Archives for May 2015

Reuters / Jim Young

The US fast food giant McDonald’s will no longer publicly announce its sales figures every month. Instead investors will have to wait for quarterly reports. The restaurant chain is seeking to reverse a decline in sales.

As the company experiences one of the most dismal periods in its 60 year history, its boss Steve Easterbrook has unveiled a raft of measures designed to cut costs and boost sales. Now the firm has confirmed that it will no longer publish monthly sales figures.

“To focus our activities and conversations around the strategic, longer-term actions we are taking as part of our plan, we have decided to discontinue our monthly sales disclosure, effective July 1st,” Easterbrook said Wednesday at a conference in New York.

McDonald’s is not alone in refusing to announce its monthly sales figures. Its competitors, such as Pizza Hut, KFC and Taco Bell do not provide monthly sales information.

As well as becoming tight-lipped about sales, McDonald’s said it would focus on improving quality. All restaurants are being told to toast their buns for longer to try and make their burgers juicier as customers turn to competitors such as Burger King.

READ MORE: ‘Fight for 15’ protest shuts down McDonald’s HQ

Other measures include more side by side lanes in drive-thru restaurants, getting employees to be more accurate with orders, franchising off restaurants and removing unnecessary layers of management.

McDonald’s has already introduced a number of changes including only selling milk that is free from artificial growth hormones and chicken that hasn’t been reared on antibiotics.

In the first quarter of 2015, McDonald’s sales fell by 11 percent. While in February US sales were even weaker than analysts had predicted. Sales in the US plunged 4.0 percent compared to an expected 0.7 percent fall.

The latest measures to try and boost profits follow announcements last month of sweeping closures of underperforming stores.

On top of 350 planned closures another 220 loss-making restaurants were shut in the first three months of 2015, mostly in the US and China as well as 130 in Japan.

But it is in its home country the US where McDonalds is feeling the most pain. Easterbrook acknowledged that the firm had “failed to keep pace” with what customers wanted.

“Some of the challenges we’ve had in the US have been somewhat self-inflicted,” he said.

McDonald’s is also facing demands from US workers for a $15 an hour minimum wage.

Article source: http://rt.com/business/262897-mcdonalds-announcing-monthly-sales/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russian President Vladimir Putin (RIA Novosti /Alexei Druzhinin)

Russia expects to launch the $100-billion BRICS New Development Bank along with a currency reserve pool worth another $100 billion at the July summit in Ufa, said Russian President Vladimir Putin.

“We expect to reach agreement in Ufa on the launch of practical operations of the BRICS Bank and a pool of currency reserves,” Putin said on Thursday at a ceremony to receive the credentials of ambassadors of foreign states, TASS reports.

Putin recalled that the BRICS was created in 2006 under Russia’s initiative, and that the group “has already become an influential factor in world policy and economy.”

“Russia is interested in further intensifying cooperation between the BRICS countries and developing new interaction mechanisms, including in the financial and economic sphere,” he said.

READ MORE: ‘I look forward to service BRICS nations’ – New Development Bank’s Indian first head

An additional impulse would be given in the next days “to the development of inter-parliamentary relations, humanitarian and information cooperation, the intensification of contacts between trade unions and non-governmental organizations,” he added.

The agreement on the establishment of the New Development bank was signed by the BRICS countries in July 2014. The bank seen as rival to the existing US-led institutions, the IMF and World Bank, will finance infrastructure projects and ensure the sustainable development of the group and other developing countries.

President of the Russian Chamber of Commerce Sergey Katyrin took over the chairmanship of a business council of BRICS, an economic association made up of Brazil, Russia, India, China and South Africa, on April 1.

READ MORE: BRICS leadership passes to Russia, $100bn development bank ‘main priority’

The reserve currencies pool worth $100 billion is intended to protect national currencies from volatility in global markets and will allow the five BRICS member states to depend less on fluctuations in the world economy, bypass market volatility and other negative factors.

The upcoming BRICS Summit is to be held in the Russian city of Ufa on 8-9 July. The countries are expected to discuss the IMF reform that should give a louder voice to developing countries in decision-making, and the possibility of creating an independent BRICS rating agency. Russia was chosen to assume the BRICS rotating leadership in April 2015.

