Archives for August 2015

Sharapova recovered from injuries in 2013 and has started winning again. In 2014, she won the French Open at Roland Garros, the fifth Grand Slam event (Wimbledon, US Australian Opens, and again the French) in her career. This made her gain $6.7 million in prize money, three times more than the year before.

However, less than 25 percent of Sharapova’s income came from tennis performances. She has Nike and Head as main contributors with Avon Products, Evian, Porsche and Tag Heuer as side sponsors.

Sugar-free: Sharapova ditches name-change idea

The sales of her ‘Sugarpova’ brand candy doubled last year, with more than 3 million bags sold in more than 30 countries. She was allegedly considering legally changing her name to Sugarpova for the 2013 US Open, but later ditched the idea, saying it would take too long to get a new passport. The very idea was labeled a publicity stunt in the press.

The Russian tennis player is also the most popular female athlete and tennis player on Facebook with 15 million subscribers.

Sharapova’s arch rival, 33-year-old Serena Williams, earned $24.6 million. But most of her income comes from prize money on the court, with less from endorsements. Williams is the world’s oldest tennis player to be number one in Women’s Tennis Association (WTA). Last month, she had twice as many ranking points than number two Sharapova, which is also a record. In her pro career, she has earned twice as much money as Sharapova at $72.7 million. However, the lack of sponsorships prevents her overtaking Sharapova in total earnings.

Third place on the female athlete list was also taken by a tennis player, Denmark’s Caroline Wozniacki, with $14.6 million. The only three athletes in the top-10 that don’t play tennis are an auto racer Danica Patrick with $13.9 million, Mixed Martial Arts (MMA) fighter Ronda Rousey with $6.5 million and golfer Stacy Lewis, who earned $6.4 million.

Article source: http://www.rt.com/business/312366-maria-sharapova-forbes-list/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Rosselkhoznadzor says the check is necessary because of the store’s previous food safety violations and failure to comply with Russia’s campaign against banned foods.

“As for Auchan, we’ve received a letter from the Embassy of France, in which they expressed concern about the situation. We understand their worries, but we are doing our job and retail chains have to do theirs properly,” the head of Rosselkhoznadzor for Moscow and regions, Evgeny Antonov, told Russian news agency m24.ru on Thursday.

The embassy confirmed it had contacted Rosselkhoznadzor, maintaining that rather than expressing concern, it was seeking clarification of technical issues.

Antonov says that the French-owned supermarket chain is not facing legal action nor suspension of its activities. It will be business as usual for Auchan, he said, but that the regulator gave the company instructions and pointed out shortcomings.

READ MORE: Dark horse: Russia considering European beef ban over meat scandal

On Wednesday, Rosselkhoznadzor announced plans to inspect Auchan hypermarkets after numerous violations were found there. Earlier this month, the watchdog discovered horse, chicken and cow meat in a sample of ‘pork mince’ sold in one Auchan store. Further inspections revealed that 89 percent of the raw meat was incorrectly labeled. Rosselkhoznadzor then called the products counterfeit, as they were made by substituting cheaper meat for more expensive ingredients listed on the packaging.

READ MORE: Russia begins mass destruction of illegally imported food

Up to 500 tons of counterfeit food has been already destroyed in Russia, the food standards agency said earlier this week. Some 900kg of mislabeled apples sold in Auchan were among those destroyed. The labels stated that the products were imported from Serbia while the real country of origin was Ecuador (though neither country is subject to Moscow’s sanctions).

On July 29, Russian President Vladimir Putin signed a decree on the destruction of sanctioned EU and US food products. The measure is part of the embargo introduced by Russia last August in response to Western sanctions.

France’s export of products that fall under Russia’s embargo has plunged by 97 percent in the first quarter of this year compared with the same period of 2014, according to statistics from the Russian Ministry of Economic Development.

Article source: http://www.rt.com/business/312360-russia-france-auchan-inspections/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Parliament was supposed to vote on the bailout on Wednesday. However, Parliamentary President Zoe Konstantopoulou, known for her distaste of Prime Minister Alexis Tsipras’ July agreement with the troika of creditors, has done everything possible to filibuster the procedure.

Meanwhile, the deadline on the agreement is looming. On Friday, eurozone ministers are meeting to discuss whether to approve the deal, or grant Athens a bridging loan to live through the €3.2 billion debt repayment to the European Central Bank (ECB), due on August 20, and win time to overhaul the deal. Without a green light from Athens by Friday, the eurozone seems unlikely to even sit down at the negotiating table.

