Oil at two-week high after largest weekly crude-supply drop since 1999

Oil futures on Thursday logged their highest settlement in at least two weeks after U.S. government data revealed the largest drop in crude supplies since 1999.
The 14.5 million-barrel decline reported by the Energy Information Administration was even larger than the surprise 12.1 million-barrel drop reported by the American Petroleum Institute late Wednesday. Ahead of both reports, analysts polled by S&P Global Platts expected a 425,000-barrel climb.
“The large draw in crude oil inventory was driven by a large decline this week in crude oil imports, primarily weather-related, while refinery runs continued to be quite strong,” Robert Merriam, manager of Petroleum Supply Statistics at the EIA, told MarketWatch. He confirmed that the weekly supply drop was the largest since the week ended Jan. 1, 1999.
Oil prices also found support from Chinese data that showed another big increase in the country’s crude imports.




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South Korean stocks sink, leading Asian market slide

Asian shares traded broadly lower Friday, as investors were disappointed by the European Central Bank’s decision to leave its €1.7 trillion ($1.9 trillion) stimulus unchanged at a policy meeting Thursday.

Australia’s S&P/ASX 200 XJO, -0.85% was down 0.6% and South Korea’s Kospi SEU, -1.61% slid 1.2%. China’s Shanghai Composite Index SHCOMP, +0.02% was about flat. Japan’s Nikkei Stock Average NIK, +0.15% was last trading 0.1% lower after the yen appreciated against the U.S. dollar. A stronger yen makes Japanese exporters less competitive.

The South Korean won tumbled within minutes of headlines that North Korea may have conducted a nuclear test. The possibility of a sanctions-breaching test arose after a shallow 5.3 magnitude earthquake was detected near North Korea’s nuclear test site. The South Korean won fell as low as 1,103.0 to the U.S. dollar, representing a 0.9% fall from its Thursday closing level of 1,092.6.




Hong Kong’s Hang Seng Index HSI, +0.96% rose 0.4%, after a Chinese regulator said Thursday it will allow domestic insurers to invest in Hong Kong-listed stocks through a trading link with Shanghai. The China Insurance Regulatory Commission’s announcement came less than a month after the unveiling of the Shenzhen-Hong Kong Stock Connect program, set to begin later this year.

Asian markets’ weak start Friday also took cues from the ECB’s non-action Thursday, which fed into views that central banks globally were stepping back from their many aggressive market-boosting measures.

“It seems the recent deterioration in survey and inflation data is still not enough to push the ECB to ease further,” said Timothy Graf, head of macro strategy at State Street Global Markets EMEA.

“We were expecting some language that would help prepare the market for easing later this year.”

The ECB also said it wouldn’t immediately extend its bond-buying program. That lead to a selloff in U.S. bonds, sending the 10-year yield to 1.61% from around 1.53%.

The Fed and BOJ decide on monetary policies on Sept. 21.

The Bank of Korea kept its base rate unchanged for a third straight month on Friday, while the latest data from China showed consumer inflation slowed in August. India is scheduled to issue data on industrial production later Friday.

Brent was trading 0.9% lower at $49.52 a barrel, and gold was trading 0.1% higher.




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‘Dividend Aristocrat’ stocks post almost double the returns of the S&P 500 in 2016

Boards of directors that consistently reward investors with higher dividends don’t get enough praise.

While Amazon AMZN, -0.05% Oracle ORCL, -1.28% and Facebook FB, -0.60% are lauded for their genius-level CEOs and innovative business models, companies that keep raising dividend payouts year after year really enrich investors in the long run, and can be excellent performers within a diversified portfolio.

U.S. companies that have raised their regular dividends on common shares for at least 25 years are included in the S&P 500 Dividend Aristocrats Index SPDAUDP, -0.53% It doesn’t matter how high a stock’s current yield is, just that the dividend continues to rise. Beloved Aristocrats include real estate investor HCP Inc. HCP, -1.81% soft-drink giant Coca-Cola Co. KO, -0.02% and pharmaceutical company AbbVie Inc. ABBV, -1.40% So even though investors tend to think of dividend stocks as vehicles for income, the Aristocrats have been a fantastic vehicle for growth. So far this year, the dividend index has returned 14.1% (with dividends reinvested), compared with 8.3% for the benchmark S&P 500 Index SPX, -0.22% — that’s almost twice the increase.



