China manufacturing activity ticks up in April but still contracts - HSBC PMI

China's manufacturing downturn eased slightly in April as declines in new orders and output slowed, a preliminary survey showed on Wednesday, though factory activity showed an overall contraction for the fourth straight month.

The HSBC/Markit flash Purchasing Managers Index (PMI) for April rose to 48.3 from March's final reading of 48.0, still below the 50 line separating expansion from contraction.

The survey showed contractions in new orders and output moderated somewhat, though new export orders slipped back below the 50 line after a pickup in March, suggesting that the external environment remains difficult for Chinese firms.

"Domestic demand showed mild improvement and deflationary pressures eased, but downside risks to growth are still evident as both new export orders and employment contracted," said Qu Hongbin, chief economist for China at HSBC, in a statement accompanying the PMI.

Signs of a slowdown in the first quarter had been evident in a series of economic indicators, prompting the government to unveil a series of measures to promote growth, although it has ruled out major stimulus.

It has also said that its main focus will be on job creation, and that it did not matter if growth in 2014 came in a little below the official target of 7.5 percent.

The final Markit/HSBC manufacturing PMI for April is due on May 5.

Source: Reuters

Jet Blue pilots elected ALPA as their representative

Lytro Illum changes focus even after you've taken the photo

There's nothing worse than taking what feels like a great photo, then opening it later to discover it's out of focus. The Lytro Illum solves that problem by taking photos that you can focus and re-focus even after you've taken them.

The Illum is a light-field camera, allowing you to adjust focus, perspective and depth of field in an image you've already snapped. It works by absorbing and recording all the information that comes through the lens, then creating pictures that can be altered later by simply tapping on the spot you want to be pin-sharp and in focus.

Although Lytro was first to make a camera that changes focus, you can now do it in phones such as theHTC One M8 -- check out our guide to the One M8's camera features -- which is a real blow to Lytro's prospects in the consumer market.

The first Lytro Light Field Camera was a small block-shaped thing that looked nothing like a camera as we know it. The Illum looks more like a traditional camera, complete with a much bigger screen and a more familiar grip.

The original Lytro had a fixed lens, while the Illum adds an 8x zoom. It has a fixed f/2.0 aperture.

Lytro's new Illum goes on sale in the US in July and costs $1,599 (£950). If you get in early and buy one before 15 July, you get $100 knocked off a special engraved version of the camera. The company hasn't yet announced pricing or availability in the rest of the world.

Source: CNET

WSJ: Russia Will Attempt to Lower Dependence on Imports, Medvedev Says

   The WSJ reports,"Russia won’t change its economic growth strategy because of Western sanctions but will try to lower its dependence on imports", Prime Minister Dmitry Medvedev said Tuesday.

Russia’s economy is in danger of sliding into recession this year for the first time since 2009, the peak of the global financial crisis, as the sanctions war between Moscow and the West has sent the ruble to all-time lows, fueled capital flight and evaporated investment activity.

Mr. Medvedev said Russia may post growth similar to that of the European Union. In early 2014, the International Monetary Fund predicted that the euro area would grow 1% this year, in line with the Russia’s economy ministry’s forecast. However, should net capital outflows remain as strong as in the first quarter and reach $150 billion in the whole of 2014, the economy may contract by 1.8%, the economy ministry said earlier in April.

Mr. Medvedev said that Moscow itself “won’t trigger a reduction of economic ties” with Europe. He said that Moscow actively trades with Europe but is considering widening its trading ties in the East, adding that Russia should aim to make the ruble a global reserve currency and switch its international trade to rubles, particularly commodities trade.

The Prime Minister vowed that despite any possible sanctions the government will fulfill its social obligations and won’t let Russian citizens become “hostages of political games.”

Mr. Medvedev said the government won’t let “unfriendly” actions from outside the country weaken Russia’s defense industry and will aim to bolster its position in the global defense market by increasing its military cooperation with Latin America and Africa.

WSJ: How Putin can Bypass Sanctions

     The Wall Street Journal reports,"one of the lessons Russian President Vladimir Putin is learning during the Ukraine crisis is that if you have oil and gas, you’ll never be lacking for friends and much will be forgiven and much will be forgotten. Although the United States is weighing heavier sanctions across the Russian economy, Mr. Putin has much control over the European energy market, and is a growing supplier with Asian countries, and many countries and companies are indicating they’re not ready to punish Russia".

Google To Offer Mobile App Install Ads In Search And YouTube; Expands App Deep Linking To AdWords

Google is announcing today its plans to offer app install ads on mobile search and YouTube, following moves made by other tech industry companies, including Facebook and more recently Yahoo and Twitter. Google says that businesses looking to promote these app installs across the AdMob network will be able to target consumers based on data Google already has on file, like what apps they use, how often they use them and what purchases they’ve made.

For example, says Google, someone who regularly uses an app to measure their runs and other exercises, might see an app that lets you track your diet.

