GKP shares continue to fall a week after launch of Open Offer

Katy Fleiner
-
1
GKP shares continue to fall a week after launch of Open Offer
Gulf Keystone Petroleum share prices have fallen to record lows, a week after the company announced its open offer to raise $25 million as part of a wider balance sheet restructuring plan.
GKP launches Open Offer
The London Stock Exchange listed oil and gas exploration business is currently offering 2.29 billion new common shares to its shareholders registered on the membership record by 5pm on the 30th of August. The offer, which launched on the 31st of August, allows shareholders to purchase twenty new common shares per nine shares already held, at a price of 0.8314 pence per share. Latest completed application forms and payment in full will have to be received by the 15th September, with results of the open offer being announced the day after. Admission and commencement of dealings of the new shares is to be expected around the 14th October. The measure, intended to raise $25 million to improve the company’s liquidity, is part of a wider balance sheet restructuring plan announced on the 14th of July.
Kurdish oil exploiter suffers under low oil prices and regional geopolitical issues
GKP, which operates in the Kurdish region of Iraq, has suffered in recent months due to low oil prices and the current unstable geopolitical conditions in the Kurdistan region. Since the second half of 2014, oil prices have seen significant and prolonged reduction due to a continued oversupply of crude oil. For operators in the Kurdistan region, supply disruptions due to the ongoing geopolitical issues in the region have further added to these troubles. GKP is currently unable to either service or refinance debt of over $600 million in Guaranteed Notes and Convertible Bonds, which will mature in April and October next year respectively.
Balance Sheet Restructuring Transaction will reduce debt to $100 million
The Balance Sheet Restructuring Transaction, announced last month, is intended to reduce debt to $100 million. With the added liquidity from the Open Offer, GKP hopes to maintain the Shaikan field production at around 40,000 barrels per day, with a possible increase to 55,000 barrels a day in the future.
In the announcement of the restructuring plan in July, Chairman Andrew Simons stated:
“Our Shareholders, and those of the other Kurdistan focused operators, have suffered significant value destruction over recent months, as a result of the low oil price and extraordinary regional geo-politics. For us this has been further compounded by a debt burden of over $600 million repayable next year. To address the liquidity and significant leverage situation faced by the Company, we have to restructure the balance sheet now. “ “A new and strengthened management team and Board have been working tirelessly for the benefit of all stakeholder, to ensure GKP’s survival. Following month of negotiation, and in the absence of deliverable alternatives, the Board believes the proposed restructuring offers the best possible outcome for all.”
CEO John Ferrier added:
“Without the restructuring and the improved liquidity delivered by the transaction, the Company cannot avoid insolvency or capture the significant future potential of the Shaikan field.”
Norwegian oil exporter bids on GKP
Shortly after the announcement of the restructuring plan, Norwegian oil exporter DNO ASA made an offer to buy GKP for $300 million, conditional on the successful completion of the restructuring plan. The offer exceeds the companies likely post-restructuring valuation by $50million.
Brokerage firm, Canaccord Genuity noted on the offer:
“The question, once this [restructuring] is done and dusted, is whether the new shareholders decide to go for the DNO offer…or strike out as an independent to develop the Shaikan field.” “We see significantly more upside and risk to the go-it-alone route” for Gulf Keystone. Share prices for GKP (LON: GKP) fell sharply after the launch of the open offer and have continued to fall throughout the last five trading days. Since the 30th of August the stock lost more than 56%. On Wednesday morning, the stock was trading at 2.12p at 11.58am (+1.19%), trading at lowest levels since 2009. 
Katharina Fleiner 07/09/2016

Morning Round-Up: Joules sales strong, Sports Direct down ahead of AGM, house prices slow

