Month: February 2015

Nikkei shrugs off weak data to hit new highs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian equity markets were mixed early on Friday, following an uninspiring lead from Wall Street amid lower oil prices. However, Japanese stocks brushed off a raft of weaker-than-expected data to clinch fresh 15-year highs.

Overnight, US stocks closed narrowly mixed, with stocks near recent highs, as concerns about oil prices and a worse-than-expected initial jobless claims figure weighed on investor sentiment. The Dow Jones Industrial Average finished flat, while the S&P 500 closed down 0.2 percent. The tech-heavy Nasdaq Composite outperformed to settle 0.4 percent higher.

Global oil prices dropped on Thursday amid ample global supply and increasing US commercial inventories. US crude settled USD 2.82 lower at USD 48.17 a barrel, while benchmark Brent crude fell USD 1.60 to USD 60 a barrel.

Nikkei adds 0.2 percent

Japanese shares brushed off weaker-than-expected economic data to touch their highest level since June 2000, with the help of a weaker yen. The benchmark Nikkei 225 index has closed at new 15-year highs in four out of the past five trading sessions.

Among the raft of data released before market open, the closely-watched consumer inflation eased for a sixth straight month in January, pushing the Bank of Japan further from its 2 percent target. Stripping out the effects of a sale tax hike, the nationwide consumer price index (CPI) rose a less-than-expected 0.2 percent, down from 0.5 percent in December.

Advances in the dollar-yen buoyed exporter stocks; Sony led gains among the blue-chips, with a rise 1.1 percent. Mitsubishi Electric and Canon gained 0.2 percent each, but Toyota Motor erased losses to dip 0.2 percent.

ASX flat

Australia’s S&P ASX 200 index pared losses as its mining and banking heavyweights turned broadly positive; BHP Billiton and Fortescue Metals pared losses to resurface above the flatline.

Energy producers were hurt by lower oil prices overnight, however; Santos and Oil Search lost over 1 percent each, while Woodside Petroleum shed 0.3 percent.

The earnings season enters its final day in Sydney today and attention is on index heavyweight Woolworths. The grocer plunged 9.1 percent following its announcement of a change in senior leadership and warning that full-year earnings will come at the bottom end of consensus estimates. Wine firm Treasury Wine Estates recouped losses to notch up 0.4 percent after swinging back to a profit in the first half.

Kospi falls 0.14 percent

South Korea’s Kospi index drifted lower, led by index heavyweights. Steelmaker Posco slumped 1.6 percent, while the top two heaviest weighted stocks Samsung Electronics and Hyundai Motor receded 0.9 and 1.2 percent each.

Oil-related counters were among the hardest-hit; SK Innovation and S-Oil lost more than 2 percent each.
Rest of Asia

Singapore-listed commodities trader Noble Group plummeted 7.9 percent after unexpectedly reported its first quarterly loss in three years due to asset write-downs.

Elsewhere, AirAsia posted its first net loss in two years amid heavy foreign-exchange losses and higher financing and operating costs. Shares of the Malaysian budget carrier opened down 1.1 percent, while the broader FTSE Bursa Malaysia KLCI opened flat.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Are oil producers running out of closet space?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil supply running ahead of demand hasn’t just pressured prices, it’s also filling up storage space, potentially pushing crude toward another leg down.

“We’re going to see pretty fast inventory builds over the next few weeks,” Francisco Blanch, head of commodity research at Bank of America-Merrill Lynch, told CNBC Wednesday, noting that global supply is running around 1.4 million barrels a day above demand.

“If you run out of space, prices tend to react a lot more violently to adjust that supply and demand imbalance and that’s what we expect over the next few weeks,” he said, forecasting both WTI and Brent will fall toward USD 30 a barrel. Prices settled at USD 50.99 and USD 61.97, respectively, on Wednesday.

Read More: Oil may fall again … but buy energy stocks?