Article source: http://rt.com/business/262813-brics-bank-summit-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Serbian Prime Minister Aleksandar Vucic (RIA Novosti / Aleksey Nikolskyi)

Serbia will join US-backed Trans-Adriatic Pipeline following Washington’s calls to reduce dependency on Russian gas, the country’s Prime Minister Aleksandar Vucic told the Associated Press.

“Regarding energy safety, energy security, we are ready to diversify the sources of gas for Serbia, which is very important for our American friends as well,” Vucic said in an interview to AP in Tirana published on Thursday.

Serbia which has already expressed interest in the Moscow-backed pipeline project says it’s not balancing or choosing sides. The country’s main goal is the European Union and it is firm on its EU path, Vucic said, adding that good relations with Washington were very important on Serbia’s road to joining the EU.

READ MORE: Serbia wants to join Turkish Stream – foreign minister

Serbia refused to join Western anti-Russia sanctions while some officials were urging it to choose between Russia and the EU.

“We don’t speak about taking or choosing sides, our side is our path to the EU, our side is (in the interest of) Serbia”, Vucic was cited as saying by AP. He also reminded that he had already voiced this point of view openly to Russian President Vladimir Putin during a press conference.

On the other hand, Belgrade would like to preserve a good relationship with Russia, the prime minister told AP.

United States has been lately persuading Balkan and other countries to join the Trans-Adriatic Pipeline, which is to bring gas to Europe from Azerbaijan via the Russia-proposed Turkish Stream.

The Turkish Stream will have an annual capacity of 63 billion cubic meters, of which 47 billion cubic meters will be delivered to a hub on the Turkish-Greek border. It is replacing the South Stream project which Russia had to suspend in December as the EU blocked its implementation.

The South Stream was supposed to connect underwater Black Sea pipelines with a network in Eastern Europe, with Bulgaria as the entry point.

Earlier this month, Serbian Minister of Foreign Affairs Ivica Dacic said that Belgrade was interested in joining the Turkish Stream pipeline and called on the European Union to support the project.

Article source: http://rt.com/business/262697-serbia-us-pipeline-eu/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Reuters / Francois Lenoir

The European Commission may subpoena eleven countries, including France and Italy unless they implement a directive to protect taxpayers from the aftermath of financial crisis and shift the burden of paying debts of struggling lenders to shareholders.

Bulgaria, the Czech Republic, France, Italy, Lithuania, Luxembourg, the Netherlands, Malta, Poland, Romania and Sweden missed the deadline set by the commission and haven’t applied the the Bank Recovery and Resolution Directive (BRRD).

“The deadline for the implementation of the Directive in national law was 31 December 2014 (see IP/14/2862). However, these 11 countries have failed to fully implement these rules into their national law. The Commission’s request takes the form of a reasoned opinion, the second stage of the EU infringement procedures. If they don’t comply within two months, the Commission may decide to refer them to the EU Court of Justice,” said a European Commission press release on Thursday.

The Commission drafted the rules as a countermeasure to the financial crisis, which started in 2008, giving EU-nations until the end of 2014 to apply them.

The directive is designed to protect taxpayers from having to bail out problem-plagued lenders, making creditors and shareholders commit to the rescue in a process known as “bail-in”.

The BRRD is central to the EU’s Banking Union, established to set up a better environment in the financial sector of the eurozone. The order gives the national authorities of the eurozone enough power to cushion the consequences of banks or large investment firms’ failure.

Taxpayers in Germany, the biggest creditor for troubled European economies, have been repeatedly protesting against further bailouts and debt write-offs made for countries like Greece, saying they are translating into higher taxes and bite deeper into their pockets.

Article source: http://rt.com/business/262765-eu-bank-recovery-program/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

RIA Novosti / Ramil Sitdikov

The December depositors’ panic that resulted in about $6 billion withdrawal was provoked to destabilize the financial situation in the bank and the whole country, says Herman Gref, chairman and CEO of Russia’s largest bank, Sberbank.

“Unfortunately, we could not avoid the panic. You saw what happened. But I can only say this: first, the attack was coordinated, thousands of sms-messages were sent in each region, including a large number of mailings done from foreign websites,” Grefsaid in an interview to Vedomosti published Wednesday, commenting on the biggest withdrawal of funds in Russian history.

