Dubai’s national carrier Emirates airline saw net profit drop 75 per cent in its first half, hit hard by the strong US dollar and a “challenging environment for the airline and travel business.”
The fast-growing airline said the first half of its 2016-17 financial year net profit was Dh786m ($214m), 75 per cent lower than the same period last year, which was one of its best half-year performances
Revenue was down one per cent at Dh41.9bn as the US dollar – to which the United Arab Emirates dirham is pegged – strengthened against major currencies, while competition drove down average fares. Demand for travel has also been dampened by economic and security concerns, it said.
Sheikh Ahmed bin Saeed Al Maktoum, Emirates’ chairman and chief executive, warned that “the bleak global economic outlook appears to be the new norm, with no immediate resolution in sight.”
Emirates carried 28m passengers between the beginning of April and the end of September, an increase of 9 per cent, but passenger seat factor – an indication of how many seats are filled on flights – dropped to 75.3 per cent compared with 78.3 per cent in the same period last year.
British Prime Minister Theresa May warned lawmakers on Sunday not to block Brexit, after the High Court ruled that she cannot start the process of leaving the European Union without parliament’s approval.
The Conservative government has said it will appeal Thursday’s court decision and May told EU leaders on Friday that she believes she has a strong case.
But in a statement published ahead of a trade mission to India, May cautioned members of parliament against using the ruling to undermine the result of the June referendum.
“The result was clear. It was legitimate. MPs and peers who regret the referendum result need to accept what the people decided,” she said.
Supporters of Brexit responded angrily to the court’s decision, amid speculation that pro-European lawmakers would seek to water down the break with the EU and derail May’s plans to begin formal exit talks by the end of March.
“Now we need to turn our minds to how we get the best outcome for our country,” the prime minister said.
“OPEC’s Board of Governors has finalized a new and comprehensive long-term strategy (LTS) at a meeting held in Vienna on 2 November 2016. The document will be submitted for approval at the next OPEC Ministerial Conference to be held on 30 November 2016,” the press release said.
According to the press release, the LTS “provides a coherent and consistent framework for the realization of the Organization’s mission”, sets specific goals, as well as monitors energy market trends. The development of the strategy has been conducted during two years through a series of high-level meetings. This is the third edition of the organization’s LTS. The first such document was adopted at the 137th meeting of the OPEC in September 2005, while the second edition was approved at the 157th meeting of the organization in October 2010.
Bank of Japan Gov. Haruhiko Kuroda admitted for the first time his disappointment at not being able to reach its target of 2% inflation within the two-year deadline originally set.
Kuroda entered office in March 2013, promising to reach 2% inflation at the earliest possible time, initially with “two years in mind.” Almost four years on, and despite throwing everything but the kitchen sink at Japan’s deflation problem, he has not been able to deliver on the promise.
Kuroda did not stray from his usual tactic of blaming external factors on Tuesday after the BOJ’s two-day policy meeting. The governor cited the fall in oil prices, weak consumer spending after the consumption tax hike and the slowdown in emerging market economies as contributing factors. “The situation is similar with the central banks in the U.S. and Europe as well,” Kuroda said. But ultimately he was forced to admit he was “obviously disappointed that 2% inflation could not be achieved within 2 years.”
Clinton is seen unfavorably by as many as 60 percent of voters, while Trump’s negative rating stands at 58 percent, according to Monday’s ABC News/Washington Post poll.
The day before, the two nominees’ negative ratings were identical at 59 percent. Clinton lost her edge after the latest iteration of the email scandal on Friday. Federal Bureau of Investigation (FBI) Director James Comey told the US Congress in a letter that the bureau had found additional emails relevant to its investigation into Clinton’s use of a private email server for official correspondence during her time as secretary of state. Clinton has been heavily criticized over the irresponsible exposure of possibly sensitive information, while Comey has been criticized for making the announcement less than two weeks before the November 8 presidential election.
Despite rising unpopularity, Clinton maintained her 6 percentage point lead over Trump during the past week, according to Monday’s NBC News weekly poll.
Voter support for Clinton was 47 percent while Trump’s came to 41 percent between October 24-30, largely unchanged from the week before.
