Cash crunch fears hit China stocks, yen at 5-year low vs dollar

Chinese stocks stumbled on Friday on concerns over a cash crunch, while Asian shares crept higher, with investors reassessing the Federal Reserve's policy outlook after its decision this week to start tapering stimulus.

The dollar climbed on the Fed tapering news to a more than five-year high against the yen, and stood tall against the euro and emerging currencies. Gold rebounded after earlier tumbling to a near six-month low.

CSI300 stock index shed 1.1 percent, hitting a five-week low, while shares of Hong Kong-listed Chinese companies sagged 0.9 percent.

"Liquidity is an issue," said Jackson Wong, Tanrich Securities vice-president for equity sales in Hong Kong.

"Even after the PBOC announced the short-term liquidity operation last night, there is still a concern in the short term because if the markets don't hear guidelines from PBOC officials, banks are still in the tight mode."

The Chinese money market began tightening on Wednesday and spiked on Thursday when the central bank, the People's Bank of China (PBOC), abstained from injecting cash to ease shortages, similar to a massive credit squeeze that roiled markets in June.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1 percent. It erased early gains to end a touch softer in the previous session.

Tokyo's Nikkei benchmark shed 0.5 percent on profit-taking. The index rallied 1.7 percent to its highest closing level in six years on Thursday as the yen slid following the Fed taper decision.

The Bank of Japan, as widely expected, stood pat on its monetary policy after a two-day policy meeting ending on Friday.

Analysts said the Fed's smooth start in cutting its stimulus by $10 billion to $75 billion a month without disrupting markets removed one uncertainty for the BOJ, giving it more time to decide whether further monetary expansion will be needed next year.

The yen touched its weakest level of 104.44 yen to the dollar since October 2008.

The euro eased 0.1 percent to $1.3642, hitting a two-week low. Against a basket of major currencies, the dollar was up 0.1 percent at 80.707, a two-week high.

"With the Fed now having begun the tapering process, the burden of proof now seems to be on the side of the data to weaken sufficiently to force a halt," analysts at BNP Paribas wrote in a note.

Thursday's data showed U.S. home resales hit a near one-year low in November and new filings for unemployment benefits unexpectedly rose last week, dulling an otherwise brightening economic picture.

China to diversify SOE shareholding

China will promote a mixed-ownership economy by diversifying the shareholding structure of state-owned enterprises. The announcement was made by the State-owned Assets Supervision and Administration Commission during a press conference Thursday morning.

It said the country will speed up the transformation of SOEs, especially parent companies, into joint-stock firms. The pay system will also be reformed with a focus on using performance as the basis for compensation for SOE managers. It will also improve the shareholding structure of SOEs.

"Some state owned enterprises, state owned capital investment companies and capital operating firms that are vital to national security, will be wholly invested in by state-owned capital. Absolute majority shares can be held by state-owned capital for SOEs in major industries and key fields that are the lifeblood of the economy. State capital can hold a relative majority of shares for important SOEs in pillar sectors and new- and high-technology industries. And it can hold minority shares in, or totally exit from SOEs that do not need to be controlled by state capital, and whose majority shares can be held by capital from other sources." said Huang Shuhe, Vice Director, State-Owned Assets Supervision & Admin. Comm..

Earthquake centered in Tokyo could kill 23,000

A Japanese government panel estimates that a powerful earthquake hitting directly below Tokyo could kill 23,000 people and cause over 900 billion dollars in damage.

The estimate, revised for the fist time in 8 years, is based on a scenario of a magnitude 7.3 quake occurring in southern Tokyo on a windy winter's evening.

The earthquake is likely to cause devastating jolts in central Tokyo and some places in three neighboring prefectures --- Kanagawa, Chiba and Saitama.

The jolts and fires caused by the quake could destroy 610,000 buildings, leaving 23,000 people dead, 123,000 injured, and 58,000 waiting to be rescued.

Source: NHK

China: Public concern over safety of genetically modified rice

The recent event involving genetically modified rice in Wuhan, central China’s Hubei province has sparked another round of nationwide debate about the safety of GM crops.

Earlier this month, a website conducted a sampling survey covering different brands of rice sold in supermarkets in Hubei province. One sample was found to contain genetically modified organisms.

A quiet laboratory with researchers doing experiments with the controversial genetically modified rice. This is the National Key Laboratory of Crop Genetic Improvement at Huazhong Agricultural University,in central China’s Hubei province.

Their recent product, the “golden rice”,modified to produce more beta-carotene, a form of Vitamin A, has raised wide concern over the safty of such products.

Professor Lin Yongjun, the project leader of insect-resistant transgenic rice varieties of the lab has been leading his team to make GM rice for over 10 years.

