Iraq Poised to Transform Oil Market in Next Decade

by  Nehal el-Sherif
Deutsche Presse-Agentur (dpa) 12/17/2009

Political and security issues in war-torn Iraq have been the focus of the world’s attention for more than six years. Now, the country’s oil reserves are doing the talking.

After a string of recent deals between the Iraqi government and foreign oil majors, experts believe that Iraqi oil will transform the global oil market over the course of the next decade.

Iraq’s proven reserves now stand at 115 billion barrels, third in the world behind Saudi Arabia and Iran, and as most of this reckoning is based on ageing fields, there remains huge potential for further discoveries.

Crude oil exports reached 58.2 million barrels in October this year, generating 4.19 billion dollars in revenue, according to the Oil Ministry.

Baghdad has signed deals this year with ExxonMobil, Italy’s Eni,and BP. On December 11 further deals with Royal Dutch Shell and China’s CNPC were agreed.

Robert Powell of the Economist Intelligence Unit (EIU) believes that these contracts will have “an enormous impact” on the world market. “This is a huge amount of oil, and the increase will be beyond what has been contracted,” Powell told the German Press Agency dpa.

The deals are part of the country’s bid to breathe life into its struggling economy and energy sector. More than six years after the US-led invasion, Iraq is hoping to increase its oil output to 7 million barrels per day (bpd), nearly triple the current 2.5m bpd.

However, some analysts are skeptical about Iraq’s hopes for such a leap in production. Joerg Schindler, from the Energy Watch Group, believes that there is not enough data about oil in Iraq and that much of the current enthusiasm is based on speculation.

Existing oil fields are very old, so perhaps companies will be able to increase production – but nothing like doubling (production),” he told dpa.

In June, the first bidding for big Western oil companies since 1972 was not a resounding success – as few companies were willing to match the government’s 2 dollars-a-barrel fee.

However, the second bid is about developing fields, rebuilding pipelines and to stabilize and refurbish production. But I would not expect any near-time effect on prices,” said Powell.

He added that the EIU forecasts oil price to be around 75 dollars per barrel by the beginning of the year and for prices to fall back in 2011, unless there was an external shock.”

Attacks on an oil pipeline in Kirkuk had caused oil exports to decline in October by 4 per cent compared with the previous month. However, overall revenues were higher because of an increase in prices.

Security in Iraq remains one of the obstacles facing international companies who would like to operate there. “(Even) with this level of violence, companies are still interested and believe they can operate in the country, said Powell.

All companies are betting on maximum level of production,” he said, arguing that when these super giants” made their deals, they increased confidence in the Iraqi oil sector.

Eugen Weinberg, a commodities expert at Commerzbank believes that land ownership, infrastructure and whether they can get legal protection are the main obstacles for companies operating in Iraq.

In spite of that, Weinberg is also optimistic that these contracts will hugely affect the global market. Production will increase massively, but this will not be seen before 5 years at least, as not all contracts were concluded,” he said.

Copyright 2009 dpa Deutsche Presse-Agentur GmbH

Lukoil : Iraq may create a revolution in Oil markets

Wednesday, December 16 / December 2009 05:32

Believes Vice President Leonid Fedun Oil Company “LUKOIL” Russian to the start of production in a number of major Iraqi oil fields will generate a “revolution” in global oil markets, increasing global production of black gold by 20%.

The vice president of “Lukoil” in a statement published on Tuesday, December 15th, said he expected a 5 times increased production in Iraq over the coming years, adding that this will put restrictions on high global oil prices and would prevent the making investments in projects Oktrklvp and the difficulty in other countries.

Fedun said: “One of the directors told me that Western companies are leading in this area, the history of the oil industry soon will be divided into two stages: the pre-Iraq and post-Iraq. And I agree on this speech. We are seeing a revolution in the extraction of oil.”

And called for a Russian businessman to re-consider a number of projects dear cost in many countries of the world, including the second phase of the pipeline “Eastern Siberia – Pacific”.

Fedun pointed out that despite the persistence of terrorist acts in Iraq, the political situation remains stable in the country, and the oil fields are situated in relatively quiet areas are not far from infrastructure. Fedun and expected to double the size of Iraq’s oil production in the coming period to 12 million barrels a day.

Fedun added that “Lukoil” plans to launch the first phase of production in the field, “the West Qurna – 2” within 3 to 4 years of signing the contract with the Iraqi Oil Ministry. He informed Fedun, also a senior shareholders, “Reuters” that “the investment will be worth billions of dollars. This project is giant.”

