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THURSDAY APRIL 30 l 2015 20 INTERNATIONAL omandailyobserver Asian shares fade, dollar on edge before Fed SYDNEY: Asian share markets faded from seven-year peaks on Wednesday while investors exited crowded positions in the US dollar as the Federal Reserve wraps up a two-day policy meeting. e broad retreat in the US currency came as a string of soſt data seemed to push back the day when the Fed might start liſting rates, and ignored a rise in Treasury yields. Trading was thinner on Wednesday with Japanese markets on holiday and little in the way of major data out in Asian time. at helped the dollar index to steady at 96.098 aſter touching the lowest since March 5. e euro stood at $1.0972 having stopped short of resistance at $1.1000. e dollar fared better on the yen at 118.84 as Japan’s central bank is expected to reaffirm its massive stimulus campaign at a policy meeting on ursday. Talk of more aggressive policy easing in China has also put a bid under many regional stock markets, and helped Shanghai recoup early losses to add 0.2 per cent. MSCI’s broadest index of Asia- Pacific shares outside Japan retreated 0.9 per cent having touched their highest since early 2008 at one point. Australian stocks slid 1.6 per cent aſter repeatedly shying away from a major psychological barrier at 6,000. South Korean electronics giant Samsung rose 1.5 per cent aſter reporting its fattest profit in three quarters. Financial spreadbetters expected Britain’s FTSE 100 to open up as much as 0.3 per cent, with Germany’s DAX adding 0.1 per cent and France’s CAC 40 0.3 per cent. European shares gave away early gains to trade slightly lower on Wednesday as investors digested a batch of mixed corporate results from bank BBVA and UK retailer Next, among others. Better-than-expected numbers from Next, Swedish bank Handelsbanken and Dutch nutritional supplements firm DSM had sent main regional indexes to a higher start. Yet the early rise quickly fizzled out, with BBVA, British American Tobacco and Belgian supermarket group Delhaize among the biggest drags aſter disappointing numbers. e pan-European FTSEurofirst 300 index was down 0.2 per cent at 1,614.95 points at 0742 GMT. e index had fallen 1.5 per cent on the previous day, weighed down by a combination of disappointing corporate updates and weak US data. With the FTSEurofirst up 22 per cent since the start of the year and expectations for first-quarter earnings growth at its highest in years, some traders felt the market was due for a pause. “If corporate results are good you can continue to see positive openings and some stocks will perform very well but the move yesterday suggests people are taking risk off the table and that can continue at least this week,” Mike Reuter, a broker at Tradition said. Telecom Italia rose 2.4 per cent aſter Italian daily Corriere della Sera wrote Vivendi’s chief Vincent Bollore was aiming to strengthen the company’s stake in Telecom Italia and at a later stage strike an alliance with Mediaset . shares in the TV group rose 1.6 per cent. Euro zone lending data for March, due at 0800 GMT, was also set to be in focus as investors gauge early indications of whether the European Central Bank’s bond-buying programme is finding its way to the real economy. On Wall Street, the Dow had ended on Tuesday with gains of 0.4 per cent, while the S&P 500 rose 0.28 per cent and the Nasdaq dipped 0.1 per cent. Aiding the Dow was a 1.9 per cent gain in IBM shares aſter the company raised its quarterly dividend by 18 per cent, the biggest increase in five years. Apple hit a record high aſter posting stellar results, but still ended down 1.6 per cent. Shares of Twitter dropped as much as 24 per cent aſter its results disappointed, before closing with a loss of 18.2 per cent. e Fed’s latest policy statement will come just hours aſter data are expected to show the US economy grew at a pedestrian 1 per cent annualised pace in the first quarter, partly due to bad weather and a port strike. e Fed has so far played down the soſtness in the hope of a rebound in the second quarter, and there have been hints of a much-needed upturn in wages and inflation.