Archives for July 2015

The company said on Wednesday it would cut Masashi Muromachi’s monthly salary by another 50 percent after an earlier 40 percent reduction.

Another bold step made Wednesday was the resignation of Masaaki Oosumi, an executive who was in charge of Toshiba’s visual products division, says the Financial Times.

“The management and employees will unite to restore the confidence of all stakeholders. We will do our utmost for the revival of the Toshiba group,” Muromachi said to the members of the new panel that would supervise the accounting irregularities estimated at $1.22 billion.

Earlier this month it became public Muromachi didn’t want to take over as interim CEO, but was thinking on leaving the company.

READ MORE: Toshiba CEO resigns over $1.2bn accounting scandal

“He told me he wanted to resign, but as a Toshiba adviser, I begged him not to step down,” said Taizo Nishimuro, president of Japan Post Holdings and a former Toshiba president, adding that Muromachi’s leadership was needed.

Toshiba is also going to hire more independent directors, including lawyers and accountants, Reuters says.

Last week Toshiba president Hisao Tanaka and vice chairman Norio Sasaki along with six other executives stepped down after the findings of an independent investigation found top management was well-aware of the accounting irregularities and, moreover, was fostering them.

The company is presumably going to sell some of its assets worth $1.62 billion, including a stake in Westinghouse Electric.

With more than a half of the board leaving it could be hard for Toshiba to tackle the crisis.

“Some of the most capable managers at Toshiba resigned with this scandal. It’s going to be difficult to find replacements,” a source close to the top management told the FT.

Article source: http://www.rt.com/business/311084-toshiba-haircuts-executives-salaries/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The company said on Wednesday it would cut Masashi Muromachi’s monthly salary by another 50 percent after an earlier 40 percent reduction.

Another bold step made Wednesday was the resignation of Masaaki Oosumi, an executive who was in charge of Toshiba’s visual products division, says the Financial Times.

“The management and employees will unite to restore the confidence of all stakeholders. We will do our utmost for the revival of the Toshiba group,” Muromachi said to the members of the new panel that would supervise the accounting irregularities estimated at $1.22 billion.

Earlier this month it became public Muromachi didn’t want to take over as interim CEO, but was thinking on leaving the company.

READ MORE: Toshiba CEO resigns over $1.2bn accounting scandal

“He told me he wanted to resign, but as a Toshiba adviser, I begged him not to step down,” said Taizo Nishimuro, president of Japan Post Holdings and a former Toshiba president, adding that Muromachi’s leadership was needed.

Toshiba is also going to hire more independent directors, including lawyers and accountants, Reuters says.

Last week Toshiba president Hisao Tanaka and vice chairman Norio Sasaki along with six other executives stepped down after the findings of an independent investigation found top management was well-aware of the accounting irregularities and, moreover, was fostering them.

The company is presumably going to sell some of its assets worth $1.62 billion, including a stake in Westinghouse Electric.

With more than a half of the board leaving it could be hard for Toshiba to tackle the crisis.

“Some of the most capable managers at Toshiba resigned with this scandal. It’s going to be difficult to find replacements,” a source close to the top management told the FT.

Article source: http://www.rt.com/business/311084-toshiba-haircuts-executives-salaries/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The investment underscores the importance Alibaba attaches to cloud computing as a revenue driver for large e-commerce companies, according to the Alibaba Group.

The money will be used to expand Aliyun’s international presence as it intends to set up data centers in the Middle East, Japan and Europe.

It will also help Aliyun develop new cloud and Big Data solutions, and strike new partnerships and technology alliances.

“Big Data and cloud computing are at the heart of Alibaba Group’s strategy for the future. The $1 billion investment is a reflection of our continued confidence and commitment,” Alibaba Group CEO Daniel Zhang said.

READ MORE: Alibaba expands into US to compete against Amazon, Google

Aliyun is positioning itself as a ”challenger to established players in the global cloud-services market,” according to the company statement.

