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Tesla (NASDAQ:TSLA) To Build Electric Car Factory In China To Tab The Largest Auto Market In The World

By
Andy Parker
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Tesla Motors Inc (NASDAQ:TSLA) intends to build an electric car factory in China, with the aim to tap the largest auto market in the world and reap rewards. Since China has the largest global auto sales market, the Californian electric car manufacturer wants to gain a strong foothold there.

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Elon Musk, CEO Tesla, made the announcement a couple of days ahead of his participation in the technology forum to be held in Hong Kong. He was updating media about his perspective on Tesla’s role in Greater China’s auto market. However, the CEO did not reveal the specifics associated with the business and said that the performance of his company was reasonably well in the Mainland China although there have been few hiccups earlier.

Musk said that Tesla wants to invest in a local partner and a location in China for building a car manufacturing plant by the middle of 2016. The key strategy will be to get a waiver on high import duties that are charged by the local governments for all the foreign automakers who intend to do business in China. The company will also try to gain access to the various local incentives that are available for EVs.

Electric cars more in demand in China

Electric vehicles are in high demand in China so Tesla is keen to open its manufacturing unit in the country. However, even Musk admitted that the company would have to overcome many challenges before it becomes a reality.

Tesla Stats

At present, there are 15 stores in seven metro cities, over 1600 destination chargers and 340 Superchargers of Tesla in Greater China. Hong Kong is the city with the highest intensity of rapid changing stations of Tesla with 42 Superchargers. The city also has 75 destination chargers. Last year Tesla sold 2,221 Model S in Hong Kong, almost 80% of the electric vehicle sales made locally and 4.39% of the total global shipment from Tesla.

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Microsoft Corporation (NASDAQ:MSFT) And Smartwatch Vendor Olio Have Signed An Unconcealed-Licensing Agreement

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Microsoft Corporation (NASDAQ:MSFT) and smartwatch vendor, Olio Devices LLC, are now reading from the same script after announcing a patent licensing agreement that will cover wearable devices. While many are thirsty for details, the companies decided to not to divulge much information at the time.

Read Now:Serious Security flaws uncovered in IOS, Android and others.

According to a Microsoft spokesperson, the company was not ready yet to issue an additional comment about the deal other than the announcement of its signing. Hence, it is not clear as to whether this is the general Android patent-protection-type agreement.

In ordinary circumstances and after signing an Android licensing agreement, Microsoft is usually very quick to divulge the details. But going by a Microsoft phrase that often accompanies Android patent-licensing deals perhaps Olio’s licensing is a way of making the company’s licensable intellectual property available.

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Apparently, another notable thing is that a majority of employees in Olio previously worked for Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOG). On the other hand, Olio iPhone and Android applications are both available, but there is no Windows Phone application.

A page on Olio’s website categorically talks about the Olio Devices applications that include plenty of open source libraries as well as their licenses. And on the list are Google Analytics and GoogleMaps.

Well, with all this unfolding around Microsoft and Olio, it is not easy for readers to deduce what is next. In any case, the question remains as to whether or not the new partnership between the two is meant to bring attention to the growing Android-licensing coffers.

 

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GrubHub Inc (NYSE:GRUB) Unveils $100 Million Buyback Plan

By
Andy Parker
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GrubHub Inc (NYSE:GRUB) intends to return $100 million to its shareholders through shares repurchase program. Additionally, GrubHub will also negotiate a $200 million credit facility to boost its cash position. At the same time, the company is hoping to take advantage of its financial flexibility to drive more long-term growth.

GrubHub Inc (NYSE:GRUB) shareholders have every reason to cheer. The board of the food ordering and delivery company has approved a $100 million buyback plan in a move that the management says is aimed at enhancing shareholder value. But there is more. The management has also received the green light to negotiate a credit facility of up to $200 million and that money will be used to grow the company so that shareholders can expect even more benefits in the future.

According to CEO, Matt Maloney, the buyback approval and the credit facility demonstrate the board’s commitment to maximize value for the shareholders.

Solid 4Q2015

GrubHub Inc (NYSE:GRUB) preannounced its 4Q2015 earnings in which EBITDA is expected to be above earlier guidance and revenue to come at the high end of the guidance. The management expects EBITDA to top the guided range of $23 to $25 million. The topline number is expected to come at the high end of the guidance of $98 to $100 million. Analysts on the average are looking for revenue of $99.3 million. That means that GrubHub is confident in beating consensus estimate for the topline.

