Real Estate: The Next Global 'It' Cities?

         The WSJ reports, "In the global luxury real-estate scene, is Lagos poised to be the next big thing?

The Nigerian city is among a list of 12 up-and-coming luxury markets around the globe, according to a new report from Savills  World Research, in cooperation with design firm Candy & Candy and Deutsche Asset and Wealth Management.

The other cities are Beirut, Cape Town, Chennai, Chicago, Dublin, Istanbul, Jakarta, Melbourne, Miami, Panama City and Tel Aviv. The most expensive city is Tel Aviv, where an entry-level, two-bedroom luxury apartment typically cost $1.45 million in March; the least expensive was India's Chennai, where a luxury two-bedroom cost around $160,000.

The report considered economic factors, such as job-market potential and gross domestic product, but also a number of qualitative aspects, like cultural attractions and the presence of English as a first or second language.

In 2013, there were nearly 200,000 people world-wide with wealth exceeding $30 million, according to the Wealth-X & UBS World Ultra Wealth Report. As prices continue to rise in prime markets like New York, London and Hong Kong, Yolande Barnes, director of Savills World Research, predicts that luxury buyers will increasingly look to less mature markets for better value".

"The cities run the gamut, from well-established markets like Melbourne and Tel Aviv, which have yet to reach their full investment potential, the report notes, to developing markets like Chennai and Lagos, which may have larger returns but more risk for buyers. "You have to look at the political risk," said Nick Candy, CEO of Candy & Candy, noting that unpredictable currency exchange and ownership hurdles for foreigners in some markets might dissuade some buyers.

In Tel Aviv, the Manhattan Tower attracts cosmopolitan buyers, says Tomer Fridman, CEO of Israel Sotheby's International Realty. "Ten to 15 years ago, there wasn't an international product," he said. Today, the 10,000-square-foot penthouse in the tower is listed for $25 million. He credits the city's thriving tech industry and interest from Europeans, among others, for the surge in foreign buying.

Other markets on the list are similar to Panama City. The Central American hub is poised for rapid growth thanks to a mix of foreign investment and government policies that benefit international buyers, said Andrea Kam, a consultant for real-estate brokerage Bonavivi in Panama City.

The global recession hit some markets on the list particularly hard, but the report says home prices are rebounding. In Dublin, for example, inventory is tightening and demand is rising, said Graham Murray, head of residential for Savills in Dublin".

A Building Boom in Bogotá, Colombia.

         The WSJ reports,"architect Richard Meier's new residential building will feature his signature jutting planes and surfaces carved from white steel and glass. The 37 apartments, starting at about $2 million, are 73% sold even though ground won't be broken until June. The project, named Vitrvm, and the buzz surrounding it, is what you might expect from the designer of L.A.'s Getty Center except for one thing: It is in Bogotá, Colombia".

"Why not Bogotá?" asked Mr. Meier. "The economy is strong and there are people that want quality buildings to live and work in."

The real-estate market of Bogotá, population about 8 million, tells a more positive story today than what some might expect from the capital, which has a history of political and drug-related violence. Prices per square foot for new construction have more than tripled from 2003 to 2013, says a report published by Colombia's Bank of the Republic. Existing-home prices also have risen over the decade.

New buildings that have top-notch amenities and that are listed above $370 a square foot have sprouted around the city, bringing rare amenities such as gyms, media rooms, and tennis or squash courts; a few top buildings feature conference rooms for executive meetings. International real-estate firms, such as Engel & Völkers, a Germany-based luxury brokerage with offices in 38 countries, are setting up shop in the city.

Meanwhile, the kidnappings that gave rise to Colombia's fearsome reputation fell by more than 90% between 2002 and 2009; there were 43 kidnappings last year in the city, states a report by the U.S. Department of State, citing Colombian government figures. Peace talks between the government and guerrillas aim to put a cap on a 50-year conflict, local officials say.

One developer, Neos Group, recently has completed two high-end residential buildings in the city and has four more slated to be finished by 2016. Sales have been brisk at $400 to $600 a square foot, said Neos sales and marketing director Valentina Grajales, who moved to Colombia last year after 10 years selling real estate in Miami.

She is encouraging Neos to use Thermador and Teka appliances and Venetian marble, based on their popularity in high-end condos in Miami. The company also is focused on designing bigger bathrooms and kitchens for wider appeal, she said.

Mr. Seda, of Royal Property Group, who moved from Los Angeles to Colombia in 2007, is securing permits to build 60 apartments and 80 hotel rooms as part of Charlee Hotel, a project in which individual investors will own most of the hotel rooms. An important client base for him is executives who work for multinational corporations that have recently established headquarters there, he said. In the past few years, international companies such as consultant A.T. Kearney, HRG Logistics andFacebook  have opened offices in Bogotá.

"Our thought process is all these companies need somewhere to put their Latin American headquarters, so they are buying offices and residential," Mr. Seda said.

