Wednesday 23 October 2013

US Department of Justice probes Nine banks

At least nine banks face probes by the U.S. Department of Justice into their sales of mortgage-backed securities as part of an effort by the task force that reached the $13 billion (8 billion pounds) agreement with JPMorgan Chase & Co , the Financial Times reported.
Citing people familiar with the matter, the newspaper said the banks include Bank of America Corp Citigroup Inc , Credit Suisse Group , Deutsche Bank , Goldman Sachs Group Inc , Morgan Stanley Royal Bank of Scotland , UBS, and Wells Fargo & Co .

Document requests and discussions between the banks and government have picked up recently after Eric Holder, the U.S. attorney-general, indicated publicly that more mortgage-backed security lawsuits were coming by the end of the year, the FT said.
Source: Reuters

Branson recalls tears, $1 billion check in Virgin Records sale

Virgin Group founder Richard Branson recalled that selling his Virgin Records music label more than two decades ago was "like selling your children" even though he pocketed a billion dollars in the deal.

Branson, 63, founded Virgin Records in 1972 with three other people, growing the label from a small successful record shop into a powerhouse of the music industry, helping usher in the progressive rock movement of the 1970s and new wave in the 1980s. The company was purchased by Thorn EMI for $1 billion (618 million pounds) in 1992, in part to fund Branson's Virgin airlines.
Source: Reuters

China HSBC flash PMI hits seven-month high in October

Strong new orders drove the fastest expansion in China's manufacturing sector in seven months in October, a preliminary survey showed on Thursday, more evidence that the economy is stabilising although a strong rebound remains elusive.
The flash PMI figure, the earliest reading of China's monthly economic performance, offers some positive news after disappointing export figures and September's manufacturing PMI, which had shown weak domestic demand.
The flash Markit/HSBC Purchasing Managers Index (PMI) stood at 50.9 in October, above September's final reading of 50.2 and marking a seven-month high. Ten of 11 sub-indices rose.
Source: Reuters

Japan's Abe plans to use extra tax revenue for stimulus spending

 Japanese Prime Minister Shinzo Abe said on Thursday he plans to use higher-than-expected tax revenue to fund economic stimulus spending rather than relying on issuing new debt.
Abe was speaking in the upper house budget committee.

The government will announce in early December details of a 5 trillion yen (31 billion pounds) economic stimulus package meant to offset the drag from an increase in the sales tax next April. 
Source: Reuters

WSJ: Chinese Acquisition Appetites Shift From Resources

  According to a report from the Wall Street Journal:" China has long been seen as a buyer of natural resources and not much else".
"The shift in appetite has been noticeable in recent weeks. Chinese personal-computer makerLenovoGroup Ltd.  is considering a bid for struggling Canadian Smartphone makerBlackBerry  Ltd. . Should Lenovo pull the deal off, it would be one of the highest-profile acquisitions by a Chinese player on the global stage. Lenovo bought IBM Corp.'s  PC business in 2005".
 Meanwhileconglomerate Fosun International Ltd.  announced plans last week to buy  One Chase Manhattan Plaza in New York City for $725 million. That comes on the heels of China's biggest-ever outbound deal  by a private company, when Chinese pork company Shuanghui International Holdings Ltd. agreed to buy Smithfield Foods Inc. for $4.7 billion in May.
The number of overseas deals done by private companies or non-state-owned publicly listed companies has been rising  since 2004, when 45 deals valued at $3.7 billion were done by such players, according to Dealogic. So far this year, 238 overseas deals valued at $24.3 billion have been done by China's private companies.
It used to be that the country's big state-owned enterprises did the bulk of China's overseas mergers, and the need to secure resources was the main objective of deal-making activity. But as China's economy matures, the resource angle is narrowing. Energy deals made up 30% of overall outbound deal activity in 2010, but by 2012 this fell to 24%, according to a report this week on Chinese outbound acquisitions by data provider Mergermarket and law firm Paul Hastings.
"Mining and oil and gas have been accounting for the bulk of outbound M&A in the past,we are seeing a lower number of deals in natural resources,but they are still strong in volume,said Ken Wang, RBC Capital Markets' head of natural resources in Hong Kong.
"We also see interest in deals in agriculture, the food industry, the automobile industry, entertainment, theaters, real estate, technology—other sectors that are all related to consumers," 

India needs a new Doctrine if it wants to contend with China's Regional Ascension

