There are many funds across the world that are known for driving changes in companies in which they have significant investment and so is the case most of the time, when Third Point LLC corners a large enough stake in any company. In a new development, that is the talk of the financial world at the moment, Third Point LLC is apparently going to raise their stake in Japanese electronics giant Sony Corp, and after the news was broken in a story, the shares of the company soared to new heights. Following the publication of the report in question, the shares in Sony went up by as much as 7%. While the surge in the share price is definitely a piece of good news for investors and shareholders, it is also necessary to note that if Dan Loeb owned Third Point is able to get their hands on more shares, then there is almost certainly going to be conflict in the company.

According to sources which are close to the developments, Third Point has decided to allocate a whopping $500 million for the purpose of buying the new batch of Sony shares, and it could go as high as $1 billion. The money is not a problem for the fund, as it already manages $14.5 billion in total assets as of today. Sony Corp remains one of the most valuable companies in Japan with a valuation of $55 billion and considering its dominance in both electronics and the entertainment industries, it could prove to be a hugely lucrative move from Third Point. However, it is also necessary to point it out that if Third Point does manage to pick up the shares that it has targeted, then the company is almost certainly going to demand management changes inside Sony. Hyundai faced a similar issue from Elliott Management recently, but their shareholders voted down the demands.

Sony’s studio business is something that could be a subject of takeover attempts in the years to come, but it is believed that the company has no plans to sell. However, getting in early might allow Third Point to be in a better position to get a good price on the stock and then have an active role in the decision-making process when the offers do come in. However, an analyst at Ace Securities dismissed the notion of sale with regards to the entertainment business. He said, “I don’t think a sale of the pictures business is an option for Sony now because entertainment content is becoming crucial for the company.”

Increasing expenditure by the current government on infrastructure in an attempt to hold off rivals in the upcoming elections in 2019 may lead to an increase in diesel consumption within the country.

India is the third largest oil user globally. The increasing diesel consumption by the country solidifies India’s role as a driver of oil demand globally.

Growing concerns about a slip in crude oil demand in 2019 due to the slowdown in economic growth have been put to rest with India’s growing fuel prices. In fact, analysts believe that India’s surging diesel consumption can help stabilize fuel and oil prices.

India’s diesel demand has been forecasted to rise by 5.7 percent by analysts at the Fitch Solutions and by 6.4 percent by the consultants at Wood Mackenzie in 2019. According to the data released by the Ministry of Petroleum, India consumed 6.9 million tons of diesel each month in 2018. This comes to around 1.7 million barrels per day.

According to Sanjiv Singh, the Chairman of Indian Oil Corp, India is a diesel driven economy. He also said that there is a high demand for energy in different sectors, which will continue rising in 2019. With GDP more than seven percent and plenty of urbanization going on, it is no surprise that diesel demand continues to grow.

Peter Lee, a senior analyst at Fitch Solutions, forecast a major growth in vehicle sales due to India’s positive demographics, loose monetary policy, and low vehicle penetration. The increase in vehicle sales will ultimately lead to an increase in fuel demands.

As per the data collected by the International organization of Motor Vehicle Manufacturers in 2015, India held twenty-two cars per thousand people versus 821 cars per thousand people in the U.S.

The upcoming elections in April and May will add to the growing diesel demand with election rallies and deployment of polling officers right around the corner.

The government has allocated 190 billion rupees in improving infrastructure like roads, which will lead to a surge in diesel consumption.

According to Aman Verma, a senior research analyst at Wood Mackenzie, the increased activity as a result of upcoming elections will fuel diesel demands during the first half of this year.

Monthly diesel sales in 2014, during the last general elections, averaged around 6.2 million tons. This was around seven percent more than the monthly average sales in the other months during the same year.

Gold prices on Thursday dropped to a two-week low, as the dollar recovered losses after cautious comments from the US Trade Representative Robert Lighthizer which dented investors’ hope for ending the tariff war with China.

