India’s central bank may extend its record interest-rate increases, economists predicted after Governor Duvvuri Subbarao said a “premature” change in the monetary policy stance may fan inflationary expectations.
The Reserve Bank of India may increase its repurchase rate to 8.5 percent from 8.25 percent by the end of December, according to 11 of 16 economists in a Bloomberg News survey after the monetary authority raised the benchmark by a quarter of a percentage point yesterday. The rest expect no change.
India stands apart among BRIC nations including Brazil Russia and China, which have either eased borrowing costs or kept them on hold, to protect their economies from faltering recoveries in Europe and the U.S. Higher fuel prices and Asia’s worst-performing currency this quarter may fan inflation, that has exceeded 9 percent in each of the past nine months.
“The RBI’s guidance was very explicit, that it rightly intends to pursue its anti-inflationary stance till inflation begins to moderate toward a more acceptable level,” said Sajjid Chinoy, a Mumbai-based economist at JPMorgan Chase & Co. “With input price pressures still strong and inflation unlikely to come off substantially in the coming months, we expect another rate hike.”
Chinoy expects the central bank to boost rates by a quarter point in the Oct. 25 policy meeting.
The yield on the 7.8 percent bond due April 2021 rose four basis points, or 0.04 percentage point, to 8.36 percent, a six- week high, at the close of trading in Mumbai yesterday. The Bombay Stock Exchange Sensitive Index gained 0.3 percent and the rupee advanced 0.6 percent to 47.265 per dollar.
Weaker Rupee
The Indian rupee has declined 5.4 percent this quarter as investors shunned emerging markets on concern the world economy is weakening.
Inflation in India is the highest among the BRICS nations, quickening to a 13-month high of 9.78 percent in August.
Consumer prices rose 7.2 percent in Brazil, 8.2 percent in Russia and 6.2 percent in China last month from a year earlier. In South Africa, they climbed 5.3 percent in July.
“Inflation remains high, generalised and much above the comfort zone of the Reserve Bank,” the central bank said in the statement. “A premature change in the policy stance could harden inflationary expectations, thereby diluting the impact of past policy actions. It is therefore imperative to persist with the current anti-inflationary stance.”
Subbarao has raised borrowing costs by a total of 350 basis points since mid-March 2010, the fastest round of increases since the Reserve Bank was established in 1935, Bloomberg data show.
‘More Comfortable’
“The measures taken would get us back to a more comfortable inflation situation earlier rather than later, while leaving scope for growth to pick-up in the second half of the year,” Finance Minister Pranab Mukherjee said in an e-mailed statement yesterday.
India needs to control inflation to protect purchasing power and sustain growth, the Reserve Bank has said.
The $1.7 trillion economy expanded 7.7 percent in the three months ended June 30 from a year earlier, the slowest pace since the last quarter of 2009. Gross domestic product rose 7.8 percent in the previous three months.
India’s central bank said that even as many indicators point to moderating growth, “in the current scenario, with the likelihood of inflation remaining high for the next few months, rising inflationary expectations remain a key risk.”
Gasoline Cost
Inflation may accelerate after Indian Oil Corp., the country’s biggest refiner, raised gasoline prices yesterday for the second time in four months. Losses from selling fuels below cost are increasing following the rupee’s decline against the dollar, Indian Oil Finance Director P.K. Goyal said Sept. 15.
The increase in gasoline prices will have a “direct impact of 7 basis points” on inflation, in addition to an “indirect impact with a lag,” according to yesterday’s statement.
“Input price pressures are not going away, particularly given the weaker rupee,” said Devika Mehndiratta, a Singapore- based economist at Credit Suisse Group AG. “This along with food prices that are going up at a decent clip may keep inflation elevated at more than 9 percent in the next few months.”
Officials from China to South Korea have refrained from raising rates in recent weeks to gauge whether slowing economic growth will dissipate price pressures. In Brazil, the central bank opted to cut its target Selic rate on Aug. 31 for the first time since 2009 to protect expansion.
Russia’s Stance
Policy makers in Russia, which doesn’t target one rate, reduced the rate charged on repurchase loans and raised the deposit rate on Sept. 14 to bolster the amount of cash in the market and spur growth.
Prime Minister Manmohan Singh last month said curbing inflation is his government’s priority. The opposition has criticized him for failing to control price gains in a country where the World Bank estimates more than three-quarters of the population live on less than $2 a day.
“As monetary policy operates with a lag, the cumulative impact of policy actions should now be increasingly felt in further moderation in demand and reversal of the inflation trajectory towards the later part of 2011-12,” the central bank statement said.
To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Friday, September 16, 2011
Thursday, September 15, 2011
India eased overseas borrowing rules and allowed companies to raise as much as $1 billion in yuan debt as higher local funding costs threaten to choke growth in Asia’s third-biggest economy.
