Issue link: https://maltatoday.uberflip.com/i/745623
maltatoday, WEDNESDAY, 2 NOVEMBER 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 BP profi t sinks as industry struggles with low oil prices Oil giant BP reported a 50% fall in third-quarter profi ts from last year as the industry continues to struggle with plummeting prices. In February prices collapsed to $26, and crude prices are now fairly settled around or just below the $50 mark. BP made $933 million on an underlying replacement cost basis, compared with $1.8 billion a year earlier, however it still trounced consensus expectations of $686 million. This comes as the British multinational sliced spending by another $1 billion dollars as the hit from weaker oil prices continued to bite. The company warned industry refining margins will continue to be under pressure in the fourth quarter yet despite this, the oil major says it expects a slight improvement in the final quarter of the year. BP blamed falling oil prices for its performance, saying it was affected by a "weaker price and margin environment". Rival oil company Royal Dutch Shell also warned over oil prices, although its profits rose by 18% from last year. The company reported better- than-expected third-quarter profits of $2.8 billion. Shell added that its profit excluding one-off items and on a current cost-of-supplies (CCS) basis – which also strips out the changing value of oil inventories – advanced 17 per cent to $2.79 billion. That easily eclipsed forecasts of $1.79 billion, as the group was aided by rising output and cost cutting after its takeover of rival BG Group. In reaction, Shell's 'B' share price rallied 4.0 per cent but BP sagged 2.0 per cent on London's falling stock market. "BP and Shell both delivered improved figures in the third quarter, but there are yet plenty of risks in the oil market as (oil) prices remain under pressure," said ETX analyst Neil Wilson. "Drilling down to the key fundamentals, oil producers have to cut costs to survive in a lower- for-longer price environment." BP's chief financial officer, Brian Gilvary said: "We continue to make good progress in adapting to the challenging price and margin environment. "We remain on track to rebalance organic cash flows next year at $50 to $55 a barrel, underpinned by continued strong operating reliability and momentum in resetting costs and capital spending. BP also cut its investment plans for this year. It now expects to spend $16 billion on capital expenditure this year, compared with a previous prediction of $17-19 billion. For 2017, it is forecasting investment of $15- 17 billion. Institute of Financial Services offers CEFA qualifi cations locally The Institute of Financial Services Malta (ifs) will now be offering qualifi cations by the European Federation of Financial Analysts Societies (EFFAS) locally. This has been made possible due to the fact that ifs has been appointed a member of the EFFAS. Ifs Malta president Kenneth Micallef said that the EFFAS qualifications will improve financial education in Malta, and they will be available in 2017. "This is an important milestone in the institute's continuous quest to facilitate the provision of well-established qualifications to professionals within the Maltese financial services sector. The qualifications offered by EFFAS will continue to raise the bar of financial education in Malta. We look forward to start offering EFFAS qualifications towards the beginning of next year." EFFAS was established in 1962 as a non-profit organisation. It is the umbrella organisation of 26 national local societies of investment professionals in Europe, representing more than 18,000 professionals in equity/ bond research, asset/portfolio management and investment advice. The aim of the organisation is to encourage the research and the independent opinion on economy, finance and financial and stock markets with the ultimate goal of setting necessary standards for the finance industry. Through its commissions, EFFAS has contributed to supporting the development of financial services regulation by incorporating practical knowledge from professionals. Furthermore, EFFAS is continuously working on the development of additional standards that are instrumental in guaranteeing a high level of quality in the investment profession. The Certified European Financial Analyst qualification offered by EFFAS is recognised by the Malta Financial Services Authority as one of the required academic qualifications for professionals seeking to attain authorisation from the regulator to provide portfolio management services. Panama Papers effect: Panama signs OECD tax treaty Panama this week signed the Mul- tilateral Convention on Mutual Administrative Assistance in Tax Matters, making it the 105th juris- diction to join the world's leading instrument for boosting transpar- ency and combating cross-border tax evasion. The OECD said the signing shows that Panama is now implementing its commitment to fully cooperate with the international community on transparency, months after 11.5 million documents leaked from law firm Mossack Fonseca revealed the extent of tax secrecy measures the country employed. "Panama's decision to sign the multilateral convention is a confirmation of its commitment to take the necessary steps to meet international expectations in the fight against tax evasion," OECD Secretary-General Angel Gurría said during a signing ceremony with Panama's Ambassador to France, María Del Pilar Arosemena de Alemán. "It also sends a clear signal that the international community is united in its efforts to stamp out offshore tax evasion. We will continue our efforts until there is nowhere left to hide." The Global Forum on Transparency and Exchange of Information for Tax Purposes is expected to publish in early November a peer review assessment of how Panama's legal framework and practices over the last three years match up against existing international standards of transparency and exchange of information on request. "The forthcoming report will reflect Panama's past record on transparency issues. Today's signing, combined with very recent legislative changes opening the door for wide-ranging international cooperation, illustrates the good disposition and commitment by Panama to move forward in the area of tax transparency," Mr Gurría said. The convention provides for all forms of administrative assistance in tax matters: exchange of information on request, spontaneous exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It guarantees extensive safeguards for the protection of taxpayers' rights. It also allows automatic exchange of information on option. The convention is global, and is seen as a critical instrument for swift implementation of the new Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries and slated to go into effect from 2017. It will also be critical for implementation of automatic exchange of country by country reports under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project, and is a powerful tool in the fight against illicit financial flows.