Facebook is the largest U.S. Tech IPO ever
NEW YORK (CNNMoney) — After four months of paperwork, hype and speculation, the last piece of the Facebook IPO is in place: Facebook said it has priced its IPO at $38 a share.
At that price, Facebook’s IPO will raise $16 billion, making it the largest tech IPO in history. It’s the third largest U.S. IPO ever, trailing only the $19.7 billion raised by Visa (V, Fortune 500) in March 2008 and the $18.1 billion raised by automaker General Motors (GM, Fortune 500) in November 2010, according to rankings by Thomson Reuters.
There are still a few more steps before Facebook’s shares are ready to trade. The company is waiting for the Securities and Exchange Commission to declare its IPO effective — the formal green light Facebook and its underwriters need before they can sell shares to outside buyers.
The $38 IPO price is the rate at which Facebook’s underwriters (including lead banker Morgan Stanley) will sell shares to their clients, which typically include large institutional investors, mutual funds and hedge funds.
Shares will be released Thursday night to those buyers, who can resell them on the open market beginning on Friday.
Facebook sets share price for record IPO
Facebook yesterday finalised the price at which it will offer its shares to the public for the first time today.
The social networking giant said its eagerly anticipated IPO would be priced at $38 per share – at the top end of the trading range it announced earlier in the week.
The share price would value the company at around $104bn, making it easily the largest technology IPO in history and the third-largest ever in the US, following the 2008 IPO of Visa and the 2010 IPO of General Motors.
Qatar on top of foreign investors’ list
Qatar remains on the top of most foreign investors’ list of investable markets in the Middle East and Africa region, according to an analyst from a leading international investment management company.
Giving insights into the MSCI upgrade decision due next month, Bank of New York Mellon Vice President and Head of GCC Depositary Receipts Peter Gotke, said: “Although Doha’s stock market has not shown the same incredible growth enjoyed in the past few years, nonetheless, Qatar remains on the top of most foreign investors’ list of investable markets in the Mena region.”
The MSCI Global Equity Indices are widely tracked global equity benchmarks and serve as the basis for over 500 exchanged traded funds throughout the world. The indices provide exhaustive equity market coverage for over 70 countries in the Developed, Emerging and Frontier Markets, applying a consistent index construction and maintenance methodology. This methodology allows for meaningful global views and cross regional comparisons across all market capitalisation size, sector and style segments and combinations.
Elaborating on reliability of Qatar market, he said: “We believe that there has been something of a pause for breath thus far this year. Fundamentals remain very strong with more contracts being awarded later this year that should support this growth.
“The beneficiaries of these contracts will impact further on investors’ buying decisions. Of course, investors would like to see increased foreign ownership limits and opportunities to buy into the resource sector but it is unclear if this will change in the short term.”
Giving his overview on the MSCI upgrade decision Gotke said: “I am more confident at this juncture that the UAE will be upgraded to Emerging Markets status by the MSCI this coming June, with many affirmative actions having taken place across regional markets. It remains a priority that both the UAE, and Qatar, continue to attract institutional foreign investment, to provide enhanced stability for region.”
With more and more foreign investors looking to buy and sell in the UAE, clearly the newly implemented delivery versus payment (DVP) system, introduced as part of the MSCI criteria, has now been more fully tested, he said.
“It is likely that the UAE and Qatar would attract significant capital flows in additional foreign investment should the markets be upgraded to emerging market status,” he added.
Regarding Saudi Arabia Gotke said: “The announcement last week from the MSCI that it will resume coverage on Saudi Arabia has been interpreted by many as a strong indicator that the Saudi stock exchange (Tadawul) will be opening soon. The MSCI has a positive outlook on the region, especially the GCC, which I see as good news ahead of the upgrade decision.”
Qapco wins award for Qatarisation campaign
The Qatar Petrochemical Company (Qapco) has been awarded the
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| Minister of Energy and Industry HE Dr Mohamed bin Saleh al-Sada presenting the annual award for Qatarisation to vice chairman and CEO of Qapco Mohamed Yousef al-Mulla |
‘Annual Qatarisation Crystal for Supporting Qatarisation’ by the Minister of Energy and Industry and chairman and managing director of Qatar Petroleum, HE Dr Mohamed bin Saleh al-Sada.