   According to an article published today in the Wall Street Journal: "When India and China shake hands, the world notices," Indian PrimeMinisterManmohanSingh said following his Oct. 22 summit meeting with Chinese PremierLi Keqiang. But what the world is noticing now is how far ahead of India China seems to be pulling in the race for primacy in Asia. The need for urgent action from New Delhi is clear".
"Despite talk of Sino-Indian cooperation to build a more "democratic" world order, China appears determined to be Asia's dominant power. Beijing's policy of blocking any U.N. Security Council reform that would elevate India (or Japan) to membership indicates it sees little room for power-sharing".
"As a result, India's national security establishment increasingly identifies China, rather than Pakistan, as the country's primary strategic competitor. Under Congress Party leadership, India has been hedging against China, including through an arms buildup and new military deployments along their contested border".
"Yet if New Delhi is serious about balancing China's rising influence, leaders need to get serious about doing so, and soon. Two major problems stand in their way.
First, India's government has hampered the country's ability to compete strategically by neglecting reforms that would allow it to grow economically. New Delhi's economic policies have driven away not only foreign but also domestic investors. The Congress Party-led government Mr. Singh runs has managed to halve the economic growth rate in only a few years mainly by stalling or backtracking on major investment-boosting policy measures".
"That makes for a stark contrast with China, whose economy is more than four times the size of India's. China's growth rate produces a "new India" every two years. The disparity has obvious implications for the relative levels of resources available to each country as they maintain or build their militaries, and also for the relative ability of each country to leverage its economic growth—in the form of trade and inbound and outbound investments—to bolster strategic ties abroad".
"Second, leaders in New Delhi need to adjust their thinking about India's role in the world, and particularly the common notion that India can and should go it alone, eschewing strong alliances with like-minded partners.
India has lately been hedging against the United States, which it sees as an unreliable partner in managing the Asian balance of power. This is despite a decade of efforts to construct an Indo-U.S. strategic partnership to meet the Chinese challenge.                                                                   The drift in Indo-U.S. relations makes China's ascendancy in Asia look more assured than it did just a few years ago".
"There are signs that some in New Delhi are waking up to some of these problems. On Oct. 16, National Security Advisor Shivshankar Menon said in a speech "In today's world there is no going back to absolute self-reliance, to autarchy or disengaging from the world." 
That's a start, at least, on the economic problem. But India awaits a meaningful rethink of its go-it-alone mentality. Strategic autonomy may have served India when it was weak and poor and didn't have a dog in the global fight of the day anyway. It is time for a new doctrine. Establishing one would advance the interests of a rising, aspirational India". 

China: To begin to protect trademark law as in developed countries

   The Wall Street Journal reports today:"Some observers have speculated for years that Beijing would start taking intellectual property rights seriously once the economy had developed to a point where Chinese companies themselves had valuable intellectual property to protect. That appears to be the case. Witness a set of amendments to the trademark law, approved in August and set to take effect in May, which come as Beijing is eager for domestic firms to move further up the value chain":
"The amendments bring Chinese trademark law more closely in line with the existing trademark regimes in developed economies. Officials have drawn a clear line connecting this legislation and the authorities' broader goals for the economy. The Minister of the State Administration for Industry and Commerce, Zhang Mao, said in September that the new law "is an important measure to accelerate the transformation in the mode of economic development, and to implement a new development strategy that is driven by innovation." But domestic companies may not be the only beneficiaries of these belated improvements.
One important change is that for the first time in its 31 year history, the trademark law now sets a fixed timeframe for processing registration and examination procedures. Electronic filing will also be officially recognized. A straightforward trademark application with no objections or oppositions raised is expected to proceed to registration as soon as 12 months from the date of filing. This ambitious target, if accomplished, would make the Chinese system comparable with or even faster than its counterparts in the U.S., the EU and Japan".

Japan lawmakers to submit bill to lift casino ban

A group of lawmakers from ruling and opposition parties at a meeting on Wednesday decided to submit a bill to lift Japan's ban on casinos to the ongoing extraordinary session of the Diet, or parliament.
The group hopes that the bill will be enacted during next year's ordinary Diet session, seen to be convened in January.The group is made up members from the ruling Liberal Democratic Party, its coalition partner New Komeito, the major opposition Democratic Party of Japan and other opposition parties such as Nippon Ishin no Kai (Japan Restoration Party), Your Party and the People's Life Party.

Source: NewsOnJapan

Japan's sexual apathy is endangering the global economy

People in Japan are so averse to romantic relationships that the country's media even has a name for it: sekkusu shinai shokogun, or "celibacy syndrome," according to a widely circulated Guardian story on the country's low rates of marriage, childbearing and even sex.