As of 0340 GMT, sport gold and the US gold future slipped by 0.1% to $131850 and $1320.10 per ounce respectively. The metal considered to be safe heaven, has dipped to its lowest point since February 15 at $1316.43 in the previous session slipping for the first time in five months.

MCX Gold was trading at 0.11% down at Rs 33248 per 10gm at around 10:30 AM IST. On the other hand, MCX Silver jumped by 0.12% at Rs 39809 per 1kg around the same time.

In an address to a Congressional hearing, Lighthizer told that it was too early to predict the outcome of ongoing trade talks with China, and the United States would need to maintain the threat of tariffs on Chinese goods for years to come even if the two parties strike a deal.

An economist at the National Australian Bank, Jon Sharma said that there is some amount of uncertainty about the trade deal which has led some of the demand for gold to go to the US dollar. He said that this shift of demand has taken a bit of bid from gold. Sharma further added that gold is expected to come up with some corrections and that prices will move around the $1310-$1330 bracket depending on the dollar. He claimed that main support for gold comes from Federal Reserve’s dovish stance and that a lot if central banks are keen on accumulating gold.

Federal reserve chairman Jerome Powell said on Wednesday that the US Central Bank would stop shrinking its $4 trillion balance sheet later this year, ending a process that investors say works at cross-purposes with the Fed current pause on interest rate hikes. During his testimony to the Senate Banking Committee on Tuesday, Powell reaffirmed that the Federal Reserve would maintain patience in hiking interest rates.

Back in India GDP of the third quarter will be focused on, as a disappointing growth figure will keep the rupee under tension. This could restrict any major fall in gold prices on the domestic exchanges. Motilal Oswal Financial services stated that Gold on MCX is expected to quote in the range of Rs 33030 and Rs 33450 for the day.

Edward Moya, a senior market analyst at OANDA, said in a note that the precious metal’s recent consolidation is supported by hesitation the financial markets have in pricing in what will be the Fed’s next move. He noted that Gold may struggle climbing higher until the market sees further deterioration in US data, which would seal the market expectation for the next move to be a rate cut.

Spot silver slipped by 1% to $15.72 per ounce, on the other hand, platinum dipped by 0.4% at $861.80. Moreover, spot palladium dipped further down from its all-time peak of $1565.09 per ounce that it hit earlier this week and was down by 0.1% on Thursday at $1527.50.

In the on-going World Economic Forum, there are many insights available for the Global Economy. And as far as the market liquidity is concerned, negating the market assumptions the chief executive of Swiss bank UBS said market activity could freeze up quicker than expected.

Last month, the Dow and S&P 500 equity indices were their worst December performance since 1931, the era of the Great Depression. It was also the most significant loss on a monthly basis since February 2009.

With growing concerns about an economic slowdown and fears the Federal Reserve might be tightening conditions to a point where liquidity in markets could dry up stocks have started to degrade. Liquidity for the investors is the ability to sell an asset quickly and at a price close to where it last traded.

Speaking on Thursday, on a CNBC-moderated panel at the World Economic Forum in Davos, UBS chief executive officer, Sergio Ermotti, said a convergence of macro and political fears as well as a growing understanding that the financial system may not let investors move capital as quickly as before had led the December stock sell-off.

“The implied assumption that we hear about liquidity being there, being able to step in and function the leveling out tensions, is the wrong assumption, ” he said before adding “liquidity can freeze very easily, like the water in Davos. ”

He also said among its US investor base at the end of the fourth quarter in 2018, and the cash asset allocation was at an all-time high of 24 percent as much investors pulled back from the market.

“This is not liquidity that is there for reinvestment. This is there because people fear that things will go wrong,” he warned.

Ermotti said most of the world’s more prominent investors are now managing money for others and, unlike banks, they might not want to or able to trade an asset just to ensure markets run smoothly.