The company was presented the award at the energy and industry sector’s 12th anniversary annual Qatarisation review, recently held at the Ritz-Carlton Hotel.
Qapco vice chairman and CEO Mohamed Yousef al-Mulla stated: “Qapco is fully committed to the Qatarisation policy created by the wise vision of HH the Emir Sheikh Hamad bin Khalifa al-Thani and we support the Qatarisation strategy as directed by HE Dr Mohamed bin Saleh al-Sada.”
“This award means so much as it recognises the hard work and commitment by all Qapco staff to implement a highly advanced level of quality Qatarisation. Also, the main goal of our people strategy is to create the right environment that will not only attract and recruit quality Qatari citizens but also develop and retain them and by doing so establish Qapco’s reputation as an employer of choice – this award is proof that we are well on the way to achieving this,” he added.
Al-Mulla noted: “Qapco has embarked on a programme of huge expansion – we have the new LDPE3 plant coming online early next year and have just signed an agreement with QP to develop and build Qapco 2 in Ras Laffan. These two projects alone will ensure that the recruitment and development of quality Qatari employees will play a vital role in Qapco’s future.”
Human resources and learning manager Nasser al-Hajri said: “Winning an award for the third year in a row is a fantastic achievement as the competition this year was even harder than before. Qapco is proud of its legacy of learning and development and is committed to providing its employees, especially our Qatari employees, with world-class training.” Source: Gulf Times
Euro-Area Inflation Slowed in April, March Exports Declined
European inflation slowed last month and exports dropped in March as the euro region’s spreading fiscal crisis undermined the economy and consumer demand.
The inflation rate in the 17-nation euro area fell to 2.6 percent from 2.7 percent in March, the European Union’s statistics office in Luxembourg said today. That’s in line with an initial estimate published on April 30. Euro-region exports fell 0.9 percent in March from the previous month, when they rose 2.2 percent, it said in a separate statement.
A customer purchases fresh vegetables at an open market in Athens, on May 14, 1012. Photographer: Kostas Tsironis/Bloomberg
The euro-area economy is showing few signs of recovery after stalling in the first quarter as budget cuts and increasing unemployment undermine consumer demand and leave companies with little room to raise prices. The European Central Bank on May 3 kept its benchmark interest rate at 1 percent, with President Mario Draghi calling risks to the inflation outlook “broadly balanced.”
“If the ECB acted, it wouldn’t be because of prices but because of the economic development,” said Michael Schubert, an economist at Commerzbank AG in Frankfurt. “We expect euro- region inflation to normalize in 2013. The economy will probably gradually recover in the second half of this year and that means the ECB has room to keep interest rates on hold.”
Core Inflation
The euro pared losses after the data were released, trading at $1.2720 at 11:10 a.m. in Brussels, down less than 0.1 percent.
Euro-area core inflation, which excludes volatile costs such as energy, held at 1.6 percent in April, today’s report showed. Consumer prices rose 0.5 percent from March.
The ECB said on May 10 that professional forecasters predict euro-region inflation will average 2.3 percent this year and 1.8 percent in 2013. That’s up from 1.9 percent and 1.7 percent three months ago. The economy may shrink 0.2 percent this year instead of a previously projected 0.1 percent, the quarterly survey showed. The Frankfurt-based central bank aims to keep inflation just below 2 percent.
Retreating energy costs are leaving the ECB with more room to focus on ways to bolster the economy. Draghi said at the May 3 rate meeting that while there was some “stabilizing economic activity at low levels” in the first quarter, the “most recent survey indicators show uncertainty prevailing.”
‘Challenging Market Conditions’
Euro-region services and manufacturing industries contracted for an eighth straight month in April and economic confidence fell to the lowest since December. Euro-area unemploymentrose to 10.9 percent in March, the highest in 15 years, and Italian households grew more pessimistic last month.
