Fico has been in hospital since Wednesday when a lone gunman shot him four times, including in the abdomen
world4 hours ago
Cheap oil has become too much of a good thing for global equities judging by the way the two markets have tanked since the start of the year, with investors becoming more alarmed by the deflationary effects of crude below $30 a barrel.
Crude has been on a downward spiral for the last 1-1/2 years, losing 75 per cent of its value, but the latest spin towards the plughole late last year has sucked stocks down with it.
"$28 oil is fantastic for importers," said Josh Crabb, head of Asian equities at Old Mutual Global Investors in Hong Kong. "But in the short term it really comes down to sentiment, which means that oil down is bad because it means inflation is bad. It just creates a whole lot of issues for the economy."
U Royal Dutch Shell said it had decided to exit the $10 billion Bab Sour gas development field in Abu Dhabi as oil prices plunge continue. |
When good becomes bad
The benefits of cheap oil are obvious - lower costs for businesses and savings for consumers.
The ill-effects of ultra-cheap oil when economies are passing through weak, uncertain times, are less obvious.
But analysts say businesses aren't using savings to invest and consumers are opting to use their savings to reduce their debts rather than spend more.
"So far there seems to be little evidence that lower fuel prices are transferring through to higher corporate or household spending," said Robert Davis, senior portfolio manager at NN Investment Partners in Brussels.
"Instead, it looks like households are warily using fuel savings to pay down debt. This then means that lower fuel prices, instead of helping a spending boom, are simply deflationary."
Moreover, the prolonged slump has led to a spate of write-downs by oil companies and raised fears of contagion from potential defaults by energy-related companies.
Falling in line
Look at some of the trends between crude price and leading Asian share markets.
As oil prices jumped 137 per cent in 2007 and 2008, stocks in regional commodity importers South Korea, Japan and Hong Kong, tumbled between 32 percent and 58 per cent.
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