Google will help marketers target users using insights from Google Play, offering tips as to what keywords worked best to convert searches to downloads.

In addition, Google is also expanding its mobile app deep linking initiative to integrate deep linking with AdWords. What that means is that businesses can buy advertisements that, when clicked, will redirect users directly inside their already-downloaded and installed mobile apps.

The company notes that there’s demand for ads that can get consumers to re-launch their apps because today over 80% of apps are only used once after being downloaded. Businesses are struggling to convert application installs into regular, engaged customers.

The app stores are also ever-expanding, which increases these challenges. For instance, as of May 2013, Google Play had seen 50 billion app downloads of over 1 million applications, the company said this morning, and every day users in 190 countries are downloading apps.

In AdWords, businesses will soon be able to measure conversions across the entire app lifecycle thanks to these changes, says Google, starting from app installation to re-enagement to in-app purchases.

App install ads and deep linking to apps go hand-in-hand, of course, as the former gets the app on consumers’ mobile devices, then the latter points consumers to the right information in their app when searching.

Source: TechCrunch

China's Xi purging corrupt officials to put own men in place-sources

Chinese President Xi Jinping plans to use a purge of senior officials suspected of corruption to put his own men and reform-minded bureaucrats into key positions across the Communist Party, the government and the military, sources said.

Xi hopes that removing corrupt officials and those resisting change will allow him to consolidate his grip on power and implement difficult economic, judicial and military reforms that he believes are vital to perpetuate one-party rule, said the sources, who have ties to the leadership.

In the most far-reaching example of his intentions, Xi plans to promote about 200 progressive officials from the eastern coastal province of Zhejiang, where he served as party boss from 2002 to 2007, to senior positions across the spectrum in the years ahead, two of them said.

"The anti-corruption (drive) is a means to an end. The goal is to promote his own men and like-minded officials to key positions to push through reforms," said one source.

To be sure, Xi is also tackling endemic corruption to try to restore public faith in the party, other sources said.

The seven sources interviewed for this article sought anonymity to avoid repercussions for discussing secretive elite politics.

The biggest investigation Xi has ordered so far revolves around retired domestic security tsar Zhou Yongkang, who is under virtual house arrest. 

Reuters reported on March 30 that more than 300 of Zhou's allies, proteges, staff and relatives had been taken into custody or questioned since late last year as part of China's biggest graft scandal in six decades. 

The government has yet to make any statement about Zhou, who retired in late 2012 from the Politburo Standing Committee, the apex of power in China, or the case against him. It has also not been possible to contact Zhou, his family, associates or staff for comment. It is not clear if any of them have lawyers.

Another source who met Xi in private this year quoted him as saying implementing reforms had been "very difficult" due to opposition from state-owned enterprises along with influential party elders and their children, known as "princelings".

State-owned firms and princelings in business enjoy many privileges and virtually monopolise certain sectors, something at odds with China's efforts to steer its economy away from a reliance on heavy industry and investment to one driven more by consumption and innovation. 

On the judicial front, Xi has overseen reforms that limit the ability of the party to interfere in most court cases - apart from politically sensitive ones - but more still needs to be done to deal with frequent miscarriages of justice that outrage the public, legal experts said. 

While Xi appears set on driving reform on many fronts, human rights activists have said major political change was not on his agenda. For example, authorities have increased controls over the local media and prominent bloggers in the past year. 


RECRUITING FROM ZHEJIANG

In looking for people he can trust, Xi, 60, will also tap reform-minded officials from his alma mater Tsinghua University in Beijing and other provinces, one source said.

But his key recruiting ground will be Zhejiang, south of Shanghai. The province is seen as ideologically progressive and has long been at the forefront of economic reforms thanks to the concentration of private firms there that helped make China the world's factory.

Besides promoting officials from Zhejiang to the party, the central government and the military, Xi would send them to other provinces, said the first two sources. Xi himself comes from northwest Shaanxi province.

Zhejiang party chief Xia Baolong, a Xi ally, is the leading candidate to take the challenging job of running the restive region of Xinjiang this year or next and then possibly becoming a member of the decision-making Politburo in 2017, sources said.

In addition, one of Xi's closest aides, Zhong Shaojun, a native of Zhejiang, was likely to be further promoted in the People's Liberation Army following a late start to his military career, said two sources who have ties to the military.

In an unusual move, Xi made Zhong, a civilian for most of his career, a PLA senior colonel last year when he appointed him deputy director of the General Office of the Central Military Commission.

Source: Reuters

Novartis to Buy Glaxo Cancer Drugs, Sell Animal Health

Novartis AG (NOVN) will focus more on cancer, GlaxoSmithKline Plc (GSK) on vaccines and Eli Lilly & Co. (LLY) on animal health as the drugmakers announced a series of deals for a total of as much as $28.5 billion today.