“Two of our GM rice varieties have already been granted safety certificates by the Ministry of Agriculture in 2009. The certificates were granted only after rigorous testing and inspection, including a 90-day experiment during which the rice was fed to rats, and tests were carried out on three successive generations of rice to ensure product safety,” said Lin Yongjun, professor of Huazhong Agricultural university.

This is the mystery golden rice. This October, the first China Golden Rice Tasting Event was held at Huazhong Agricultural University, sparking another round of nationwide debate over the safety of GM crops.

“Public doubt concerning the safety of GM foods was highlighted recently when Internet users overwhelmingly sided with many well-known people. They are not scientists. It’s not right for them to judge something they don’t know. So we want to quell public fears about the safety of the GM products,” said Lin.

Soybeans are a daily necessity for most Chinese. They are used to make tofu, cooking oil and animal feed. In China, up to 80 percent of soybeans are now imported from the countries including the United States, Brazil and Argentina. And most of these are genetically modified.

In China, all the products containing genetically modified soybean are forced to be labeled. But no specific protocols have been rolledout for the commercialization of GM rice in China. In early December, rice sold at a supermarket in Hubei province was detected positive for genetically modified organisms.

“I’m completely against it. We’re not experiments. Some GM foods have already been imported or commercialized without further research. I’m against it,” said local resident.

“I also highly doubt its safety now, but I believe GM foods have many advantages. If the government and academics can prove them completely safe, I will definitely try them,” said a local resident.

Rice is a staple food for most Chinese people. Currently, the safety certificates issued to Professor Lin’s research team are the only one in China. He said there is an urgent need to commercialize GM rice to correct the imbalance between China’s grain output and demand.

GM foods have been a hotly discussed topic on China’s internet in recent years. So far the public has gotten conflicitng information by various professional researchers. In the end, concerned citizens are still waiting for further research to definitively prove the safty of GM products.

Source: CNTV

Japan tsunami exacerbated by landslide

The 2011 Japan tsunami, which killed up to 20,000 people and caused the partial meltdown of the Fukushima nuclear plant, was made worse by an underwater landslide, according to scientists.

Until now, the lethal waves have been blamed solely on the magnitude-nine earthquake which struck at sea, 43 miles east of the country's northern Tohoku peninsula.

But an international team, led by Professor Dave Tappin of NERC's British Geological Survey, say the earthquake can't explain the full extent of the waves.

'The earthquake alone cannot explain the height of the waves along the Sanriku coast of northern Honshu Island,' says Tappin. 'They were generated by a submarine landslide.'

According to Tappin, the research raises a 'big problem' for early-warning systems. Where the risk of landslides goes unrecognised, tsunamis generated by similar earthquakes could be badly underestimated.

It's well known that landslides can generate tsunamis on their own, and research on the Papua New Guinea event of 1998 showed that landsides triggered by small earthquakes could also produce devastating tsunamis.

But this research, presented at last week's Fall Meeting of the American Geophysical Union, is the first to recognise the significant contribution that underwater landslides can make to tsunamis generated by giant quakes.

Source: NewsOnJapan

Japan Government's 2014 bond issuance to hit record

The Japanese government has announced that it will issue a record amount of bonds during the 2014 fiscal year.

The amount is expected to be about 1.7 trillion dollars, a rise of nearly 6 percent in yen terms over fiscal 2013.

Officials plan to spend about 1.2 trillion dollars on refinancing government bonds. That's up 7 percent from the current fiscal year.

Spending on new government bonds will be reduced by 2 percent, to about 400 billion dollars.

Source: NHK

McDonald's Japan shuts 74 outlets while cutting net forecast

McDonald's Corp. (MCD)'s Japan business plans to close 74 outlets in the country as the fast-food operator cut its full-year profit forecast by more than half in its second-largest market.

Net income will probably be 5 billion yen ($48 million) in the year ending December, 57 percent lower than its previous forecast, McDonald's Holdings Co. Japan Ltd. said in a statement to Tokyo's stock exchange yesterday. That compares with an average estimate of 9.53 billion yen from three analysts compiled by Bloomberg. The company had 3,170 outlets in Japan as of the end of October.

The earnings shortfall came after sales fell for five straight months through November in the world's third-largest economy, said McDonald's Japan, about 50 percent owned by the Oak Brook, Illinois-based McDonald's.

"The number of customers during the first quarter was ''well below the company's expectations,'' McDonald's Japan said yesterday, citing investment costs to improve customer numbers as well as costs on store closures for the change in forecast.

Source: Bloomberg

Ex-AIJ boss gets 15 years for pension fund fraud

The Tokyo District Court on Wednesday sentenced Kazuhiko Asakawa, former president of AIJ Investment Advisors Co., to 15 years in prison for defrauding pension funds out of nearly ¥25 billion.

