July 30 – Daily Brief of World Finance & GCC News

WORLD FINANCE NEWS BRIEF

China Has Amassed $1 Billion Glut of U.S. Cotton It Doesn’t Need

URL: https://www.bloomberg.com/news/articles/2020-07-29/china-has-amassed-1-billion-glut-of-u-s-cotton-it-doesn-t-need

The purchases — made as part of the phase one trade deal between Washington and Beijing — are hitting just as the pandemic shuts down clothing stores, decimating demand.

To be sure, China’s purchases of U.S. cotton could still increase further as the government seeks to meet its phase one pledge.

India’s Banks Are Racing to Lend Against a $1.5 Trillion Hoard of Gold 

URL: https://www.bloomberg.com/news/articles/2020-07-29/banks-are-racing-to-lend-against-a-1-5-trillion-hoard-of-gold

Indian families, sitting on the world’s biggest private stash of gold, are rushing to borrow against their jewellery as the precious metal rallied to records and the coronavirus pandemic fuels an economic downturn.

The added competition could lower borrowing costs for Indian consumers, who in desperate moments of financial stress often pay exorbitant rates to informal lenders to use gold as collateral.

The World Gold Council estimates that Indian households are sitting on a $1.5 trillion hoard of gold, the biggest of its kind largely made up of jewellery, which families often inherit or are gifted at the wedding.

Gold loans allow consumers to draw up to 75% of the value of the metal. Banks can charge interest rates of about 7% to 15%

With transaction times to process gold loans falling to less than an hour and collateral that’s easy to sell in the event of default, India’s market for such lending is set to expand by at least 34% to 4.6 trillion rupees ($61 billion) in two years to March 2022, according to an estimate by KPMG.

Popular U.S. Treasury Trade Is Set to Unwind by Most Since 2017

URL: https://www.bloomberg.com/news/articles/2020-07-29/wall-street-s-favorite-treasury-trade-is-starting-to-unwind

The spread between five and 30-year yields has narrowed by about 17 basis points since the end of June, poised for the biggest monthly drop since November 2017.

GCC NEWS BRIEF

Children ‘Will Start Dying From Hunger’ in Beirut, Save the Children Warns

URL: http://www.middleeasteye.net/news/lebanon-financial-crisis-children-starve-death

“Children, even those from Lebanese middle-income families, are increasingly eating less or nothing at all for a whole day just to make ends meet. In some cases, children are working to help with the family income, keeping them away from their education.”

WFP said two-thirds of the households in Lebanon had lost income during the crisis, forcing many to spend less on food. 

Saudis Seen Cutting Oil Price for First Time in Four Months

URL: https://gulfbusiness.com/saudis-seen-cutting-oil-price-for-first-time-in-four-months/

A reduction in Saudi OSPs could signal a pause or even a reversal in the rapid recovery across oil markets from the coronavirus

Aramco is typically the first among Middle Eastern producers to announce monthly official prices, setting the tone for sellers in Iraq, Kuwait and Abu Dhabi.

About the author

Financial advisor to UHNWI, private entities, family offices, and companies. Certified Anti-Corruption Manager from The American Anti-Corruption Institute

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