Real-estate brokers and developers say most of the demand for luxury housing is from Colombians. All of the buyers so far of the Richard Meier building are locals, said partner and head of sales José Luis Caleya, of developer Icono Urbano. But Americans, typically with some tie to Colombia such as a Colombian spouse, also are exploring the market, said Sam Miller, managing director of Colombia International Real Estate, a Bogotá-based consultancy. Mauricio Jaimes, founder of Buy Colombia Realty, which works exclusively with foreign investors, said his client base is 60% American, 30% European and 10% Middle Eastern.

Snapchat Adds Ephemeral Text Chat And Video Calls

Snapchat is slowly adding features on top of its highly successful ephemeral messaging platform. Today’s two new features are a good old chat interface and a new FaceTime-like video calling feature. Text messages could greatly change the nature of the app.

While ephemeral photos are a great way to send something funny and start a conversation with your friends, many users sent multiple snaps back and forth just to chat. You ended up taking a crappy photo and adding a caption. The fact that it was ephemeral and limited when it comes to the number of characters were quite charming, but sometimes infuriating.

But all of this is past now. You can swipe right on a friend’s name in your Snapchat inbox to enter a new chat screen. It’s a regular chatting interface. You can write and send text messages, send snaps, and send photos or videos from your camera roll. Alas, you won’t find any sticker.

But there is a new button as well at the bottom of the screen. Whenever it turns blue, it means that he or she is currently in the chat screen, reading your messages. If you hit the button, you will start a call. If the other person hits the button too, you will see both ends of the calls at the same time.

Just like when you see a snap, you need to maintain your finger on the screen to keep the video call active on your end. Below your finger, you will see a thumbnail of your camera. The rest of the screen is filled with your friend’s face. You can remove your thumb, and you will only see your friend without sharing your camera.

Source: TechCrunch

Singapore minister Teo Ser Luck envisions Asia as the next Silicon Valley (Startup Asia preview)

We’re just a week away from the opening of our Startup Asia Singapore 2014, which is on May 7 and 8. The conference opens with a reminder of the big picture behind the toiling of so many entrepreneurs in the region – about building up Asia to be a tech powerhouse, to be the next Silicon Valley. Teo Ser Luck, Singapore’s Minister of State for Trade and Industry, will present the opening keynote entitled ‘Why Asia Can Be The Next Silicon Valley’. Since taking that ministerial post in 2011, Mr. Teo has been actively involved in Singapore’s startup ecosystem, and no doubt he’ll have choice words about Singapore’s role in Asia’s tech-oriented future. While listening to the keynote, you might like to remember where Asia stands in terms of tech right now. Asia’s ecommerce market is worth $525.5 billion this year; the continent has 390 million active users of Facebook; and the region is the future of the mobile internet. That’s the landscape that most of Asia’s startups launch into, and it’s one that increasingly serves as a launchpad for local startups into the rest of the world.

Source: TECHINASIA

Vine Launches A Six-Second YouTube

When Vine first launched on the web, all you could do was view your stream and check out profiles for individual users. The desktop version came with TV Mode, too, which was admittedly addictive with its constant stream of full-screen content.

But today Vine is going big on the web, bringing a number of the navigation and discovery features you’re used to in the app straight to your desktop. Plus, all of the content is accessible to anyone on the web, with no sign-in required.

Alongside your Vine feed and user profile streams, Vine will now show a featured section that includes Editors Picks, cool playlists, and special featured videos.

You’ll also have access to channels, trending tags, and a popular page, just as you do in the app.

Perhaps more importantly, users don’t have to be logged in to Vine on the web to surf through these channels or featured Vine videos. Previously, to use Vine on the web, you had to be signed in or hunt down the URL for a user profile. Now, simply hitting up Vine.co will give you access to all of the best content on Vine, complete with TV mode, which plays them one after the other in full-screen.

This is a refreshing update considering that most mobile-first companies have limited and poorly designed web counterparts to keep people active in the main (mobile) experience. Instagram.com, with its limited feature set and crappy performance, is perhaps the most shameful example.

The future of Vine as it exists within Twitter’s long-term plan remains unclear. Since launching over a year ago, two of the co-founders have left the company, but it seems that the app continues to enjoy an active user base. This move, however, is a clearer step away from competing with Instagram on a mobile consumption level and focusing more on how mobile video creation and true video consumption play into each other.

In a way, Vine is inching closer and closer to being a YouTube competitor, where users can create short videos on mobile and yet still experience all the wonders of the laid-back YouTube-style consumption experience.

To be perfectly honest, video creation nor consumption is where it needs to be for it to take off in the way that mobile photos have, and part of the problem is inherent in video itself. A photo requires perfection or correctness or whatever for a single moment in time, and can be enhanced beyond that. Video, however, requires that perfection or correctness to extend for seconds and seconds.

A lot more talent, creativity, and attention to detail goes into creating an enjoyable video, and just as Twitter did with its own product, the company has used restriction to force quality content out of its users. Vine actually stands a chance at being the place where we finally enter into a world of mobile video immersion and addiction, and herding people over to the web to consume is a surprisingly smart way to start.

To check out the new Vine.co in all its glory, head on over by clicking here. Though, be forewarned, it looks like it might not be up and running quite yet.