The transactions, as well as a plan to form a consumer-health joint venture with Glaxo, are part of an overhaul of the pharmaceutical industry spurred by the loss of sales as best-selling medicines lose patent protection. Pfizer Inc., the world’s biggest drugmaker, sold its infant-nutrition business to Nestle SA for $11.9 billion in 2012, and then last year spun off its animal-health unit.

Novartis agreed to buy cancer drugs for as much as $16 billion while selling most of the company’s vaccines division to Glaxo for $7.1 billion and its animal-health unit to Lilly for $5.4 billion.

For Glaxo, the deals shift the company away from prescription drugs and toward consumer products and vaccines, which are less vulnerable to the patent life cycle. The new joint venture with Novartis will be the second-largest consumer health care company by revenue, trailing only Johnson & Johnson, and it will control 29 percent of the global vaccine market. It also signals a willingness to sell off promising drugs that other companies may be better positioned to market.

Glaxo and Novartis’s consumer-health venture will have about 6.5 billion pounds ($10.9 billion) in revenue, Glaxo said. The U.K. company will have majority control, with an equity interest of 63.5 percent.

“What this transaction does for GSK is it takes one of the leading position in consumer health care and truly elevates us to a global leadership position,” Witty said on a conference call. “It gives us a very rare, extremely rare opportunity to substantially strengthen our vaccine business. And it finds a home for our nascent oncology business.”

Glaxo said the transaction will probably be completed during the first half of 2015 subject to approvals. The company said it expects to return 4 billion pounds to shareholders after the completion of the deal and will maintain its commitment to increasing dividends.

Source: Bloomberg

U.S. Existing-home sales decline 0.2% in March

Sales of existing homes ticked down 0.2% in March to a seasonally adjusted annual rate of 4.59 million, the slowest pace since July 2012, theNational Association of Realtors reported Tuesday. Sales rates have trended down since the summer on falling affordability as inventory remained low. Unusually rough weather in recent months likely also curbed demand, NAR said. Economists polled by MarketWatch had expected a March sales rate of 4.55 million, compared with a February rate of 4.6 million. Recent drops in the sales pace of existing homes have been relatively small, signaling that the market may be stabilizing and sales could bounce higher in coming months, said Lawrence Yun, NAR's chief economist. The median sales price of used homes hit $198,500 in March, up 7.9% from the year-earlier period, supported by low inventory. March's inventory was 1.99 million existing homes for sale, a 5.2-month supply at the current sales pace. 

Source: Marketwatch

WSJ:Price of Gas in U.S. Rises as Refiners Export More to Other Countries Nation's Gasoline Stockpiles Are at Lowest Point This Time of Year Since 2011

A new pipeline, built to release a glut of crude oil that was stuck in the middle of the country, is now feeding oil to refineries on the Gulf Coast that churn out gasoline and diesel. While these fuels still make their way to the Southeast and the East Coast, growing amounts are being sold to Mexico, the Netherlands, Brazil and other countries.

The push into these markets has been spurred by the U.S. oil boom. Rising oil output had been flooding the nation's oil market in recent years, keeping U.S. crude prices low relative to world prices. Facing tepid fuel demand in the U.S., refiners have been ramping up exports, creating more global competition for U.S.-produced fuel.

While the construction of pipelines and other transportation infrastructure allows other countries to benefit from the oil boom, it also means the market for motor fuels has become more competitive. The gasoline market now has to reckon with demand from other countries—and the potential impact on prices—during a U.S. economic recovery many economists see as fragile.

"Quite frankly, this is not just a U.S.-centric topic anymore," said Nancy White, a spokeswoman for motor club AAA. "Production is going overseas, so that impacts the supply here, and that will drive prices up."

Gasoline stockpiles nationwide are at their lowest point for this time of year since 2011, according to the U.S. Energy Information Administration. Meantime, the retail price for a gallon of regular gasoline averaged $3.68 on Monday, up 4.2% from a year ago, according to the EIA. That is the highest price since March 2013. AAA had the average price on Monday at $3.67.

Gasoline futures climbed 1.1% to $3.0869 a gallon Monday on the New York Mercantile Exchange and are up 11% for the year. Prices for the futures, which are contracts to buy or sell at a specified price and time, are a leading indicator for prices at the pump and don't reflect the impact of taxes and other components of retail prices.

Total petroleum exports, mostly gasoline and diesel, averaged about 3.6 million barrels a day last week, according to the EIA, up 25% from the same period last year. The figure includes a small amount of oil exports that are allowed by the U.S. government, which effectively banned them in 1975.

"Export demand is still growing," said Jan Stuart, head of energy research at Credit Suisse. And as the U.S. economy improves, "slowly but surely, vehicle miles traveled has begun to rise again," he said. Mr. Stuart expects gasoline-futures prices to be 10 cents higher, on average, in the third quarter compared with the second quarter.

The potentially bad news for consumers is good news for oil bulls, who have been struggling against the rising tide of U.S. oil output since the start of 2011. Citing low levels of gasoline supplies, some fund managers say pump prices are unlikely to weaken until after the summer vacation season.

