Month: December 2014

India to reap $12 bn-plus Budget windfall from oil slide

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

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A plunge of nearly half in oil prices could help Indian Finance Minister Arun Jaitley reap a fiscal windfall of at least USD 12 billion when he presents his 2015/16 budget in February, two government sources told Reuters.

The savings would come in the form of reduced fuel subsidy costs and higher petrol and diesel levies, the sources said. In addition, finance ministry officials have proposed restoring a crude oil import duty that was scrapped in 2011.

As a result, the government would claw back most of the money that India saves on oil
imports. That would help Jaitley hit borrowing targets but dilute any boost to consumption in Asia’s third-largest economy.

Energy-hungry India imports around 4 million barrels of oil per day and the net cost of the country’s oil imports is expected to total USD 88 billion in the fiscal year to next March, based on a budgeted oil price of USD 105 per barrel.

Read More: When will the hideous downturn for oil be over?

Officials drawing up Jaitley’s first full-year budget are penciling in a view that oil prices will average USD 65-USD 70 in 2015/16. That would cut the national import bill by USD 18 billion – or 0.9 percent of GDP, they reckon.

“Benefits from the fall in oil prices would reflect in the budget through lower oil subsidies and higher tax projections next year,” one senior finance ministry official told Reuters.
The sources estimate that the overall fiscal boost can total 750 billion rupees (USD 12 billion). More than half, 400 billion rupees, would come from savings on oil subsidies.

Tax and don’t spend

Prime Minister Narendra Modi, in power since May, has freed prices for diesel, which account for 40 percent of consumption of refined fuels.

Read More: OPEC’s Badri: Oil’s price slide beyond fundamentals

Taking advantage of the resulting fall in pump prices, his government has raised factory gate duties on petrol and diesel twice in the last month. That means state coffers, and not drivers, will benefit to the tune of USD 1.6 billion this fiscal year and nearly USD 5 billion next year.

A revival in the profitability of state-owned oil refiners like Hindustan Petroleum Corporation and Indian Oil Corporation could generate another USD 1 billion in extra revenues.

Further, ministry officials recommend restoring the old 5 percent crude oil import duty in full. This would require Modi’s approval, and if implemented could raise up to USD 4 billion more, lifting total potential fiscal gains to over USD 16 billion.

“A proposal to impose import duty on crude oil is under consideration,” said another finance ministry source. “The final decision could be announced in the budget.” Both sources requested anonymity, because they were not authorized to speak to the press on the record.

Read More: India’s November inflation at record low of 4.38%

Jaitley is struggling to hit his fiscal deficit target of 4.1 percent of gross domestic product this fiscal year. He wants to cut it to 3.6 percent in 2015/16, and 3 percent in 2016/17.
Budget bailout

Fiscal constraints leave little over for the wider economy, with consumers still cautious about their prospects and concerned that recent falls in inflation will be only temporary.
Although the price of diesel, used by truckers and farmers, has fallen by 6 percent in the past five months, drivers in India are now paying more to fill up than in the United States.

Read More: Why India and Russia remain BFFs

“The boost to household consumption is likely to be small,” said Shilan Shah, India Economist at Capital Economics in London. “The government has been able to take advantage of the windfall.”

By Shah’s reckoning, the oil windfall could help cut the budget deficit by 0.5 percent of GDP, as well as narrowing the current account gap and easing price pressures.

“This could lead to the RBI beginning to cut interest rates early next year, which on its own should have impact on economic growth,” said Shah.

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

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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

Asian markets post steep declines on oil rout, Japan fears

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

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Asian stocks pulled back sharply early Monday, tracking sharp declines on Wall Street last Friday, as investors fretted about the relentless slide in energy prices and declining manufacturing sentiment in Japan.

US stocks finished sharply lower at the end of last week, with benchmark indexes posting sizable weekly losses, as crude’s ongoing slide rattled investors. The Dow Jones Industrial Average declined 1.8 percent on Friday, down 3.8 percent from the week-ago close, its worst weekly loss since November 2011. Recording its worst weekly hit since May 2012, the S&P 500 plunged 1.6 percent while the tech-heavy Nasdaq Composite dropped 1.1 percent.