“The target was to destabilize the country’s largest bank and financial situation in the country,” he added.

On December 18, Russia’s Sberbank suffered a massive information attack, when people received a text message saying the lender had problems giving out deposits. The same information was transmitted via numerous forums on the internet.

Gref refused to give exact figures, but said that even though 300 billion rubles (about US$6 billion) is not a precise number, it is close to the total sum that citizens withdrew on December 18.

READ MORE: Ruble plummets losing more than 20% in a day, hitting new dollar and euro lows

The outflow was historical, we have never seen anything like that happen, said Gref.

An investigation into Sberbank’s security service is in progress and has already paid dividends.

“I would not like to disclose the results. But we do have specific sites and IP-addresses these mailings were sent from, we even know who these addresses belong to. Not all of them are within our reach. But there is no doubt it was a well-planned provocation,” said Gref.

The biggest bank’s withdrawal in Russian history took place two days after December 16, so-called Black Tuesday, when the ruble hit a record low against hard currencies, trading 99.5 against the euro, and at 79 to the US dollar that day.

A drop in oil prices and US-led sanctions pushed ruble to a 55 percent fall against dollar in 2014.

READ MORE: Russian ruble seen as world’s best performing currency, hits 2015 high

This year has seen a sharp strengthening of Russian national currency.It has been acknowledged the world’s best performing currency in 2015, but this week the ruble has retreated, trading at 52.4 against the dollar and 57 to the euro Thursday at 3pm MSK on Moscow Exchange.

Article source: http://rt.com/business/262685-gref-attack-sberbank-provocation/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Reuters / Carlos Garcia Rawlins

Crude supply from non-OPEC producers will continue growing for another two years, according to an OPEC draft report seen by Reuters. Increased production, mainly shale in North America, is a ‘turning point’ in the restructuring of global markets, it said.

“Since June 2014, oil prices have experienced a significant reduction, reaching levels even lower than the crisis experienced in 2008, yet non-OPEC supply is still showing some growth,” OPEC’s long-term strategy report says, Reuters reported on Thursday. Supply from rival non-OPEC producers will grow at least till 2017, the document said.

The OPEC report comes ahead of the group’s landmark meeting in Vienna on June 5 where it’s expected to make a decision on production quotas.

READ MORE: US oil production growth at record 100-yr high in 2014 – EIA

“Recent structural changes in the growth patterns of non-OPEC supply as a result of the substantial contributions from North American shale plays might prove to be a turning point,” the report said.

It’s the first time in almost 25 years that non-OPEC oil supply has received such optimistic forecasts. Even a severe low price environment won’t result in production cuts for non-OPEC supply and high-cost producers will always seek to cover a part of their operating costs, the report states.

New and cheaper technologies for the extraction of tight crude, shale gas, and oil sands will guarantee aggregate growth at six percent per year and contribute 45 percent of the growth in energy production to 2035, according to the report.

A global oil glut and weak demand could lead to OPEC’s crude fall from 30 million barrels per day (bpd) in 2014 to 28.7 million in 2019. The group’s output currently stands at 31 billion bpd. Demand for OPEC’s oil will start rising only after 2018-2019, reaching almost 40 million bpd by 2040, the report said.

The world’s largest oil producing organization, OPEC refused to cut its output in November despite the price collapse, aiming to recover its market share.

Oil prices, almost halved from last year’s $115 a barrel, have rallied strongly to around $68 per barrel since the beginning of 2015.

Brent futures for July were up 28 cents at $62.34 a barrel by 14:47 MSK on Thursday. US West Texas Intermediate (WTI) crude rose 10 cents to $57.61.

Article source: http://rt.com/business/262645-opec-oil-rivalry-shale/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Ruters / Jason Reed

Visa Inc. may reconsider its sponsorship contract with FIFA if the latter does not immediately take prompt actions to remedy its reputation. Many other sponsors, including Coca-Cola, Adidas and McDonald’s could follow the lead.

“Our disappointment and concern with FIFA in light of [Wednesday’s-Ed.] developments is profound. As a sponsor, we expect FIFA to take swift and immediate steps to address these issues within its organization,” said an official statement on the Visa website published Wednesday.