Source: TechCrunch

LINE Buddies Up with Wandoujia, Bidding Farewell to Qihoo 360

Chinese mobile search service Wandoujia announced today it has partnered with LINE, which will oversee the services and marketing activities of the Korean messaging app in Chinese mainland.

In this cooperation, Wandoujia will provide technical supports to LINE’s services in China and the two companies will strengthen the localized features of LINE by integrating the brands and platform resources of both parties.

LINE entered Chinese market in 2012 through a one-year contract with Qihoo 360, which is responsible for promotion and operation of LINE’s services in local market. After announcing this tie-up, LINE expanded its cooperation with other partners like Baidu, 91, Alibaba.

It is not surprising for us to see the cooperation between LINE and Wandoujia, since the two parties has already kicked off partnership in September last year. Wandoujia, as an app distribution platform, shares similar target users with LINE. Back then, LINE said they will not suspend cooperation with Qihoo 360, which is still an important, but not sole partner of LINE in China.

Qihoo 360 announced today it maintained part of the cooperations with LINE after their contact expired, but it is no longer the operator of LINE’s service in China.

To tap Chinese market, LINE also cooperated with Uniqlo, a Japanese casual wear brand also popular in China.

Source: TechNode

Xbox One to Enter Chinese Market This September, Finally

BesTV and Microsoft jointly announced today that they will introduce Microsoft’s flagship game console Xbox One into Chinese market this September. The news finally settles loads of buzzheated up since the establishment of a joint venture E-Home Entertainment Development Co., Ltd. between BesTV and Microsoft and the lifting of bans on game consoles imposed in 2000.

Xie Enwei, senior VP of Microsoft Grater China, is named as the general manager of Microsoft’s Xbox Department China. In addition, he will also in charge of the joint venture. E-Home Entertainment will invest in an innovation project, helping game developers to develop and distribute games based on Xbox One platform.

Microsoft has sold out over 5 million sets of Xbox Ones in 13 countries since its debut at the end of last year, making it the most successful product of Xbox Series, according to the company. Xbox One is sold for $499.99 yuan in US market. Although the two companies did not disclose the price of Xbox One in China, some media reported that it is priced at 4,999 yuan (around $798).

The Chinese gaming industry had 490 million users and saw 38% in total revenue in 2013. Trigger by the huge market potential and ease of regulation curbs, a lot of companies set their eyes on game console sector.

Huawei showed off its homegrown game console Tron at the beginning this year and planned to ship it at around 1,200 yuan this May. ZTE The9, a joint venture co-founded by ZTE and online game company The9, also released a similar game console Fun Box this March.

Source: TechNode

Alibaba Tmall Partners Ten Home Appliance Brands to Experiment with C2B

Tmall, the online business-to-customer marketplace of Alibaba Group, has reached partnership with ten Chinese home appliance brands to experiment with customer-to-business model on twelve production lines.

Tmall will offer sales data and consumer feedback generated from those brands’ stores so that they will be able to make improvements on or customize certain products. For instance, a specific function can be added to a product as requested for users aged 25-30. But since the number of users of this age group who’d possibly buy this custom edition must be much smaller than the total, the planned output shouldn’t be high.

It is expected those products will be sold at comparatively lower prices as there will be no distributors other than Tmall.

The first batch of products, ranging from traditional home electronics products to newly emerged gadgets such as digital media player, will land on Juhuasuan, the group-buying platform of Alibaba, on May 7, according to the company. The ten manufacturers include household names in China, Joyoung, Midea and Supor.

Source: TechNode

WSJ: Exxon Profit Drops on Refining Segment Weakness Earnings Easily Top Wall Street Estimates

      The WSJ reports "Exxon Mobil Corp.said its first-quarter earnings fell 4.2% as growth in its exploration and production business was offset by declines in its refining and chemicals segments.

Exxon Mobil reported a profit of $9.1 billion, or $2.10 a share, down from $9.5 billion, or $2.12 a share, a year earlier. Revenue decreased 1.5% to $106.77 billion.

Analysts polled by Thomson Reuters expected a per-share profit of $1.88 and revenue of $109.76 billion.

Earnings from its exploration-and-production business rose 11% to $7.8 billion, reflecting higher natural-gas price realizations. Production dropped 5.6% on an oil-equivalent basis from a year earlier.

Capital and exploration expenditures for the first quarter were $8.4 billion, down 28%.

Exxon's refining and marketing business reported that earnings declined 47% to $813 million on weaker margins, mostly in its refining business.

Chemical segment earnings fell 7.9% to $1.05 billion.

Share repurchases to reduce shares outstanding were $3 billion in the latest quarter.

The world's largest publicly traded oil company is also the largest natural gas producer in the U.S. since its $25 billion acquisition of XTO Energy Inc. in 2010. Exxon has added to its shale-gas assets through additional deals since then".

Europe looks to US for next steps on bank health checks

 Europe's banking watchdog has edged closer to the United States in a check up of its banks this year and is keen to go further still to increase its influence over how banks behave, including how much they pay staff or shareholders.