Brent crude futures fell as much as 2.5 percent on Monday to a new five-year low near USD 60 a barrel after the world’s energy watchdog forecast even lower prices on weaker demand and larger supplies next year. US crude for January delivery was down 95 cents at USD 56.86 a barrel, after hitting a low of USD 56.25, down 2.7 percent, the lowest since May 2009.

Business sentiment in Japan worsened in the fourth quarter, data showed on Monday. The big manufacturers index slipped to +12 from +13 in the previous quarter, below expectations for a reading of +13 in a Reuters poll, the Bank of Japan’s Tankan survey showed.

India’s wholesale price index, due at 1430 SIN/HK, likely eased for the sixth straight month to 1.41 percent in November, according to analysts polled by Reuters. October’s reading of 1.77 percent was the lowest level in more than five years due to slower annual rises in food and fuel prices.

Also on the calendar is China’s foreign direct investment inflow for November.

Tokyo loses 1.2 percent

Japan’s benchmark Nikkei 225 trimmed losses early Monday, after dropping more than 300 points at the open, as a rebound in dollar-yen helped calm jitters caused by worsening business sentiment in the country.

Meanwhile, Prime Minister Shinzo Abe won his snap election over the weekend and his ruling Liberal Democratic Party (LDP) and coalition partner maintained a supermajority, according to media exit polls, giving the Japanese prime minister a fresh mandate for his struggling strategy to revive the economy.

Japanese shares were broadly lower, with automakers Suzuki Motor, Nissan and Toyota Motor sagging between 2.6 to 1.9 percent.

Index heavyweights Fast Retailing and robot maker Fanuc lost 1.3 and 0.8 percent, respectively.

Mainland shares down

China’s benchmark Shanghai Composite index opened down nearly 1 percent at the open after the central bank said in a report on Sunday that the mainland’s economic growth could slow to 7.1 percent in 2015 from an expected 7.4 percent this year.

Stronger global demand could boost exports, but not by enough to counteract the impact from weakening property investment, according to the report published on the central bank’s website, www.pbc.gov.cn.

In Hong Kong, the key Hang Seng index also plunged 1.6 percent to fall below the key 23,000 level.

Sydney drops 0.9 percent

Australia’s benchmark S&P ASX 200 index hovered near a nine-week low early Monday as energy and mining stocks were battered by the turmoil in commodity markets.

Oil and gas producers Oil Search and Santos traded 0.8 and 0.3 percent lower, respectively, while Rio Tinto and BHP Billiton lost nearly 2 percent, each.

Newcrest Mining shed over 1 percent on news that the gold miner was planning to split the development of its massive Golpu deposit in Papua New guinea into two stages as it seeks to reduce spending and improve returns.

Traders will also be looking to the mid-year review of Australia’s budget, where Treasurer Joe Hockey is expected to reveal that the budget deficit for the year to June 2015 will blow out by about AUSD 5 billion (USD 4.2 billion) to nearly AUSD 35 billion.

Meanwhile, Australian police cordoned off one of Sydney’s main business areas on Monday, with media reporting that hostages were being held in a cafe. Part of Martin Place, home to the Reserve Bank of Australia and commercial banks, was closed off by armed police.

Traders in currency markets said the hostage news may have contributed to a dip in the Australian dollar, which was already under pressure from global risk aversion as oil prices fell anew. The local currency was pinned at USD 0.8225, near its lowest since mid-2010.

Seoul falls 0.6 percent

South Korea’s Kospi index traded near an eight-and-a-half-week low on the first trading session of the week, with blue-chips leading the declines.

KB Financial receded 3 percent while Samsung Electronics lost 1.3 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

IEA cuts 2015 demand growth forecasts

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

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Weak demand and oversupply in oil markets raise the risk of global social instability and the potential for financial defaults, the International Energy Agency (IEA) warned on Friday, as it cut its forecasts for global oil demand growth in 2015.

