Saturday, May 14, 2016

Moody's downgrades Saudi Arabia; Germany to spend $106bn on refugees; Toyota profit falls 35%

1 Moody’s downgrades Saudi Arabia (The Guardian) Saudi Arabia’s credit rating has been downgraded by Moody’s because of the long and deep slump in oil prices. Moody’s Investors Service said it also downgraded Gulf oil producers Bahrain and Oman. It left ratings unchanged for other Gulf states including Kuwait and Qatar.

Saudi Arabia is the world’s largest oil exporter. Moody’s cut the country’s long-term issuer rating one notch to A1 from Aa3 after a review that began in March. Crude prices fell from more than $100 in mid-2014 to under $30 a barrel in February, although they have recovered into the mid-$40s. Benchmark international crude settled on Friday at $47.83 a barrel.

“A combination of lower growth, higher debt levels and smaller domestic and external buffers leave the Kingdom less well positioned to weather future shocks,” Moody’s said in a note. Moody’s lowered Oman to Baa1 from A3 and Bahrain to Ba2 from Ba1. The ratings agency did not downgrade Kuwait, Qatar, the United Arab Emirates or Abu Dhabi, but it assigned a negative outlook to each.

Oil prices slumped because of production that grew faster than demand. Surging production from shale operators in the US contributed to the glut. So did the Organization of Petroleum Exporting Countries, which decided in November 2014, several months after prices began falling, to continue pumping rather than give up market share.

3 Germany to spend $106bn on refugees (San Francisco Chronicle) Germany's federal government expects to spend 93.6 billion euros ($106.2 billion) to support refugees over the next five years, weekly Der Spiegel has reported.

The Hamburg-based magazine cited a finance ministry document that predicted the annual costs would rise from about 16.1 billion euros ($18.2 billion) this year to 20.4 billion in 2020. Much of the money would go toward basic benefits, housing support and language lessons for asylum-seekers, but the overall amount also includes spending on efforts to fight the reasons why people flee their home countries and seek refuge in Germany.

Finance ministry spokesman Juerg Weissgerber declined to comment on the figures but confirmed that federal officials were in discussion with representatives from Germany's 16 states about the cost of supporting refugees.

Heavy government spending on refugees has boosted Germany's economy in recent months, but has also stoked resentment among some Germans who believe that migrants are getting preferential treatment. Almost 1.1 million asylum-seekers entered Germany last year, although the government has stressed that the figure doesn't account for those who move on to other countries or return home.

A finance ministry document predicts that 600,000 refugees will come to Germany this year, falling to 400,000 in 2017 and 300,000 in the following years. It assumes that over half of those who are officially recognized as refugees will find work within five years.

Thanks to low unemployment and strong exports, Germany recorded a budget surplus of 12.1 billion euros last year on federal spending of 299.3 billion euros.

3 Toyota profit falls 35% (Khaleej Times) Toyota Motor Corp is projecting a 35 per cent plunge in profit for the fiscal year through March 2017, as the perks of a favourable exchange rate fade, and it reported a four per cent drop in profit for January-March on-year at ¥426.6 billion ($3.9 billion).

The Japanese automaker is expecting ¥1.5 trillion ($13.8 billion) in annual profit, a reversal after three straight years of record profits. That number could fare worse as it doesn't account for recent production stops over supply shortages caused by a major earthquake in southwestern Japan.

For the fiscal year ended in March, Toyota's profit totalled ¥2.3 trillion ($21 billion), up 6.4 per cent from the previous year, when it had recorded a ¥2.2 trillion profit. January-March sales fell two per cent to ¥6.9 trillion ($63 billion). Sales for the fiscal year gained four per cent to ¥28.4 trillion ($261 billion).

Toyota, the No. 1 automaker in global vehicle sales, sold 8.7 million vehicles for the fiscal year through March, down from nearly nine million vehicles the previous fiscal year. Sales fell in Japan, the rest of Asia and Europe, with North American the only major market to see rising vehicle sales. The company expects its global vehicle sales to recover in the fiscal year through March 2017 to 8.9 million vehicles.

Toyota was in a neck-and-neck race against Volkswagen for the crown of world's biggest automaker until Volkswagen was hit by an emissions-cheating scandal last year. US rival General Motors Co led the industry for more than seven decades until Toyota surpassed it in 2008.

No comments:

Post a Comment