He cited fresh American Petroleum Institute (API) data which showed US crude inventories climbed by a larger-than-expected 8.9 million barrels in the week ended Feb. 20, for a total of around 437 million barrels squirreled away. Around 50 million to 100 million barrels of crude oil may be gathering dust in floating storage by the end of the second quarter, compared with around 110 million barrels in April 2009, during the global financial crisis, he estimated.

The supply build isn’t helped by an oil market that’s in contango, or when the “spot” price is lower than the price of the future contract. That makes it more profitable for traders to stick their oil in storage to sell at a higher price later.

As much as 80 percent of the commercially available storage in the US may already be utilized, Premasish Das, downstream analyst at IHS Energy Insight, told CNBC last week.
“As the oversupply increases again in the second quarter, the contango structure will widen. This will further incentivize crude storage,” Das said.

Others are also concerned about how quickly space could run out. “Within around two months, [onshore storage will] be completely exhausted,” Ivan Szapakowski, a commodity strategist at Citigroup, told CNBC last week. “The only remaining storage globally will then be floating storage, tankers.”

Read More: Oil slide could trigger OPEC emergency meeting

Citigroup is forecasting oil prices to fall toward USD 20 a barrel before recovering.
Oil is already getting stashed offshore. Tanker prices and lease rates have doubled over the past 18 months, Gaurav Sodhi, a resources analyst at Intelligent Investor, told CNBC last week.

“Clearly, someone is going out there and leasing a lot of offshore storage and those lease rates are much higher. That suggests to me that there’s a massive supply of oil sitting on the ocean,” Sodhi said, noting each tanker can hold around 1 million to 2 million barrels each.

“That sort of storage is going to take a while to unwind.”

Stashing oil offshore can also create other headaches. It’s harder to move the oil to where the buyer may want it and there can be issues with pollution, potentially making it more costly, IHS’ Das noted.

But despite the difficulties, the oil hoard may only grow in the near term. Das noted that Asia is heading toward its refinery maintenance shutdown period in the second quarter.

Additionally, a strike among refinery workers in the US is now into its fourth week, affecting plants responsible for around 20 percent of the country’s production. Media reports said no talks between unions and management are scheduled for this week. If demand from the affected refineries declines further, it could be more bad news for inventory growth and prices.
—By CNBC.Com’s Leslie Shaffer; Follow her on Twitter @LeslieShaffer1.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nikkei hits fresh 15-year high amid mixed open in Asia

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Japanese shares outperformed the region by clinching a new multi-year high as the rest of Asia opened mixed on Thursday following a flat finish on Wall Street overnight.

Overnight, US stocks closed mixed after struggling to stay positive amid firming oil prices, moderate housing data and debate over Federal Reserve Chair Janet Yellen’s congressional testimony. The Dow Jones Industrial Average and S&P 500 traded up 0.1 percent, while the Nasdaq Composite broke a nine-day winning streak to finish flat.

Nikkei adds 0.4 percent

Japan’s Nikkei 225 index touched a fresh 15-year high of 18,692 as dollar-yen was jumped 0.2 percent to trade at 119.01.

Financials extended their rally on the back of news that Japan’s Financial Services Agency could give bank groups the freedom to expand into areas like e-commerce. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group drifted up 0.4 percent each.

Among index heavyweights, Softbank and Fast Retailing climbed 2 and 1.2 percent each, while robot maker Fanuc trimmed losses to 0.3 percent.

Meanwhile, Koji Ishida, member of the Policy Board of the Bank of Japan, is due to speak at a conference this afternoon. Japanese markets will also digest news that the Diet on Wednesday approved the appointment of Waseda University economics professor Yutaka Harada to the BOJ’s Policy Board. Harada, 64, is a proponent of reflationary policies and is expected to support the BOJ’s goal of achieving 2 percent inflation.

ASX slips 0.6 percent

Australia’s S&P ASX 200 index retreated further from a seven-year high attained earlier this week as its heavyweight banking and mining sectors came under pressure. National Australia Bank slipped 0.5 percent, while Australia and New Zealand Banking, Commonwealth Bank of Australia and Westpac dipped 0.4 percent each.