As a group, hedge funds and other money managers held $9.3 billion of bullish bets on Nymex gasoline prices, the most in a year, according to the U.S. Commodity Futures Trading Commission.

Weak China shares depress Asia, Ukraine also a risk

 Extended weakness in Chinese shares, driven by worries over liquidity and earnings, put a brake on other Asian stock markets on Tuesday despite Wall Street stocks rallying into a fifth session.

Although Japan's Nikkei share average held onto marginal gains and was up 0.3 percent, MSCI's broadest index of Asia-Pacific shares outside Japan was almost flat, while trading not far from a six-month high hit earlier this month.

The China Enterprises Index of the leading offshore Chinese listings in Hong Kong fell 1 percent to its lowest in nearly four weeks. That subdued other Asian markets, forcing investors to look past the longest winning streak since October in the S&P 500 index.

"Today is going to be a bit weak," said Du Changchun, an analyst at Northeast Securities in Shanghai. "I'm not so optimistic, I don't think there's much space for any increases as we're still in a period of adjustment."

The Shanghai Composite Index was almost flat around 2,063.5 points on Tuesday, after having shed 1.5 percent the previous day.

Chinese stocks have been hit by concerns about a potential share oversupply after the securities regulator released draft prospectuses for 28 new firms planning to list, marking the resumption of IPOs after a two-month hiatus.

Chinese companies such as Great Wall Motor Co Ltd, carmaker BYD and Air China have all posted weak earnings numbers or expected earnings numbers over the past week, leading to further concerns over the slowing economy.

Source: Reuters

JJL: The Highlights of 2013

It’s been another interesting year in Asia Pacific. We’ve seen quite a bit of change in economic dynamics across the region, while in the real estate sector it’s been a time of cautious corporates and busy investors. The 2013 highlights:

• China and Japan dominated the headlines. The region’s number 1 and 2 economies made good strides in addressing their challenges. China averted a hard landing and its government has pushed hard on a range of “austerity” measures. The Japanese government launched a massive stimulus program to reignite economic growth and we’ll get a better idea over the next 12 months as to the success of Abenomics.

• The leasing and investment disconnect widened. Ongoing global uncertainties have seen corporates remain cautious in their hiring and space requirements, and 2013 is likely to be the weakest year for AP office leasing activity since 2009. At the same time, QE and ultra-low borrowing costs have driven strong commercial real estate investment activity – so strong, in fact, that 2013 is likely to equal the previous record back in 2007. We’re forecasting leasing activity to pick up next year and investment volumes to strengthen further, so it will be interesting to see when the disconnect starts to narrow.

• Chinese outbound investment is set for a record year, with commercial volumes up 25% y-o-y as at the end of Q3. The major destinations for this capital have been Europe, the US, Australia and Singapore. Chinese buyers and developers have also been very active in overseas residential markets.

• e-commerce accelerated across the region, a trend which is sure to drive major change in the retail and logistics sectors in the years ahead. At the same time, international retailers have continued to set up shop in Asia Pacific, attracted by our region’s high economic growth and increasing wealth levels.

• The residential sector saw strong demand in many markets including China and South East Asia. Interest rate cuts also stimulated sales activity in Australia. Meanwhile in Hong Kong and Singapore, transaction levels have fallen following a series of cooling measures aimed at keeping a lid on home prices.

Source: JJL   Jane Murray is the Head of Research, Jones Lang LaSalle Asia Pacific.

Has the importance of physical retail space been vindicated by Alibaba?

Alibaba’s decision to significantly invest into Intime Retail, which operates 36 department stores throughout China provides an interesting insight into how internet retailers might be viewing the importance of multi-channel retailing and the role of physical retail stores.

China’s Alibaba Group, one of the world’s largest internet retailers, globally has agreed to invest US$ 692 million to acquire a 26% stake in Intime Retail (Group) Co., the Hong Kong listed operator of predominantly luxury orientated department stores, throughout mainland China.

While this news should not be read as a reversal of the significant global trend of retail spending switching from some physical retail stores to the internet, it is in our opinion a vindication from one of the strongest internet retailers as to the ongoing importance of physical retail space.

We anticipate that the most successful retailers in the future are going to be those with a complete multi-channel offering. Those providing efficient and convenient methods of sales, deliveries and returns through both a physical store portfolio and a strong internet platform will likely be the best performers.

In addition to retailing, the ownership and management of retail places is becoming increasingly specialized and challenging. Shopping mall owners need to ensure that their retail assets remain relevant in the rapidly evolving retail landscape. Nowhere is this more prevalent than in China, which has the world’s largest supply pipeline of shopping malls under development. As luxury brands and first mover fast fashion retailers look carefully at and rationalise their own expansion plans, developers might look to attract internet based operators as one way to ensure that their malls remain competitive. Don’t be surprised to see landlords chasing the signatures of internet retailers with as much vigor as they once did with global luxury brands and international department stores.