The report came as oil prices slid to new multi-year lows, with Brent crude hitting a 5-½ -year low of USD 63.33 a barrel on Friday.

“Continued price declines would for some countries and companies make an already difficult situation even worse,” the IEA said in its new monthly report.

Global oil inventories are projected to build by around 300 million barrels in the first half of 2015 in the absence of any disruption, the group said. It estimated that stocks in major global economies could start to “bump” against storage capacity limits.

“The resulting downward price pressure would raise the risk of social instability or financial difficulties if producers found it difficult to pay back debt,” it said.

Russia, Venezuela singled out

Singling out Russia and Venezuela, the Paris-based energy think tank said that further price drops would heighten the financial risks to “highly leveraged” producers, and countries that are heavily dependent on oil revenues.

Read More: Oil set to fall further in ‘new chapter’ for markets: IEA

It warned on the threat to international financial stability should the situation in Russia deteriorate to the point of a default. Bond yields and the cost of insuring Russia against a default have risen in recent weeks amid fears over falling oil prices and intensifying sanctions from the West. Oil – the country’s biggest export – is crucial for its economy, and influence in the world.

“Lower oil prices significantly dent potential export revenues in net oil‐exporting countries, slashing their income streams and in turn denting demand,” it said.

“In particularly cash‐strapped economies, such as Venezuela and Russia, this impact is likely to be magnified as the risk of default escalates,” it said, adding that Venezuela’s capital Caracas was currently struggling to make bond payments, fund social programs and pay debts to oil partners.

Venezuela needs to fill a capital shortfall of around $29 billion next year, according to Bradford Jones, a portfolio manager at an emerging markets focused hedge fund called Sagil Capital. He told CNBC Friday that the country was facing a number of very tough decisions and believed a currency devaluation would not do much to alleviate the pain.

“This is a country really facing a perfect storm,” he said.

Read More: Oil pressure could sock it to stocks

‘More modest’ demand growth

Brent crude’s losses for the week now stand at more than 8 percent and it has seen a 45 percent fall since peaking near USD 115 a barrel in mid-June. US crude fell below USD 60 a barrel on Thursday for the first time in five years, and WTI futures for January traded at USD 59.23 a barrel at 8:00 a.m. GMT Friday morning.

Weak demand, a strong dollar and booming US oil production have been cited as the main reasons behind the dramatic fall in oil prices, and the IEA has previously called it a “new chapter” in the history of oil markets.

OPEC (Organization of Petroleum-Exporting Countries), a group of 12 major oil producers, decided not to cut production at its meeting in November, further fueling sliding prices, which have shaken stock markets and raised volatility.

The IEA on Friday also cut its 2015 forecasts for global oil demand growth, with an estimate of 93.3 million b/d (barrels a day) for next year, down from November’s prediction of 93.6 million b/d.

Read More: Oil settles below $60 for 1st time since July 2009

It now expects “more modest” demand growth next year, and said its Russian forecasts had been particularly hard hit by the selloff. Its 2015 estimate for the country has been revised down by 195,000 b/d, to 3.4 million b/d, on Russia’s “darker macroeconomic outlook.”

Moscow acknowledged for the first time earlier this month that the country could fall into a recession next year and analysts have told CNBC that Russia could be ripe for another credit downgrade from one the ratings agencies.

The energy watchdog also said that it may take some time for supply and demand to respond to the price rout. Producers that are cutting back on spending will have little impact on short-term supplies, it said, and lower prices generally give little benefit for a country’s economy.

Even if Russia does decide to trim its production next year, the IEA said that upward revisions to North American projections meant this would largely offset the changes.

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

Asian equities open higher on positive US lead

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

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Asian equity markets made gains early Friday, as a positive lead from Wall Street overnight offset concerns about a further decline in oil prices.

US stocks advanced on Thursday, cutting weekly losses, but euphoria over increased retail sales in November faded after crude dropped below USD 60 a barrel. The pullback escalated amid efforts to block a spending bill in the House, sparking worries of a government shutdown.