Miranda Wadham
-
0
Morning Round-Up: Joules sales strong, Sports Direct down ahead of AGM, house prices slow
Lifestyle brand Joules hits strong sales British lifestyle brand Joules saw impressive earnings for the year to May, with pretax profits up 41.5 percent. The group, who floated on the stock market earlier this year, saw revenue rise 12.8 percent “in line with trading expectations”. Earnings per share rose 42.9 percent. CEO Colin Porter commented on the results: “The Group has a clear growth strategy, underpinned by the consistent quality and design of our products and the skill and commitment of our enterprising team. “Our active customer base and international sales have also grown impressively, all of which is great testament to the growing strength and appeal of Joules as a premium lifestyle brand.” Sports Direct chairman offers to step down Sports Direct shares fell nearly 10 percent this morning after announcing it had rejected chairman Keith Hellawell’s resignation. The company released its work practice report yesterday, vowing to change their working conditions ahead of its annual general meeting with shareholders today. The retailer warned that 2016-17 profit was expected to fall 21 percent, with shares already down 60 percent on last year. Chairman Keith Hellawell, who has been in the role since 2009, offered to step down but was asked to stay on by the board. Sports Direct is currently trading down 9.79 percent at 315.37 (1008GMT). House prices continue to slow – Halifax House price growth slowed in August to 0.7 percent, according to mortgage lender Halifax. The pace of growth slowed in August, with property values falling by 0.2 percent compared with July. However, houses remained 6.9 percent higher than this time last year, with the average home costing £213,930. Martin Ellis, housing economist at the Halifax, commented: “House price growth continued the trend of the past few months in August with a further moderation in both the annual and quarterly rates of increase. There are also signs of a softening in sales activity. “The slowdown in the rate of house price growth is consistent with the forecast that we made at the end of 2015. Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth.” 
07/09/2016

US Non-Manufacturing PMI down, Dollar falls – What will the Fed do?

Katy Fleiner
-
0
US Non-Manufacturing PMI down, Dollar falls – What will the Fed do?
Data released by the Institute for Supply Management (ISM) at 3pm on Tuesday afternoon showed business conditions worsening in the US non-manufacturing sectors in August. The Dollar fell against the Pound in response to the news. A cohort of recently published US economic data came in below expectations, begging the question: what the Fed will decide to do this month?
ISM Non-Manufacturing PMI falls in August
The US ISM Non-Manufacturing PMI for August came in at 51.4. The figure dropped 4.1 points from July, the biggest drop since September 2013 and missing estimates by 4.3 points. Further, an index for the Labour market conditions in August, published by the Fed this afternoon, also fell. The figure stood at -0.7, down 1.3 points from July. On Thursday last week, the ISM Manufacturing PMI came in well below expectations.
The Dollar weakened against the Pound on the new data release.
Between 2.40 and 3.48pm the USD/GBP lost 0.69% to a new value of 0.74501. The dollar also recorded major losses on Thursday and Friday last week, after the ISM Manufacturing PMI and labour market data for August came in well below expectations.
May the Fed still hike rates?
Data releases on the performance of different economic sectors and the labour market will be watched closely by the Federal Reserve, which will make its next decision on monetary policy measures in a meeting on the 20. and 21. of this month. In a speech on Friday the 26th Fed chair Janet Yellen said “the case for raising interest rate had strengthened” on the back of July’s encouraging figures on economic activity and improvements in labour market condition. She did however refrain from giving any clear indication when a rate hike should be expected. Since Yellen’s speech data on US labour market growth in August disappointed with 104,000 less jobs being created than in the previous month. The latest figures on developments in the indices for business conditions in the manufacturing and non-manufacturing sectors adds to the discouraging data. The CME Group’s FedWatch Tool has decreased its probability rating for a Fed rate hike in September. The probability of an increase to 50-75 stands at 18%, down 3% from Monday. However, a rate hike is still expected this year. The FedWatch Tool currently indicates a 42.9% probability for an increase in December, up 1.8% from the previous day. 
Katharina Fleiner 06/09/2016

