29 June 2010

BP Shares Affected by Storm Alex Comment

BP shares have fallen again today after the company announced on Monday that its oil spill operation might be hampered by the tropical storm Alex.

The company's total costs for the cleanup and all the other facets of the disaster including claims are now estimated at $100 million each day.

BP shareholders have been affected not just by share prices in the company falling by half this year, but by the fact that dividends will now not be paid out this year.

Around 80,000 claims have been made over the oil spill which began on April 20.

22 June 2010

Osborne's Budget

The Emergency Budget is being announced today by brand new Chancellor George Osborne.

As had been widely expected, the report is filled with tough spending cuts and measures designed to reduce the huge deficit that the country is currently clouded by.

But while most Britons are bracing themselves for a time of bargain-hunting and tighter purse strings, there are some sectors that have reacted angrily at the way that they have been affected. One such group is that of public sector workers such as nurses and teachers, who are facing pension cutbacks.

Tax rises, pay freezes....welcome to the new British climate. The only hope is that it will do the job to get the economy back to stability.

21 June 2010

Currency Peg Between Yuan and US Dollar to Ease

The People's Bank of China (China's central bank) over the weekend made a surprise announcement: it intends to ease up on its peg against the US dollar.

Markets reacted with a jump in the yuan and Asian stocks, however these cooled somewhat as it became clear the Bank does not intend to make any fast changes. Monday's daily rate remained unchanged since Friday - proving that while a change is afoot, it will very much be at their own pace.

China's currency peg with the US dollar had put China under intense strain in its relationship with the US since mid 2008. The decision to ease up has come just ahead of the next G20 meeting in Toronot, Canada and many hope that trade and political relationships will improve as a result.

18 June 2010

Gold To Hit New High?

Gold hit a new record high on Thursday, reaching well over $1,245 an ounce on the New York Mercantile Exchange. As investors headed away from the US dollar amid poor US economic data, gold became even more popular as a safe asset.

The euro is also on an interesting week, heading for what could be its second straight week of gains. Earlier this month, the currency had slumped to four-year lows against the US dollar. Now, it has hit 3-week highs.

The euro was enjoying renewed interest among those investors seeking riskier assets. This was due in part to an auction of government bonds in Spain, which saw healthy demand.

17 June 2010

BP Cutbacks Surprise Investors

The oil giant BP has announced that it plans a $20 billion fund to pay for claims arising from the oil spill disaster in the Gulf of Mexico.

As part of its measures to pay its penalty, BP has also cut dividends for the next three quarters. The dividend payout for the first quarter due for June 21 has been cancelled, as have those in the second and third quarters.

Investors were surprised by the scale of BP's cutbacks - it also plans to sell assets and trim its investment programmes. Most had predicted that the company would pay dividends in shares for a quarter or two. UK pension funds are affected by this, as many have heavy investments in BP.

15 June 2010

Greece Downgraded to Junk - by Moody's

Greece recived another junk rating this week, this time from another top credit ratings agency, Moody's. Down to Ba1 from A3, Moody's is the second agency to downgrade Greece's government bonds.

The country, which has been at the heart and core of the European debt crisis, has pledged to reduce its deficit from 14% of GDP to 3% by 2014. So far, it says it is ahead of schedule on this mission.

Still, a downgrade seemed inevitable, though Moody's did add that this rating was now stable for at least 18 months.

The euro, which has seen some investor interest on the foreign exchange market over the past few days, has taken the main rap from the European crisis.

10 June 2010

UK Pensions Affected by BP Price Falls

UK pension funds are unlikely to be overjoyed at today's share market - BP share prices fell to 13-year lows in early trade before recovering slightly. As largescale investors in the troubled oil giant, UK pensions could be hit by possible dividend cuts from the firm.

Anti-British sentiment surrounding BP is apparently growing in the US, and anger around the oil spill disaster in the Gulf of Mexico is a daily emotion for politicians, investors, activists and the man on the street.

With widespread BP share selling on the market, the company's only reaction was that it did not see any reason to justify share price falls...

09 June 2010

Rise and Rally in Global Markets

A report showing that China's exports grew by around 50% in May compared with a year before has led to a rise in many global markets, including US index futures, commodities and the European share market.

Meanwhile sales of government debts led to declines in UK and German bonds. Governments in numerous European countries are selling bonds today in order to combat high public debts.

The news of China's growth comes at a time when many developed economies are experiencing a spate of slow economic activity.

08 June 2010

Australian Sharemarket Buoyed despite Global Falls

The Australian sharemarket managed to steer clear of the losses seen on Wall Street and in Europe on Tuesday - gains were seen on shares in mining companies and banks.

Since the end of last week shares around the world have been declining on the back of fears that the global economy is at risk of falling under the European debt crisis.

While US Treasury chief Bernanke assured markets that the US economy was stable, investors were still very jumpy around European assets.

It seems that now, investors are likely to stay wary of EU assets - while in Australia it was so-called 'bargain-hunting' that apparently led investors to keep the market afloat on Tuesday.

07 June 2010

Euro hits new 4-Year Low

Monday saw global stocks fall as renewed fears over the European debt crisis and the health of the US economy left their impact on investors.

After a low end to the week last week, with worse-than-expected jobs data in the US, and new focus on problems in the Hungarian economy, on Monday fresh fears of a double-dip recession affected markets which are already hyper-sensitive.

After overnight falls in Asia and Sydney, the euro fell to its lowest level in over four years against the US dollar on the foreign exchange market.

Good news for US travellers to the European mainland perhaps, but for already suffering European economies it brings another blow.

04 June 2010

Ready to Start on the Property Ladder?

According to latest figures from Halifax, house prices fell for the second month in May this year. In May they declined by 0.6% while in April prices fell 0.1% - so are we facing another housing market slowdown?

Generally, housing experts are erring on the side of pessimissm. Predicting flat prices for 2010, they say that there are concerns that the market is becoming slow.

But compared with a year ago in the same period, prices are much higher by nearly 7%! And with interest rates at their currently very low rate, now might be an ideal time to get buying and start the game of the property ladder!

Many Brits are still choosing to look abroad for their property bargains - with the weak euro and even lower prices in places like Spain, an overseas mortgage is looking more than possible...

03 June 2010

Global Stocks Surge

Stock markets around the world surged today, as investors ploughed into riskier assets. The US dollar and the Japanese yen took the knock while currencies like the Australian dollar enjoyed gains.

The main reason for the global surge was better-than-expected US housing data, which was greeted with cheers from investors. Now, the positive sentiment looks set to be rounded off with another round of good data on Friday, as US jobs figures are announced.

As ever there are warnings that the market sentiment may not last. The euro, while enjoying the renewed interest, could still be on a widely downward trend say currency strategists.

But for now, investors are enjoying a rousing day. Will tomorrow bring more of the same?

02 June 2010

US Begins Oil Slick Probe

The US government has begun its probe into the BP oil spill disaster in the Gulf of Mexico.

News that a criminal investigation was to take place sent US shares tumbling in the US on Tuesday, with energy in the lead. BP shares broadly lost value as investors shied away from its tainted reputation.

The cleanup operation in the Gulf of Mexico continues. There are still frequent reports that the efforts to contain the oil slick are just driving clouds of the murky liquid down, deeper into the waters.

The latest estimate for the end of the clean is August. The amount of damage that the oil will have achieved by then is hard to imagine and will certainly give BP a tough time ahead.