Month: February 2016

China central bank cuts reserve requirement ratio by 0.5% points

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

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China’s central bank, the People’s Bank of China, has cut further the reserve requirement ratio, the amount of cash the country’s banks have to hold, in an attempt to calm investor jitters over the world’s second largest economy.

The PBOC cut the ratio by 0.5 percentage points after the country’s markets closed Monday. The cut, which comes into effect Tuesday, means that most large Chinese banks will have a reserve ratio of 17 percent, Reuters reported.

This is the fifth time since last February that the PBoC has cut its ratio, the last cut being on October 23.

China’s stock markets had another torrid day Monday: The Shanghai composite pared some losses to close down 79.38 points, or 2.87 percent, at 2,687.82 points, after earlier trading down as much as 4.63 percent. The Shenzhen composite slid 93.18 points, or 5.36 percent to 1,643.35 points.

Latest government figures show that the Chinese economic growth rate slowed to a 25-year low of 6.9 percent in 2015 and 6.8 percent in the fourth quarter of last year.

In a statement reported by Reuters, the PBOC said the move was made to ensure ample supply of liquidity in the system.

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

US shale’s message for OPEC: Above $40, we are coming back

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

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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 still under pressure, but bulls are on the run

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

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The hunt for a crude oil bottom continues. But for now, at least, the bulls appear to have some wind at their backs.

A week after WTI crude oil fell to its lowest level in more than a decade, some oil industry stakeholders appear to be hard at work trying to find reasons why the worst is over for crude.

Over the course of the week, oil ministers from Saudi Arabia, Qatar and Nigeria have all been saying an OPEC production freeze—which may help stabilize prices—is likely.

In a Friday interview with CNBC’s “Fast Money,” Nigeria oil minister Emmanuel Kachikwu said that one a freeze has been initiated, “I’m certainly hoping from prices in the range of $45 to $50, that’s what I’m putting my fingers on.”

He intoned: “Is there a scientific basis for that? Probably not.”

Never mind that Iran’s oil minister called such a freeze a “joke.” Even if it does happen, commitments on the part of certain countries to simply not produce more than they already do would be cold comfort for the oil bulls, given the global supply glut.

So how about a coordinated production cut — the sort of market-manipulating action that an organization like OPEC is arguably designed to take?

In Wednesday remarks, Saudi oil minister Ali Al-Naimi dismissed such a step out of hand. “This is not going to happen because not many countries are going to deliver even if they say they will cut production,” the official said. “So there is no sense in wasting our time seeking production cuts.”

The lack of a synchronized message reinforced a belief among many market watchers that the formerly powerful cartel appears well past its prime. Oil trader Bob Iaccino of Path Trading Partners told CNBC that “OPEC essentially doesn’t exist anymore.”

In addition to the coordination issue, OPEC’s power has been severely curtailed by the incredible growth of U.S. oil production.

“The U.S. is the marginal producer now, it’s not OPEC,” Iaccino said in a recent interview on CNBC’s “Futures Now.” He added: “It’s not going to be OPEC that says we’re boosting a hundred million barrels a day or cutting a million—it’s the U.S.”

Still, due to factors related to the seasonality of gasoline production, Iaccino does see crude oil finding a “medium-term bottom,” and rising to $40 per barrel. That is more than $7 above Friday’s settlement price. He doesn’t see it getting much above $40, however.

That would still require a significant break of oil’s recent trading range. Save a few high and low ticks, over the last several weeks WTI has appeared to have become comfortably ensconced between $29 on the downside and $36 on the upside.

Meanwhile, a look to the options market shows what a long-shot Iaccino’s target is considered to be. The way the April crude oil option with a striking price of $40 is trading, the chance of oil finding itself above $40 when the April futures contract expires in late March is considered to be lower than 10 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

Asia trades mixed; China shares tumble, with Shanghai down 4.1%

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

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Chinese markets tumbled at the open Monday, but other markets in Asia were mixed by mid-morning, with Japan extending its gains from the previous week. Analysts expect some rocky trading this week amid a deluge of economic data in the region.

