Ralph Williams

Anadarko Considers Deal With Occidental Petroleum

Anadarko Petroleum Corp, an oil and gas exploration & production company based in the U.S. had agreed to sell itself for $33 billion to Chevron Corp earlier this month. However, it decided to make a deal with Occidental Petroleum Corp instead.

The bidding war for Anadarko Petroleum has marked the value of its numerous assets, especially in the Permian Basin of West Texas as well as New Mexico. The huge field consists of oil and gas deposits which can produce supplies for many more years using the latest low-cost drilling techniques.

The board of directors at Anadarko has decided that the $38 billion bid by Occidental can lead to a deal that is a lot better than the one it had with Chevron. The $38 billion bid by Occidental is a cash and stock bid as well. Anadarko plans to start negotiations soon in order to finalize a deal with Occidental. Occidental has been vying for a deal with Anadarko before Chevron came into the picture.

Chevron will be offered a chance to match the new deal offered by Occidental. In case, Chevron is not able to make a new offer, Anadarko will have to pay $1 billion break-up fee to Chevron, as per the terms of the agreement. Occidental and Anadarko did not respond to any requests for comments. Kent Robertson, the Chevron spokesman also declined to make any immediate comment.

The takeover of Anadarko will add about a quarter million acres as holdings in the Permian shale basin area. This will also help double the global oil and gas production of Occidental to over 1.4 million barrels of oil per day.

Occidental revealed its bid for Anadarko on Wednesday. It offered to pay for the company half in cash and a half in shares. Interestingly, Chevron’s deal with the oil and gas production company was structured as 75 percent stock and 25 percent cash deal.

The deal offered by Occidental relies on the approval of the Occidental shareholder. Considering this fact, a deal with Chevron is easier to go ahead as it does not give its shareholders a chance to vote on this decision. Anadarko shareholders will be allowed to vote on the sale of the company, regardless of which bid considered.

However, Pierre Bieber, Chevron’s finance chief has mentioned that Chevron has the ability to put more cash into the deal if required so.

Ralph WilliamsAnadarko Considers Deal With Occidental Petroleum
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Slow Economic Growth In Gulf Countries Expected

The International Monetary Fund reduced the global growth outlook for the third time in 6 months to 3.3% due to the slowing world economy. It seems, that even some of the richest countries including the Gulf are not spared. As per results of the economists poll on Gulf countries, the growth outlook for this year is low due to a reduction in oil production, decreased spending and lack of growth in non-oil sectors.

High spending low growth

Saudi Arabia which is the leading oil exporter is expected to grow at 1.8% this year and 2.2% next year which is less than what was predicted for the country last quarter. This despite the Kingdom increasing the spending by 7% in 2019. Despite that, the GDP forecast shows slow growth. Non-oil growth is likely to increase by 3.6% which is thanks to the diversification of business but the revenue is only a small part of the total budget which ranges from 10% to 35%.

UAE as per economists will see a reduction in growth by 0.1% and be at 3% in 2019 and 3.2% in 2020 despite diversifying into a non-oil business. The budget for this year 2019 was the highest in its history with an increase of 17% when compared to last year and there is an additional stimulus package being provided despite which the growth is slow.

The other region which is facing major economic concerns is Dubai where the economy is at its lowest in 9 years with a GDP of 1.9%. There is growing concerns of unemployment as many companies are cutting jobs and adding to this is the prices of real-estate which is the backbone of the country’s economy is reducing by as much as 15% in 2019. The government has introduced many stimuli like the debt relief program and also adopting new employment strategies for creating jobs but the results are not yet been seen.

Oman is another country which has increased its total expenditure budget by 3% but despite that, the growth is expected to slow to 1.5% from 2% in the year 2018. That will dent the GDP by 9% and is attributed to governments lack of initiative to implement new revenue generation methods.

Most of the Gulf countries are spending more and are having deficits every year but not seeing the growth they are expecting. But these are things that should be implemented as they try to move away from oil and invest in non-oil sectors for sustaining in the global economy in the long-term.

