Thursday, 11 August 2011

German nuclear shutdown forces E.ON to cut 11,000 staff

The financial effects of the Fukushima nuclear power crisis continued on Wednesday as Germany's E.ON announced that plans by its government to shut the country's reactors in response to the Japanese disaster would result in up to 11,000 job losses.

As fears mounted that the nuclear shutdown would significantly increase Germany's industrial operating costs – weakening its competitiveness in an already fragile global economy – E.ON announced a swing into the red, a dividend cut, the redundancies and profits warnings for the next three years.

Germany's biggest utility, which on Friday announced an average 15% price rise for its five million domestic UK gas and electricity customers, took a €1.9bn (£1.7bn) charge relating to plant closures and a new tax on spent nuclear fuel rods, pushing the group to its first quarterly loss in 10 years – a second-quarter deficit of €1.49bn.

Sale of MySpace knocks News Corp

Media giant News Corporation has seen its quarterly profits fall 22% on the back of losses caused by the sale of the MySpace social networking website.

The company, whose UK subsidiary News International has been rocked by the phone hacking scandal, made $683m (£423m) net profit in the three months to 30 June - down from $875m last year.

News Corp sold MySpace in June for $35m, having paid $580m for it in 2005.

Stock markets rally as fears of France downgrade abate

European markets have rebounded in early trade after Asian markets steadied overnight.
In London, the FTSE 100 index was up by 1.85%, Germany's Dax index was 2.2% higher and the Cac 40 in France rose 2.1%.

French banking shares were among the biggest gainers, with Societe Generale shares up 6%.

Fears about the financial stability of France and its banks were a key trigger for Wednesday's steep falls.

Monday, 1 August 2011

HSBC sells 195 New York branches for $1bn

The disposal of 195 branches to First Niagara Bank was announced less than 12 hours before the bank publishes its financial results for the first half of the year, which are forecast to show a pre-tax profit of $10.9bn.

Iraq - BP will be paid even when production is disrupted?

BP has been accused of taking a "stranglehold" on the Iraqi economy after the Baghdad government agreed to pay the British firm even when oil is not being produced by the Rumaila field, confidential documents reveal.

Commodities hit

First of all, oil prices are hovering at unsustainable levels close to $120 per barrel.
Then there's the potential debt crises brewing, not in the private banks this time, but the central banks. US officials have been preparing for a possible, though unlikely, default, the dollar is near a record low.

Inflation is climbing, while analysts are warning that slowing growth could hit commodity demand.

Sunday, 31 July 2011

Obama announces US deficit deal between party leaders

Just two days before a deadline to lift the so-called debt ceiling, the White House and congressional leaders said the compromise would cut about $2.5 trillion from the deficit over the next 10 years but allow Mr Obama’s administration to carry on borrowing money until 2013.

Monday, 25 July 2011

Iran signs $10 billion gas deal with Syria and Iraq

Iran on Monday signed a preliminary $10 billion deal with Syria and Iraq to export its natural gas, its latest effort to boost its energy sector that has been targeted by international sanctions.

Clinton says 'confident' of deal on US debt crisis

U.S. Secretary of State Hillary Rodham Clinton is in Hong Kong to extol the virtues of American financial policies and values despite the currently poor state of the economy and the stalemate over the national debt.

Toyota output and sales dip in first half of the year

Japanese auto giant Toyota said on Monday domestic production in the first half of 2011 tumbled 38 percent due to the impact of the March 11 disasters, before mounting a faster-than-expected recovery.
Domestic sales slipped 41 percent in the six months to June to 500,638 units.

Monday, 11 July 2011

Iran will invest $18b to boost south's oil output

Iran will invest some $18 billion in southern oil-rich part of the country during the Fifth Five-Year Development Plan (2010-15), said deputy oil minister for planning and supervision on hydrocarbon resources.
Mohsen Khojasteh-Mehr further said that until the end of current Iranian year (March 20, 2012), about $3 billion will be invested in the region, Shana reported.

