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Saudi Aramco held its first ever international bond offering. The demand for them was so strong that it allowed the company to raise funds at lower interest rates than Saudi Arabia does.
This is not a typical situation for the bond market, which once again underlines the global race for profitability, which is forcing investors to deviate from generally accepted norms. Due to the increased demand for Saudi Aramco bonds, the cost of borrowing for Saudi Arabia has fallen.
Demand for Saudi Aramco bonds was a record for bonds of developing countries and their companies in general.
According to published data, Saudi Aramco's revenue in 2017 amounted to $ 263 billion, and in 2018 - $ 356 billion. The company's net profit increased from $ 76 billion in 2017 to $ 111 billion in 2018.
According to Bloomberg, 1.06 billion shares of Japan Post Holdings Co., which combines postal, banking and insurance assets, will be sold.
According to the representative of the Japanese Ministry of Finance, the Japanese authorities have already selected four Japanese underwriters and two overseas to arrange the placement of shares of the Japan Post. The sale of securities will bring the government about $ 12.2 billion.
The upcoming sale of shares will complete the privatization process of the Japan Post, which was wholly owned by the state more than a century before its IPO in 2015.
The Japanese government has already raised approximately $ 25.1 billion through a 43% stake in Japan Post.
After the sale of the third and last tranche of shares, the state's stake in the Japan Post will decline to the level prescribed by law. The funds raised are planned to be used to restore the areas affected by the tsunami and earthquake in March 2011.
US government debt increased by more than $ 1 trillion. over the past 11 months. This is due, inter alia, to the tax reform of US President Donald Trump, which cost the country $ 1.5 trillion, as well as an increase in spending on defense programs.
The Michael Peterson, chief executive officer of the Peter G. Peterson Foundation, which deals with long-term problems in the financial sector of the country, noted that the achievement of this sad milestone is the last sign that the financial situation in the United States is not only unstable, but also worsening. The reason for this is "structural discrepancies between costs and revenues."
According to M. Peterson, the main factors are the aging of the population, high health care costs and rising interest payments, together with the tax code, which cannot provide a sufficient inflow of taxes.
In late January, the international rating agency Fitch Ratings noted that the United States is the country with the largest debt, and its amount is increasing by about $ 1 trillion. annually. In the top three in terms of public debt, in addition to the United States, Japan ($ 12 trillion) and China ($ 6 trillion).
Such data led the publication of the Financial Times. Shazeta notes that part of this amount was poured in by the financial regulator of China through seven-day reverse repos, and another by 28-day reverse repos. As a result, the total volume of injections from these operations was a record for the Central Bank of China.
The publication indicates that such actions by the regulator are designed to increase the amount of liquidity in the banking system, as well as push financial companies to increase lending.
An official statement from the Peoples Bank of China states that total liquidity in the banking system is rapidly declining, given the peak period of tax payments.
As Qatars Minister of Energy Saad bin Srida al-Qa'abi noted, $ 20 billion will be invested over five years in various projects in the states. The United States, according to Qatari, is promising in terms of investment.
According to the minister, such investments will add to the total production of 60 million tons per day.
Qatar Petroleum's executive director said that $ 20 billion of investment will follow from the company. He stressed that by quitting the Organization of Petroleum Exporting Countries (OPEC), Qatar will be able to free itself from legal risks in the United States.
Qatar is also going to allocate $ 500 million over ten years to UN organizations to support their activities. The text of the signed agreement states that 8 UN organizations will receive subsidies, including UNICEF and the High Commissioner for Refugees.
Dear partners! Happy New Year! I Wish you good health, strength, energy and good luck to achieve your goals and implement grandiose and profitable business projects. Thank you for the fruitful cooperation and look forward to its successful continuation in the next 2019.
Best regards, Team PrimeCapitals Ltd.
Starting December 7, 2018, the UK authorities will suspend the issuing of visas for wealthy foreign investors as part of reforms to combat money laundering and organized crime.
Those who invested in the UK economy at least £ million ($ 2.5 million) could count on "golden visas".