Previous European bank health checks since the financial crisis failed to restore confidence in an industry where many banks were rescued by taxpayers. But in the United States, regulators have been praised for stepping in early to recapitalise banks and they now have the clout to keep bank chiefs on their toes.

"What the U.S. has been able to do successfully is in 2009 people were looking for blood on the floor immediately and were focused on who passed and who failed," said Piers Haben, director of oversight at the European Banking Authority, which runs Europe's tests.

"They've managed to transform that so people are now much more focused on forward capital plans," he said. "It is now much more about 'what's your dividend policy?' or 'what's your bonus policy?' and 'what's your pathway?' That's a very important feat the U.S. has managed to achieve," Haben said at this week's Reuters Financial Regulation Summit.

The U.S. Federal Reserve has stepped in the way of big banks several times. This week it told Bank of America to suspend raising dividends and buying back shares after the country's second biggest bank miscalculated its capital, sending its shares tumbling.

Europe's latest test, unveiled on Tuesday, can force banks to raise equity to improve capital and also gives supervisors a bigger toolkit to deal with any weaklings.

European regulators have made several trips across the Atlantic to learn lessons from the more established U.S. process, and some have privately said they were surprised at the level of rigour there.

Europe could also learn from the more flexible approach to capital levels and testing in the United States, Christian Clausen, chief executive of Sweden's Nordea , said.

"They put in a lot of capital on day one and Europe didn't do that. And they put in a lot of restrictions and then lowered them, and have replaced it with a stress test regime. That is a smart way to do it, rather than keep raising the bar," Clausen said at the Reuters Summit.

When Europe's test results are released in October it is not expected to lead to a huge capital raising. [ID:nL6N0MZ0YQ] Analysts say Deutsche Bank may raise equity in advance of the results and some smaller banks may need cash.

Banks have already boosted capital by about 35 billion euros

($48.5 billion) and taken bigger provisions on loans in advance of the test, according to analysts at Morgan Stanley.

In Britain, where big banks will go through the European health check and also a parallel domestic test, the regulator can limit pay for shareholders and staff and even force banks to change executives. The EBA has said other national supervisors have extra powers, although it has declined to specify them.

With the European Central Bank taking over supervision of all euro zone banks there will be greater consistency on dealing with banks that fail, and the ECB is already forcing banks to assess the quality of assets before the health check starts.


PAST FLAWS

Europe's tests in 2009, 2010 and 2011 foundered as a disjointed political and regulatory landscape was exacerbated by economic crisis in many countries. Europe also tests a much bigger number of banks - 124 this year, compared with 30 in the United States.

The Fed's test, known as a comprehensive capital analysis and review (CCAR), has been criticised for lack of transparency on its methodology and its decisions can seem arbitrary.

The aim of the tests is to assess banks' ability to withstand recessions, spikes in unemployment, falls in house prices and other factors. The most adverse scenario the Fed inflicts on banks is seen as harsher than the EBA's test.

But other factors - notably Europe's insistence that banks use a 'static balance sheet' that does not allow adjustments for asset sales or other remedial action in a crisis - make comparisons about test severity difficult.

What is more significant is how the U.S. testing process has evolved so it has become a key part of executives' planning and strategy, industry sources said.

"Over the last five years the CCAR process has had a very strong effect on the banks in the U.S. in terms of the discipline to the approach and the resources they apply, which are much greater than typically applied in Europe," Richard Barfield, a director in PwC's risk and regulation practice, said. "All those qualitative aspects of the process have moved on from the starting point."

Almost 90 percent of European banks had less than 20 people dedicated to stress testing, according to a survey by PwC in January, whereas core teams in some U.S. banks included 40-70 people, and one big bank estimated it had 500 people involved.

The Fed's test takes place every year to a set timetable.

"There is a value to routine," the EBA's Haben acknowledged. Europe's banks will conduct annual national tests, but he said no decision had been taken on whether that should be done across the European Union. 

Source: Reuters

Geopolitics: Ukraine Crisis recent developments

"The Russian president said military withdrawal, an end to violence and a national dialogue were the key issues in Ukraine, according to a Kremlin briefing on the phone conversation.

A spokesman for Merkel said the focus of the call had been the German chancellor asking for Putin's assistance in freeing seven observers from the Organisation for Security and Co-operation in Europe who are being held by pro-Russia separatists in eastern Ukraine. The Kremlin said Merkel initiated the call.

A crowd of pro-Russians hurling rocks and Molotov cocktails took control of the prosecutor's office in Donetsk on Thursday as Kiev's hold on the east continued to ebb away.

Several of the 100 police officers guarding the building were injured and in some cases severely beaten as they were stripped of their weapons and shields. The pro-Russians hoisted the Russian flag, barricaded the front door and burned Ukrainian symbols in the street.

The Russian foreign ministry said earlier on Thursday that a proposal from Ukraine's prime minister, Arseniy Yatsenyuk, to hold a poll on Ukrainian unity and territorial integrity was a sham that would only deepen the crisis in the country.