Gulf Air in marketing partnership with Copenhagen

Gulf Air has signed a joint marketing agreement with Copenhagen Connected, the route development programme of Copenhagen, to aggressively drive inbound tourism from the Middle East to Copenhagen through Gulf Air’s Bahrain hub.

The agreement was signed at a recent press conference marking the airline’s inaugural flight to Copenhagen by Gulf Air’s chief commercial officer Karim Makhlouf, and chairman of the Copenhagen Connected Programme steering committee Lars Bernhard Jorgensen.

Banks' loan rejection rates rocket

Labour yesterday blamed the government's economic policies for stymying small business growth as an independent survey showed that a "significant minority" of small businesses seeking loans are failing to gain the credit they seek.

Banks have adopted a ‘take it or leave it’ approach to small business loans with outright rejection rates rocketing sevenfold since before the financial crisis, a key survey shows.

Stock markets across Europe fall on debt fears

Fears that Italy will be forced to seek a bailout sent Italian government bonds falling on Monday, as Europe's most senior finance ministers gathered to discuss the ongoing eurozone debt crisis.

The FTSE Mib sank to a 14 month low.

In Italy shares were down almost 4%, in France the Cac index fell 2.7%, Germany's Dax fell 2.3%, and London's FTSE 100 was down 1%. Banks across Europe were hit hard, with Italy's Unicredit down 6.3%.

Wednesday, 6 July 2011

Etihad joins with the French railway SNCF

Etihad Airways has ome together with the French National Railway, SNCF (Société Nationale des Chemins de fer Français), to provide passengers with connectivity beyond Paris.

The commercial agreement — Etihad's 32nd codeshare deal, which came into effect yesterday — between the two parties would allow Etihad passengers to book flights beyond Paris Charles de Gaulle airport (CDG), by connecting onward on SNCF's 2,000 km of high-speed TGV rail routes, and vice-versa, the Abu Dhabi-based carrier said yesterday in a statement.

It added that the seamless air-rail connections comprise 20 cities in France, among them Bordeaux, Le Mans, Lille, Lyon, Marseille, Nantes, Rennes and Strasbourg.

Portugal's credit rating downgraded to junk status

In early May, I spoke about the Portugal bailout from the EU and IMF.

The credit ratings agency Moody's Investors Service has downgraded Portugal's debt to junk status.

Moody's slashed Portugal's debt four notches to Ba2, saying that the country was likely to need a second bail-out before it could raise money in the capital markets.
Based on the conditions imposed on Greece, it was likely that "private sector participation would be required as a precondition" to a second cash injection, said Moody's.

Monday, 4 July 2011

Sale of npower 'threat to energy industry investment'

Gas and electricity giant Npower could be sold for up to £5bn after its German parent company RWE put its future under review.

RWE has hired investment bankers at Goldman Sachs to consider Npower’s future, according to reports, and the options on the table include putting the company up for auction.

Tim Yeo, the MP and chairman of the Energy and Climate Change Select Committee, said the potential sale is "worrying". 

Greek rescue package will mean a default, warns S&P

Standard & Poor's has warned that current proposals for restructuring Greece's debt would effectively constitute a default.

French banks, which hold some of the biggest exposures to Greek government debt, want to allow the country to extend the maturity of its bonds, which S&P said could be defined as a "selective default".  

The euro fell against the dollar, losing around half a cent to $1.4513, after S&P released its analysis.

Monday, 27 June 2011

Nissan reveals 6 year plan

Nissan Motor Co. CEO Carlos Ghosn said Monday the automaker aims to achieve a global market share of 8 percent by the business year ending in March 2017 by focusing on rapidly expanding emerging markets.

The figure shows that Nissan is taking a bullish stance on strong growth in emerging economies despite the negative impact of the March 11 earthquake and tsunami.