But this is more than a story about Japan and its cultural quirks: It's a story about the global economy. Japan is the world's third-largest economy, a crucial link in global trade and a significant factor everyone else's economic well-being. It owns almost as much U.S. debt as does China. It's a top trading partner of the U.S., China and lots of other countries. The Japanese economy is in serious enough trouble that it could set the rest of us back. And the biggest source of that trouble is demographic: Japanese people aren't having enough kids to sustain a healthy economy. One big reason they're having fewer kids is that they're not as interested in dating or marrying one another, in part because they're less interested in sex.
Source: Washington Post
             NewsOnJapan

Beijing will test Daan Roosegaarde "Electronic Vacuum Cleaner" for pollution

Dutch artist Daan Roosegaarde plans to build and test a pollution-collecting system in smog-addled Beijing.
Billed as an "electronic vacuum cleaner" for Beijing's polluted skies, the so-called Smog system throws an unexpected solution at a complicated problem. Much in the same way that a static-charged balloon attracts hair, this pollution-devouring set-up uses copper coils buried under grass to create electrostatic field and attract smog particles  to the ground. Once pulled from the sky, the particles can be compressed and repurposed.
Roosegaarde's Shanghai-based design firm, Studio Roosegaarde, recently forged an agreement with Beijing's mayor to test the concept in one of the city's parks. The set up should be capable of clearing a 22,500 square foot area of clear sky in the otherwise smoggy park, showing local citizens what life could be like without the pollution. "Here, the absence of the smog is the design and I like that," Roosegaarde says.
   
   Source: Gizmodo

The UK is about to connect an entire Highway to the Internet

Imagine a future where your car is connected to the internet and not only sending a steady stream of data but also receiving signals to speed up or slow down based on traffic. This futuristic future is already here. The UK has just revealed a new transportation system that connects an entire highway to the internet . "A 50-mile stretch of the busy A14 that runs between Felixstowe and Birmingham will soon be outfitted with sensors that will monitor traffic by sending signals to mobile devices in moving cars. In effect, it turns the highway into a smart road, one with greater capabilities than just monitoring traffic. Experts think that this type of technology could form the foundation of  a communications system for self driving cars".
  The brits are no the only ones trying to make driving smarter. "Ann Arbor, Michigan is hosting a massive experiment right now involving nearly 3,000 cars that have been equipped with special wireless communication devices that enable them to communicate with each other and with devices embedded at intersections and on roadways. The idea is that a steady stream of data flowing back and forth between vehicles, the highway, and other vehicles will not only make driving safer but also more efficient".
"A Dutch design firm has plans for a so-called "Smart Highway" that would use next generation paint to make signs on the pavement responsive to the environment. Snowflakes would appear, for instance, if the temperature dropped below a certain threshold, or the lines would light up when it got dark. "One day I was sitting in my car in the Netherlands, and I was amazed by these roads we spend millions on but no one seems to care what they look like and how they behave," designer Daan Roosegaarde told Wired last year. "I started imagining this Route 66 of the future where technology jumps out of the computer screen and becomes part of us."

Source: Gizmodo
 

Honda to exhibit micro sports car at auto show

Honda Motor Co. said Wednesday that it will showcase the S660 Concept micro sports car at the Tokyo Motor Show, which will be opened to the public from Nov. 23.
The automaker plans to launch a commercial version of the concept model in 2014, aiming to attract new customers, including young drivers, at a time when 660cc minivehicles are attracting broad popularity in Japan due to their relatively low running cost.
Source: NewsOnJapan

'Washoku' to become UNESCO intangible cultural heritage

"Washoku," or traditional Japanese cuisine, is now likely to be inscribed on UNESCO's list of intangible cultural heritage.

A UNESCO body that screens cultural asset candidates has recommended that "Washoku, traditional dietary cultures of the Japanese" be registered as an intangible cultural heritage, Japan's Cultural Affairs Agency said Tuesday.
An intergovernmental panel is seen making a final decision on the listing of the Japanese food cultures at a meeting in Azerbaijan in early December.