Halting a three-session losing streak, the Dow Jones Industrial Average ended up 0.4 percent, while the S&P 500 added 0.5 percent. The tech-heavy Nasdaq Composite gained 0.5 percent.

Oil prices remain in focus after US crude fell below USD 60 a barrel on Thursday, the first time in five years that it breached the psychologically-important support level, as oil markets extended this week’s losses on oversupply concerns.

In Asia, focus falls on China, which is due to hand in a raft of monthly economic reports. Industrial output, retail sales figures and fixed asset investment for November are due at 1330 SIN/HK.

Analysts expect the data deluge to show a persistent cooling in the world’s second-largest economy, adding pressure on authorities to ramp up stimulus measures after unexpectedly cutting interest rates last month.

Fixed-asset investment, an important driver of growth, likely grew at its slowest pace in nearly 13 years between January and November, rising 15.7 percent in that period from a year ago, a Reuters poll of 18 economists showed.

Industrial output is also expected to have decelerated last month, with Moody’s Analytics predicting an annual rise of 7.6 percent, slightly lower than October’s 7.7 percent gain. Beijing factories were temporarily closed in November to ease pollution before the Asia-Pacific Economic Cooperation (APEC) summit, which likely stalled production, the group said.

Retail sales could see an 11.6 percent annual rise, following October’s 11.5 percent gain, according to Citi.

Tokyo rises 1.3 percent

Japan’s Nikkei 225 started Friday on a strong note, after three consecutive losing sessions, on the back of the yen which weakened to 119 against the greenback. Japanese shares sagged to a two-week low in the previous session as a stronger currency and a downbeat machinery data curbed risk appetite.

Index heavyweights Fast Retailing and Softbank advanced more than 1 percent, respectively.

Exporter stocks traded mixed despite the softer yen, limiting gains on the bourse. While Canon climbed 4.4 percent, Nissan and Honda Motor lost more than 1 percent lower each, dragged down by Thursday’s announcements for wider recalls over Takata air bag issues.

Meanwhile, polls continue to point to a landslide win for the ruling coalition ahead of Sunday’s parliamentary election. Surveys showed the LDP-Komeito bloc would retain a two-third majority in parliament, giving Prime Minister Shinzo Abe the mandate he needs to continue his economic policies.

Mainland shares up

China’s benchmark Shanghai Composite index and Hong Kong’s Hang Seng index opened 0.8 and 0.4 percent higher, respectively.

Expectations for more stimulus are supporting mainland markets higher, said Donald Straszheim, Senior Managing Director, China Research at ISI Group. “Everybody in China now see stimulus coming, monetary easing, more interest rate cuts and more targeted fiscal measures. [Since] it’s a policy market and that’s what Chinese investors are seeing, it’s driving markets up.”

Sydney falls 0.3 percent

Australia’s benchmark S&P ASX 200 fell back into negative territory two hours into trade as banking majors extended the week’s losses.

Australia and New Zealand Banking Group and Commonwealth Bank of Australia retreated 0.8 percent each. Westpac Bank traded 0.6 percent lower ahead of its annual meeting later in the session.

Leighton Holdings erased early gains to ease 1.6 percent despite news that China Communications Construction has agreed to buy a building unit of the project development and contracting group for USD 951 million.

Meanwhile, the Australian dollar traded at USD 82.47 against the U.S. dollar – levels unseen since 30 June 2010 – after Reserve Bank of Australia governor Glenn Stevens said that the currency remains overvalued and USD 0.75 is his target, on Thursday.

Seoul up 0.3 percent

South Korean shares headed higher on the last trading session of the week after the benchmark Kospi index finished at a five-week low on Thursday.

LG Electronics outperformed with a 2.6 percent gain while retailer Shinsegae added 0.3 percent at the open.

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

Why India and Russia remain BFFs

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

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The long-standing romance between India and Russia seems very much alive as Vladimir Putin`s one-day summit in Delhi commences on Thursday.

“If you look at the history between the two countries, I would go as far to say Russia remains India`s best friend amongst all the great powers,” said John Lee, adjunct associate professor at the University of Sydney.