“Our goal is to overtake Amazon in four years, whether that’s in customers, technology, or worldwide scale,” Simon Hu, the president of Aliyun and former head of Alibaba’s microfinance arm, told Reuters. “Amazon, Microsoft and others have already laid the groundwork for us by educating the markets about cloud in the US and Europe, so we have an even better opportunity to join in the competition.”

In March Aliyun, which provides public cloud-computing services for Alibaba’s five data centers in China and in Hong Kong, opened a cloud data center in Silicon Valley. It is Alibaba’s first division outside China. The service is to compete with the US major cloud players Amazon, Google and Microsoft.

Last week, Amazon said its Web Services’ second-quarter sales increased by 81 percent over the previous year to $1.82 billion. Its operating profit was $391 million, with the previous year’s $77 million.

Alibaba’s cloud-computing revenue for the quarter ending in March stood at $63 million, up 82 percent from a year earlier. The company says that as of the end of June 2014, 1.4 million customers were using Aliyun services directly or through independent software vendors.

Article source: http://www.rt.com/business/311074-alibaba-cloud-investment-amazon/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“Speculators are shorting the metal for the first time since US government data began in 2006, and holders of exchange-traded products are selling at the fastest pace in two years”, says a Bloomberg survey of 16 analysts and traders.

It also says the bullion market is sentiment-dominated, as only some 60 percent of mined or recycled gold each year is used in jewelry and industrial applications. The rest is sold in coins and bars, and when interest falls, the prices could also go down.

Robin Bhar, an analyst at Societe Generale in London who was polled, compares bullion with old-fashioned clothes.

“Gold is out of fashion like flared trousers: no one wants it. It’s not going to collapse, but we think it is going to be at a lower level in the not-too-distant future,” he said.

The reasons for a plunge in the gold price are an impending US rate hike and that China has been buying less gold than predicted in recent years. In July, Beijing disclosed its gold reserves for the first time in six years. China’s gold holdings have grown by almost 60 percent since 2009, however, investors had expected more.

READ MORE: Gold touches 5yr low, as China suspected of heavy selling

Goldman Sachs Group’s Jeffrey Currie, who had predicted the slide in 2013, has said the price could go below $1,000.

Not everyone expects the era of gold is completely over.

Frank Holmes, a money manager at US Global Investors told Bloomberg that investors still consider bullion as insurance.

“As an investor, you should have gold. There are lots of systemic risks out there,” he said.

One of these risks is the Greek crisis, which could still end with Athens leaving the eurozone.

Physical demand for gold is also one of the reasons that the fall would slow down, the survey says. American Eagle gold coins, for instance, have been selling well, and are facing the biggest monthly total since April 2013. Perth Mint Treasurer Nigel Moffatt told Bloomberg Television on Wednesday the demand had increased since the price fell below $1,100 for ounce.

Gold, which has been steadily going down this year, saw a dramatic fall in July, sinking to its lowest level since February 2010, trading at $1,087 an ounce last Monday. This may result in the sharpest monthly decline in two years. As of 11:30am GMT, gold was trading at $1,096.10, showing a slight drop from Tuesday’s close.

Article source: http://www.rt.com/business/311064-gold-losing-its-luster/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Varoufakis can’t be charged now, as he has immunity as a member of parliament. Now, the parliament has to decide whether the immunity should be lifted.

Five different cases have been opened against the team Varoufakis put together to hack into taxation service files, including US economist, James K. Galbraith.
Now, a special congressional committee to examine the allegations may be assembled.

READ MORE: Varoufakis was ready to start parallel banking system by hacking Greek tax department

“It can all happen quite fast,” Anna Asimakopoulou, a leading member of the conservative New Democracy party, was quoted as saying by The Times.
Varoufakis is facing charges of high treason and breach of duty, which are punishable with a prison sentence of between five and 25 years.