Source: NewsOnJapan

China's crude oil output rises 2.3 %

China's crude oil output reached 155.19 million tonnes in the first three quarters, a year-on-year increase of 2.3 percent, according to data from the country's top economic planner.
During the January-September period, China refined 328.63 million tonnes of crude oil, up 7.4 percent year on year, while refined oil production rose 6.4 percent to 202.15 million tonnes, the National Development and Reform Commission said in an online statement.
Apparent consumption of refined oil, calculated as production plus imports minus exports, increased 4.3 percent from a year earlier to 194.84 million tonnes.
In a separate statement, the planner said natural gas output totaled 86.3 billion cubic meters in the first nine months, an increase of 9.2 percent year on year.
China's imports of natural gas saw an increase of 27.3 percent to 38.8 billion cubic meters, while the apparent consumption came in at 120.8 billion cubic meters, the commission said.
China's appetite for natural gas has grown substantially with the country's industrialization and urbanization initiatives amid government efforts to cut carbon emissions.
According to the sector's development plan, China aims to bring its natural gas supply capacity to around 176 billion cubic meters, making the energy available to 250 million people, or 18 percent of the population, by 2015.
Source: Xinhua

China: Time to fight air pollution

On September 23, the Beijing Environmental Protection Bureau revealed plans to invest nearly 1 trillion yuan to manage air pollution over the next five years. Of that, 300 billion yuan will be devoted to reducing levels of PM2.5 by one-fourth. This plan shocked me. At first, I was proud. Thirty years ago, China would not be able to raise this much money for environmental protection. But then I became sad. Trillions of yuan! How much could be done with this amount of money if it was used elsewhere. The fact is, according to the plan, even if we do invest all this money, average PM2.5 levels will only drop to 60 micrograms per cubic meter of air, far above the 25 microgram standard set by the European Union. So the question is: Are there cheap and fast ways to deal with the smog?

Source: Caixin

Google: Minecraft and Quantum Computing. New Game in Town Qcraft.

Google is hoping to inspire Children's interest in quantum computing by using one of their favourite digital pastimes: Minecraft
The company's Quantum A.I. Lab Team has collaborated with MinecraftEdu and Caltech's Institute for Quantum Information and Matter to launch a modpack for the popular game called qcraft.
"It lets players experiment with quantum behaviors inside Minecraft's world, with new blocks that exhibit quantum entanglement, superposition, and observer dependency," explained a Google + post from the team.
According to Google, the release is an attempt to capitalise on the popularity of Minecraft among children and encourage them to experiment with quantum physics as they craft their virtual worlds.
"We built the Quantum A.I. Lab to explore the potential of quantum computing, and figure out what questions we should be asking. One question is clear: Where will future quantum computer scientists come from? Our best guess: Minecraft," explained the Google+ post.
"Millions of kids are spending a whole lot of hours in Minecraft, not just digging caves and fighting monsters, but building assembly lines, space shuttles, and programmable computers, all in the name of experimentation and discovery.
Minecraft has sold more than 33m copies on PC, Xbox 360 and mobile devices, becoming in the process one of the biggest brands in children's digital entertainment.
A recent survey of 2,000 6-16 year-olds by marketing firm SuperAwesome found 13% citing Minecraft as their favourite mobile brand, more than double the number who cited Angry Birds or Cut the Rope.

