May 7, 2011

UPDATE 1-JP Morgan raises 2011 oil price forecasts

Filed under: Uncategorized — bigcapital @ 5:37 pm
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UPDATE 1-JP Morgan raises 2011 oil price forecasts — May 07, 2011

J.P. Morgan raised oil price forecasts for the rest of 2011 and 2012, a day after prices plunged an unprecedented $12 a barrel, as the bank expects tight supplies to offset economic headwinds.

The bank raised its Brent forecast for the third quarter to $130 a barrel from $108, for the fourth quarter to $120 a barrel from $108 and overall 2011 forecast to $120 a barrel from $110.

J.P. Morgan expects WTI to average $109.5 per barrel in 2011, up from its previous forecast of $99. It projects Brent averaging $120 a barrel and WTI averaging $114 a barrel in 2012.

The bank said its current supply and demand projections show a supply shortfall of 600,000 barrels per day (kbd) in the third quarter, even assuming that OPEC increases output by 1.2 million barrels per day (mbd) in the coming months.

Although the deficit could narrow to just 300 kbd by the fourth quarter, that narrowing would depend heavily on additional output increases by Saudi Arabia to 9.5 mbd, Angola to 1.7 mbd, and Iraq to 3.0 mbd by the end of the year, the bank said

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December 31, 2010

Goldman Sachs Boosts Global Growth Forecasts 2011


Goldman Sachs Boosts Global Growth Forecasts 2011

 Economists at Goldman Sachs Group Inc., the most profitable Wall Street firm, increased their forecasts for U.S. and global growth in 2011, predicted an acceleration in 2012 and recommended investors buy banks.

 The U.S. economy will grow at a 2.7 percent rate next year, up from a previous forecast of 2 percent, and 3.6 percent in 2012, economists led by Jan Hatzius in New York said in a report today. The global economy will grow 4.6 percent in 2011 and 4.8 percent in 2012, Dominic Wilson, senior global economist, said in a separate report.

 They recommended U.S. bank stocks, junk bonds, commodities, Japanese stocks and China’s currency as the first of the firm’s “top trades” for 2011. The forecasts are a departure from the pessimism that characterized Goldman Sachs’ projections since 2006.

 “This outlook represents a fundamental shift in the thinking that has governed our forecast for at least the last five years,” Hatzius said in the report. “The hand-off from policy stimulus to private demand — which seemed elusive just a couple of months ago — now appears to be developing.”

 U.S. stocks started what is historically their best month with a rally today after ADP Employer Services data showed companies added 93,000 jobs last month, the Federal Reserve said the economy gained strength across most of the nation and manufacturing in China expanded at the fastest pace in seven months. The Standard & Poor’s 500 Index advanced as much as 2.3 percent, the most since Sept. 1.

 Underlying Demand

 The Goldman Sachs economists said underlying demand, a measure of growth that excludes the effects of fiscal stimulus and inventory restocking, has strengthened and is on track to expand at a 5 percent rate in the fourth quarter.

 On average, economists surveyed by Bloomberg expect the U.S. economy to grow 2.5 percent next year and 3.1 percent in 2012. The Organization for Economic Cooperation and Development lowered its forecast for global growth last month to 4.2 percent for 2011 from 4.5 percent, and predicted 4.6 percent for 2012.

 Even as growth accelerates, U.S. unemployment will remain elevated by historical standards, declining to 8.5 percent by the end of 2012 from 9.6 percent in October, the economists said. The jobless rate increased to 10.1 percent in October 2009, the highest monthly figure since 1983.

 Inflation, Unemployment

 Core inflation, which excludes food and energy prices, is likely to be 0.5 percent in each of the next two years, Goldman Sachs said. The combination of high unemployment and low inflation is likely to keep the Federal Reserve from raising interest rates, the economists said.

 Conditions will be “positive for risky assets,” they wrote. The S&P 500, the main benchmark for American equities, will likely end next year at 1,450, up 20 percent from 1,206.07 at 4 p.m. in New York.

 The S&P 500 has gained 8.2 percent this year and recouped three-fifths of its decline from a record in October 2007. Concerns about the economic fallout from government debt reduction by some European countries caused rallies to stall in April and November and are the principal risk to Goldman’s outlook, the economists said.

 Growth in emerging markets may slow next year as acceleration in the U.S. prompts China, other Asian economies and Brazil to tighten monetary policy, the economists said.

 For its top trades, Goldman recommended betting on a decline in the value of the U.S. dollar against the Chinese renminbi via two-year non-deliverable forwards for an expected return of 6 percent.

 Bets on the KBW Bank Index will return 25 percent, and selling protection on high-yield corporate bonds via credit- default swaps will return 8.7 percent, they predicted.

 Japan’s Nikkei 225 Stock Average is likely to return 20 percent next year, while a basket of crude oil, copper, cotton, soybeans and platinum will gain 28 percent, they said.

November 16, 2010

Abu Dhabi investment fund eyes European deals-paper

Filed under: Uncategorized — bigcapital @ 9:11 am
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ABU DHABI, Nov 15 (Reuters) – Abu Dhabi’s fastest growing investment fund Aabar is eyeing three European deals worth 2 billion euros ($2.74 billion) after selling its stake in Banco Santander’s Brazil unit, its chairman said in remarks published on Monday.

Aabar, which recently delisted from the Abu Dhabi Securities Market (ADX), is looking at two infrastructure investments in Europe valued at between 500 million and 1 billion euros, Khadem al-Qubaisi told the Financial Times.

Aabar is also considering buying a “small stake” in a blue-chip telecoms company in Europe or the United States that could be worth 1.95 billion euros, he told the paper.

International Petroleum Investment Company (IPIC), the parent company of Aabar, considered buying up to 10 percent of BP after the then chief executive Tony Hayward made an approach, he said, but IPIC backed off after the UK oil company made clear it wanted investors to buy shares in the open market.

Aabar’s assets have grown to $13 billion and are expected to touch $15-$16 billion by end of next year with new deals, he said.



Oil-exporter Abu Dhabi is investing billions of dollars in industry, tourism, real estate and infrastructure to diversify its economy away from oil. Its investment funds are actively investing across asset classes globally. ($1=.7312 Euro)

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