1 UK warned of cocktail of economic risks (BBC) The
UK faces a "cocktail" of serious threats from a slowing global
economy as 2016 begins, Chancellor George Osborne has warned. He said this year
is likely to be one of the toughest since the financial crisis. He told
business leaders that far from "mission accomplished" on the economy,
"2016 is the year of mission critical".
His message is in stark contrast to the positive
tone of his Autumn Statement, when he said the UK was "growing fast".
The price of a range of key commodities, such as oil, gas and iron ore, has
fallen sharply in the past year, a move that indicates weakening demand in the
global economy while oil prices hit fresh 11-year lows.
But shadow chancellor John McDonnell blamed the
government's "failed economic policies" for the threats facing the
economy. "It's a cocktail of his own mixture - failing to invest, failing
to rebalance the economy, relying upon consumer debt to boost the economy for
an election victory and now we're facing our own lethal cocktail within our own
economy," he said.
The chancellor laid out a number of risks that the
UK economy faces over the next 12 months in his Cardiff speech. Significant
challenges - including tension in the Middle East, slowing growth in China and
low commodity prices - are all weighing on global confidence, he added.
2 Saudi Arabia considers Aramco IPO (Terry
Macalister in The Guardian) Saudi Arabia is considering a stock market listing
for its national oil group – the world’s biggest energy company and probably
the most valuable company on the planet.
Saudi Aramco is a highly secretive organisation but
is likely to be valued at well over $1tn. Any public share listing would be
viewed as a potent symbol of the financial pain being wreaked by low prices on
the world’s biggest crude exporting country.
Prince Muhammad bin Salman, the country’s highly
influential deputy crown prince, confirmed that a decision would be taken
within months whether to raise cash in this way, even as oil company shares are
depressed at this time.
The sale via an initial public offering (IPO) of any
part of Saudi Aramco would be a major change in direction for a country, which
has jealously guarded its enormous – and cheaply produced – oil reserves.
Aramco’s reserves are 10 times greater than those of Exxon, which is the
largest publicly listed oil company.
The prince, considered the power behind the throne
of his father King Salman, is keen to modernise the largely oil-based Saudi
economy by privatisation or other means but it also needs to find money. The
country is under pressure, with oil prices plunging to their lowest levels in
11 years and more than 70% below where they were in June 2014.
This has put huge strain on Saudi public spending
plans, which were drawn up when prices were much higher and pushed the public
accounts into deficit. Prince Muhammed, however, denied that the country was
facing an economic crisis: “We’re too far from it. We are further than the 80s
and the 90s. We have the third-largest reserve in the world. We were able to
increase our non-oil revenues this year alone by 29%,” he said.
Western oil companies including Shell, BP and
ExxonMobil may be very interested in an opportunity to buy into Saudi Aramco –
even when their own balance sheets are being stretched by a collapsing crude
values. But other state-owned petroleum groups, from China and elsewhere, would
also be keen to take a stake in a company that controls more than 260bn barrels
of reserves. Saudi Aramco produces all of Saudi’s 10.25m barrels a day, which
is more than double that of Exxon and Rosneft in Russia.
http://www.theguardian.com/business/2016/jan/07/saudi-arabia-considers-ipo-national-oil-group-aramco
3 Samsung Q4 profit misses expectations (San
Francisco Chronicle) Samsung Electronics has said that its fourth-quarter
profit rose 15 percent over a year earlier, a smaller-than-expected gain as the
world's largest maker of smartphones and memory chips struggles to revive
growth.
The South Korean company reported in its earnings
preview that it recorded 6.1 trillion won ($5.1 billion) in operating profit
for the October-December quarter, compared with 5.3 trillion won a year
earlier. Samsung was expected to report 6.6 trillion won in operating profit.
Sales stayed nearly flat at 53 trillion won ($44.3
billion), also slightly lower than expectations. It did not give net profit or
other details, which will be announced at the end of this month. The
preliminary results showed that the company's annual operating profit likely
posted a slight gain from 2014 after posting more than 30 percent fall in 2014
from 2013.
Analysts recently lowered their forecasts on
Samsung's earnings for the final quarter of 2015, citing weak global demand for
personal computers and smartphones that hurt its semiconductor business. Its
memory chip and mobile processor business have helped partially outweigh its
profit fall from sales of its own smartphones.
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