Source: theguardian

Singapore's mid-life crisis as citizens find their voice

"In year 2,000 in Singapore the Government was debating  "whether or not to permit a version of Speakers' Corner, the spot in London's Hyde Park where individuals vent their opinions on whatever topic they choose to whoever wants to listen".
Being Singapore, this "free speech forum" was a regulated one. Speakers needed police permission before they could use the space.
Like so many other aspects of Singapore's "disciplinarian" state, their Speakers' Corner provoked plenty of wry comment by foreign journalists. Few people turned out to hear the first anodyne speeches. The common assumption was that Singaporeans were not interested in risking trouble with their government by listening to speeches. They would rather go shopping.
Speakers' Corner has become the venue for a number of quite lively demonstrations recently, over an issue which has provoked more debate than at any time since the country's tumultuous birth 48 years ago - immigration.
Those demonstrations, though, are still subject to regulations. They cannot say or do anything that might stir up racial tension or disturb public order.
The really heated debate has been on the internet from original  Singaporeans - and vitriolic denunciations of the ruling People's Action Party over the rapid rise in the number of foreigners, both low-wage immigrant workers and the wealthy individuals from the rest of Asia who now view Singapore as a safe-haven for their millions.
Foreigners now make up close to 40% of the 5.3 million-strong population. They are blamed both for the stratospheric rise in property prices and for squeezing local people out of jobs.
Prime Minister Lee Hsien Loong said three years ago he was quite happy to invite the world's richest man to live in Singapore, if it increased the country's net wealth.
But the conspicuous presence in Singapore today of so many of the world's super-rich is leaving many lower-income people feeling left behind.
That debate reached boiling point earlier this year when a government white paper predicted that by 2030, the population would expand to just under seven million, of which only a little over half would be Singaporeans.
The public outcry prompted the government to issue a clarification; the figures were a forecast, not a target, it said.
With its share of the vote dropping to just over 60%, the ruling PAP had its worst result since independence. It is worth remembering that Singapore is as much a concept as a country, an artificial creation forced on its people by its expulsion from Malaysia in 1965.
It is a tiny city-state in an era of nation states.Instead it has always been defined by the performance of its government, both in utilising the limited living space and resources it has, and in ensuring better living standards for its people.
Singapore's founding father Lee Kuan Yew,imposed a top-down, rigorously-planned modernisation, with curbs on individual freedom - a government-knows-best strategy he later described as "Asian Values".
The best and brightest were attracted to the top ranks of the PAP and the government with generous salaries to carry this out.
For decades Singaporeans accepted this arrangement, with only minor grumbling. Not any more.
The government has not altered its plans yet. But there was a striking change of tone, if not direction, in the annual independence day speech given this year by Lee Hsien Loong, who happens to be Lee Kuan Yew's son.
Our country is at a turning point, he said. "I understand your concerns. I promise you, you will not be facing these challenges alone because we are all in this together."
There was talk of better access to education, of wider healthcare cover, and more access to low-cost housing. There seemed to be an effort in the speech by Mr Lee to offer empathy, rather than statistics, a realisation that the Mandarin-style meritocracy built by his father may no longer be enough to retain the loyalty of Singaporeans".
Source: Reuters

Cameron pledges energy review to cut 'unacceptable' prices

Prime Minister David Cameron sought to regain the initiative in a political battle over soaring energy prices on Wednesday, promising to improve competition in the sector and cut green taxes that have helped inflate prices.

His announcement caused a rift with his coalition partners, the Liberal Democrats, who dismissed it as a panicky policy that had been "made up on the hoof ... by a party getting cold feet on the environment".
Energy costs have become high-profile political football in Britain since several energy firms unveiled sharp price increases and the opposition Labour Party promised to freeze bills for 20 months if it won the next election in 2015.
How much Britons pay to heat their homes has played into a wider debate about the cost of living, which has risen as inflation and price rises from everything from utility bills to train tickets have outstripped stagnant wages.
"We need to roll back some of the green regulations and charges," Cameron told parliament during an emotionally-charged debate. "We'll be having a proper competition test carried out over the next year to get to the bottom of whether this market can be more competitive."
Even though the economy is improving, Labour, who are just ahead in most polls, says many people are faced with a choice between "eating and heating", and it accusing Cameron's Conservatives of being out of touch.
"We need to roll back some of the green regulations and charges," Cameron told parliament during an emotionally-charged debate. "We'll be having a proper competition test carried out over the next year to get to the bottom of whether this market can be more competitive."
Even though the economy is improving, Labour, who are just ahead in most polls, says many people are faced with a choice between "eating and heating", and it accusing Cameron's Conservatives of being out of touch.
Cameron described the cost of energy as unacceptable, but said Labour's plans to freeze prizes were an unworkable "con". He too was prepared to intervene in the sector, he added, but in a way that was practical.
Source: Reuters

Apple's New iPads Are Out and they are Gorgeous(But) (will continue)

The tablet war is getting interesting. Launched by Apple  in April 2010, the iPad created the tablet market which immediately took a bite out of personal computer (PC) demand, much to the chagrin of companies tied to PCs like Microsoft , Intel  and Hewlett-Packard .
  Tablets are used as consumption devices, and its introduction brought a declining market for
laptops and notebooks,and lower prices for these products.
   The percentage of device time tablet owner spend on the following activities is:
Entertainment 50%, Communication 26%, Production Activities(editing video,writing blogs) 15%,
Finding Information(weather,news,product information) 9%. Source: Gartner
Apple was the dominant producer of iPads for an extended period of time. But by the Q2 2013,Android based tablets were the 67% of the market. Apple's market share dropped even further not only as a result of android's success but also as a result of the  growth of windows based tablets. Source Strategy Analytics.
Apple's efforts to protect its market share, included upgrades to the iPad annually and the introduction of the iPad mini in Otober 2012.

