Oil subdued after heavy falls on price war

SINGAPORE — Oil prices were subdued in early Asian trade Thursday following sharp falls overnight, after Saudi Arabia and the UAE escalated a price war by vowing to pump millions more barrels of crude.

Both main contracts fluctuated between small gains and losses. West Texas Intermediate was trading at around $33 a barrel while Brent crude was at about $36 a barrel. 

Crude markets suffered their biggest 1-day drop in a generation on Monday after top exporter Riyadh began a price war following a refusal by Moscow to reduce output to combat the coronavirus impact.

Prices have swung wildly since and fell heavily again Wednesday, mirroring falls on global stock markets, after Saudi Arabia and Gulf partner UAE said they would open the oil taps further.

They said they will together boost production by at least 3.5 million barrels per day (bpd), to 16.3 million bpd, from April.

Investors were also waiting for an address by US President Donald Trump, who is set to explain his plan for tackling the virus outbreak -- which has now been declared a pandemic by global health officials -- and economic assistance. 

The collapse of oil prices came after OPEC kingpin Saudi Arabia had led a push to reduce output further to shore up prices amid slumping demand.

But the move was blocked by Moscow, the world's second-biggest oil producer, prompting Riyadh to slash prices.

Analysts see no end in sight to the turmoil.

"We suspect that Russia and Saudi Arabia may not be interested in a de-escalation for the time being," said investment firm DWS in a note.

Agence France-Presse 

OPEC recommends drastic output cut to counter coronavirus

VIENNA -- Ministers from the OPEC cartel of oil-producing countries on Thursday recommended a drastic production cut of 1.5 million barrels per day to their allies to counter a slump in demand caused by the coronavirus outbreak.

However, it remains to be seen whether the OPEC+ states -- Russia in particular -- will be prepared to countenance such a large cut when they join the meeting of the Organization of Petroleum Exporting Countries on Friday.

OPEC nations -- led by the world's third-largest oil producer Saudi Arabia -- agreed Thursday to recommend "a further adjustment of 1.5 million barrels per day until 30 June 2020," a statement issued by the Vienna-based bloc said.

Countries in the OPEC+ grouping of the cartel's allies would be asked to take on 500,000 barrels of the cuts, the statement added.

Producers had already had to contend with abundant supplies weighing on prices -- agreeing to 500,000-barrels-per-day production cuts at their last meeting in December -- but the spread of COVID-19 across the world has sent prices plunging.

The European benchmark, Brent crude, sank to under $50 per barrel on Sunday, a level not breached since July 2017.

'MIGHT NOT BE ENOUGH'

The success of the summit will above all hang on the alliance between Saudi Arabia and Russia, the most important players in the OPEC and OPEC+ groupings respectively.

Russian President Vladimir Putin was quoted on Sunday as saying the current market price was "acceptable" and above the level foreseen in Russian economic planning.

Russia's RIA Novosti agency reported Wednesday that Moscow's delegation was proposing an extension of the existing deal with no fresh cuts.

Ann-Louise Hittle, an analyst with Macro Oils, said she expected that Russia, world's number 2 producer after the United States, to agree with the cut "given their history of co-operation with OPEC".

Tamas Varga of PVM told AFP that even the recommended extra cuts "might not be enough", saying OPEC's new forecasts for a drop in global oil demand growth may turn out to be "overoptimistic".

"I believe that oil prices will fail to recover significantly for the remainder of the year as the coronavirus crisis drags on," he said.

Some economists believe it is not impossible that the world economy could contract in the first quarter of the year, which implies lower demand for oil than OPEC has been forecasting, although activity is expected to bounce back once the crisis fades.

Oil prices drifted lower after the announcement.

'FOOTSHAKE'

Aside from bridging their differences on the effect of the virus on the market, the assembled officials are also having to accommodate changes to their routines in Vienna.

All those entering the OPEC headquarters have to undergo temperature checks.

After the meeting's opening speech, a medical adviser passed on hygiene guidelines, while assuring delegates that the risk of coronavirus infection in Vienna was "very, very low".

Austria nationwide has recorded more than 40 cases so far.

On Wednesday, OPEC's Secretary General Mohammed Barkindo and Russian Energy Minister Alexander Novak were seen in a video tweeted by the organisation attempting a "footshake", gently bumping the sides of their feet together in a more hygienic alternative to a handshake.

The cartel has also barred access to its headquarters for the media due to the "risk that would come from convening such a vast number of people in one place".