The prison term for Asakawa, 61, matched the demand of the prosecution. The court also sentenced former executive Shigeko Takahashi, 54, and Hideaki Nishimura, 58, former president of AIJ sales arm ITM Securities Co., each to seven years in prison. The prosecution had sought sentences of eight years.The court also ordered the confiscation of ¥568 million in deposits at AIJ group bank accounts in Hong Kong and the payment of ¥15.6 billion to help cover the damages of victims, against ¥21.2 billion demanded by the prosecution.
According to the ruling, the three conspired to defraud 17 groups, most of them kosei nenkin kikin add-on corporate pension funds, out of ¥24.82 billion between 2009 and 2012 by selling the group's financial products based on fictitious investment performance records.

Source: Yomiuri

Japan: Government's 2014 bond issuance to hit record

The Japanese government has announced that it will issue a record amount of bonds during the 2014 fiscal year.

The amount is expected to be about 1.7 trillion dollars, a rise of nearly 6 percent in yen terms over fiscal 2013.Officials plan to spend about 1.2 trillion dollars on refinancing government bonds. That's up 7 percent from the current fiscal year.
Spending on new government bonds will be reduced by 2 percent, to about 400 billion dollars.

Source: NewsOnJapan

Chinese premier wants more U.S. high-tech imports

 Chinese Premier Li Keqiang on Thursday urged the United States to relax limits on China's high-tech imports.

"We expect the U.S. to relax restrictions on high-tech exports to China and provide a good environment for Chinese businesses to invest in the United States," Li said in a meeting with the U.S. delegation.

The delegation includes U.S. Secretary of Commerce Penny Pritzker, Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack, who came to Beijing for the 24th Joint Commission on Commerce and Trade (JCCT), which begins on Friday.

Calling economic cooperation the ballast of China-U.S.relations, Li called on the two countries to make best of their advantages and improve cooperation.

"I expect both sides to take a pragmatic attitude and understand each other to seek good results from the JCCT and deepen bilateral trade cooperation," Li said.

Li said common ground outweighs differences in China-U.S. relations as and applauded growing collaboration.

"Both sides should tap potential for further cooperation, respect each other's core interests and major concerns, properly handle differences and seek sound and steady growth of bilateral relations," Li said.

Pritzker, on behalf the U.S.delegation, said having strong economic relations is of "vital importance" to both countries.

"Having a positive and successful JCCT will help strengthen bilateral relationship," she said.

She underscored the U.S. commitment to stronger cooperation with China in trade, investment, telecommunications, agriculture, food security and intellectual property protection.

She also pledged to deal with frictions properly.

The JCCT is an annual forum launched in 1983 for the two countries to promote trade and address issues of mutual concern.

Source: Xinhua

Asian shipyards poised to enjoy good year ahead amid strong order flow

If the last-week announcement made by Singapore's Keppel Corporation underlined the growing confidence of the world's largest offshore rigbuilder upon the outlook of shipbuilding industry, analysts also agree that Asian shipyards will have a busy year ahead amid growing demand.

Keppel said last week its unit, Keppel FELS, is going ahead with the construction of the CAN DO drillship without a contract in hand. It explained it had received positive feedback from customers as the drillship is designed for broader capabilities, including performing development and completion drilling. Its decision to build ahead of a firm order was widely seen by industry watchers to suggest the company's confidence in market demand of its designed ship.

Indeed, it has been a robust year for Keppel. For the first nine month, the conglomerate bagged 5.3 billion Singapore dollars worth of contracts which included 13 jack-up rig orders, which are all based on its proprietary series design. Another Singapore rigbuilder SembCorp Marine also did fairly well, securing new order wins worth 3.9 billion Singapore dollars during the same period, inclusive of 7 jack-up rig orders. The strong order book will provide long-term earnings visibility for both companies.

Phillip Securities Research said "despite fierce competition coming from the Chinese yards, we believe established drillers and shipping operators still prefer established yards liked Keppel and SembCorp Marine for their established rig designs, strong track record, and ability to deliver on-time. This can be seen in Keppel Corporation's recent 1.1 billion U.S. dollars contract win from Transocean for the construction of 5 KFELS Super B Class jack-up rigs, with options for an additional 5 similar rigs."

CIMB Research was also upbeat on the containership building segment, expecting the strong order momentum to continue into 2015 despite the pressures from near-term overcapacity in the container shipping space. It said strong containership orders benefit primarily the Korean shipyards such as Hyundai Heavy Industries, and Daewoo Shipbuilding and Marine Engineering. According to CIMB, the strong containership orders are buoyed by the shipping companies' expectation that the deliveries of containership in the size of thousand twenty-foot equivalent units (teus) to drop significantly in 2016. As there is two- to three- year lead time between placing the order and actual delivery, shipping companies have to place orders in 2014 for fleet renewal or upsizing requirements.