While concerns about China’s debt load, capital flows, and depreciating currency have been pushed to the backburner in recent months, perhaps facilitated by a welcome rebound in global inflation – perceived by markets and global central bankers that monetary policy is finally working – it is worth a quick reminder of how we got here.
First, a quick trip through memory lane to remind us how much has changed in just the past year.
In a note by Morgan Stanley’s Chetan Ahya released on Sunday, the strategist reminds us that a little more than a year ago, the global economy was facing intense disinflationary pressures. Global commodity prices were declining significantly and the slowdown in China and other major commodity-producing EMs had led to some concerns that it could pull developed markets into recession and drag inflation down along with it. At the same time, in China, producer prices fell by almost 6%Y and the regime change in its currency management approach meant that China was no longer absorbing disinflationary pressures from abroad.
And while this seems like a distant memory today, thanks to China which has played a pivotal role in driving the global inflation cycle – this time on the upside – as the cyclical recovery has both lifted China’s own inflation and transmitted it globally, here is how this happened: the recovery in China has been driven by yet another round of debt indulgence. Debt in China has grown by US$4.5 trillion over the past 12 months, by far the highest amount of debt creation globally as compared to US$2.2 trillion in the US, US$870 billion in Japan and US$550 billion in the euro area. Indeed, China on its own has added more debt than the US, Japan and the euro area combined.
While we have shown the IIF’s forecast of Chinese debt countless times in recent months, here it is once again to put China’s unprecedented debt expansion in context:
UBS lifted adjusted profits by more than expected in the third quarter despite tough market conditions which the Swiss bank warned were unlikely to change for the foreseeable future.
Adjusted pre-tax profits were SFr 1.3bn in the three months to September, compared to SFr979m in the same period a year earlier. The consensus forecast of analysts had been for a rise to SFr 1.1bn.
However, net profits fell to SFr827m compared with SFr2.1bn in the same period a year earlier, when they had included a net tax benefit worth SFr1.3bn
Sergio Ermotti, chief executive, said the “strong performance” came despite “continued macroeconomic, geopolitical and market headwinds.”
But UBS remained gloomy about the outlook:
Underlying macroeconomic uncertainty and geopolitical tensions continued to contribute to client risk aversion and generally low transaction volumes. Lower than anticipated and negative interest rates still present considerable headwinds. These conditions are unlikely to change in the foreseeable future.
Since 2012, UBS has focused on building its businesses for managing the wealth of the world’s richest individuals and families. Adjusted profits in its wealth management division fell SFr55m to SFr643m but its wealth management Americas division reported a SFr80m increase to SFr367m.
UBS’s results following unexpectedly strong third-quarter performances reported earlier this week by European rivals Deutsche Bank and Barclays, which helped dispel some of the investor gloom surrounding the sector.
According to Pino, the meeting of the OPEC states will be held on October 28, and the representatives of the non-cartel states will join them on October 29.
“We invited Russia, Azerbaijan, Kazakhstan, Oman, Egypt, Bahrain, Colombia, Mexico, Trinidad and Tobago, Bolivia, Norway and Canada,” Pino told journalists.
Pino added that solely Russia and Kazakhstan had confirmed their participation to date, answering the question on the aforementioned states’ confirmation of attendance. Earlier, Venezuelan President Nicolas Madura has said that his minister’s visit to Moscow aimed to work out the details of the oil production deal between OPEC and non-OPEC countries. On September 28, OPEC member states agreed on cutting its oil production to 32.5-33 million barrels per day for the whole cartel, however, no exact limits for each country have been placed. The OPEC countries are set to finalize the agreement on oil output freeze at the OPEC summit in Vienna on November 30.
C/A NSA EUR +23.6bln vs +33.8bln prev revised up from +31.5bln
net direct/portfolio investment inflow €+79.8bln vs 80.9bln prev
net portfolio investment inflow €+34.0bln vs 59.1bln prev
net direct investment inflow €+45.8bln vs +21.8bln prev
Decreasing combined investment inflows being reflected in declining euro from the August 1.1366 EURUSD highs and elsewhere. Will be interesting to know September’s data as direct investment still perky in the Aug reading.