Source:  Michael Blair
            Seeking Alpha

S. Korea urges Japan to delete Youtube video claiming on Dokdo islets

South Korea on Wednesday urged Japan to promptly delete a Youtube video claiming its sovereignty on the Dokdo islets, known as Takeshima in Japan, calling the action as anachronistic and provocative.

"We strongly protest against the Japanese government trying to damage our dominium over the Dokdo islets as Japan's Foreign Ministry produced a video that makes nonsensical claims on our territorial islets and distributed it on the Internet," Seoul's Foreign Ministry said in a statement, urging its neighboring country to delete the video immediately.
The 87-second-long video, which was posted on the Youtube a week ago, claimed that Japan set up its dominium on the islets in the 17th century and it was reconfirmed in 1905, saying that South Korea has taken illegal control over the rocky outcroppings since 1952 when then President Rhee Syngman drew the so-called Syngman Line.
Seoul's Foreign Ministry called the video posting as non- historical and anachronistic, noting that such provocative action has been a major stumbling block to enhancing diplomatic ties between Seoul and Tokyo.

Source: NewsOnJapan

British energy review to study prices and profits

Britain will launch a review into competition in its energy sector in the next few weeks, looking at prices, profits and barriers to entry, Prime Minister David Cameron's spokesman said on Wednesday.
The review will become an annual event, conducted by the energy regulator Ofgem, the Office for Fair trading, and the Competition and Markets Authority, the spokesman said.

Where regulators lack the powers to implement changes deemed necessary by the review, it will produce recommendations for the government to consider, the spokesman said.
Source: Reuters

Chinese president says world needs China-India common development

Chinese President Xi Jinping said the world needs the common development of China and India, in a meeting with Indian Prime Minister Manmohan Singh here on Wednesday.
Xi said Singh is an old friend of the Chinese people and he has made important contributions to the development of China-India relations.
He agreed with Singh that there is enough space in the world for India and China to achieve common development and said he believes the world needs the common development of the two nations.
As one of the most important bilateral relationships in the world, China-India ties do not only benefit the two peoples, but have a profound impact on the development of Asia and the world, said the president.
The top priority of both countries is the economy and improving people's lives, he said, suggesting the two sides deepen cooperation in infrastructure construction, information technology, telecommunication, investment and industrial parks.
China's western development campaign and India's "Look East" policy should be combined to achieve mutual benefit and win-win results, he added.
He congratulated China for its great achievements, noting that the China Dream and the India Dream are closely related.
India and China will be an unstoppable force in promoting world peace and development by working together, said the prime minister.

Source: Xinhua

London close. STOCKS JUMP TO FIVE-MONTH HIGH AFTER US JOBS MISS

Stocks across Europe rose strongly on Tuesday afternoon with London's FTSE 100 rising to a five-month high following a worse-than-expected US jobs report which spurred hopes of a near-term continuation of quantitative easing (QE) by the Federal Reserve.

"The full impact of the government shutdown is still unknown, and while that remains the case, don't expect the Federal Open Market Committee to start turning off America's QE taps when it meets later this month," said Marcus Bullus, Trading Director at MB Capital.

After a tentative start, the FTSE 100 advanced 41.46 points to 6,695.66, its highest closing high since May 28th when it closed at 6,762.01.

Non-farm payrolls increased by just 148,000 in September, according to the US data this afternoon which was delayed by over two weeks due to the prolonged government shutdown. The consensus forecast was for a much bigger increase of 180,000.

While the unemployment rate fell from 7.3% to 7.2%, the data reinforced speculation that the Fed will refrain from tapering stimulus until next year, given that that the survey was taken before the fiscal stand-off in Washington which is said to have weighed heavily on economic growth.

Analyst Michael Gapen from Barclays said the report was on the "soft side" and that the recent pace of job growth is "unlikely to satisfy [Fed] policymakers". He said that the data reduces the likelihood of the Fed scaling back of stimulus in the near future, as he pushed back his forecast for the first taper of asset purchases to March 2014, from his previous prediction December 2013.

Earnings impress, miners gain

Household products group Reckitt Benckiser was a high riser after lifting its 2013 revenue growth guidance to "at least 6%" following a strong third quarter and a decent performance by recent acquisitions. 

BHP Billiton was also in demand after the world's largest miner raised its estimate for annual iron ore production whilst maintaining guidance for oil, copper and coal output.

Engineering firm GKN advanced after a 16% increase in group sales to £1.87bn and a 34% jump in profits in the third quarter, helped by a good performance from its auto and commercial aerospace divisions.

