Month: October 2015

BP cuts costs, bracing for $60 barrel oil until 2017

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

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BP, the UK oil giant, is slashing costs as it prepares for a long-term low oil price environment.

The company is now planning for around USD 60 per barrel price for Brent crude until at least 2017, after a sustained fall in the price of the commodity over the past year.

It also plans a further USD 3-5 billion worth of asset sales next year. Its share price rose by more than 2 percent in early London trading Tuesday following the announcement.

There was good news for investors in the company’s continued commitment to dividend payouts, with a quarterly dividend of 10 cents per ordinary share, expected to be paid in December.

Bob Dudley, chief executive of BP, said in a statement: “Last year, we acted decisively to reset BP for a sustained period of lower oil prices and the results are coming through well. We are now in action to rebalance our financial framework in this new price environment.”

Investment bank Goldman Sachs this week warned of downside risk for oil prices through spring 2016.

Jason Gammel, equities analyst at Jefferies said lower oil prices would weigh on energy stocks until the end of the year.

“My personal opinion is that USD 60 will not even be sufficient to balance the market by 2017,” he said, but to balance the company dividend it seemed “reasonable”.

BP has now reduced its full-year capital expenditure (capex) for the third time this year, and announced on Tuesday it had cut investments for this year to close to USD 19 billion, down from previous plans under USD 20 billion.

This spending will fall to USD 17-19 billion a year through to 2017, according to the oil major.

There was also some good news in better than forecast third-quarter underlying replacement cost profit, a common accounting measure to report profits in the oil industry which takes into account the fluctuations in the price of oil, of USD 1.8 billion, higher than the average analysts’ forecast of USD 1.2 billion.

In recent years, BP has also struggled with the fallout from the Gulf of Mexico oil spill, which had already weakened the company before the oil price fall.

It fell from number 2 to number 29 in the Platts ranking of global energy companies for 2015, with the downgrade “due in large part to its weaker profits and poor 2 percent ROIC (return on invested capital) upending its revenue and assets”, Platts said in a statement.

Dudley and Brian Gilvary, BP’s chief financial officer, will give an important presentation to investors later Tuesday about how the company will respond to lower oil prices.

Biraj Borkhataria, analyst at RBC, described the results as “encouraging” and predicted they would be “positively” received in the 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

The hazy reason why Apple’s CEO was stood up

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

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Indonesia’s president cut short his maiden trip to the US, skipping a much ballyhooed meeting with Tim Cook, Apple’s CEO, as the political pressure increases over the Asian country’s raging forest fires.

It isn’t entirely clear why Indonesian President Joko Widodo, popularly referred to as Jokowi, cancelled his dinner plans with Cook but regional experts and media have pinned the blame on the country’s forest fires.

Even though they are an annual event – Indonesians deliberately set rainforests ablaze to clear land, generally to produce palm oil – a lack of rain and the El Nino weather system has meant that the air pollution caused by the fires has been particularly bad this year, covering Southeast Asia in a so-called haze.

But, the fires have been raging for months so why did Jokowi choose to cancel his trip? Experts are puzzled.

“There’s nothing he could do this week that he couldn’t have done last week. There’s nothing he could do from Jakarta that he couldn’t do from San Francisco,” Aaron Connelly, a research fellow at Lowy Institute for International Policy, said in a phone interview.

Connelly noted that Indonesia’s failure to get the forest fires under control has damaged the country’s credibility with its neighbors.

Over the past couple months, the pollution has caused some flights into Thailand, Singapore, Malaysia and the Philippines to be cancelled as well as forcing some schools to close.

Indonesia’s president had been expected to chat up Apple, Google and other technology players about investment projects in the country, both to boost internet access in Indonesia and the country’s tin industry, as the metal is used in iPhone production, Reuters reported.

Apple is also expected to set up a research and development center in Indonesia, according to media reports.

A representative of the president’s office didn’t immediately return an email on whether another government official kept the appointment with Cook.

Apple did not immediately respond to a request for information on the meeting.

Indonesia desperately needs investment in its technology infrastructure.

At the end of 2014, only about 23 percent of the population had access to a smartphone, only 31 percent of the total population used a 3G network and only 4 percent was using the much-faster 4G LTE, Naveen Menon, the head of the communications, media and technology practice for Asia at A.T. Kearney, told CNBC.

As part of Jokowi’s US trip, the US government pledged this week to give Indonesia at least USD 2.75 million to help fight the current fires and prevent future ones.

Jokowi has said previously that the country won’t offer any more licenses for clearing peatland, but it isn’t clear whether the government will enforce the restrictions.

