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.