Issue link: https://maltatoday.uberflip.com/i/625693
maltatoday, WEDNESDAY, 13 JANUARY 2016 11 Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way Oil slips toward $30, traders bet on more falls Crude oil slipped toward $30 per barrel to a near 12-year low on Tuesday as heavy oversup- ply showed no sign of easing, while analysts scrambled to cut their price forecasts and traders bet on further declines. Prices are down around 16 percent since the start of the year, dragged lower by a glut, China's weakening economy and stock market turmoil, as well as the strong dollar, which makes it more expensive for those using other currencies to buy oil. "The bearish sentiment surrounding the commodity has intensified," said Brenda Kelly, head analyst at London Capital Group. International benchmark Brent crude fell to a low of $30.43 per barrel, a level last seen in April 2004, before recovering to $31.43, down 12 cents or 0.38 percent, by 1028 GMT. It was down for the seventh consecutive session, and has fallen every day of 2016 so far. U.S. crude West Texas Intermediate (WTI) fell to a low of $30.41 per barrel, a level last seen in December 2003, before crawling back to $31.06, down 35 cents or 1.11 percent. Trading data showed that managed short positions in WTI crude contracts, which would profit from a further fall in prices, are at a record high, implying that many traders expect further falls. China's slowing economy has been another factor contributing to the oil rout, which has pulled prices down by around 70 percent since mid-2014. And while demand looks fragile, supply from key producers remains robust. Iraq, the second-biggest producer within the Organization of the Petroleum Exporting Countries (OPEC), plans to export a record of around 3.63 million barrels per day from its southern oil terminals in February, trade sources said. They cited a preliminary loading program, up 8 percent from this month. Nigeria's oil minister said a "couple" of OPEC members had requested an emergency meeting, adding that current market conditions support the need to hold such a gathering. Market commentary: European shares rebound as carmakers rally European stocks rose, with auto- makers leading the fray as inves- tors assessed valuations after the region's equity benchmark posted a four-day losing streak. Auto-re- lated companies recorded the best performance of the 19 industry groups on the Stoxx Europe 600 Index. The German DAX is leading the group of European bourses, up around 1% followed by the French CAC 40 up 0.4%. Miners Rio Tinto Group and BHP Billiton Ltd. dragged a gauge of miners to its lowest level since October 2003 as commodity prices slipped further. A measure of energy stocks slid as oil extended declines from the lowest close in more than 12 years. WTI crude is now trading at USD 30.75 with analyst projections expecting the resource to fall even further on the back of the strengthening USD. Among stocks moving on corporate news, Debenhams Plc jumped 16 percent after the British retailer reported 19- week holiday sales that exceeded analysts' projections. Wm Morrison Supermarkets Plc rose 12 percent as the supermarket chain unexpectedly snapped a four-year record of declining sales. Michael Page International Plc dropped 5.1 percent after saying profit growth slowed at its U.K. unit. Credit also traded marginally higher this morning, with the Xover tighter by 1.7 points as well as the ITRX CDSI marginally tighter. Best performing companies within investment grade credit this morning are Safeway Ltd, Telekom Austria AG and Marks and Spencer PLC. Worst Performing include Credit Agricole SA, LafargeHolcim Ltd and Total SA. In high yield, Grupo Isolux Corsan is leading gains followed by Premier Foods Finance and Ardagh Packaging Finance. Worst performing companies include Financiere Quick SAS, Care UK Health & Social and TUI AG. Yesterday in the US we saw a late rally on Wall Street in the last hour of trading bringing to an end three consecutive days of heavy losses for the S&P 500 after the index crept into positive territory (+0.09%) by the closing bell. There was no shortage of volatility however after markets initially opened with a positive tone, shrugging off those steep falls in China, only to then fall as low -1.1% intraday before that late rally as attention quickly turned to more huge falls in the Oil. With earnings season around the corner, all eyes will be on the quarterly reports in the energy sector. Yesterday saw Alcoa unofficially kick off the earning season. Despite a miss at the top line, earnings beat consensus (4c vs. 2c expected) which helped in sending the shares up a couple of percent in extended trading although it's worth highlighting that previous market forecasts for the quarter were as much as 14c at the beginning of October, so it shows how far expectations have fallen in the last few months. Looking at today's calendar, main releases are out of the UK where we'll get the November industrial and manufacturing production reports. Over in France we'll get the December business sentiment reading. This afternoon in the US the main release of note is the JOLTS job opening report for November where the quits and hiring rates are set to be closely watched. As well as this we will receive the January IBD/TIPP economic optimism print and December NFIB small business optimism reading. Today's Fedspeak is set to come from Lacker who is due to speak on the US economic outlook. US President Obama's State of Union Address will also be worth keeping an eye on. There's little to report on the corporate earnings front before the banks at the end of the week. This article was issued by Simon Psaila, Treasury Officer at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services. Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this newspaper. China's Wanda buys Hollywood studio Chinese conglomerate Dalian Wanda Group has bought U.S. fi lm studio Legendary Entertainment for about $3.5 billion, turning its chairman into a Hollywood movie mogul as China's richest man steps up a drive to diversify his business empire overseas. At a news conference in Beijing on Tuesday, Wanda Chairman Wang Jianlin said he plans to package Legendary, behind hits like "Jurassic World", with existing movie production assets in China and sell shares in the merged operation in an initial public offering (IPO). The move makes Wanda the first Chinese firm to own a major Hollywood studio - a sign of the country's growing power in the global movie world, industry watchers said. The executive gave no further details on the IPO plan, but said was acquiring Legendary Entertainment for both intellectual property reasons and the studio's movies. A person familiar with the matter told Reuters earlier this month a deal to secure a majority stake in Legendary had been agreed. "Wanda Cinema already has made tremendous development in China, but it isn't enough," said Wang, whose personal wealth is estimated by Forbes magazine to be about $27 billion. "Movies are global, and our company certainly wants to add our voice to the world film market." The deal is Wanda's biggest overseas acquisition ever and comes as Wang accelerates a drive to diversify a giant with 2015 revenue of $44 billion away from its core, but slowing domestic property operations. With deals to buy into everything from financial services to Spanish soccer club Atletico Madrid, Wanda said on Monday revenue rose 19 percent last year. Under the deal announced on Tuesday, Wanda said it will buy an unspecified majority stake in Legendary. As part of the transaction, Legendary's founder and Chief Executive Officer Thomas Tull will continue to head up the movie maker. Founded in Dalian, a city on China's northeast coast, and now based in Beijing, Wanda is already the world's biggest movie theater operator, having bought AMC Entertainment Holdings Inc, North America's second-largest cinema chain, for $2.6 billion in 2012. It also owns Australian movie theater company Hoyt's Group, and Wanda Cinema Line Corp, the group's domestically listed firm, is the biggest theatre operator in China. YOUR FIRST CLICK OF THE DAY www.maltatoday.com.mt