The CNBC moderated panel also included Mary Callahan Erdoes, J.P. Morgan’s asset & wealth management chief executive. Mary who also happens to sit on the Federal Reserve Bank of New York’s Investor Advisory Committee said a lack of liquidity is “what we all worry about.”

Callahan Erdoes told at the WEF that an additional $11 trillion worth of assets had been pumped into the financial system since 2008 which led to the strange pricing levels in the market. For instance, the U.S. banker noted the situation in 2017 when 85 percent of the Italian high yield market was traded below the yield of U.S. Treasuries.

In a normal condition, the yield on U.S. Treasuries should be lower than Italian high yield as it is taken as a safer investment than the other.

But, as per the J.P. Morgan executive, the market anomalies noted will be solved as the capital will be redeployed, but he did not fail to warn that people could find danger amid a lack of market makers and a shortage in liquidity.

The rule followed by the Fed Reserve, the Volcker rule is post-crisis regulation to curb banks making big bets with their own money. It has been criticized heavily by banks as it aims to reduce market liquidity. But as per experts, it is a necessary piece of regulation to ensure that financial institutions cannot repeat the financial meltdown of 2008.

Callahan Erdoes said as the role of the banks and investment dealers as investor and market makers is diminishing, that place might be taken by the shadow banking system like private equity and hedge funds, to lubricate the wheels of the global market.

She said, “They have a lot of capital that could be deployed, but they are not going to go in to make markets in the way banks used to. They are going in as a fiduciary, to make money for their investors, and those are the dynamics that everyone is struggling with. ”

On Tuesday, the shares of the Asian countries collapsed, and the prices of oil further slipped down. This has led for discouragement about world growth, and a group of investors is staying away from the risky assets whereas sterling ticked lower during the recent twists and turns that appeared in the Brexit.

After the announcement of Beijing, the world’s second-largest economic growth in 2018 has declined to its weakest level lowest in the decade since the report on Monday China started with an unstable week. Adding to this, the International Monetary Fund has lowered the global growth predictions while a survey that was conducted showed increased grief within business organization executives due to the overshadowing of the trade tensions.

The joyless news emphasized that policymakers from around the world are facing challenges and need to deal with the crisis especially with a current crisis or potential crisis from among the US-China trade war and with Brexit.

The ANZ analysts in morning news reported that it is the second decline of IMF in a row.

According to spreadbetters, there is another weak for Europe to start. During US stock futures the FTSE futures[FF1c1] was down by 0.2 percent that showed a sign regarding Wall Street and how the Wall Street will open, the [Esc1][1YMc1] were off to around 0.7 percent.

In Asia, most of the losses were headed by the Chinese shares and the blue-chip index showing at <.CSI300> which was off by 1.2 percent. The Hong Kong’s Hang Seng Index [.HSI] also noticed a downfall of more than 1 percent and Australia’s main Share Index [.AXJO] trembled at 0.5 percent

On Tuesday the broadest Index of Asia Pacific MSCI’s located outside Japan <.MIAPJ0000PUS> was dropped by 0.9 percent. It was almost top for seven weeks in its recent times.

Japan Nikkei [.N225] which had noticed a strong opening also dropped by 0.7 percent.

Due to the holiday, the US markets remained closed on Monday, so the trading was normally weak through the night. Although, due to inappropriate Chinese data the equity price in Europe and Latin America slipped down.

Nick Twidale is a Sydney based analyst working at Rakuten Securities Australia stated that because of the financial markets the stress related to slow global growth have started to trickle.

The worries made money to be sent for copper by using used electrical wire, vehicle and drifting lower.

To overcome the threat new strategy was used, the Australian dollar [USD=D3] most preferably used a liquid proxy for China investments which put the investment on track for almost three straight sessions of losses and eased it by 0.3 percent to around $0.7134.

No Brexit Deal?

The analyst Twidale of Sydney mentioned that once the London market opens then the focus will be totally on the UK while the Brexit news remains in the minds for investors.

