Oil price drop continues into third week
A global fall in oil prices has extended into its third week, on worries of oversupply and unseasonably warm weather.
Brent LCOc1 for December delivery fell 20 cents to $47.34 a barrel by 1000 GMT, with U.S. crude CLc1 also falling 37 cents to $43.61 a barrel.
Last night, Brent closed down nearly 1 percent at $47.54 a barrel, and U.S. crude closed down 62 cents at $43.98. Both crude benchmarks have lost about 10 percent over the past two weeks; this time last year, oil prices were above $100 a barrel, with the disparity causing visible financial difficulties for major oil companies.
According to Reuters, US commercial crude stockpiles are expected to have risen for a fifth straight week by an average of 3 million barrels to 479.6 million, fuelling fears of oversupply.
BP results exceed analysts expectations
Oil giant BP (LON:BP) has beaten analysts’ expectations in their latest set of results, despite an overall fall in profits.
The company cited lower oil and gas prices as a reason for the fall, with their replacement cost profit over the third quarter dropping to $1.23 billion, down from $2.38 billion the year before. Total revenue fell by nearly 50 percent; down to $55.9 billion from $94.8 billion last year.
Chief Executive Officer Bob Dudley took the opportunity to lay out a plan for deeper cost cuts in order to withstand the low prices; prices for crude have dropped to $50 a barrel, from over $100 last year. He said:
“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.”
BP was one of the first of the oil companies to start cutting costs and selling assets following its Gulf of Mexico spill in 2010, and the size of the company was reduced by a third in order to pay the $55 billion fine. Investors reacted well to the results, with BP’s share price rose 1.8% in early trading. It is currently trading up 1.01 percent at 288.27 pence per share (1044GMT).Indian budget airline IndiGo announces public share offering
Indian budget airline IndiGo has announced plans to conduct an initial share offering this week – India’s largest share offering since 2012.
IndiGo, India’s largest domestic airline, is aiming to raise around 32.68 billion rupees (£325.6m) by listing on the Bombay Stock Exchange and the National Stock Exchange of India. The public offer is set to open on Tuesday, closing on 29 October and is already subscribed nearly 80 per cent.
In a statement, the company’s president Aditya Ghosh told NDTV: “An IPO or listing gives you one more stamp of approval because with IndiGo one thing I have got used to is people doubting what we are doing. An IPO is a milestone. Being a listed company also makes sure we don’t get complacent.” IndiGo has a net debt of Rs 3,912 crore, all of which stems from a recemt order for 430 aircraft from Airbus. IndiGo plans to use the proceeds to retire Rs 1,166 crore of debt, while the remaining amount will be used to fuel expansion, the company said. IndiGo has 430 aircraft on order from Airbus. IndiGo, founded in 2006, has been the only consistently profitable airline in the country for the last seven years, with international destinations including Singapore, Dubai and Bangkok.The Money Shop owner to refund £15.4m to customers following FCA review
After an investigation by the Financial Conduct Authority (FCA); Dollar Financial UK who owns high street lenders including The Money Shop, Payday Express and Ladder Loans, has agreed to refund £15.4m to 147,000 customers.
Chief Executive of Dollar Financial, has said:
“As the new CEO, I accept the findings of the review and apologise to anyone who may have suffered difficulties as a result. It is proper that we put things right where they have gone wrong and I have gone further than the review in reforming the way our business operates to reflect the company aim of being the most responsible lender in its marketplace.”
The FCA has stated that the Dollar Financial customers may have suffered due to the firm’s affordability checks, debt collection practices and system errors. This was found through a review last year that found that many customers were lent more money than they could afford to repay.
The Dollar Financial has since agreed to change its lending requirements to meet FCA standards. Jonathan Davidson, the director of supervision for retail and authorisations at the FCA, has made clear that the FCA “expects all credit providers to carry out proper checks to ensure that borrowers don’t take on more than they can afford to pay back.”
This is not the first or largest refund by a high street lender. In October last year, Financial Dollar’s rival Wonga wrote off £220m worth of debt for 330,000 customers after admitting providing loans to those who could not afford them.
Author of ‘Loan Sharks – The Rise and Rise of Payday Lending’, Carl Packman, has said:
“The news confirms what many critics have known about the payday loans business for some time: that in order for payday lending to grow in the way it did over the recession years it needed to rip off people struggling with their finances.”
Approximately 67,000 customers will have their current loan balance reduced, whilst 65,000 will be given a cash refund and a further 15,000 will be given a combination of the two.
Safiya Bashir on 26/10/2015
Crowdfunder: rewards based crowdfunding
Crowdfunding, a form of alternative finance, has traditionally been used to invest money into businesses with potential and promise, ensuring businesses get access to fund at competitive rates whilst investors get generous returns on their investments.
Crowdfunder.co.uk offers a crowdfunding platform that works throughout the UK in rewards-based crowdfunding, community shares crowdfunding and equity crowdfunding.
What makes Crowdfunder different from other crowdfunding platforms such as Crowd2Fund and Crowdcube is crowdfunder’s emphasis and importance placed on crowdfunding for non-profit organizations such as community groups and charities.
One such example of crowdfunding on Crowdfunder was the ‘I am an Immigrant’ poster campaign, which raised over £50,000 in 21 days for the posters that can be seen on the London Underground.
A current campaign on the website is ‘Save Brixton Cycles’; London’s oldest worker-owned bike shop who have to leave the current premises, which are going to be converted into luxury flats. Through their campaign on Crowdfunder, Brixton cycles have so far been able to raise 85% of their £40,000 target.
