a world embroiled in trade wars.

Vietnam’s campaign to tamp down the Trump administration’s trade gap ire has come to a coastal commune better known for growing dragon fruit along one-lane potholed roads.

The community could soon be home to a $ 5 billion liquefied project that would include an import terminal and gas-fired power plant and eventually import billions of dollars of U.S. fuel into the country. It’s being fast-tracked with the blessing of Prime Minister Nguyen Xuan Phuc as part of a push to buy American products in Vietnam, where the Communist government has embarked on a crash course in modern U.S. politics.

“I’ve never seen the Vietnamese government move so quickly,” said John Rockhold, an engineer with 28 years experience shepherding infrastructure projects in Vietnam. He is country director of Energy Capital Vietnam, which is leading a consortium of companies backing the development on salt beds in southern Binh Thuan province. “I think they see LNG as a way of lowering the trade deficit the U.S. has with Vietnam. There is a lot of pressure from the White House right now.”

Indeed, the nation’s leaders are doing all they can to avoid China’s fate after President Donald Trump in June described Vietnam as “almost the single worst abuser of everybody” when asked if he wanted to impose tariffs on the nation. U.S. Trade Representative Robert Lighthizer “has a scoreboard: if you have a trade surplus with the U.S. of over $ 10 billion, you are in the middle of his dart board,” said Ernest Bower, president of Fairfax, Virginia-based Bower Group Asia, which advises businesses on operating in Southeast Asia.

Under pressure from the U.S., Vietnam is also cracking down on the fake labeling of Chinese goods being routed through the Southeast Asian country to bypass Trump’s tariffs.

Vietnam has become perhaps Asia’s biggest beneficiary of the U.S.-China trade war as companies including Nintendo Co (T:). and Alphabet (NASDAQ:) Inc.’s Google shift production to the country. So Vietnamese officials, from the politburo to local governments, are looking for ways to trim the nation’s trade surplus with the U.S., which hit $ 40 billion in 2018. That gap totaled $ 30 billion in the first seven months of this year, 39% higher than in the same period last year, according to U.S. Census Bureau data.

“If we buy more from the U.S., it will surely help boost our relationship with them,” said Mai Anh Tung, a government official in Binh Thuan province, where the LNG project involving companies such as General Electric (NYSE:) Co., KBR Inc. and Korea Gas is planned.

Coal, Engines

Vietnam’s Communist Party Secretary and President Nguyen Phu Trong is expected to visit the White House next month with a deal list for made-in-America products. Think natural gas from Texas, coal from Pennsylvania, pork from Iowa, and even aircraft engines — a shopping cart that could total billions of dollars. It’s no coincidence that many of these products come from regions that are important to Trump’s re-election hopes in 2020.

“They have hired trade advisers,” Bower said. “They’ve learned you have to have a game in Washington.”

This isn’t the first time Trump has pressured Vietnam on trade. The U.S. president prodded Vietnamese leaders to buy U.S. military equipment during his 2017 visit to the country, reminding his hosts that he would face re-election. Vietnam, which until 2016 was barred from buying U.S. military weapons systems, has received training from the U.S. on navigating America’s procurement process, said Tuong Vu, a professor of political science at the University of Oregon.

Vietnam’s one-party government can influence decisions of private companies, state-owned enterprises and local authorities, such as those overseeing the LNG project in Binh Thuan province, 212 kilometers (132 miles) northeast of Ho Chi Minh City. The project will buy U.S. LNG, though discussions with suppliers haven’t begun yet, Rockhold said.

“If private companies support the policies of the government, the government can support the private companies in other ways,” said Le Dang Doanh, a Hanoi-based economist and former government adviser. “All the tycoons in Vietnam are well-connected with the leadership of the government.”

In fact, Phuc hasn’t been shy about his U.S. shopping spree. He made a beeline for the U.S. president at the Group of 20 summit in Japan for an impromptu huddle, promising to buy “large volumes” of LNG. The country’s total LNG demand is estimated to reach 4 million tons a year by 2030, according to BloombergNEF analysts. Importing all of that fuel from the U.S. — valued at about $ 1.5 billion a year — would equal 3.7% of the country’s 2018 trade surplus with America.

This month Liquefied Natural Gas Ltd. announced a non-binding term sheet that could lead to the first deal to supply U.S. gas to Vietnam for a Mekong Delta power plant. The agreement, which could result in $ 30 billion of exports from the U.S. over the 25-year project, would “help balance Vietnam’s trade surplus with the U.S.,” Singapore-based Delta Offshore Energy PTE LTD, which plans to build the plant, said in a press release.

Phuc in a January interview promised that his country would buy more Boeing (NYSE:) Co. aircraft. A month later, during Trump’s visit to Hanoi to meet with North Korean leader Kim Jong-Un, Vietnam’s Bamboo Airways and VietJet Aviation JSC signed agreements to purchase 110 Boeing jets. State-owned Vietnam Airlines JSC says it is considering an order for 50-100 737 Max.

“Doing business with U.S. partners is safe and it can help develop the relationship between Vietnam and the U.S.,” Bamboo Airways Chairman Trinh Van Quyet said.

