Oil prices fall on supply glut

Oil prices fell again on Thursday after an up and down week, as traders tracked developments over China and an oversupplied market. 

PHOTO: AFP

AUG 14, 20157:16 AM

[LONDON] Oil prices fell again on Thursday after an up and down week, as traders tracked developments over China and an oversupplied market.

Brent North Sea crude for delivery in September dipped 61 cents to stand at US$49.05 a barrel in London late afternoon deals after earlier rising 16 cents.

US benchmark West Texas Intermediate for September dropped US$1.07 to US$42.23 a barrel compared with Wednesday's close.

New York oil prices on Wednesday edged up from six-year low points as US oil supplies declined and the dollar retreated.

The US Department of Energy Wednesday said the estimated amount of crude oil in the country's commercial storage tanks tumbled 1.7 million barrels to 453.6 million barrels in the week ending August 7.

The report also said US domestic oil production fell 70,000 barrels a day to about 9.4 million barrels, which is positive for oil prices in an oversupplied market.

The dollar has meanwhile taken a hit after China's surprise move to devalue the yuan, with analysts saying this could delay plans by the US central bank to raise interest rates, a move previously expected as early as September.

A weaker US currency makes dollar-priced oil cheaper for holders of other units, perking up demand and supporting prices.

But analysts said oil prices were being weighed down by continued concerns over a glut in the world crude market.

"The market is just bearish overall," said Daniel Ang, an investment analyst with Phillip Futures in Singapore.

"There's still no big change to the supply and demand fundamentals in the oil market," he told AFP.

AFP

    

Samsung ramps up Apple challenge with large handsets

Samsung staked its claim to the high end of the smartphone market on Thursday, unveiling two large-screen handsets and its new mobile payment system as part of its challenge to Apple. 

PHOTO: BLOOMBERG

AUG 14, 20157:11 AM

[NEW YORK] Samsung staked its claim to the high end of the smartphone market on Thursday, unveiling two large-screen handsets and its new mobile payment system as part of its challenge to Apple.

The moves are aimed at keeping the South Korean giant atop the global smartphone market and countering its US rival Apple, which has made gains with its large-screen iPhone 6 and 6-Plus and its tap-to-pay feature.

At a New York media event, Samsung unveiled its Galaxy S6 edge+, the latest update for its flagship handset, and Galaxy Note5, its main device in the "phablet" market.

"Today the journey continues in the large-screen category that Samsung created," said J.K. Shin, Samsung's head of IT and mobile communications.

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The S6 edge+ and Note5 each have a 5.7-inch display, but the S6 has smaller overall dimensions and a curved "dual edge" screen that sets aside a portion of the display for contacts or other content.

LAUNCHING SAMSUNG PAY

The company also announced that its Samsung Pay service would roll out in South Korea on August 20 and in the United States on September 28, and that it would launch in Britain, Spain and China with partners to be named in each market.

Shin said he expects wide adoption because Samsung Pay "doesn't cause small business to upgrade their terminals and will be accepted almost everywhere on day one." Samsung said its mobile service can be used with magnetic stripe terminals as well as those using updated NFC or "near field communication" contactless payments employed by Apple Pay.

InJong Rhee, Samsung Electronics vice-president, said that "NFC is fine technology but most stores don't have it." He added that Samsung Pay will be secured by its Knox software, which creates a one-time code without transmitting credit card numbers.

Samsung has remained atop the global smartphone market even though its sales have been slipping in the past year.

With the new devices, Samsung expands from its 5.1 inch display on the existing Galaxy S6, and leapfrogs Apple's handsets at 4.7 and 5.5 inches.

The new handsets, which have Samsung Pay and wireless charging options integrated, will go on sale in the US and Canada on August 21, said Samsung, which did not announce specific launch dates for other markets.

The Note5 is the upgraded version of the phablet which Samsung is generally credited with popularisng. The new device has a new pop-out pen stylus and shares its upgraded 16-megapixel camera with the S6 edge+.

Kantar Worldpanel analyst Carolina Milanesi said Samsung trailed Apple in the phablet market - devices with screens at 5.5 inches and above - in the second quarter.

STEALING A MARCH ON APPLE

Ramon Llamas, analyst at IDC, said the launch appears aimed at getting ahead of Apple, which is widely expected to announce its own upgrades later this year.

"This is a calculated move to avoid the marketing onslaught of Apple in September and October," Mr Llamas told AFP.

Mr Llamas said that with these devices, "Samsung is establishing itself at the high end and attacking its biggest and closest competitor, Apple."

