FTSE On An Uptick; RBS Fails Stress Test

ftse

The UK stock index finished with an uptick on Thursday, with oil-backed equities soaring in expectations of a successful OPEC production cut deal. On the other hand, after failing the stress test given by the Bank of England, the stocks of the Royal Bank of Scotland PLC dropped.

The FTSE 100 was up 0.6 percent at 6,811.95 following a drop of 0.4 percent on Tuesday, its second consecutive decline.

As trading wraps-up for November, oil and banking industries gain the center stage Wednesday which is anticipated to set the FTSE 1000 on a monthly decline of around 2 percent. Following five months of gains, this might become the index’s first monthly loss.

OPEC Outlook Lifts

International benchmark US West Texas Intermediate crude prices leaped 3.5 percent, while Brent crude surged 4 percent, after reports of OPEC Secretary General Mohammad Barkindo confirming that the international oil cartel is sure to reach a production-cut deal on Wednesday in their official meeting in Vienna.

Stakes of oil producers like BP PLC and Royal Dutch Shell PLC accelerated gains. Both stocks inched higher, with 2.2 percent and 3 percent, respectively.

The OPEC deal aims to address the current international oil supply glut that has been sending prices downward for the past two years. The first proposal was to cut the group’s oil output by above a million barrels a day, or around 1 percent of the world’s supply.

Stress Test Failure

royalbankscotland

With its failure in the tougher stress test for systemic UK banks, Royal Bank of Scotland made a 1.9 percent slump, off session lows. Now they must come up with an improved plan to generate capital, Bank of England stated Wednesday. RBS ought to come up with around £2 billion ($2.5 billion) in capital.

The stress test also disclosed capital insufficiencies at Standard Chartered PLC and Barclays PLC, but these banks are not required to submit new capital plans since they’ve already carried out their own actions to strengthen their capital, the BOE disclosed in a statement.

Standard Chartered stocks were down 0.4 percent and Barclays stakes had not much movement at £2.14 each.

“The key take away from the report is that the outlook for financial stability is challenging, Brexit and high levels of household debt have been cited as the key reasons for this,” said City Index research director Kathleen Brooks in a note.

“On the positive side, the BOE said that the U.K. is well able to finance its huge current account deficit, and the banking system, although not perfect, is in a position to support the U.K. economy, even in a severely stressed scenario,” she added.

Late Tuesday, the pound changed hands at $1.2479, down from $1.2503, in New York.

Online media is flooded with finance news here and there. However, Trade12 gives you the freshest update in the market daily. Trade12 provides daily market charts as well. Visit Trade12 now!

Interested in trading binary options. Don’t go anywhere else, try Options12.com.Options12.com brings your money back to you, the difference? Options12 prioritizes each client in maximizing his/her trading potential.

Financial trouble? Let Exo Capital Markets manage your funds accordingly. Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Advertisements

Royal Dutch Shell’s Ph unit to enter Philippine Stock Exchange

shell

Pilipinas Shell Petroleum Corp—the Royal Dutch Shell PLC’s Philippine unit—is aiming to come up with up to $400 million in an initial public offering on the Philippine Stock Exchange in Manila despite recent political issues weighing the Philippine markets down.

The energy giant’s Philippine unit pushed through with its IPO after seeing that some investors are still willing to take a leap and surf the uncertain waters of the country’s market. The book-building process is said to last for a week ending with Pilipinas Shell being enlisted on the Philippine Stock Exchange on Nov 3, people knowledgeable about the matter said.

Shell didn’t have anything to say about it yet.

With the growing unease over President Rodrigo Duterte’s “roughness” towards long-standing allies such as the United States and the U.N., the Philippine stocks and the peso have limped in weeks. The recently elected head of state has insulted U.S. President Barrack Obama and the U.N. and even told the U.S. president to “go to hell” in a recent speech, while telling the European Union to “choose purgatory” instead, saying that hell is “already filled up”. He even threatened to sever ties with the ally country.