Livestreams of the beginning of meetings are instead being made available to journalists at a press center in a nearby hotel.

In a statement on Tuesday, OPEC said it was following UN guidelines and planned to "shorten the format of such gatherings, limit the number of participants and cancel any related side-events".

Agence France-Presse

Motive unclear in deadly New Jersey kosher grocery rampage - officials

NEW YORK—Investigators are not sure why 2 people launched a deadly attack at a New Jersey kosher grocery store, state officials said on Wednesday, but a federal law enforcement source said the incident did not appear to be an act of organized terrorism.

Six people, including the 2 shooters, 3 civilians and a police officer, died in a series of events that ended in a police shootout on Tuesday in Jersey City, New Jersey, across the Hudson River from New York City.

The 4-hour gun battle at the Jewish JC Kosher Supermarket erupted after the pair shot the police officer at a nearby cemetery and then fled in a white van. It ended after police crashed an armored vehicle through the wall of the market.

"We are not in the position at this time to say definitively why the suspects stopped in front of the supermarket and began firing," New Jersey Attorney General Gurbir Grewal told a news conference.

Jersey City Mayor Steven Fulop ordered police to be on high alert to protect Jewish neighborhoods following the attack.

The federal law enforcement source said investigators believe mental illness and drug use may have been the primary factors in the attack. He said investigators now view an anti-Semitic message posted online by one of the shooters as a secondary factor.

Officials identified the shooters as David Anderson, 47, and Francine Graham, 50. The 3 civilian victims inside the market were Mindy Ferenz, 32, Miguel Douglas, 49, and Moshe Deutsch, 24, they said.

A fourth person who was in the market when the shooters entered escaped. Officials declined to identify that person.

Police found a homemade pipe bomb in the rented van that the shooters drove to the market.

Some local media reported the initial confrontation between the suspects and police near the Jersey City cemetery, about a mile (1.6 km) from the supermarket, was linked to a previous homicide investigation. The 2 shooters also are suspects in that earlier murder, officials said.

The dead police officer, identified as Joseph Seals, a 15-year veteran of the force and father of 5, was shot at the cemetery shortly before the shootout around the grocery began.

"We are deeply shocked and saddened by the antisemitic attack in #JerseyCity yesterday," the Israeli embassy in Washington said on Twitter.

"This remains a very fluid and fast-moving investigation," said New Jersey Governor Phil Murphy. "Based on everything we know, there is no ongoing security concern related to the events of yesterday."

source: news.abs-cbn.com 

US stocks sink more than 2% on trade war fears

NEW YORK, United States - US stocks plunged more than 2 percent Friday after President Donald Trump warned of tariffs on an additional $100 billion of Chinese imports, provoking a strong response from Beijing and fanning fears of a full-blown trade war.

Investors were unnerved by the latest broadside from the volatile US president and by China's strident response, which vowed Beijing would stand firm "until the end at any cost."

"The market is getting more concerned about the possibility of a trade war between the US and China," said Tom Cahill, portfolio strategist at Ventura Wealth Management.

"The market does not like uncertainty and right now we have a lot of it."

The Dow finished down 2.3 percent at 23,932.76, with all 30 members ending in the red. The S&P 500 and tech-rich Nasdaq indices also lost more than 2 percent.

The barbs over trade overshadowed a lackluster jobs report, which placed US jobs growth at 103,000 in March, well below analyst expectations. Unemployment held steady at 4.1 percent. 

European equity markets also retreated, but not as severely, with Paris, Frankfurt, and London falling half a percentage point or less.

Asian stocks mostly receded on Friday. Tokyo finished in the red, losing 0.4 percent. There were also losses for Seoul and Sydney, while Shanghai was shut.

Hong Kong, however, outperformed regional peers with a sizable 1.1-percent gain, with the market playing catch-up after Thursday's closure. 

BARGAINING TACTIC

The more muted response overseas likely reflects skepticism that the harsh trade rhetoric between the US and China will be followed up with concrete action.

Some investors have taken solace from signals that the Trump administration may be taking a harsh line as a bargaining tactic towards deal making with China. 

But those hints were absent Friday.

Top White House economic advisor Larry Kudlow, who had repeatedly suggested that US tariffs might not go into effect, reversed himself, and warned Friday that the tariff threat is not a negotiating tactic.

Kudlow said that tariffs were still not a certainty and there were some "back channel" talks going on but "any foreign policy can go wrong."