Ghosn also said Nissan, which currently has a market share of about 5.8 percent, aims to increase its corporate operating profit to 8 percent from 6.1 percent by the 2016 business year.

LA Dodgers baseball team files for bankruptcy

The Los Angeles Dodgers baseball club has filed for bankruptcy in a Delaware court, blaming Major League Baseball for not approving a television deal that could have kept the team secure.

Bankruptcy permits the Dodgers to use $150m (£94m) for daily operations and gives the team time to to seek a media deal, the club said in a statement.

The statement added that the team would not be disrupted by its financial woes.

But reports indicated the Dodgers could have trouble meeting its next payroll.

Rothschild, the investment bank, takes a bigger role in the European debt market

The bank is positioning itself for a major push into the collateralised loan obligation market, which has begun to show signs of recovery following its collapse during the credit crisis.

CLOs are a form of derivative product in which managers package different types of leveraged loans and sell them on to investors.

The market suffered significant losses in the financial crisis, following a significant boom in the heady days of the leveraged buy-out boom in the middle of the last decade, but has since begun to recover.

Five biggest threats to the US economy

The Telegraph recently reported on the 5 biggest threats to the US economy.

Saab has confirmed a new order that will help some of its financial concerns.

Last week, the company said it was too short of cash to make the payments.

A Chinese company has provided a lifeline for Saad Automobile with a price order for almost 600 cars and enough cash to pay the wages of its 3,800 workers this month and make some payment to suppliers.

Now it has said that the pre-payment on a 13m euro ($18m; £12m) order for 582 Saab vehicles would give it the short-term funding it needs.

Thursday, 2 June 2011


On a lighter and much happier note, Commercially Savvy has had 1000 views! YAY!! That's 1000 views in the first month to be exact! I hope you all like the blog and if you would like me to talk about anything in particular please let me know!

Big Baws Lawyer ;) xxx


Hello all,

I would like to apologise for not updating recently. It is that time of the year when my head is buried in books, studying for exams. I will not be posting for the next two weeks either, I really am sorry for being so rubbish! I promise that I will blog very regularly after my exams!!

Big Baws Lawyer ;) xxx

Friday, 27 May 2011

Egypt's economy - post-revolution

A really interesting short video by the Financial Times explains Egypt's economic status currently and what might happen in the future.

Click here to watch.

Tuesday, 24 May 2011

World stock markets hit by eurozone debt fears

London's FTSE 100 fell sharply as concerns over eurozone debt knocked global stock markets. 

Markets have been unsettled by the result of the Spanish local elections and Greek and Italian debts. 

MP's say Kraft acted 'irresponsibly' in Cadbury takeover

The American food company Kraft Foods acted "irresponsibly and unwisely" when it pledged not to close a factory during its £11.5bn takeover of Cadbury, a Parliamentary Committee has concluded. 

The Business Select Committee said that Kraft should not have said it would keep Cadbury's Somerdale factory open – only to renege on the pledge after the bid. "A company of Kraft's size and experience ought to have acted with better judgement," the MPs said. 

Irene Rosenfeld, the Kraft chief executive, declined to appear in front of the Business, Innovation and Skills on two separate occasions.  

Sony predicts annual loss of $3.2bn!

I will chose Sony over Apple every time and so I am genuinely upset that Sony have been hit so hard due to so many factors!

Analysis by the Guardian suggests that the Japanese electronics giant Sony's fourth quarter ending in March was one of its worst sales quarters in 11 years and that it will announce a ¥73bn (£554m) operating loss for the period.

The figures emerged after the company warned that on Thursday it will announce a loss for the fiscal year of ¥260bn.
It said the loss was largely due to writing off $4.4bn related to a tax credit booked in a previous quarter.

The firm has been hit recently by March's earthquake and tsunami, and a series of computing hacking attacks.

Ryanair profits up but braced for first-ever fall in passengers

Irish budget carrier Ryanair has reported a 374m euros ($525m; £325m) annual profit, a 23% rise.