New directors

GrubHub Inc (NYSE:GRUB) plans to add two new independent directors to its board. One of the two new directors will replace a board member who is due to step down. However, it remains unknown who is it that is poised to vacate his seat on GrubHub’s board.

The new members joining the board of GrubHub will be sourced from leading companies and the candidates are expected to bring extensive expertise in product development and leadership experience.

The shakeup of GrubHub’s board comes after Bill Gurley recently exited the board to apparently avoid a potential conflict of interest. Gurley is also a board member at Uber, which is expanding into the food ordering and delivery business, which is GrubHub’s domain.

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BBCN Bancorp Inc (NASDAQ:BBCN) Declares $0.11 Per Share Quarterly Dividend

By
Andy Parker
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BBCN Bancorp Inc (NASDAQ:BBCN) said it had a largely successful year in 2015 and looks forward to continued growth in 2016. The management reported 4Q2015 and full-year 2015 earnings that improved from a year ago. At the same time, BBCN Bancorp announced that its board of directors had approved a quarterly cash dividend of $0.11 a share.

Quarterly dividend

The $0.11/share dividend will be paid out to shareholders on February 19. However, the payout will only capture shareholders of record as of February 5. The dividend declaration is part of the efforts by BBCN Bancorp to return value to shareholders. The declaration of the dividend also followed a solid 4Q2015 and fiscal 2015 in which key performance metrics improved, sometimes beyond expectations.

4Q2015 performance highlight

BBCN Bancorp Inc (NASDAQ:BBCN) reported 4Q net income of $22.9 million or EPS of $0.29 after taking into account $1.4 million of expenses linked to the merger with Wilshire Bancorp. In Q3, the company generated net income of $25.1 million or EPS of $0.32. There was no major financial hit in the quarter as in the latest one. A year ago, BBCN Bancorp’s net income was $22.7 million or EPS of $0.29.

As such, net income of $22.9 million in the latest quarter exceeded $22.7 million in the same quarter last year.

Full-year highlights

BBCN Bancorp Inc (NASDAQ:BBCN)’s fiscal 2015 net income of $92.3 million surpassed the annual income of $88.6 million in the previous year. On an adjusted basis, 2015 EPS was $1.16, compared to $1.11 a year ago.

Other metrics

According to BBCN Bancorp Inc (NASDAQ:BBCN)’s CEO, Kevin S. Kim, new loan origination of $550 million hit a record and led to loan receivable jump of 12% compared to 2014. New loan bookings of $1.69 billion also rose 27% over last year’s figure.

BBCN Bancorp Inc (NASDAQ:BBCN) hit the performance milestones despite intense competition in its industry. Following the merger with Wilshire Bancorp, BBCN Bancorp is looking forward to a much brighter future in 2016 and beyond.

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OPEC Blames Nations Outside Cartel For Oil Rout

By
Andy Parker
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It was a short-lived recovery in oil prices, which have again jumped back in sub-30 per barrel territory. A slew of factors are responsible for driving oil prices to lower levels. However, the reluctance of the OPEC (Organisation of the Petroleum Exporting Countries) to address oversupplies combined with the massive output from Iraq are weighing on the commodity.

OPEC pleads co-operation

The global benchmark, Crude Oil Brent is seen trading at $30.52 as it shed nearly 6.3% on Monday while the U.S. Crude Futures (CLH6) for March delivery is hovering near $30.34.

The sentiment around oil has grown negative after the head of OPEC has asked oil-producing countries outside of OPEC to show co-operation. This signals that the OPEC is adamant on its stance to continue with existing oil output. Abdullah al-Badri, head of OPEC, released a statement asking co-operation from non-OPEC members to help contain oil supplies. Al-Badri held non-Opec members responsible for the current oil rout, which has further dampened the expectations of an early resolution.

Reluctant to act on its own

So far, only one of the members of OPEC is willing to consider ways to boost oil prices, according to Indonesia’s OPEC representative. Meanwhile, Iraq is busy pumping out more oil, indifferent to the current oil glut, which has further fueled the concerns over increasing oil supplies. The Iraqi government has reported a record high oil production of 4.13 million barrels per day. Simultaneously, Iran is also keen on loading more oil tankers following the lift of Western sanctions.