Volkswagen AG (VOW)’s Audi brand on May 10 forecast 2012 profit will hold steady as faltering European markets offset higher worldwide deliveries. Chief Financial Officer Axel Strotbek said the company is faced with “particularly challenging market conditions” in western Europe.
Still, Germany’s export-driven economy has helped soften the region’s economic slump. Europe’s largest economy expanded 0.5 percent in the first quarter from the previous three months, more than economists had forecast, boosted by global demand while domestic consumption also increased.
Bayerische Motoren Werke AG (BMW), the world’s biggest maker of luxury vehicles, on May 3 reported first-quarter profit that beat analyst estimates. The Munich-based company will start production at a second plant in China this month.
Euro-area imports dropped 1.1 percent from February, when they rose 3.2 percent, today’s report showed. The trade surplus widened to 4.3 billion euros ($5.5 billion) from 4 billion euros. Shipments to the U.S. rose 14 percent in the two months through February, while exports to the U.K. advanced 10 percent, the statistics office said. Source: Bloomberg
To contact the reporter on this story: Simone Meier in Zurich at smeier@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
EU agrees strict new bank rules
Margrethe Vestager, Danish minister for economics: “Healthy and regulated financial sector is important”
The European Union has agreed strict new rules for banks, intended to make them safer and eliminate the need for future bailouts.
All EU banks will have to hold more “top-quality capital”, broadly meeting new international standards, the 27 nations of the EU unanimously agreed.
Under pressure from the UK, EU states can impose even stricter capital requirements on top of the new rules.
The new rules will now go before the European Parliament.
It is expected the new regulations will come into force in June.
The agreement comes as there is lingering uncertainty over the euro, with fears that Spain and Italy could need bailouts and Greece may exit altogether.
“Our overall objective remains to strengthen the resilience of the banking sector in the EU while ensuring that banks continue to finance economic activity and growth,” said EU Internal Markets Commissioner Michel Barnier.
“The final compromise must contribute to financial stability, the necessary basis for growth and employment.”
Basel III
The new rules meet the standards set by Basel III, agreed by the G20 group of wealthiest nations, that strengthen the regulation and supervision of the global banking sector.
When the new EU rules are passed, banks will have to hold more of the least-risky Tier 1 capital – 4.5% compared to 2% under current rules.
Two new capital buffers will be introduced, including one designed to avoid “excessive lending”.
On top of these, each member state may impose another capital buffer, depending on approval from the European Commission.
Speaking before the decision, UK Chancellor George Osborne said “uncertainty is undermining the entire European recovery”.
“And I think we’re reaching a point where we’ve got to make a decision to see the eurozone stand behind their currency.
“A very important part of that, of course, is strengthening the entire European banking system. And that is what we intend to do today.” Source: BBC
Oil Drops to Six-Month Low on Rising Stockpiles, Greek Crisis
Oil dropped in New York to the lowest price in more than six months after U.S. crude stockpiles grew and talks to form a coalition government in Greece collapsed, raising concern that Europe’s debt crisis will worsen.
West Texas Intermediate futures slid as much as 2.3 percent, declining for a fourth day. U.S. inventories rose 6.6 million barrels last week, data from the American Petroleum Institute indicated. A government report today is projected to show a gain of 1.8 million, according to a Bloomberg News survey. Greece will schedule new elections as early as June 10, which German Finance Minister Wolfgang Schaeuble said will be a referendum on whether the country stays in the euro.
“We have demand destruction at the same time that supply risks are being relieved,” said Hakan Kocayusufpasaoglu, chief investment officer at Archbridge Capital in Zug, Switzerland, who predicts that commodities will recover in the second half of the year. “What took the market by surprise is how quickly the European economic situation deteriorated. If Greece leaves, it sets a precedent, and the consequences for Europe would be catastrophic.”
Crude for June delivery decreased as much as $2.17 to $91.81 a barrel in electronic trading on the New York Mercantile Exchange, the lowest intraday price since Nov. 3. It was at $92.24 at 10:47 a.m. London time. Yesterday, the contract fell 0.8 percent to $93.98. Prices are 6.7 percent lower this year.