German newspaper Bild, referring to Germany’s Finance Ministry, says that Berlin is uncertain about the role of the IMF, debt sustainability and privatization plans.

“Some very important measures are still not yet implemented and are not specified,” Bild reports.

READ MORE: Germany made €100bn profit on Greek crisis – study

Berlin has challenged Greece’s ability to sustain its €320 billion foreign debt, while the country is expected to return to growth no sooner than 2017. Germany is also worried that the launch of a €50 billion privatization fund has been delayed.

The role of the IMF in the deal is ambiguous, according to Berlin.

“Does IMF fully subscribe to the conditionality in the program, that is the link between reforms and planned credit disbursements?” FT quotes Bild as saying.

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

This is not the first time when the EU’s biggest economy has raised concerns over the Greek deal. German Finance Minister Wolfgang Schauble said that it’s an option for Greece to temporarily leave the eurozone in order to put things straight.

Article source: http://www.rt.com/business/312330-berlin-calls-greek-debt-insufficient/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

According to the 29-page document acquired by FT, it becomes obvious that Greece’s left-leaning government will have its hands tied on all aspects of economic policy, starting from drug prices to tourist rentals, let alone tax administration. 

The first package of austerity measures needs to be implemented before the deal. PM Alexis Tsipras’ Syriza government will have to cancel cross-border withholding taxes, introduced recently. Among the other measures are raising the retirement age to 67, cutting drug prices and liberalizing energy supplies to homes by 2018.

After that, the austerity will continue, as Greece will have to adopt various fiscal, financial, regulatory and pension reforms and keep to a strict budget program. The country’s creditors are insisting on a prime target of a 0.25 percent budget deficit this year, and surpluses of 0.5 percent in 2016, 1.75 percent in 2017 and 3.5 percent in 2018.

Facing a 1.5 percent contraction in GDP this year, it will be a hard task for Athens to cut the 1.25 percentage points deficit in four months.

The FT, quoting unnamed European Union officials, says the EU acknowledges and expects a 2.3 percent fall in Greek GDP in 2015, and a 1.3 percent decline in 2016. However, the EU claims that Greece will achieve 2.7 percent GDP growth in 2017, followed by 3.1 percent growth in 2018.

Greece’s banking system will also be under strict EU control, according to the document.

“No unilateral fiscal or other policy actions will be taken by the authorities, which would undermine the liquidity, solvency or future viability of the banks. All measures, legislative or otherwise, taken during the program period, which may have an impact on banks’ operations, solvency, liquidity, asset quality etc. should be taken in close consultation with the EC/ECB/IMF and where relevant the ESM [ European Stability Mechanism, the EU fund that will bankroll the bailout],” it said. 

READ MORE: Greek crisis endgame: EU agrees to allocate €80bn+ over 3 years

The €50 billion privatization fund meant to collect and sell off Greek state assets to pay off creditors and recapitalize banks was a key condition when Tsipras reached an agreement with creditors in July. However, a decision on it how it will be established has been postponed until December. The fund will be located in Greece, not in Luxembourg as had been proposed by Germany, but the participation of the Greek government and how the fund will be established is still to be decided.

Article source: http://www.rt.com/business/312280-eu-greece-bailout-crisis/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The main culprit seems to be Saudi-led OPEC, which is sticking to keeping its market share rather than defending the prices. The cartel boosted its output to 31.8 million bpd (OPEC says 31.5 million) in July, which is bigger that its quota it officially promised in June not to neither cut, nor increase. This is the highest output from King Salman-dominated bloc in three years.

However, OPEC’s role in the global oversupply is only part of the story.

“OPEC only accounts for a bit more than half of the annual increase in world oil supply. While non-OPEC output growth has sunk from its heights of 2014, supply in July was still running 1.2 million bpd on a year earlier thanks to hefty investment made previously,” said the agency in a report published Wednesday.

At the same time, global demand for oil is also accelerating faster than expected. The IEA predicts that global oil consumption will grow by 1.6 million bpd in 2015. This is 200,000 bpd higher than the agency forecast a month ago. This will be the fastest growth in five years.

The projected bigger demand will slow down the glut in 2016 even if OPEC sticks to its recent output.

“Assuming OPEC production continues at around 31.7 million bpd (its recent three-month average) through 2016, the second half of 2015 sees supply exceeding demand by 1.4 million bpd, testing storage limits worldwide. The surplus drains down to about 850,000 bpd in 2016, with the fourth quarter of 2016 marking the first quarter of a potential stock draw,” said the IEA.