In addition, CIMB expected more orders in the neo-panamax containership category of 8,000 to 9,999 teu to replace the 2.87 million teus of panamax-sized ships in the 4,000 to 4,999 teu category still in the global fleet today, as the latter will gradually lose their competitiveness when the new Panama Canal locks complete their upgrading in April 2015. Other impetus to the business of Asian shipyards also included the increased demand of eco-ships as a result of growing concern about environmental issues such as carbon dioxide emissions, and increased awareness of fuel-cost savings amid rise in oil price.

JP Morgan Research believed that South Korean shipbuilders liked Hyundai Mipo and Daewoo Shipbuilding & Marine Engineering, as well as Japanese shipbuilders such as Mitsui Engineering & Shipbuilding, will benefit much from the demand of eco-ship.

JP Morgan said despite the poor freight rates, eco-ships have started to gain popularity among shipping companies, as its proven fuel efficiency gives greater comfort to ship owners about the stability of ship earnings, mainly through significant fuel-cost savings. With new ship orders expected to be strong for the next few years, JP Morgan forecast new-build prices will rise 10 percent to 12 percent price next year. (1 U.S. dollar equals to 1. 26 Singapore dollars)

China: Reform of the Household Registration System

The timetable the Ministry of Public Security has disclosed for reform of the household registration system gives 200 million migrant workers the hope of securing the identity of urban citizens in the coming seven years.

A new household registration system will be established by 2020, according to the timetable Vice-Minister Huang Ming revealed on Tuesday.

China's urbanization rate is estimated at about 52.6 percent while the number of registered urban residents accounts for only 35.3 percent of the total population. This means about 200 million villagers-turned-laborers are still not registered as urban residents although they work in cities.

But, they not only need to be registered as urban residents, they also need to have access to the social benefits, such as medical insurance, opportunities for their kids to enter local schools, pensions and so on, that such status should entail.

It may be not easy for the mega and major cities in the relatively developed eastern region, where the majority of rural migrant workers are concentrated, to achieve in the coming seven years. Even if they have the will, they may not have the money.

What is needed now are joint efforts from both the public security ministry and other government departments to gradually separate social welfare attachments from the household registration per se because such benefits pose the severest challenge to the household registration reform. The goal will be to extend social welfare to both rural and urban residents in a fair manner through a unified system of basic public services.

This does not mean that villagers who have become urban residents will be excluded from the social benefits their urban counterparts enjoy. It is just an initial step to bridge the gap between rural and urban residents.

Hopefully, there will be fairer social welfare provided to all residents soon, no matter where they are registered, as the huge gap between the social benefits urban residents and their rural counterparts enjoy must be bridged. This is a key requirement for the success of China's urbanization and the fulfillment of its goal of national renewal.

The systematic debts that have been accumulated because of the rigid urban management system of the past several decades will hardly be repaid in a short period of time.

But the shift of the policy emphasis of urbanization to the development of small and medium-sized cities, along with the reform of household registration system, is meant to eliminate the gap.

Source: China Daily

China Urbanization Strategy Focus on people not buildings

China formulated its urbanization strategy at the beginning of this century and it has gained widespread social recognition over the years. However, a misconception has also arisen about the urbanization strategy, with some believing it is the process of accelerating urban construction and urbanizing rural areas. This misconception has led to an urban building boom and the loss of arable land to urban expansion.

In essence, though, the urbanization strategy should be the transfer of the rural population to urban areas. Over the past three decades or so, since China launched its reform and opening-up drive in the late 1970s, millions of farmers have migrated from rural regions to work in cities. They have been the driving force behind China's urbanization and industrialization.

From a statistical perspective, migrant workers are categorized as permanent residents in the cities where they work, but in reality they are not, due to limited access to urban social services and welfare. That these people, who mostly come from the country's mid-western regions, such as Guizhou, Sichuan, Hunan and Henan provinces, often migrate across provinces to work in eastern coastal areas, compounds the difficulty of addressing their rights and interests in the places where they work.

One prominent problem is that migrant workers usually move to cities alone without their family members. This has led to the phenomena of long-separated couples and a generation of vulnerable "left-behind" children and elderly.

The urbanization strategy, therefore, must encompass the task of addressing the problems facing migrant workers in cities. The right thing to do is to encourage them to stay in the cities where they work and create conditions so their family members can join them. The fundamental approach to this should be facilitating their acquisition of urban citizenship, localizing them in the urban context and embracing them in cities in a family-friendly way.

The aim should be to ensure that all migrant workers in medium- and large-sized cities, small cities and townships, enjoy the same public services and social welfare as urban residents, are entitled to the same rights and shoulder the same obligations, so that they will no longer be on the fringes of the urban landscape.