Amid these developments, several analysts hold are of the opinion that the oil reserves will rise during the next few months and will start declining from thereon. Given the current oil stockpiles, HSBC has trimmed its price forecast for Brent crude to $45 per barrel from $60 per barrel for the year 2016. Another research firm, UniCredit has also slashed its crude price forecast to $37 per barrel from $52.50 per barrel, signalling more pain ahead for the commodity.

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Halliburton Company (NYSE:HAL) Expects Tough Year Ahead

By
Carol Harper
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Halliburton Company (NYSE:HAL)

Halliburton Company (NYSE:HAL) reported adjusted earnings from continuing operations of $270 million or 31 cents a share for the fourth quarter while revenue plummeted by 42.1% YOY to $5.08 billion. Capital IQ consensus projected earnings of 24 cents a share and $5.13 billion revenue. The company recorded charges in respect of asset write-offs, as well as, severance costs of $192 million or 22 cents a share due to downturn in the energy prices and the resultant impact on its outlook. On a GAAP basis, the company suffered a net loss of $28 million or a loss of three cents a share in the fourth quarter.

Dip In Adjusted Operating Income

Halliburton Company (NYSE:HAL)’s adjusted operating income dipped 6.5% to $473 million from $506 million in the third quarter. Similarly, completion and production revenue fell 12% sequentially to $2.8 billion fuelled by pricing, as well as, activity and headwinds in every region. Drilling and evaluation revenue also dipped 5% sequentially to $2.3 billion hurt by the weak logging services and drilling activity in the America regions, Europe, Africa, and Commonwealth of Independent States (CIS).

The company’s global business witnessed 5% drop in revenue while operating income dipped 10% reflecting the decline in activities and price concessions. Also, its customer budget constraints hurt the gains from equipment and software sales. However, operating margins grew by 1.6 percentage points fueled by cost-cutting measures and the completion of tool sales.

Another Challenging Year Ahead

With oiil prices at a 12 year low, Halliburton (NYSE:HAL) expects the current year 2016 to be one of the more challenging years for the company, as well as, the industry. The company was confident that its customers would be focused on the maximization level of cost per barrel and benefiting from increased efficiency levels as both were good for the company.

Halliburton Company (NYSE:HAL) also reiterated its commitment to the acquisition of Baker Hughes Incorporated (NYSE:BHI). The company said that it was continuing its discussions with competition authorities and provided an offer of improved divestitures set to resolve any issues concerning the competition.

Halliburton Company (NYSE:HAL) is not the first company to forecast a difficult year. Last week Royal Dutch Shell Plc (ADR) (NYSE:RDS.A) announced that it expects its fourth quarter profit to decline by 40 percent. The reason which the management gave was the fall in Crude prices. The company did manage to bring down the operating costs by $4 billion.

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U.S. Dollar Trades Nearly Flat Against Major Currencies

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The U.S. Dollar continues to trade marginally lower than the Euro as the market participants are eagerly waiting for the monetary policy stance of the Federal Reserve, which will be out by Wednesday this week. The EUR/USD is seen trading down by 0.21% to 1.0830.

The Federal Reserve stance

The market expectations reflect beliefs that the Central Bank is likely to keep the rate hike on hold due to global uncertainty. The Fed had announced first rate in nearly a decade last month in December.

The Euro remains under pressure after the European Central Bank chief Mario Draghi signalled at the possibility of taking additional monetary easing measures. Also, a decline in the German business climate index to 107.3 from 108.6 also weighed on the Euro.

Japan’s battling with weakness in exports

Meanwhile, the U.S. Dollar continued to lose ground against the Japanese Yen after Bank of Japan Governor Haruhiko Kuroda hinted to undertaking more stimulus measures last Friday. Analysts are anticipating some monetary easing measures towards the end of the year. USD/JPY is lower by 0.24% to 118.01 today. Japan is already confronting a sequential decline in its monthly exports, which fell 8% during the last month.

Meanwhile, both the New Zealand and Australian Dollar traded lower than the greenback. NZD/USD shed 0.12% to trade at 0.6448 before hitting a low of 0.6425. The pair is expected to get support at 0.6409 and resistance at 0.6534. On the other hand, AUD/USD was down by 0.01% to 0.6953, trading nearly flat.