This year has seen numerous differing forecasts, many of which conflict with each other. The oil market is rapidly changing every month which makes it hard to predict where the crude price will go. Brent oil has become 25 percent cheaper than it was in mid-June, going back to figures last seen in January, but it could just as easily unexpectedly rebound.

Article source: http://www.rt.com/business/312268-iea-oil-output-glut/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Asian markets finished sharply lower on Wednesday with Hong Kong topping the region. The Hang Seng was down 2.57 percent, Japan’s Nikkei slumped 1.58 percent and Shanghai Composite dropped 1.06 percent.

On Monday, when Beijing staged the biggest devaluation of the yuan in a single day since January 1994, the authorities said it was only a one-time adjustment.

A cheaper yuan means economies that produce raw materials for the world’s biggest commodity consumer, including Australia, Brazil, Chile and South Korea, will suffer. 

“Our commodity team has estimated that a 1 percent move in the [yuan] is associated with a 0.5-0.6 percent decline in USD commodity prices,” said Bank of America in a note following the devaluation.

The falling demand from China has already made impact on them, but the two-day devaluation is a double-blow.

The drastic move is seen as Beijing’s attempt to reanimate its exports, which had dropped 8.3 percent in July, compared to a year before. The weaker yuan gives the exporters bigger revenues from their foreign trading.

China has now let the markets determine its currency rate, making a “shift to a more market-determined exchange rate.”

The world’s second-biggest economy has recently been struggling. Poor performance in real sector has made the 7 percent growth target in 2015 much less feasible, as manufacturing and trade are tumbling.

READ MORE: New restrictions from Beijing boost Chinese stocks

Chinese markets are currently on a roller-coaster. A daily collapse is usually led by multibillion-dollar injections and restrictions from the China Securities Regulatory Commission (CSRC), in charge of stabilizing the market, which has lost some $4 trillion since its peak in mid-June. The data last week showed that the commission had injected more than $32 billion to slow down the collapse.

Article source: http://www.rt.com/business/312252-china-again-devalues-yuan/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Iran’s return to the world market is expected to add 1 million barrels of oil a day to production, the World Bank said in its report Monday. While the increase will drag oil prices to new lows from the current $49 a barrel, it will also help Iran’s economy grow. The World Bank expects Iran’s economic growth to accelerate to 5 percent in 2016, from 3 percent this year.

READ MORE: July OPEC output hits 3yr-high as Iran oil returns to market

“Just as the tightening of sanctions in 2012 led to a sharp decline in Iran’s oil exports and two years of negative growth, we expect the removal of sanctions to boost exports and revive the economy,” said Shanta Devarajan, World Bank chief economist for the Middle East and North Africa (MENA) region.

The World Bank projects a decrease of export earnings and revenue for MENA’s other oil exporters, the Gulf States and Libya. Crude importers in the region, Egypt and Tunisia, are expected to benefit from lower oil prices.

Exports from Iran are expected to increase by about $17 billion next year, or 3.5 percent of GDP. Foreign investment may scale up to $3 billion a year.

World Bank MENA economist Lili Mottaghi says that the interest from multinational companies in investing in Iran has increased since the framework agreement of April 2015. She adds that the trend will continue after the sanctions are removed, supporting much-needed capital for the modernization of Iran’s oil sector.

READ MORE: Rejecting Iran deal could damage the dollar, support for Russia sanctions – Kerry

Sanctions imposed on Iran will be lifted in exchange for Tehran curbing its nuclear program. The long-awaited deal was signed in Vienna by Iran and six major world powers on July 14 after long negotiations. The agreement sealed by world powers last month will be debated in the US Congress in September.

Article source: http://www.rt.com/business/312244-sanctions-iran-oil-down/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The return of Iranian oil to the market could make oil even cheaper than the current lows of about $49.50 a barrel.

“According to secondary sources, total OPEC crude oil production averaged 31.51 million barrels per day in July, an increase of 101,000 barrels per day over the previous month. Crude oil output increased mostly from Iraq, Angola, Saudi Arabia and Iran, while production in Libya showed the largest drop,” OPEC said in its monthly report Tuesday.

Under the influence of top producer Saudi Arabia, the cartel, which produces more than 40 percent of the world’s oil, has refused to cut output. The Gulf kingdom has told OPEC it reduced its own production by 200,000 bpd to 10.36 million bpd in July.

The World Bank said Monday that when Iran completes its full return to the world oil market, the volume of oil sold will increase by about 1 million bpd. As a result, oil prices will decline next year by about $10 per barrel, or approximately 21 percent from current levels, the World Bank said.