On Monday, the Greek newspaper Kathimerini published a transcript of a conference call Varoufakis made to international hedge funds supposedly run by former British Chancellor of the Exchequer Norman Lamont on July 16.

In the call, Varoufakis admitted he was preparing a parallel payment system in case the banks in Greece were shutdown “as a result of the ECBs aggressive action to deny some breathing space.”

To launch the system, he and his team had to break into people’s tax files in order to create reserve accounts. The government would have transferred the money in these accounts and given PIN numbers so holders could access the funds.

On Monday Varoufakis defended himself by saying he always acted in the interests of the people and said he was “completely against dismantling the euro” despite the allegations he was looking into the new drachma from the beginning.

Varoufakis also said the taxation department, the General Secretariat of Public Revenues, was under full influence of the troika of international creditors, of Brussels. He and his ministry couldn’t control it.

The European Commission reacted on Tuesday by saying that Varoufakis words were “false and unfounded.”

“On what Mr. Varoufakis has been saying, the allegations that the troika was controlling the Secretariat General of Public Revenues are false and unfounded. The Secretariat General of Public Revenues is a quasi-independent entity, responsible for tax administration, that is formally part of the Ministry of Finance,” said Mina Andreeva, a spokeswoman for the European Commission.

Article source: http://www.rt.com/business/311044-varoufakis-faces-charges-greece/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The net result, which included a charge for liabilities related to the 2010 Gulf of Mexico oil spill, was a $6.3 billion loss.

“The result reflects the impact of continued low oil and gas prices, a reduced contribution from Rosneft, and one-off charges arising from circumstances in Libya, but also continuing strong earnings from BP’s downstream businesses and lower cash costs throughout the Group,” according to BP’s news release, issued Tuesday.

The company took a pretax charge of $10.8 billion in the second quarter, including a $9.8 billion charge related to the government settlements, the statement said.

This month BP reached an $18.7 billion settlement with the US government and five states to resolve most of the claims from the Gulf of Mexico oil spill five years ago. The deal is the largest corporate settlement in US history. The rig explosion and spill killed 11 workers and spewed oil for nearly three months onto the shores of several states. 

READ MORE: BP to pay record $18.7bn over 2010 Deepwater Horizon oil spill

Oil prices, another drag on BP results, averaged $60 a barrel in the second quarter of 2015, up around $5 a barrel from the first quarter but down from $110 a year earlier.

“In the past few weeks oil prices have fallen back in response to continued oversupply and market weakness and the recent agreements regarding Iran. I am confident that positioning BP for a period of weaker prices is the right course to take, and will serve the company well for the future,” BP’s Group Chief Executive Bob Dudley said.

Profits were also hit by a $600 million exploration write off and other costs related to BP’s activities in Libya due to the security situation in the country.

BP has lowered its expected full-year capital spending to below $20 billion after cutting it by 13 percent earlier this year. It is among other top energy firms that have put off $200 billion in spending on 46 major oil and gas projects due to the oil price slump which is now at to 4-month low.

READ MORE: Oil slump leads to $200bn cut in new energy projects – study

Low oil prices have also reduced the contribution from BP’s 20 percent stake in Russia’s Rosneft. In June the company made agreements on the stake purchase in Rosneft subsidiary Taas in Eastern Siberia, it also agreed to explore three areas in eastern and western Siberia. The company also announced plans to reorganize and simplify its German refining joint venture with Rosneft.

Estimated underlying net income from Rosneft almost halved in the second quarter of 2015 to $510 million.

BP announced a quarterly dividend of 10 cents per share, which is expected to be paid in September.

“The external environment remains challenging, but BP moved quickly in response and we continue to do so. Our work to increase efficiency and reduce costs is embedding sustainable benefits throughout the Group and we continue with capital discipline and divestments,” Dudley said.