Fortescue Metals led losses among the big miners, down 0.4 percent, while junior miners such as BC Iron and Atlas Iron slumped nearly 3 percent, respectively.

Qantas soared 5 percent after delivering its best first-half profit in four years as its cost-cutting program took effect and lower oil prices trimmed fuel expenses. Among other firms releasing their corporate earnings, Japara Healthcare and Nine Entertainment shot up 7.3 and 9.7 percent each.

Transfield services plummeted 10 percent as its first-half earnings fell short of market consensus.

Mainland indices down

China’s stock market opened down 0.7 percent, adding to a 0.5 percent decline in the previous session. The Shanghai Composite index resumed trade on Wednesday after being shut for the week-long Lunar New Year holiday.

In Hong Kong, the Hang Seng index slipped 0.2 percent, with gaming stocks remaining in the doldrum. Melco Crown fell 3 percent, while Sands China and Galaxy Entertainment plunged 1 percent, due to news that the Macau government plans to impose a limit to the number of mainland tourists that visit the city.

Kospi dips 0.1 percent

South Korea’s Kospi index edged down modestly in early trade, failing to move off a near three-month high clinched on Wednesday.

For the day, markets are likely to focus on news that retailer Shinsegae is interesting in acquiring a majority stake in Kumho Industrial, which holds a 30.1 percent stake in the country’s second-largest flagship carrier Asiana Airlines. Shares of both firms bumped up 0.6 and 15 percent, respectively.

Rest of Asia

Across Asia, corporate earnings will be the key theme, with Singapore-listed commodities trader Noble Group and Malaysian budget carrier AirAsia taking the spotlight.

The former’s fourth-quarter results come after a negative report written by an obscure research company named Iceberg Research sent the Hong Kong-based firm’s shares into a tailspin last week. Shares of Noble Group retreated nearly 1 percent, outpacing a 0.4 percent slip in the broader Straits Times index.

Meanwhile, Reuters reported that Singapore’s first prime minister Lee Kuan Yew remains on mechanical ventilation in an intensive care unit in hospital, according to a statement from the Prime Minister’s office on Thursday. The 91-year-old, who has been widely credited with the city-state’s economic success, was admitted to hospital on February 5 with severe pneumonia.

Markets will also closely monitor AirAsia’s financial results for any impact related to the crash of Singapore-bound AirAsia flight 8501 in December. The low-cost airline erased early losses to bounce 0.4 percent, while Malaysia’s FTSE Bursa Malaysia KLCI inched down 0.1 percent.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Greece finance chief: We want to regain EU’s trust

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Greece`s new Government wants to re-establish trust with the rest of Europe, the country`s finance minister told CNBC, as Athens obtained a four-month extension of its bailout program.

“The reason why we have this four-month period is to re-establish bonds of trust between us and our European partners as well as the IMF in order to build a new contract between us and our partners so as to put an end to this debt inflationary spiral,” Yanis Varoufakis said in an interview in Athens.

On Tuesday, euro zone finance ministers accepted a list of Greek reform proposals , but warned that the reforms must be expanded in detail before new bailout funding would be released. International Monetary Fund (IMF) managing director Christine Lagarde called the proposals “sufficiently comprehensive to be a valid starting point” but said they lacked “clear assurances.”

Varoufakis said implementing new legislation concerning corruption and tax evasion is his top priority. As to whether European officials will approve each and every measure passed in parliament, he said “there is going to be a great deal of toing and froing between us and the institutions and our partners.”

The trained economist was also critical of the tense negotiation process with euro zone finance ministers, saying they were dominated by “legalisms.”

Read More: The one chart you need to see on the Greek saga

“You know what I think the main problem is, European finance ministerial meetings are seldom about finance, they`re more about process and rules…and I`m not good at that. I think that when we`re talking about macroeconomics, when we`re talking about Greece`s recovery, I don`t think we have the moral right to talk as if this is applying rules.”