Ryanair's inexorable passenger growth will go into reverse this winter for the first since it became a low-cost carrier, the airline admitted on Monday, as high fuel costs and weak demand force the grounding of up to 80 aircraft.

Friday, 20 May 2011

Emirates airline hires four banks for potential bond

Emirates airline has zeroed in on four banks — Deutsche Bank, Emirates NBD, HSBC and Morgan Stanley - for a potential dollar-dominated bond issue, the Dubai-based carrier said yesterday.

"Emirates can confirm the appointment of the joint lead managers and our intention to go on a roadshow, with a view to launching a bond if market conditions, including pricing, are favourable," an Emirates spokesperson said.

$10bn Glencore's shares flat on debut day

I spoke about Abu Dhabi's recent investment in Glencore (as well as other investors) recently so its only fair to update on their current market status.

Shares in the commodities trading giant Glencore ended right where they started on the first day of conditional - or "grey" - trading in London.

 They closed at the same price as they opened - 530p - although at one point they rose as much as 4% to 548p.

LinkedIn shares double

Shares in business networking website LinkedIn have more than doubled on their trading debut in New York, having been priced at $45 each.

At one point the networking site climbed as high as $121.97.

At the closing price, LInkedIn commands a market cap of $8.91 billion.

Japan in recession

The Japanese economy shrank at an annual rate of 3.7 per cent in the first quarter, tipping it unofficially into a recession, as the March 11 earthquake and tsunami disrupted production and prompted consumers to cut spending.

Japan's economy has now contracted for two quarters in a row, the generally accepted definition of a recession. Japan sank into a recession during the global financial crisis, but had emerged from it in 2009.

The drop off was worse than economists had expected. In a survey of 23 economists, Bloomberg had projected an average drop of 1.9 per cent.

HMV to sell Waterstones for £53m

Earlier I spoke about an unconfirmed report that HMV is selling waterstones.

HMV has agreed to sell its Waterstone's book chain to a fund controlled by Russian billionaire Alexander Mamut for £53m. Mr Mamut already owns 6% of HMV, which has issued a string of profits warnings this year.

Last week HMV alerted the market to interest in Waterstone's from multiple bidders although it emerged that Mamut, who counts Chelsea FC owner Roman Abramovich among his friends, was considered to be the front runner.

Tuesday, 17 May 2011

US hits their debt limit - $14.3 trillion - now looking elsewhere for money

The US has reached its debt limit of $14.3 trillion (£8.6tn) (WOW!) and is taking measures to cut spending to avoid breaching it.

Treasury secretary Tim Geithner announced that he was suspending payments into two federal pension funds, after the government reached its maximum legal borrowing limit. Geithner said the suspension should allow the US to avoid a default before 2 August (previously set to 8 July) and urged Congress to agree to raise the debt ceiling before this 11-week deadline expires.

Monday, 16 May 2011

Portugal bail-out goes ahead while Strauss-Khan is refused bail!

As the IMF managing director was remanded in custody in New York on charges of attempted rape and declared a flight risk, his colleagues were striking a deal for the eurozone's third rescue package.

 The ministers – along with the 10 EU finance ministers from outside the single currency, including chancellor George Osborne – agreed on a €78bn bailout for Portugal. They also signed off on the permanent eurozone bailout fund, the European stability mechanism, which is to shore up the currency from 2013.

Sunday, 15 May 2011

Al-Futtaim Motors cuts number of used cars

Dubai Al-Futtaim Motors Company (AFM) plans to cut the number of used cars it sells in an effort to concentrate on new vehicle sales.

Simon Frith, Managing Director of Al-Futtaim Motors Company, told Gulf News that AFM would not be selling cars more than three years old because customers were reluctant to buy them. He said that going forward AFM would be selling "a third as many used cars" as it would be selling new.

So why did Microsoft buy Skype for $8.2bn?

Earlier I blogged about Microsoft buying Skype for $8.2bn, a figure that shocked analysts.

