Each week QFINANCE will endeavor to bring you some of the biggest news stories from the past five days in finance and business, as well as some of the most fascinating websites and links that have crossed our path. We hope you'll enjoy reading, we hope you'll have a great weekend and we hope that you'll come back each Friday to brush up on your finance and business knowledge.
Monday July 11
Last week it was announced that the News of the World was to be shut down in light of recent phone hacking allegations against News International and its parent company, News Corp. At the start of this week, it was announced that Jeremy Hunt, the UK government’s Culture Secretary, will refer News Corp’s bid for British Sky Broadcasting to the Competition Commission. This investigation, which would look into the take-over and assess it in relation to anti-monopoly laws, would have delayed the bid for several months. However, in light of this decision, and with further revelations coming out in the phone-hacking scandal, Rupert Murdoch’s News Corp announced that it would be putting its bid for BSkyB on ice for a year. The debate has been raised as to whether News Corp would be a “fit and proper” owner of BSkyB, criteria required by the media regulator Ofcom.
Read about Jeremy Hunt's referral to the Competition Commission in more depth here.
Read about News Corp's decision to put their BSkyB bid on hold in more depth here.
On Wednesday Rupert Murdoch’s News Corporation announced that it would be dropping the bid to take full ownership of BSkyB. Chase Carey, News Corp’s deputy chairman made the announcement, stating that it had become “too difficult to progress in this climate”.
Read about the dropping of News Corp's bid in more depth here.
On Friday, Rebekah Brooks, chief executive of News International, announced her official resignation.
Read the story here.
Tuesday July 12
The early part of the week saw stock markets fall dramatically as investors began to fear that eurozone debts could spread to other countries besides Greece. Despite claims by eurozone finance minsters that they were willing to pass measures to prevent the spreading of the crisis, various European countries felt the sting of uncertainty. Italy’s main index was down 4% and Spain’s was 2% lower, the German’s Dax lost 2.3% and the UK’s FTSE 100 1.6%. The opening to the day’s trading saw the euro fall to $1.3958, a four-month low against the dollar. The fear is that Italy and Spain will suffer the same fate as Greece, Portugal and the Republic of Ireland, finding themselves in tough financial spots and requesting a bail-out from the EU and the IMF. Italy’s finance minister, Giulio Tremonti, has said that he is working on an austerity budget that aims to reduce deficit to zero by 2014, but the markets were rattled when Silvio Berlusconi claimed in a newspaper interview that the plan may not have full cabinet support.
Read about eurozone contagion fears in more depth here.
Wednesday July 13
The International Energy Agency (IEA) has predicted that the global demand for oil will increase even more so next year. The rate of this growth is estimated to be an extra 270,000 barrels a day (from 1.2 million on a day in 2011 to an average of 1.47 million in 2012), put down largely to demand coming from emerging economies. China and other fast-developing economies have been named as the main reason for the prices of crude rising over the past year, despite oil prices falling very recently over fears that the eurozone debt crisis will reduce crude consumption.
Read about the IEA's projections for global oil demand in more depth here.
Thursday July 14
Amidst fears that the eurozone debt crisis could become a contagion, the Italian Senate passed an austerity budget that will see cuts of 48bn euros ($67bn or £42bn) over the next three years. As a country with one of the largest sovereign debt piles in the eurozone, Italy would want to avoid any need for a bail-out, something reinforced by the IMF’s request earlier this weeks that the country ensure “decisive implementation” of austerity measures. The vote passed by 161 votes to 135 after the Italian Finance Minister Giulio Tremonti stated in parliament that, if this budget were to not get through, “the monster debt from our past will swallow up our future”.
Read about the moment Italy passed a tough austerity budget in more depth here.
Friday July 15
Earlier this morning BHP Billiton announced that it has agreed to pay $12.1bn (£7.5bn) in cash to buy US shale gas firm Petrohawk Energy. The move comes as demand for shale gas increases along with other fuel costs, and only months after BHP agreed to buy Chesapeake Energy’s Arkansas-based gas business for £4.75bn. A spokesman for the company said that, whilst it will now receive greater exposure to the world’s energy market, the decisions will also help broaden the company’s geographic and customer spread. The US natural-gas market is valued at almost $99tn.
Read about BHP's acquisition of Petrohawk Energy in more depth here.
Come back next Friday for another report on the world of business and finance.
More useful links we’ve come across this week:
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