Mining stocks were also providing a lift in London today as metals prices advanced across the board on the back of a weaker US dollar. Precious metals peers Randgold and Fresnillo were rising strongly by the close.

After swinging between gains and losses, chip designer ARM Holdings finished firmly in the red as investors gave a mixed reaction to third-quarter figures despite a strong 36% jump in pre-tax profits to £92.6m.

Whitbread finished broadly flat despite interim earnings rising ahead of expectations as its Premier Inns hotels and Costa coffee shops continued to grab market share. Total sales rose 12.2% in the first half.

Source: LiveCharts

FRENCH MANUFACTURING PROSPECTS SEEN EXCEEDING LONG-TERM AVERAGE

Confidence amongst French manufacturers improved slightly in October with the INSEE gauge rising to the 98-point mark after a reading of 97 in September. 

The reading was in line with the consensus estimate of 98.

The survey's improvement was explained by a significantly more favourable assessment of past production levels (from -11 to -2) and, to a lesser extent, domestic orders (from -26 to -24), due to a mild pick up in both domestic and foreign orders, economists at Unicredit explained in a note to clients. 

The barometer measuring the general production outlook also improved, to -5 from -10.

"Encouragingly, industry's prospects were seen steadily improving and exceeding their long-term average for the first time since July 2011. [...] This supports our confidence that gross domestic product will regain traction already in the fourth quarter, after a temporary slowdown (from +0.5% to +0.1% quarter-on-quarter) in the third quarter," the Italian broker pointed out.

Source: LiveCharts

Asia: Stocks Fall on China Worries

Asian stock markets lost their grip on earlier gains as the yen strengthened on growing expectations that the Federal Reserve will maintain its stimulus programme until at least next year.

Also weighing on sentiment was the Peoples Bank of China (PBoC) decision on Wednesday to refrain from adding liquidity to the market. That led to a sharp increase in the country's benchmark money market rate. 

The PBOC opted not to carry out new reverse repurchase operations. The seven day repurchase rate gained 47 basis points overnight, the largest increase since the middle of the year. 

The dollar weakened against the yen after delayed data out on Tuesday showed September non-farm payrolls increased by just 148,000 in September, lower than an anticipated increase of 180,000.

The report, which was delayed by two weeks because of the government shut-down, reinforced the view that the US Federal Reserve will hold off from tapering its bond-buying programme.

The Japanese unemployment rate declined to 7.2%, the lowest rate since November 2008, from 7.3%.

The benchmark Nikkei 225 index closed down 287 points at 14,426 in Tokyo while the Hang Seng fell 283 points to 23,032.
Focus is also expected to turn to preliminary Chinese manufacturing data for October, due out on Thursday. 

Source: LiveCharts

SPANISH GDP GROWS FOR FIRST TIME IN TEN QUARTERS IN Q3

Spain's gross domestic product (GDP) expanded at a 0.1 per cent quarter-on-quarter rate in the third quarter, according to the country's statistical agency (INE).

That was as expected by economists. 

It marks the first quarter of positive growth in ten. 

Source: LiveCharts

CHINESE BAD LOANS TRIPLED IN THE FIRST HALF OF 2013

China's five largest banks reported that bad loans tripled in the first half of the year. 

Specifically, these five Chinese financial institutions wrote off 22.1bn yuan (£2.25bn) in the first six months of 2013, compared to just 7.65bn a year earlier, according to a Bloomberg report. 

The agency noted that these write offs didn't affect bank profits thanks to earlier provisions made to counteract the bad debts. 

The Chinese financial sector regulator warned the country's banks last April to increase their financial cushion in order to prepare for potential defaults. 

LiveCharts

Russia: Rosneft cuts output forecast for Vankor Field

  Rosneft has cut its output forecast for a field that is pivotal to its Asian export strategy, even as boss Igor Sechin pledges more oil for China and seeks cash backing from Beijing to fund ambitious expansion plans and ease debt.