Some people argue that integrating migrant workers into urban life on an equal footing as those fully recognized as urban residents means enticing them back into small cities and townships, where the problems related to household registration, healthcare and their children's education can be more easily solved. However, this is actually unfeasible and unattainable, given the limited job vacancies in small cities and townships. Others suggest that the citizenship movement should be aimed at breaking the barriers of the household registration system, and in this sense all the related problems will be solved. But the fact is, the household registration system is just a format, while all the benefits that come attached to the household registration system are the real substance. Therefore, we need to enable migrant workers to access social welfare and services in cities.

Undeniably, urbanization has become a policy focus for the government. Urbanization was, for the first time, written into the 10th Five-Year Plan (2001-05) when China pledged not to miss the opportunity to implement the strategy of urbanization. The significance of urbanization was reiterated in the 11th Five-Year Plan (2006-10), as the central leadership vowed to coordinate the development of small, medium and large cities, enhance the carrying capacity of cities and towns, actively promote urbanization and steadily transform the dual rural-urban structure step by step. The 12th Five-Year Plan (2011-15) has specifically proposed that the country facilitate the transfer of the agricultural population to urban areas and made implementing the urbanization strategy a key task.

The country's new leadership pledged at the 18th National Congress of the Communist Party of China, in November last year, that reform of the household registration system will be accelerated, rural migrant workers will be incorporated as permanent urban residents in an orderly way. The government will also endeavor to ensure that all permanent residents have access to basic urban public services.

With proper policy support the livelihoods of migrant workers and their family members will be enhanced, and this is the true purpose of the urbanization drive.

Source: Xinhua

The average Succesful Startup raises US$ 41M, and exits at 242.9

CrunchBase Reveals: The Average Successful Startup Raises $41M, Exits at $242.9M

The CrunchBase dataset has now captured more venture exits than ever, so we decided to take a closer look at what successful startups can tell us about venture investing and the startup landscape.

We found that the average successful US startup has raised $41 million and exited at $242.9 million. We also found that there is a strong correlation between larger exits and companies that raised more money, but no such relationship between the amount of time between founding a company and being acquired or taken public.

Between the two types of exits, we found that the average successfully acquired U.S. startup has raised $29.4 million and sold for $155.5 million, for investor profits of about 7.5x (if you assume 100 percent investor ownership of the company, which is never the case). Startups that went public in an IPO raised significantly more funds, but also took substantially more venture funding, and thus more dilution.

The average IPO-bound startup raised $162 million before going public. Thanks to a few recent large IPOs, the average raised amount soared to $467.9 million, for a 2.9x investor return (of course, venture investors will never sell all their shares on the IPO date).

The analysis includes all funded startups in CrunchBase that had an exit since 2007. As with most analysis dealing with startups and venture investing, it’s worth noting that some company information from CrunchBase may be incomplete or inaccurate, even if it’s the largest free source for startup information in the world.

Facebook both took the most pre-IPO money, $2.3 billion, and raised the most through going public at an estimated $18.4 billion. Twitter raised an estimated $1.8 billion in their IPO, but also took almost $1.2 billion from venture investors before going public. 

  Source: By  Mark Lennon Techcrunch 

The US boom energy production and its ripple effetcs

The United States is experiencing a boom in energy production. Natural gas output increased
25 percent, and crude oil and other
liquids increased 30 percent during the
past five years, reducing net oil imports
by nearly 40 percent. The U.S. Energy
Information Administration (EIA, 2013)
baseline scenario shows U.S. production
of tight oil increasing until 2020 before
falling off during the next two decades.11
The baseline also shows U.S. shale gas
production increasing steadily until 2040
. The United States is expected
to be a net exporter of natural gas in
the 2020s.
Simulations from a large-scale model
(GEM) suggest modest impacts of the
energy boom on U.S. output.12 In GEM,
energy is produced by combining capital
and labor with a fixed factor, which can
be thought of as known reserves. As
discussed above, EIA expects production
of tight oil and shale gas to increase in
coming years but there is uncertainty
about the duration and extent of the
increase. The model is simulated under the assumption that there is an increase in energy
production over the next 12 years so that by the end of this time horizon production has
increased by 1.8 percent of GDP.
 (11 Tight oil is petroleum found in formations of low permeability, generally shale or tight sandstone)
 The main finding is that the U.S. GDP increases by about 1.2% at the end of 13 years and employment
increases by 0.5%. This is under the assumption that the increase in energy production is fully anticipated by households and firms. The corresponding increase in domestic demand is about 1.8%. The decline in the cost of energy induces firms to employ more capital and labor. Adjustment costs in
investment encourage firms to start putting capital in place even before all  the declines in energy prices materialize. In addition to the increase in investment, consumption also rises because of rising household real incomes and wealth. The impacts on GDP levels in other country blocs are also positive,with the exception of a very small decrease in the GDP of other energy-exporting countries.
 The main reason for the modest impact on U.S. GDP is that the share in the economy remains quite small even after factoring in the addtional production. The impacts are greater when the economy exhibits slack because in this case monetary policy does not need to lean against the resulting increase in aggregate demand.
In terms of the impact on U.S. Current Account  the improvement in the energy component of the trade balance is offset by a decline in the non-energy balance.
 In the case where the increase in energy supplies is fully anticipated, U.S. households and corporations temporarily increase
borrowing from abroad to support higher consumption (anticipating the wealth increase from
higher energy production) and investment. The appreciation of the U.S. dollar reduces import
prices and also contributes to the increase in the non-energy balance. Overall, the result is a
small decline in the current account balance
  In recent years, West Texas Intermediate (WTI)
prices fell substantially below Brent prices as a
supply surge from unconventional energy sources
in the United States and Canada, and difficulties
in moving this supply to U.S. refining hubs led to
a build-up of inventories. But the differential has
narrowed this year.
To understand fundamental oil price drivers, a
sign-restricted structural vector autoregressive
model is estimated using four variables: global
crude oil production, global industrial production,
the real price of Brent crude oil, and Organization
for Economic Cooperation and Development crude
oil inventories .
Brent competes
more closely with North and West African and
Middle Eastern crude oil varieties, hence its price is
more exposed to precautionary demand stemming
from geopolitical risk. Risk premiums and the
prevailing Brent futures term structure also attract
financial investors.
WTI prices have been
influenced more by global supply conditions,
particularly the boom in North
American supply and crude oil transportation
constraints since 2009—and less by speculative
demand. More recently, infrastructure bottlenecks
have eased and speculative and
seasonal demand increased, raising WTI and
narrowing the spread. But this narrowing may not
prove durable. Seasonal U.S. demand will dissipate
in the third quarter, and sufficient crude oil
infrastructure to carry oil from the middle of the
United States to the Gulf coast will not be
reconfigured and completed until late next year.
Therefore, downward pressures on WTI could
continue, altering the WTI futures term structure
and lowering recent investor interest.