Click here to read an article in The Telegraph explaining why Microsoft payed $8.2bn.

It is a long but easy read and goes into more depth as to why and how Facebook and various other companies were interested in buying Skype, despite its losses.

IMF chief Dominique Strauss-Kahn's arrest may prolong ongoing debt crisis

Mr Strauss-Kahn, 62, was taken off an Air France plane at JFK airport just minutes before it left for Paris.
Police say he faces three charges, including attempted rape. His lawyers say he denies the claims.

Markets are expected to react negatively on Monday to the news of Mr Strauss-Kahn's detention in New York.
The former French finance minister had been a key ally for the European Union as Greece, Ireland and Portugal all sought billion pound bail-outs to pay their debts.

Strauss-Kahn had been due to attend a crucial meeting of eurozone finance ministers in Brussels on Monday, to talk about the final details of a €78bn (£69bn) IMF-backed bail-out for Portugal and discuss further funding for Greece.

Friday, 13 May 2011

UAE + Poland = boosting commercial cooperation?

Sheikha Lubna bint Khaled Al Qasimi, Minister of Foreign Trade, has discussed prospects of further developing commercial and investment ties with Poland, Namibia, Scotland, China and Indonesia.

During her talks with the Former Prime Minister of Poland and Vice President of the Polish Information and Foreign Investment Agency, Bozena Czaja, she discussed boosting commercial cooperation and mechanisms to stimulate bilateral investments in dynamic economic sectors.

Trade between the countries was valued at $307 million in 2010.

Shares in HMV increase - Russian billionaire to buy Waterstones

Shares in HMV have risen sharply on an unconfirmed report it has received a bid for its bookshop chain Waterstone's from a Russian billionaire.

HMV has estimated debts of £130m and is under pressure from its bankers to raise cash and so the sale of Waterstone's may be of use.

Its business prospects have been declining quickly. In March HMV said it expected to make £38m this year, but one month later it said it would only make £30m.

The shares rose at much as 12.5% after the Financial Times reported Alexander Mamut had made a £43m cash offer for the 300-outlet book chain.

Eurozone's economy growing at a surprising rate - no thanks to the UK

Growth in the German and French economies has surged thanks to strong business investment and consumer spending.

The German economy grew at an impressive 1.5% in the first three months of 2011, while France grew by 1%, the most since early 2006. In contrast, the UK grew 0.5% in the same period. 

"As our economy has flatlined with zero growth over the last six months countries like France, Belgium, the Netherlands and even Spain have overtaken us while Germany is powering ahead." said Ed Balls, Labour's shadow chancellor.

Tuesday, 10 May 2011

Julian Assange (WikiLeaks) given peace prize

I am SO happy that I just had to write about this!!!

Julian Assange, the founder of whistle-blowing website WikiLeaks, has been awarded an award “for exceptional courage in pursuit of human rights”. 

The Sydney Peace Foundation said that it was making the award to recognise Mr Assange in recognition of the need “for greater transparency and accountability of governments”.

WikiLeaks has caused controversy over the past year by releasing secret US Government documents including reports about detainees held in Guantanamo Bay, Cuba and hundreds of thousands of US diplomatic cables.

Assange says “With WikiLeaks we are all engaged in a struggle, a generational struggle for a proposition that citizens have a right and a duty to scrutinise the state."

I couldn't have said it better myself!

Maybe now is a good time to invest in commodities?

Click here to watch Colin O Shea, head of commodities at Hermes, explain why it is still a good time to invest in commodities. 

I must warn you the video is only 3.28 min but his voice is... monotone (yawn) it may feel like 1 hour! So if you don't want to watch it I have summed up what Colin O Shea says:

He says the recent price falls were a healthy correction and commodities remain a good way to diversify a portfolio. Going forward, Hermes favours crude oil, copper and corn.

But watch the video for more details, he does explain it very well!

