Drop in oil prices following China data
Oil prices fell during Asian trading hours on Monday as analysts have expected a weaker demand from China in the approaching months.
The lowering consumption from China has caused worry in the global energy sector, where oil prices have nearly halved from the same period a year earlier due to oversupply and reduced demand.
At 0751 GMT, Brent futures LCOc1 was down by 6 cents at $49.50 a barrel, whilst CLc1 fell by 15 cents to $46.44 per barrel.
Commodities analyst, Hong Sung Ki, at Samsung Futures Inc has said;
“China’s manufacturing sector, which is still in contraction, is adding downward pressure on oil as it’s closely related to demand for oil products,”.
Data from other Asian economies remains mixed with improved data from Japan, Asia’s second biggest oil consumer and economy. Data from South Korea and Taiwan looks to further slowdown.
Considering supply; Russia’s output has increased since September with an increase of 40,000 barrels per day. Iran also has plans to increase output by 500,000 barrels a day, however this will not affect decline due to the market already accounting for the added barrels.
Germany’s factory activity remains in growth – PMI
Growth in German factory activity remained solid for the third quarter, according to figures from Markit, suggesting the German economy remains strong despite the catastrophic the Volkswagen scandal and volatilty in China over the last quarter.
Markit’s purchasing managers’ index (PMI) for manufacturing in Germany fell two points to 52.1 in October from 52.3 the previous month, with factory output increasing for the 30th month in a row. Any figure over 50 is considered to show growth.
However, some companies’ noted slightly weaker demand from Russia and China. Growth was led mainly by consumer goods companies, suggesting private consumption will continue to stay strong.
Ryanair ups growth targets on positive results
Budget airline Ryanair (LON:RYA) posted strong results this morning, disclosing a 37 percent rise in half-yearly pre-tax profit and a 13 percent jump in passenger numbers.
The company also upped its growth target, and now expects to have 180 million passengers a year within a decade; 20 million higher than its previous forecast.
Revenue also rose 14% to just over €4 billion in the six months to September, as Ryanair became the first EU airline to carry more than 10 million passengers in July. Chief executive Michael O’Leary said in a statement: “We have enjoyed a bumper summer due to a very rare confluence of favourable events including stronger sterling, adverse weather in northern Europe, reasonably flat industry capacity and further savings on our unhedged fuel.” Cost-cutting measures in place include an agreement to buy 95% of its fuel at $62 a barrel, estimated to save around €430 million in 2017, and the addition of the new Boeing 737-800 aircraft to the fleet is hailed to cost less than most of its existing planes. O’ Leary commented: “This combination of lower aircraft and fuel costs will enable Ryanair to continue to lower fares and grow market share.”HSBC reports strong third quarter results after cost-cutting measures
HSBC (HSBA) have reported a 32 percent rise in pretax profit for the third quarter, evidence that cost-cutting measures announced in June are having a positive effect on the bank’s finances.
In June, the bank announced thousands of job cuts and 10 strategic management goals in order to improve shareholder returns. Heavy spending on compliance has meant that there have been reduced costs from fines and settlements with regulators.
Chief executive Stuart Gulliver said in a statement:
“Our cost-reduction measures are beginning to have an impact on our cost base. However, there is more to achieve on costs and we expect the measures we have already taken to have a further impact in the fourth quarter.”
Quarterly pretax profit was $6.1 billion, up from $4.6 billion in the same period a year ago and above expectations by analysts.
However, underlying revenues fell 4 percent to $15.1 billion compared with the same quarter last year, as the effect of turbulent stock markets in Asia over the last quarter is felt.
Fundbird launch comparison site for alternative business finance
Given the increase in non-traditional small business funding, it is surprising that website offering comparison and advice for small businesses has been missing from the sector for so long. Fortunately, Fundbird has recently been launched to fill the gap, operating an online platform matching SMEs with the right funding for them.
The company’s mission is to simplify the world of alternative finance for small businesses, helping them to navigate the range of non-bank funding options and find the best match for their individual requirements.
Fundbird’s co-founder and CEO, Sharon Argov, knows exactly the kind of problems that SMEs face when looking for funding and was driven to set up the platform in order to simplify the process:
“As an entrepreneur myself, I have first-hand experience of knowing how difficult it can be to secure a bank loan for a new business, and I know the stress and frustration it can cause.
“Now that alternative finance is such a viable option for SMEs the frustration comes when trying to work out which option is best for your business – it’s a complex landscape to get your head around, which is precisely why we set up Fundbird – to help time pressed business owners navigate this area.”
Funded by FinTech Angel investors including Yuval Tal, founder of Borderfree and Payoneer, and Rhodium Venture Capital, Fundbird has a unique ability to pre-filter SME applications based on their individual requirements. This guides the business to understand the type of funding they need, and acts as a lead funnel for the alternative finance industry, creating reliable, high quality leads for lending partners.
The platform compares many alternative funding methods, including secured loans, property finance, equity crowdfunding, peer-to peer lending, and start-up loans. All the site’s partners have been carefully selected based on criteria including competitive interest rates and flexible payment plans.
For lending partners, working with Fundbird will deliver a pipeline of good quality, well-matched leads. These have the potential to be converted into valuable, long-term customers, as the businesses seek different forms of alternative finance at different stages of their business evolution and growth.
“The rise of alternative finance has opened so many doors for small businesses, that a “no” from the bank no longer means an inability to access finance altogether. Alternative finance empowers SMEs who previously thought they were unfundable”, Argov says.