Italian FM: Iraq will recover strongly

December 15, 2009 – 12:54:10

BAGHDAD / Aswat al-Iraq: Italian Foreign Minister Franco Frattini on Tuesday said that Iraq will recover strongly and restore its role on the regional and international scenes, the Iraqi Foreign Ministry said on Tuesday.

This came during Iraqi Foreign Minister Hoshyar Zebari’s meeting with his Italian counterpart on the sidelines of the meetings of the Joint Iraqi-Italian Committee, held on Monday evening in Rome, according to the ministry’s official web site.

The Italian official has expressed his full support for the Iraqi government in its efforts to establish security and stability and to build a democratic state.

Frattini has condemned the recent wave of blasts that ripped through the country.
The meeting was attended by the deputy foreign minister, Labeed Abbawi; the head of the political planning department, Fareed Kamel Yaseem; and Iraqi the chargé d’affaires in Rome, Shamel Abdulaziz Mohammed.
SS (P)

Iraq will be ‘big player’ at OPEC meet: US diplomat

Sun Dec 13, 11:18 am ET

BAGHDAD (AFP) – Iraq will be a “big player” at OPEC’s meeting in Angola later this month over its allocated crude production quota following a string of deals with oil majors, a senior US embassy official said on Sunday.

The Organisation of Petroleum Exporting Countries meeting in Luanda on December 22 will come shortly after Baghdad set ambitious output targets at a Friday-Saturday auction of Iraqi oil field contracts to foreign energy firms.

“They’re going to have to negotiate with their OPEC partners on that one,” the official at the embassy in Baghdad told reporters, on condition of anonymity, referring to Iraq’s production aims and its OPEC quota.

“They’re going to be a big player that wants to come back to the table, so they’re going to have to negotiate with Saudi Arabia, Iran, Venezuela and the other OPEC members.”

Iraq currently produces around 2.5 million barrels of oil per day (bpd). But after awarding seven contracts to foreign energy firms at the auction, following three more deals sealed since a first auction in June, it aims to ramp up output to 12 million bpd within seven years.

Since economic sanctions of the Saddam Hussein era after his 1990 invasion of Kuwait, Iraq has been the only OPEC member not bound by the OPEC quota system and the cartel’s overall output ceiling of 24.84 million bpd.

The US official added there was still time for OPEC to reach accord on Iraq’s quota, as it would be several years before the country will be in position to hike output to its targeted levels. “This isn’t like suddenly tomorrow (Iraq is) going to be producing 12 million barrels,” the official said.

Iraq is wild card in world oil supply

Ten years ago, U.S. Energy Secretary Bill Richardson was hinting at a potential release of oil from the country’s strategic reserves to cool prices, then at the heady level of $25 a barrel. As 2009 draws to a close, many regard Friday’s price of $69.87 as a buy.

Surging demand from countries like Brazil, Russia, India and China trashed prevailing wisdom. The BRIC nations accounted for 61% of demand growth over the past decade, according to the International Energy Agency.

As important, however, was a squeeze on supply. The Energy Policy Research Foundation has estimated disruption caused by factors like war and resource nationalism lowered potential global output by between 2.5 million and 4.5 million barrels per day in the second half of this decade. That is a lot when you consider OPEC’s buffer of spare capacity fell below two million barrels per day by mid-2008, when oil prices peaked.

A loosening of supply constraints is the major risk to the expectations of a rebound priced into oil futures, especially as demand growth will likely prove lackluster.  The average size of discoveries has been 35% bigger this year compared with last, according to IHS Cambridge Energy Research Associates.   Heard on the Street columnist Liam Denning explains to Simon Constable why he sees a bearish decade ahead for oil prices. Plus why the BRICS and BRINKS are key to understanding the supply-demand story.

Meanwhile, in a nod to the BRIC countries that helped define the last decade, consultants PFC Energy has coined its own acronym for the next: BRINK, or Brazil, Russia, Iraq, Nigeria and Kazakhstan.  Brazil has hosted a string of big discoveries, while Russia has defied expectations by overtaking Saudi Arabia’s output. Kazakhstan is expanding three major projects, while a tentative peace is allowing Nigeria to start raising output.