Microsoft confirms aquisition of Skype for £5.2bn, despite Skype’s losses last year

This morning, all over the internet was this 'hush hush' acquisition of Skype by Microsoft. Skype and Microsoft refused to comment on the deal and so called sources wanted to remain anonymous whilst they leaked information of this deal to the press. 

I don't know about you, but all this secrecy got me excited and I was constantly checking the news on my phone whilst I was in class today to see if any more information was out about this acquisition. Especially because many analysts reactions to the £5.2bn amount was quite shocking!

Anyway, enough about me. It has been confirmed that Microsoft has bought Skype for £5.2bn.

This is Microsoft’s biggest acquisition yet the deal has shocked analysts who think it would be a substantial overpayment for the company.

 The acquisition of Skype would expand Microsoft’s presence on the Internet, which Chief Executive Steve Ballmer views as an essential field. Additionally, analysts say Microsoft wants to buy Skype to improve its video conferencing services. The service could be integrated into existing Microsoft products such as its Xbox 360 games console and Kinect gaming systems, or even into its flagship Office product to let users collaborate more effectively.

Monday, 9 May 2011

Top 20 most valuable brands!

The Telegraph released an article today stating the top 20 most valuable brands and how much they are worth.

Apple is number 1, worth $153bn!! (WOW)

click here to read the article.

Sunday, 8 May 2011

Osama the reason for the drop in commodity prices - I think NOT!

Many commentators have said that the reason for the 'flash crash' in oil prices is due to Osama Bin Laden's death.

"The killing of Osama Bin Laden may have been the catalyst for this week's rout in oil prices that's deflating commodity prices around the world," an article on Bloomberg read.

 It seems unlikely that Osama's death had much to do with the slide in commodity prices. It is thought that "the death of bin Laden… changed the focus to the demand picture, which is worrisome".- Bloomberg

The real reason is suggest that the sudden drop in commodities is due to 1) concerns about the eurozone (Portugal, Greece and Republic of Ireland), 2) gains in the dollar and 3) rising US inventories of oil.

India financially assists Sri Lanka in biggest Harbour

The Indian government has agreed to provide financial assistance to develop Kankasanthurai (KKS) Harbour in two phases. The KKS harbour is one of the 10 sea and air entry points to the country.

The harbour's development will enable economic and social development of the war-torn North.

 It is thought that development of KKS harbour will facilitate the transportation of goods from nearby Indian ports.

Sri Lanka High Commission's Minister-Counsellor Sugeeswara Senadhira said the cabinet of ministers gave the green signal to the KKS Harbour Development Project last week.

"A memorandum of understanding with the Indian government to carry out the development of the port is to be signed shortly," Senadhira said.

China's production of green technologies has grown by 77%

"The Chinese have made, on the political level, a conscious decision to capture this market and to develop this market aggressively," said Donald Pols, an economist with the WWF.

Denmark earns the biggest share of its national revenue from producing windmills and other clean technologies. As a longtime leader in wind energy, Dwnmark derives 3.1% of its gross domestic product (GDP) from renewable energy technology and energy efficiency.

The United States is rapidly expanding its clean-tech sector but China is 'on another level'.

China is the largest producer in money terms, earning more than €44 billion - 1.4% of its GDP.

Etihad slash fares

The Abu Dhabi-based carrier stated the they reduced air fares by 40% for the month of May.

They said that this was not linked to a slump in global oil prices nor was it a response to Emirates' decision earlier on Sunday to remove a fuel surcharge on all its airfares. 

APPARENTLY it is because they were the leading airline in the Middle East at the region's World Travel Awards. 'We are very excited to offer these sale fares to complement the win, designed to help all our UAE based customers choose their perfect holiday or short break during May," said Hareb Al Muhairi, Etihad Airways' vice president of UAE sales.

I think its just a strategic business move in light of the volatile state of oil prices. Your views?