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Asian Market Update : Epic Research Malaysia

Asian stocks fell as investors weighed the outlook for monetary policy in the US and Japan after the European Central Bank downplayed the need for more economic stimulus. South Korean shares dropped amid concern North Korea may have conducted a nuclear test.

The MSCI Asia Pacific Index dropped 0.7 per cent to 141.03 as of 10:49am in Tokyo. The measure is heading for a 2.1 per cent advance this week as traders pared bets the Federal Reserve will raise rates at its September meeting while speculation swirled over whether the Bank of Japan will add to already record stimulus.

Shares in the US and Europe fell after ECB chief Mario Draghi played down the prospect of an increase in asset purchases at a time when concern over the impact of Brexit on the euro area is mounting.

"While the ECB disappointed, we could still expect additional stimulus later in the year as there's so much uncertainty in Europe," James Woods, a strategist at Rivkin Securities in Sydney, said by phone.



"Investors will probably sit on the sidelines ahead of the Fed and Bank of Japan policy meetings."

South Korea's Kospi index lost 1.3 per cent, on course for its biggest drop since July 6. A shallow 5.0-magnitude earthquake was detected near North Korea's nuclear test site, according to the European Mediterranean Seismological Centre.

South Korea's government said North Korea may have conducted a nuclear test, Yonhap News said, citing an unidentified government official.

Draghi Decides Europe's Stoxx 600 index slid 0.3 per cent on Thursday while the US S&P 500 Index lost 0.2 per cent, retreating from a record high. Mr Draghi said the ECB didn't discuss an extension to its bond-buying programme at its latest meeting, where interest rates were left unchanged.

The European decision comes before this month's closely watched BOJ meeting, at which the board will announce the results of a comprehensive review of monetary policy and decide whether it should expand easing.

Japan's Topix index slid 0.3 per cent as the yen added 0.4 per cent against the US dollar on Friday. New Zealand's S&P/NZX 50 Index declined 0.6 per cent. Australia's S&P/ASX 200 Index fell 0.7 per cent.

Hong Kong's Hang Seng Index climbed 0.4 per cent to the highest level since Aug 2015. Chinese shares in Hong Kong rose for a seventh day, increasing 0.8 per cent.

The Shanghai Composite Index added 0.2 per cent. Data showed China's factory-gate deflation eased for an eighth straight month signalling less need for the central bank to ease further.




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Opening Market Update : Epic Research Malaysia

MALAYSIA share prices opened lower on Friday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 0.260 points to 1,691.120.

Volume was 21.500 million lots worth RM4.936 million.

Gainers outnumbered losers 65 to 57.



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CIMB Research: Bioalpha major shareholders undertaking to fully subscribe to rights issue is positive

The move by Bioalpha Holdings Bhd major shareholders to subscribe to the health supplements maker’s latest rights issue is a positive one as it will ensure the rights shares will be fully subscribed.

CIMB Research on Thursday said the company’s major shareholders, William Hon and PNS, have given an undertaking to subscribe for their portion of the rights issue shares. “In addition, Hon and PNS have also undertaken to subscribe for 16% and 56%, respectively, of the allocated rights issue not subscribed by minority shareholders.

“This means, Hon and PNS have undertaken to subscribe for 100% of the proposed rights issue. We view this move positively as this ensures Bioalpha‘s proposed rights issue will be fully subscribed,’’ it added.

Yesterday, the company had proposed 1-for-5 rights issue (one rights share for every five shares owned) and in addition would give one free warrant for every rights share subscribed. The issued share base would rise to 800 million shares, or 934 million shares assuming warrant conversion. Based on the indicative RM0.21 rights issue price, the company would raise around RM28mil cash.

Assuming the rights issue is set at RM0.21, this is at 25% discount to the estimated ex-rights issue price, the research house said, which it view fair as shareholders would also get a free warrant for very rights share subscribed.

On a fully diluted basis, the issued share base would rise from 667 million to 934 million shares. Estimated 2017 earnings per share (EPS) dilution ex-rights issue is around 35%, it said, noting that the research house ex-rights target price (fully-diluted basis) would fall from RM0.52 to RM0.37.

CIMB said the proposed rights issue was a positive surprise as the proposed funds raised would be mainly used for planting 880 acres in Pasir Raja with herbs (RM10mil), and purchase of raw materials, packaging costs and working capital needs for new products (RM13.5mil).

