Thursday, November 12, 2015
How China spent $1bn in eight minutes; Profit warning hits Rolls-Royce shares; Oil continues slide
1 How China spent $1bn in eight minutes (BBC) For Westerners, the site is nowhere near as ubiquitous as Amazon or eBay but in China Alibaba dwarves its American counterparts when it comes to one-day online sales.
Singles Day, an annual online shopping day in China similar to Cyber Monday in the US, has exploded in popularity since 2009. Held on 11 November each year, it draws its name from the “bare sticks” represented by the four number ones in the date. Last year shoppers spent $9.3bn in one day. This year, Singles Day has eclipsed that amount by $5 bn.
In eight minutes the sales had crossed $ 1 billion, and in 24 hours it topped $ 14.3 billion on Alibaba. In the US, the biggest ever online sale in a day was $ 2.04 billion, achieved on December 1, 2014, also known as Cyber Monday.
2 Profit warning hits Rolls-Royce shares (Julia Kollewe in The Guardian) Rolls-Royce’s share price plunged more than 20% after the British engine maker issued its fourth profit warning in just over a year. The company pointed to a sharp drop in the number of corporate jets powered by Rolls-Royce engines in the third quarter, while demand for other corporate jet services also weakened.
The company now expects profit “headwinds” of £650m next year, more than double the £300m cut to profit identified in July. Rolls-Royce also announced on Thursday a major restructuring programme for next year to reduce fixed costs, streamline senior management and improve decision-making, all aimed at saving up to £200m a year.
Chief executive Warren East, who took over from John Rishton in July, said: “While 2015 remains broadly as expected, the outlook for 2016 is very challenging. The speed and magnitude of change in some of our markets, which have historically performed well, has been significant and shows how sensitive parts of our business are to market conditions in the short-term.”
The engine maker’s fortunes turned after a decade of rising sales, leading to a series of profit warnings from early last year. Annual profits more than halved in July. The Derby-based group has already announced it is cutting more than 3,000 jobs in its aerospace and marine arms. This includes closing factories in Ansty in Warwickshire, England, and East Kilbride in South Lanarkshire, Scotland.
3 Oil continues slide (Tarik Chebib in Khaleej Times) Commodity prices have been falling across the board; Gold, Silver and Oil are all down in November. Focusing on Crude Oil, we can see that the decline has temporarily stopped at a key support level at 42.60. This level is significant, as the commodity has bounced off it three times this year already. First last March, a low of $42.64 printed before prices climbed all the way up to $62 in the following 7 weeks.
The rig count in the US has fallen an average of more than 10 per week in the last 2.5 months.