Issue link: https://maltatoday.uberflip.com/i/656590
maltatoday, WEDNESDAY, 23 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: An eventful start to the week Brussels is – unfortunately – the main headline this morning after a suspected terror attack in its main airport. European shares fell the most in a week with most airlines bearing the brunt, while traditional safe haven assets such as gold, the yen and most government bond prices rose. US stock futures are also pointing to a lower open. It was an eventful Monday for the markets. Obama made history visiting Cuba in a bid to ease tensions between the two countries, and the FBI may have found a way to crack the infamous San Bernardino iPhone. Meanwhile, Apple has unveiled a new mid- range iPhone SE, in a bid to win over customers in emerging markets and those who disapprove of the ever-increasing screen size trend. Apple is hoping the cheaper model will stimulate overall iPhone sales, after the company forecast the first ever decline in sales. Some analysts are worried that Apple is moving away from the innovative strategy which made it so successful in the past decade and is becoming more and more concerned with incremental upgrades and catching up to markets trends, rather than driving them. The company showed off new wristbands for the Apple Watch and a new iPad Pro tablet, and a robot called Liam to take apart old iPhones and reuse the materials, but none of those moves generated much excitement among investors. Apple shares were flat on the day, but are down 20% from its all-time high of $133 just over a year ago. Drugmaker Valeant Pharmaceuticals is continuing its shake up of top management – its CEO is leaving and billionaire investor William Ackman joins the board in the wake of its accounting problems in a bid to save its business. The Canadian company whose operations include prescription drugs, consumer products and the popular Bausch & Lomb brand, has lost nearly 90%of its value as it came under public scrutiny for its pricing and distribution practices, including investigations by Congress and various government agencies. Last week the company suffered its biggest one day loss as shares fell 50% after it disclosed it could miss its reporting deadlines, causing it to jeopardise plans to borrow and sustain its operations. The company also made significant negative revisions to critical performance indicators such as sales, revenues and loss provisions. News from the mergers and acquisitions sphere - IHS Inc agreed to acquire London-based Markit Ltd. to bulk up in financial services. IHS is a publisher and provider of information for industries including finance, aerospace, automakers, energy and technology. Markit compiles indexes for financial products, including credit-default swaps. Shareholders of IHS will get about 57% of the enlarged company and stockholders of Markit – which is being valued at about $5.5 billion through the deal – will get the rest. The new company will be called IHS Markit, would have $3.3 billion in revenue based on 2015 results. In a quasi-dramatic turn of events the owner of the Sheraton and Westin brands, Starwood Hotels and Resorts Worldwide accepted a revised – and higher – offer of $13.6 billion from its peer Marriott International. Only last week it was in talks with China's Anbang Insurance Group which already owns New York's Waldorf Astoria Hotel. The Fed won't hike, right? After what seemed like a dismissal of near-term rate hikes by Fed Chairman Janet Yellen in the Fed's last meeting, two officials said interest-rate increases may be warranted as soon as the central bank's meeting next month, citing solid readings on the U.S. economy despite headwinds from abroad, even as home re-sales fell sharply in February in a potentially troubling sign for the US economy. Current pricing shows a probability of a rate hike in April at 8% compared to 27% a week ago, but if you're Goldman Sachs, that pricing is completely wrong. Dismissing the theory of co- ordinated central bank intervention, analyst at Goldman are suggesting that the strength of the US economy in the face of a now stabilized global economy will force the Fed to raise more than the market is expecting this year, ultimately respecting its original scenario of four rate hikes. Failure to do so might leave the US exposed to significant overheating and inflation overshooting, causing to act far more aggressively and potentially tipping the economy into recession. This article was issued by Andrew Martinelli, Trader 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 & Co. Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this newspaper. Apple unveils smaller iPhone and iPad Pro Apple has announced smaller ver- sions of the iPhone and iPad Pro at an event hosted in San Francisco and streamed online. The iPhone SE has the same processing and graphics performance of the larger Apple 6S, the firm said, and can capture 4K video. The new iPad Pro will have a 9.7 inch screen - the same size as the original iPad. The iPhone SE will be available in 110 countries by the end of May. With a starting price of $399/$499, the new iPhone is the "most affordable" handset Apple has ever released, Apple said. It also said the new iPad Pro would be available in three different storage sizes with an extra large 256GB version. Pricing will begin at $599 for the smallest version and will ship in the US at the end of the month. The firm also showed off a recycling robot called Liam that can strip down old iPhones into their components for reuse. The Apple Watch is to come down in price to $299 from its launch price of $349, chief executive Tim Cook also announced. Apple said it sold 30 million four- inch handsets last year, however its handset sales have slowed in recent months in line with the overall smartphone market. Some analysts are predicting up to a 15% decline in shipments in the first quarter of 2016 alone. Visa Europe announces record revenues Visa Europe has announced its highest ever revenues of €2.31 billion – up 25% year-on-year (year-to-June 2015) during its fi rst ever press conference organised in Malta. Costs have been held fl at for a fourth successive year and the organisation has returned a re- cord €739 million to its member- shareholders in the form of rebates and joint-investment initiatives. Visa Europe now accounts for more than €1 in every €5.70 spent in Europe today, while the number of Visa cards issued in Europe now stands at 522 million - or more than one Visa card per adult. Point-of sale spending has risen by 7.7% in the last year (to €1.58 trillion). Visa Europe CEO Nicholas Huss said: "Our new Annual Report shows that, financially, this was our most successful year ever – and by quite some distance. We've done that while maintaining always on delivery with 100% availability of our systems for more than 100 months in a row and maintaining trust in the system by keeping fraud at record low levels of less than 5c for every €100 spent (0.044% year to June 2015) and investing in multiple layers of cyber and data security. Following such positive results and increased spending in European markets, Visa Europe has seen an opportunity in expanding their capacity to Malta, further showing their commitment and desire to invest in the market. "Visa saw Malta as a perfect opportunity for growth and is directing all its efforts towards an overall strategy which will see an advance on all Visa core products and the use of innovation as a means of improving and facilitating services for both users and merchants. With Malta being a tourist mecca, we would like to take this opportunity to leverage on this touristic value to further displace cash and move the market to our innovative payment technology such as contactless. Contactless has been adapted positively in other European countries and will bring to Malta fresh benefits to both users and merchants, including speed, simplicity and security, three factors aligned with our overall strategy of being at the forefront of technology and innovation," said Catalin Cretu, General Manager – Croatia, Malta, Romania, Slovenia at Visa Europe while addressing the press during the Annual Results Press Conference held in Malta. Visa Inc. and Visa Europe announced in November a definitive agreement for Visa Inc. to acquire Visa Europe, creating a single global company. The transaction is subject to regulatory approvals and is expected to close in Visa Inc.'s fiscal third quarter of 2016 (April-June). Chairman Gary Hoffman said: "This deal will unlock significant value for members, both through the consideration paid and because the Board believes a combined Visa will be better positioned to serve the needs of customers going forward. We are also confident that Visa Inc. is committed to long- term investment and development of the European business." Visa Europe CEO Nicolas Huss commented: "We are performing extremely well as Visa Europe. However, taking a long-term perspective and against a backdrop of a rapidly evolving landscape, increased globalisation, intensifying regulation and competition, there is no better time to come together as one company." "The time is right because scale, speed to market and investment are critical to bringing competitive advantage. Integrating into one global business will ensure we have the financial strength and operational scale to accelerate the next generation of payments throughout Europe building deep partnerships with our existing and new clients. The deal will also give Europe a powerful voice on the global stage using our world- leading position to drive the future". "These are very exciting times for Malta. We are giving our clients across Europe, including Malta, access to global scale, technologies, investment and resources. The accelerated development of electronic payments will shape the future of commerce, bringing tangible benefits to merchants enabling them to grow their businesses and to consumers by enabling them to pay where and when they choose, and on any device," concluded Catalin Cretu.