The new visa issuing rules will include requirements to verify the applicants financial and business interests.
Visa applicants will also need to confirm that the money they intend to invest in the UK economy has been at their disposal for at least two years before applying.
Government bonds that previously also granted UK residency were also excluded from the list of investments.
The authorities will also investigate all issued gold visas, which were issued before the spring of 2015.
It is planned that the issuance of visas to investors may resume in 2019.
Bloomberg estimates that these changes will be most affected and may affect wealthy Russians.
Earlier, a report on dirty money from the Russian Federation was published on the website of the British Parliament. The authors of the report called for strengthening instruments of financial pressure on Vladimir Putin and his entourage.
Recall that in May 2018, the United Kingdom did not extend the investment visa to Russian businessman Roman Abramovich.
According to The Wall Street Journal, the Chinese government plans to sell US bonds totaling $ 3 billion. The newspaper claims that the Chinese Ministry of Finance instructed major national and world investment banks to tackle this issue.
It is expected that next week, China will offer buyers securities of the US government.
American government bonds with maturities of 5, 10 and 30 years will be put up for sale. It is worth noting that since 2004, the Chinese authorities are selling their US securities for the third time and for the second time since the beginning of the year.
In July of this year, Beijing announced a reduction in investment in the US public debt by $ 7.7 billion. However, this did not prevent China from retaining its first place among investors in US government bonds. Chinas total investment in US government securities reaches $ 1.17 trillion.
Mark Zandy, chief economist at Moody's Analytics, draws attention to the "frightening" similarities between subprime mortgages that led to the US financial crisis in 2007-2008 (and ultimately to the global economic downturn) and the current market for risk loans (leveraged loans) and junk bonds.
Leveraged loans are loans that are issued to already heavily loaned non-financial businesses. As a rule, these loans are provided at a floating interest rate tied to Libor (that is, the cost of their servicing is growing amid the general growth of rates in the economy), and they have "junk" ratings from credit rating agencies. Borrowing companies use these loans to finance mergers and acquisitions, dividend payments, repurchases of own shares, and debt refinancing.
"This is the most serious brewing threat to the current business cycle," says Zandy. The volume of these risky loans in the USA, according to Moodys, reached a record $ 1.4 trillion, and in the amount of junk corporate bonds, the risk debt is approximately $ 2.7 trillion. "Now notice that subprime mortgage debt was close to $ 3 trillion at its peak in the wake of the 2008 financial crisis," the economist warns.
Chinese President Xi Jinping announced the creation of a Sino-Arab interbank association aimed at promoting financial cooperation between China and the Arab countries. The fund will manage $ 3 billion in funds. A statement was made during the opening ceremony of the 8th meeting of the Foreign Ministers of the Sino-Arab Cooperation Forum.
Xi Jinping noted that the Chinese side is ready to begin long-term strategic planning with the Arab countries, as well as strengthen cooperation in the field of digital economy, artificial intelligence, biopharmaceuticals, smart cities and other areas.
A ministerial meeting of the Sino-Arab Cooperation Forum is scheduled for next week. Based on its results, the Beijing Declaration, the Action Plan for 2018-2020, as well as other documents should be adopted.
As noted by French Minister of Economy and Finance Bruno Le Mer, the state should not be engaged in the management of competitive enterprises.
The Cabinet of Ministers will receive a bill on partial privatization on June 18, but it will not go through parliament earlier than in early 2019.
To date, the French government owns a 50.6% stake in ADP worth about 9.2 billion euros and 24.1% Engie worth 8 billion euros. According to the current legislation, the minimum permissible share of state participation for ADP is 50% of the capital, and for Engie - a third of the voting shares. The new bill should take into account the relevant changes.
In addition, the privatization of Francaise des Jeux, whose shares are not listed on the stock exchange, unlike ADP and Engie, requires the formation of a new gambling regulator.
Engie fell 0.4% on Wednesday in Paris, while ADP rose 5%.
The main theme of the forecast was the approach to the end of the era of the largest experiment in monetary policy amid the influence of factors such as nationalism, continuing inequality in society and the prevailing feeling of disappointment among the younger generation.