On Wednesday Yatsenyuk said the Kiev government would send to parliament a law on conducting the nationwide poll on 25 May, when the country is also due to hold a presidential election.

The Russian foreign ministry said the plans were "cynical" given what it said was Kiev's military operation against "its own people"".

Source: theguardian

China censors assert online authority in blow to U.S. TV shows

Globe says Pacific Rubiales cut to "sector perform"

The Globe and Mail reports in its Friday, April 25, edition that RBC Dominion Securities analyst Nathan Piper has downgraded Pacific Rubiales Energy ($17.87) to "sector perform" from "outperform." The Globe's Darcy Keith, Tim Shufelt and Jody White write in the Eye On Equities column that Mr. Piper cut his price target to $21 from $23. The analyst warns that a big increase in operating costs could erode investor sentiment toward Pacific Rubiales Energy. Pacific Rubiales shares have advanced by almost 40 per cent in two months. Mr. Piper lowered his rating after the company, which is the largest private oil producer in Colombia, reported an increase in first quarter operating expenses of up to 25 per cent from the previous quarter. Mr. Piper says, "Although production guidance for FY14 remains unchanged we think the cost increase could impact recent positive investor sentiment." Credit Suisse also dropped its price target to $17 from $18 and reiterated a "neutral" rating. The average analyst price target, according to Bloomberg, is $24.28. Credit Suisse analyst David Phung downgraded Pacific Rubiales to "neutral" from "outperform" in the Eye column on Oct. 16, 2013. The shares were then worth $22.52.

U.S. ISM manufacturing index climbs to 54.9% in April from 53.7%

U.S. manufacturing companies expanded in April at the fastest pace since the end of last year, a survey of executives found. The Institute for Supply Management said its manufacturing index rose to 54.9% last month from 53.7% in March, marking the highest level since December. That was higher than the 54.4$ forecast of economists surveyed by MarketWatch. Readings over 50% indicate more companies are expanding instead of shrinking. The employment gauge jumped 3.6 points to 54.7% - also the highest level since December. The ISM's new-orders index was flat at still-strong 55.1%, while production dipped to 55.7% from 55.9%. Seventeen of the 18 industries tracked by ISM reported growth last month. The only one to record a decline were makers of nonmetallic mineral products.

Source: Marketwatch

US Jobless claims rise 14,000 to 344,000

- The number of people who applied for U.S. unemployment benefits rose by 14,000 to a nine-week high of 344,000, the Labor Department said Thursday. The increase was unexpected. Economists polled by MarketWatch had expected claims to fall to a seasonally adjusted 320,000 in the seven days ended April 26. Claims jumped 25,000 to 330,000 in the prior week but analysts had thought some of the gain was due to the Easter holiday and would be reversed this week. The average of new claims over the past month rose by 3,000 to 320,000, the highest since the end of March. The monthly figure smooths out the jumpiness in the weekly data and offers a better look at the underlying trend. Also, the government said continuing claims increased by 97,000 to a seasonally adjusted 2.77 million in the week ended April 19. 

Source:  Marketwatch

China's PMI came in at 50.4 in April

Beijing's official measure of manufacturing activity (PMI) came in at 50.4 in April, up a tick from March but under forecasts of 50.5. The middling outcome was not enough to lessen concerns about the economy, but neither did it point to a deepening slowdown.

There was also better news from South Korea as its exports grew at their strongest annual pace in over a year, suggesting the recovery in global demand was gathering pace after a soft start to the year.

The conflicted mood was clear in the Australian dollar, often a bellwether for market thinking on China given the country is a major exporter of resources to the Asian giant.

After an initial dip to $0.9279 on the PMI, the currency quickly rebounded to $0.9300 to be a shade firmer on the day. The reaction in share markets was modest given most in the region were off on holiday.

Japan's Nikkei .N225 was up 0.4 percent, while Australian shares .AXJO eased 0.4 percent. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS barely budged.

Sentiment had been supported somewhat by Wall Street where the Dow notched up its first record high of the year. The Dow .DJI ended up 0.27 percent, while the S&P 500 .SPX gained 0.3 percent and the Nasdaq .IXIC 0.27 percent.

Source: Reuters

WSJ: Fed Cuts Bond Buys, Sees Growth Pickup

       The Wall Street Journal reports,"the Federal Reserve said Wednesday it would reduce its bond purchases to $45 billion a month and it was starting to see a growth pickup in recent weeks after a harsh winter that hit the U.S. economy".

The Fed is effectively in watch, wait and plan mode. The $10 billion cut in monthly bond purchases, the fourth this year, was widely expected by investors and represents a continuation of the policy strategy laid out in the past few months by Fed ChairwomanJanet Yellen, who took over in February, and former Chairman Ben Bernanke.

The central bank also stuck to its guidance on short-term interest rates, saying they would remain near zero for a "considerable time" after the bond-buying program ends later this year. Many investors don't expect the Fed to start raising interest rates until well into next year.