Chinese markets opened in negative territory, with the main Shanghai composite down 4.07 percent while the Shenzhen composite slipped 5.7 percent.

“Markets look set for a volatile week as a raft of data releases globally set markets up for a dramatic reweighting of growth expectations,” wrote Angus Nicholson, a market analyst at IG, in his morning note.

The Japanese benchmark index, Nikkei 225, was up 0.4 percent, after earlier trading up as much as 1.5 percent. Last week, the index added about 1.39 percent. Early movers on the index included Sharp.

Shares of the troubled Japanese electronics maker were down as much as 4.55 percent in early trade before retracing some of the losses to trade down 3.79 percent. Its shares have fallen 26 percent between February 23 and February 26. Sharp shares fell after its takeover deal from Taiwan’s Foxconn, which was announced last Thursday, was put on a hold. The latter said it would not sign the deal until Sharp clarified previously undisclosed contingent liabilities, reported Reuters.

On Monday, Sharp said there was no deadline for finalizing a deal, following a report over the weekend from the Nikkei setting March 7 as the timeline for an agreement.

Across the Korean Strait, the Kospi was up 0.25 percent. Hong Kong’s Hang Seng index fell 0.59 percent.

Australian’s S&P/ASX 200’s was up 0.72 percent in afternoon trade, with most sectors gaining. The heavily-weighted financials sector was up 0.72 percent, while the gold sector fell 2.10 percent.

Despite expected gains in shares Monday, analysts also believe risk appetite remain “exceptionally weak” as more investors have turned to safe-haven assets in recent weeks. Vishnu Varathan from Mizuho Bank wrote in a morning note, “U.S. 10-year bond yields dropping below 1.8 percent and sharp gains in safe-haven Japanese yen and gold prove this point.”

Economic data due this week include Japan’s industrial production numbers on Monday, Australia’s fourth quarter gross domestic product (GDP) and Chinese factory activity data. Japan’s January retail sales data are also due today.

In Asian hours, US West Texas Intermediate (WTI) crude futures for April delivery erased losses of over 0.4 percent to trade up 0.15 percent at USD 32.83 a barrel; US crude futures gained about 3 percent last week.

Global benchmark Brent gained about 0.8 percent to USD 35.38 a barrel as of 9.47 a.m. HK/SIN time; it added about 6.33 percent last week.

Energy plays were mixed in Asia, with Santos up by 0.78 percent, Woodside Petroleum losing 0.7 percent and Inpex trading flat. Chinese mainland energy plays were mostly lower, with China Oilfield shedding 4.08 percent.

“Global crude prices are convulsing (albeit at rather low levels) amid ‘on-off’ hopes of global oil production cuts. This adds yet another layer of volatility to an already bifurcated global market,” Varathan added in his note.

In the currency market, the yen maintained its strength against the dollar at the 113 handle, with the pair trading down 0.54 percent at 113.38 as of 9.50 a.m. HK/SIN.

The Chinese yuan was marginally weaker against the dollar, with the pair up 0.13 percent at 6.5478. The People’s Bank of China set Monday’s yuan mid-point at 6.5452.

Stateside on Friday, the Dow Jones industrial average was down 0.34 percent, while the S&P 500 ended lower by 0.19 percent. The Nasdaq composite gained 0.18 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

US crude hits $34 on gas demand, output cap hope

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

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Crude oil prices reversed early losses on Friday, with Brent on track for its first weekly gain in a month, as strong US gasoline demand and hopes of OPEC action outweighed concerns over fundamental oversupply.

Brent crude futures rose USD 1.47, or 4.2 percent, to USD 36.76 per barrel at 9:28 a.m. ET (1428 GMT), about USD 2 above an intraday low of USD 34.73.

US West Texas Intermediate (WTI) crude futures were up USD 1.33, or 4 percent, at USD 34.40 a barrel, off a low of USD 32.76.