Visa urged FIFA to start restoring its reputation in the eyes of football fans by“rebuilding a culture with strong ethical practices.” If the football organization fails to do so, VISA will reassess the sponsorship, the statement said.

Visa Inc. was FIFA’s major partner at Brazil’s 2014 World Cup, reportedly paying $25-$50 million per year, along with others such as Emirates Airlines and Sony.

In 2014, the world’s biggest bank-card network extended its contract with FIFA to the 2018 World Cup in Russia and the 2022 tournament in Qatar.

READ MORE: FIFA arrests in corruption probe

The partners are Adidas, Coca-Cola, Visa, OAO Gazprom, Hyundai Motor Co. and its Kia Motors Corp. affiliate, with Anheuser-Busch InBev NV’s Budweiser and McDonald’s as second-tier sponsors of the World Cup.

Visa is not the only company to contemplate tearing up its agreement with FIFA.

“This lengthy controversy has tarnished the mission and ideals of the FIFA World Cup,” said Coca-Cola.

FIFA’s second-tier sponsor McDonald’s expressed its concern with the latest developments, saying it was closely monitoring the situation.

The latest on FIFIA’s $150 million bribery scandal: http://t.co/1jhWFW4KsN pic.twitter.com/atHaiN44z6

— Business Insider (@businessinsider) May 27, 2015

Adidas said it aims to establish a culture of the highest ethical standards and expects the same from its partners.

The FIFA-crisis has no impact on its sponsorship agreement with Gazprom, spokesman for the company Sergey Kupriyanov told TASS on Thursday.

On Wednesday, seven FIFA officials were detained in Zurich at the request of US law enforcement. The Federal Court in Brooklyn indicted 14 sports functionaries, including nine current officials. Among them are FIFA vice-president Jeffrey Webb, President of Costa Rica’s Football Federation Eduardo Li and FIFA Development Officer Julio Rocha.

READ MORE: Red card! Swiss justice office freezes implicated FIFA officials’ bank accounts

They are accused of systematically paying and agreeing to pay over $150 million in bribes and kickbacks, going back to the early 1990s.

Article source: http://rt.com/business/262637-visa-can-leave-fifa/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Reuters / Bogdan Cristel

Macedonia is ready to take part in the construction of the Turkish stream natural gas pipeline once Russia and Brussels reach an agreement on the strategic project, Macedonian Prime Minister Nikola Gruevski has announced.

“Our position is that when Brussels and Moscow reach an agreement on this project, we will take part in it,” Gruevski told Press24 portal. “As a country aiming to join the European community, these are exactly the guidelines we follow when making strategic decisions.”

Following the abandonment of the South Stream gas pipeline project in December 2014, Moscow has switched its resources towards constructing the Turkish Stream as an alternative.

At present, Athens and Moscow are working out the details to construct a segment of the pipeline starting on the Greek-Turkish border that will enable supplies to the EU. The Greek segment of the gas system is projected to run to the Macedonian border.

The Gruevski-led government, which has seen massive uprisings against it in recent weeks, in the past opposed Western sanctions against Russia and supported the Turkish Stream construction.

READ MORE: US urges Greece to reject Turkish Stream, focus on Western-backed project

“If you look at the geography of the region, Macedonia is the best place for constructing the extension of the newest energy infrastructure project in the region, the so-called Turkish Stream,” Russia’s ambassador to the EU, Vladimir Chizhov told Bloomberg last week.

Last Wednesday, Russia’s Foreign Minister Sergey Lavrov stressed that “the Macedonian events are blatantly controlled from the outside” to pressure Skopje, among other things, to opt out of the Turkish Stream project.

Meanwhile Gruevski said that Macedonia will not face any serious problems re: gas supply over the next 10 years, as it consumes less than projected. However he says the largest problem for the country now is the high price of gas.

Article source: http://rt.com/business/262605-macedonia-turkish-stream-pipeline/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

A worker checks a valve of an oil pipe at Rumaila oilfield in Basra, southeast of Baghdad (Reuters / Essam Al-Sudani)

Iraq is ready to increase its crude exports to a record 3.75 million barrels per day in June, continuing OPEC’s strategy of ousting US shale producers from the market.