Brexit still remains crucial for the UK markets, and the progress seems to be limited. The due date is approaching very fast, and everything looks like a real concern as there is no progress at all between the various aspects involved, the possibility is of the hard kind that seems like no deal will appear in Brexit and this is more like to happen in real time.

Teresa May the British Prime Minister declined to prevent the no- deal Brexit which further made the sterling to be weak at $1.2872. There are few indications that the Prime Minister can crack the deadline along with the parliament members only after the rejection of the Brexit deal last week.

May further offered to make some improvements in her rejected deal by allowing concessions from the European Union; this was a backup plan to escape the hard border of Ireland.

Liam Peach, the Capital Economic analyst, said that any upside for sterling could be limited in the coming days. Confusion will continue to remain throughout the long negotiations process, and there seems to be no assurance that the process will last for a short period.

The investors are in distress about creating positions in the pound because of Britain going away from EU without making any deal the analyst announced the state.

There was a demand for the safe haven that made greenback to stay under pressure beside the Japanese Currency was last bought at 109.41 per dollar. The euro was close to its last trading range and currently is trading at $1.1358[EUR=] range against different currencies, the dollar was stable and remained unchanged at 96.393[.DXY].

The global growth was a huge concern that pulled down the oil prices further lowering them in commodities. In stock Brent [LCOc1] was nearly down by 55 percent at $62.19 and the US crude futures [CLc1] falls off by 39 percent at 53.41 [O/R].

The world is experiencing a slowdown in growth. Owing to the slump in demand, Saudi Arabia Energy Minister Khalid Al Falih has recently said that OPEC and all its allies are ready to respond to the global economic slowdown quickly.

Al Falih told that though he did not see any big recession in the near future, they had everything needed in their hands to correct the situation.

Al Falih said if the world sees a slowdown, the oil market will also see a small slowdown that can be absorbed with adjustment in supply.

Oil prices became much higher when the OPEC members along with Russia in December decided to slash the production of oil. President Trump heavily criticized this step. The deal called for a cut of 1.2 million barrels a day from the world market.

Though the step revived the prices, few major economies like China and Germany objected to the step owing to their slow growth of the economy.

Al Falih said that the group along with its allies is ready to even cut more in supply if needed. He added that they were monitoring the market on a daily basis and if they would feel the need to reduce more than 1.2 million barrel a day, they would not hesitate to do that.

It should be reported here that, US crude oil futures have inflated in recent weeks to trade above $51 per barrel. Brent crude, the global benchmark, is roaming around $60. Saudi Arabia would welcome further price hikes by lowering supply.

According to the International Monetary Fund, the country is depending on oil revenue to fund an economic overhaul and support growth. The economy has contracted in 2017, but it is expected to grow by 2.2 percent in 2018 and by 2.4 percent in 2019.

Higher prices of oil will encourage the IPO (Initial Public Offering) of Saudi Arabia’s biggest state-owned oil company, Aramco. It is a part of the country’s plan to diversify the economy from oil to many things.

The IPO along with other reforms were initially planned to happen by 2018 but later stalled for multiple reasons. But, as per the recent news, the country is planning to bring the reforms on by the end of 2021.

The minister said that they were waiting for the right time so that every stakeholder starting from the Government to other shareholders would be benefited from this.

Saudi Arabia has for the first time recently allowed independent auditors to its vast energy reserves. It is a part of the plan by the country to diversify its economy out of oil.

US energy consultancy DeGolyer & MacNaughton concluded that the country has a reserve of 268.5 billion barrels just above the Government given data of 266.3 billion barrel reserve. The vagueness in the total reserve size and its value has led to the stalling of IPO of Aramco, due to skepticisms by the investors.

After multiple decades of dependence on oil, Saudi Arabia is finally all set to diversify its economy. As decided earlier, after a delay of almost a year, Saudi Arabia is now all set to sell assets worth of $11 billion.