The wild card is Iraq, where more licenses for foreign oil companies were awarded Friday. Contract terms encourage firms to maximize output quickly. Winners to date aim to boost output from five fields 12-fold to 8.5 million barrels per day.  Given Iraq’s fragile peace and ravaged infrastructure, that looks unrealistic. But even if production increased by a more conservative 1.5 million barrels per day by 2015, it could pressure oil prices through unsettling the organization Iraq helped found 39 years ago: the Organization of Petroleum Exporting Countries.

OPFC projects the world will require an extra 3.2 million barrels per day from OPEC by 2015 to meet demand. Leaving aside the fact that effective spare capacity is already 5.4 million barrels per day, Iraq’s increased production would take up more than half of the extra amount required.

OPEC will have to reintegrate Iraq into its quota system eventually. Other members, which have benefited from Iraq’s weakened output for years, will be expected to limit their own to make way.

The cartel is struggling to maintain discipline as it is. Compliance with quotas hit 58% in November, down from 83% in March, the IEA says. Many members have large development needs. If sovereign-debt concerns ripple out from places like Dubai to squeeze foreign investment elsewhere, the temptation to pump more oil for cash will increase, pressuring prices.

What’s more, Iraq’s grandiose targets reflect its vast reserves and thirst for recognition and funds. It will likely demand a bigger quota than its old pre-Gulf War level of 3.1 million barrels per day.

Saudi Arabia, which maintains a large buffer of spare capacity already and whose public finances can better withstand a lower oil price than rivals like Iran, will likely bridle at taking all the pain of accommodating Iraq. It is worth remembering that when oil prices collapsed in 1986 after the second oil shock, it was due to a combination of competing supplies, lackluster demand growth, and a breakdown in OPEC cohesion.

Iraq Was Not a War for Oil

Iraq Was Not a War for Oil
But the oil fields are the nation’s best hope for recovery.
By Christopher Hitchens

Monday, Dec. 14, 2009, at 10:02 AM ET If the intervention in Iraq was indeed “a war for oil,” then some of that war’s more positive consequences were to be seen in Baghdad last week. The country’s oil minister, Hussain al-Shahristani, presided over an auction at which development rights for seven major oil fields were awarded in competitive bidding among several international consortia. Three features of the outcome were worthy of note. The auction was to award service contracts rather than the production-sharing agreements that the major corporations prefer. The price was set at between $1.15 and $1.90 per barrel, as opposed to the $4 that the bidders originally proposed. And American corporations were generally not the winners in an auction where consortia identified with Malaysia, Russia, and even Angola did best. (ExxonMobil and Occidental have, in previous negotiations, been awarded contacts in other Iraqi oil fields.)

Iraqi Oil Minister Hussein al-Shahristani

Thus, the vulgar and hysterical part of the “war for oil” interpretation has been discredited: Iraq retains its autonomy, the share awarded to outsiders in development is far from exorbitant, and there is no real correlation between U.S. interests and the outcome. Except that we do have a very genuine interest in the success of this endeavor as it unfolds. If the recuperation of Iraq’s oil fields persists, and if production levels continue to rise, the country will begin to reacquire what it lost under the insane regime of Saddam Hussein, which debased the oil infrastructure and then squandered its proceeds. Current production is about 2.5 million barrels a day, which, on current projections, could rise to 7 million barrels in a relatively short time and which Shahristani, perhaps optimistically, believes could rise to 12 million barrels a day in 2016. The potential for this recovery certainly exists. Iraq has the third-largest proven reserves in the world at 115 billion barrels, and new explorations undertaken since the removal of Saddam Hussein and the lifting of sanctions suggest that even that figure could be on the low side.

What this means is that Iraq could quite soon be in a position to rival the output of Saudi Arabia and Iran. This is precisely what many of us in the regime-change camp used to point out: the huge, glittering prize of a democratic and federal Iraq situated between two parasitic theocracies and capable of challenging their oil duopoly.

If you bear this in mind, two further things also become somewhat easier to understand. The unbelievable cruelty and viciousness of the so-called “insurgency,” which daily continues to murder Iraqis in areas of the country that are not patrolled by Americans, is to a considerable extent a mercenary and reactionary movement financed from outside the country. The Sunni killers of al-Qaida in Mesopotamia draw on sources of support within Saudi Arabia, while the Shiite gangs are part of a shadow thrown by the so-called Revolutionary Guards and other paramilitary elements of the Iranian dictatorship. It is they who are shedding blood for oil and trying to prevent the recovery of a country that could challenge their patrons in more ways than one. The Syrian regime, for reasons equally obvious, gives arms and money and a hinterland to the gangsters, perhaps showing special sympathy for the former Baathist ones.