Source: FMI

Business lobby says recession has pushed Italians to breaking point

Italy's main business lobby group warned on Thursday that the risk of social breakdown was growing, despite signs that Italy's two-year recession was coming to an end.

Confindustria, which represents almost 150,000 companies, said it expected gross domestic product to fall 1.8 percent this year rather than 1.6 percent.

"The major risk is a breakdown in social cohesion, with an increase in protest movements channelled by groups urging disobedience and the subversion of institutions," the group's economic forecasting arm said.

It said it broadly expected growth of 0.7 percent in 2014 and 1.2 percent in 2015, though in a less likely, unfavourable scenario, growth might only reach 0.4 percent next year and zero in 2015. It warned that the impact of the recession would be long-lasting.

Noting that the economy had contracted by 9.1 percent overall and by 11.5 percent per head of population since 2007, it said Italy was facing a situation comparable to the damage inflicted by a war.

"The use of the expression 'recovery' to describe the increase in productive activity and internal demand expected in the next two years is in many ways inappropriate," the report said, adding that any improvement appeared "derisory" in comparison with the scale of the contraction. "It would be much better to talk about the start of a new era of reconstruction."

After eight consecutive quarters of contraction, Italy's economy was flat in the third quarter, while industrial production data has improved, prompting Economy Minister Fabrizio Saccomanni to declare the recession over.

However, unemployment remains at record levels, with more than 40 percent of young people out of work. Thousands of companies have closed, incomes have fallen and households have been forced to eat into their savings.

The comments underline growing concern at the threat of social tension in the eurozone's third largest economy, which has seen sporadic anti-government demonstrations over the past two weeks.

Prime Minister Enrico Letta has warned that European Parliament elections in May could produce the largest vote against the European Union ever seen in Italy, fuelled by popular anger at the sacrifices imposed on ordinary citizens in the crisis.

Financial markets have calmed since the height of the euro zone crisis, when Italy was on the brink of defaulting on its huge public debt, but the austerity measures adopted to control public finances have caused widespread resentment.

Confindustria forecast that Italy's deficit would come in at 3 percent of GDP in 2013, just in line with European Union borrowing limits, falling to 2.7 percent in 2014 and 2.4 percent in 2015.

It said public debt would reach 132.6 percent of GDP this year, compared with a previous estimate of 131.7 percent. It said it would rise further to 133.7 percent in 2014 before easing to 132 percent in 2015.

Intel Capital has so far invested over $2 billion in Asian startups

There are a lot of venture capital funds out there, many of whom are playing close attention to what’s happening with startups in Asia. Perhaps the most recognizable name is Intel ,the venture capital (VC) arm of chip-maker Intel .

When we looked at investment in Asian e-commerce firms from 2010 to 2013, we saw thatnearly $ 7 billion was invested by dozens of VCs  in nearly 400 deals in that time-frame. Tiger Global was the most active in that list, with Intel Capital second.