The world's largest listed oil company by output, Rosneft has cut the forecast for the Vankor field in East Siberia, according to a document obtained by Reuters.
The state oil major declined to comment on Vankor's future production, but said it would meet all its supply commitments without having to divert westbound oil flows to cover the new Chinese volumes.
Russian oil pipeline monopoly Transneft and some analysts have questioned whether Rosneft has the oil to honour its long-term contracts.
Output at Vankor, which feeds in to the Eastern Siberia - Pacific Ocean (ESPO) pipeline, will only reach 23 million tonnes (462,000 barrels per day) in 2016, according to a forecast on a regional government web site to which access was blocked.
Vankor will pump 21.3 million tonnes this year (428,000 bpd) - below a peak initially seen at 25 million tonnes, according to a copy emailed by an official to Reuters.
With proven oil reserves of 1.4 billion barrels, Vankor is the biggest Russian oilfield to enter production in 25 years. It is vital for the state oil major to meet its growing commitments to supply Asian Markets.
"Rosneft's production plans will without doubt ensure that all oil supply commitments are met," the company said in comments emailed to Reuters.
"In the event of possible deviations, existing agreements and the most profitable supply routes will be prioritised."
On Tuesday, Rosneft signed an outline deal in Beijing to supply 200,000 bpd to Sinopec for 10 years, pushing oil sales to China announced by Sechin over 1 million bpd.
Sechin has ramped up supply deals with China to win market share and secure up-front payments he needs to sustain both Rosneft's ambitious exploration plans and its net debt load of 1.85 trillion roubles ($58 billion).
Rosneft debt has swollen since its takeover of Anglo-Russian venture TNK-BP, which will increase oil production by 200,000 bpd for the next 7 years.
China,  is in a position to finance Russian oil exploration through deals that include a pre-paid component, which was reported in the Sinopec deal to be 20-30 percent of the overall cost.
Rosneft has also offered equity in another field in Eastern Siberia to China National Petroleum Corp (CNPC), in a departure from earlier deals that secured future supplies against multi-billion-dollar loans.
Rosneft and CNPC agreed last week to jointly develop Srednebotuobinsk, a greenfield project that is forecast to pump more than 100,000 bpd in 2017.
It also has agreed with Transneft to double the capacity of a pipeline spur to China to 600,000 bpd by 2018, to honour supply contracts set this year with CNPC.
If logistical headaches render direct supplies to China uneconomic, Rosneft could resort to oil swaps, which would allow it to rely on other firms' crude flows as long as it provides matching volumes elsewhere.
Source: Reuters

ECB Bank Stress Tests Meant to "Strenghen Confidence"

"The European Central Bank (ECB) announced details on Wednesday for its comprehensive assessment of Eurozone banks, which the monetary authority believes will foster transparency, implement "necessary corrective actions" and build confidence. 

"The assessment is an important step in the preparation of the single supervisory mechanism and, more generally, towards greater transparency of the banks' balance sheets and consistency of supervisory practices in Europe," the ECB said in a statement. 

The central bank plans to convene meetings in Frankfurt starting in November with banks undergoing the assessment and noted that it expects the process to take 12 months. 

The ECB pointed out that the assessment will consist of three elements:


i) A supervisory risk assessment to review, quantitatively and qualitatively, key risks, including liquidity, leverage and funding.

ii) An asset quality review (AQR) to enhance the transparency of bank exposures by reviewing the quality of banks' assets, including the adequacy of asset and collateral valuation and related provisions.

iii) A stress test to examine the resilience of banks' balance sheet to stress scenarios.

The ECB further noted that the assessment will be based on a capital benchmark of 8% Common Equity Tier 1. Furthermore, the monetary authority said that the details concerning the stress test will be announced at a later stage, in coordination with the European Banking Authority (EBA)".

LiveCharts

Credit Suisse sees 50% chance of ATT to bid for Vodafone

Credit Suisse has hiked its target price for telecoms group Vodafone from 195p to 245p, saying that it sees a 50 per cent probability of a bid from US counterpart AT&T.

The bank values Vodafone at just 210p on a "resting" basis assuming no bid, but values it at 280p if AT&T were to decide to bid for the company once its stake in Verizon Wireless is sold.

"AT&T would then have to bid up to £80bn to overcome Vodafone's potential scepticism of the deal synergies and the impact of free cash flow/share dilution on the value of AT&T shares received," Credit Suisse said.

However, one possible "red line" for the American company could be that a bid may put its own dividend cover at risk, the bank suggested, "particularly if its US mobile growth stalls next year".

"We also see little logic to AT&T in such a footprint deal, with few if any synergies, no big change in EU spectrum regulation coming and leaving Vodafone exposed to the same 4play problem it has today. 

"So despite the repeated comments by AT&T (widely reported by Reuters and others in recent weeks) that it is interested in buying large European mobile assets, we place only a 50% probability of an AT&T bid for the Vodafone stub happening."

The bank maintained its 'outperform' rating for Vodafone on Wednesday, helping the stock 0.25% higher to 228.52p in morning trade.

Source: LiveCharts

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