Saturday, 7 May 2011

Rumours and fears about Greece

 I recently spoke about Portugal's bail-out from the EU and IMF. I also mentioned that Portugal is the third eurozone country to look for help from the EU after Greece and the Irish Republic.

Finance ministers from an inner core of eurozone countries (Germany, France, Italy, Spain and Greece) are thought to have held secret talks in Luxembourg Friday night to discuss a possible debt restructuring Greece.

It is thought that negotiations centred on the mounting eurozone debt crisis, and included not just Greece but the terms of Portugal's bailout and Ireland's demands for easier repayment terms on its loans.

Friday, 6 May 2011

Qatar up, UK down?

Interesting short video explaining Qatars plans in London.

Suprise suprise, guess who is going to suffer from the North Sea tax increase?

The chief executives of gas companies are worried that this tax increase will lead to job losses and an increase in household bills. Great, so in an attempt for the government to gain money, once again, it seems like we have the broadest shoulders!

OK, my little rant aside, 15 chief executives of gas companies have written to the Prime Minister in regards to their worries of such consequences of the tax rise.

The problem here that the chief executives pointed out is that gas projects are just as expensive as oil projects, but while oil is trading at $105 per barrel, companies can only get the equivalent of $49 per barrel for their gas.

The letter was signed by heavyweights such as Centrica boss Sam Laidlaw, BG Group chief executive Frank Chapman, and BHP Billiton’s Marius Kloppers.

Thursday, 5 May 2011

Chose a fixed rate mortgage? - This might annoy you!

The Bank of England has left rates at 0.5% for the 27th consecutive month! Whilst people are panicking from the recession and worried that interest rates will increase dramatically they are out getting fixed loans at ~1.5%. Well this is just rubbing it in their face whilst they are stuck paying a higher interest rate!

OK to be honest that's not really the biggest issue, but it really annoys me!

Whats the actual problem?

Price of commodities take a nosedive - and puts the financial market on the edge!

OK, I know I keep talking about commodities, incease tax on oil and gas and Glencore's new investors but today was the biggest drop in the cost of raw materials in almost two years!

 Well, how does this effect us and companies?

Dont forget to vote!

Today is the day! Please don't forget to vote! Every vote counts, if you still have not made up your mind click here to read a short article explaining what AV is and what changes it would make.

We are the people of this country, have your say!

Wednesday, 4 May 2011

Such a predictable disaster!

Eeek!! I recently wrote about the tax increase on oil and gas in the north sea, well here is an update!

Yes, as predicted, investors are getting scared! Possibly the last thing the oil and gas industry needs!

Major oil companies, such as BP, Shell and Total, registered a drop from 60 to 39 (ouch). Wait, wait, what on earth does that mean?

The index is based on a 100 point scale, where the 50 mid-point divides positive and negative outlooks (OK, so definitely ouch!)

Oh la la! Check you out Abu Dhabi and Glencore!

Abu Dhabi prepares to become the largest cornerstone investor in Glencore as one of the emirate's sovereign wealth funds, Aabar Investments, takes a stake in the commodities trading group's highly anticipated flotation later this month. They and other investors are going to take 31% of the shares being sold.

Founded in 1974 by billionaire Marc Rich, the company - then called Marc Rich & Co  - is now the world's largest commodities trader.
Abu Dhabi's Aabar Investments, part of the emirate's International Petroleum Investment Company,has stakes in carmaker Daimler and Italian bank UniCredit, said in a statement on Wednesday that it would invest $850m in Glencore, and possibly an additional $150m.

Portugal bail-out

Portugal needs financial assistance worth 78bn euros ($116bn; £70bn) (ouch!) and has been working on a deal with European Union (EU) and International Monetary Fund (IMF) for the past 3 weeks.

Basically, Portugal will be given more time to reach its budget deficit targets than had previously been expected. The interest rate on Portugal's bailout loan is expected to be set at a meeting of eurozone finance ministers in mid-May.