Leftist political party Syrzia rose to power during elections last year on promises to abolish austerity measures, but its principal task of reducing Greece`s $366 billion debt has been flatly rejected. Several Greeks, noticeably senior politician Manolis Glezos, claim the party has bent too much to European creditors, making it no different from the previous administration.

But Varoufakis rejected the notion that Syrzia has been unfaithful to Greeks: “We got elected to renegotiate Greece`s deal with our partners. What is a negotiation; it`s an attempt to find a compromise. The fact that we comprised is not a U-turn. A U-turn would have been to have led this negotiation to an impasse, and we didn`t do that because we`re interested in a mutually beneficial agreement.”

The 53-year old maintains he will continue pushing for debt restructuring despite a Eurogroup statement proclaiming that “Greek authorities reiterate their unequivocal commitment to honor their financial obligations to all their creditors fully and timely.”

Read More: Why I still like Greece: Mark Mobius

“Even though we are a government of the radical left, we come to the table with a mentality of a bankruptcy lawyer from the city of London who simply says if we have a problem with debt, you need to restructure it.”

“We are again going to offer and propose a menu of swaps. The Greek debt comprises many different slices so a swap per slice so as to maximize the net present value for our creditors as well as making possible for us to repay our debts to grow and to end this process,” Varoufakis said.

While it remains unclear how the cash-strapped nation will fund itself in the near-term, especially when it faces a March deadline to repay an IMF loan, Varoufakis urged investors to look at the bigger picture.

“My message to market people is very simple. They understand that when there is a cash flow problem, which is effectively a spike for a short space of time, but the long term seems quite good, they can be confident that Europe is going to find a way of dealing with the cash flow problem.”

As to how Greece will eventually return to financial markets, it all hinges on solving “a system of three equations and three unknowns,” according to Varoufakis.

“The three unknowns are – the debt level and its flows, secondly investment levels and means of cranking it up, and thirdly primary surplus…I have no doubt that Europe in the end is going to solve this system of equations and unknowns.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India seizes record 60kg of gold in smuggling bust

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian Police confiscated 60 kilograms of Gold worth an estimated 165 million rupees (USD 2.65 million) at the Ahmadabad Airport on Tuesday in the country’s single biggest seizure of Smuggled bullion, According to a local media report.

The Gold, in the form of bars, was allegedly flown from Dubai to the city located in Gujarat on an Emirates Flight, the Media reported, citing a statement from the Special Operations Group of the city crime branch.

Six people were arrested in connection with the smuggling – three were on the flight and three had come to collect the contraband gold.

Gold smuggling is a long running issue in India, which reclaimed the top spot as the world’s largest Gold consumer last year.

But the problem has become more acute in recent years due to government measures implemented to restrict imports of the yellow metal.

Read More: What charts say about the outlook for Gold

The Government has made it more expensive to Import Gold through a series of tax hikes since 2012, fueling imports through illegal channels. Gold is currently subject to a 10 percent import duty.

The World Gold Council estimates that 175 tonnes of gold were smuggled into the country last year, according to Reuters.

Indian smugglers have been known to go to great lengths to traffic Gold, including hiding gold biscuits in the rectum, microwaves, cups and saucers, belt buckles, and even mixing gold dust with coffee powder.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

This year’s best performing stock market is Russia

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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An Economic crisis, a crash in oil prices and hefty sanctions for intervention in Ukraine – even with such a dire backdrop Russia’s Stock Market has proven to be the world’s best performer in early 2015.

The Country’s benchmark stock index has surged almost 27 percent in the year-to-date as investors dip their toes back into a market that suffered sharp losses at the end of last year.

The gains outpace a rise of about 2.8 percent in the S&P 500, the broadest measure of US shares, and a 13 percent rally in the pan-European Euro Stoxx 600 Index.

“At some levels, Russia is extremely cheap so if you are ever going to invest in Russia, maybe now is the time,” David Stubbs, a global market strategist at J.P. Morgan Asset Management, told CNBC Tuesday.