Bioalpha is planning to launch new products in all markets (China, Indonesia and Malaysia) over the next few months.



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Qantas, Virgin Australia ground Samsung Note 7 after recal

Australian carriers Qantas and Virgin Australia told customers on Thursday not to use or charge Samsung’s Galaxy Note 7 during flights after faulty batteries in the new smartphone caused some handsets to explode.

Samsung, the world’s largest smartphone maker, said last week it was suspending sales of its latest flagship mobile device and recalling 2.5 million units shipped globally following reports of exploding “phablets” that dealt a heavy blow to the firm’s reputation.

”Following Samsung Australia’s recall of the Samsung Galaxy Note 7 Personal Electronic Device (PED), we are requesting that passengers who own them do not switch on or charge them inflight,” a Qantas spokesman said in a statement.

The request applies to domestic and international flights as well as Qantas’ discount carrier Jetstar, the spokesman added.

Qantas’ domestic competitor Virgin Australia issued a similar statement, adding that it was making on-board announcements ahead of departures.

In 2014, Qantas and Virgin Australia allowed passengers to use mobile electronic devices in-flight with limited restrictions after a relaxation of the rules by the country’s aviation authority.

Previous regulations banned their use during taxiing, take-off and landing due to fears they could interfere with the plane’s navigation equipment.

Samsung’s recall - the first for one of the South Korean electronics giant’s top of the range phones - came a week before arch-rival Apple unveiled its iPhone 7 on Wednesday.

Samsung’s mobile business chief Koh Dong-Jin had said the faulty rate amounted to 24 handsets per each million sold and that it would take about two weeks to prepare replacements.



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New era for F1 as Liberty agrees US$8b takeover

Formula One entered a new era on Wednesday as US billionaire John Malone’s Liberty Media agreed a takeover that values the motorsport at US$8 billion and raises questions over the role of its colourful, long-time mastermind, Bernie Ecclestone.

In a deal that ends years of speculation over F1’s future, Liberty said it had struck an agreement to buy out Formula One’s parent company from CVC Capital, and had already acquired a minority stake of 18.7%.

Liberty Media group will pay a total equity price of US$4.4 billion in cash, newly issued shares, and exchangeable debt to complete the deal, which gives Formula One an enterprise value of US$8 billion.

Liberty said it would keep Ecclestone, who built Formula One into a global operation over nearly four decades, as chief executive, but also named 21st Century Fox vice-chairman Chase Carey as the company’s new chairman.

The takeover is set to be completed next year, subject to approval by regulators, Liberty Media’s shareholders and F1’s governing body, the Federation International de l’Automobile (FIA).

It gives Liberty control of a global and highly profitable sport which includes 21 races this year stretching from Melbourne and Shanghai to Sochi, Mexico City and finishing in Abu Dhabi.

Formula One rakes in billions from advertisers and broadcasting rights for what is one of the world’s most-viewed competitions.

It also earns millions from Formula One-branded merchandise. F1’s future under CVC has long been in question and a mooted share flotation in Singapore was shelved in 2012.

Despite the big profits, some F1 teams are plagued by financial problems and the sport faces challenges to its fanbase and TV viewership, with its races often criticised as predictable.

‘NEVER A DULL MOMENT’

Ecclestone, a former motorcycle dealer and racing driver, has been the flamboyant figure at the centre of Formula One since the 1970s, crafting it into one of the world’s most glamorous and best-known sports.

After months of talks with the sellers, Liberty agreed to retain the canny and combative 85-year-old, who insisted his role would remain unchanged despite the arrival of Carey as chairman.

”I will stay on as F1 chief executive,’ Ecclestone told the Autosport website. “I will continue to do all the things I have previously done, such as negotiate with the circuits, television companies and people like that.

”The good news is we will have someone on board in Chase, and he will hopefully be able to push F1 into new territories with social media. I have never found a way to make money from that.”

CVC co-chairman Donald Mackenzie praised Ecclestone, who forked out us$100 million to German authorities to end a high-profile bribery trial in 2014.

”Bernie has been a wonderful CEO for us over the last 10 years,” Mackenzie said in a statement.

”There have been many successes and the occasional challenge but there has never been a dull moment and we have had a lot of fun. The combined skills of Chase and Bernie mean that the successes should continue and we wish them well.”

The purchase also adds a new gem to the growing collection of savvy, low-key tycoon Malone, who Forbes estimates has a fortune of us$7.1 billion.