Daniel Gleeson at IHS Technology agreed, saying Samsung "is hoping to steal a march on Apple's new iPhone announcement which will likely happen in early September." Mr Gleeson said the Note5 appears aimed at professionals and business users due to its stylus and keyboard attachment, while the S6 edge+ "is a much more fashion-forward device and is likely to appeal to a younger, hipper market."

According to IDC, Samsung led the smartphone market in the second quarter with a 21.7 per cent market share, even though sales dipped from a year earlier and its market share was below 24.8 per nt in the same period a year ago.

Apple, which briefly took the lead in the fourth quarter of 2014 with its new iPhones, saw its market share rise more than two points from a year earlier to 14.1 percent, IDC said.

Mr Gleeson said Samsung Pay faces challenges because of the head start by Apple and Google's Android Pay.

"Unlike Apple which has accumulated 800 million payment card accounts associated with iTunes, Samsung lacks this critical element for its payment service to quickly gain traction," he said in a note to clients.

"Samsung Pay's co-existence with Android Pay is likely to create frictions in the Android ecosystem as consumers could be confused by the two payment options."

AFP

    

Corporate taxes to be major agenda item when US Congress returns

Fixing the tax code for US businesses will be at the forefront when Congress returns from vacation next month, with many lawmakers focusing on "C"corporations, despite new data showing a continuing decline in their numbers. 

PHOTO: ST FILE

AUG 14, 20157:20 AM

[WASHINGTON] Fixing the tax code for US businesses will be at the forefront when Congress returns from vacation next month, with many lawmakers focusing on "C"corporations, despite new data showing a continuing decline in their numbers.

Most of America's biggest and most powerful businesses, from Apple Inc to Wal-Mart Stores Inc, are C corporations.

The profits of C corporations, which are taxed separately from their owners, have soared since the 1980s, though the sheer numbers of these businesses have declined and their proportional contribution to federal tax revenues has slipped.

New Internal Revenue Service data shows that the agency received 1.6 million income tax returns from C corporations in 2012, the latest year available, down from 2.1 million in 2002.

The debate in Congress on tax reform, which will resume on Sept 8 when Congress reconvenes, is expected to focus heavily on the comparatively small and shrinking slice of the US tax revenue pie that is paid by C corporations.

Democrats and Republicans concur that the income tax rate paid by C corporations is too high and should be reduced, though they disagree on how far to cut it.

The tax-writing Ways and Means Committee of the House of Representatives on Thursday said in a statement its top priority in months ahead will be "international tax reform," an issue that directly affects the profits of C corporations.

The Republican-controlled panel said that means it will weigh proposals such as giving C corporations a tax break on foreign profits; taking steps to halt C corporations from reincorporating abroad to cut US taxes, and giving C corporations a tax break on intellectual property profits.

The focus of Congress on C corporations reflects the ability of their well-paid lobbyists to capture and hold Washington's attention.

Today, the vast bulk of federal revenue comes from the individual income tax, social insurance tax and other taxes.

The US government still gets from 7 per cent to 14 per cent of its revenue from the corporate income tax, depending on the economy's health and corporate profits. In the 1960s and 1970s, that range was 14 per cent to 23 per cent.

Meanwhile, while the number of C corporations has been going down, the number of so-called S corporations has been going up, partially because company owners using that designation can avoid paying a corporate tax, according to researcher Steven Rosenthal at the Urban-Brookings Tax Policy Centre.

In 2012, the IRS received 4.2 million returns from S corporations, up from 3.2 million a decade ago. S corporations, which pay no income taxes themselves, pass profits directly from the company to the owners, who pay an individual income tax on those profits.

The number of limited liability companies, sole proprietorships and other business structures, has also surged. They do not pay corporate income tax, either.

No mention was made in the Ways and Means Committee's statement of reducing taxes on ordinary wage earners and owners of S corporations and other so-called pass-through businesses.

Kyle Pomerleau, economist for the Tax Foundation's Centre for Federal Tax Policy, said the two political parties disagree on individual tax code reforms more than on corporate reforms. "How are you going to capture pass-through income correctly?" Mr Pomerleau said. "It's not clear to me whether anyone has come up with a good solution for that."

REUTERS

    

IMF awaits steps from Europe on Greek debt relief

The International Monetary Fund said Thursday it wants Greece's European partners to decide on a package of debt relief before determining if it will take part in Athens' next bailout. 

PHOTO: AFP

AUG 14, 20156:55 AM

[WASHINGTON] The International Monetary Fund said Thursday it wants Greece's European partners to decide on a package of debt relief before determining if it will take part in Athens' next bailout.

Senior IMF official Delia Velculescu made the comment after leading a team that met in Athens this week with Greek and European financial officials working on a rescue plan.

