04/01/2016
Oil jumps after execution in Saudi increases Middle Eastern tension
The price of oil has jumped after the execution of a prominent Shi’te Muslim cleric in Saudi Arabia sparked outrage and escalated tension in the region.
The execution of Sheikh Nimr al-Nimrhas been condemned by Iran, with Riyadh cutting ties with Tehran after protestors stormed the Saudi embassy. Nimr was executed for terrorism on Friday, an act described as a ‘grave mistake’ by the Supreme Islamic Shia Council in Lebanon, with warnings that it would have repercussions which could bring down the Saudi Royal family.
The price of oil jumped on the back of the events, with the Global benchmark Brent futures LCOc1, which fell 35 percent last year due to fear of over-supply in a global slowdown, gaining 3.3 percent to its highest in three weeks.
However, the market will continue to remain under pressure from excess supply with OPEC failing to cap output, exacerbated by an influx of oil from Tehran once restrictions are lifted later this year.
Still, many think the market will remain under pressure as producers including the Organisation of the Petroleum Exporting Countries (OPEC), Russia and the United States pump between 0.5-2.0 million barrels of oil every day in excess of demand.
Chinese markets suspended after 7 percent drop
Weak economic data caused Chinese stock markets to fall over 7 percent this morning, leading to the market’s first reactive suspension of trading.
The markets were closed around 90 minutes before normal close of trade, with the Shanghai Composite ending down 6.9 percent and the CSI300 index down 7 percent. The technology heavy Shenzhen Composite was the worst hit, falling by over 8 percent.
Monday’s early close was the first example of new ‘circuit-breakers’ coming into effect, a control announced byt he government last year designed to curb volatility. A 15 minute trading suspension is triggered id the CSI300 falls by over 5 percent.
The slide was triggered by the release of further poor economic data from a private company, coming just after the Caixin/Markit PMI survey sent China’s manufacturing figure down to 48.2 in December, its tenth month of contraction.
04/01/2016
Oil: up or down in 2016?
The price of oil has held steady after falling 3 percent post-Christmas, with the outlook for 2016 looking bleak for the sector.
US Crude is currently at $36.60 a barrel, with Brent at $36.46. Both benchmarks have fallen by a third this year to levels not seen in over a decade.
There is contention in the industry as to how oil will look in 2016, with Goldman Sachs saying $20 a barrel prices may be necessary to rebalance the market. At the end of last year, analysts expected a price recovery in 2015, whilst traders betted on a continued fall – they, of course, were right. This year a similar stance is being taken, with analysts expecting a price recovery towards the end of 2016, with production falling as drillers succumb to debt and low revenues. However, traders are disagreeing.
OPEC have continued to fail to control demand, leading to the amount of oil on the market far outstripping supply. So far, they are showing no signs of beginning to reign in production and losses have wiping out the gains from a decade-long commodity super-cycle sparked by China’s energy demand boom.
What will happen in 2016 remains to be seen.
31/12/2016
Waitrose continues to perform well in tough supermarket sector
Waitrose have released their pre-Christmas sales results, indicating that they are continuing to thrive in the tough supermarket sector.
Sales were up 10 percent in the week to 26th December, as well as 1.7 percent on the year to date. This follows on from last year, when the supermarket’s sales figures were up 29.3 percent for the same week, and 7.3 percent on the year before.
This accords with UK Investor Magazine’s survey that was carried out just before Christmas, with the aim of understanding consumers’ Christmas grocery shopping habits and drawing predictions as to how each supermarket will fare. Supermarkets are having a tough time at the moment, with each of the Big Four having to compete more than ever before with both independent food stores and discount chains such as Lidl and Audi.
Our survey indicated that quality was more important than price when it came to Christmas food shopping, with over 80 percent of people agreeing with the statement “good quality is more important than a low price when shopping for Christmas groceries.” Given Waitrose’s reputation for quality, their latest results tally well with our findings.
To read the rest of our survey results and predictions for the sector in 2016, follow the link here.
John Lewis Christmas results indicate strong retail performance
Britain’s biggest department store John Lewis posted a 2.3 rise in sales for the week before Christmas, perhaps an indication of a strong performance across the board for the retail sector.
Sales at John Lewis rose 2.3 percent in the week to 26th December, bringing the total figure up to 3 percent for the year to date. It’s sister store Waitrose also posted good results, seeing a 10 percent rise in the week before Christmas.
Being the only major British retailer to publish sales figures on a weekly basis, John Lewis provides the industry and investors with a up-to-date information on how the sector is performing. John Lewis added that, due to the timing of Christmas, this data doesn’t include Boxing Day sales figures and is therefore a little different to last years’ – the traditional sale started online on Christmas Eve, but stores did not reopen until 27th December.
Managing Director Andy Street said of the figures:
“We are now in the final week of our peak trading period with Clearance in full swing across our shops and online, and we are seeing customers continue to enjoy our reductions across fashion, home and electricals and home technology.”