“Investors are approaching FOMC with the view it will bore as much as possible. — Reuters Kier targets more highways work with Mouchel deal LONDON: Kier Group has agreed to buy Mouchel in a £265 million ($404 million) deal that will add motorway maintenance to its local roads business and help it to secure more of the £17 billion Britain is spending on its highways. e construction group said it would fund the purchase through a 5-for-7 share rights issue, priced at 858 pence a share, to raise £ 340 million. Chief Executive Haydn Mursell said he had already identified infrastructure as a growth opportunity. “We are seeing a huge increase in spend on roads,” he said, adding that Britain had committed to a 17 billion pounds highways budget over the next five years. “Buying Mouchel combines Kier’s current highways and maintenance skills with local authorities with Mouchel’s leading position with Highways England looking aſter the motorways and key A roads,” he said. Mouchel has played an important role in Britain’s construction industry aſter it brought reinforced concrete to the country in 1897. But the 127 year old company fell victim to sharp cuts in government spending in 2011. It went into administration in 2012 and was sold to its lenders Royal Bank of Scotland, Lloyds and Barclays and its management. Chief Executive Grant Rumbles has turned the business around in the last three years. It reported underlying operating profit of £27.7 million on turnover of £ 617 million in the year to end- September 2014. “We were looking at a range of opportunities, one of which was to go back on the stock exchange,” he said in an interview. “(But) we started discussions with Kier and we decided the two businesses combined would provide a great growth story.” —Reuters The 127-year old firm fell victim to sharp cuts in govt spending in 2011 BIZ BRIEF PARIS: French oil giant Total announced a 20 per cent fall in first quarter profits due to slumping oil prices and disruption of its activities because of violence in Yemen and Libya. Total said in a statement that profits for the first three months of the year dropped to $2.6 billion (2.4 billion euros) from $3.3 billion during the same period last year, on 30 per cent lower sales of $42.3 billion. The company said the profit slide amounted to 22 per cent in adjusted terms compared to the first quarter of 2014. But it said that erosion was partially offset by a 10 per cent hike in production to 2.4 million barrels per day, and capital gains realised on asset sales. Total chairman Patrick Pouyanne said that the slackening profit was relatively moderate in a market where “the Brent price decreased by 50 per cent compared to last year.” The adjusted net result also beat analysts’ forecasts of $2.1 billion in profits. The numbers also were largely in synch with first quarter figures revealed by British rival BP on Tuesday, which said its profits had dipped 26 per cent to $2.6 billion. Pouyanne also cited the positive impact of Total’s push to cut $1.2 billion in operating costs, and profits made on $5 billion in assets Total has already sold out of a total of $10 billion it has decided to shed. “Against a backdrop of lower prices, Total’s first quarter results include a number of significant accomplishments in all segments,” Pouyanne said. “Total is thus demonstrating its resilience and profiting from its integrated model.” In addition to depressed global oil prices, Total said income was undermined by the closure of the LNG gas terminal in Yemen since April, due to continuing violence there. Total owns 40 per cent of the installation. The French major also said violence in Libya had forced the group to cease all onshore activity in the country. — AFP THE HAGUE: Dutch consumer goods, healthcare and lighting giant Philips revealed a 27 per cent first quarter plunge in net profits despite a rise in sales over the same period a year earlier. Philips said net profit slackened to 100 million euros ($105 million) on increased sales of 5.3 billion euros during the first three months of the year compared with the first quarter of 2014. That 14 per cent jump in turnover was fuelled by a 10 per cent surge in sales by its consumer goods and lifestyle unit. But that advance slimmed to only two per cent in comparable terms, once changes in business environment were factored in. “Our investments, coupled with negative currency effects, are the main reasons for the low profitability in healthcare in the first quarter,” said Philips chairman Frans van Houten in a statement. Though lower compared to last year, the quarterly results nevertheless surpassed the expectations of analysts polled by Bloomberg, who had anticipated total sales of just over five billion euros. Costs tied to restructuring — in particular a splitting of Philips’ lighting unit founded in 1891 — also ate into profits, which led van Houten to describe overall activity and outlook as positive. “We are encouraged by the resumption of sales growth in the first quarter of 2015, which was driven by continued strong performance in Consumer Lifestyle and positive comparable sales growth in Healthcare. We saw positive order-intake growth, despite the continued challenging Healthcare market environment”. — AFP