Futures extended gains after government data showed US economic growth slowed in the fourth quarter, but not as sharply as initially thought.

Gross domestic product increased at a 1.0 percent annual rate instead of the previously reported 0.7 percent pace, the Commerce Department said on Friday in its second GDP estimate.

The gains, if they hold, would mark the third consecutive daily increase for Brent and the fifth for US benchmark WTI.

Traders said the rises were driven by short positions closed ahead of Brent’s expiry next week and by strong demand for gasoline in the United States.

But analysts said the oversupplied market, which many do not expect to balance until early next year, would pull prices back down in the near term.

“I don’t think it is fundamentally justified … I don’t think it will last,” Tamas Varga, oil analyst at PVM in London, said of the rise in prices.

“I don’t think it is fundamentally justified … I don’t think it will last,” Tamas Varga, oil analyst at PVM in London, said of the rise in prices.

Prices had also received a boost from Venezuelan Oil Minister Eulogio Del Pino saying late on Thursday that Qatar, Russia and Saudi Arabia had agreed to a meeting in mid-March as part of efforts to stabilize oil markets.

Strong gasoline demand in the United States was a big support. Data from the US Energy Information Administration showed gasoline inventories falling last week for the first time since early November, suggesting that consumers could gobble up more of the world’s oil products than expected.

“The idea that gasoline demand is actually rising suggests that perhaps the lower prices of crude are actually prompting a greater usage of this product (gasoline),” said Vyanne Lai, oil analyst at National Australia Bank.

The data is a glimmer of hope for markets grappling with a glut exacerbated by crude production that is exceeding demand by 1 million to 2 million barrels per day (bpd), though Iran’s target of increasing its exports by 1 million bpd within the next year looms over the market.

In the longer term, however, analysts expect oil prices to rise again.

Investment bank Jefferies called current prices unsustainable and said that production declines across most of the important non-OPEC producers is likely to set the stage for an oil price recovery in the second half of this year.

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

Budget 2016: How world’s fastest-growing economy will spend its cash

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

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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 has more billionaires than US: Report

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

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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 shares stumble, as Asia markets trade mixed

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

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Some Asian markets rebounded Thursday following Wall Street’s reversal of sharp intraday losses overnight on the back of higher oil prices, but it wasn’t enough to support the Chinese, Australian and Hong Kong markets.

China’s Shanghai composite was lower by 1.22 percent, while the Shenzhen composite dropped 1.4 percent. Concerns were raised over China this week after the People’s Bank of China set the yuan mid-point rate notably lower at 6.5273 to the dollar on Tuesday, down 0.17 percent from Monday’s fix. Today’s mid-point was set at 6.5318.

Francis Cheung, head of China and Hong Kong strategy at CLSA, told CNBC’s “Squawk Box” that Chinese markets are doing somewhat better, despite the sell-offs this week.

“We are seeing a little more support from the market, mainly because I think people are expecting more of a stimulus from the government.”

Hong Kong’s Hang Seng Index was down 0.65 percent, while the Japanese benchmark Nikkei 225 index was up about 0.5 percent. Across the Korean Strait, the Kospi gained 0.41 percent.

The yen, which surged against the dollar in recent sessions, maintained the 112 handle; the pair traded at 112.12 as of 8.15 a.m. HK/SIN time. A stronger yen is usually a negative for Japan’s exporters as it reduces overseas profits when converted into local currency. But exporters saw mixed fortune early on, with Toyota down 2 percent, while Canon gained 0.74 percent.

Australia’s S&P/ASX 200, which saw gains of 0.37 percent early on, lost support and traded down 0.1 percent. The heavily weighted financials sector was a drag, down 0.89 percent.

The index previously suffered two consecutive sessions of declines, closing down 2.1 percent on Wednesday.