In June, OPEC officially maintained its production quota at 30 million bpd, but has been exceeding it in practice since then. The cartel is seeking to tackle competition from other global players, especially US shale oil producers.

The cartel raised its outlook for oil supplies from non-OPEC countries by about 90,000 bpd in 2015. This is a clear sign that despite Riyadh-led efforts to dump oil prices and thus remove shale oil, which is expensive to extract and refine, from the market, it is taking longer than previously expected to elbow out shale and other players.

READ MORE: Saudi Arabia to raise $27bn in bonds, trying not to sink with oil – media

The massive decline in oil prices, down from $115 per barrel in June 2014, has have hurt Saudi Arabia, too. The oil-rich kingdom, which needs a crude price of $106 per barrel to break even, has spent $65 billion of its reserves since the oil decline began, and intends to raise some $27 billion on bond markets by the end of the year to compensate for lavish government spending.

Article source: http://www.rt.com/business/312183-opec-output-grew-in-july/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The sharp GDP quarterly decline more than doubled the 2.2 percent year-on-year contraction recorded in the previous three months, Russia’s Federal Statistics Service said Monday. The government had previously predicted a Q2 decline of 4.4 percent.

The slump sees the Russian economy officially enter recession for only the second time in the past 15 years. Russia was hit hard by the global financial crisis and recession of 2008-2009 as a result of its integration into the world economy.

However, the situation may improve by the end of the year according to Minister of Economic Development Alexey Ulyukayev, who says Russia’s GDP will not drop by more than 2.6-2.8 percent annually.

Retail sales fell by 9.4 percent in Q2 compared with the same period last year as the national currency depreciated by more than 40 percent against the dollar in the past 12 months.

READ MORE: Ruble hits 6-month low against major currencies

The ruble, which had been the world’s best-performing currency at the beginning of 2015, plunged to a six-month low last week, hitting 64 against the US dollar and 70 against the euro. The Central Bank of Russia (CBR) made this year’s fifth consecutive cut of the key rate on July 31, choosing to support economic growth instead of stabilization of the currency. Earlier, CBR said it stopped buying foreign currency due to the ruble’s intensified deterioration.

The Russian currency was weakened by sliding oil prices which in the beginning of August hit a six-month low, with Brent trading at $49.67 per barrel.

READ MORE: Russia begins mass destruction of illegally imported food

Western sanctions have also had a damaging effect on the Russian economy. They were first imposed on August 1, 2014 over the conflict in Ukraine and Crimean reunification. Russia responded with counter-measures, banning imports from the EU, US and others.

In June, Moscow extended its embargo on food imports from Western countries until August 2016 due to the prolonged anti-Russia sanctions.

Article source: http://www.rt.com/business/312171-russia-economy-decline-recession/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The bank’s announcement prompted the yuan exchange rate to tumble against the US dollar. As of 8:15am GMT on Tuesday, the yuan (renminbi) was trading at 6.33 to the dollar, 1.9 percent lower than Monday. 

Over the weekend, Beijing said July exports dropped 8.3 percent, compared to a year before. The weaker the yuan, the bigger revenues exporters get from their foreign sales.

The tough move may also indicate that Beijing is allowing the market more freedom to determine the yuan rate.

“The People’s Bank of China has astutely combined a move to weaken the yuan with a shift to a more market-determined exchange rate,” Eswar Prasad, a Cornell University professor and former China representative of the IMF told the Wall Street Journal.

Becky Liu, a Hong Kong-based senior strategist for Standard Chartered, said the bank’s move was “big… and bolder” than predicted.

“The new fixing will be quoted based on the previous day’s closing, which is a real market level. The band will become the real band. This is a big step, and bolder than we expected,” she told Bloomberg News.

Tuesday’s devaluation comes a decade after Beijing’s key decision to replace the hard peg against the US dollar by a link to a basket of currencies. The exchange rate was simultaneously set within a band of around 8.11 to the US dollar, marking a 2.1 percent move from an 8.28 yuan exchange rate in place before 2005. In those 10 years, the yuan has risen 33 percent, becoming one of the world’s most-traded currencies, while Beijing has staked out its position as the world’s second-biggest economy.

The adjustment could complicate Beijing’s goal of making the yuan the world’s leading currency. On the other hand, becoming more market-oriented is a solid step towards greater openness.

Article source: http://www.rt.com/business/312160-beijing-dumps-yuan-trade/?utm_source=rss&utm_medium=rss&utm_campaign=RSS