The government yesterday decided to raise the cap on foreign borrowings without approvals by 50 percent to $750 million, and said it may permit the overall limit to exceed $30 billion “on a case-by-case” basis, R. Gopalan, secretary in the Department of Economic Affairs in the finance ministry, told reporters in New Delhi. Companies building airports, roads, ports and power plants will benefit from the new rules, he said.
Prime Minister Manmohan Singh aims to double spending on infrastructure to $1 trillion in the five years to March 2017 to accelerate growth to more than 10 percent and lift living standards in the nation. Eleven interest-rate increases by the Reserve Bank of India since March 2010 drove average five-year borrowing costs for top-rated local companies to an 18-month high of 9.78 percent on June 1.
“Including all hedging costs, there’s still an arbitrage of 1 to 2 percentage points,” said A. Issac George, chief financial officer at GVK Power & Infrastructure Ltd. (GVKP) “This will certainly help at a time domestic interest rates are threatening to hurt growth.”
Slowing Growth
Gross domestic product is likely to increase 8 percent in the year to March, according to central bank estimates, slower than 8.5 percent last year. Factory output grew 3.3 percent from a year earlier in July, the slowest pace in 21 months, according to data provided by the New Delhi-based Central Statistical Organisation.
The extra yield firms need to pay for five-year debt over similar-maturity government securities has risen to 93 basis points from as low as 56 on Dec. 6, according to data compiled by Bloomberg.
Indian companies sold more than $9 billion of non-rupee bonds to investors abroad in 2011, twice the amount in the same period last year, Bloomberg data show. They borrowed $14.6 billion of loans denominated in international currencies this year, a 17 percent decline.
The government also decided to allow companies to use 25 percent of the proceeds raised abroad to repay existing debt, Gopalan said. A $10 billion limit on foreign ownership of the nation’s sovereign debt remained unchanged, he said.
“The decisions taken are game changers as far as Indian companies are concerned,” Gopalan said.
Yuan Funds
Infrastructure Leasing & Financial Services Ltd., an Indian lender to road projects, plans to raise $100 million from yuan- denominated bonds and has hired bankers to manage the sale, a person with direct knowledge of the matter said Sept. 9, asking not to be identified as the matter is private.
Many companies sought yuan as one of the currencies for overseas debt, Gopalan said. Lanco Infratech Ltd. (LANCI), Adani Power Ltd. (ADANI), SRM Energy Ltd. (SRME) and Moser Baer Projects Pvt. have said they’re talking to China’s export banks for loans, after billionaire Anil Ambani’s Reliance Power Ltd. (RPWR) borrowed $1.1 billion from China Development Bank Corp. in December.
Industrial & Commercial Bank of China (601398) Ltd., the world’s largest bank by market value, may provide services for Indian customers seeking to raise yuan funds from the sale of so-called dim-sum bonds, President Yang Kaisheng said in Mumbai yesterday.
“More multinational companies will feel comfortable tapping this market as the Chinese government continues to clarify its procedures for fund raising and remitting those proceeds into China,” Michael Lam, the Hong-Kong-based director of fixed-income capital markets for Asia at Deutsche Bank AG, said at a Euromoney conference in Singapore yesterday.
To contact the reporters on this story: Anto Antony in New Delhi at aantony1@bloomberg.net; Anurag Joshi in Mumbai at ajoshi53@bloomberg.net
To contact the editor responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net; Shelley Smith at ssmith118@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
The government yesterday decided to raise the cap on foreign borrowings without approvals by 50 percent to $750 million, and said it may permit the overall limit to exceed $30 billion “on a case-by-case” basis, R. Gopalan, secretary in the Department of Economic Affairs in the finance ministry, told reporters in New Delhi. Companies building airports, roads, ports and power plants will benefit from the new rules, he said.
Prime Minister Manmohan Singh aims to double spending on infrastructure to $1 trillion in the five years to March 2017 to accelerate growth to more than 10 percent and lift living standards in the nation. Eleven interest-rate increases by the Reserve Bank of India since March 2010 drove average five-year borrowing costs for top-rated local companies to an 18-month high of 9.78 percent on June 1.
“Including all hedging costs, there’s still an arbitrage of 1 to 2 percentage points,” said A. Issac George, chief financial officer at GVK Power & Infrastructure Ltd. (GVKP) “This will certainly help at a time domestic interest rates are threatening to hurt growth.”
Slowing Growth
Gross domestic product is likely to increase 8 percent in the year to March, according to central bank estimates, slower than 8.5 percent last year. Factory output grew 3.3 percent from a year earlier in July, the slowest pace in 21 months, according to data provided by the New Delhi-based Central Statistical Organisation.
The extra yield firms need to pay for five-year debt over similar-maturity government securities has risen to 93 basis points from as low as 56 on Dec. 6, according to data compiled by Bloomberg.