Read More: Some Russian-European ties are growing closer

However, he warned that a “big risk” remained: the escalation of tensions between Russia and neighbouring Ukraine, which has strained the country’s relations with the US and Europe.

“When you talk about retaliation (from Moscow) – one possibility is preventing people from flying over Siberia and capital controls. So you could put your Money into Russian assets and it might be very hard to take your money out,” Stubbs added.

Russia, one of the world’s biggest oil producers, has also been hard hit by the collapse in oil prices which have more than halved in value since last June. The impact has been exacerbated by a weak Russian ruble.

Read More: Oil back below USD 50 as OPEC hopes fade

Alexander Branis, director of Prosperity Capital Management, was bullish on the outlook for Russian equities, however.

“The oil price has stabilised, the ruble is very cheap, so the prospects are quite good (for stocks),” he told CNBC on Friday. “Russia is the best performing market this year in dollar terms in the world. So we are up too, in dollar terms.”

All about sanctions

For other analysts, the lifting of sanctions against Russia would be a significant trigger for further stock market gains. But this could be some way off — according to Reuters, the U.S. and Europe are considering harsher sanctions on the country for breaches of a February 12 ceasefire in Ukraine.

Russia’s economy has been severely hurt by the impact of sanctions and the slide in oil prices. It is expected to enter recession in 2015, while last week sovereign ratings agency Moody’s downgraded the country’s debt rating.

“Russian Stocks are very, very cheap right now,” Mark Mobius, executive chairman of Templeton Emerging Markets Group, told CNBC Tuesday.

Read More: Why I still like Greece: Mark Mobius

“The problem is sanctions. Many of us are not able to go into the companies we would like to go into, simply because of the sanctions. Once they are lifted, then I think you will see a lot of money going in.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Meet iBall: the tablet maker crushing Samsung in India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian Budget consumer electronics firm iBall raised eyebrows this week on a report that it has stolen South Korean juggernaut Samsung’s crown as India’s number one tablet vendor.

Mumbai-based iBall claimed a 15.6 percent share of India’s tablet market in the fourth quarter of 2014, up from 4.5 percent a year earlier, as Samsung’s share shrank to 12.9 percent from 17.9 percent, According to IDC.

“iBall rapidly climbed up its way to the number 1 spot last quarter. Its growth is backed by low cost products targeted at consumers looking to own entry level form factors. The brand is actively engaged in expanding its retail presence as well as geographical reach,” said IDC.

Budget allure

iBall launched in 2001 with just one product category – the mouse. It ventured into the mobile phone business in 2010 and made its foray into tablet space a year later with the iBall Slide. In a price sensitive market, iBall products are attractive.

“Local Tablet vendors are posing stiff competition to Samsung at retail counters,” IDC added.

As with Smartphones, the tablet market is becoming increasingly commoditized, enabling low-cost manufactures to produce compelling devices at competitive costs.

“Samsung spends so much on marketing that they can’t reduce costs as much,” said Neil Shah, research director for Counterpoint Research.

iBall has done particularly well in targeting corporates and educational instructions, said Shah, a segment of the market Samsung hasn’t been able to crack due to its higher prices.

Samsung tabletshave a starting price of around $150 in India – more than doublethatof iBall tablets.

A juggernaut beset

If it’s any consolation for Samsung, tablets do not make up a significant portion of its revenues.

In the fourth quarter of 2014, tablets accounted for just 10 percent of revenues in its mobile division, according to Counterpoint. Handsets, by comparison, accounted for 80 percent.

Nevertheless, iBall’s dethroning of Samsung is the latest in the string of defeats faced by the South Korean company.

Read More: Micromax knocks Samsung off the top spot in India

In the same quarter, Indian budget smartphone maker Micromax overtook Samsung as the leading supplier in India’s smartphone market, according to research firm Canalys.

In its report published earlier this month, Canalys said Micromax accounted for 22 percent of smartphone sales in India in the October-December quarter, ahead of Samsung’s 20 percent.