The two nations enjoyed a heady courtship during the 1970s, but the relationship has faded over the years. Five years ago, Russia-India trade was one-fifth of Russia-China trade, but as China becomes increasingly assertive in Asia, that ratio fell to one-tenth in 2014.

In what is becoming a signature move on Modi`s global charm offensive, the Indian leader posted a series of tweets in Russian upon Putin`s arrival. During a visit to Japan earlier this year, Modi also tweeted in Japanese .

“Times have changed, our friendship has not. Now, we want to take this relationship to the next level and this visit is a step in that direction,” Modi`s tweet said.

What to expect

Military deals are expected to steal the show, as India remains a major client of Russian arms. Roughly 75 percent of India`s weapon imports come from Russia, according to the Stockholm International Peace Research Institute.

“Russia has been a traditional supplier to India but they have slid away a bit in the face of competition with the US and Israel. Still, the Indians are dependent upon them for spare parts for their existing equipment,” said Thomas Pickering, vice chairman of Hills and Company and former US ambassador to India and Russia.

India is set to finalize a purchase of 126 fighter airplanes from France` Dassault Aviation, but Pickering expects Putin will attempt to convince Modi to buy Russian hardware instead.

Modi`s agenda will primarily focus on energy, with state-run oil firms Essar Oil, ONGC Videsh and Oil India all expected to sign Memorandums of Understanding with Rosneft, Russia`s largest oil producer, during Putin`s visit.

A gas pipeline between Russia and India may also be discussed as a long-term future possibility, but experts widely cautioned against the feasibility of such a project since the pipeline would have to cross China.

“India certainly does not want to see a warm embrace between Russia and China given its own nervousness and concerns about China`s military, so that`s part of the geopolitics of the deal,” Pickering said.

Power play

The visit marks contrasting points in each nation`s development paths. Russia faces a perfect storm amid international sanctions, a record-low currency, sinking oil prices, and global backlash against its involvement in the Ukraine conflict. Meanwhile, India is the current emerging market darling as investors cheer the central bank`s successful fight against inflation and Modi`s pro-business reform agenda.

Putin hopes to walk away from this visit with as much as possible, Pickering said.

“He`s the skunk of the international garden party these days…if he can bring off something with India, however small, it will be recognition of the fact that he isn`t totally banned by the rest of the international community that he can`t move around.”

India has the upper hand in this relationship, others said.

“India is playing a game of opportunistic alliances. As Russia`s Ambassador to India, Alexander Kadakin, rightly said in an interview on Monday: India is like a rich fiancée with many bridegrooms,” stated Anil Gupta, professor of strategy, globalization and entrepreneurship at the University of Maryland.

“Ten years from now, Russia is unlikely to be a particularly important country for India. India would be the world`s 3rd largest economy at that time (and much larger than Russia). By then, India is also likely to have overcome its weaknesses in defense. However, Modi has concluded that a strategy of opportunistic alliances is the best strategy to achieve that goal as rapidly as possible,” Gupta added.

Copyright 2011 cnbc.com

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

Asian shares lower on oil’s slump, poor Japan data

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

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Asian bourses suffered losses early Thursday, after Wall Street finished sharply lower overnight on the back of further oil price declines, while a worse-than-expected machinery orders report from Japan accelerated the market’s slide.

Japan’s leading gauge of capital spending snapped a four-month rising streak in October. Core machinery orders fell 6.4 percent on month, worse than expectations for a 2.4 percent decline in a Reuters poll and slower than September’s 2.9 percent increase. Year-on-year, machinery orders fell 4.9 percent in October, worse than expectations for a 0.3 percent decline.

Providing some relief is the announcement of Australia’s employment data. For the month of November, the country added 42,700 jobs, above the 15,000 forecast by Reuters, data from the Australian Bureau of Statistics (ABS) showed on Thursday. The jobless rate was 6.3 percent, up from 6.2 percent in October.

Meanwhile, South Korea’s central bank kept interest rates unchanged for a second straight month on Thursday, in line with expectations, while observing the effects from its two rate cuts this year. Monetary policy decisions in the Philippines and Indonesia are also due late Thursday but no change is expected.