Now, the deficit will be cut to 5.9% of GDP this year, 4.5% in 2012 and 3% in 2013. Portugal previously aimed to reduce the deficit to 4.6% this year, 3% in 2012 and 2% in 2013.

Well, this sounds lovely but nothing is ever that easy!

Tuesday, 3 May 2011

Tesco not cut out for USA?

OK, I'm not going to ramble on about this, but basically, Tesco has been told that its US business, Fresh & Easy is only going to see disappointment! 

Berkshire Hathaway, one of Tesco's biggest shareholders, has raised doubts on Tesco's success in the U.S. 

"I'm not critical, I just think it's difficult to be a new boy," said Charlie Munger, the billionaire vice-chairman of Berkshire. "Tesco is God Almighty in England. But you come into Southern California and you have Trader Joes and CostCo - that's tough competition." 

It is predicted that they will only break even towards the end of the 2012-2013 financial year!

They should have asked for my opinion...

Interest rates increase in India

Why should you care about interest rates increasing in India? Well, all economists know that India is one of the 'big four', part of BRIC - Brazil, Russia, India and China. These countries are thought to be at a similar stage of newly advanced economic development. Therefore, many, many companies are finding that they are expanding into these countries and hence an understanding of what is happening in their economic market will lead to a better understanding of how this will affect companies.

Reserve Bank of India (RBI) hiked the repo and reverse repo rate by 0.5% (50 basis points or bps) ( Click here to read a short simplistic article on the meaning of repo and reverse repo)

The increasing prices of staple foods in India has helped push inflation to almost 9%. This is the ninth time in 15 months that there has been an increase in interest rate inn an attempt to at least plateau inflation.

Japan car sales halve!

The earthquake hit Japan on 11 March and (not surprisingly) we are still feeling the impact of the disaster.

The region that was worst hit by the magnitude-9.0 earthquake and the tsunami that followed was north-east Japan. This is where many important vehicle parts suppliers have factories and hence as a result, the industry's supply chain is in chaos, specifically, semiconductors and plastic parts.

According to data from the Japan Automobile Dealers Association (Jada), there is a shortage of parts which is affecting vehicle production. It was also states that this 51% fall from a year earlier was the biggest decline since records began in 1968.

How is this affecting companies?

Monday, 2 May 2011

Tax on oil and gas production from 20% to 32%

Recently Chancellor George Osborne raised supplementary tax on oil and gas production from 20% to 32%; even though there were warnings that this will limit exploration (of oil and gas) and make the UK more dependent on imports from Russia and other overseas sources.

The Treasury said the supplementary charge on oil and gas companies allow the government to lower fuel duty for motorists struggling with high prices at a time of austerity.

So what are the repercussions on companies so far?

Opening Credits

What on earth is 'commercial awarness'? Don't worry, all you need to do is 'read the newspaper'! Pft!

I have a BSc. Hons. in Pharmacology and Molecular Genetics...hmm, definitely was not aware of mergers and acquisitions, financial restructuring, the stock market...If I was not reading it in the Metro whilst on my way to work, then I did not know about it!

I have found myself studying law, pursuing (more like fighting to get into) international commercial law firms, for so many reasons that I could talk all day about it! I felt like I have what the firms are looking for, except this 'commercial awarness' that they keep banging on about.

Law firms want a person that understands their clients business and the market that their business is in. So if you don't show that you have an understanding of what is going on today with companies (potential clients, competitors of clients, current clients etc), why would they want to give you a vacation scheme, let alone a training contract?

I know, I know, coming from a non-business background how can you understand what that dreaded 'business section' is saying past the second paragraph in any article...lets not even get onto the Financial Times!

So, I aim to blog about main events taking place today, albeit an acquisition of a company, political issues and their effect on the market, liquidation of a company and other daunting issues!

Without being patronising, of course, I will try and explain what is going on in a simple yet detailed manner.

I hope you find this blog useful and please email me if you would like me to write about anything in particular.