The president’s tirades were in response to their criticisms over his “war” against illegal drugs and crime that resulted to more than 3,000 casualties that mostly include alleged drug addicts, dealers, and syndicate members. The U.S., U.N., and EU, all expressed concerns if the president’s eradication measures were in accordance with human rights laws.

Reports of foreign investors pulling out shares rocked the market’s boat. Foreign investors removed $213 million worth of listed Philippine exchange stocks in September. The Philippine peso slumped about 4 percent versus the dollar, in a seven-year low close of 48.50 pesos in September. A 2 percent dive was made by the benchmark PSE index in September.

Some investors are anxious over the political situation of the country, but still showed eagerness to invest in the IPO since the Philippines has a strong demand for infrastructure and Shell is an all-time good performer, according to a person familiar with the company’s order taking. It is the Philippines’ second-largest oil refiner by capacity.

About eight anchor investors already agreed to buy a chunk of Pilipinas Shell’s shares ahead of the IPO, the person said with no further details given.

The company opts for 64 to 70 pesos ($1.33 to $1.44) per-share price, people with in-depth knowledge with the deal said.

If the IPO prove to be successful, this would be the second fundraising thru IPO by a foreign company in more or less two months. Mexican cement maker Cemex SAB made its Philippine unit’s IPO in July raising about $507 million in net proceeds.

As stipulated by rules requiring the firm to sell at least 10 percent of its shares to the public, J.P. Morgan Chase & Co. and local firm BPI Capital Corp are advising on the Pilipinas Shell IPO. Proceeds of the company’s first public offering will be used to fund capital needs and repay debts.

One of two oil refineries in the country are operated by Pilipinas Shell and more than95 percent of its net sales are from the local market.

Online media is flooded with finance news here and there. However, Trade12 gives you the freshest update in the market daily. Trade12 provides daily market charts as well. Visit Trade12 now!

Interested in trading binary options. Don’t go anywhere else, try Options12.com.Options12.com brings your money back to you, the difference? Options12 prioritizes each client in maximizing his/her trading potential.

Financial trouble? Let Exo Capital Markets manage your funds accordingly. Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Chesapeake Energy Corporation Fails to Meet Earnings Forecasts

Chesapeake Energy Corporation (NYSE: CHK), the second largest producer of natural gas posted downbeat earnings results today as oil and natural gas markets struggle to report continuous improvement.

For the second quarter of the current fiscal year, the natural gas producer reported an adjusted loss of 14 cents per share, failing to meet the consensus estimate by 3 cents. Before the adjustments, the natural gas corporation lost approximately $1.8 billion or $2.48 per share during the given period. This loss is primarily due to a $1.045 billion impairment charge against Chesapeake’s oil and natural gas assets.

natural-gas

In the given period, the company managed to generate revenues of $1.6 billion, missing forecasts of $330 million. The natural gas producer’s revenues have been cut in half on a year-over-year basis.The reason behind this is that the average realized prices on crude oil and natural gas slumped during the quarter.

Due to the ongoing decline in the energy markets, Chesapeake has shed over 90 percent of its market value. Aside from the low oil price environment, the company’s biggest concern at the moment is its high debt load. So far this 2016, the natural gas company employed a number of measures, such as a major debt reduction through swaps.

chesapeake-energy.jpg

Chesapeake CEO Doug Lawler stated, “In 2016, we have made substantial progress on many fronts, including the reduction of more than $1 billion of debt, the reduction of complexity in our portfolio through the purchase of oil and natural gas interests previously conveyed in certain volumetric production payment transactions (VPPs), the continued improvement in our cash cost structure and the optimization of our current portfolio through non-core asset sales.”

After the earnings report, the company’s stock is changing hands at $5.15 during pre-market hours, down by 2.65 percent. As of 10:32 AM GMT -4, the CHK stock is trading at $5.08, down by 3.88 percent or 0.20 points.

If you are interested in stock trading, feel free to register for a live account at www.Trade12.com and experience working with the most reliable brokers in the industry. Trade12 is a brand owned by Exo Capital Markets—a company dedicated to provide the highest quality of services through the most innovative platforms, tools, and trading education.