But there are signs the political pressure over the fires may be ratcheting up at home, with the haze reaching the country’s capital of Jakarta at the weekend.

“With the Indonesian military preparing an evacuation of the most vulnerable people from these provinces, Jokowi is facing mounting domestic criticism for travelling to the US rather than leading the haze crisis management in Indonesia,” Rajiv Biswas, Asia-Pacific chief economist for IHS Global Insight, said in an emailed statement.

The evacuation is expected to involve 27 ships and will mostly involve children, media reports said.

The fires, mainly on Kalimantan and Sumatra islands, have killed 10 people and more than 500,000 there have suffered respiratory infections, the country’s national disaster agency, Badan Nasional Penanggulangan Bencana (BNPB), said in a release on its website at the weekend.

The agency’s spokesperson called it “an extraordinary crime against humanity.”

The Pollutant Standards Index (PSI), a global gauge of air quality, has been over 2,000 in Kalimantan and Sumatra, according to reports.

A level between 100 and 200 indicates unhealthy air quality, while levels above 300 are considered hazardous.

The emissions from the fires exceed those from fossil fuel emissions in the US on a daily basis, data from the Global Fire Emissions Database show.

Wildlife is also suffering. The Borneo Orangutan Survival Foundation (BOSF) said via email that it has been fighting fires at several locations.

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 business confidence rises as RBI cut aids sentiment

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

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A hefty rate cut by the Reserve Bank of India late last month boosted business confidence in Asia’s third-largest economy, a survey showed Tuesday.

The MNI India Business Sentiment Indicator, a barometer of confidence among companies on the Bombay Stock Exchange, climbed to 62.3 in October from 61.4 in September, said MNI Indicators, which produces the survey.

A rise in sentiment was reported across the manufacturing and construction sectors, while sentiment among service sector companies fell for the fourth consecutive month.

India’s central bank surprised markets last month by cutting its key interest rate by 0.50 percentage points to 6.75 percent, its fourth interest rate reduction this year.

The flurry of rate cuts by India’s central bank are starting to have an impact, as MNI Indicators said the cost of debt servicing for panel companies fell to a record low.

The increase still belies a softer outlook for goods produced by Indian companies. The read is also disappointing given that there is usually more consumer activity in anticipation of the festive period. India will celebrate the Diwali festival on November 10.

Export orders were 8.4 percent below the series average, while new orders slumped 13.1 percent from a year earlier.

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

Goldman in talks on $50 m fine for releasing NY Fed secrets

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

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Goldman Sachs is in the last stages of negotiating a USD 50 million fine with New York’s State banking regulator over allegations that a former employee leaked confidential supervisory materials from the Federal Reserve Bank of New York, people familiar with the matter told The Wall Street Journal.

The New York Department of Financial Services is putting the finishing touches to a tentative agreement that could also include a three-year ban for the bank on regulatory consulting work in New York and an admission of failing to properly supervise its employees.

The case centers on a former junior employee at the firm, Rohit Bansal, who is alleged to have shared confidential information obtained from his former employer, the New York Fed, with his bosses while advising banking clients on regulatory matters.

A Goldman executive, Scott Romanoff, reported the matter to compliance supervisors, leading to an internal investigation by the firm. The bank then notified the New York Fed, which launched its own probe. The firm fired both Bansal and one of his supervisors.

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 is the last BRIC standing: WPP CEO

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

Asia’s stock rally pauses amid weaker commodity prices

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

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Asian stocks posted a cautious open on Tuesday, tracking an uninspiring lead from Wall Street amid weakened commodity prices.

Major US averages finished mixed overnight, as energy shares fell in tandem with oil prices and Apple declined a day before its quarterly results. The blue-chip Dow Jones Industrial Average and S&P 500 edged down 0.1 and 0.2 percent respectively, while the Nasdaq Composite finished a tad above the flatine.

Traders were also awaiting the release of Chinese industrial profits for September at 9.30am local time. August’s report showed a near 9 percent annual fall, the biggest drop since the National Bureau of Statistics began monitoring the data in 2011.

Nikkei slips 0.1 percent

Japan’s Nikkei 225 nursed modest losses at the start of trade, remaining just shy of the 19,000 mark that it briefly reclaimed on Monday.

Corporate earnings will likely hog the spotlight on Tuesday, with report cards from Canon, Mitsubishi Motors and Fanuc on tap. Canon declined 2 percent, while Mitsubishi Motors slipped 0.5 percent. Shares of industrial robot maker Fanuc retreated 1 percent.

Seven & I Holdings surged 3.4 percent following news that U.S. hedge fund Third Point had bought a stake in the Japanese retailer and wants the company to downsize its general merchandise business to improve profitability, sources with knowledge of the matter told Reuters.