NEW YORK: US pharmaceutical giant Pfizer reported a slight rise in first-quarter profit but lowered its full-year forecast, citing a hit to sales from the stronger dollar. Pfizer said that recent changes in foreign exchange rates, primarily the dollar’s gains against the weakening euro, would impact foreign sales. It cut its 2015 full-year sales estimate to $44.0 to $46.0 billion, from $44.5 to $46.5 billion. Adjusted earnings per share would be $1.95 to $2.05, five cents less than previously estimated, the company said, saying the lowered expectations were “solely” related to the forex impact. “Our update to these guidance components is solely due to recent negative changes in foreign exchange rates and does not reflect any unfavourable changes to our operational outlook for the year,” said Frank D’Amelio, chief financial officer, in a statement. Pfizer posted net income of $2.376 billion in the first three months of the year, 2.0 per cent higher than in the same period in 2014. Adjusted earnings were 51 cents per share, two cents better than the consensus Wall Street estimate. Revenue of $10.86 billion was down 4.3 per cent from a year ago, and missed analyst estimates of $10.72 billion. Pfizer, one of the world’s largest drug companies, said it had improved operational revenues by 2.0 per cent despite the loss of exclusive rights to various treatments. “We began the year with good performance on both the top and bottom line and I believe the company is well-positioned in terms of in-line products, recent product launches, geographic reach and product pipeline,” said Ian Read, Pfizer chairman and chief executive, in the statement. — AFP Total’s Q1 profit falls on depressed oil prices Philips’ quarterly net revenue declines Pharma giant Pfizer cuts 2015 forecast An employee of German technology company Bosch demonstrates the use of a Bosch eye care solution to check up the retina of an eye with a digital camera at the company’s headquarters in Gerlingen near Stuttgart, southwestern Germany, yesterday. — AFP Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange, Germany, yesterday. — Reuters BP profit slides 26 pc in first quarter LONDON: British energy giant BP announced sliding net profit for the first quarter of the year compared with the same period in 2014, amid plunging oil prices. Profit aſter tax stood at $2.6 billion (2.4 billion euros) between January and March compared with net profit of $3.5 billion in the first quarter of 2014, BP said in an earnings statement. “We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower (oil) prices,” said BP chief executive Bob Dudley. “Our results today reflect both this weaker environment and the actions we are taking in response,” such as the selling of assets and heavy cost-cutting. BP and its peers are slashing investment this year aſter tumbling oil prices bit into their profits. World oil prices lost as much as 60 per cent of their value between June last year and March, largely owing to a surge in global reserves boosted by robust US production from shale rock. BP said the average price of a barrel of Brent North Sea crude oil cost $54 in the first quarter compared with $108 one year earlier. BP said underlying replacement cost profit — a measure of earnings watched by the market — slumped 39 per cent to $2.1 billion. But with the profit figure beating analysts’ expectations, BP’s share price was among the early risers in London, up 1.52 per cent at 484.15 pence. “To put this morning’s number into perspective profits are still much lower from a year ago, down by 39 per cent but as with anything it’s all about expectations and these were low, with most in the market focussed on BP’s potential as an acquisition target,” said Michael Hewson, chief market analyst at CMC Markets UK. Analysts say BP could become a takeover target also because it has been forced to sell off assets following the Gulf of Mexico oil spill disaster in 2010. e British government has warned BP that it would oppose a foreign takeover of the company, according to media reports on Monday. Energy titan Royal Dutch Shell earlier this month announced a mega- takeover of British rival BG Group worth £47 billion ($71.1 billion), consolidating their positions in a sector battered by sliding oil prices. — AFP WALL ST GAINS: The Dow had ended earlier with gains of 0.4 pc, while the S&P 500 rose 0.28 pc and the Nasdaq dipped 0.1 pc BP and its peers are slashing investment this year after tumbling oil prices bit into their profits Apple hit a record high after posting stellar results, but still ended down 1.6 per cent. Shares of Twitter dropped as much as 24 per cent after its results disappointed, before closing with a loss of 18.2 per cent