“ASX suffered again at the hands of oil prices (overlay BHP’s share price and WTI), and it’s also under pressure due to valuations and a market that had added 329 points from the 10 February low to the high on Tuesday. This was a 7 [percent] move, but there are no excuses for yesterday’s savagery,” Evan Lucas, market strategist at IG, wrote in his morning note.

Online job-search company Seek, an early mover on the index, was up 6.34 percent. The company reported a 50 percent jump in interim net profit to AUSD275.1 million (USD 198.2 million), and a dividend of 21 Australian cents per share. The sale of Seek’s education business, IDP Education, and strong revenues from China helped boost profit.

Oil prices retreated again in Asian trading hours with US crude dropping 0.47 percent to USD 32 a barrel, after settling up 0.88 percent in overnight trade. Global benchmark Brent was lower by 0.84 percent at USD 34.12 a barrel, following a 3.4 percent gain during US hours.

The overnight bounce came as data showed US gasoline demand over the past four weeks rose more than 5 percent compared with a year earlier. But US government data showed crude stockpiles rose 3.5 million barrels last week to more than 507 million barrels.

“The market…was looking for some good news for once and took its cue from falling gasoline inventories and gasoline demand up 1.8 [percent], a hint that the long looked-for increase in consumer-led driving and spending might be afoot,” said David de Garis, a director and senior economist for fixed income, currencies and commodities at National Australia Bank, in a morning note.

Oil came under pressure this week after Saudi Arabia’s oil minister dashed hopes for a possible production cuts.

Elsewhere, sterling remained weak against the dollar on concerns over a possible “Brexit.” The pair traded at 1.3927 as of 6.10 a.m. HK/SIN.

Stateside, the Dow Jones industrial average closed up 0.3 percent, erasing a 266-point intraday drop. The S&P 500 gained 0.44 percent after trading more than 1 percent lower intraday and the Nasdaq composite was up 0.87 percent.

Companies that will announce earnings in Asia today include South32, Galaxy Entertainment and CITIC Telecom.

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

Apple-FBI spat: Bill Gates on the fence?

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

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Bill Gates is supportive of investigators’ efforts to force Apple to help them crack into an iPhone used by one of the San Bernardino shooters, saying a balance needs to be struck between government access and the need to preserve data security.

While clarifying he doesn’t support untrammeled government access to personal data, the Microsoft co-founder’s position runs contrary to those of many tech executives who have backed Apple Inc. The heads of Facebook, Twitter and Google have all sided with Apple on the grounds that complying with the government’s request would ultimately undermine data privacy.

Gates stated in a handful of interviews that it’s not uncommon for phone companies and banks to hand over customer information to investigators. He questioned why tech companies should be treated differently.

In particular, he took issue with Apple CEO Tim Cook’s argument that helping crack the shooter’s iPhone would set a broader precedent.

“They are not asking for some general thing, they are asking for a particular case,” Gates, who remains a technical adviser to Microsoft Corp., told the Financial Times in a Tuesday interview.

And in a lengthy interview on Charlie Rose on PBS, Gates said that if government is “blind,” it might not be able to stop online crimes such as tax evasion, child pornography and, most importantly, terrorism.

He added in an interview with The Associated Press that public opinion will likely be on the government’s side, saying “I do think people want the government to act on their behalf if they feel like the safeguards are there.”

But Gates later on Tuesday said that he was being mischaracterized by the media as backing the FBI.

“The extreme view that government always gets everything, nobody supports that,” he told Bloomberg News. “Having the government be blind, people don’t support that.”

Magistrate Judge Sheri Pym last week ordered Apple to assist investigators by creating specialized software that would let the FBI rapidly test random passcode combinations to try to unlock the iPhone and view data stored on it.

The county-issued iPhone 5C was used by Syed Farook, who with his wife, Tashfeen Malik, killed 14 people at an office holiday party in December before they died in a gun battle with police.

But Apple maintains that creating such software would set a dangerous precedent, threatening data security for millions by making essentially a master key that could later be duplicated and used against other phones.

AP writer Deepti Hajela in New York contributed to this report.

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