Indian companies sold more than $9 billion of non-rupee bonds to investors abroad in 2011, twice the amount in the same period last year, Bloomberg data show. They borrowed $14.6 billion of loans denominated in international currencies this year, a 17 percent decline.
The government also decided to allow companies to use 25 percent of the proceeds raised abroad to repay existing debt, Gopalan said. A $10 billion limit on foreign ownership of the nation’s sovereign debt remained unchanged, he said.
“The decisions taken are game changers as far as Indian companies are concerned,” Gopalan said.
Yuan Funds
Infrastructure Leasing & Financial Services Ltd., an Indian lender to road projects, plans to raise $100 million from yuan- denominated bonds and has hired bankers to manage the sale, a person with direct knowledge of the matter said Sept. 9, asking not to be identified as the matter is private.
Many companies sought yuan as one of the currencies for overseas debt, Gopalan said. Lanco Infratech Ltd. (LANCI), Adani Power Ltd. (ADANI), SRM Energy Ltd. (SRME) and Moser Baer Projects Pvt. have said they’re talking to China’s export banks for loans, after billionaire Anil Ambani’s Reliance Power Ltd. (RPWR) borrowed $1.1 billion from China Development Bank Corp. in December.
Industrial & Commercial Bank of China (601398) Ltd., the world’s largest bank by market value, may provide services for Indian customers seeking to raise yuan funds from the sale of so-called dim-sum bonds, President Yang Kaisheng said in Mumbai yesterday.
“More multinational companies will feel comfortable tapping this market as the Chinese government continues to clarify its procedures for fund raising and remitting those proceeds into China,” Michael Lam, the Hong-Kong-based director of fixed-income capital markets for Asia at Deutsche Bank AG, said at a Euromoney conference in Singapore yesterday.
To contact the reporters on this story: Anto Antony in New Delhi at aantony1@bloomberg.net; Anurag Joshi in Mumbai at ajoshi53@bloomberg.net
To contact the editor responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net; Shelley Smith at ssmith118@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Wednesday, September 14, 2011
Asia Stocks Rise From One-Year Low; Kiwi Falls By Shiyin Chen and Shani Raja - Sep 14, 2011
Asian stocks rose from a one-year low as German and French leaders said they’re certain Greece will remain in the euro zone. New Zealand’s dollar slid after the central bank held interest rates amid the risk of slowing global economic growth.
The MSCI Asia Pacific Index rose 1.6 percent at 11:30 a.m. in Tokyo, rebounding from the lowest level since August 2010. Standard & Poor’s 500 Index futures rose 0.1 percent, indicating the U.S. stocks gauge will extend a three-day rally. The euro lost 0.2 percent to $1.3729 before a Spanish debt sale and the so-called kiwi dropped against all 16 major peers. Oil futures slipped a second day.
French President Nicolas Sarkozy and German Chancellor Angela Merkel said they’re convinced Greece will remain in the euro area after Greek Prime Minister George Papandreou committed to meet deficit-reduction targets. Spain plans to sell as much as 4 billion euros ($5.5 billion) of bonds today. Reserve Bank of New Zealand Governor Alan Bollard said there is now a greater risk the global economy will slow “sharply,” while data today may show U.S. inflation eased and industrial production stalled.
“We’re seeing some ‘risk-on’ trading on hopes that the European issue will be pushed further down the road,” said Belinda Allen, senior analyst of investment markets research at Colonial First State Global Asset Management in Sydney, which oversees about $150 billion. “Despite the comments from the French and German leaders, Europe still has a lot of issues to work through that will impact markets over coming months.”
About six shares rose for every one that declined on MSCI’s Asia Pacific Index. The gauge sank 1.7 percent yesterday to close at the lowest level since Aug. 25, 2010. Japan’s Nikkei 225 Stock Average advanced 1.6 percent, Australia’s S&P/ASX 200 Index climbed 1.4 percent and South Korea’s Kospi Index rallied 1.5 percent.
Chipmakers Gain
Elpida Memory Inc. jumped 5 percent in Tokyo after the chipmaker said it may shift some production from its plant in Hiroshima, Japan, to Taiwan as part of its plans to cope with a strong yen and an industry slump. Hynix Semiconductor Inc. (000660) rose 4.8 percent in Seoul. Semiconductor makers are gaining amid speculation computer memory chips will stabilize soon, said Choi Do Yeon, an analyst with LIG Investment & Securities Co.
The S&P 500 rose 1.4 percent yesterday, rounding off a three-day, 3 percent rally. U.S. data today may show consumer prices rose 0.2 percent in August from July, when inflation was at 0.5 percent, according to the median forecast in a Bloomberg News survey. Industrial production probably posted no growth last month, a separate survey showed. Treasury 10-year yields were little changed at 1.98 percent.
Greece’s Future
Greece’s Papandreou yesterday committed to meet deficit- reduction targets demanded as a condition for an international bailout, according to statements distributed by Athens and Paris. Sarkozy and Merkel “are convinced that the future of Greece is in the euro zone,” the French statement said, easing concern that the monetary union may fall apart.