Redrow reports on 23% rise in FY pre-tax profits and no adverse Brexit-impact

Katy Fleiner
-
1
Redrow reports on 23% rise in FY pre-tax profits and no adverse Brexit-impact
Welsh housebuilder Redrow plc (LON: RDW) reported record full year earnings on Tuesday, with chairman Steve Morgan also mentioning that the recent Brexit vote seems to have no adverse effect on the company’s profitability. However, Shore Capital analyst Robin Hardy suggests troubles may still be to come.
Redrow plc reports a 23% increase in pre-tax profits for their 2016 fiscal year
The company’s pre-tax profits rose from £204 million in 2015 to £250 million by the 30th June 2016, up 23% in its third consecutive year of record earnings growth. Revenues grew by 20% to £1.38 billion over the one-year period. Improved earnings were driven both by an increase in house sales and rising house prices. Redrow reported 694 more house sales than the previous year, bringing the total number of legally completed sales to 4,716. House prices were on average 7% higher, with the average house selling at a price of £288,600. The board increased the last dividend payment to six pence per share to reflect the higher earnings. This will bring the total pay-out for the year to ten pence, up four pence from the previous year’s pay-out.
Chairman states Brexit has not impacted the company negatively
Steve Morgan, Chairman of Redrow said:
“Redrow entered the new financial year with a record private order book of GBP807 million, up 54% year on year…Our strategy of continued growth for the business is on track and I am confident this will be another year of significant progress for Redrow…We have seen very little impact as a result of the Brexit vote.” In the first ten weeks of the new fiscal year, sales are already up 8% from the same period the previous year.
Share price rises on higher earnings and favourable statement on post-Brexit performance
The FTSE-250 listed company saw share prices rise to 410 pence by 1.54pm on Tuesday, up 6.69% from previous market close.
Has the UK housing market successfully avoided adverse impacts from Brexit?
While the positive earnings report lead to an increase in share prices, the positive outlook on the post-Brexit environment, provided by Morgan, will have also helped push prices upwards. His statement added to last weeks published figure of a 5.6% increase in nationwide housing prices in August, ringing positive for the development of the UK housing market. However, not everyone is quite so confident that the UK housing industry has completely avoided adverse effects from the UK’s recent decision to leave the European Union.
Shore Capital analyst Robin Hardy stated:
“While the market could return to its previous path, we still not believe that [its] rating can return to previous levels. The risk profile has changed as Brexit could still alter wider economic prospects or the narrower housing market in a way that was not present before the vote.” “Policy stimulus measures and pricing pressures added to the mix will further complicate the market”, he added. 
Katharina Fleiner 06/09/2016

Is this the end of the oil industry?

Miranda Wadham
-
0
Is this the end of the oil industry?
Oil is one of the main drivers of the global economy, but prices went into freefall at the start of this year with rates reaching as little as $28 a barrel in January. While it has recovered somewhat since then, the heady days of prices reaching $100 a barrel are little more than a distant memory. The new reality is a two-year slump that shows no signs of ending anytime soon: with hopes of a production freeze fading, the reality of oversupply continues to bog down the market. Simply speaking, the reasons behind the price decrease in oil are excessive supply coupled with decreased demand. China’s economic slowdown is affecting a lot of commodities at the same time as Saudi Arabia, in an effort to maintain its large market share as a crude oil producer, is refusing to reduce productions. And across the Atlantic we have increasing shale production by the US leading it to becoming a self-sufficient energy nation. It’s now becoming increasingly difficult for oil companies in the North Sea, like BP, Shell and Total, to operate with these low prices and we’ve already seen a number of projects stalled. Oil’s lowered price is already hitting construction companies in two directions. On one hand half of all firms are reporting a decline in fuel costs but the flip side is the possible cancellation of major projects, particularly in oil producing countries in the Middle East. As nations come under increasing budgetary pressures, construction projects are under threat. Abu Dhabi, for example, have stalled or cancelled US$200 billion worth of projects. The positive side of the oil slump is that many producer countries are looking seriously at the prospect of renewable energy to guarantee future consumption and export growth in an environment growing increasingly hostile to fossil fuels. Following the historic climate deal in Paris, in which nearly 200 countries participated, Russia, Saudi Arabia, Kuwait and other major oil producers have announced plans to overhaul their energy strategy in order to diversify away from fossil fuels. For these and other oil exporting countries, crude oil and liquefied gas are no longer seen as reliable in generating the state revenues needed to foster economic growth and development. In many ways, the world is already preparing for the end of the oil industry, though the final blow to crude prices – the largescale use of electric cars – is still a few years away. As major automakers ramp up production of affordable electric and hybrid cars, many analysts believe that oil demand could drop further still. In the wake of such projections, the importance of focusing on green building methods has never been greater. Assuming lower prices for the two benchmark crude oils, Brent (Europe, North Sea) and WTI (West Texas Intermediate), for a sustained period, the effect on the construction industry would be noticeable. Those companies that will be stand out as able to succeed in this brave new world will be those who have embraced new, green technologies and who continue to promote and push for further innovations. 
Nikolas Xenofontos, Director of Risk Management at easyMarkets on 06/09/2016
easymarketsRisk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).