The broader Liberty group runs a wide range of media-centric businesses, including Time Warner cable television, concert promoter Live Nation, the Atlanta Braves Major League Baseball team, and a stake in Formula E, the all-electric version of Formula One which launched in 2012.

”We are excited to become part of Formula One,” Liberty Media president and chief executive Greg Maffei said. ”We think our long-term perspective and expertise with media and sports assets will allow us to be good stewards of Formula One and benefit fans, teams and our shareholders.”




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Nintendo is a winner on sluggish day for other Asian stocks

Shares in Japan’s Nintendo Co. rallied strongly early Thursday, following the announcement of a new mobile game featuring its famed Mario character, though broader stocks across the Asian region were mostly lower.

As the Nikkei Stock Average NIK, -0.32% eased 0.3% amid further yen strengthening against the dollar, the videogame maker has jumped 14%, reversing some of the late-July pullback seen after Nintendo’s stock surge that month in the wake of the release of “Pokemon Go.” But broader equity weakness in Japan came as a revised economic report showed inflation slowed and stagnated wage growth.

Elsewhere, Australia’s S&P/ASX 200 XJO, -0.71% was recently down 1%, Hong Kong’s Hang Seng Index HSI, +0.67% was off 0.1% and Korea’s Kospi SEU, +0.09% was down 0.2%.

Overnight, Nintendo 7974, +13.20% said “Super Mario Run” — the latest push into mobile-phone gaming for a company which long stayed out of the sector — will launch in December on smartphone platforms beginning with Apple Inc.’s AAPL, +0.61% iOS. Analysts forecast the impact being greater than from what Nintendo is liable to see from “Pokemon Go.”

“Earnings contribution was said to be limited from ‘Pokemon Go,’ but Mario is Nintendo’s content...We can expect earnings improvement,” said Hideyuki Ishiguro, senior strategist at Daiwa Securities.

Apple, meanwhile, unveiled the iPhone 7 to mixed reviews. While its stock rose slightly in the U.S. on Wednesday, the tech firm’s Midas touch didn’t extend to Taiwan, where shares of key manufacturing suppliers -- Hon Hai Precision Industry Co. 2317, -1.26% , Wistron Corp. 3231, -1.29% and Compal Electronics Inc. 2324, -0.26% — were down modestly.

“Overall, this update is much better than Apple’s past few events,” said Neil Saunders, CEO of retail research firm Conlumino. “However, in our view it still falls some way short of the magical launches Apple used to conduct. As such, while it will stimulate demand we do not expect it to completely remedy the more sluggish sales Apple has faced over the past few quarters.”

In Australia, institutional selling and a recalibration of expectations surrounding rates in the country following the Reserve Bank of Australia’s decision to keep interest rates unchanged pressured stocks.

“The financials are taking the big points out of our market today,” said Chris Weston, chief market analyst at IG Market Ltd.

Still on tap later Thursday is trade data from China, which could trigger market volatility.





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Home Economy & Politics Market Extra Get email alerts Pressure mounts on ECB to do QE3 — what to watch at today’s meeting

Will they or won’t they? Extend the European Central Bank’s quantitative easing program, that is.

Investors are becoming increasingly convinced the ECB will prolong its asset-buying program beyond March 2017, but the big question is whether they will make the move as early as this week. The ECB kicked off its corporate bond buying program in June, complementing its purchases of government debt.

The gathering Thursday marks the second meeting for ECB policy makers since the U.K.’s June 23 Brexit vote. After a dovish message in July, economists are scrutinizing every possible hint in a bid to predict the next move. But with ECB President Mario Draghi remaining remarkably quiet in recent weeks, analysts are left to inspect economic data, which aren’t pointing to a clear path for policy.

“The decision to announce further policy accommodation at the September meeting or wait for further evidence is likely to be a close call. The recent survey and hard data, credit flow data and inflation paint a mixed picture of the eurozone economy,” analysts at Deutsche Bank said in a note.

Second-quarter gross domestic product numbers out on Tuesday confirmed eurozone economic growth at 0.3%, in line with expectations, but still way below the historic average. The purchasing managers indexes showed private-sector activity in the bloc overall expanded in August, but with weakness starting to emerge in Germany and the periphery. A slowdown in Europe’s largest economy was also the takeaway from the country’s July factory orders that grew an underwhelming 0.2%.


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