European equity markets closed before the statement was released. The Stoxx Europe 600 Index rose 1.5 percent yesterday, a second day of gains.
Treasury Secretary Timothy F. Geithner is scheduled to attend a session of the European Union’s Economic and Financial Affairs Council in Wroclaw, Poland for the first time. Zhang Xiaoqiang, a vice chairman of the National Development and Reform Commission, said China is willing to buy bonds of nations hit by the debt crisis.
The euro was at 105.18 yen after yesterday snapping four days of losses against Japan’s currency. The auction by Spain today comes two days after Italy’s borrowing costs surged at a bill sale.
N.Z. Rates
The kiwi fell as New Zealand’s central bank kept its official cash rate at a record-low 2.5 percent today, a decision predicted by all 15 economists surveyed by Bloomberg.
Crude for October delivery decreased 0.5 percent to $88.43 a barrel on the New York Mercantile Exchange. Futures sank 1.4 percent yesterday. Gasoline stockpiles rose 1.94 million barrels last week, the biggest gain since June, according to the Energy Department.
Immediate-delivery gold retreated 0.4 percent to $1,812.05 an ounce, bound for a second-day of losses. Zinc for three-month delivery added 0.5 percent on the London Metal Exchange, halting two days of losses.
To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
The MSCI Asia Pacific Index rose 1.6 percent at 11:30 a.m. in Tokyo, rebounding from the lowest level since August 2010. Standard & Poor’s 500 Index futures rose 0.1 percent, indicating the U.S. stocks gauge will extend a three-day rally. The euro lost 0.2 percent to $1.3729 before a Spanish debt sale and the so-called kiwi dropped against all 16 major peers. Oil futures slipped a second day.
French President Nicolas Sarkozy and German Chancellor Angela Merkel said they’re convinced Greece will remain in the euro area after Greek Prime Minister George Papandreou committed to meet deficit-reduction targets. Spain plans to sell as much as 4 billion euros ($5.5 billion) of bonds today. Reserve Bank of New Zealand Governor Alan Bollard said there is now a greater risk the global economy will slow “sharply,” while data today may show U.S. inflation eased and industrial production stalled.
“We’re seeing some ‘risk-on’ trading on hopes that the European issue will be pushed further down the road,” said Belinda Allen, senior analyst of investment markets research at Colonial First State Global Asset Management in Sydney, which oversees about $150 billion. “Despite the comments from the French and German leaders, Europe still has a lot of issues to work through that will impact markets over coming months.”
About six shares rose for every one that declined on MSCI’s Asia Pacific Index. The gauge sank 1.7 percent yesterday to close at the lowest level since Aug. 25, 2010. Japan’s Nikkei 225 Stock Average advanced 1.6 percent, Australia’s S&P/ASX 200 Index climbed 1.4 percent and South Korea’s Kospi Index rallied 1.5 percent.
Chipmakers Gain
Elpida Memory Inc. jumped 5 percent in Tokyo after the chipmaker said it may shift some production from its plant in Hiroshima, Japan, to Taiwan as part of its plans to cope with a strong yen and an industry slump. Hynix Semiconductor Inc. (000660) rose 4.8 percent in Seoul. Semiconductor makers are gaining amid speculation computer memory chips will stabilize soon, said Choi Do Yeon, an analyst with LIG Investment & Securities Co.
The S&P 500 rose 1.4 percent yesterday, rounding off a three-day, 3 percent rally. U.S. data today may show consumer prices rose 0.2 percent in August from July, when inflation was at 0.5 percent, according to the median forecast in a Bloomberg News survey. Industrial production probably posted no growth last month, a separate survey showed. Treasury 10-year yields were little changed at 1.98 percent.
Greece’s Future
Greece’s Papandreou yesterday committed to meet deficit- reduction targets demanded as a condition for an international bailout, according to statements distributed by Athens and Paris. Sarkozy and Merkel “are convinced that the future of Greece is in the euro zone,” the French statement said, easing concern that the monetary union may fall apart.
European equity markets closed before the statement was released. The Stoxx Europe 600 Index rose 1.5 percent yesterday, a second day of gains.
Treasury Secretary Timothy F. Geithner is scheduled to attend a session of the European Union’s Economic and Financial Affairs Council in Wroclaw, Poland for the first time. Zhang Xiaoqiang, a vice chairman of the National Development and Reform Commission, said China is willing to buy bonds of nations hit by the debt crisis.
The euro was at 105.18 yen after yesterday snapping four days of losses against Japan’s currency. The auction by Spain today comes two days after Italy’s borrowing costs surged at a bill sale.
N.Z. Rates
The kiwi fell as New Zealand’s central bank kept its official cash rate at a record-low 2.5 percent today, a decision predicted by all 15 economists surveyed by Bloomberg.