Fundbird is the perfect example of a FinTech company that thriving in the UK, showing just how amenable London inparticular is to helping new Fintech businesses grow. However, in order for alternative finance Fintech companies to really integrate with mainstream finance, Argov feels it has to go further:
“Whilst initiatives such as Fintech 2020 are great, I think that there needs to be more collaboration between banks and start-ups in order to make a real difference and truly create FinTech products that customers need.
“RBS working with Funding Circle is an example of this already happening, but it needs to continue and go further. The banks need to realise that FinTech is not here to extinguish traditional financial institutions, but has the ability to help make banking and finance better and more efficient.”
Whilst the process for obtaining alternative funding for businesses is usually simpler than the extensive checks required by banks, according to Argov “SMEs must make sure they get important documents in line to ensure a smooth journey. Meticulous planning – knowing exactly how much is needed, and how much can comfortably be paid back each month, is also important. Intermediaries such as Fundbird are a great way to compare options and make the right decision for your business.”
For further information on getting the right alternative finance for your business, visit fundbird.co.uk.
Miranda Wadham on 30/10/2015
British Airways owner IAG posts strong results
International Airlines Group (LON:IAG) released strong third quarter results on Friday, raising its 2015 profit guidance after pre-tax profit grew 48 percent on last year.
IAG, who own British Airways, Iberia and Vueling, recently added Irish airline Aer Lingus to its portfolio. THe company now expects full-year operating profit (excluding Aer Lingus) to be between 2.25 and 2.3 billion euros, up on the previous forecast of 2.2 billion.
The company also announced on Thursday that it would be paying its first dividend since its creation in 2011, which will be 10 euro cents per share.
In a statement, Chief Executive Willie Walsh they were “reporting strong quarter results with a positive contribution from all of our airlines.”
Aer Lingus proved a valuable asset to the group, disclosing an operating profit of €45m between 18 August and 30 September.
The airline sector has been hugely helped by falling oil prices, with several large airlines, including German operator Luthansa, posting positive third quarter results. For IAG, fuel costs fell between by 8.6% between June and September.
RBS sees profits rise on Citizen sale
Royal Bank of Scotland Group (LON:RBS) disclosed a net profit of £952 million for the third quarter, helped by the sale of their £1.1 billion stake in US bank Citizens.
However, revenues slipped by £596 million to £3.04 billion as it shrank its corporate banking operations and the bank reported an operating loss of 134 million due to significant restructuring costs. In a statement RBS, which is 73 percent owned by the British government, admitted it could be hit by further regulatory fines: “Whilst legacy issues continue to be addressed, material further and incremental costs and provisions in respect of conduct and litigation related matters are expected, and could be substantially greater than the aggregate provisions RBS has recognised.” The bank is facing a number of misconduct investigations both in the UK and the US and has already set aside £4.5 billion to cover costs. RBS are currently trading down 0.44 percent at 319.50 pence per share. (0838GMT)China to end controversial one-child policy
China has announced that it will end its controversial one-child policy, according to the state news agency Xinhua.
The Communist party will now allow all couples to have two children, ending a decades long policy estimated to have prevented around 400 million births. It was initially introduced in 1979 to control a huge population increase. Critics have been urging China to end the policy for years, arguing that it will create a demographic “timebomb” with a soaring ageing population and a rapidly declining work force. The UN estimates that by 2050 China will have nearly 440 million over-60s. The policy has also created a significant gender imbalance, with many parents choosing to abort girls in favour of having a male heir. China has gradually relaxed the policy over recent years; since 2013 couples in some parts of the country have been allowed to have two children if one parent was an only child. Parents who flout the one child rule risk fines, forced unemployment or abortion and sterilisation. The announcement was made at the Communist Party’s Central Committee meeting, and was publicised on Twitter. At the meeting, the party is also set to announce growth targets and its next five year plan.Santander sees profit rise in ‘favourable economic environment’
Santander (NYSE:SAN) have announced a 5 percent rise in third quarter profit, at 1.68 billion euros, up slightly on last year and in line with analysts’ expectations.
The eurozone’s largest bank saw revenue rise to 11.3 billion euros, up from 10.96 billion last year.
In a statement, the lender attributed the rise to a “more favourable economic environment in the developed economies where it operates”, but said that “emerging economies faced important challenges”.
The bank also stressed that depreciating currencies in Latin America affected the balance sheet, particularly the decline in Brazil’s currency against the euro during the past year.
Santander are trading up 0.89 percent on the news at 5.69 pence per share (0953GMT).
Royal Dutch Shell sees £4 billion profit loss
Oil giant Royal Dutch Shell (LON:RDSA) reported a £4 billion loss for the third quarter on Thursday, with net income falling 70 percent on last year.
The company’s figures are a huge fall on last year, where they made a $5.3 billion profit. The decision to stop projects in both Alaska and Canada impacted on finances, paying $8.6 billion to cover costs.
Chief executive Ben van Beurden labelled the decision to stop exploration as “difficult, but impactful” and said that he is “determined that Shell will become a more focused and competitive company as a result.”
The company also confirmed that its $70 billion takeover of BG Group would still be going ahead:
“The BG deal, which remains on track for completion in early 2016, is a springboard to focus Shell into fewer and more profitable themes, especially deep water and integrated gas.”
Shares in Royal Dutch Shell are currently trading down 1.73 percent at 1708.00 pence per share. (0934GMT)