In August, state-run Vietnam National Coal-Mineral Industries announced it was negotiating to buy U.S. coal for the first time from Xcoal Energy & Resources LLC, which is based in Pennsylvania, a state expected to play a pivotal role in the 2020 election and which Trump won in 2016.

Pork Shortage

Meanwhile, Nestor Scherbey, a licensed U.S. customs broker and consultant based in Ho Chi Minh City, is working with U.S. meat suppliers to help fill an estimated 500,000-ton pork shortage — valued at $ 1.29 billion — expected between now and the Tet Lunar New Year amid a swine fever epidemic that has reduced Vietnam’s hog population.

“You’ll start seeing things like packaged ham shipped from Texas in Vietnam supermarkets,” he said.

Vietnamese consumers already favor American products. The nation imported more than $ 3.1 billion in U.S. electronics, such as iPhones and Dell Technologies Inc. laptops, in the first eight months of the year, a 52% increase from last year, according to government statistics. U.S. vegetable and fruit imports have soared 72% as Washington Gala apples and Thompson seedless grapes are showing up in supermarket checkout lines.

Still, with an average annual per capita income of 58.5 million dong ($ 2,522), boosting other pricey imports isn’t a given. Alaskan lobster, which sells for the equivalent of $ 56 per kilogram in Ho Chi Minh City, and Ford Motor (NYSE:) Co.’s Explorer sport utility vehicle, with a price tag of about $ 97,700 in Vietnam, are out of reach for most Vietnamese consumers.

Vietnam’s efforts to boost imports from the U.S. faces another complication: Trump’s decision to exit the 12-nation transpacific trade deal. The pact will eventually slash 90% of tariffs from nations such as Australia, New Zealand, Japan and Canada — putting U.S. exports at a disadvantage, said Fred Burke, managing partner at the law firm Baker McKenzie.

“Many of the most significant tariff reductions will begin taking effect in the run-up to the presidential election in the U.S.,” he said.

(Updates with crack down on fake labels on Chinese goods in fifth paragraph)

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PBOC Drains $20.5 Billion in Bank Liquidity, Keeps Rates on Hold

© Reuters.  PBOC Drains $  20.5 Billion in Bank Liquidity, Keeps Rates on Hold © Reuters. PBOC Drains $ 20.5 Billion in Bank Liquidity, Keeps Rates on Hold

(Bloomberg) — The People’s Bank of China drained liquidity from the financial system, signaling that officials remain cautious about drastically stepping up the scope of stimulus even after a slew of weak economic data.

The People’s Bank of China injected 200 billion yuan ($ 28.3 billion) through the medium-term lending facility while 265 billion yuan worth matured. The one-year funding was offered at 3.3%, according to a statement, unchanged from before. The central bank also let 80 billion yuan worth of 7-day reverse repurchase agreements mature, taking the total net withdrawal to 145 billion .

Tuesday’s operation will offset some of the easing effects of the cuts to bank’ announced earlier in September. Even so, top officials are increasingly worried about economic growth, and more government debt sales are in the stimulus pipeline.

A growing number of economists have cut their forecasts for gross domestic product growth in 2020 to below 6%, and the economy continued to slow in August, official data on Monday showed.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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US treasury sells $32 billion of 7-year notes at a high yield of 1.489%

WI level at auction was 1.468%

  • high yield 1.489% well above the 1.468% WI level. Tail of 2.1 bps
  • Bid to cover 2.16x vs 2.44x 6 month average
  • dealers take 33.8%
  • Directs take 16.1%
  • Indirects take 50.2%

This is a poor auction with a 2.1 basis point tail and bid to cover well below the 6 month average. Dealers were also forced to take a much greater percentage of the auction. The 6 month average was only 23%. They are settled with 33.8%.  

Yields are moving higher at a result post the auction with the 5 year up from 1.404% to 1.4224%. The 10 year is up from 1.514% to 1.5299%.

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Anbang to sell entire $2.4 billion Japanese property portfolio, Blackstone seen bidding: sources

TOKYO (Reuters) – China’s troubled Anbang Insurance Group has started a sale of its entire $ 2.4 billion Japanese property portfolio and previous owner Blackstone (NYSE:) Group is bidding, two people said, after the insurer failed to sell some of the assets last year.

Beijing has been speeding up asset disposals at the government-controlled insurance group, previously one of the most aggressive Chinese buyers of foreign assets. Anbang is aiming to sell the entire residential portfolio it bought from the U.S. private equity firm, said the people, declining to be identified because the deal is not public.

The price for the portfolio has not been set and the process is still at an early stage, they said. Anbang paid Blackstone around 260 billion yen ($ 2.4 billion) for the assets in 2017, in what was Japan’s biggest property deal since the global financial crisis.

Representatives for Anbang and Blackstone declined to comment.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Switzerland July foreign currency reserves CHF 767.9 billion vs CHF 759.1 billion prior

Latest data released by the SNB – 7 August 2019

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Slight delay in the release by the source. A decent increase in foreign reserves but nothing out of the ordinary from recent levels thus far. Let’s see how the data progresses in the next couple of months before drawing any firm conclusions of potential SNB intervention.

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