Article source: http://www.rt.com/business/310981-bp-profit-fall-oil/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

This summer’s downward trend for the ruble is likely to cancel its excellent performance in the first five months of the year. After winning back some 24 percent against the dollar from the beginning of the year till mid-May, the Russian currency has fallen over 18.5 percent since then and is close to last December’s figures.

The ruble rate keeps on changing in sync with the oil plunge; though some key Russian policymakers have insisted the currency’s correlation to the oil price is over.

Crude prices have fallen 16 percent in July with Brent crude trading at $52.89 per barrel on Tuesday, while on June 30 a barrel of Brent cost more than $63.

Some big players in the market have a negative outlook on the crude, considering the recent fall. Bank of America Merrill Lynch on Tuesday predicted $50 per barrel for Brent and $45 for WTI barrel for the third quarter. The previous forecast was $54 for Brent and $50 for WTI. Morgan Stanley warned last week the fall in oil prices could be the worst in 30 years.

On Monday, the Chinese stock market fell by 8.5 percent, an eight-year record fall, which also pulled oil prices lower. Bad economic data from China, the world’s biggest energy consumer, signals demand will further go down.

Another factor likely affecting the rollercoaster ruble is Wednesday’s announcement on US interest rate policy by the Federal Reserve. It is widely expected by market participants that the outcome of the meeting will signal the imminent change in US monetary policy.

The Fed has been following a policy on low interest rate since 2008, keeping its key rate now at a record low of 0.25 percent.To increase the rate, the US is waiting to get enough evidence its economy is robust enough, with a 2 percent inflation rate being one of the benchmarks.

The ruble’s decline makes the previously expected 0.5 percent cut in the key interest rate in Russia highly unlikely. The Central Bank of Russia (CBR) meets on July 31, where it’ll have to make a difficult choice between the need to stimulate economic growth in the country and support the ruble.

After hiking the rate to 17 percent last December at the peak of the currency crisis, the bank has been pursuing a policy of steadily cutting the rate, bringing it down to 11.5 percent in June.

Article source: http://www.rt.com/business/310963-russian-ruble-hits-60-against-dollar/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

It was the Greek debt crisis that stressed the need for urgent reforms in the eurozone, the German government’s panel of five independent economic advisers said, Reuters reports.

“To ensure the cohesion of monetary union, we have to recognize that voters in creditor countries are not prepared to finance debtor countries permanently,” said Christoph M. Schmidt, chairman of the council, in the report published Tuesday and obtained by Reuters.

READ MORE: Varoufakis was ready to start parallel banking system by hacking Greek tax department

The long negotiations over Greek debt have made the experts debate the eurozone structure that allows entry, but doesn’t allow a country to leave. Even though the ‘wise men’ say that the union should remain intact, acknowledge that an ‘out’ mechanism should exist, even though as an “utterly last resort.”

Member states that can’t afford being in the eurozone at the moment, shouldn’t lay the burden on other countries’ taxpayers.

“A permanently uncooperative member state should not be able to threaten the existence of the euro,” the council wrote.

However, the group advised against setting up measures such as a eurozone treasury, a European unemployment insurance scheme or an economic government for the bloc, calling them “quick-win” policies.

“Making the euro area collectively responsible for potential costs without member states giving up any national sovereignty over fiscal and economic policies would – sooner or later – make the currency union more unstable,” the council wrote.

READ MORE: ‘Grexit’ better option for Athens’ debt relief – German finance minister

Greece and the troika of international creditors are negotiating over a third financial aid package for Greece that could amount to €86 billion in the next three years. The help will be provided in return for tax hikes, a pension age increase and other austerity measures.

German Finance Minister Wolfgang Schaeuble suggested that Athens should temporarily leave the eurozone to put its financial house in order. However, current EU rules don’t have a mechanism for leaving the eurozone.

Article source: http://www.rt.com/business/310948-eurozone-grexit-germany-greece/?utm_source=rss&utm_medium=rss&utm_campaign=RSS