The extra oil from Iraq comes to about 800,000 barrels per day, more than from another OPEC member, Qatar, said Bloomberg, referring to Iraq’s oil shipments schedule.

OPEC countries are increasing crude output to protect their market share and decrease oil prices, in an attempt to divert investors from expensive oil, including US shale, heavy oils and deep offshore.

OPEC nations are scheduled to meet on June 5 and are expected to confirm current output levels – about 30 million barrels per day. Thirty-three out of 34 analysts and traders surveyed by Bloomberg agreed that OPEC will maintain its daily production.

READ MORE: Saudi Arabia claims success in tussle for oil market share

Officials from OPEC countries have already said the oil output is unlikely to be cut in the nearest future.

“Lowering OPEC’s production ceiling requires consensus between all members … under current conditions it seems unlikely that the OPEC production ceiling will change,” said Iran’s Oil Minister Bijan on Sunday.

Iraq is increasing oil exports in two directions. The first is in the Shiite south, where companies such as BP and Royal Dutch Shell work. The second is Nothern Iraqi Kurdistan, whose government last year received Baghdad’s consent to independent oil deliveries.

In April, Iraq exported almost 3.1 million barrels of oil per day, which is a record.

Forget #OPEC as a whole, the two countries to watch are #Iraq and #Iran as #oil output rises pic.twitter.com/ZphwyVMJqb

— Javier Blas (@JavierBlas2) May 27, 2015

The same month, Saudi Arabia increased crude output by 13,700 barrels per day to 10.308 million, reporting its highest oil production in more than three decades.

Many non-OPEC players in the region are dissatisfied with the situation on the market, which is flooded with cheap oil.

Oil prices dropped by about 50 percent in the second half of 2014, but have gone up to $60-65 per barrel since the beginning of 2015.

The current situation on the oil market and the price is not sustainable for Oman, said the country’s Oil and Gas Minister Mohammed Rumhy, adding that his country is ready to unilaterally cut oil output.Oman is the biggest Middle Eastern oil producer outside Saudi-led OPEC,

At the last OPEC meeting in November, the organization decidednot to cut production despite falling prices and a major oversupply.

Article source: http://rt.com/business/262425-iraq-floods-oil-market/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Reuters / Bobby Yip

The center of great wealth creation has shifted from the United States east to Asia, a joint report from UBS and PwC shows. China, the most outstanding example, produced new billionaire almost every week in the first quarter of 2015.

Billionaires have generated $3.6 trillion over the past 19 years, according to the 2015 Billionaire report released on Tuesday. Asia accounted for 36 percent, pushing Europe into third place.

Nearly 20 percent of the self-made billionaires in Asia come from the consumer industry, with an average wealth of $3.2 billion, according to the report. They are followed by billionaires from the real estate sector, which accounts for 12.9 percent among the self-made moguls with an average wealth of $2.7 billion.

Pioneering report on creation, preservation and legacy of great wealth by UBS, PwC http://t.co/03zn7SMrC8 VIDEO: http://t.co/0tgVmnJcvZ

— UBS (@UBS) May 26, 2015

“Wealth expansion is mainly due to the fever in setting up businesses and the booming capital market amid China’s economic growth,” managing partner of PwC China Financial Service Consulting Zhang Lijun was cited as saying at a media briefing in Beijing by Chinese newspaper Global Times.

READ MORE: Record 290 newcomers join Forbes Billionaires list, total wealth of $7trn

China had about 200 billionaires last year, while the US had 570. Self-made billionaires in the US come mostly from the financial services sector, accounting for 30 percent.

Asian billionaires are generally younger than average, at 57 years. Some 25 percent of the Asian billionaires grew up in poverty, compared to only 8 percent in the US and 6 percent in Europe.

It seems there are three characteristics that all the billionaires in the world have in common – an appetite for clever risk-taking, business focus and determination.

The number of self-made billionaires in the world will continue to grow in the next five to 10 years, the report said.

The 2015 Billionaire report analyzed data on more than 1,300 billionaires across 14 largest billionaire markets, covering the past 19 years.

Article source: http://rt.com/business/262369-wealth-billionaires-china-us/?utm_source=rss&utm_medium=rss&utm_campaign=RSS