Ralph WilliamsSlow Economic Growth In Gulf Countries Expected
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Battery Concerns: the Big Roadblock for China’s Electric Vehicle Industry

As the world moves towards a greener future, electric vehicles are going to become one of the biggest industries in the years to come, and many nations across the world are trying to get a leg up in their quest to produce those cars as soon as they possibly can. Needless to say, China has become one of the biggest hubs for electric vehicle manufacturing, but the country faces an uphill struggle in making batteries adequately for that purpose. In this regard, it is necessary to point out that battery is one of the most important factors that decide whether a car can be a long term alternative to a traditional vehicle and if it is not up to the mark, then it is unlikely that customers are going to shell out big money for these vehicles.

Nio is the biggest electric vehicle manufacturer in the country and can be called the Tesla of China, but in a recent report by Reuters, it has emerged that the battery in some of its models are not working well. In that report, it has emerged that a customer who bought a high-end model from Nio, had to return it since the vehicle could not meet the promise of going 335 km after a round of charging. Eventually, the customer had to sell the car that had set him back by 481,000 yuan. The car owner said, “We had to recharge the car once and drove with a high level of anxiety throughout, constantly having to keep an eye on the range meter I wouldn’t want to do that kind of trip again – ever.” It is necessary to point out that Nio is the most well known electric vehicle company in China and if it is facing difficulties with batteries, then it is almost certain that the situation is same in other companies.

 This has created a big problem for electric vehicles at large in China and although do say, that the distance travelled per charge may vary, it is important to note that no such problem exists for traditional vehicles. In addition to that, electrical vehicles are far more expensive and if the batteries start falling short of expectations, then there is every chance that customers are going to stay from these cars for the foreseeable future. Due to the sort of pollution that China suffers from, the electric vehicles industry wishes to grow the sale of such vehicles in a big way over the next decade or so. However, the whole situation is not looking great, due to the current battle with batteries.

Ralph WilliamsBattery Concerns: the Big Roadblock for China’s Electric Vehicle Industry
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Indian IT Behemoths Projects Show Strong Growth Following Quarterly Results

The Indian tech industry, usually referred to as the ‘information technology’ or ‘IT’ industry, grew at breakneck speed during the first decade of the new millennium but over the past few years, some of the biggest companies in the industry had a hard time as new technologies emerged. However, robust fourth in the fourth quarter by some of the biggest names in the industry like Tata Constancy Services (TCS) and Infosys has prompted both companies to forecast strong growth momentum in the future.

Traditionally, Indian IT companies have been dependent on outsourcing projects for their bumper revenues, but over the past half a decade or so, those projects have become increasingly tough due to shrinking margins. In order to reverse that trend, the IT majors in India have gone into artificial intelligence, digital marketing services and machine learning in a bit way. Needless to say, this pivot has helped them in staging a remarkable turnaround in their bottom line.

TCS is the big daddy of Indian IT industry, and in the past few years, it has left pioneering firm Infosys in the dust. In the fourth quarter (by Indian accounting practices), the company raked in Rs. 81.26 billion in profits. In the same quarter in 2018, TCS had recorded profits of Rs. 69.04 billion and that goes to show how they have weathered the gathering storms in the industry over the past few years. The number beat analysts’ estimates comfortably.

 The software exporter also stated that the orders are flowing in against at a healthy rate from all its key markets. Some of the most profitable markets for TCS has been the Middle-East, mainland Europe and the United Kingdom. It also has a massive presence in its domestic market. Rajesh Gopinathan, who is the Chief Executive Officer of TCS, predicted that the momentum is going to continue. He said, “That’s one of the big things that give us the confidence about the momentum we see.” 

On the other hand, Infosys, which used to be the biggest name in Indian tech, reported profits of Rs. 40.74 billion. Last year, the same figure stood at Rs. 36.9 billion. Infosys has also made a forecast that the annual revenues in the company are going to rise handsomely by up to 9.5%. CEO Salil Parekh said, “We are at a much more stable place we were 12 months ago. We had given ourselves a three-year period to become fully functioning in terms of stability, momentum and acceleration.”