JLL global retail research team has completed a fascinating piece of research called Redefining Retail Places. While it can be read as presenting a daunting future for shopping malls, its themes should certainly be used to form part of the picture when owners are making: buy; sell; hold; joint venture and strategic management decisions.

Our most recent outlook to retail real estate investment in Asia Pacific also highlights an expected trend of specialist retail asset managers and co-investors playing a growing role alongside the investment capital and developers, in ensuring assets are built and managed to their best advantage.

Source: JLL.  David Raven lead director for retail investment for Asia

Rental Growth,Occupational fundamentals supporting higher investment volumes

Another year and another quarter of investment volume growth around the world. Investment markets which have grown consistently over the last four years have started 2014 brightly with 23% growth compared to this time last year.

Much of the growth over the last four years has been associated with a hunt for yield globally, not just within the property sector but across the global capital markets. With government bond yields at historic lows in many countries commercial property has provided an attractive source of risk adjusted investment returns, with many groups investing in the sector for the first time.

However, while investment volumes have continued to improve, occupational fundamentals have struggled post the financial crisis. The structural changes happening in the financial services industry have forced occupiers to consider their longer term space needs, in terms of quality, quantity and location. This has made for a depressed and stagnant leasing environment in many cities. This now seems to be changing with many more cities seeing an improvement in take up fundamentals and a return of rental growth across many of the office markets JLL covers globally. The improvement is not uniform, with many cities still providing plentiful options for occupiers it will be a long process, but we certainly seem to be seeing the first signs that the corner has been turned.

This should give renewed impetus to investment markets, stronger corporate demand coupled with financing markets returning to normality in most countries will provide an additional level of enthusiasm for investors to proceed with purchases. In addition the rise in values is encouraging vendors to place more stock into the market place, particularly in 2014 portfolios and larger lot sizes.

With US$130 billion transacted in the first quarter of 2014, we are confident that we shall see another year of investment growth. At this stage we are estimating US$650 billion for the full year, 10% higher than we recorded in 2013.

Source:  JLL, David Green-Morgan is Global Capital Markets Research Director, based in Singapore.

Commercial Real Estate Investment The Smaller the Safer?

When planning a successful shopping centre, location is always a top priority. If a retail project sits in the middle of a busy commercial district, or a densely populated residential area, the starting point is a catchment with lots of potential customers. But in an era with oversupply looming in many cities in China, and landlords having a harder and harder time pre-leasing space, do smaller shopping malls have less execution risk?

During a recent field trip to Zhabei district, a densely populated and mature residential part of northern Shanghai, we found three cases of low occupancy, community-oriented shopping centres that from a location perspective can be considered “good” sites. The three projects have been operating for more than one year, but average occupancy is still less than 50%. After going through Shanghai’s retail supply list, we found a significant number of smaller projects (20,000 – 50,000 sqm) in residential areas that are struggling to find tenants throughout a long period of time to reach stabilisation.

What are the reasons behind these projects’ struggles? Inexperience on the part of the landlord can lead to a lack of understanding of the catchment area and poor planning of the project positioning, including:

A mismatch between the types of tenants and income level of the neighbourhood;

Ineffective or inexperienced leasing teams for finding non-anchor tenants, especially after a supermarket, cinema or KTV have been secured;

Rental expectations that are too high.

If the average housing price near a community mall is low, residents in the neighbourhood tend to spend most of their time and money in the anchor supermarket rather than the other stores. If the catchment area has many high-end residential projects, but the mall doesn’t offer interesting lifestyle tenants, consumers may instead drive to a destination shopping mall further away for more options. Another execution risk is when anchor tenants “steal away” consumers rather than securing foot traffic for the whole property. Supermarkets or cinemas will often have their own direct access points and consumers can easily bypass the rest of the property if there isn’t a sound conversion strategy to lure them in. In conclusion, while these malls will probably stabilsze eventually, once the landlord gets the positioning right, ‘going small’ is not a panacea – there is still plenty of execution risk. Careful planning and a strong retail asset management team are critical to ensure a successful shopping centre.

Source: Jones Lang LaSalle(JLL) by Chen Lou

Lukoil launches giant West Qurna 2 oilfield in Iraq

• Russia's Lukoil (LUKOY, LUKOF) finally launches commercial production from the giant West Qurna 2 oilfield in Iraq in a move expected to lift the country’s output to record levels of ~4M bbl/day this year.
• Production from one of the world’s largest untapped oilfields, with recoverable reserves estimated at ~14B barrels, is set to rise to 400K bbl/day by year-end from an initial rate of 120K.
• The launch of the field after lengthy delays also will allow Lukoil, which holds a 75% stake as operator, to more than double its overseas output.Source: 
• Source:Seeking Alpha   March 31, 2014

Russia accuses Ukraine of violating Geneva peace deal Sergei Lavrov says Kiev 'not lifting a finger' to control extremists as armed groups refuse to stand down in eastern Ukraine

     The Guardian reports,"the Russian foreign minister, Sergei Lavrov, has accused Ukraine of violating an accord reached in Geneva last week aimed at averting a wider conflict.