“Samsung is being crushed by everyone in smartphone segment,” Shah said. “Their focus now has shifted to protecting market share there as they realize tablets are no longer a growth market.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Oil back below $50 as OPEC hopes fade

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Any hopes of a sustained rally in the price of Oil disappeared Tuesday morning as doubts were raised over an anticipated cut in production from the Organization of the Petroleum Exporting Countries (OPEC).

The Oil cartel is not due to meet until June this year but a report by the Financial Times – with comments by Diezani Alison-Madueke, the Nigerian oil minister – suggested that an emergency meeting was due in the near term. This raised hopes that OPEC could cut production, something it had refused to do back at its last meeting in November 2014.

An anonymous delegate from the group denied these claims, telling Media overnight there was no emergency meeting planned. Brent crude futures dropped to 58.56 a barrel by 8:00 am GMT on Tuesday and US crude was back at USD 48.97 a barrel after climbing above USD 50 on Tuesday afternoon. OPEC was not immediately available for comment when contacted by CNBC.

S&P to rally?

The dramatic fall in the price of oil – which tanked as much as 60 percent from mid-June last year – has been due to weak demand, a strong dollar and booming US Oil production, according to the International Energy Agency (IEA). OPEC’s reluctance to cut its output has also been seen as a key reason behind the fall. The group produces about 40 percent of the world’s crude oil.

Some analysts have told CNBC that there is a global “game of chicken” being played out between the Gulf states and US shale producers, over who can absorb the dip in prices and not cut back on production.

Saudi Arabia is the world’s top exporter of oil and one of the biggest producers. The country is the main swing producer in the Gulf region and is able to cut and expand production more freely than some of its neighbors.

Alison-Madueke told the FT on Monday that most OPEC countries – except the Arab bloc – were very uncomfortable with the current price of oil.

“Oil should remain a well-supplied market, with US tight oil (shale oil) keeping OPEC in check,” a team at Barclays, led by Keith Parker, said in a note on Tuesday morning.

The bank believes that lower oil prices are likely to persist with demand growth slowing due to energy efficiency and lower aggregate growth globally. However, on the plus side it also believes that growth will get a boost from lower prices and highlighted that the S&P 500 usually climbs 12 percent the year after an oil trough.

UK industry slumps

The dramatic fall in oil has tested global oil majors as well as smaller shale producers in the US BHP Billiton on Monday evening announced that it was cutting back on its expenditure for shale. It will reduce its rig count this year from 26 to 15 and highlighted a 15 percent cut in spending. It has also shelved plans to sell its Fayetteville shale business in Arkansas.

It remained upbeat on the price of oil, however, saying that a cyclical rebalancing of the market was already under way as supply is reduced. The medium-term outlook appears positive, according to the basic resources firm, as it believed that higher prices would be required to “induce the new supply needed to offset natural field decline”.

Meanwhile, there was dismal news out from the UK The country’s oil and gas industry experienced a negative cash flow of £5.3 billion (USD 8.2 billion) in 2014, according to a new report by industry body Oil and Gas UK This was the worst seen since the 1970s.

Production revenues were also the lowest since 1998 and exploration has “collapsed” with the number of new wells last year falling to its lowest since the 1960s, it said. 

“These are exceptionally worrying leading indicators of where this industry might be heading,” the report on Tuesday said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia mostly higher after China flash PMI beat estimates

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian equities traded mixed amid choppy trade early Wednesday after a modestly higher close on Wall Street overnight and as China’s manufacturing sector surprised markets with growth for the first time in three months.

The flash HSBC Purchasing Managers’ Index (PMI) rose to 50.1 from January’s 49.7 final reading, above the 50-mark which demarcates expansion from contraction, a private survey showed on Wednesday.

Overnight, US stocks advanced in choppy trade, with the Dow and S&P 500 hitting intra-day records, supported by Federal Reserve Chair Janet Yellen’s dovish congressional testimony. Yellen said the central bank would not hike rates for the next few Federal Open Market Committee meetings.