Ralph WilliamsIndian IT Behemoths Projects Show Strong Growth Following Quarterly Results
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Unimpressive Forecasts Halts Rally on Wall Street

The rally on Wall Street came to a halt on Wednesday and stocks went marginally south as some of the key indicators seemed to have tempered the optimism of investors. According to a report on Reuters, the downward trend is primarily to do with the events related to the US-China trade war and less than impressive revenue estimates from videogame makers.

Standard & Poor 500 and Nasdaq, the benchmark indices showed declines as the losses suffered by videogame giant Electronic Arts Inc weighed them down. Electronic Arts released its estimates for the company’s revenues for the whole year, and the figures did not meet with the estimates of Wall Street analysts. Following the release, the shares of EA crashed by as much as 13.3% and hurt other stocks from the videogame industry.

Another videogame major Activision Blizzard Inc also suffered losses as its stock nosedived by as much as 10.1%. The drop in videogame stocks accounted for the 1.5% decline in the communication services sector index of the S&P 500. It was the major drop across the different sectors that are tracked by S&P. However, it needs to be pointed out the different Wall Street indices are still not far off from its highest point in two months.

The being said, many analysts are not looking into Wednesday’s decline as being a particularly alarming event. Nathan Thooft of Boston based Manulife Asset Management said, “The market is feeling a little exhausted after we’ve had a nice run in January and early February.” Furthermore, it is believed that at this point there are not many events or triggers that could instigate gains in the market. In other words, not much is happening that could inspire a rally.

On the other hand, the events surrounding the trade talks between the United States and China could also be a reason behind a bit of trepidation that might have kicked into Wall Street recently. The trade war has been one of the biggest reasons behind spooked markets all over the world and in March, the two countries are supposed to reach a trade agreement. That could be another hugely important trigger that could send the stock markets either way. In addition to that, it is necessary to keep in mind that if the two countries fail to reach an agreement that fresh tariffs might be imposed and that is something no one really wants.

Ralph WilliamsUnimpressive Forecasts Halts Rally on Wall Street
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Volkswagen Has Bet It All on Electric Cars

German car manufacturing giant Volkswagen (VW) has made an enormous bet on electric cars and for all, intents and purposes, the company has staked its future on electric cars. VW wants to become the global leader in the production of electric cars and the risky, yet incredibly ambitious bet traces its origins to the company’s biggest crisis. VW has made an enormous bet, amounting to $91 billion on electric cars and in the long-term, they wish to mass produce electric cars with a profit. The reason why this radical vision is regarded as risky is that no other car maker in the world has succeeded in profitably mass producing electric cars.

However, VW’s reasons behind this strategy lie in the emission cheating scandal that not only cost the company a total of 27 billion Euros in fines but also dragged its storied name through the dirt. It was at that time in 2015 that the top executives at VW got together at a summit meeting of sorts to chart the future of the company. Speaking of that landmark meeting, VW board member Juergen Stackmann says, “It was an intense discussion, so was the realization that this could be an opportunity if we jump far enough. It was an initial planning session to do more than play with the idea of electric cars. We asked ourselves: what is our vision for the future of the brand? Everything that you see today is connected to this.” He went on to add that without that meeting that decided to build electric cars at an industrial scale would never have come to pass.

According to many analysts, however, the gigantic bet on electric cars remains a risky one. For instance, analysts at Deloitte state that the industry could produce as much as 14 million electric cars a year but what they need to take into consideration is the simple fact that there is no matching demand for those cars. However, should the demand ever come about, then VW is going to be in a position to meet the demand head on and wipe out rivals. They now possess the wherewithal to flood the market with their mass-produced electric cars if the demand rises. However, another group of analysts does believe that with the tightening of emissions laws all over the world, including in China and the European Union, the mass adoption of electric cars is only a matter of time. If and when that happens, Volkswagen could find itself as the king of that market.

Ralph WilliamsVolkswagen Has Bet It All on Electric Cars
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US Troops to Cover Mexican Border

The US-Mexico border dispute has been on the cards ever since American President Donald Trump wanted to raise a physical barrier to prevent the immigrants from entering the country. The Pentagon has now announced that there will be 3,750 troops deployed to the border security in addition to the active personnel already present, which raises the total number of troops to 4,350. This deployment increases the number of personnel on active duty by sevenfold on the Mexican border. Acting Secretary of Defence, Patrick Shanahan approved this arrangement in favor of Trump on January 11, 2019, and stated that this would last for 90 days. This mission included mobile surveillance and putting up 150 miles of concertina wire to cover up the ports of entry. The first approval for deployment of troops to Mexican border happened in October 2018.