Crude for October delivery decreased 0.5 percent to $88.43 a barrel on the New York Mercantile Exchange. Futures sank 1.4 percent yesterday. Gasoline stockpiles rose 1.94 million barrels last week, the biggest gain since June, according to the Energy Department.
Immediate-delivery gold retreated 0.4 percent to $1,812.05 an ounce, bound for a second-day of losses. Zinc for three-month delivery added 0.5 percent on the London Metal Exchange, halting two days of losses.
To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
Tuesday, September 13, 2011
Crude Oil Drops From Six-Week High on Concern Economic Recovery to Falter By Ben Sharples - Sep 13, 2011
Oil fell from a six-week high as investors bet gains this week were exaggerated amid concern that Europe’s debt crisis and the faltering U.S. economic recovery will temper fuel demand.
Futures slipped as much as 1.1 percent after climbing 2.3 percent yesterday. Technical indicators signaled oil prices in New York may have climbed too quickly. U.S. Treasury Secretary Timothy F. Geithner will urge European governments to step up their crisis-fighting efforts when he meets finance ministers this week, a euro-area official said. The International Energy Agency yesterday cut global oil-consumption forecasts for this year and 2012.
“There is overall reduced demand as a consequence of weaker than expected economic growth in the developed economies,” Ric Spooner, a chief market analyst at CMC Markets in Sydney, said by telephone today. “Growth in the big Western economies is weaker than it was a few months ago and getting weaker all the time.”
Crude for October delivery dropped as much as $1 to $89.21 a barrel in electronic trading on the New York Mercantile Exchange and was at $89.30 at 1:05 p.m. Sydney time. The contract yesterday advanced $2.02 to $90.21, the highest close since Aug. 3. Prices are 16 percent higher the past year.
Brent oil for October settlement fell 44 cents, or 0.4 percent, to $111.45 a barrel on the London-based ICE Futures Europe Exchange. The European benchmark contract’s premium to U.S. futures was at $22.15, compared with a record close of $26.87 on Sept. 6.
Technical Indicators
New York oil’s five-day stochastic oscillators rose above 70, signaling prices increased too quickly this week, according to data compiled by Bloomberg. Futures also stopped advancing before the 50-day moving average, which was at $90.72 a barrel today. A failure to breach technical resistance typically means prices will change direction.
Geithner will meet European Union finance ministers in Wroclaw, Poland, on Sept. 16 and 17. It will be the first time he has attended a session of Europe’s Economic and Financial Affairs Council, known as Ecofin.
The Paris-based IEA lowered its estimate for oil consumption this year by 200,000 barrels a day and by 400,000 in 2012. Worldwide demand will rise 1.2 percent to 89.3 million barrels a day this year and 1.6 percent to 90.7 million next year. The full resumption of Libyan exports following the ouster of Muammar Qaddafi will be “long and difficult,” it said.
U.S. Economy
U.S. retail sales probably climbed 0.2 percent in August, the slowest pace in three months, as job and income growth weakened, according to the median estimate in a Bloomberg survey of economists before a report today. Sales climbed 0.5 percent in July.
Gasoline inventories climbed 2.76 million barrels last week, the American Petroleum Institute said yesterday. That compares with a forecast decline of 500,000 barrels in an Energy Department report today, according to the median of 14 analyst estimates in a Bloomberg News survey.
Crude supplies fell 5.05 million barrels, the API said. The Energy Department report may say they dropped 3 million barrels after Tropical Storm Lee shut output in the Gulf of Mexico, according to the Bloomberg News survey.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Maria, the 14th named storm of the Atlantic hurricane season, gained speed on a path that may take it toward refineries in Canada.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Futures slipped as much as 1.1 percent after climbing 2.3 percent yesterday. Technical indicators signaled oil prices in New York may have climbed too quickly. U.S. Treasury Secretary Timothy F. Geithner will urge European governments to step up their crisis-fighting efforts when he meets finance ministers this week, a euro-area official said. The International Energy Agency yesterday cut global oil-consumption forecasts for this year and 2012.
“There is overall reduced demand as a consequence of weaker than expected economic growth in the developed economies,” Ric Spooner, a chief market analyst at CMC Markets in Sydney, said by telephone today. “Growth in the big Western economies is weaker than it was a few months ago and getting weaker all the time.”
Crude for October delivery dropped as much as $1 to $89.21 a barrel in electronic trading on the New York Mercantile Exchange and was at $89.30 at 1:05 p.m. Sydney time. The contract yesterday advanced $2.02 to $90.21, the highest close since Aug. 3. Prices are 16 percent higher the past year.
Brent oil for October settlement fell 44 cents, or 0.4 percent, to $111.45 a barrel on the London-based ICE Futures Europe Exchange. The European benchmark contract’s premium to U.S. futures was at $22.15, compared with a record close of $26.87 on Sept. 6.