Brent oil for June settlement, which expires today, slipped 1.6 percent to $110.67 a barrel on the London-based ICE Futures Europe exchange. The more-actively traded July future retreated 1.4 percent to $109.92. The front-month price for the European benchmark contract was at a premium to WTI of $18.44, after closing at $18.26 yesterday, the widest gap since April 13.
Cushing Record
Oil in New York has long-term technical support at $89.83 a barrel, according to data compiled by Bloomberg. On the weekly chart, that’s the 50 percent Fibonacci retracement of the fall to $32.40 in December 2008 from a record high of $147.27 in July that year. Buy orders tend to be clustered near chart-support levels. Futures last traded at that price in November 2011.
Crude inventories at Cushing, Oklahoma, the delivery point for contracts traded on the New York Mercantile Exchange, rose 2.8 million barrels last week to a record 46.9 million barrels, according to the industry-funded API.
“Demand destruction is back on the agenda,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity- markets newsletter in Sydney. “The market is going to remain weak over the next month or so until we get some clarity of what’s happening in the world. The Greek turmoil is a problem.”
Seaway Reversal
The reversal of the Seaway pipeline tomorrow to move crude away from the storage hub at Cushing for the first time may do little to ease the glut that has kept WTI below Brent for an unprecedented 21 months, according to Citigroup Inc. and Barclays Plc.
The line’s capacity of 150,000 barrels a day won’t make much difference to stockpiles amid “really heavy” refinery maintenance, said Amrita Sen, a London-based analyst at Barclays. Supplies will rise as production surges, Ed Morse, global head of commodities research at Citigroup in New York, said in an April 16 note.
U.S. gasoline stockpiles dropped 2.6 million barrels last week, the API said. They are forecast to fall 100,000 barrels in today’s Energy Department report, according to the median estimate of 12 analysts surveyed by Bloomberg. Distillate inventories, a category that includes diesel and heating oil, slid 1.6 million barrels compared with a projected 150,000 barrel gain.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Greek Crisis
Post-election attempts to form a government in Greece broke down yesterday after nine days as President Karolos Papoulias failed to broker a coalition in meetings with party leaders in Athens. New elections may be held next month. Four surveys have given the lead to the anti-bailout Syriza party that says it would tear up the conditions attached to 240 billion euros ($306 billion) of aid.
The euro weakened to an almost four-month low, making dollar-denominated oil more expensive for holders of the European single currency.
Shell’s Voser
New York crude has dropped 17 percent since March 1, when concern that Western sanctions against Iran would disrupt Middle East supplies helped drive prices to $110.55 a barrel, the high for the year. Brent has fallen 14 percent since reaching $128.40 the same day.
Iran and International Atomic Energy Agency inspectors extended a round of negotiations over the Persian Gulf nation’s nuclear program after two days of talks ended in Vienna yesterday with both sides saying progress had been made. IAEA inspectors will meet again with their Iranian counterparts on May 21 in the Austrian capital.
Royal Dutch Shell Plc Chief Executive Officer Peter Voser said he expects weaker oil prices in the second half of the year as demand growth slows in China and other emerging markets.
Prices in the first half had been elevated because of tensions between Iran and Israel, Voser said in a television interview in Rotterdam today. Source: Bloomberg
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
Qatar buys ‘major’ stake in oil giant Shell
Qatar is ploughing more of its commodity wealth back into
Shell is the operator of the world’s largest gas-to-liquids plant, Pearl GTL, developed under a Production and Sharing Agreement with Qatar Petroleum
the sector with the purchase of a major stake in Royal Dutch Shell while also reportedly eyeing a chunk of Italian oil major ENI.
A Shell spokeswoman confirmed the purchase while declining to detail its size but the Middle East Economic Survey (MEES) reported earlier that Qatar’s sovereign wealth fund (QIA) was looking at a 3-5% stake.