Intel’s VC crew has invested in over 1,300 companies across 54 countries since 1991. Out of these 1,300 companies invested in, 200 of have gone to IPO, while 320 went through mergers or acquisitions.

How many in the portfolio are Asian startups? According to John Mandeville, head of corporate PR for Intel in Asia Pacific, Intel Capital has invested in over 300 firms in Asia, totaling a whopping $2+ billion dollars of investment.

Out of that $2 billion figure, $1.4 billion has gone to startups in Australia, Bangladesh, India, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Sri Lanka, Taiwan and Vietnam. More than $670 million has been invested in Chinese tech companies. The below figure breakdown is given by Mandeville:

• Approximately $440 million invested in 40+ companies in Japan
• Approximately $330 million invested in 90+ companies in India
• Approximately $260 million invested in 40+ companies in Taiwan
• Approximately $200 million invested in 30+ companies in Korea
• More than $100 million invested in over a dozen companies in Southeast Asia
• About 60 Asian companies have been acquired or gone public
• Invested more than $670 million in over 110 technology companies in China
• More than 30 companies have gone public and/or have been acquired in China
• Approximately 40 Chinese companies in its current portfolio

 Mandeville explains:

 

We are stage agnostic and we are funded by Intel, so we are a partner for the long haul. We are a global corporation, so we can bring all our marketing and networking strength to bear on behalf of our portfolio companies. […] We don’t operate on the basis of one country to the exclusion of another. We operate on the basis of technology and business potential.

Despite being a huge firm, Mandeville says that Intel Capital team likes to remain accessible to startups, via the homepage or on Twitter.

While Intel Capital doesn’t have a fixed checklist when talking with startup founders, Mandeville adds that having “a clear focus and a relevant business plan” is a good start for a discussion that could lead to investment.

Source: TECHINASIA

In its first flash sale in Hong Kong, Xiaomi sold 10,000 Hongmi devices in 36 seconds

Just when we start thinking Xiaomi is bound to cool off, it continues to keep us on our toes.

Today Xiaomi held its first flash sale in Hong Kong, during which the company put 10,000 Hongmi models – its budget smartphone that only costs $130 – up for grabs.

At 12:00 PM this afternoon, the sale opened for business. 36 seconds later, all 10,000 devices had been snatched up.

That’s the quickest clear out the company has seen in its history.

This flash sale marks Xiaomi’s second-ever in a market outside of its native mainland China. One week ago the company company doled out its first batch of 10,000 Hongmi devices in Taiwan, andthey disappeared in nine minutes.On Monday, Taiwanese Xiaomi fans grabbed the second batch of 10,000 phones in just over one minute.

Again, we’ll stress that we ought not to take these numbers too seriously. Without knowing the number of people who registered for the sales blitz and didn’t get one, analyzing flash sales can only be interpreted as a holistic indicator of demand.

Still, 36 seconds is nothing to turn one’s nose up at. We’ll stay on watch next week to see if it can crack the single digits.

Xiaomi raked in revenues of $2.16 billion during the first half of this year , and aims to surpass double that amount upon year’s end. It’s stated publicly that it intends to enter markets in Southeast Asia early next year.

Source; TECHINASIA

Airbnb Tops 10 Million Guests Since Launch, Now Has 550,000 Properties Worldwide in its Platform

This is what hockey-stick growth looks like: Peer-to-peer lodging marketplace Airbnb announced this morning that it’ll top 10 million guest stays since being launched in 2007. That’s a big number, for sure, but the bigger overall point is that the company had more than 6 million guest stays on the platform in 2013, more than doubling its total over the past year.

Of course, we kind of knew this was coming, based on dataAirbnb had shared in October . Back then it touted 9 million stays, so it’s added another million in the past two months alone.

The company’s user base continues to skew international. Of the 6 million guest stays over the past year, about a third were American. The company has said in the past that about 75 percent of its stays have an international component — that is, either a foreign guest staying in a U.S.-based property or a U.S. guest staying in a foreign property, or a non-U.S. guest staying in a non-U.S. property — so that’s not surprising.

But the distribution of guests to lodgings has a funny sort of symmetry: Airbnb says that travelers from more than 175 different countries used the platform over the past year, staying in listings from more than 175 different countries.

While Airbnb has seen really impressive demand, its supply of listings has also grown dramatically in 2013. More than 250,000 properties have been added to the platform over the past year, bringing the total number of listings to 550,000 worldwide.

The company has added more than 50,000 in the past month alone,when Airbnblaunched new mobile apps  to facilitate the process of adding your home to the platform.

Airbnb’s big year came after the company raised US$200 million in funding from Founder's Fund last fall. The company has been using that funding to aggressively expand worldwide, something that appears to be working out.