Technical Indicators
New York oil’s five-day stochastic oscillators rose above 70, signaling prices increased too quickly this week, according to data compiled by Bloomberg. Futures also stopped advancing before the 50-day moving average, which was at $90.72 a barrel today. A failure to breach technical resistance typically means prices will change direction.
Geithner will meet European Union finance ministers in Wroclaw, Poland, on Sept. 16 and 17. It will be the first time he has attended a session of Europe’s Economic and Financial Affairs Council, known as Ecofin.
The Paris-based IEA lowered its estimate for oil consumption this year by 200,000 barrels a day and by 400,000 in 2012. Worldwide demand will rise 1.2 percent to 89.3 million barrels a day this year and 1.6 percent to 90.7 million next year. The full resumption of Libyan exports following the ouster of Muammar Qaddafi will be “long and difficult,” it said.
U.S. Economy
U.S. retail sales probably climbed 0.2 percent in August, the slowest pace in three months, as job and income growth weakened, according to the median estimate in a Bloomberg survey of economists before a report today. Sales climbed 0.5 percent in July.
Gasoline inventories climbed 2.76 million barrels last week, the American Petroleum Institute said yesterday. That compares with a forecast decline of 500,000 barrels in an Energy Department report today, according to the median of 14 analyst estimates in a Bloomberg News survey.
Crude supplies fell 5.05 million barrels, the API said. The Energy Department report may say they dropped 3 million barrels after Tropical Storm Lee shut output in the Gulf of Mexico, according to the Bloomberg News survey.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Maria, the 14th named storm of the Atlantic hurricane season, gained speed on a path that may take it toward refineries in Canada.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Monday, September 12, 2011
Oil Rises a Second Day on Forecast Supply Drop; Brent-WTI Spread Narrows By Ben Sharples - Sep 12, 2011
Oil rose for a second day amid speculation crude stockpiles shrank last week in the U.S., the world’s biggest consumer of the commodity. Brent’s premium to New York futures narrowed to the lowest in three weeks.
Prices advanced as much as 1.1 percent before an Energy Department report tomorrow that may show oil supplies fell for a second week. London-traded Brent’s premium closed at the lowest since Aug. 23 yesterday after the Organization of Petroleum Exporting Countries said Libya will be able to restore most its oil output in six months.
Crude for October delivery climbed as much as $1.02 to $89.21 a barrel in electronic trading on the New York Mercantile Exchange and was at $89.02 at 9:22 a.m. Singapore time. The contract yesterday increased 95 cents to $88.19. Prices are 15 percent higher the past year.
Brent oil for October settlement decreased 52 cents, or 0.5 percent, to $112.25 a barrel on the London-based ICE Futures Europe Exchange yesterday. The European benchmark contract closed at a premium of $24.03 to U.S. futures, the lowest since Aug. 23 and down from a record close of $26.87 on Sept. 6.
The Energy Department report may show crude inventories slid 3 million barrels last week, according to the median of 10 analyst estimates in a Bloomberg News survey. Gasoline supplies probably fell 500,000 barrels, the survey shows. The industry- funded American Petroleum Institute will report its own data today.
Libya Production
Full production from Libya may resume in 18 months, the Organization of Petroleum Exporting Countries said yesterday in its monthly report. The country may pump 1 million barrels a day in six months, OPEC said. It was producing about 1.6 million before fighting began between rebels and forces loyal to former leader Col. Muammar Qaddafi.
An oil tanker is sailing to the Libyan port of Mellitah, a sign the nation may be resuming energy exports after months of fighting that led to the ouster of Muammar Qaddafi, ship- tracking data compiled by Bloomberg show.
OPEC, responsible for about 40 percent of world crude supply, “marginally” lowered estimates for global oil consumption in 2012 and trimmed its 2011 assessment by 150,000 barrels a day. Demand will grow to 87.99 million barrels this year and 1.4 percent to 89.26 million a day in 2012.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Prices advanced as much as 1.1 percent before an Energy Department report tomorrow that may show oil supplies fell for a second week. London-traded Brent’s premium closed at the lowest since Aug. 23 yesterday after the Organization of Petroleum Exporting Countries said Libya will be able to restore most its oil output in six months.
Crude for October delivery climbed as much as $1.02 to $89.21 a barrel in electronic trading on the New York Mercantile Exchange and was at $89.02 at 9:22 a.m. Singapore time. The contract yesterday increased 95 cents to $88.19. Prices are 15 percent higher the past year.
Brent oil for October settlement decreased 52 cents, or 0.5 percent, to $112.25 a barrel on the London-based ICE Futures Europe Exchange yesterday. The European benchmark contract closed at a premium of $24.03 to U.S. futures, the lowest since Aug. 23 and down from a record close of $26.87 on Sept. 6.