ASX up 0.1 percent

Australia’s S&P ASX 200 index was directionless in early trade.

Resources and oil plays were on the back foot; Woodside Petroleum and Santos tanked more than 1 percent each after declines in crude oil prices overnight. BHP Billiton and Rio Tinto lost 0.6 and 1 percent respectively.

Iron ore minnow BC Iron said on Tuesday it would trim its rail costs through an agreement that allows it to pay less to use Fortescue Metals’ rail line when iron ore prices fall below USD 56 a tonne. Shares of the former gained 1.7 percent, but the latter slumped 5.5 percent.

Pension services firm Link Group, Australia’s biggest initial public offering so far this year, spiked 11 percent on its market debut.

Meanwhile, National Australia Bank placed its shares on a trading halt, fueling speculation that Japan’s Nippon Life Insurance will buy its insurance unit in a deal valued at about USD 1.8 billion.

Kospi drops 0.2 percent

South Korea’s Kospi index edged down, with heavyweight components leading declines.

The bourse’s top two weighted stocks Samsung Electronics and Hyundai Motor shed 0.4 and 0.6 percent respectively, while Posco plunged 2 percent.

Refiners S-Oil and SK Innovation dropped 2 and 0.9 percent respectively. LG Chem receded 1.2 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

Philips beats on Q3 profit, but takes a hit in EM

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

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Philips’ sales in emerging markets (EM) were hit in the third quarter, the company said in its latest results, and the company’s chief executive told CNBC Monday that it would take time to see a recovery.

“It will take some time, in my view, before the emerging markets are all back at their historical growth rates. Of course, we see the impact of currency volatility which is difficult to deal with. Nevertheless, I’m pleased with the 22 percent results improvement despite all that currency volatility,” Chief Executive Frans van Houten said.

Growth in central and eastern Europe and Asia Pacific was offset by a decline in China, the Middle East and Turkey, the company said in its latest report.

“With 30 percent of revenue in emerging markets, we are exposed to the currency volatility in those countries and so hedging, taking protection on that currency exposure in emerging markets, is very expensive, and as a result we can not always do it.”

However, speaking to CNBC, Van Houten said he was “very pleased by the resilience of our mature markets.”

Philips on Monday reported better-than-expected quarterly profits on cost cutting and strong orders for its US healthcare business. However, the company said the sale of its Lumileds division, worth USD 3.3 billion, is in doubt.

The Dutch company said the sale of Lumileds, which makes automotive lights and LED components, to a consortium of mostly Chinese investors had run into unexpected opposition from the U.S. government.

Third-quarter net income swung to a profit of 324 million euros from a loss of 103 million euros in the same period a year earlier while sales were up 2 percent to 5.80 billion euros from the same period a year earlier. In the third quarter of 2014 Philips booked losses related to the temporary closure of a factory in Cleveland, Ohio.

Analysts polled by Thomson Reuters had expected net profit of 191 million euros and sales of 5.80 billion euros.

Philips repeated its full year guidance for “modest” sales growth and an improved operating profit in 2015.

Philips announced in March it would sell 80.1 percent of the Lumileds business to Go Scale Capital, an investment fund run by GSR Ventures and Oak Investment Partners.

But the Dutch company said on Monday the Committee on Foreign Investment in the United States (CFIUS) had expressed “certain unforeseen concerns” about the deal. It did immediately say what those concerns were.

“Philips and Go Scale Capital will continue to engage with CFIUS and will take all reasonable steps to address its concerns, but given these, the closing of the transaction is uncertain,” Philips said.

Most of Lumileds’ sales and profits come from its automotive components business, but it also includes LED production and a large portfolio of LED patents. Investors in Go Scale include GSR Capital, Nanchang Industrial Group, and Asia Pacific Resource Development, all based in China.

Philips said the rest of its lighting business — which is the world’s largest maker of lights – is still on track for an initial public offering or sale in 2016.

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

PBOC: Our big easing nothing like ECB’s, Fed’s QE

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

India to get Apple Watch within weeks

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

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The Apple Watch will be launched in India on November 6, a spokeswoman has confirmed.

The watch page on Apple’s India site had earlier been updated with an easily-missed “Available 6/11,” indicating the watch had a Indian launch date.

The global roll-out of Apple Watches been slow-paced, heightening anticipation for the wearables. Six months after its global launch, India is part of Apple’s tenth wave of releases. The previous launch was in Chile, Philippines and South Africa on October 23.

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

IMF set to put yuan into key currency basket: Sources

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

Listen to the Article (6 Minutes)

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