Tuesday, February 2, 2016
Eurozone unemployment at lowest level in four years; Saudi fiscal reserves at four-year low; Yahoo reports $4.4bn loss, to cut 15% staff; BP profits halve, shares plunge
1 Eurozone unemployment at lowest level in four years (San Francisco Chronicle) Unemployment across the 19-country eurozone fell in December for the 15th month running to its lowest level in a little more than four years, official figures have shown.
However, the monthly decline was the smallest in six months and has reinforced concerns that the recovery was already losing momentum at the end of 2015 — even before the China-related turmoil in financial markets stoked fears for the global economic outlook.
Statistics agency Eurostat said the number of people out of work across the eurozone in December decreased by 49,000 to a total of 16.75 million, its lowest level since October 2011. The last time the eurozone has enjoyed a longer run of falling unemployment was the 21-month stretch that ended in June 2007.
As a result of the latest monthly fall, the unemployment rate fell from 10.5 percent to 10.4 percent, its lowest since September 2011. Though unemployment has been falling steadily, it's still relatively high across the region, certainly in comparison with the US, where the jobless rate stands at 5 percent.
And the overall numbers continue to mask big disparities. While Germany's unemployment rate stands at 4.5 percent, according to Eurostat, Greece and Spain remain lumbered by jobless rates above 20 percent. And youth unemployment is way too high at 22 percent across the eurozone as a whole.
2 Saudi fiscal reserves at four-year low (Gulf News) Saudi Arabia’s fiscal reserves dropped to a four-year low last year as the government sought to finance a budget deficit caused by plunging oil revenues, a report says.
The reserves of the world’s largest crude exporter dropped to $611.9 billion at the end of 2015, the lowest level since 2011, down from $732 billion a year before, the Saudi Jadwa Investment said. Jadwa said it expected reserves to fall to around $500 billion by the end of 2016, after oil prices fell by three quarters since mid-2014.
The kingdom, the second largest crude producer after Russia, posted a record budget deficit of $98 billion last year after oil income dived by 60 per cent to just $118 billion. Riyadh also projected an $87 billion deficit for this year but Jadwa forecast the shortfall to be more than $107 billion.
To help finance the budget deficit, the kingdom in December introduced a series of austerity measures raising fuel prices by up to 80 per cent and increasing the prices of electricity, water, natural gas and others. Jadwa said it expected inflation to soar this year to 3.9 per cent, from 2.2 per cent last year, as a result of the price hikes. The kingdom also issued bonds in the domestic market worth $30 billion.
The International Monetary Fund last month revised downward Saudi gross domestic product growth to just 1.2 per cent this year, the lowest since 2009. Its GDP grew 3.4 per cent in 2015. Saudi Arabia is currently pumping 10.2 million barrels of crude per day.
3 Yahoo reports $4.4bn loss, to cut 15% of staff (Jana Kasperkevic & Julia Carrie Wong in The Guardian) Yahoo chief executive Marissa Mayer has announced plans to cut the company’s workforce by 15% and close five foreign offices by the end of 2016.
The struggling tech company reported a $4.4bn loss for the last three months of 2015 as it wrote down the value of assets including Tumblr, the blogging site it bought for $1bn in 2013. Mayer, a former Google executive, has come under pressure from activist shareholders unhappy with her tenure. She announced an “aggressive strategic plan” that is expected to lead to the sale of parts of its business.
Yahoo’s fourth quarter earnings for 2015 were better than expected, coming in at $1.27bn. Overall, the revenue for 2015 was $4.9bn, up from $4.6bn the year before. But the company’s traffic acquisition costs (TAC), the amount Yahoo spends to attract users to its websites, rose to $271m in the fourth quarter, up from $74m a year earlier.
Yahoo said its strategic plan would simplify the company and narrow its focus. While revenue has gone up, Yahoo shares have fallen 33% over the past year. Over the past three months they have fallen by 17%. The company also reinforced its commitment to spinning off its $31bn stake in Alibaba, the Chinese e-commerce business.
4 BP profits halve, shares plunge (BBC) Shares in BP have ended Tuesday almost 9% lower after it reported that annual profits had more than halved. The oil giant said its profits had fallen by 51% to $5.9bn (£4.1bn), compared with $12.1bn in 2014 following a dramatic slide in oil prices.
Oil prices fell sharply on Tuesday, with Brent crude down 5.3% to $32.42. BP's underlying fourth-quarter profits sank to $196m, compared with $2.2bn for the same period in 2014 and far worse than analysts had expected. A further 3,000 job cuts were also announced by BP on Tuesday.
Last year, it said 4,000 jobs would go in its upstream division as part of a $2.5bn restructuring programme. BP said its upstream business, which covers exploration and production, slumped to a $728m loss in the final quarter. Bob Dudley, BP chief executive, said the company was making good progress in managing and lowering costs and capital spending.