US stocks closed sharply lower on Wednesday as the price of crude fell to a new five-year low near USD 60 a barrel and the Organization of Petroleum Exporting Countries (OPEC) cut its demand outlook for next year.

The Dow Jones Industrial Average had its worst day since October 9, closing down 1.5 percent at a one-month low. The S&P 500 also put up its worst performance since October 13, ending down 1.6 percent. The tech-heavy Nasdaq Composite lost 1.7 percent.

Tokyo sinks 1 percent

Japanese stocks traded not too far away from a near-three-week low in Thursday’s morning session as dollar-yen tested its lowest levels in two weeks and after the release of worse-than-expected machinery orders. The benchmark Nikkei 225 index finished at a two-week low in the previous session.

Automakers Toyota Motor, Suzuki Motor and Honda Motor were battered by the strong yen, posting losses between 0.4 to 1.4 percent, respectively.

Near 1 percent tumbles in heavyweight components, including robot maker Fanuc and mobile carrier SoftBank, also weighed on the bourse.

Mainland shares down

China’s Shanghai Composite index and Hong Kong’s Hang Seng index were off to a bad start on Thursday, losing 0.3 and 1 percent each at the open.

Sydney sheds 0.3 percent

Australia’s key S&P ASX 200 index recovered from a two-month low after a better-than-expected employment number for November suggested continued improvement in the labor market.

Banking majors recovered modestly; Macquarie Group lost 1.3 percent while Westpac Bank eased 0.5 percent. Among miners, Fortescue Metals retreated nearly 3 percent.

Oil and gas exploration company Santos plunged 4.2 percent after announcing a reduction in its projected 2015 capital expenditure to USD 2.0 billion, from the previous guidance of USD 2.7 billion.

Seoul loses 0.7 percent

South Korea’s Kospi index mirrored losses in its Asian peers to hover near a five-week low early Thursday.

Blue-chip majors dwindled in the red; Hyundai Motor and Posco nearly 1 percent each while Samsung Electronics plummeted 0.8 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

Buffett now the world’s most generous man

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

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Go big or go home seems to be Warren Buffett`s mantra when it comes to philanthropy.

The Berkshire Hathaway, CEO and legendary investor made the single biggest charitable donation this year, giving USD 2.1 billion to the Bill and Melinda Gates Foundation in the form of 16.6 million shares of his company, according to Wealth-X`s ranking of the 10 largest philanthropic donations of 2014 published on Wednesday.

On Monday, 84-year-old Buffett surpassed Mexican business mogul Carlos Slim to become the world`s second richest person as shares of Berkshire Hathaway rallied to an all-time high. Forbes said its real-time ranking of the world`s billionaires now estimates Buffett`s wealth at USD 74.4 billion, about USD 1.5 billion more than Slim`s USD 72.9 billion. Slim is now in third place.

Founder and CEO of GoPro Nicholas Woodman`s USD 497.5 million donation to Silicon Valley Community Foundation ranked second. The Foundation connects corporate and individual donors with Bay Area nonprofits, with a focus on areas such as education, affordable housing and immigrant integration.

HK billionaire brothers set record

Eight of the top 10 donations of 2014 were made by American philanthropists. Hong Kong property tycoons Ronnie and Gerald Chan are the only non-Americans to feature on the list.

The Chan brothers each donated USD 175 million to Harvard University`s School of Public Health, ranking them in third and fourth place. The combined USD 350 million gift was the largest donation in the University`s 378-year history.

In a rare move for the university, the school was renamed to the Harvard T.H. Chan School of Public Health. There is only one other school within the university that is named after an individual in modern times, according to the Associate Press: Harvard Kennedy School, named for John F. Kennedy.

Harvard also received a USD 150 million donation from hedge fund manager Kenneth Griffin to support financial aid in what was the fifth largest charitable donation this year.

Universities win big time

The remainder of top 10 donations were also made to education institutions.

Oregon Health and Science University received a USD 100 million gift from Gert Boyle, chairman of the board for Columbia Sportswear, the outdoor apparel and equipment manufacturer.