Up ahead in the day, the investors will be looking forward to consumer confidence data in the U.S. to be published later today to gauge the economic progress.

Elsewhere, GBP/USD was sharply down by 0.42% to 1.4187 during the late Asian trading hours. The U.S. Dollar Index was moderately higher by 0.02% at 99.37 against the basket of other global currencies.

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Oil And China Playing Havoc With Global Markets

By
Andy Parker
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As anticipated, a fresh weakness in oil prices slashed the gains in the Asian session. All the major Asian indices finished the day steeply lower. China’s Shanghai SE Composite Index took the worst beating as it closed the day nearly 6.50% lower at 2,749.79. Japan’s Nikkei 225 followed the trail, losing 402.01 points or 2.35% to settle at 16,708.90. There has been mounting pressure on Japan’s central bank to adopt stimulus measures in view of the persisting weakness.

Oil back in pressure

The agony for global markets resumed as the U.S. crude futures re-entered sub-$30 zones adding to previous day’s 6% fall. Global benchmark Brent is also trading near $30 level, signalling weakness in oil prices. Hong Kong’s Hang Seng fell 2.48% to 18,860.80.

At the same time, the European markets have also brushed off the Central Bank’s assurance of more monetary easing measures as major indices hit red today. The inability of oil prices to remain above $30 level, combined with an ongoing slowdown in China are the key factors driving weakness across the global markets.

U.S. market development

This is reflective in the European markets, where France’s CAC 40 was down by 1.57% or 67.53 points to 4,243.80. Euronext 100 dipped 1.46% to 838.55. A weak business sentiment in Germany sent its index DAX down by 1.29% to 9,610.25 but has since recovered to 9722. The region’s IFO survey data pointed that the business sentiment index fell to 107.3 from 108.6 in December.

Back in the U.S., the scenario was no different as Dow Jones Industrial Average took a steep plunge by nearly 208 points to close at 15,885 in previous day’s session. S&P 500 Index declined by 1.56% to 1,877.08. The key factor that will drive the U.S. markets this week will be the Federal Reserve’s policy meet, which will conclude on Wednesday. Based on the global sentiment, most of the analysts have projected that the Fed will announce rate hikes at a slower pace than earlier estimated.

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Short Covering and Weather-Driven Demand Fail To Hold Oil Price Firm

By
Carol Harper
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Two important factors, weather freezing in some parts of the Northern hemisphere and short covering both has failed to prevent the global oil price to stay firm. In fact, the short rally was taken as an opportunity to lock profit on Monday as concerns on continued oversupply of oil curbed traders from taking further positions. While Brent LCOc1 shed 67 cents at 0816 GMT, the US crude CLc1 fell 58 cents. However, the saving grace was that the oil price managed to stay above $31 a barrel level.

Record Production In Iraq

In December, Iraq witnessed a record oil production with the help of higher output from its central, as well as, the southern fields. Also, after a big increase in price over the week end, people have started booking profits. Phillip Futures analyst, Daniel Ang, told Reuters that the market continued to remain in the oversupply zone thus resulting in the bearish sentiments.

Though Saudi Arabia-based Aramco Chairman, Khalid al-Falih, indicated cost-cutting due to weak oil prices, the company was not slashing any of its fresh investments in the oil and gas production. Aside from that, Indonesia’s OPEC Governor indicated that there were slim chances of the oil cartel initiating steps to boost the oil prices. That meant the OPEC was not ready to reduce the oil production.

Weak USD Helping Oil Futures

ANZ said that the recent rally was due to a change in sentiment with a bias towards short positions. On the other hand, Morgan Stanley (NYSE:MS) believes that the weak Greenback was driving the oil futures that denominated in the US dollar currency. The brokerage said that a retracement of the Greenback, which would be like the last spring season, was one of the few possible drivers for oil price in the near-term.

The secondary driver would be any marginal changes in the fundamentals of crude supply/demand. That was also much similar to the one witnessed last year. Barclays Research note indicated that the market might face a temporary turnaround if there was no further macro deterioration, as well as, any other bearish sentiments. Weather might continue to hold its part in dictating the price.

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