I would say it was far more important to help Iraq defeat these religious and political criminals in a country of the most salient importance to the health of the global economy than it is to pretend that Pakistan is our friend in an area dominated by rocks, ravines, and poppy fields. But perhaps the lessons learned in Iraq will help Gens. Stanley McChrystal and David Petraeus on their new mission-in which case the experience of counterterrorism in Iraq will also prove to have been extremely valuable.
The oleaginous dimension of the situation has real relevance to the internal state of Iraq as well. If you remember, two years ago the media consensus was that Iraq was doomed to civil war, if it wasn’t already undergoing one. Well, in spite of some appalling provocations and reprisals, such a state of affairs has still not come about. One possible reason is the incentive to cooperate on jointly reviving the national prosperity. The last time I was in Baghdad, I stayed in the house of a Kurdish member of the government-a man who had spent hard years of his life fighting for, at minimum, an autonomous Kurdistan within Iraq. “But now I sit on the budget committee,” he told me, “and I see how incredibly wealthy this country could be. I tell my friends back home in the north: Don’t walk out on your share of this.”

A version of the same observation may well apply in Anbar province, where important new discoveries of oil and natural gas have been made since the liberation. There are fields in the immediate neighborhood of Baghdad and stretching across the west of the country almost all the way to the Syrian border. To phrase matters in the sectarian terms in common use, this means major deposits located in Sunni Arab territory. (For more on this topic, see James Glanz’s report in the New York Times of Feb. 19, 2007.) In the barbaric days of dictatorship and aggression, Saddam Hussein’s Sunni minority of a minority in Tikrit had to exert despotism over the Shiite and Kurdish majority because it was mainly under their soil that the country’s chief resource was located. Now, in bold contrast, there is a petrochemical basis for federalism, a federalism not defined by religion or ethnicity but by province and region. (For an excellent guide to the constitutional implications of this, see Brendan O’Leary’s book How To Get Out of Iraq With Integrity.)

The arguments over regime change in Iraq still get themselves bogged down in recrimination over weapons of mass destruction and other disputes. But the essential and overarching choice is, and always was, this: Iraqis can have a future of tribalism in which their children skip school to stand guard over barricades made of burning tires and all is resolved by the militia system and malign cross-border interference. Or Iraqi nationhood can be slowly rebuilt by a federal order that allows for extensive decentralization and the solution of differences by elections and the courts, with a reviving economy that could ultimately make all citizens as rich as their Kuwaiti neighbors and former victims. Win or lose, this is the best offer that Iraqis could have been made, and it is rightly feared by the decrepit but still-dangerous oligarchies next door. Here, surely, is something still worth arguing about-and worth fighting for.

Christopher Hitchens is a columnist for Vanity Fair and the Roger S. Mertz media fellow at the Hoover Institution.

Iraq: Fewer Foreign Fighters Entering

Iraq: Fewer Foreign Fighters Entering

December 13, 2009

U.S. Central Command chief Gen. David Petraeus said Dec. 13 that fewer foreign fighters have been able to enter Iraq to join al Qaeda in Iraq, and that the group has changed it strategy to staging fewer but more deadly attacks, Reuters reported. Petraeus said from a security conference in Bahrain that the capabilities of al Qaeda in Iraq have been severely diminished, and that the flow of foreign fighters passing into Iraq from Syria has reduced from 110 per month at its height to fewer than 10 per month now. Petraeus said the United States is on track to reduce its forces in Iraq to 50,000 by August 2010 from 115,000 at present.

Ukraine, Iraq: $2.5 Billion Arms Deal Secured

Ukraine’s largest arms deal to date has been secured in a $2.5 billion project with Iraq that will impact more than 80 Ukrainian firms, AP and DPA reported Dec. 9, citing Kiev lawmakers. The orders include 420 BTR-4 armored personnel carriers, six AN-32B military transport planes and other military hardware, said a senior parliamentary member. UkrSpetsExport is handling the contracts.

Iraqi oil power may shake Iran more than Saudi

Iraq to tie up big oil investment, leaving little for Iran

The geopolitical power balance in the Middle East faces upheaval if Iraq succeeds in tripling oil output, and fellow Shi’ite power Iran will feel more threatened than rival Sunni oil giant Saudi Arabia. Iraq’s potential leap into the ranks of the top three global oil producers could result in a strengthened Shi’ite Muslim front within OPEC if Baghdad aligns supply policy with Tehran.

