1 Oil falls despite Saudi-Russian output deal (BBC) Oil
prices fell on Tuesday despite Saudi Arabia and Russia agreeing to freeze oil
output at January levels if other producers follow suit. The announcement came
after ministers from the two nations met in Doha along with their counterparts
from Venezuela and Qatar.
Brent crude, which had risen more than 5% earlier,
finished down 3.2% at $32.33 a barrel, while US crude was down 2% at $29.14. Oil
prices have sunk from their recent peak of about $116 in June 2014.
Saudi Arabian oil minister Ali al-Naimi said:
"Freezing now at the January level is adequate for the market. We don't
want significant gyrations in prices, we want to meet demand. We want a stable
oil price."
Iraq's oil ministry said the country was also ready
to commit to a production freeze if a deal was reached among other producers. Iraq
announced record oil production in January, when output from all its fields averaged
4.7 million barrels per day. It is Opec's second largest oil producer,
according to the International Energy Agency.
But Iran's petroleum minister, Bijan Zangeneh, said
that the country would "not forego its oil market share". Iran is
keen to recover lost ground after western sanctions were lifted recently,
adding to fears about oversupply. It aims to raise crude production and exports
to one million barrels a day.
Tensions also remain between Saudi Arabia and Russia
over Syria. Russia is supporting President Assad's regime, with help from Iran
while Saudi Arabia as the regional Sunni power is backing opposition forces.
2 China plans new steps to boost economy (Straits
Times) China is stepping up support for the economy by ramping up spending and
considering new measures to boost bank lending.
The nation's chief planning agency is making more
money available to local governments to fund new infrastructure projects,
according to people familiar with the matter. Meantime, China's cabinet has
discussed lowering the minimum ratio of provisions that banks must set aside
for bad loans, a move that would free up additional cash for lending.
Officials are upping their rhetoric too. Premier Li
Keqiang said policy makers "still have a lot of tools in the box" to
combat the slowdown in the world's No 2 economy, days after People's Bank of
China Governor Zhou Xiaochuan broke a long silence to talk up confidence in the
nation's currency, the yuan.
The nation's communist leaders are seeking to
maintain economic growth of at least 6.5 per cent a year through 2020 to meet
their pledge of creating a "moderately prosperous society." China's
annual National People's Congress meets in March, where delegates will sign off
on a new five-year economic plan.
China grew by 6.8 per cent last quarter, the slowest
pace since the global financial crisis. The sluggish performance came against
the backdrop of a stock-market rout and a sudden devaluation in the yuan that
roiled investors amid fears of further weakness.
Signs are now emerging that six interest-rate cuts
by the People's Bank of China since November 2014, along with other measures to
boost lending, are starting to flow through. PBOC data released Tuesday showed
that aggregate financing surged to 3.42 trillion yuan in January, compared with
the median forecast of 2.2 trillion yuan in a Bloomberg survey.
In a more positive sign, companies are paying down
their foreign debt. Over the past six months, corporates have shaved their
dollar borrowings to $820 billion from $940 billion in July. Cutting back on US
dollar exposure brings down borrowing costs for companies in the real estate,
energy and banking sectors especially, and removes risks should the yuan
continue to weaken.
3 Apple issues bonds worth $12bn (Sam Thielman in
The Guardian) Apple announced it was issuing bonds estimated in value at $12bn,
despite a current cash reserve of $215bn. The bond issue, the latest in a
series of huge debt issues, will be used largely to return money to
shareholders without repatriating any of the estimated $177bn it holds overseas
at a tax rate lower than it would be charged in the US.
Reports indicate that US-based companies are
offshoring some $2.1tn in cash between them; Google, Apple and Microsoft alone
account for one-fifth of that wealth. Some firms have decided to begin bringing
the previously tax-free cash back into the country as lawmakers begin to
develop policies that disallow untaxed foreign liquidity.
Apple’s bond issuance appears to give the company
another out. The tech behemoth’s CEO, Tim Cook, has been voluble on the topic
of whether the largest company in the world goes too far to avoid paying taxes
on its income. “Apple pays every tax dollar we owe,” Cook said.
According to Moody’s credit agency, the company
avoided paying $9bn in taxes in 2012 alone using this strategy. The latest debt
issue comes amid an ongoing European Commission investigation into Apple’s use
of Irish tax shelters could result in an $8bn tax bill.
No comments:
Post a Comment