UBS | The oil price crash and ongoing volatility have created uncertainty and financial stress across the sector. An industry in ‘survival mode’ has manifested in major capex cuts and seen M&A activity collapse to 14 year lows.
UBS | Given the re-emerging importance of Iran, we spent time digging into the operating environment in Iran and speaking with oilmen on the ground there.
Spain’s bancarisation is making life difficult for its independent financial advisers (Empresas de Asesoramiento Financiero Independiente or EAFIs), while excessive regulation is also clipping their wings.
UBS | On Thursday the Basel Committee released a consultation on ” Reducing variation in credit risk-weighted assets “. A surprise gift before a long weekend. Our read is that in the pursuit of reducing variability in bank capital backing similar portfolios at different banks, the Committee intends doing away with models for certain books of business and specifying inputs into others.
BARCLAYS | Despite the recent firming in oil prices, crude remains firmly below the level that we would consider being conducive to additional investment. As such spending continues to come under pressure, with our recently published upstream spending survey showing that companies have revised down budgets by a further 15% since January.
UBS | The overnight call rate is already running at close to zero after the BOJ introduced negative interest rates, partly due to problems in putting in place the systems, and no consensus view has yet taken shape about the knock-on effect and the impact on the economy or individual sectors.
James Alexander via Historinhas | A couple of my recent posts have focused on the immeasurability of inflation and the consequent immeasurability of RGDP. And, therefore, the unsuitability of using either as a guide to monetary policy, especially a notional “gap” between an unmeasurable RGDP and a theoretical maximum, but still unmeasurable, RGDP.
Citi | The London Stock Exchange and Deutsche Börse have provided this week some more detail about their proposed all-share merger. Targeted cost savings of €450m per annum, three years after completion, were announced and formed the most significant piece of new information.
Trading volumes on the Spanish stock market have been worse than those of its European peers in February. This gives the impression that investors are rejecting Spain’s bourse, either because of political uncertainty, its exposure to Brazil, or else the eternal doubts about some of the Spanish banks.
UBS | In recent notes (” Trouble down the line “, ” The outlook for OPEC production capacity “) we detailed the meaningful slow-down in activity we are seeing across the industry. This is being driven by a reassessment of portfolios, on grounds of affordability and in reaction to structural and cyclical deflationary dynamics. In this note we show the effect of this slowdown on investment levels. The results have been dramatic.