US stocks deepened further in the afternoon following an interview with Treasury Secretary Steven Mnuchin and a speech by Federal Reserve Chairman Jerome Powell.

Briefing.com analyst Patrick O'Hare said investors were disappointed by the lack of reassurances from Trump administration officials, including Mnuchin, who told CNBC that the administration hoped to negotiate but acknowledged that a trade war was a possibility.

The Mnuchin interview was a "reminder that things are moving in a contentious direction because there are no negotiations and no one is really backing down on either side on the implementation of tariffs," O'Hare said.

Fed Chair Powell, meanwhile, signaled that the US central bank still plans to press ahead with additional interest rate hikes in 2018, a stance that also disappointed investors.

"The market might have been starting to contemplate that all the trade volatility might lead the Fed to be a little less aggressive with its policy, and at least for today, the Fed chairman didn't give any indication that that was going to be the case," O'Hare said.

KEY FIGURES 

New York - Dow: DOWN 2.3 percent at 23,932.76 (close)

New York - S&P 500: DOWN 2.2 percent at 2,604.47 (close)

New York - Nasdaq: DOWN 2.3 percent at 6,915.11 (close)

London - FTSE 100: DOWN 0.2 percent at 7,183.64 (close) 

Frankfurt - DAX 30: DOWN 0.5 percent at 12,241.27 (close)

Paris - CAC 40: DOWN 0.4 percent at 5,258.24 (close)

EURO STOXX 50: DOWN 0.6 percent at 3,408.10 (close)

Tokyo - Nikkei 225: DOWN 0.4 percent at 21,567.52 (close)

Hong Kong - Hang Seng: UP 1.1 percent at 29,833.31 (close)

Euro/dollar: UP at $1.2281 from $1.2240 at 2100 GMT Thursday

Dollar/yen: DOWN at 106.92 yen from 107.39

Pound/dollar: UP at $1.4088 from $1.4003

Oil - Brent North Sea: DOWN $1.22 at $67.11 per barrel

Oil - West Texas Intermediate: DOWN $1.48 at $62.06 per barrel

source: news.abs-cbn.com

Wall St surges on government shutdown's end, aiding global momentum

NEW YORK - A deal to end a three-day government shutdown in Washington sent a jubilant Wall Street to a fresh set of records on Monday, as US stocks continued their seemingly irrepressible upward march.

Most other global markets also rose but across the Atlantic results were mixed, with Paris and Frankfurt up while London sagged.

Word of the bargain struck among lawmakers in Washington early Monday afternoon sent all three New York stock indices soaring to fresh heights -- the eighth time this year that Wall Street has hit a trifecta of record finishes.

"The market collectively breathed a sigh of relief as the government shutdown is over and it did not get dragged out or disrupt normal Main Street or Wall Street activities," said Adam Sarhan of 50 Park Investments.

Sarhan said corporate profits again are the central focus of investors, and 68 percent of companies that have reported so far have beaten Wall Street's estimates.

"Until we have more clarity in respect of what is going to happen on the earnings front in 2018, the bulls deserve the benefit of the doubt," he told AFP. "The market refuses to fall, even in these extended circumstances."

Struggling industrial behemoth General Electric, which also is due to post quarterly earnings, fell another 0.6 percent Monday -- briefly sinking below $16 per share -- after a downgrade of its stock by Bank of America Merrill Lynch.

A BREAKTHROUGH IN GERMANY, TOO?  

Meanwhile, prices edged higher in Paris and Frankfurt, after Germany's center-left Social Democrats voted Sunday to begin formal coalition talks with Chancellor Angela Merkel's conservatives.

The news, which brought Europe's top economy a step closer to a new government after months of deadlock, helped guide the euro higher.

"This is a step in the right direction for German politics and traders will be watching it closely," said CMC Markets UK analyst David Madden.

The thumbs-up will come as a huge relief to Merkel, staving off the threat of snap polls or the unappealing prospect of leading an unstable minority government.

Shares in the French and German telecoms giants, Orange and Deutsche Telekom, were boosted by a report in French daily Le Monde that the two held merger talks between May and September 2017 last year, traders said. Shares of both companies ended the day around two percent higher.

The report said there were "confidential discussions" held between the two companies examining the options for a "merger of equals."