If Qatar did buy 5%, it would be just ahead of Blackrock, which is currently Shell’s biggest investor with 4.97%, according to Reuters data.
Shell is already an important partner for Qatar, with two big projects in the country. Its $19bn Pearl gas-to-liquids plant 80km north of Doha is the biggest of its kind in the world. It has also partnered with Qatar Petroleum on a big LNG facility.
Shell said last month that the Pearl gas-to-liquids venture would reach full capacity by the middle of the year. The plant, which converts gas to liquid fuels such as kerosene and diesel, began operating last year. Once fully operational, it will be able to convert 1.6bn cubic feet a day of gas into 140,000 barrels a day of liquid fuels such as kerosene and base oil that are normally produced in a refinery. The facility will also make 120,000 barrels a day of condensate and liquid petroleum gas.
Qatar’s massive gas supplies have made it rich, allowing it to create a sovereign wealth fund that has been buying up assets, including stakes in listed companies, around the world.
“We are delighted to welcome the Qatar Investment Authority as a long-term and major shareholder in Shell, and particularly given our excellent strategic relationship with the Qatari state,” the spokeswoman said in a statement.
Shell’s London-listed “A” shares rose 1.1% to trade at 20.74 euros by 1526 GMT, against a 0.4% rise in the STOXX Europe 600 Oil and Gas index.
Eni, whose shares traded up 1.9% at 16.89 euros, had no comment on the MEES report that Qatar was negotiating a stake in it.
Two analysts said the Qatar fund might be interested in buying the ENI stake of around 3.4% that state-controlled finance company CDP could sell to help fund its acquisition of a stake in transmission operator Snam from Eni.
Prime Minister Mario Monti had a meeting with HH the Emir Sheikh Hamad bin Khalifa al-Thani in Rome in April. Monti told reporters at the end of that meeting that Qatari institutions had shown interest in long-term investments in Italy.
In Italy investors must inform the market regulator Consob when they buy stakes of more than 2% in a listed company.
A senior executive of the Qatari fund said in April that the financial crisis had restricted investment in commodities and that he expected a supply-demand gap to emerge by 2016 or 2017.
“We like commodities, we like to invest in commodities. Since 2002, the commodity price trend keeps going up,” Qatar Investment Authority Executive Board member Hussain al-Abdulla told reporters.
Qatar Holding, a unit of QIA, said last month that it had increased its stake in French oil group Total to 3% and is undecided on buying more shares.
Qatar signed a deal in April to co-invest $250mn with Barclays’ natural resources private equity investment unit.
QIA has been the most active of the region’s sovereign wealth funds in recent years, deploying profit from its natural gas riches into assets ranging from German sports car maker Porsche to British bank Barclays.
The fund has also been slowly buying into London-listed miner Xstrata recently. Its current holding in Xstrata, which is planning to merge with commodities trader Glencore, is about 7.2%.
Yesterday, the Financial Times reported Qatar’s sovereign wealth fund planned to increase its Xstrata stake to at least 10% as part of a long-held strategy to invest in Glencore, suggesting the state could provide crucial support to the pair’s $90bn merger deal.
Qatar recently increased its stake in Lagardere, the French media-to-aerospace conglomerate, to 12.8%. It said it could raise the holding further and may seek representation on the supervisory board.
Qatar also owns stakes in Volkswagen, Porsche , Iberdrola, Hochtief, Vinci , Veolia, Vivendi, Sainsbury, the London Stock Exchange, Barclays, Credit Suisse, Agricultural Bank of China and Santander Brasil. It owns Harrods outright.
In rare comments last month, a senior official from Qatar’s sovereign wealth fund was upbeat on the commodities sector, predicting a supply-demand gap would emerge in 2016 or 2017, pushing prices higher. Qatar is the world’s largest exporter of liquefied natural gas. Source: Reuters, Gulf Times
Inflation may rise in Qatar 3% this year
Inflationary pressures will mount in Qatar this year with government spending picking up and recent public sector salary increases raising aggregate demand, a new report said yesterday. According to Samba Financial Group, Qatar may see an inflation rate of 3% in 2012.