So what are the benefits for investors in this form of crowdfunding? Rewards-based crowdfunding may not offer high returns on investments, but do offer gifts depending on the pledge, with Brixton Cycles offering rewards ranging from cycling caps to an invitation to the launch party to free services and discounts in-store.
Shares in TalkTalk fall following cyber attack
Following the cyber attack to TalkTalk, shares in the mobile phone and broadband company have reportedly fallen by another 7%, currently standing at 238.3 pence.
The cyber attack, which took place last Wednesday could have led to breaches of customers’ financial and personal details including names, email addresses and telephone numbers. TalkTalk have since admitted that “not all of the data was encrypted”.
Over the weekend the company stated the cyber-attack was “smaller” that originally thought, however a spokeswoman for TalkTalk has said that “BAE Systems are supporting us as we investigate this week’s cyber attack,”, with Scotland Yard’s cyber crime unit also launching an investigation.
Keith Bowman, an analyst at Hargreaves Lansdown, has said that the hit to the company’s reputation has appeared to take its toll.
TalkTalk have advised for customers to “keep an eye on your accounts over the next few months”.
This has been TalkTalk’s third data breach this year.
Early success for Crowd2Fund’s investment exchange platform
Two weeks ago, crowdfunding platform Crowd2Fund launched The Exchange, an online marketplace allowing investors to trade Crowd2Fund investments. Since then the platform has seen a flurry of activity and the successful completion of its first trades, which have earned investors an otherwise unobtainable premium on investments and given sellers early access to their cash.
Put simply, the platform allows those who hold debt or equity crowdfunding investments from Crowd2Fund to re-sell them to another investor. One of the first trades on the platform was for a Hummus Bros Mini Bond investment, which sold at a 10% APR coupon; a 2% premium on the initial offer of 8% APR.
Chris Hancock, CEO of Crowd2Fund, says:
“In our opinion the current system is overly restrictive. Individuals who need access to their capital needn’t be tied into their investments and if a central exchange was developed it would radically increase the liquidity into ‘the real economy’ providing a much needed boost.
“It is arguable that more widespread and transparent trading of individual debt investments, could have avoided the financial crisis – by allowing individuals to trade debt investments openly we would have avoided the sub prime debt and credit default swaps being conducted by the banks, which ultimately resulted in the crash.“
Currently Crowd2Fund only perform match trading on the Exchange, which is far less complex than operating a full exchange and bidding system. However, it is something that The Exchange are looking to introduce in the near future; sellers will be able to set a reserve and potential investors will be able to bid on an item, with the highest price winning the bid.
The market’s initial positive response to the platform suggests that The Exchange will become an important part of the future of crowdfunding, eliminating a liquidity problem that puts many off investing in the sector. Ultimately, this will lead to providing more capital for businesses who create jobs and are significantly important to support overall economic growth. For further information and to take a look at the investments available on The Exchange, visit their website here.
Miranda Wadham on 26/10/2015
WPP reports successful third quarter
The World’s largest advertising company, WPP, has reported a third-quarter like-for-like net sales growth of 3.3%; 1% higher than in the first half.
This acceleration in sales has been due to good demand in Germany, Spain and the U.S., whilst also having slightly improved trade in China.
This growth in sales has led to analysts believing that WPP will continue to benefit in the fourth quarter, helping the company hit its full year forecast of net sales of more than 3%.
WPP, who handles the advertising for brands such as Ford and Unilever, have reported that they will continue into the fourth quarter cautiously due to low and even deflation in many countries, which limit their ability to increase prices.
Last week, Publicis, WPP’s rival fell short of expected results due to an “unusually large” number of clients cancelling or postponing advertising campaigns.
In the last month, shares in WPP rose by 8%
Aberdeen Asset Management denies sourcing potential buyer
According to a report in the Financial Times, the global investment management group Aberdeen Asset Management has begun to source a new potential buyer to put an end to its slump in share prices and profitability.
Europe’s second largest fund house, which recently suffered worst than analysts have predicted, are said to have made a number of informal approaches to different rivals.
Despite share prices for Aberdeen Asset Management falling by 25% over the last six months due to a hit by recent Asian stock markets, a spokesman for Aberdeen recently stated; “In his 32 years running Aberdeen, Martin Gilbert has never approached anyone, formally or informally, about buying the business,”
Aberdeen Asset Management have also addressed rumours that the chief executive, Martin Gilbert who co-founded the company in 1983, is currently looking for a successor with a source telling City A.M. that he is “as committed as he’s ever been.”
Shares in the group jumped as much as 7 per cent to 376.6 pence on Monday morning.
Caledonia Investments to buy Gala Bingo for £241 million
Caledonia Investments have announced plans to buy Gala Bingo Holdings from Gala Coral, in a deal worth £241 million.
Gala Coral signed a merger with rival Ladbrokes in July, in a deal that created the country’s biggest betting group. Gala Bingo operates 130 clubs with more than 1.1 million active members.
However, the takeover will not include Gala Coral’s online presence, galabingo.com, Caledonia said in a statement on Monday.
Gala said the sale of the clubs would help to pave the way for the deal, which is subject to approval by regulators. Gala Coral Group is currently owned by a set of private equity companies, including Apollo Management and Cerberus Capital Management.
The betting and gaming sector has seen a string of high profile deals over recent months, as companies club together to beat higher taxes and stricter legislation. This year alone saw mergers between both Betfair and Paddy Power and online firm 888 and Bwin.