In its report for the first quarter, Saxo Bank talked a lot about bubbles in the financial markets, and today we want to warn investors that we are at the end of a certain cycle, unlike any other. Today, its not political leaders, but central banks of countries that are responsible for adopting and supporting low and negative interest rate policies and quantitative easing. This policy dragged on for a long time, much longer than the normal economic cycle would require. These measures were necessary to maintain a positive atmosphere in global markets, but adverse side effects were inevitable.
Today, capital markets are in a state of zombies. There is low volatility and extremes in the estimates for all assets, the absence of an increase in growth and productivity, a tremendous increase in inequality.
According to CNN, the collapse of the Dow Jones in absolute terms - by 1175 points at the close of the session and by 1600 during the bidding - became the highest in the history of its existence.
It all started last week, when increased inflation expectations spurred growth in government bond yields. Investors fear that, as economic growth intensifies, hitherto low inflation may go up sharply, which will force the Federal Reserve System (FRS) to raise interest rates much faster than planned.
As a result, the wealth of the 500 richest people in the world fell by $ 114 billion due to a sharp drop in the US stock market.
Most unlucky was the head of Berkshire, Warren Buffett, who lost about $ 5.1 billion.
The general panic led to the fact that many investors began to sell shares and send money into bonds, the yield of which fell on Monday. So, the yield of 10-year-old U.S. Treasury declined to 2.794% from Friday's 2.852%. At the same time, the Wall Street Fear Index, the CBOE Volatility Index (VIX), jumped 104% to 35.02 points, the highest since August 2015.
According to analysts, there is a risk of a "bubble" in the market, but no one believes them.
In particular, Japan's stock indices have been at a maximum since 1991, the FTSE 100 in the UK has updated its historical maximum, and the American Dow Jones has surpassed the mark of 25 thousand points. Another US index, the S&P 500, also began the year with the best performance in 30 years.
Indicative is the MSCI world index, which tracks the dynamics in stock markets around the world. It increased in 2017 by 20%, and at the beginning of 2018 another 2.6%.
According to surveys in the US, the most optimistic is observed among ordinary retail investors who are willing to buy and buy.
Analysts, meanwhile, predict that the market may soon be overheated. At the same time, global factors of instability remain, including the inevitable slowdown in economic growth in China, stagnation in the eurozone, which could lead to the collapse of the EU.
According to Fast Company, which cites materials from the Bloomberg agency, the results of the past 2017 showed that the 500 richest entrepreneurs earned $ 1 trillion, which is 4 times higher than the 2016 result. Moreover, the most successful year was for those billionaires whose business is associated with high technology.
It is noted that the IT sector showed the highest growth. So, 57 technological entrepreneurs out of all 500 participants in the rating earned $ 262 billion last year. This figure is 35% higher than similar in any other field.
At the top of the rating, which is quite natural, were Jeff Bezos and Bill Gates, as well as Tencent founder Ma Huaten.
In addition, Fast Company adds that, against the backdrop of the growth of the stock market last year, the trend towards increasing financial inequality continued. In particular, the increase in total wages was negligible. Thus, people with low incomes did not take advantage of the economic development.
Dear partners! Happy New Year and Merry Christmas! Let the coming year become a year of significant achievements for you, the opening of new investment opportunities and the implementation of the most daring ideas and ambitious business projects. Thank you for the fruitful cooperation and look forward to its successful continuation next year.
Best regards, Team PrimeCapitals Ltd.
This was announced by World Bank President Jim Yong Kim in Paris on December 12, 2017 at the One Planet Summit. According to the statement, the World Bank considers it necessary to revise the methodology in a rapidly changing world. In addition to discontinuing funding for fossil fuel exploration, the World Bank has put forward a list of measures that will be implemented to meet the requirements of the Paris Climate Agreement.
1. The World Bank will cease all financing of oil and gas production after 2019. In exceptional circumstances, the Bank will consider financing gas production in the poorest countries, where there is a clear need for access to energy for the poor.
