Federal Reserve Rate Hike: Who Wins, Who Loses, Who Goes Meh

Janet Yellen and the Federal Open Market Committee have finally taken the world’s biggest economy off life support. Now, U.S. government deficits will rise, insurance companies will get relief and savers -- who’ve weathered years of earning next to nothing -- will continue to survive on crumbs.

The rate hike comes as no surprise, but it’s new territory nonetheless. Investment bankers, traders and analysts who were in business school back in December 2008 when then-Fed Chairman Ben S. Bernanke began the journey known as ZIRP, for zero-interest-rate policy, are now in their 30s, their entire careers spent in what current Fed Vice Chairman Stanley Fischer called “far from normal” times.

Here are some winners, some losers and some who won’t be much affected by the Fed’s “liftoff”:

OPEC Sees Zero Impact on Oil Market From U.S. Lifting Export Ban

Oil prices won’t be affected by U.S. crude exports, according to OPEC’s top official.

“The net effect of export of American oil on the market is zero,” Abdalla El-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Tuesday. “This will have no effect on the price because the U.S. still is an importing country.”

The U.S. Congress is nearing a deal on the biggest shift in the nation’s oil policy in more than a generation by allowing the world’s largest oil and gas producer to sell crude abroad. Pressure has been building to lift the ban as new drilling technologies unlocked reserves in shale formations, pushing output and stockpiles to records while punishing prices.

It's All Gone Wrong for One of World's Biggest Mining Companies

Even for a company that once had the global monopoly on diamond production during almost a century of all but constant expansion, the collapse in commodities prices is proving too much.

Anglo American Plc, a conglomerate spanning everything from brewing, publishing and gold mining during its peak in the early 1990s, will shrink beyond recognition after Chief Executive Officer Mark Cutifani on Tuesday announced a package of asset sales, mine closures and job cuts. Among the potential casualties is Minas Rio, a Brazilian iron-ore mine where spiraling costs and collapsing prices turned a $14 billion project into the epitome of the company’s predicament.

“Minas Rio is the high water mark of their mistakes,” said Jeremy Wrathall, head of global natural resources at Investec Plc. “It was a series of strategic errors, the collective madness of the super cycle where everyone got it wrong.”

Biggest 2016 risk may be the one just behind us: oil

The biggest financial risk in 2016 may be the one that's been on stage all year.

In Britain's popular Christmas pantomime shows, audiences scream out "He's behind you!" as a warning to the hero whenever the villain appears.

That refrain is almost audible as investment strategists scan 2016 for risk events, as the well-known baddie of plummeting oil prices re-emerges from

PLUNGING OIL PRICES DRAG DOWN WALL STREET

Wall Street started the week in the red as energy and raw material stocks took a hit, with oil prices falling to their lowest in nearly seven years.

Brent crude prices LCOc1 dropped to $41.38 and U.S. crude CLc1 fell to $38.15 a barrel, after OPEC's meeting ended last week without a reference to its output ceiling. [O/R]

A stronger dollar also made it more expensive to hold crude positions. The dollar .DXY rose for a second day and was up 0.3 percent at 98.64 against a basket of major currencies.

INVESTORS BRACE FOR OIL PRICE LOWER FOR EVEN LONGER AFTER OPEC

Investors are betting on the oil price staying lower for even longer after OPEC's decision to ditch a formal production ceiling, pushing U.S. crude futures for delivery nearly 10 years away below $60 a barrel.

This could possibly harm the ability of U.S. shale producers, among the casualties of OPEC's strategy of pumping hard to retain market share, to lock in profitable prices for future deliveries.

OPEC UNSHACKLED FROM QUOTA COULD ADD MILLIONS OF BARRELS

OPEC’s new free-for-all production stance could lift the lid on millions of barrels of additional crude supply next year.

“Everyone does whatever they want” now that the Organization of Petroleum Exporting Countries has effectively abandoned its formal production target, Iranian Oil Minister Bijan Namdar Zanganeh said after the group met on Friday. What Iran wants is to revive exports by about 1 million barrels a day when sanctions are removed next year. It’s not the only member with potential to swell the global oil surplus, with millions of barrels of capacity lying unused under the sands of Saudi Arabia and Libya.

“It means more OPEC oil next year,” Jamie Webster, a Washington-based oil analyst for IHS Inc., said of the organization’s Dec. 4 decision. “OPEC is not cutting. With Iran looming, as well as largely only upside risk for Libya, the smart money is on more, and not less, production.”

GTI RESEARCH: NIGERIA BREWERIES Q3-2015 REPORT

INVESTMENT HIGHLIGHT

Nigerian Breweries Plc (“The Company” or “NB”) released its Q3 2015 un-audited statement of comprehensive income for the nine months ended September 30 2015 on October 21 2015. YoY, the company recorded a 10.36% hike in turnover, however, this was eroded by the growths in distribution/administrative expenses and finance cost. PAT consequently shed 12.24% YoY. 

The surge in administrative cost is expected given the toughened macro-economic environment during the quarter under review. Similarly, finance cost grew as a result of the NB’s expanding financial liabilities which was channeled towards its acquisition and merger of consolidated breweries. Following this investment it became imperative for NB to further invest in the quality of products it acquired from the deal. The Benue Brewery was hugely invested in to facilitate the re-branding of the ‘More Lager Beer’ and generate added value for the brand.

A Q3 YoY analysis of the company’s result highlights a 10.36% growth in turnover to N214.9bn ($1.07ml) from N194.7bn ($97ml) while PBT was down by 11.79% to N37.562bn ($185ml) from N42.583bn ($21ml). Moreso, PAT plummeted by 12.24% to N26.18bn ($13ml) from N29.83bn ($149.15ml) YoY. The YoY dip in PAT is on the back of the growth in administrative expenses accompanied by a significant 69.83% slid in other income. Furthermore, the M&A which was concluded in 2014 resulted in the surge in finance cost YoY. 

Click link for full report
https://drive.google.com/file/d/0B7bfqve2E3QrNWNrbjNlWE84U3M/view?usp=sharing

OIL BULLS BRACE FOR REPEAR OF OPEC'S BEARISH BLOW AT MEETING

Hedge funds are betting this week’s OPEC meeting will deliver another bearish blow to crude.

l Prices

A year ago, Saudi Arabia led the Organization of Petroleum Exporting Countries in keeping production quotas steady, exacerbating a global glut and sending prices tumbling. Analysts surveyed by Bloomberg expect a repeat this year when the group meets on Dec. 4 in Vienna. Iran has said it will announce plans during the meeting to expand its output.

"Without the Saudis nothing is going to happen and it’s pretty clear they aren’t about to cut," said Mike Wittner, head of oil-market research in New York at Societe Generale SA. "It’s hard to even come up with a scenario where there would be an agreement for a cut."