Archives for March 2017

Scuffles erupt in South African parliament after opposition MPs insult President Zuma (VIDEO)

In a major cabinet reshuffle, President Zuma has replaced Finance Minister Pravin Gordhan with home affairs head Malusi Gigaba, according to a statement. Also, African National Congress lawmaker Sfiso Buthelezi will replace Mcebisi Jonas as Deputy Finance Minister.

Some other changes in the cabinet affected the positions in the ministries of energy, police, and tourism.

The rand has fallen 1.3 percent against the US dollar, to its lowest in seven weeks, and looks to be heading for further decline. The rand has been falling for five days in a row and is currently trading at 13.38 per dollar.

Benchmark 10-year government bonds had their worst day in seven months, tumbling and sending the yield soaring by 42 basis points to 8.93 percent.

Some experts are saying the falling rand, and government bond prices are indicative of the good reputation of the former finance minister among investors. Gordhan’s policymaking ensured stability in South Africa was a rebuttal of the country’s rating being lowered to junk status. His pledge to cut spending and state debt inspired investor trust.

“Market reaction to the cabinet reshuffle and what looks to have been a clean sweep of the Treasury top team is going to be a significant negative. Given past volatility in the rand when a cabinet reshuffle was even suggested, the expectation is that the impact may be more pronounced now,” said Razia Khan, chief Africa economist at British multinational bank Standard Chartered.

READ MORE: S. Africa bill to redistribute whites’ land to blacks risks leaving people homeless

The South African rand was one of the top three emerging market currencies last year and in early 2017, enjoying a 12.6 percent surge against the greenback in 2016 outpaced only by Brazil’s real and Russia’s ruble.

“The annoying, frustrating thing from the South Africa perspective is that you don’t want political worries now because things are trending up, things are picking up. South Africa is pretty much in the penalty box for investors now,” said Moz Afzal, global chief investment officer of Swiss investment manager EFG Asset Management.

Article source: https://www.rt.com/business/382953-south-africa-political-turmoil-currency/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Pay inequality between bosses workers ‘widening’ every year, study shows

“At the very least, it demonstrates a rather incredible sense of entitlement, doesn’t it?” Baskin Wealth Management President David Baskin told Canadian broadcaster CBC.

“Here’s a company that basically went begging to the province and the federal government for money, saying that if you don’t give us all this money, we’re going to lay off all these workers,” he said.

The Montreal-based aerospace company started a five-year turnaround plan in 2015 to regain its financial footing. Since then the company has cut 14,500 jobs worldwide as part of the organizational change.

According to CBC, the total compensation for Bombardier’s top five executives and board chairman Pierre Beaudoin increased 50 percent from their 2015 bonus of $21.9 million.

CEO Alain Bellemare received $9.5 million, including $5.2 million in share and option-based awards and a $1 million salary. His annual bonus almost doubled to $2.36 million.

Beaudoin’s compensation increased to $5.25 million from $3.85 million a year earlier.

The company attributed the higher pay to a number of factors, including achieving profit and cash flow targets, securing CSeries orders and completing the first flight of the new Global 7000 business jet.

​‘Excessive’ perks: BP boss receives £1.7m in pension benefits, despite profit fall

Bombardier spokesman Simon Letendre said a significant portion of the compensation was not guaranteed.

“For instance, 85 percent of the compensation of the president and CEO is at risk, and 28 percent is comprised of stock options whose value depends on the appreciation of Bombardier stock, something that would, of course, benefit all shareholders,” Letendre told CBC.

Last year, Bombardier received a $1 billion investment for the CSeries program from the Quebec government in exchange for a 49.5 percent stake. The company also sold a 30 percent stake in its railway division to pension fund manager Caisse de Depot for $1.5 billion.

Bombardier cut its loss to $981 million last year, down from $5.34 billion in 2015 despite lower revenues.

On Thursday, Canada’s Prime Minister Justin Trudeau stood by the government’s decision to put money into the company.

“Investing in Bombardier is a way of ensuring good long-term jobs in the aerospace industry right across the country,” he said.

Article source: https://www.rt.com/business/382948-bombardier-executives-bonuses-losses/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

US trying to thwart Russia’s Nord Stream-2 project – Lavrov

The European Union tried to thwart the extension of the pipeline following pressure from Poland and the Baltic States.

The pipeline will double Nord Stream’s existing capacity, which delivers natural gas to Germany under the Baltic Sea bypassing Ukraine. The gas transit contract between Moscow and Kiev expires in December 2019 and has not yet been extended.

In a March 28 letter to Denmark and Sweden, seen Thursday by The Wall Street Journal the European Commission said it had no grounds to stop the pipeline.

“We don’t like Nord Stream-2 politically,” said Anna-Kaisa Itkonen, an energy spokeswoman at the Commission, as quoted by the media.

“This being said, there are no legal grounds for the Commission to oppose Nord Stream-2…because [EU] rules do not apply to the offshore part of the pipeline,” she added.

Poland and other Eastern European EU countries will lose lucrative transit fees if Russia ceases to use the existing pipelines.

On the other hand, Germany opposed political interference in the pipeline, as it is profitable for Berlin and is backed by major European companies.

When Nord Stream’s capacity is doubled to 110 billion cubic meters a year, it will cover Germany’s and France’s combined annual consumption of gas.

Moscow has repeatedly said Nord Stream-2 is strictly about business, as it improves European energy security.

Russia says it wants to bypass Ukraine because it is concerned about a repeat of the gas crisis in 2006. That winter, parts of Europe were left without heat after Ukraine allegedly siphoned off gas sent to the European market.

Article source: https://www.rt.com/business/382934-russia-nord-stream2-eu/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

In March, the country’s producers reduced output by 200,000 barrels per day as the decrease in January and February was ahead of the original plans, according to the minister.

‘Largest discovery’ of oil off Scottish coast could raise chances of independence

“Russia is reducing its oil production in stages, in accordance with the plans we worked out voluntarily with our production companies,” Novak said in an interview with CNBC at the International Artic Forum in Arkhangelsk on Thursday.

“We anticipate complying with the figure outlined in the agreement by the end of April,” he said, stressing that the reduction target was 300,000 barrels per day.

According to Novak, overall supply and demand trends will be a major reason for Russia to support renewing the agreement at the end of May.

“Undoubtedly, and this could be an even more important factor, is the situation on the market linked with the balance between supply and demand and the situation with regards to the development of the situation with oil reserves and oil product reserves in the OECD countries and the countries in the world as a whole,” said the energy minister.

“And we will be following this closely; it will be important for us to know what’s going to happen in April, the forecasts for May and June and the second half of next year,” he stressed.

The minister has also pointed to the importance of the Arctic region for Russia’s energy strategy.