U.S. stocks rose after the report, with the Dow Jones Industrial Average closing up 0.3% at a record 16580.84. The yield on benchmark 10-year Treasurys fell to 2.647% as the price rose.

The Fed's move came after a government report Wednesday showed the U.S. economy barely grew in the first quarter. The central bank's policy-making committee acknowledged the first-quarter slowdown was worse than expected, saying in a statement that activity "slowed sharply." Previously, the group had just said activity slowed.

Still, officials nodded to signs of economic improvement in March and April, suggesting they aren't too worried about the winter slowdown.

"[G]rowth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions," the statement said.

Household spending "appears to be rising more quickly," Fed officials said. Recent reports on retail sales and auto sales have been stronger than expected. But they said business fixed investment had "edged down" and repeated their view from March that the "recovery in the housing sector remained slow."

With reductions in the bond-buying program on course, Fed officials are focusing on longer-run issues. That includes emerging discussions about which short-term interest rates to target once a credit-tightening campaign kicks off.

More broadly, Fed officials need to update their formal exit strategy from easy-money policies. Three years ago, they agreed on a plan to someday sell off the central bank's large portfolio of mortgage-backed securities. Many officials believe this strategy is out of date. For instance, the Fed might choose instead to let the mortgage portfolio wind down gradually without aggressive sales.

Alibaba in Talks to Reclaim Stake in Alipay Payments Unit

      The Wall Street Journal reports,"Alibaba Group Holding Ltd. is in discussions with its major shareholders to reclaim a formal stake in its strategically important online-payment affiliate, said people familiar with the matter".

"A stake in the affiliate, called Alipay, could significantly raise the future value of Alibaba, now preparing an initial public offering already expected to be one of the largest in U.S. history. Even if an agreement over Alipay is reached, it isn't expected to take effect before the IPO, the people said, and would face regulatory review in China.

Alipay is central to Alibaba's operations, processing its e-commerce payments similar to the way PayPal handles transactions for eBay Inc".

"One scenario being discussed with a major shareholder would have Alibaba taking a one-third stake in Alipay, said one of the people familiar with the talks.

The Alipay ownership discussions come as Alibaba is gearing up for an IPO late this summer that could raise more than $20 billion. With such a huge supply of shares potentially coming to market, the company must drum up significant interest among investors if it wants to sell those shares at a high price.

The possibility of direct ownership in Alipay could add to investor excitement, enabling Alibaba's future shareholders to benefit from Alipay's growth, especially in its payment services for non-Alibaba clients and in its financial services. Alipay doesn't disclose its profit or revenue.

The Alibaba-Alipay relationship has nonetheless been controversial, and demonstrates an often interconnected web of Chinese corporate ownership.

Alibaba founder Jack Ma separated Alipay from the group in 2011, saying the spinoff was necessary for Alipay to obtain a license to continue its business under then-new Chinese government regulations.

The move prompted large Alibaba investor Yahoo Inc.  to complain it wasn't made aware of the transfer of Alipay until after it was enacted. Some investors were angry that the shift devalued their holdings.

Alibaba said at the time that its board, on which Yahoo co-founder Jerry Yang held a seat, had previously discussed the possibility of such a spinoff. The two firms, and another major investor SoftBank Corp., later reached an agreement over terms of the separation.

Today, Alipay is controlled by a parent company in which Mr. Ma holds a 46% stake. Other Alibaba co-founders also hold stakes in Alipay's parent company. That parent company also owns the unit that operates Alipay's money-market fund, Yu'E Bao.

SoftBank, a Japanese Internet and mobile service company, has an about 37% stake in Alibaba Group. Yahoo, its second-largest shareholder, owns 24% and Mr. Ma owns roughly 7%.

Following the 2011 spinoff, Alipay and Alibaba agreed that Alibaba would be paid between $2 billion and $6 billion if Alipay were to go public. Their agreement also sought to ensure that Alipay didn't try to overcharge Alibaba for its payment services. The direct ownership structure under discussion would replace that framework agreement".

Alibaba on patent-buying spree ahead of US listing

 Alibaba Group Holding Ltd is beefing up its patent holdings in the United States, a move that may help avoid the pitfalls that bedevilled Google Inc, Facebook Inc and Twitter Inc ahead of their initial public offerings (IPOs).

China's largest e-commerce company has so far obtained 102 US patents, including 20 purchased from International Business Machines Corp (IBM) last year, according to researcher Envision IP.

Alibaba has applications on more than 300 others for technology such as payment processing, product recommendations and picture searches, the US Patent and Trademark Office's database shows.

"It's a smart move," said Maulin Shah, managing director of New York-based Envision. "When a company announces IPO plans, they instantly become a target from competitors already in the market who want to hamper the IPO or those who see it as an opportunity to exploit the company at a vulnerable time."

Source: BTPremium

WSJ: Understanding Alibaba

      The WSJ reports,"perhaps the best way to understand Alibaba is as a mix of Amazon, eBay and PayPal, with a dash of Google  thrown in, all with some uniquely Chinese characteristics.

