Important news from Breana

Depending on how you look at it, August may not have been as bad a month for stocks as advertised. For the month as a whole, the MSCI all-country world stock index  lost more than 7.5 percent.  This was the worst performance since May last year, and the worst August since 1998. But if you had bought in at the low on August 9, you would have gained  healthy 8.5 percent or so. In a similar vein, much is made of the fact that the S&P 500 index  ended 2009 below the level it started 2000, in other words, took a loss in the decade. That completely ignores, however, a more than doubling of the index between 2002 and 2007. There is a danger sometimes in allowing the calendar to dictate your interpretation of financial market behaviour.

McDonald’s Corp will roll out a high-definition television channel to nearly 800 restaurants in southern and central California by March. The world’s biggest hamburger chain is doing this as part of a test, and one day hopes to take it across the United States.Businesses from gas stations and grocery stores to coffee maker Starbucks Corp are beaming more entertainment directly to customers, trying to address a captive audience in a world crawling with entertainment options.McDonald’s Channel content partners include Walt Disney Co’s ABC, BBC America and reality television producer Mark Burnett, who is known for such hits as “Survivor” and “The Apprentice.”Test markets have include Los Angeles, San Diego, Las Vegas, Manhattan, Seattle and some communities in Oklahoma.As it evolves, the McDonald’s Channel will add more local programming such as high school sports news.”We think that’s a major part of the community that the channel can really bring to life,” said Leland Edmondson, founder of ChannelPort Communications, which is overseeing the project. “We’re talking to a number of sports properties.”The programming will include exclusive content and be made up of short spots ranging in length from 90 seconds to 20 minutes. Diners who want to see longer versions of some spots will have the option access them via mobile devices or home computers.”There’s no remote on the table, but there is Wi-Fi in the restaurant,” Edmondson said.Programs include “The McDonald’s Achievers,” profiles of local high school and college athletes; “Mighty Moms,” about local mothers balancing families and careers in sports; and “Vimby” (Video In My Backyard), which has partnered with Burnett to cover local lifestyle news including fashion, art, music, action sports and nightlife.The channel will show less than eight minutes of advertising per hour. McDonald’s will take a fraction of that time, which will be shared with other brands, he said.Eventually, every McDonald’s in southern California will carry the channel, which will be seen by about 18 million McDonald’s customers in the area each month, Edmondson said.

By Dmitry Zhdannikov and Emma FargeLONDON, Oct 12 (Reuters) - Energy bankers are telling small oil companies they will soon face a spike in funding costs and should therefore hedge through selling oil not yet produced to protect future cash-flows and survive.”We are saying to people: You need to be creative and look at other sources. The IPO market is not a place where, if you are a small company, you can find funding,” Morgan Stanley’s co-head of the oil and gas group, Michael O’Dwyer, told an annual Oil and Money conference.Banks have been facing a drought of merger and acquisition activity this year due to severe asset price volatility and are looking for new ways of doing business — including through providing hedging services — while they also face a higher regulatory burden.Banking sources say big clients are not asking for banks’ hedging services but that small companies with production costs close to the current oil prices are increasingly seeking to mitigate risks through hedges.O’Dwyer said he has told small companies, “Ultimately you have to consider selling yourself as a company. If you don’t have the balance sheet to finance your project, someone else will.”He said other options included a farmout, in which an oil company sells a small stake in its assets, or hedging through selling Brent oil futures.”Oil prices are discounted in share prices far below the forward (Brent) curve. If the market is not giving you credit for $100-$110 oil, why not monetise it?”Standard Charter’s managing director for Global Energy, John Martin, said he was also witnessing a slowdown in merger and acquisition deals.”One of the hindering factors is commodity prices. At these price levels, companies aren’t rushing to sell assets.”Robert Maguire, a partner at Perella Weinberg Partners, said owners of small firms find it difficult to sell because they still remember their assets being valued higher earlier this year, when oil prices peaked.BASEL III AND FUNDING COSTSO’Dwyer, Martin and Maguire all warned that the oil industry will soon face a spike in funding costs.”One should remember that equity markets are closed for banks … Oil companies don’t understand how those regulations are changing the (banking) industry,” said Martin.All three bankers said pressure on banks to recapitalise, partly to meet tougher Basel III capital adequacy rules, will rebound on the oil industry by constricting banks’ lending ability.”Smaller companies will face a greater impact of increased cost of debt,” said Martin.He said the trend was especially worrying at a time that the oil industry’s combined upstream capital expenditure programmes are set to exceed $500 billion for the first time ever this year.The amount is likely to rise further in the years to come as major investments planned in countries such as Australia and Brazil stretch infrastructure and industry resources and continue to drive up costs across the world.Maurizio La Noce, chief of Mubadala Oil and Gas, which manages $46 billion in assets on behalf of the government of Abu Dhabi, said cash-rich companies might decide to delay acquisitions by at least another three to six months to get a clear view of where financial markets are heading.Hopes that investors from the resource-rich Middle East will snap up assets are also unfounded, because they have to deal with problems inside their own countries amid mounting unrest.”(In the Middle East) there is a lot of pressure to build, rebuild, improve the infrastructure, to expand job creation in the countries and the local economies, rather than going outside,” La Noce said.

Coal accounts for 60 percent of India’s energy use, runs most power stations and factories and enabled state-run company Coal India to have a blockbuster IPO last year raising a record $3.5 billion. But despite having the world’s fourth largest coal reserves, India remains a major importer and the coal industry is pointing fingers at the environment ministry for part of the failure to properly develop coal fields. “The main reason for slow progress (in developing coal fields) is the time taken for getting clearance (from the environment ministry),” Coal Secretary Alok Perti said during a coal conference on Tuesday. Prior to 2009, getting forest clearance took 3-5 years instead of the stipulated 240 days, Perti said, highlighting the conflict between environment concerns and the need to build industrial capacity to power Asia’s third-largest economy. The environment ministry shot to the spotlight under the stewardship of Jairam Ramesh, who set new standards in compliance and halted more than 60 big ticket projects and held up more than 450 of them. Apart from stricter enforcement of existing environment laws, he brought in new ones like the so-called ‘go, no-go’ policy under which a mining application could be rejected without being considered because of the forest density of the area. But with Ramesh moving to another portfolio and demand for coal and other minerals increasing, the trade-off between growth and environment looks to be moving in favour of the industry. Officials predict new environment minister Jayanthi Natarajan will show more “flexibility” in giving clearance because of the country’s “imperative to grow”. And the coal secretary said there was now a “thinking” that it would be better to do away with the ‘go, no-go’ policy. With alternative energies like nuclear, wind and thermal still underdeveloped, the importance of coal for India cannot be overstated in a country where electricity blackouts are still common and with a peak-hour power deficit of nearly 14 percent. And although green initiatives like a solar plan seeks to boost green power generation from near zero to 20 gigawatts (GW) by 2022, the majority of power will continue to come from coal, which is much cheaper compared to other forms of energy. Coal Minister Sriprakash Jaiswal also warned that unless the country “facilitates” new coal production through “proactive measures”, the gap in demand and supply from domestic sources would exceed 200 million tonnes by 2017 from around 142 million tonnes presently — a sure signal for increased production push.