"In the period ahead, we look forward to working with the authorities to develop their programme in more detail and for Greece's European partners to make decisions on debt relief that will allow Greece's debt to become sustainable," she said.

She said the IMF would assess "its participation in providing any additional financing to Greece once the steps on the authorities' program and debt relief have been taken." Greek lawmakers are to vote on an 85-billion-euro ($94.8-billion) rescue plan negotiated with the European Union, European Central Bank and the IMF, its third bailout since 2010.

A major Greek creditor, the IMF took part in talks on the package but has let it be known that its participation in a bailout depends on Europe agreeing to sustainable debt relief.

Germany, the major eurozone economy and another Greek creditor, has "questions" about the planned deal. Eurozone finance ministers are to meet on Friday in Brussels.

AF
P

Drone-plane safety incidents seen quadrupling in US: FAA

United Airlines planes are seen on platform at the Newark Liberty International Airport in New Jersey, July 8, 2015. 

PHOTO: REUTERS

AUG 13, 20157:18 AM

[WASHINGTON] Pilot encounters with drones are on pace to at least quadruple to more than 1,000 this year, highlighting a growing threat to US aviation by unmanned aircraft.

There were 650 cases reported to the Federal Aviation Administration through Aug 9 compared with 238 in 2014, the agency reported on Wednesday night. Assuming the reports continue at the current rate, there would be more than four times the safety incidents by the end of this year.

The reports of drones spotted near traditional aircraft come from pilots on private planes and helicopters, as well as crews aboard airliners, according to an FAA release. FAA rules prohibit drones from flying near airports or at altitudes where piloted aircraft operate.

Industry groups estimate that as many as 500,000 drones have been sold in the US, many of which are capable of flying thousands of feet above the ground.

BLOOMBERG

    

Update: China July FDI recovers to 5.2% y-o-y: Xinhua

AUG 13, 20156:03 PM

[BEIJING] China's foreign direct investment (FDI) inflows recovered in July after a marginal growth in the previous month, as investors focussed on the more resilient services industry, state news agency Xinhua said on Thursday.

In July, China attracted 50.6 billion yuan in FDI, up 5.2 per cent from a year earlier, the official news agency quoted the commerce ministry as saying.

That compared to a 0.7 per cent annual increase in June.

In the first seven months, China FDI grew 7.9 per cent to 471.1 billion yuan or US$76.6 billion, Huang Feng, vice director of the foreign investment department of the ministry, was quoted as saying.

The figure is an important gauge of the health of external economy that supports manufacturing activities, but it is a small contributor to overall capital flows compared with the trillion-dollar-worth exporting business.

FDI into China's fast-growing services sector rose 19.6 per cent in January to July period from a year ago, according to Mr Huang. He did not provide a value figure for the service FDI.

Among 10 countries that were the biggest sources of China's FDI in the first seven months, France saw a remarkable investment growth, Mr Huang added.

FDI inflows into China rose 1.7 per cent in 2014, the slackest pace since 2012, while the total was a record US$119.6 billion.

REUTERS

    

Emirates announces 'world's longest' flight to Panama

AUG 13, 20158:24 PM

[DUBAI] Dubai's Emirates Airline announced Thursday it will launch the world's "longest non-stop flight" in February from the bustling Gulf emirate to Panama City, lasting more than 17 hours.

The carrier will fly daily to Panama's capital in a passenger flight operated by a Boeing 777-200LR aircraft which can also carry up to 15 tonnes of cargo, Emirates said in a statement.

The flight between the two trading hubs will last 17 hours and 35 minutes, making Panama the airline's first destination in Central America, it said.

Currently, the longest flights connect Dallas to Sydney (almost 17 hours), Johannesburg to Atlanta (16 hours 40 minutes), and Dubai to Los Angeles (16 hours 35 minutes).

Previously, the longest flight, lasting almost 19 hours linked Singapore and New York, operated by Singapore Airlines. But it was suspended in 2013 in a bid to cut costs.

Emirates operates a fleet of 235 aircraft, serving 147 destinations in 81 countries.

The airline has the world's largest fleets of Airbus A380s and Boeing 777s, with another 274 planes on order worth US$135 billion.

In March, US carriers and American aviation labour groups accused Gulf airlines of enjoying interest-free loans, subsidised airport charges, government protection on fuel losses and below-market labour costs that are considered unfair subsidies by the World Trade Organization.

The region's "Big Three", Emirates, Qatar Airways and Abu Dhabi's Etihad, have repeatedly denied the accusations and hit back that US carriers are resentful of competition.

AFP