“None of her views were new, but the market took the testimony as slightly move dovish than before and moved the expectations of a first move in the Fed funds rate from September to October,” Evan Lucas, IG’s market strategist, wrote in a note.

The Dow Jones Industrial Average closed up 0.5 percent, while the S&P 500 settled up 0.3 percent. The tech-heavy Nasdaq Composite added 0.1 percent.

Meanwhile, news that finance ministers from the euro zone approved Greece’s new bailout plan could support sentiment. Athens submitted a list of reform proposals at around midnight on Monday, in return for a four-month extension on its bailout package.

Nikkei rebounds 0.1 percent

Japan’s Nikkei 225 index rebounded into positive territory an hour into trade, remaining in sight of Tuesday’s 15-year highs, but a weak dollar-yen capped gains.

Hitachi fell 0.8 percent on news that the Japanese conglomerate will be snapping up the rail business of Italian aerospace and defense group Finmeccanica for USD 2.2 billion.

Owner of clothes brand Uniqlo, Fast Retailing, shed 0.9 percent, but other index majors like robot maker Fanuc and Softbank helped to offset losses with 0.1 and 3.4 percent gains.

Mainland indices mixed

China’s stock market inched down 0.2 percent after wavering between gains and losses following the flash PMI reading. The Shanghai Composite index is in its first day of trade since being closed for the past five sessions due to the Lunar New Year holiday.

In Hong Kong, the Hang Seng index held near the flatline in similar choppy trade, as the city’s financial secretary John Tsang is due to deliver his budget statement for the 2015-2016 fiscal year.

ASX adds 0.2 percent

Australia’s S&P ASX 200 index resurfaced above the flatline as the banking sector turned mostly positive. Commonwealth Bank of Australia and Westpac slipped 0.2 percent each, while Australia and New Zealand Banking and National Australia Bank ticked up 0.1 and 0.3 percent.

Traders are also digesting more corporate earnings; Perth-based Macmahon Holdings surged above 10 percent after it declared confidence that it will emerge from the mining slump that has led to a 30 percent loss in first-half profit. Engineering firm Worley Parsons tanked 8.3 percent following a 7 percent drop in first-half net profit, while Pact Group lost 12.3 percent despite reiterating its full-year guidance for higher revenue and underlying earnings in 2015.

The Australian dollar extended gains to hit a two-and-half-week high of USD 0.7878 to the dollar on the back of better-than-expected manufacturing data from the mainland.

Kospi up 0.7 percent

South Korea’s Kospi index was the top performer in the region, hitting a two-and-a-half-month high as index heavyweights rallied. Utility Kepco piled on 3.4 percent, while Samsung Electronics and Posco rose nearly 1 percent, respectively.

Kumho Tire dipped 0.5 percent as news of strikes at its plants damped sentiment.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China’s manufacturing surprises with growth in February

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China’s manufacturing sector expanded for the first time in four months in February, a private survey showed on Wednesday.

The flash HSBC Purchasing Managers’ Index (PMI) rose to 50.1 from January’s 49.7 final reading, above the 50-mark which demarcates expansion from contraction, and better than a Reuters poll expecting a reading of 49.5.

Factory activity contracted in both January and December, after stalling in November.
But the new export orders sub-index shrank for the first time since April last year, skidding to 47.1, signalling that external demand remains weak.

“Today’s data point to a marginal improvement in the Chinese manufacturing sector going into the Chinese New Year period in February,” said Hongbin Qu, chief economist of China & co- head of Asian Economic Research at HSBC. “However, domestic economic activity is likely to remain sluggish and external demand looks uncertain.”

“We believe more policy easing is still warranted at the current stage to support growth,” he added.

The Australian dollar rose against both the US dollar and the yen on the news. China’s Shanghai Composite index pared losses to bounce into positive territory, while Hong Kong’s Hang Seng index held near the flatline. 

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow