As election looms, divided US Fed begins meet on rates

A divided US Federal Reserve began a two-day meeting on interest rate policy yesterday, as bitterly contested US elections loomed large on the horizon.

Most observers and market players do not expect the Federal Open Market Committee, the Fed’s monetary policy board, to announce a rate hike when the meeting lets out on Wednesday afternoon, despite some recent signs of improving health in the world's largest economy.

Instead, the Fed may use the occasion to put the public on notice to expect a rate hike in December – though even that is far from guaranteed.

Fed Chair Janet Yellen in recent months has signaled that the case for raising rates has grown stronger. But the FOMC does not appear to be under pressure to act immediately.

Raising rates so close to an election, which could invite needless political controversy, is also rare for the Fed, which has done so only once since the 1980s. Researchers say, however, that there is little evidence the FOMC acts based on the US political calendar.

AFP

China aircraft market to hit nearly $1trn in 20 years: Airbus

Flight attendants at China International Aviation & Aeropsace Exhibition - the country is expected to bu around $1trn of aeroplanes over the next 20 years (Reuters)

China will need nearly 6,000 aircraft worth $945bn (£773bn) over the next two decades, aerospace giant Airbus said on Tuesday at the Zhuhai air show.

At that point China will be the world's number one source of air traffic and its top aircraft market, it said in its 2016-2035 Global Market Forecast.

“Domestic passenger traffic in mainland China has quadrupled over the last 10 years, and is set to become the world's number one aviation market,” said John Leahy, Airbus chief operating officer.

“In the next 20 years, the greatest demand for passenger aircraft will come from China.”

China accounts for nearly a quarter of the European aircraft maker's deliveries, with 158 delivered to China last year.

It is currently the second-largest aviation market after the US.

Air travel is booming in the world's second-largest economy, as its burgeoning middle class spends more on travel, with overall air traffic growth of over 500 per cent from 2000 to 2014, Airbus said.

Despite slowing economic expansion and a challenging transition to a consumer economy, China's market for international air travel is predicted to average 6.7 per cent annual growth for the next 20 years, it added.

Airbus is locked in close competition with Boeing for China market share, with Airbus planes accounting for slightly less than half of the country's fleets.

AFP

German YouTube alive with sound of music after copyright deal

One of the world's most restrictive countries on access to music videos opened up on Tuesday as YouTube announced a deal with musicians' body Gema to pay when people stream music in Germany.

YouTube users in the country had for years been confronted with a red sad-face emoticon and messages announcing “this video is not available in Germany” when trying to view videos ranging from the latest pop clips to films with GEMA-controlled background music.

Now the blockages should largely be a thing of the past.

“Hell has frozen over!” wrote one Twitter user in response to the news. “Listen to all the music!” said another.

Tuesday's deal will see YouTube pay an undisclosed amount for music belonging to the roughly 70,000 German artists represented by Gema – as well as many international artists – each time their songs are played.

“Authors, composers and music publishers will be paid fairly,” YouTube executive Christophe Muller said in a statement.

AFP

Sony profit dives on strong yen, unit sale

(Reuters (Reuters)

Japan's Sony said on Tuesday its first-half net profit dived as it was hit by a sharp rally in the yen's value and losses linked to the sale of its battery business.

The electronics giant, which has been shedding assets as part of a broad restructuring, reported a 26bn yen (£203m) net profit in the six months through September, down nearly 78 per cent from a year earlier.

Revenue in the first half of Sony's fiscal year fell more than 10 per cent to 3.3 trillion yen “primarily due to the impact of foreign exchange rates”, Sony said.

Sales in Sony's mobile communications business slumped, while profitability in its memory chip and components businesses also suffered.

That partly offset strong demand for games on its hugely popular PlayStation 4 game console.

Last month Sony launched its new virtual reality headset, the PlayStation Virtual Reality (PSVR), in Japan and North America, joining Facebook, Samsung and Google in a market that analysts say could boost the global gaming sector.

Tuesday's first-half results came a day after Sony warned that it now expected a net profit of 60bn yen in the year through March 2017, down by a quarter from an earlier forecast.

AFP

Go-Ahead sticks to outlook despite Southern strike chaos

British bus and train operator Go-Ahead said it was on track to post annual results in line with its expectations despite being hit by strikes on its Southern rail contract.

The Southern network is part of Govia Thameslink Railway, which is 65 per cent owned by Go-Ahead alongside France's Keolis. It has faced widespread criticism from passengers, politicians and the media after months of strikes, cancellations and delays on trains into London.

Go-Ahead said on Tuesday that aside from its GTR contract, its rail and bus operations traded strongly in the July to October period.

Strikes during the period, most recently in October with more due in November, dragged on margins at the company's struggling GTR franchise, said Go-Ahead, but its expectations for the network's performance over the seven-year contract remained the same.

Reuters

Saudi minister hails ‘bold’ deal with Japan's SoftBank

Saudi energy minister, Khaled al-Falih (Reuters)

The Saudi energy minister said on Tuesday that a multi-billion-dollar technology investment fund the kingdom is developing in partnership with Japan's SoftBank showed its determination to diversify its economy.

Khaled al-Falih told an international forum that the proposed new fund “is simply one indication of this determination and the bold steps being taken” to reorient the economy of the world's biggest oil exporter.

Since 2014, global oil prices have collapsed by about half, accelerating Saudi efforts to move away from petroleum, which still accounts for the bulk of government income.

Falih told the KAPSARC Energy Dialogue that in the past the kingdom had not implemented diversification policies “as efficiently as we should have”.

Vision 2030 - a wide-ranging plan released in April - was a “proactive response” to build a diversified economy led by the private sector and with international investments providing alternative revenue sources, he said.

AFP

Pfizer profit just misses; company scraps cholesterol drug

US-based Pfizer rejected the CMA’s findings and said it would appeal against the decision (Getty)

Pfizer, the largest US drugmaker, reported a quarterly adjusted profit that just missed analysts' estimates, and the company shaved 4 cents off its 2016 earnings forecast after scrapping development of a cholesterol-lowering treatment.

The drugmaker earned 61 cents per share in the third quarter, excluding special items, missing the average analyst estimate by 1 cent, according to Thomson Reuters I/B/E/S.

Pfizer's new breast cancer treatment, Ibrance, generated sales of $550m (£450m), missing the consensus forecast of $576m (£471m) compiled by Evercore ISI.

Pfizer also said on Tuesday it was abandoning the development of its cholestrol-lowering drug, bococizumab, citing an “evolving treatment landscape”.

Reuters

Standard Chartered profits not yet acceptable, says boss as earnings disappoint

(GETTY IMAGES) (Getty)

Standard Chartered boss Bill Winters has admitted the bank's profits are “not yet acceptable” as it posted worse-than-expected earnings.

The Asian-focused bank, which is listed in London, saw shares slump by more than 7 per cent at one stage after it reported third quarter underlying profits of $458m (£374m).

This marked an improvement from losses of $139m (£113.5m) a year earlier, but left investors disappointed as it fell short of City forecasts.

Standard also revealed fresh compliance woes after confirming that Hong Kong’s financial regulator planned to take action against the bank over its role as a joint sponsor of an initial public offering in 2009.