Morning Round-Up: Retail spending falls, Redrow shares up, Payday loan complaints triple

Miranda Wadham
-
0
Morning Round-Up: Retail spending falls, Redrow shares up, Payday loan complaints triple
Retail spending falls in August after strong July Spending fell back in August after a surprise hike in July, according to the British Retail Consortium on Tuesday. Hot weather kept customers off the high street last month, causing spending to fall 0.3 percent on August 2015. This is a sharp fall from July’s 1.9 percent spike. The figure was the weakest in two years, but the BRC were quick to highlight that it was unlikely to be linked to Brexit. Redrow shares up on strong profits Welsh housebuilder Redrow reported strong figures on Tuesday, with pre-tax profits up 23 percent to £250 million. Sales were “very encouraging” over 2016, despite a warning from Chairman Steve Morgan last year that more expensive regulations might make housebuilding harder. Shares in Redrow are up 7.47 percent at 413.00 (1005GMT). Payday loan complaints triple Complaints over payday loan companies have risen sharply in 2016, more than tripling compared with the last six months of 2015. A total of 4,186 complaints were made about pay day loan companies in the first six months of the year, with 53% of these being upheld by the Financial Ombudsmen. However these issues continue to be dwarfed by PPI complaints, which accounted for 54% of claims considered by the ombudsman. 169,132 new cases in total reached the ombudsman in the first half of the year. 
06/09/2016

Russia – Saudi Arabia oil market deal, Oil futures back below $48

Katy Fleiner
-
1
Russia – Saudi Arabia oil market deal, Oil futures back below $48
After an initial jump in oil futures, fuelled by the Russian – Saudi Arabian announcement of cooperation on strategies to stabilise the oil market, Brent Crude has again retracted below $48 per barrel.
Russia and Saudi Arabia agree on collaborating on strategies to stabilise the oil market
Russian Energy Minister, Alexander Novak, and Saudi Energy Minister, Khalid al-Falih, made the announcement at a G20 news conference in Hangzhou, China. In the statement, the two state representatives voiced their countries’ recognition of the necessity to contain excessive volatility in the oil market and announced, that the two top oil producers will be leading the formation of a working group which will monitor the oil market and make recommendations targeting the stabilisation of the oil price. The countries hope that other OPEC countries will join the initiative to coordinate a response to the commodities slump, which started more than two years ago.
A “historic moment” for OPEC and non-OPEC oil producer relations
Novak said, that the announcement of the countries collaboration presents a “historic moment” in relations between both OPEC and non-OPEC oil producing countries. He also suggested that a production freeze would present a way to stabilize oil prices. However, attempts at oil production freezes have failed in the past. In many instances freeze initiatives failed because Saudi Arabia was unwilling to commit to the measure, and Saudi Minister Falih said in an interview with Saudi-owned Al Arabiya TV, that “Freezing [production levels] is one of the preferred possibilities but it’s not necessary today.” Although this divergence in opinion from the two sides represents a challenge, Novak specified to reporters, that Russia would be willing to accept any month of the second half of this year to choose as a Benchmark for a production freeze, further encouraging Saudi Arabia and other OPEC countries to engage with the idea. CNBC stated that “this time around, Iraq and Iran’s cooperation will be key if a broader deal on oil production levels is sought.” OPEC will be holding informal talks in Algeria in September and an official meeting in Vienna in November. Both assemblies will be accompanied by a meeting between the Russian and Saudi Arabian Energy Ministers. The first official meeting of the new working group will be held in October.
Oil futures rise initially but retract slightly on gains in the afternoon
On the news, Brent Crude (CO1:COM) increased 5.6%, to $49.31bbl. by 10.25am. It has since retracted to stand at $47.49bbl. at 5.17pm, up 1.41% from market open. 
Monday, 05/09/2016