"Steps are being taken – above all by those who seized power in Kiev – not only that do not fulfil, but that crudely violate the Geneva agreement," he said on Monday.

Lavrov also told a news conference that a deadly gunfight on Sunday near Slavyansk, a Ukrainian city controlled by pro-Russian separatists, showed Kiev did not want to control "extremists".

"The authorities are doing nothing, not even lifting a finger, to address the causes behind this deep internal crisis in Ukraine," he said".

At least three people are thought to have been killed in the shootout, shaking an already fragile accord reached last Thursday betweenRussia, Ukraine, the US and the European Union.

The authorities in Kiev described the incident in the early hours of Sunday as a "crude provocation" staged for Russian TV. They said some of the details of the shootout were so implausible as to be ridiculous. Ukraine's intelligence service said its Russian military counterpart, the GRU, had staged it with help from criminals. The death toll and the allegiance of those involved were hard to confirm independently.

The Geneva agreement called for an immediate end to violence in Ukraine, where western powers believe Russia is fomenting a pro-Russian separatist movement, an allegation Moscow denies.

The accord also called for illegal armed groups to stand down in a process to be overseen by Europe's OSCE watchdog.

However, separatists have shown little sign of leaving public buildings in largely Russian-speaking eastern Ukraine.

Lavrov said the Ukrainian authorities had failed to remove illegal protests from squares in Kiev, Ukraine's capital. "This is absolutely unacceptable," he said.

Washington has warned of stronger economic sanctions than those already imposed if Moscow fails to uphold the Geneva deal.

"Before giving us ultimatums, demanding that we fulfil demands within two or three days with the threat of sanctions, we would urgently call on our American partners to fully accept responsibility for those who they brought to power," Lavrov said.

He added that attempts to isolate Russia would fail because it was "a big, independent power that knows what it wants".

Schwab:U.S. Market Brief

Coming off a solid Easter shortened week, the U.S. equity markets are mixed in late-morning action, with 1Q earnings season set to heat up this week, while a stronger-than-expected read on domestic Leading Indicators is having a limited impact. However, international market action was light as European, Hong Kong, and Australian markets remained closed for the holiday weekend. Treasuries are gaining ground despite the data, which was the lone release on today's docket. Meanwhile, Sun Trust Banks, Hasbro, and Advanced Micro Devices all topped the Street's bottomline expectations, while Sarepta Therapeutics offered an upbeat outlook for its experimental muscular dystrophy treatment. In other equity news, Britain's Sunday Times reported that Dow member Pfizer approached AstraZeneca with a $100 billion takeover proposal. Gold is lower, while crude oil prices and the U.S. dollar are higher. Overseas, Japanese stocks finished flat as some weakness in the yen was offset by a disappointing trade report, while Chinese markets dropped ahead of this week's preliminary April manufacturing report from HSBC.

Source: Schwab

A Contrarian Oil Play

• "The Russian stock market has been recently out of favor, but valuations seem to be too much cheap to ignore.
• Investors should look for companies with low governmental influence like Lukoil, which is mainly owned by its management.
• Lukoil is one of the world's largest oil & gas companies and has very good growth prospects.
• It currently trades at only 4x its estimated 2014 earnings and offers a dividend yield of 5%.

The recent crisis between Russia and Ukraine has led to significant drops in Russian shares. Russian stocks were already cheap before the recent crisis, and took further beating after the Crimea standoff. For contrarian and value investors this may represent a good time to buy, especially quality companies with below-average political risk. One interesting opportunity may be Lukoil (OTCPK:LUKOY), one of the world's largest oil & gas companies. Its current market capitalization is about $45 billion, and is traded in the U.S. in the over-the-counter [OTC] market.

Lukoil is Russia's second-largest oil company, and one of the world's biggest vertically integrated companies for the production of crude oil and gas as well as for the refining of petroleum products and petrochemicals. Headquartered in Moscow, Lukoil is the second-largest public company, after Exxon Mobil (XOM), in terms of proven oil and gas reserves. In 2012, the company had 17.3 billion barrels of oil equivalent [boe], accounting for some 0.8% of global oil reserves. The company has operations in 38 countries around the world".

Source: Seeking Alpha

VimpelCom And Global Telecom Holding Announce A Strategic Partnership With The Algerian Fonds National d'Investissement And A Successful Resolution In Algeria

 April 18, 2014 /PRNewswire/ -- VimpelCom Ltd ("VimpelCom") (NASDAQ: VIP) and Global Telecom Holding S.A.E. ("GTH") (EGX: GTHE, LSE: GLTD) today announce the signing of a share purchase agreement (the "Share Purchase Agreement") for the sale by GTH of a 51% interest in Orascom Telecom Algerie SpA ("OTA" or "Djezzy") to the Fonds National d'Investissement (the "FNI"), the Algerian National Investment Fund, for a purchase consideration of USD 2.643 billion.