The Energy Department report may show crude inventories slid 3 million barrels last week, according to the median of 10 analyst estimates in a Bloomberg News survey. Gasoline supplies probably fell 500,000 barrels, the survey shows. The industry- funded American Petroleum Institute will report its own data today.
Libya Production
Full production from Libya may resume in 18 months, the Organization of Petroleum Exporting Countries said yesterday in its monthly report. The country may pump 1 million barrels a day in six months, OPEC said. It was producing about 1.6 million before fighting began between rebels and forces loyal to former leader Col. Muammar Qaddafi.
An oil tanker is sailing to the Libyan port of Mellitah, a sign the nation may be resuming energy exports after months of fighting that led to the ouster of Muammar Qaddafi, ship- tracking data compiled by Bloomberg show.
OPEC, responsible for about 40 percent of world crude supply, “marginally” lowered estimates for global oil consumption in 2012 and trimmed its 2011 assessment by 150,000 barrels a day. Demand will grow to 87.99 million barrels this year and 1.4 percent to 89.26 million a day in 2012.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Sunday, September 11, 2011
Tata Motors Forced to Search for Chief Executive While Jaguar Sales Plunge By Siddharth Philip and Steven Rothwell - Sep 11, 2011
Tata Motors Ltd. (TTMT), owner of the Jaguar and Land Rover brands, is being forced to search for a new chief executive officer as it struggles to revive sales of the luxury sedan amid a worsening debt crisis in Europe.
Carl-Peter Forster, 57, who helped the Jaguar Land Rover unit turn to profit in the year ended March 31, quit on Sept. 9 after less than two years as the global head of India’s biggest automaker citing “unavoidable personal circumstances.”
Forster’s replacement will face the challenge of reversing six straight months of declining sales at Jaguar as economies in Europe stall. Tata Motors, which last year got 35 percent of its revenue from the U.S. and Europe, needs to find a head for the company soon to avoid derailing a plan to invest $2.4 billion annually in new models and expanding into China, according to Deepesh Rathore, managing director for IHS Automotive.
“They are going to be left wondering who is going to replace him,” said Andrew Jackson, an analyst at research firm Datamonitor in London. “This is a big blow really for Jaguar Land Rover. He signed off on a very bold change in direction for the company.”
Prakash Telang, managing director of the company’s Indian operations, and Ralf Speth, chief executive officer of Jaguar Land Rover, will represent their respective units on Tata Motors’ board, according to an e-mailed statement on Sept. 9.
Tata Motors American depositary receipts plunged 9.2 percent to $15.35, the lowest since Feb. 25, in New York on Sept. 9 after Forster’s resignation. The company’s shares have dropped 42 percent this year, making it the worst performing stock in the BSE India Sensitive Index.
Growth Market
Forster presided over a 20-fold jump in Jaguar Land Rover’s profit before tax in the year ended March 31. He also led Tata Motors plan to tap China, Asia’s largest economy.
China is the No. 1 growth market for Jaguar Land Rover, Forster said in a Bloomberg TV interview in May. Tata Motors is looking for a local partner in China to set up assembly operations in the country, and the company has shortlisted manufacturers, Forster said in a separate interview the same month, without naming any of the potential partners.
Forster wasn’t available for comment, Tata Motors spokesman Debasis Ray said on Sept. 9.
Forster helped by “pulling Jaguar and Land Rover out of the mud and making them profitable,” said Peter Schmidt, managing director of Warwick, England-based Automotive Industry Data. “It will be very, very difficult to replace him in the short-term and possibly in the long-term.”
The Jaguar Land Rover unit, based in Gaydon, England, generated 57 percent of Tata Motors’ revenue for the year ended March 31, up from 53 percent a year earlier.
Supercar
The division’s pretax profit surged 20-fold to 1.12 billion pounds for the fiscal year. Jaguar aims to challenge Bayerische Motoren Werke AG with a hybrid supercar and an entry-level sedan to compete with the 3-Series.
The new models are part of Tata’s plans to invest 1.5 billion pounds ($2.4 billion) annually in product development at Jaguar and Land Rover over the next five years. The spending will include 40 new vehicles or upgrades, including the Range Rover Evoque, for which the company has begun deliveries.
Europe’s debt crisis drove a 23 percent decline in Jaguar sales to 4,372 in July, according to a company statement. Almost 25 percent of Jaguar and Land Rover sales come from the U.K., where the economy grew at the slowest pace in the second quarter since it contracted in the first three months of 2010. North America and Europe account for about 22 percent each of sales, according to a company presentation.
Nano Sales
Forster, who was hired in February 2010, will remain as a non-executive member on the company’s board, Mumbai-based Tata Motors said in the statement. The company recruited Forster from General Motors Co. (GM) where he was head of European operations.
Passenger-vehicle sales at Tata Motors slumped 33 percent in August from a year earlier after India’s central bank raised its benchmark interest rate to 8 percent in July, the highest among Asia’s biggest economies.