KEY FIGURES AROUND 6 A.M. MANILA TIME  

New York - DOW: UP 0.6 percent at 26,214.60 points (close)

New York - S&P 500: UP 0.8 percent at 2,832.97 (close)

New York - Nasdaq: UP 1 percent at 7,408.03 (close)

London - FTSE 100: DOWN 0.3 percent at 7,708.82 (close)

Frankfurt - DAX 30: UP 0.2 percent at 13,463.69 (close)

Paris - CAC 40: UP 0.3 percent at 5,541.65 (close)

EURO STOXX 50: UP 0.4 percent at 3,665.28 (close)

Tokyo - Nikkei 225: FLAT at 23,816.33 (close)

Hong Kong - Hang Seng: UP 0.4 percent at 32,393.41 (close)

Shanghai - Composite: UP 0.4 percent at 3,501.36 (close)

Euro/dollar: UP at $1.2263 from $1.2225

Pound/dollar: UP at $1.3987 from $1.3860

Dollar/yen: UP at 110.92 from 110.77 yen

Oil - Brent North Sea: UP 42 cents at $69.03 per barrel

Oil - West Texas Intermediate: UP 25 cents at $63.62

source: news.abs-cbn.com

Bitcoin makes muted stock exchange debut at $15,000

NEW YORK - Cryptocurrency Bitcoin made its debut on a major bourse Sunday, opening at $15,000 per unit at the Chicago board options exchange.

Around 23:20 GMT, the price of the currency had risen to $15,940 dollars on a futures contract scheduled for settlement on January 17 according to data provided by the Chicago board options exchange (Cboe).

A futures contract is a financial product that allows investors to bet on whether the currency's price will rise or fall.

It is the first opportunity for professional investors to invest in bitcoin.

Many are way of embracing bitcoin because it has no central bank backing it and no legal exchange rate.

The first twenty minutes of trading saw volatility, with the price rising to $16,600 per unit before going down.

Bob Fitzsimmons, a futures manager at Wedbush Securities, told AFP approximately 150 trades were made in the first few minutes.

"It's quiet," he said.

Its price was $15,250 in pre-opening trades that took place 45 minutes before the official start, Fitzsimmons added.

This was still far short of its highs of $17,000 on other non-regulated online platforms last week.

The Cboe website was down at the time of the debut on Sunday.

source: news.abs-cbn.com

Bitcoin futures launch sparks excitement, warnings

NEW YORK - Bitcoin will make its debut on a major exchange Sunday, a landmark for the cryptocurrency that has generated enthusiasm among some investors and more than a little anxiety from others.

The Cboe Futures Exchange in Chicago will open trading in bitcoin futures at 7 a.m. Monday (Manila time), a move that is expected to be followed a week later by a rival listing on Chicago Mercantile Exchange.

"Bitcoin bonanza takes hold of world markets," proclaimed the front page of the Times of London on Friday, reporting on the latest record price of the digital currency.

Among those cheering the launch are the Winklevoss twins, who have been called the first bitcoin billionaires. Critics include financial commentator Jim Cramer, who warns that prices could tumble once the new trading venues open the door to "short sellers," who bet on downward moves in assets.

The two launches were made possible after a key US regulator, the Commodities and Futures Trading Commission, gave the green light to the exchanges on December 1, while warning "of the potentially high level of volatility and risk in trading these contracts."

Anticipation of the first mainstream listings for the digital currency has been a catalyst for a sharp price increase in recent weeks. Bitcoin opened 2017 at around $1,000, surged past $10,000 for the first time last month and soared as high as $16,777 on Thursday before retreating somewhat.

The actual opening of the Cboe market, an electronic trading venue, is expected to be a low-key affair, lacking the pomp of an initial public offering, which is often marked by the new entrant ringing the bell of the New York Stock Exchange.

"There won't be any ceremony, no champagne," said a person close to the Cboe process.

"It's going to happen quietly, a switch flipping," the person added. "There are not going to be many people in the office."

GOING MAINSTREAM

The embrace by mainstream exchanges of bitcoin futures -- a type of derivative contract that allows trading based on bitcoin's movement, without taking ownership of the currency itself -- marks a sea change from the days when the digital currency was associated with drug dealing and other illicit activities.

Still, plenty of key figures in and around markets are taking a cautious approach to bitcoin, which has no central bank backing it, and no legal exchange rate.

The Futures Industry Association, which includes some of the world's biggest derivatives brokerages, criticized the CFTC's move in a letter to the regulator, saying contracts are being rushed through without properly weighing the risks.

"A more thorough and considered process would have allowed for a robust public discussion among clearing member firms, exchanges and clearing houses," the association said.