President Donald Trump claims that “the border needs a strong physical barrier. It needs a wall.” The US Government came to a standstill due to his deadlock demand of $5.7 billion to construct the wall. This led to the Government shutdown for 35 days, the longest in US history. In continuation of this, Trump has stated that shutting down the federal Government again and declaration of National Emergency are the two options he is considering to sort the security issues and prevent the invasion. He believes that, unless the wall is raised, US is subjected to Human traffickers, drugs and gangs and criminals pouring in.

However, Nancy Pelosi, Speaker of the US, drove the President to end the shutdown without adhering to his demands. She had offered $1 billion to the president for the border security services, but not to construct the wall. This led to Trump opposing and accusing his political rival. He stated that “Her decision was bad for the country. Though she knew that the border needed the physical barrier, she refused his demands to win a political point.” He also pointed that “she was convinced with open borders and did not mind human trafficking..”

Discussions between the White House, congressional Republicans, and Democrats, about Trump’s demand of $5.7 billion for the wall hasn’t been favorable to him. Alabama senator, Richard Shelby, a key Republican participant, remarked that “a solution to this border security issue can be sorted only with a Trump-Pelosi truce.”

However, the deployment of these active troops has been criticized as a political stunt created by Trump to redeem his promise to protect the US ports of entry during the campaign, by the independent observers. Given this, the secretary of Defence, James Mattis, concluded that “the Pentagon approved this mission solely based on the request from the commissioner of customs and Border security Police and that his department didn’t entertain the political stunts.”

Ralph WilliamsUS Troops to Cover Mexican Border
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Crypto Exchange QuadrigaCX Wallets are Missing

In a shocking announcement, the Canadian-based QuardigaCX has stated that they are unable to find their cold storage wallets. A notice was published in regards to this on its website. They further state that they have applied for protection under the Companies’ Creditors Arrangement Act (CCAA), a Canadian law which deals with bankruptcies in Canada.

The notice states, “For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful. Further updates will be issued after the hearing.”

The exchange wins out by not qualifying as a bank or a trust, both of which are exempt from the CCAA protection laws.

According to PwC Canada, “the CCAA presents an opportunity for the company to avoid bankruptcy and allows the creditors to receive some form of payment for amounts owing to them by the company.”

The announcement also confirmed that on 5 February, the court would be asked to appoint ‘Big Four’ auditing firm Ernst & Young as an independent third party. This third party shall monitor the proceedings.

On January 14, the exchange had publicized the death of Gerald Cotton, their founder, and CEO.

QuadrigaCX announced – Please see our statement regarding the sudden passing of our @QuadrigaCoinEx founder and CEO, Gerry Cotten. A visionary leader who transformed the lives of those around him, he will be great.

QuadrigaCX had started reporting problems since October the previous year when a bank froze its funds. A court document at the time read that the trading platform urged the court not to yield to an unverified and invidious conjecture that the transactions are questionable. Margaret Waddell, Quadriga’s lawyer, claimed that the judge had reserved his decision in the hearing on the case. And the Canadian Imperial Bank of Commerce (CIBC) had refused to make any comments on the case.

The QuadrigaCX exchange was the largest in Canada by volume until its sudden demise this month. Now the company’s public notices leave many details out. They are not the first Canadian exchange to suddenly face problems. MapleChange is another such example.

The death of the company’s founder is speculated to play a major role in its decline. However, some users have asked for proof of Cotten’s passing. One of the users even posited a theory that the exchange could not access the assets in cold storage, as the keys were only known to Gerald Cotten.

All users of the platform are claiming to be unable to access or withdraw their funds since months. Some predicted that the platform had gone insolvent earlier when the exchange appeared to be down for maintenance. One commenter on Reddit posted, “They will declare insolvency due to an inability to find a suitable bank to host an account and facilitate transfers.”

Ralph WilliamsCrypto Exchange QuadrigaCX Wallets are Missing
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