"Unlike Amazon.com Inc., which buys goods from suppliers and sells them to customers, Alibaba has always acted as a middleman, connecting buyers and sellers and facilitating transactions between them. While it isn't an auction company, its middleman role is similar to the one played by eBay Inc.

Taobao, Alibaba's biggest website, is like a gigantic Chinese bazaar, with about 760 million product listings from seven million sellers. Merchants don't pay to sell products on Taobao. Instead, they pay Alibaba for advertising and other services to allow them to stand out from the crowd.

hat no-fee model is part of Taobao's appeal in China. Much as with Google Inc., the ads from merchants appear with Taobao's product-search results.

While Taobao is mostly for small merchants, Tmall, another shopping site run by Alibaba, is designed for bigger merchants, including well-known brands such as Nike Inc.  and GapInc.  Apple Inc this year opened a store on Tmall. Unlike Taobao, Tmall, which has about 70,000 merchants, charges each seller a deposit and an annual fee, as well as a commission on each transaction.

"What sets Alibaba apart is size. The company has said that Taobao and Tmall account for more than half of all parcel deliveries in China. In 2012, the combined transaction volume of Taobao and Tmall topped one trillion yuan ($163 billion), more than Amazon and eBay combined".

"Alibaba's revenue is about one-tenth of Amazon's because the Chinese company doesn't sell products on its site. But Alibaba is far more profitable. Alibaba's third-quarter revenue rose 51% from a year earlier to $1.78 billion. Net profit was $792 million, giving the company a profit margin of 44.6%, according to shareholder Yahoo Inc.,  which owns a 24% stake in Alibaba. Amazon posted revenue of $17.09 billion and a loss of $41 million in the same quarter".

Bloomberg: Alibaba, China's E-Commerce Giant

"Just how dominant is Alibaba in China’s booming e-commerce market? In 2012, the homegrown Amazon/EBay mashup accounted for 70 percent of the country’s package deliveries. On one day last year, itlogged $5.75 billion in transactions, and the business done over its sites accounted for the equivalent of almost 2 percent of China’s GDP in 2012. (Wal-Mart‘s sales in 2013, by contrast, are equal to about 0.03 percent of the U.S. GDP.) There are lots of  attention-grabbing Internet companies that hope to make money off of trend-hopping teens; Alibaba is  building an  empire on the spending power ofChinese farmers, laborers and white-collar workers. That could add up: By next year, more than 850 million Chinese are expected to be online — more than the population of any other country except India.
In March, Alibaba announced plans to go public, and settled on New York as the venue for its IPO after Hong Kong regulators refused to approve its proposed governance structure, which would allow its partners to nominate a majority of its board. The company generated $3.06 billion in revenue in the three months ended in December — a 66 percent increase from a year earlier — and profit more than doubled to $1.35 billion.  Figures like that have led to estimates of its worth that have run as high as $245 billion. Alibaba, which faces competition from other Chinese companies like Tencent and Baidu, is investing heavily in reaching customers through smartphones and tablets. It owns stakes in messaging application TangoMe and ride-sharing program Lyft (now expanding to serve 60 U.S. cities), has its own mobile operating system and is leasing spectrum from state-owned phone companies to offer mobile voice and data packages. However fast Alibaba’s sales grow, e-commerce transactions in China are growing faster — the government projects that they will reach 18 trillion yuan ($2.9 trillion) next year — an 80 percent increase from 2013.
The gigantic values analysts place on Alibaba speak for the bullish view of its growth potential. Yet some investors may be wary that Alibaba will suffer as China’s economic growth cools. The economy is forecast to expand 7.4 percent this year, which would be the slowest pace since 1990. Some investors have reservations about Alibaba’s management in light of its proposed board structure. Listing in the U.S. may bring more scrutiny for potential infringements of intellectual property, although Alibaba has made an effort to crack down on sellers of counterfeit goods.   And increasing competition on Taobao and Tmall is squeezing profit margins for merchants like yarn-seller Liu. If newcomers find it harder to make money on Alibaba’s platforms, the giant might start to grow more slowly".

Sinopec, Petronas agree deal on LNG project

Sinopec and its partner China Huadian Corporation have reached a deal to buy liquified natural gas (LNG) from a Canada-based LNG project operated by Petronas of Malaysia, Sinopec announced on Wednesday.

Sinopec and its Chinese partner will acquire a 15-percent stake in the Pacific Northwest LNG Project (PNW LNG), which will allow them 1.8 million cubic meters of LNG annually for 20 years, the company said.

Sinopec will have a 10-percent stake and China Huaidan Corporation will have 5 percent, the company said.

In addition, Sinopec, through its affiliate, has signed a binding Heads of Agreement with Petronas for the purchase of 3 million cubic meters of LNG for 20 years, Sinopec said.

The transactions are yet to be approved by authorities, the firm said.

These deals are expected to secure 4.2 million cubic meters of LNG per year for Sinopec, which will help the company boost its gas market share in China as well as its clean energy supply capacity, the company said.