Deliveries of the Nano, the world’s cheapest car, plunged 85 percent to 1,202 units in August, Tata Motors said in a statement on Sept. 1. The Society of Indian Automobile Manufacturers said last week it may cut the industry’s sales forecast after economic growth slowed to the lowest in six quarters in the three months ended June.
“I would expect Forster’s position to be filled up in the next two to three months if the company wants to keep their plans on track,” said Rathore.
Tata Motors bought Jaguar Land Rover from Ford Motor Co. in 2008 for $2.5 billion.
To contact the reporters on this story: Siddharth Philip in Mumbai at sphilip3@bloomberg.net; Steven Rothwell in London at srothwell@bloomberg.net
To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Carl-Peter Forster, 57, who helped the Jaguar Land Rover unit turn to profit in the year ended March 31, quit on Sept. 9 after less than two years as the global head of India’s biggest automaker citing “unavoidable personal circumstances.”
Forster’s replacement will face the challenge of reversing six straight months of declining sales at Jaguar as economies in Europe stall. Tata Motors, which last year got 35 percent of its revenue from the U.S. and Europe, needs to find a head for the company soon to avoid derailing a plan to invest $2.4 billion annually in new models and expanding into China, according to Deepesh Rathore, managing director for IHS Automotive.
“They are going to be left wondering who is going to replace him,” said Andrew Jackson, an analyst at research firm Datamonitor in London. “This is a big blow really for Jaguar Land Rover. He signed off on a very bold change in direction for the company.”
Prakash Telang, managing director of the company’s Indian operations, and Ralf Speth, chief executive officer of Jaguar Land Rover, will represent their respective units on Tata Motors’ board, according to an e-mailed statement on Sept. 9.
Tata Motors American depositary receipts plunged 9.2 percent to $15.35, the lowest since Feb. 25, in New York on Sept. 9 after Forster’s resignation. The company’s shares have dropped 42 percent this year, making it the worst performing stock in the BSE India Sensitive Index.
Growth Market
Forster presided over a 20-fold jump in Jaguar Land Rover’s profit before tax in the year ended March 31. He also led Tata Motors plan to tap China, Asia’s largest economy.
China is the No. 1 growth market for Jaguar Land Rover, Forster said in a Bloomberg TV interview in May. Tata Motors is looking for a local partner in China to set up assembly operations in the country, and the company has shortlisted manufacturers, Forster said in a separate interview the same month, without naming any of the potential partners.
Forster wasn’t available for comment, Tata Motors spokesman Debasis Ray said on Sept. 9.
Forster helped by “pulling Jaguar and Land Rover out of the mud and making them profitable,” said Peter Schmidt, managing director of Warwick, England-based Automotive Industry Data. “It will be very, very difficult to replace him in the short-term and possibly in the long-term.”
The Jaguar Land Rover unit, based in Gaydon, England, generated 57 percent of Tata Motors’ revenue for the year ended March 31, up from 53 percent a year earlier.
Supercar
The division’s pretax profit surged 20-fold to 1.12 billion pounds for the fiscal year. Jaguar aims to challenge Bayerische Motoren Werke AG with a hybrid supercar and an entry-level sedan to compete with the 3-Series.
The new models are part of Tata’s plans to invest 1.5 billion pounds ($2.4 billion) annually in product development at Jaguar and Land Rover over the next five years. The spending will include 40 new vehicles or upgrades, including the Range Rover Evoque, for which the company has begun deliveries.
Europe’s debt crisis drove a 23 percent decline in Jaguar sales to 4,372 in July, according to a company statement. Almost 25 percent of Jaguar and Land Rover sales come from the U.K., where the economy grew at the slowest pace in the second quarter since it contracted in the first three months of 2010. North America and Europe account for about 22 percent each of sales, according to a company presentation.
Nano Sales
Forster, who was hired in February 2010, will remain as a non-executive member on the company’s board, Mumbai-based Tata Motors said in the statement. The company recruited Forster from General Motors Co. (GM) where he was head of European operations.
Passenger-vehicle sales at Tata Motors slumped 33 percent in August from a year earlier after India’s central bank raised its benchmark interest rate to 8 percent in July, the highest among Asia’s biggest economies.
Deliveries of the Nano, the world’s cheapest car, plunged 85 percent to 1,202 units in August, Tata Motors said in a statement on Sept. 1. The Society of Indian Automobile Manufacturers said last week it may cut the industry’s sales forecast after economic growth slowed to the lowest in six quarters in the three months ended June.
“I would expect Forster’s position to be filled up in the next two to three months if the company wants to keep their plans on track,” said Rathore.
Tata Motors bought Jaguar Land Rover from Ford Motor Co. in 2008 for $2.5 billion.
To contact the reporters on this story: Siddharth Philip in Mumbai at sphilip3@bloomberg.net; Steven Rothwell in London at srothwell@bloomberg.net
To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
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