2. Starting in 2018, the World Bank will publish an annual report on greenhouse gas emissions from all investment projects.
3. The World Financial Corporation (IFC) will invest up to $ 325 million in the creation of the world's largest fund of "environmental" bonds for emerging markets - the Green Cornerstone Bond Fund. The fund has already allocated more than a billion dollars.
4. The bank will continue to invest in areas that were once again announced at One Planet Summit.
5. The World Bank Group will continue to work with the UN to develop the Invest4Climate platform.
6. The World Finance Corporation (IFC) and the Government of Finland launched the Finland-IFC Climate Change Program, a climate change program, with 114 million Euro in return capital. The project aims to stimulate the private sector to invest in renewable energy, energy efficiency, green building, smart agriculture and forestry.
7. The World Bank will facilitate the transition to renewable energy in developing countries.
The new city will be called Neom. He will have his own regulatory environment, and he will be controlled by Prince Mohammed bin Salman. The project will be financed by public funds, resources of the Saudi state investment fund Public Investment Fund (PIF), as well as private investment.
They plan to arrange Neom on the Red Sea coast in the neighborhood of Jordan and Egypt, its area will be 260 thousand square kilometers, and it will be provided with electricity generated from renewable sources.
A new free zone is being created with one main goal - to attract as many investments as possible in new technologies, renewable energy and robotics.
According to forecasts by the Saudi authorities, by 2030, Neom's contribution to the country's GDP will be $ 100 billion.
In 2016, the government announced the start of an economic transformation program aimed at reducing its dependence on the oil sector. The program provides for the privatization of assets, the creation of 1.2 million jobs in the private sector and the reduction of unemployment from 11.6% to 9% by 2020.
Saudi Arabia already does not have very successful experience in launching multi-billion-dollar projects for creating economic zones. Of the six new cities conceived ten years ago, only one was further developed - the Economic City of King Abdullah. Now Prince M. bin Salman promises that Neom will be built.
According to the report of the Linklaters LLP law firm, over the next 10 years, the volume of investments by Chinese investors will increase by 70% to $ 1.5 trillion, and this in the presence of certain political barriers. Linklaters LLP analysts estimate that over the past decade, Chinese companies have already invested $ 880 billion in foreign enterprises.
The Chinese authorities strongly support investments in production technologies, especially with regard to advanced developments. Priority for China is the acquisition and development of innovative technologies. To this end, the Made in China 2025 strategy has been developed, which is aimed at achieving maximum independence fr om foreign companies and the development of a significant share of technology and production markets.
All this contributes to the increase in investment by Chinese companies. According to Rhodium Group, from January to May 2017, Chinas investment in the United States amounted to $ 22 billion, which is 100% more than in the same period last year.
In addition, most of the investment from China relates to the field of artificial intelligence, wh ere China and the United States compete. Investors from China have invested $ 700 million in 51 American companies from the field of artificial intelligence.
Last month, the world's largest investors were actively selling shares of American IT companies, which led to a drop in investment in the US stock market to a minimum since the beginning of 2008. These are the results of a survey of managers of global investment funds with total assets of $ 586 billion. The survey was conducted by the financial conglomerate Bank of America Merrill Lynch.
68% of respondents believe that the shares of high-tech companies from the NASDAQ Composite index are overvalued, and another 12% consider this market to be overheated and see signs of a "bubble" on it. Then it is not surprising that the total investment of funds in the IT sector decreased from 37% in May to 28% in June. In addition, the total weight of US stocks in investment fund portfolios has dropped to a minimum since January 2008.
According to Michael Hartnett, chief strategist at BofA Merrill Lynch, over 80% of global investors are confident that the US stock market is the most overvalued in the world.
The survey also showed that about a quarter of respondents hold pessimistic views on global financial markets, believing that in the future they will fall. Among the greatest risks for their business, fund managers highlight the likely collapse of debt markets, as well as possible errors in the monetary policy of the Federal Reserve and the European Central Bank.
At the same time, over the past month, investment funds have seen an increase in investments in the Japanese stock market, in the US healthcare sector, in manufacturers of materials and raw materials.