The Arabian Government aims for this money by 2020 through its privatization program that includes the sale of stakes in utilities, soccer clubs, flour mills, and medical facilities. The selling of stock will be done to detach the Arabian Economy from the high influence of oil only. But, the plans of stock sale have been delayed for multiple reasons, especially the introduction of IPO of oil giant Aramco.

According to the National Center for Privatization and PPP that deal with privatization said with the current status of initiatives and the progress made by the Privatisation Supervisory committees, the target seems attainable. And except a few big things, all the projects are on schedule.

As per NCP’s statement, Saudi Arabia will complete the sale of four flour milling companies and Saudia Medical Services facilities by the end of this year.

Jean-Paul Pigat, head of research at Dubai-based Lighthouse Research said privatization is one of the major parts in the large reform process Saudi Arabia has planned. But, it has been missing its target dates, and in comparison with the last year, the macroeconomic conditions may not be conducive for acceleration in privatization this year also.

Here are the details of the Companies, Saudi is aiming to privatize-

Saudi Aramco-

Crown Prince Mohammed bin Salman declared the sale of shares in 2016. And announcing the IPO, he said he meant only business by the sale of the shares. And, experts believed it to be the largest IPO in the world. Later, the target year was pushed from 2018 to late 2020 and finally to 2021 so that it can buy a $70 billion stake in the kingdom’s biggest petrochemical company Sabic.

Stock Exchange-

Tadawul, the Middle East’s largest stock exchange, released plans for a public offering in 2014. It also had appointed HSBC Holding Plc. as the financial advisor. It was also scheduled to be done by 2018 but later dragged to the end of 2019. It is expected that inclusion of Saudi stocks in indexes compiled by FTSE Russell and MSCI Inc. may boost the company’s value, ultimately giving larger amount after the sale.

Riyadh Airport-

The stake of King Khalid International Airport was also scheduled to be sold in September. But, it was put on hold. The Saudi Civil Aviation Holding Co. is said to have asked local and international investment banks to act as financial advisor to the deal.

Flour Mills-

There was a plan to sell four flour mills by the Saudi Grains Organisation in 2016. It was also delayed by three years. Potential buyers have filled their application for bidding. HSBC Saudi Arabia is the advisor for this deal.

Ras Al Khair Power Plant-

Ras Al Khair power plant on the east coast was scheduled to be sold at $7.2 billion by 2020. BNP Paribas was hired to advise on this sale. The sale of this plan is a part of the larger plan of privatizing Saline Water Conversion Co. by selling a part of its assets and developing plants.

Soccer Clubs-

The plans to privatize the Soccer Clubs were first formulated in 2016. And the sale was scheduled to be ended by 2020. Turki Al Alshikh, former head of the Saudi Sports Authority, predicted to raise money in the range of $800 million to $1.5 billion from this sale. The NCP said that the last year was spent on deciding the legal and commercial framework to cover the use of advertising, sponsorship deals and broadcast rights to be used after the sale.

The NCP also added that along with these big deals, there are also some deals in the pipeline which will be open to the public for holding stakes. They include municipal assets related to commercial-land for development, renewable energy PPP projects in solar and wind, parking centers; a second cargo license station at King Khalid International Airport, the establishment of an agriculture company and independent schools in PPP mode, as well as school buildings on a build-maintain-transfer basis.

In the health sector as well, the NCP will open tenders in PPP mode in radiology, laboratories, hospital commissioning and housing for health facilities staff. It is aiming to get around $7.5 billion from the sale in health care.

The NCP replied when asked about the delay, that they were finalizing on the legal and commercial framework for the sale to happen. They want the best-in-class operators across the globe to participate in the PPP sale. And for investments, they plan to attract long term and reliable investors to Saudi Arabia.

It is indeed an important step by the Saudi Arabia Government to diversify their economy. Oil has been the vital component of their market, and with the reforms, they have in the pipeline, it is expected to have fewer shocks globally in the Oil market if they become successful in diversifying.