EMU services sector expansion slows in August

Katy Fleiner
-
0
EMU services sector expansion slows in August
The Euro-Zone Markit Services PMI for August, published by Markit Economics Monday morning, has suggested that expansion in the services sector has slowed last month. While France, Italy and Spain figures beat estimates, Germany’s services sector growth came in far below expectations.
Euro-Zone services sector perform below expectations
The collective Euro-Zone Markit Services PMI for August came in at 52.8, down 0.3 points from both July’s measure and analysts’ estimates. Lower growth performance in the services sector added to a lower-than expected Markit Manufacturing PMI, published last week. This moved the PMI Composite to 52.9, down 0.4 points from July.
France, Italy and Spain on the other hand performed above expectations.
The Spanish Markit Services PMI stood at 56 in August. This measure is 1.9 points higher than it was in July and beat estimates by 0.9 points. Italy’s Services PMI rose from 52 in July to 52.3 in August and beat the consensus prediction by 0.4 points. France’s Services PMI also increased from 52 to 52.3, an increase 0.3 points above estimates.
However, German services figures performed particularly poorly.
The PMI Services came in at 51.7, down 1.6 points from the previous month and the lowest value the indicator has taken since December 2014. The PMI Composite stood at 53.3, losing 1.1 points from July and falling to its lowest measure in 18 months.
EUR falls against GBP
Amid the disappointing EMU data release and a higher-than-expected UK Services PMI, the Euro fell sharply against the Pound this morning. Between 8.50am and 9.50am the EUR/GBP dropped over 5.6%, to a low of 0.83534. It has since recovered near to half of its initial losses and was trading at 0.83749 at 12.15pm.
ECB monetary policy meeting scheduled this Thursday
Lately, a cohort of data has suggested that Euro-Zone economic activity has contracted since the UK’s decision to leave the European Union. The European Central Bank is set to meet this Thursday and the governing council will communicate its interpretation of the latest publications of economic data, as well as its monetary policy decision, Thursday afternoon. 
Katharina Fleiner 05/09/2016

Comptoir Libanais shares rise on new store openings

Miranda Wadham
-
0
Comptoir Libanais shares rise on new store openings
Shares in Lebanese chain Comptoir Libanais rose over 10 percent this morning after it announced the opening of six new restaurants. The group will open three more restaurants in London, in Soho, Kensington and its first in-store restaurant in John Lewis Oxford Street. It also plans to open sites in Exeter, Bath and Leeds later this year. Chaker Hanna, CEO of the Comptoir Libanais said: “”We are delighted to be rolling out six new sites with even more planned for next year. We’ve seen a real increase in demand for the fresh, nutritious and affordable food we offer so are excited to showcase the best of Lebanese cuisine to new local communities, businesses and families. We look forward to opening our doors to lots of mezze-lovers!” Shares in Comptoir Group (LON:COM) rose 10.29 percent on the news to 75.00 pence per share. (1130GMT). 
05/09/2016
 

Theresa May tight-lipped on Brexit promises

Miranda Wadham
-
0
Theresa May tight-lipped on Brexit promises
Theresa May has refused to commit to an Australian points-based system of immigration, shedding some light on how the UK may look post-Brexit. May questioned a system whereby migrants were admitted by skill and spoke of potentially retaining preferential treatment for EU citizens. Warning there was “no single silver bullet” on reducing immigration, she declined to comment further on the type of strategy she would be pursuing. She also refused to commit to other promises made by the Leave campaign, including the £100 million a week going towards the NHS. Remaining tight-lipped on any concrete plans, she said only: “I’m going to work for what I just said I’m going to work for: the best possible deal for the UK in terms of the relationship that we would have with the EU, following us leaving.” She gave her comments just before setting off to China for the G20 summit, where she will meet with other heads of state – some of whom have issued stark warnings over their relationships with Britain post-Brexit. This morning Tokyo threatened to move its companies to other European countries if the privileges of EU membership are not retained. Yesterday the Japanese government specified a 15-page list of demands designed to protect its car manufacturers based in the UK. 
Miranda Wadham on 05/09/2016
1...1,6671,6681,669...1,810Page 1,668 of 1,810