OTA will distribute a dividend of USD 1.862 billion to GTH immediately prior to the closing of the transaction ("Closing"), which is expected to occur by the end of 2014.

The total dividends and proceeds due to GTH at Closing are expected to amount to USD 4.0 billion, net of all taxes and after the settlement of all outstanding disputes between the parties and the payment of associated fines. All proceeds will be used to pay down the outstanding shareholder loans provided by VimpelCom to GTH.

GTH and the FNI will enter into a shareholders agreement ("the Shareholders Agreement"), effective as of Closing, which will govern their relationship as shareholders in OTA going forward. GTH will continue to exercise operational control over OTA and, as a result, both GTH and VimpelCom will continue to fully consolidate OTA. This partnership with the FNI provides OTA with a strong and stable shareholder structure on which to build and strengthen its operations in Algeria.

Jo Lunder, Chief Executive Officer of VimpelCom, commented: "This favorable long-term agreement and settlement represents a successful outcome for all stakeholders. For VimpelCom and GTH, this value accretive transaction releases USD 4.0 billion in cash proceeds to pay down gross debt. For GTH and Djezzy, it resolves our dispute in Algeria and allows us to solidify our strong leadership position in Algeria by enabling us to further invest in a high speed 3G network to take full advantage of the potential for mobile data growth in the country. We look forward to working with our new partner, the Algerian National Investment Fund, to drive the business forward and to create significant long-term value for all of our stakeholders in line with our strategic Value Agenda."

The terms of the Share Purchase Agreement and the Shareholders Agreement have been approved by the Algerian Conseil des Participations de l'Etat, the Conseil de Direction of the FNI, the VimpelCom Supervisory Board and the Global Telecom Holding Board of Directors.

Prior to Closing and in order to facilitate the Closing OTA will contribute its operations (the "Contribution") to Optimum Telecom Algerie S.p.A. ("Optimum"), a wholly-owned subsidiary of OTA. In addition, at or prior to closing, Optimum intends to establish a credit facility with a syndicate of local banks in an amount of up to 82 billion dinars (approximately USD 1.0 billion).

Ukraine peace deal falters as rebels show no sign of surrender

 An agreement reached last week to avert wider conflict in Ukraine was faltering as the new week began, with pro-Moscow separatist gunmen showing no sign of surrendering government buildings they have seized.

Washington says it will hold Moscow responsible and impose new economic sanctions if the separatists do not clear out of government buildings they have occupied across swathes of eastern Ukraine over the past two weeks. U.S. Vice President Joe Biden was due in Kiev later on Monday.

Kiev and Moscow traded accusations over a deadly shooting on Easter Sunday morning, when at least three people were killed at a checkpoint manned by armed separatists. Moscow and its separatist allies accused Ukrainian nationalists of attacking the checkpoint; Kiev said Russia had provoked the violence.

In a later incident, the Ukrainian defence ministry said gunmen on motorcycles fired on an army checkpoint between Donetsk and Slaviansk shortly after dark on Sunday. The troops opened fire, wounding one attacker and capturing two, it said.

Russia, Ukraine, the European Union and the United States signed off on an agreement in Geneva on Thursday, designed to lower tension in the worst confrontation between Russia and the West since the Cold War.

The agreement calls for occupied buildings to be vacated under the auspices of envoys from the Organization for Security and Cooperation in Europe, a security body. All sides are meant to refrain from force.

But no sooner had the accord been signed than both sides accused the other of breaking it, while the pro-Moscow rebels said the pledge to withdraw from occupied buildings was not binding on them.

"Steps are being taken - above all by those who seized power in Kiev - not only that do not fulfil, but that crudely violate the Geneva agreement," Russia's Foreign Minister Sergei Lavrov said on Monday, describing the attack on the separatist checkpoint as a crime.

President Vladimir Putin overturned decades of post-Cold War diplomacy by announcing last month that Russia has the right to intervene on the territory of its neighbours to protect Russian speakers. He then seized and annexed Ukraine's Crimea peninsula.

Moscow has since massed tens of thousands of troops on the Ukrainian border, and Kiev and its Western allies say Russian agents are directing the uprising in the east, including the

"green men" - heavily armed, masked gunmen in unmarked uniforms.

In his latest move, likely to be seen by the West as a further threat to the post-Cold War order, Putin signed a law on Monday making it easier for Russian speakers across the former Soviet Union to obtain Russian citizenship. [ID:nL6N0ND0WH]

Eastern Ukraine is largely Russian speaking and many residents are deeply suspicious of the pro-European government that took power in Kiev in February when Moscow-backed President Viktor Yanukovich fled the country after mass protests.