That would rattle Riyadh, already suspicious of the rise to political supremacy of Iraq’s Shi’ite majority since the fall of Sunni dictator Saddam Hussein. Disunity within OPEC could increase, undermining efforts to present an image of harmony. But oil development in Iraq is more likely to feed tensions with Iran, draw away potential foreign investment from Iraq’s neighbour and fuel social discord by depriving Tehran of much-needed money should it result in lower oil prices. Revenue from the additional 4.5 million or more barrels per day that Iraq is hoping to pump could also give it the economic might to challenge Iran’s influence over the Shi’ite world.

“Iraq’s development is inevitable,” said analyst Gala Riana of IHS Global Insight. “The changes in the balance of power won’t be immediate, they are longer term and bring difficulties that Iraq and surrounding countries will need to deal with.”


Both Iraq and Iran need huge investment in their dilapidated oil industries. Iraq’s opening to global energy firms, albeit on tough terms, gives it the edge in attracting the billions it needs to execute oilfield development of an unprecedented scale. That would make it harder for Tehran to attract the cash it needs at a time when the Iranian state is already under enormous social and political pressure following the contested re-election of hardline President Mahmoud Ahmadinejad. Even worse, Chinese state energy giants are participating in Iraq, leaving them less resources for elsewhere. Tehran has turned to Asian state firms for money and technology as Western companies have shunned it due to politics and sanctions.

“Why would you want to invest in Iran? It’s very risky. You have the sanctions and the politics. If you’re in Iraq, you would want to limit your exposure to another risky country in the region,” said a senior western oil executive.

Iran could well become the destination for those that lose out in Iraq’s oil auctions, he added. If all of the contracts Baghdad is offering are signed, Iraq could boost its output capacity to 10 million bpd – rivalling Saudi Arabia’s 12.5 million bpd and Russia’s 10 million bpd, and leapfrogging over Iran, which says it can pump 4.2 million bpd. Iran is more dependent than top oil exporter Saudi Arabia on high oil prices to finance social spending programmes. Higher output from Iraq would be bearish in the long term for the oil price and could also claw away market share from others.

“Another price downturn like that of last winter would really put the squeeze on the Iranian government, already suffering unpopularity from economic mismanagement, as well as the obvious political problems stemming from the election,” said David Mack, a former U.S. envoy to the Middle East.


Saudi Arabia will watch the rise of Iraqi oil power and its relationship with Tehran with caution. Dominated by the puritanical Wahhabi sect, many of whose adherents view Shi’ites as apostates, Riyadh regards Persian Iran as its arch-foe. But analysts say the view that post-Saddam Iraq is under the sway of Iran is often overstated. Many of Iraq’s Shi’ite leaders sought shelter in Tehran under Saddam, but Iraqi nationalism runs strong, as do memories of the 8-year Iran-Iraq war that killed a million people.

Even if a general election next year ushers in an overtly pro-Iranian government in Baghdad, the impact that increased Iraqi oil output might have on economic and political tensions inside Iran may drive the two neighbours apart, analysts say. Ultimately, staunch U.S. ally Saudi Arabia would rather see a developing and prosperous Iraq than a country that serves as a base for al Qaeda. The kingdom has become entangled in neighbour Yemen’s internal conflict and deepening instability.

“It’s in our interest that Iraq emerges stable, we don’t want another Yemen,” said one Saudi official. “If Iraq becomes a regional economic power, that will help the Saudi economy.”

Black Market Signals Vietnam Dong Devaluation Is Just Beginning

Black Market Signals Vietnam Dong Devaluation Is Just Beginning

By Beth Thomas

Nov. 26 (Bloomberg) — Vietnam, struggling to control accelerating inflation and a widening trade deficit, will keep weakening the dong after devaluing the currency for the first time since December, black-market rates and forwards show.
The central bank permitted the currency to decline 3.3 percent today, bringing its losses in the past year to 8.3 percent. The unofficial rate offered at gold shops in Ho Chi Minh City is 4.9 percent weaker than the spot-market price of 18,488 per dollar. Contracts based on the exchange rate in 12 months signal a 12.6 percent depreciation.