Data through March show inflation holding at 1.2% year-on-year, held down by “sustained falls” in the heavily weighted rental component.
Food price increases also remained relatively modest at 3.4% and there was a sharp deceleration in the transport and communications component which dropped to 2% year-on-year in March having averaged 6.4% during 2011.
The latter two factors helped dampen the consumer price index (CPI) excluding rents, which dipped to 3.8% in March (in this index food has a 19.5% weight and transport and communications 30.2%), Samba said.
Proposed government infrastructure spending in the National Development Strategy (NDS) was put at $65bn to be spent on the port, airport, roads, water, wastewater, power, metro and rail, Qatar-Bahrain causeway, Education City, Sidra Hospital, and real estate developments implemented through Qatar Diar and Barwa.
Samba expects that the budget covering 2012/13 will continue to emphasise spending in line with priorities laid out in the NDS, which will include large investments in infrastructure projects, as well as sustained spending on health and education.
Under the initial 2011-16 plan government infrastructure spending was scheduled to peak in 2012, although delays in project implementation will probably result in a smoother and more extended path of spending. In particular, key mega-projects such as the Qatar-Bahrain causeway and the metro-system appear to be currently stalled at the planning stage.
The release of the 2012/13 budget, which was due to start on April 1, has been pushed back to May-end due to changes in the government’s accounting system and the way it prepares budgets, according to official sources. Source: Gulf Times
HH Sheikha Moza hails strategic importance of Qatar University
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| HH Sheikha Moza bint Nasser meeting with faculty and students during a visit to Qatar University |
HH Sheikha Moza bint Nasser has met with a number of members of the administrative authority, faculty and students at Qatar University during an open dialogue organised by the university at the education building yesterday morning.
During the meeting a number of topics were addressed, most notably the importance of Qatar University’s role as a national university besides discussion on a decision Arabicising the medium of instruction as well as the university’s role in support of many programmes in the scientific research field.
HH Sheikha Moza said she was proud of being one the Qatar University graduates and spoke about the significance of the university as a national university and a major player upon which the country’s national strategy relies.
Qatar University, since its foundation, has made significant achievements at various levels, the most important of which being the provision of Qatar labour market with local workforce.
HH Sheikha Moza thanked the university for its efforts to “nationalise” scientific research and to form a research infrastructure for 480 projects supported by Qatar National Research Fund (QNRF).
In response to queries by some students on the decision of the Supreme Council for Special Education to Arabicise the medium of instruction at the university, HH Sheikha Moza praised the Arabic language as “our mother tongue which we must work to revive”, stressing that it was and to date is a language of science and research.
She said the university must continue to work to develop students’ skills in the English language by offering different programmes involved in this area, provided that English is a prerequisite for graduation from the university and not an obstacle hampering acceptance in it.
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| College of Engineering students at Qatar University brief HH Sheikha Moza bint Nasser on the ‘Life is Engineering Project’ where they reach out into the community and engage high school students interested in science and engineering. This year, the project resulted in 13 schools participating to assemble car kits and in May, six schools will compete in the final race challenge held at Lusail Racing Circuit. PICTURES: Aisha al-Musallam/HHOPL |
In a speech addressed to the administrative authority and the faculty, HH Sheikha Moza underlined the need to open channels of communication between the faculty and students, work to understand their needs and solve the problems that impede their academic and scientific drive at the university.
She added that the university should take into consideration development in various sectors of the state and meeting of the labour market requirements through its programmes and qualifying of students.
With regard to the relationship between the University of Qatar and Qatar Foundation for Education, Science and Community Development (QF), HH Sheikha Moza said both are national organisations of common goals, explaining that when the Foundation adopted the partnership model with an elite of prestigious universities, its prime objective was to benefit from their expertise and co-operation with the University of Qatar as a reference for quality and educational upgrading.
At the conclusion of the visit, HH Sheikha Moza toured the university campus’ new buildings such as the library, the research complex and premises of the engineering, management, economics and law faculties.
Source: Gulf Times