University of Wisconsin-Madison was gifted a USD 100 million donation from American businessman John Morgridge, former chairman of the board of Cisco Systems.

University of Notre Dame received the largest single donation in the school`s history from private equity investor John “Jay” Jordan, who donated USD 75 million this year.

Advertising executive turned investor Edward Meyer gave a USD 75 million gift to Weill Cornell Medical College. The donation will expand the medical college`s cancer care and research programs.

Charles Munger, the vice-chairman of Berkshire Hathaway known as Warren Buffett`s right-hand man, was also very much in the spirit of giving, donating USD 65 million to University of California Santa Barbara to support the growth of its theoretical physics department.

Copyright 2011 cnbc.com

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

Big money: Oil to fall more, but energy stocks OK?

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

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Private money managers who invest in energy think the price of oil will continue to fall — even as crude hit a five-year low on Tuesday — but some still see opportunity in related companies.

“Oil is going to a new price point because of the revolution in production,” said Bill Perkins, chief investment officer of energy-focused hedge fund firm Skylar Capital Management.

Perkins believes the price of crude could fall as low as USD 45 a barrel. He is personally short, a bet that the price of the commodity will drop. He believes oil will settle between USD 45 and USD 80 a barrel in the next year.

At the same time, Perkins is individually invested in an undisclosed oil-related business — Skylar focuses on natural gas — as he believes owning strong companies in the sector is a good bet because of continued demand and cheaper production.

“Companies are harnessing amazing new technology to destroy the traditional energy value chain,” Perkins said. “There’s a lot of money to be made on that.”

Read More: Cheap gas — bet on these 5 stocks: Mario Gabelli

Recent data from Credit Suisse’s hedge fund servicing unit show that commodity trading specialists are still short crude contracts. At the same time, the bank said in a Dec. 3 report, hedge fund managers who focus on stocks added to their long bets over November despite the continued price drop.

“U.S. energy names remain a significant net exposure for equity long/short managers who added longs and cut shorts after October’s trough,” the report said. “If pressed, one could interpret this positioning as bullish for energy stocks.”

Overall, energy stocks represent 14 percent of equity hedge fund portfolios, a relatively large position, and 10 percent of the top 100 most common long positions overall, according to Credit Suisse.

MORE CRUDE PAIN

Read More: Brent bounces off 5-year low

Many hedge fund managers still think the price of oil will keep falling. They include Andy Hall of Astenbeck Capital Management (per a Reuters report), Paul Singer of Elliott Management and Pierre Andurand of Andurand Capital Management.

“I expect that prices will carry on coming off to rebalance the market,” said Andurand, a Frenchman who was previously CIO of commodities investor BlueGold.

Andurand thinks crude could hit USD 50 a barrel in the first quarter of 2015 and then rebound to a high of USD 70 in the fourth quarter. He said the oil market is oversupplied by between 1.5 and 2 million barrels per day, given weak demand, low disruptions to supply and increased production by nations that don’t belong to the Organization of the Petroleum Exporting Countries.

“OPEC is not the swing producer anymore. US shale oil producers are, but will take more time to react to prices than OPEC — it is a game changer that will lead to more volatile prices and bigger price ranges,” he added.

Andurand isn’t as bullish on energy stocks as others. “I expect that high-cost, highly leveraged shale oil companies will be at risk, there will be more (mergers and acquisitions) activity in the sector and some countries will be at risk of default,” he said.

Andurand Capital’s main fund is up 20 percent this year after gaining 18 percent in November on bearish bets, according to a person familiar with the performance (a spokesman for the firm declined to comment on returns). The firm manages USD 350 million, according to the person.

Spokesmen for Astenbeck and Elliott did not respond to a request for comment.

SECOR Asset Management also successfully shorted oil and related stocks in November, according to a person with knowledge of the performance.

The firm’s USD 170 million SECOR Alpha Fund, a systematic macroeconomic vehicle led by former top Goldman Sachs quantitative investor Ray Iwanowski, gained 7.4 percent for the month and is up 22.6 percent for the year, according to the person. The computer models correctly predicted that the high price of oil would spur shale oil production in the US, eventually leading to oversupply and a drop in price.

