Good morning

The headlines:

  1. Oil has rebounded from its biggest decline in 3 months. Observation: the price oil movement never ceases to be dramatic in Bloomberg’s eyes. “Biggest increase in two weeks”. “Two day high”. “Biggest decline in three months”. Well obviously – the minute you throw in a frame of time reference, things just sound more dramatic. This morning is the earliest I’ve woken up in 14 years!!! (Based on a rolling average – unadjusted for time zones and heavily weighted in favour of a university student lifestyle). Hmmm. That reporter. Needs to. Calm down. Anyway – the increase (by 0.7% – after declining by 2.3% the previous day) is apparently due to an industry-report stating that US stockpiles of oil have fallen. Saudi Arabia has said that it can increase its supplies by 25% immediately, if necessary. To me – there doesn’t seem to be an oil price trend so much as general panic. No doubt heightened by said Bloomberg reporter. Link: Oil price recovery.
  2. The US Sanction-Enforcement against Iran (and its customers) continues, with the US granting sanction-exemption to Japan and 10 of the EU countries; who have managed to “significantly reduce” their purchases of Iranian oil. China, India and Korea, however, have qualified for no such exemption – mostly because they continue to buy Iranian oil. This will be awkward, I think. It’s like a game of economic chicken: I almost dare Obama to continue steering down the wrong lane, just to see where it goes. And best he carry clean underwear – because I don’t think that the Asians play chicken. They serve it sweet and sour, side of dumplings, no credit cards. Cheap shot? No apologies. Link: US exempts Japan and 10 EU countries from Iranian Sanctions.
  3. Greece is selling off assets to Turkey. And they’re starting with the auction of the operational rights of two sea ports: Piraeus and Thessaloniki. I have to tell you – if this was a shrewd political move, it’s magnificent. I think the Greeks would rather not eat. The two sea ports are the big boys: Piraeus is the Athens port, and Thessaloniki is the second biggest city. The ports are going to be followed by the sale of the Greek gas supplier and the national oil refinery. Link: Greece seeks Turkish Buyers.
  4. Glencore has agreed to a $6.15 billion purchase of Viterra, which will give the Swiss commodities trader access to the Canadian and Australian grain markets. In case the name sounds familiar, this is the same Glencore of Glencore-Xstrata fame. Lots of M&A activity on the Glencore front. The deal was made in conjuction with two other companies, who will each take over certain portions of Viterra’s operations/assets. Viterra shareholders are expected to vote on the transaction in May.
  5. Disney is expecting to make a $200 million loss on the movie “John Carter”. I’m not sure why people aren’t that keen – I enjoyed it. Agreed – it’s no Lord of the Rings – but to me it sounds like Disney was expecting to make back its money in a single quarter. I suppose that’s when it all happens for a film. You don’t expense film costs as they happen – you capitalise it as a type of inventory until you launch the movie. Then you expense it all in a single shot. Ah well. DVD sales and television syndication. Recoupments will no doubt be made. Link: John Carter is a loser.
  6. And finally, the Africa Business News in brief. Link: ABN Briefs. The highlights:
    • The South African mining minister (Susan Shabangu) is unhappy with the fatality rates in South African mines. As fatalities are still happening, I believe that’s the traditional emotional response. 
    • AngloAmerican is looking to acquire new iron-ore opportunities in Africa and Australia.
    • Sudan is aiming to raise between $1 billion and $1.5 billion with its new Islamic “sukuk” bonds, that will offer stakes in an oil pipeline. Bonds without interest? Fascinated. 
    • Zambian maize production is expected to fall by 80% as farmers have moved toward more cash-lucrative crops (such as soya beans).
    • Tanzania has cut its coffee output estimate for this season. 

That’s all for now.

Happy Wednesday.