Inflation reached a six-month high of 4.35 percent in November and the nation’s balance of payments worsened as exports dropped and rising commodity prices swelled the cost of imports. The dong has slumped 24 percent in the past decade and the government risks “damaged credibility” by allowing further losses, according to Standard Chartered Plc.

“Whenever you devalue a currency, there is general expectation for more,” said Thomas Harr, a foreign-exchange strategist in Singapore at Standard Chartered, which predicts a decline to 19,000 by the end of next year. “The key challenge is the widening trade deficit and slowing inflows from foreign direct investment, remittances and equity inflows.”

The State Bank of Vietnam decided to lower the reference rate 5 percent to 17,961 against the dollar, close to yesterday’s spot rate. That was the first such move since Dec. 25. The dong’s decline was limited as policy makers also narrowed its trading range to 3 percent from the daily rate, from a 5 percent band adopted March 23.

Support for Exports

The currency, which is not fully convertible, traded at 19,450 at gold shops in the nation’s financial center, according to a state-run telephone information service. Twelve-month non- deliverable forwards, in which assets are bought and sold at current prices for future delivery, have lost 6.7 percent this month to 21,175. The contracts are settled in dollars.

A weaker dong may help to increase overseas shipments, said Dominic Scriven, a director of Ho Chi Minh City-based fund managers Dragon Capital, which has $1.6 billion under investment.
“Government attempts to address market concerns ought to be seen positively,” he said. “The move on the currency can only strengthen Vietnam’s export competitiveness.”

The devaluation “may have some impact” on the competitiveness of Thailand’s goods, the country’s Finance Minister Korn Chatikavanij said today in Bangkok.

Gold Hoarding

The trade deficit widened to $1.75 billion in November, according to preliminary figures from the General Statistics Office in Hanoi released today, compared with a revised $1.6 billion last month. Exports fell 11.4 percent in January- November, compared with the same period last year.

Vietnam’s currency is caught in a “vicious circle” between the government’s desire to boost exports and its concern that a devaluation could push more locals into holding dollars, Morgan Stanley said this month.

The dong is the second worst-performer among currencies of Asia’s 17 biggest economies in the past year, after the Kazakhstan tenge, as Vietnamese hoarded gold to protect their savings from further devaluation. The metal’s price climbed as high as 28.84 million dong ($1,560) per tael yesterday, from 18.4 million dong at the start of the year at jewelry shops in Ho Chi Minh City. One tael is about 1.2 ounces of gold.

“I just bought a load of gold to save my money since it looks like prices will go higher,” said 46-year-old Nguyen Thi Hoa, who runs a coffee shop in Hanoi’s Old Quarter. “The dong has lost its value.”

Investment Outflows

Outflows of investment are overwhelming inflows. The deficit in Vietnam’s financial account rose to $5 billion in the first half, compared with $1.6 billion for all of 2008, according to the International Monetary Fund.

The benchmark VN Index of stocks dropped 4.1 percent to 482.60 and the regulator told brokerages to halt lending for stocks. Direct foreign investment commitments fell 73 percent in the first 10 months and the central bank is forecasting a drop of as much as 20 percent in remittances from overseas Vietnamese.

“We used to have exposure to the currency but we’ve gotten out already,” said Michael Hasenstab, who oversees $45 billion in assets for San Mateo, California-based Franklin Templeton Investments. “There are questions about the economy.”

Imports and inflation have gathered pace as the government provided subsidized loans to meet its 5.2 percent economic growth target for 2009, compared with 6.2 percent expansion last year. Credit growth in the first 10 months reached 33 percent, exceeding policy makers’ 30 percent full-year target.

‘Unlikely’ to be Last

To help restore confidence, central bank Governor Nguyen Van Giau increased the benchmark interest rate yesterday by one percentage point to 8 percent.
The central bank response to the triple threat of inflation, the trade deficit and the slumping dong “is most unlikely to be the last,” Robert Prior-Wandesforde, a senior economist at HSBC Holdings Plc in Singapore, wrote in a research note yesterday. He predicted an 11 percent benchmark rate by the end of 2010.

“Funding costs for corporates are on their way up so this may lead to some downward revisions in earnings outlooks,” said Mark Canizares, the head of equities at Ho Chi Minh City-based Manulife Vietnam Fund Management, which has about $280 million in assets under management.

To contact the reporter on this story: Beth Thomas in Hanoi at [email protected]
Last Updated: November 26, 2009 04:10 EST