31/12/2015
Barclays fined $13.75 million in the US for improper conduct
Barclays plc has been ordered to pay more than $13.75 million in restitution after inadequately supervising mutual fund deals in the US over the last five years.
The US Financial Industry Regulatory Authority fined Barclays $3.75 million and told the bank to pay back over $10 million to affected customers. The regulatory authority said that between January 2010 to June 2015, Barclays’ held responsibility for failing to stop many customers from swapping one mutual fund for another when the benefits may be outweighed by the costs.
More than 6,100 fund switches took place during the five-year period, causing $8.63 million of harm to customers, most of whom were not warned of the impact it may have.
FINRA enforcement chief Brad Bennett said in a statement: “The proper supervision of mutual fund switching and breakpoint discounts is essential to the protection of retail mutual fund investors.”
In November, Barclays was fined £72m in the UK for failing to conduct the proper legal checks on its richest clients, because it did not want to ‘inconvenience them.’
30/12/2015
Mirada plc climb AIM on interim results
UK-based audiovisual specialist mirada plc (AIM:MIRA) is one of the biggest movers on the AIM market this morning, with shares up nearly 30 percent after the release of interim results.
The company announced a revenue of £2.26 million in the six months to September, up from £2.19 million in the previous half of the year.
Half-yearly highlights for the group included the continued commercial deployment of their first Televisa network and a roll out 20 percent ahead of management expectations. Two more networks – Cablevisión and Cablemás, both with headquarters in Mexico City – are expected to begin using mirada products commercially at the end of the current financial year.
mirada’s CEO José Luis Vázquez said in a statement:
“We now have a suite of seamlessly integrated products, that enables customers to manage TV experience from a tablet or smartphone and to move content from one screen to another.
“The team is performing well and is fully deployed on the projects announced in recent months. The immediate priority is the commercial roll out of the larger networks at Televisa, while continuing to develop our product suite.
mirada are are UK-based company who provide and support products and services in the digital television and broadcast markets. They have a 52 week range of between 4.00 and 14.50 and are currently trading up 29.82 percent at 6 pence per share.
30/12/2015
House price growth at eight-month high – Nationwide
Growth in British house prices accelerated faster than expected in December, with figures rising to an eight-month high.
According to the latest survey by mortgage lender Nationwide, house prices grew by 0.8 percent in December, compared to jsut a 0.1 percent increase in November.
The average price of a property in the UK now stands at £196,999, with prices rising 4.5 percent year-on-year. Nationwide’s chief economist Robert Gardner said:
“As we look ahead to 2016, the risks are skewed towards a modest acceleration in house price growth, at least at the national level, despite the likelihood of interest rate increases from the middle of next year.”
London took the top spot again, with average prices in the capital up 12 percent on last year. However, this is not expected to continue on into 2016, as prices grow beyond affordability for the average worker in the city; prices in London are now 50% above their pre-crisis peak in 2007.
However, rival lender Halifax’s survey showed growth twice as fast as Nationwide, with figures showing that prices rose 9 percent in the year to November.
30/12/2015
Anglo-American shares drop on mine sale to Australian coal baron
Shares in American mining company Anglo-American (LON:AAL) fell over 6 percent this morning on the sale of its Dartbrook coal mine to Australian Pacific Coal Ltd.
The sale is part of the major restructuring that Anglo-American is undergoing in order to stay afloat in a difficult commodities market. The company is aiming to shrink its assets from 55 to under 25.
Australian Pacific Coal is led by Nathan Tinkler, the boom-to-bust coal baron who became Australia’s youngest billionaire, before losing it all after the collapse of coal prices. Anglo American agreed last week to sell its 83.33 percent interest in the Dartbrook coal mine to Tinkler for $18 million upfront, as well as royalties on coal produced or processed at the mine. Australian Pacific Coal intends to lower production costs at the mine by converting it from an underground operation to open cut.
Anglo-American was one of today’s biggest fallers, currently trading down 5.69 percent at 309.40 pence per share. (1256GMT).
29/12/2015
FTSE opens higher post-Christmas, despite further drop in oil
The FTSE 100 opened higher in the first day of trading since Christmas, despite a further fall in oil causing prices to hit an 11-year low.
The FTSE rose 0.3% in early trade on Tuesday, after the market was closed for the Bank Holiday on Monday. However, the price of US crude oil fell over 3% overnight, while Brent crude remaining near 11-year lows. The glut, caused by oversupply and a lack of global demand, is set to continue into 2016 and possibly heighten with the addition of Iranian exports onto the market once economic sanctions against Tehran have been lifted. Oil-rich countries including Saudi Arabia, the UAE and Kuwait have said they are counting on a growth in global demand to help smooth out the market in 2016; however, analysts remain uncertain as to how soon demand will increase next year – if at all.29/12/2016