Several leading financial heavyweights are still studying bitcoin and not serving as financial intermediaries. This group includes JPMorgan Chase, Bank of America Merrill Lynch, Citigroup, Barclays, Morgan Stanley and Societe Generale, said people close to the matter.

Of the larger banks, only Goldman Sachs and ABN Amro are serving as intermediaries for the trades. That means most of the terrain will be dominated by smaller entities that are typically requiring larger than usual margin requirements -- funds set aside as collateral in case of losses.

Wedbush Securities has lifted its margin requirements and is only permitting trades from clients on a "selected" basis, said Bob Fitzsimmons, a managing director for the firm.

"We are commissioning only the select clients who have experience in bitcoins," he said.

"Our risk systems are ready and we have made sure we have our customers and firm protected by increased margins and increased scrutiny."

source: news.abs-cbn.com

China's answer to Kindle raises $1.1-B for Hong Kong listing

HONG KONG - Chinese internet giant Tencent's e-book arm has raised US$1.1 billion for a Hong Kong listing next week, reports said Wednesday.

China Literature, the country's biggest online publishing business and Tencent's answer to Amazon's Kindle Store, saw 151 million shares priced at the top end of the offered range of HK$55 ($7.05) each, Bloomberg News said, according to people close to the deal.

The internet giant owns 62 percent of China Literature, which called itself a "pioneer" of China's online literature market on its prospectus and said that it carries 6.4 million writers and 9.6 million literary works.

Formerly known as China Reading, the Shanghai-based company was created through a merger between Tencent's online literature arm and another Chinese internet publisher, Shanda Cloudary.

The e-book firm is expected to list on Hong Kong's bourse on November 8.

China Literature's offering is the fifth-largest IPO in the city this year, according to Bloomberg News, with tech companies increasingly looking to list on the southern Chinese city.

Popular selfie app developer Meitu debuted on the Hong Kong stock exchange in December -- the largest IPO by a technology company in the city in almost a decade.

The listing raised $629 million for the firm, which targets teenagers and young adults, primarily female, who use the beautifying app to retouch selfie photos.

Video game accessories maker Razer is also looking to list in Hong Kong and is expected to raise at least $400 million.

Razer's chief executive officer Tan Min-Liang has already raised funds from Singapore's Temasek Holdings and from Hong Kong's richest man Li Ka-shing.

source: news.abs-cbn.com

PSE's CMIC Gets SRO Status

MANILA, Philippines — The Philippine Stock Exchange (PSE) lauded the decision of the Securities and Exchange Commission (SEC) to grant the Capital Markets Integrity Corporation (CMIC) a self regulatory organization status (SRO).

The CMIC was granted a provisional SRO status or the authority to operate as the independent audit, surveillance and compliance unit of the PSE.

The provisional SRO shall be subject to review by the SEC after six months and the full status as SRO may be granted once the SEC is convinced that the CMIC is able to operate pursuant to its mandate.

"This is one of the cornerstone milestones for the equities market in terms of enhancing the corporate governance structure for market regulations. This positive development will also allow the PSE to focus on market and product development," said PSE president Hans B. Sicat.

CMIC president Antonio Garcia Jr. said "the board and management of CMIC are thankful to the SEC for its vote of confidence on CMIC and our commitment to market reforms."

Last year, the CMIC signed an agreement with the Korea Exchange for the acquisition and implementation of a surveillance system which will enhance its capability to monitor stock trading activities and strengthen market integrity.

The said system, called Exture Surveillance System, is targeted to be operational by the first half of 2012.

Integrated into the EXTURE surveillance system are detection rules, statistic analysis models, benchmarks and accounts relation and pattern recognition logics.

The accuracy of these analysis models is crucial for maintaining a fair and orderly market. The new surveillance system also features an Integrated Visual Analysis System (IVAS) tool that can visually illustrate the market at a glance.

Such a function reduces the average analysis and investigation time thereby increasing the efficiency of the whole market surveillance operations.

The new surveillance system is dynamic, efficient, scalable and reliable. At the minimum, the system is designed to support a market of 1 million orders/trades per day.

EXTURE can also adapt to any type of cash (whether equities or fixed-income instruments), derivatives inter-linked markets in the world.

CMIC is the successor company of the PSE's Market Regulation Division which was tasked with trading participant regulation and surveillance. The company is governed by a board composed of its president and CEO and four independent directors.(James A. Loyola)

source: mb.com.ph