Issue link: https://maltatoday.uberflip.com/i/647574
maltatoday, WEDNESDAY, 2 MARCH 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 Market commentary: Warren Buffett says buy while stocks are cheap! In an interesting interview yes- terday with the iconic investor Warren Buffet, the chairman of Berkshire Hathaway, said that it is a great time to pick up stocks fol- lowing the drop in prices since the start of year. According to Buffet, he is "happy" when stocks drop, as this gives him an opportunity to purchase great companies at discounted prices, comparing it to when clothes go on sale! Buffett continues saying that over time he is always a net buyer of stocks and barely remembers a month where he did not buy any as "corporate America isn't sim- ply going to disappear", even in the toughest of times. Interesting one his comments was that inves- tors that try to time the purchase of stocks are "simply crazy". Equity markets opened mixed this morning after the US markets traded to close lower yesterday by around 0.75% across the indices. Asia subsequently traded higher, with the Nikkei closing 0.37% up and the Hang Seng up 1.55%. European bourses are currently up around 0.50%, with the DAX leading up 1.1% following strong performances of K+S Ag (up 3.53%) and Continental AG (up 3.14%). Markets were marginally affected by positive effects of the PBoC's 50bp Requirement Reserve Ratio cut which was offset by weak China PMI figures. The National People's Congress meets this weekend to outline a new 5 year plan. West Texas crude rose 2.7% overnight, to $33.65/bbl. Crude oil prices have reversed nearly all their February decline. Pemex lost about $32 billion in all of 2016 as oil prices plunged and the company's crude output fell for an 11th straight year, according to a financial report released yesterday. Pemex hasn't recorded a profit since 2012. The company had more than $87 billion in debt at the conclusion of the third quarter and owes an estimated $7 billion to service providers. Pemex will cut as much as $3.6 billion in spending by delaying projects. Glencore reported results, recording its biggest drop in profit since its IPO date due to the slump in prices of commodities. Despite net income excluding some items plunged 69 percent to $1.34 billion during the year, its shares rallied before dropping off later into the session. Miners BHP Billiton, Rio Tinto Group and Vale SA have all reported plunging profits and cut dividends this year, whilst painting a gloomy picture for the near term recovery of the industry. Spain's Abengoa posted a 1.2 billion euro net loss as well as debt rises, placing the company on the brink of becoming the country's largest-ever bankruptcy. The company said yesterday that its debt had risen by 492 million euros in 2015's fourth quarter. It's an interesting day for data ahead of the ECB meeting next week, with PMI's for Europe as well as unemployment data (exp. 10.4%) for the region. Manufacturing data is also due from the US. Also, today is Super Tuesday in the US, where a key vote takes place for the election of candidates representing both the Democratic and Republican parties, where Hilary Clinton and Donald Trump are the favourites to dominate the contest? This article was issued by Simon Psaila, Treasury Officer at Calamatta Cuschieri. For more information visit, www.cc.com. mt The information, views and opinions provided in this article are 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 in this article. Energy price slump sends eurozone into defl ation Consumer prices in the eurozone fell sharply in February to minus 0.2%, putting more pressure on the European Central Bank. The slide into deflation is a sharp reversal from the revised 0.3% increase recorded in January. It is the first fall in inflation since September when it shrank by 0.1%, according to Eurostat. Energy drove the decline, with prices down 8% in February compared to a 5.4% slide in January. The dismal figures have dashed hopes that ECB efforts to boost prices were working. That raises the chance of the bank announcing further stimulus measures next month. It has already announced a cut to its bank deposit rate, which remains in negative territory. ECB chief Mario Draghi insisted earlier this month the policies were working. Nordea economist Holger Sandte said: "Deflation would be a disaster for the euro area as the burden of high debt would increase. Therefore, the ECB will continue easing monetary policy significantly. "But no matter what the ECB decides to do on 10 March, inflation is likely to hover around zero during the next few months before it picks up - if oil prices behave well." Economic sentiment across the eurozone deteriorated more than expected in February, according to research by the European Commission. The Group of 20 (G20) finance ministers and central bankers agreed on Saturday to use "all policy tools, monetary, fiscal and structural - individually and collectively" to renew growth. Argentina settles 15-year bonds battle Argentina has signed an agreement with US hedge funds to settle a pro- tracted dispute over its failure to repay billions of dollars worth of bonds. It will pay the funds who sued the nation about $4.6bn to settle claims. They had bought the bonds at heavily discounted prices after the country's economy collapsed in 2001. The previous government of President Cristina Fernandez de Kirchner, refused to negotiate with the investors, labelling them "vulture funds". The agreement is a victory for Mauricio Macri, who was sworn in as Argentina's president in December. He reversed the non-payment stance taken by his predecessor. The creditors were led by hedge funds NML Capital and Aurelius Capital Management. Daniel Pollack, the court- appointed mediator, said: "It gives me greatest pleasure to announce that the 15-year pitched battle between the Republic of Argentina and Elliott Management, led by Paul Singer, is now well on its way to being resolved." The long-standing dispute has restricted the country's access to international credit markets. After the announcement was made the Buenos Aires Stock Exchange's benchmark Merval Index was up by 3%.