Separatists have declared an independent "People's Republic of Donetsk" in the east's biggest province and have named themselves to official posts in towns and cities, setting up checkpoints and flying Russian flags over government buildings.

Ukraine announced an "anti-terrorist" operation to retake the territory last week, but that modest effort largely collapsed in disarray when a column of paratroops surrendered rifle parts and some armoured vehicles to a separatist crowd.

Kiev has declared an "Easter truce", though it is far from clear it could muster any real force if it tried. The army is ill-equipped, untested and untrained for domestic operations, while the government in Kiev doubts the loyalty of the police.


SANCTIONS

The United States and European Union have imposed visa bans and asset freezes on a small number of Russians over the annexation of Crimea, measures that Moscow has openly mocked.

Washington and Brussels both say they are working on tougher economic measures to impose unless Russia's allies in eastern Ukraine back down, although building a consensus is tricky in Europe where many countries rely on Russian energy exports.

One European diplomat said the Geneva deal was a way for Putin to buy time and undermine momentum towards sanctions:

"Talks and compromises are just part of his tactics," said the diplomat. "He wants to have Ukraine."

The OSCE, a European security body that includes both NATO members and Russia, has deployed around 100 monitors and mediators in Ukraine in 10 different cities including the capital Kiev and eastern and southern towns.

An OSCE spokesman said the mediators were visiting separatist-occupied buildings with copies of last week's Geneva accord to explain it to the people inside.

"It's a mixed experience dealing with checkpoints and so forth and there is a varying reaction to teams. There is a hardened attitude in Donetsk or Slaviansk but some other areas are more accommodating," spokesman Michael Bociurkiw said. "When teams go to smaller centres people are more willing to talk."

He said there were reports of "a handful of buildings" being evacuated, though he was unable to give any details. So far Reuters has not been able to confirm any reports of separatists standing down.


JOURNALIST HELD

The separatists in the east have grown increasingly assertive and hostile to outsiders. A lawyer said on Monday the rebels had detained a Ukrainian journalist, accusing her of "war crimes" during protests that toppled Yanukovich. There were also reports of other journalists being held.

Irma Krat, 29, was held late on Sunday by militants in the city of Slaviansk, said Oleg Veremienko, a lawyer for the online television news site Krat runs. Russian Internet channel Life News posted video of her being escorted by masked men in combat gear and of an activist saying she was under arrest.

Details remained disputed in Sunday's shootout in Slaviansk, a town on an eastern highway north of Donetsk which has become a heavily militarised rebel redoubt.

The separatists said armed men from Ukraine's Right Sector nationalist group had attacked them. The Right Sector denied any role, saying Russian special forces were behind the clash.

The town's self-appointed pro-Russia mayor placed a curfew on the town and appealed to Putin to consider sending troops.

Separatist militiamen told Reuters four vehicles had approached their checkpoint at around 2:00 a.m. (2300 GMT) and opened fire.

"We had three dead, four wounded," one of the separatist fighters, called Vladimir, told Reuters at the checkpoint, where there were two burned-out jeeps.

Source: Reuters

WSJ: Another Selloff Averted. The Bullish Approach

"While the beating that momentum stocks have taken over the past month has garnered plenty of attention, the major U.S. stock indexes are once again perched near record levels.

Much of the turbulence has been concentrated in social-media companies, cloud-computing firms and early-stage drug producers. As these so-called momentum stocks have dropped sharply, the worry has been that they’d take the broad market down with them.

That hasn’t played out.

Many investors now believe that the big flows of money into and out of these stocks will have little impact on the appetite for bigger, more-established companies. There is renewed confidence that the broad indexes are poised to move higher once the so-called momentum stocks stabilize.

The Dow Jones Industrial Average, coming off its biggest gain of the year during the holiday-shortened week, is only 1% from its all-time high. The S&P 500 is positive for the year and is only 1.4% from its own record hit earlier this month.

By comparison, the Nasdaq Biotechnology Index, which doubled from early 2013 through the beginning of this year, is down 14% over the past month. The Nasdaq Internet Index is down 9% over the same time frame.

“Investors have collectively realized that earnings and growth assumptions in these highflying stocks were too aggressive and hard to come by in a world of low nominal growth and weak pricing power,” Mr. Zhao said. “As a result, they have run for the exits, causing prices to fall.”

The difference is that the broad market hasn’t felt the same pain.

“Such localized shakeouts are an inherent part of any bull market,” he added. “Although high-valuation stocks have been hit hard in the U.S. equity market, the rest of the global financial markets remain very much focused on exploiting yield, playing various carry trades and taking on risk. This is another reason why the crack in social network stocks may not be foretelling of some­thing bigger about to happen.”

The bull market, in its sixth year following the financial crisis, has shown signs of fatigue in 2014. After last year’s 30% rally, the S&P 500 is up just 0.9% this year. As MoneyBeat columnist E.S. Browning pointed out, the S&P 500 hasn’t dropped 10% or more since September 2011. That is twice as long as usual".