SECOR’s investing models — which assess all sorts of global securities and markets and then take positions to profit off the results — still indicate that crude is overpriced, according to the person. The hedge fund has short bets against stocks in the exploration and production sector and against crude oil as a commodity via futures contracts.

A spokesman for SECOR, which launched in September 2012, declined to comment.

Another oil bear is Elliott’s Singer.

“We believe the trend of strong US supply is likely to continue for the next several years, which should depress oil prices further, absent further supply outages in the Middle East and North Africa,” Singer wrote in a letter to investors Oct. 28.

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That bearish view was reflected by Morgan Stanley.

“The risk of oil prices moving even lower into 2015 (as well as higher volatility) is now significantly elevated,” bank analysts wrote in a research report. “By 2Q15, the market will be oversupplied and needs to find a mechanism to balance.”

Morgan Stanley said the price would need to fall as low as USD 35 or USD 40 a barrel to stop production and rebalance supply.

Still, the bank noted that the price will likely rise eventually.

“Oversupply is likely exaggerated and the market may be complacent about upside risks,” the report said.

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Asian stocks drop; Shanghai sinks in volatile trading

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

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Asian equity markets joined Wall Street’s slump on Tuesday after oil markets resumed their downward spiral.

China’s benchmark index tumbled as much as 6 percent in the last hour of trade after rallying to a three-and-half-year high of 3,091 points earlier in the session. Analysts attributed the selloff to profit-taking, expectations for 2015 gross domestic product to be lowered to 7 percent and liquidity fears regarding new corporate bond market restrictions, announced on Monday.

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“An interesting development for risk in the near term will be what happens with China after Monday’s alarming trade balance numbers. With both exports and imports declining, there are reports suggesting pressure is ramping up on the People’s Bank of China to cut the reserve required ratio,” said Stan Shamu, market strategist at IG.

Meanwhile, oil prices fell to new five-year lows in the Asian trading session with Brent crude below $66 a barrel. Overnight, prices tumbled 4 percent on the back of bearish forecasts, which saw the the Dow post its biggest decline since October.

Shanghai 5.3% lower

Mainland shares snapped their five-day winning streak, and the CSI300 bank share index closed down 4.5 percent after slumping as much as 9 percent. Meanwhile, the yuan fell to a five-month low against the greenback. In the past 30 days, the Shanghai Composite has rallied nearly 20 percent on hopes for more stimulus.

Banks were the biggest losers on the benchmark Shanghai Composite; ICBC, Bank of China, Bank of Communications and Agricultural Bank of China lost more than 9 percent each.

Hong Kong stocks lost over 2 percent after rising to a one-and-a-half-week high on Monday, falling for the first time in three sessions.

ASX down 1.7%

Australia’s benchmark S&P ASX 200 retreated from one-and-a-half-week highs hit in the previous session, while the Australian dollar sank to a new four-year low against the greenback.

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Energy producers were hit hard; Santos and Oil Search tanked 7 percent each while Origin Energy dropped nearly 5 percent.

Iron ore miners also suffered; BHP Billiton and Fortescue Metals declined 4 percent each.

Nikkei 0.7% lower

Japanese shares snapped their seven-day winning streak, moving off a seven-and-a-half-year high, weighed down by a stronger currency. The yen last traded at 120.7 per dollar, off Monday’s seven-year low.

Sentiment was also hurt by a Reuters poll showing that a majority of firms see the economy in a standstill or in recession.

Read More: BOJ increasingly likely to cut price forecast

Sony was one of the biggest losers on the benchmark Nikkei, down 4 percent, following Monday’s cyber attack on the company’s PlayStation store.

Kospi down 0.4%

South Korean stocks fell for a second day, hitting a one-week low and retreating further from a two-month high hit on Friday.

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Shipbuilders posted steep declines; Hyundai Mipo Dockyard lost 5 percent and Daewoo Shipbuilding declined over 4 percent.

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