PNW LNG is located on Canada's West Coast near Prince Rupert, British Columbia, with natural gas sourced from Progress Energy Canada Ltd's North Montney assets. Petronas of Malaysia is the project operator and majority owner of Progress Energy and PNW LNG projects.

Source: Xinhua

China Merchants wins historic bid for Australia's Newcastle port

China Merchants Group (CMG) Wednesday secured a critical foothold in Australia's key export port-city of Newcastle with State Premier Mike Baird and Treasurer Andrew Constance announcing the winning China Merchants Group bid - partnered with Hastings Fund Management - will secure the lease for 98 years.

While investment bank Morgan Stanley tackled an intense bidding process on behalf of the New South Wales (NSW) state government - five separate groups were competing for the port including industry leaders ATEC, Cheung Kong Infrastructure and Macquarie Infrastructure.

The NSW government has agreed to lease the port for 98 years to Port of Newcastle Investments, a consortium which comprises Hastings Funds Management and CMG.

It is a landmark acquisition with the asset in its entirely - the world's largest coal export port, servicing more than 2,200 vessels carrying about 150 million tonnes of cargo in the past year - at the crest of an infrastructure wave that will reshape the city of Newcastle as well.

The state government came to terms over 98 years with the consortium comprising Hastings Funds Management and China Merchants, acting as Port of Newcastle Investments.

According to Treasurer Constance, the long-term lease will deliver gross proceeds of 1.75 billion Australian dollars.

Premier Baird confirmed 340 million dollars from the proceeds will be used for the revitalization of the Newcastle CBD, in addition to the 120 million dollars the government has already allocated to the project, which includes a new light rail service.

Baird described the deal as "momentous" and one that "exceeds all expectations."

He said the scale of this transaction means the people of Newcastle and the Hunter Region of NSW should enjoy a cascade of further initiatives in the region.

"Transactions such as this bring enduring benefits to communities and the economy, and build on the NSW government's successful track record in recycling mature state-owned assets to deliver major infrastructure projects that will unlock opportunities for growth, jobs and economic development," the premier told journalists in Newcastle.

The state government reached an agreement with Port of Newcastle Investments for the lease following a competitive five- month bidding process.

Treasurer Constance said the Port of Newcastle lease is the latest in a series of successful asset recycling projects, including the sale of Eraring Energy and Delta Electricity's western power stations, the long-term lease of Port Botany and Port Kembla, and the refinancing of the Sydney Desalination Plant.

"The strong level of interest from a highly-qualified and experienced bidding field - resulting in five final bids - is a powerful endorsement of Newcastle and the Hunter and the NSW government's ability to run a robust and transparent process."

Constance said the two members of Port of Newcastle Investments are well-known, long-term global infrastructure investors, with an attractive track record in asset ownership, operations and developments. Having built terminals in China's major seaports, the CMG has been looking overseas for growth.

The CMG has a 50 percent share in a deepwater container port in Togo and is building a new 500 million U.S. dollars terminal in Colombo, a trans-shipment hub in the Indian Ocean.

"They have the infrastructure management experience and the resources needed to secure the ongoing development and professional management of the port," Constance said.

The CMG has consistently reported growing gross assets, five years ago at 201.2 billion yuan (29.5 billion U.S. dollars) and 1, 732 billion yuan (253.4 billion U.S. dollars) under management.

With a 140-year history as an owner and operator of ports and transport businesses, the CMG has been operating in the trading and retail sector in Australia for more than 20 years. In 2010, it acquired leading Australian-based container pallet logistics provider Loscam.

The looking-out policy has secured the company a massive global footprint with a proven track record across Asia and Africa and a renewed focus on the potential of the Asia-Pacific.

Hastings Funds Management and China Merchants Group are equal partners in Port of Newcastle Investments. Hastings has been involved in many successful government asset transactions, including the Sydney Desalination Plant and Cairns and Mackay Airports.

"I congratulate Port of Newcastle Investments on their successful bid and the NSW government looks forward to long and productive working relationship."

The NSW government will continue to retain regulatory oversight of the Port of Newcastle as well as responsibility for a range of maritime safety and security functions, including emergency response, harbor master, port safety operating license and pilotage functions.

Source: Xinhua

US Federal Reserve trimmed the size of its bond buying by US 10 billion to US 45 billion monthly

Looking past surprisingly grim growth in the first three months of the year, the Federal Reserve on Wednesday decided to keep moving slowly toward the exit of its bond-buying stimulus plan.

As expected, the U.S. central bank trimmed the size of its bond-buying strategy by $10 billion to $45 billion. This is the fourth straight meeting with an identical, gradual, reduction.

The decision was announced hours after a report showed the economy barely grew in the first three months of the year. The Commerce Department said the economy expanded at a 0.1% rate in January, February and March, an abrupt deceleration from 2.6% growth in the last quarter of 2013.

In a statement, the Fed said data shows “that growth in economic activity has picked up recently.”

The central bank also said the labor market “showed further improvement” and consumer spending “appears to be rising more quickly.”

At its meeting, the Fed decided once again to hold its benchmark federal funds rate at zero, where it has been since December 2008.

Source: Marketwatch