Source: TECHinASIA

918 Spyder is quicker than Porsche thought

Ever since the Porsche 918 Spyder debuted as a might-never-be concept at the 2010 Geneva Motor Show, we knew it was quick. But we didn't know just how quick. In preparation of the first 918 deliveries, Porsche has announced that the hybrid supercar outperforms the company's previous, already-impressive performance estimates.

The 918 Spyder with Weissach package – and when you're already paying US$845,000 for a car, why not throw in an $84,000 performance package – is nearly as quick as the Bugatti Veyron, dashing to 62 mph (100 km/h) in 2.6 seconds (the Veyron does it in 2.5 ticks of the wristwatch). The car will double that 62 mph speed in 7.2 seconds from 0, a half-second faster than originally estimated. The trip from 0 to 186 mph (300 km/h) comes in 19.9 seconds, more than two seconds quicker than original estimates.

While it shoots out of the gate like a bullet out of a gun, the 918 does much more than fire straight forward. The hybrid supercar (with Weissach package) recently set a Nurburgring record for fastest street-legal car with a time of 6:57, proving that it doesn't have to walk a line to perform at its peak.

We're betting 918 buyers won't be quite as interested with all-electric acceleration times, but Porsche notes some improvements here, too. As newly tested, the 918 rolls to 62 mph in 6.2 seconds (6.1 seconds with Weissach package) when the electric motors are firing without the help of the V8 engine. That's well under the seven seconds Porsche was quoting earlier this year.

It's still hard to say that an $850,000 car is a "bargain," but given that it now boasts quickness that can rival nearly any car on the planet, the 918 offers that much more bang for the buck.

The Porsche's updated performance numbers are so hot off the track, the informational pamphlet the automaker is handing out at the LA Auto Show still lists the older figures. You can see a few live photos from the show in our gallery and read more about the ins and outs of the 918 in our* in-depth look.

Source: Gizmag

Samsung to ALSO debut world's largest curved UHD TV at CES 2014

Today appears to be the day for jumbo-sized TV announcements. First, we heard that LG will be debuting its 105-inch "world's largest curved UHD TV"  at CES. Now, word comes that Samsung is making the same claim about a new TV of its own – with the added boast that it's also the "most curved" UHD TV ever.

Like LG's just-announced 105UB9, Samsung's Curved UHD TV (catchy name) has a 105-inch screen with a resolution of 11 million pixels (5120 x 2160) and a 21:9 aspect ratio. It also reportedly features "a new proprietary picture quality algorithm that delivers optimized color and greater feeling of depth."

Additionally, it utilizes a "Quadmatic Picture Engine" to present all content at UHD-level picture quality, regardless of the source.

Little other information is available at the moment, but we'll no doubt learn more when we get to check it out first-hand at CES next month.

Source: Samsung

World Bank president calls corruption 'Public Enemy No. 1'

The World Bank took a bold stance on fighting corruption on Thursday, with President Jim Yong Kim saying that corruption at both the public and private level is the scourge of the developing world.

The development institution, which long shied away from tackling corruption because it wanted to steer clear of politics, on Thursday said it plans to hire more experts in the rule of law and other governance issues.

Kim said corruption must be at the centre of the development lender's work.

Every dollar that a corrupt official or a corrupt business person puts in their pocket is a dollar stolen from a pregnant woman who needs health care," Kim said during a panel. "In the developing world, corruption is public enemy No. 1."

The announcement shows just how much the bank has changed since the 1990s, when corruption was a taboo subject in an institution that has 188 member countries and shuns picking sides.

Source: Reuters

China aiming for half a million green vehicles by 2015

China has been actively promoting the use of environment friendly vehicles in recent years. The central government outlined its newest incentive program this September, to push for the use of new energy vehicles in 28 pilot cities.

According to the program, buyers of electric cars in these cities can receive up to 60,000 yuan or almost 10,000 US Dollars in subsidies. Those who purchase hybrid vehicles can get subsidies up to 35,000 yuan. Only locally produced vehicles qualify for the subsidies.

Earlier this year, the government also announced a fund of 4 billion yuan to help manufacturers strengthen new-energy vehicle design, batteries and other related technologies. Last year, Chinese consumers only bought a little over 11,000 electric vehicles, out of total vehicle sales of 19.3 million. The country hopes to have half a million hybrid and electric vehicles on its roads by 2015 and five million by 2020.

Source:  CCTV

Yanukovich offers Ukraine protesters nothing as Russian aid starts

- A $15 billion Russian aid package for Ukraine began to take shape on Thursday as Ukrainian President Viktor Yanukovich went public in defence of the deal, but offered no concessions to persuade thousands of protesters to leave the streets.

In his first public appearance since agreeing the deal with Moscow, he argued that securing cheaper gas and credits from Russia had been the only way to avoid default.

Soon after, his government issued a $3 billion two-year eurobond whose terms corresponded exactly to those of a bond that Russia had said it would buy as part of a $15 billion lifeline to help its former Soviet ally out of economic crisis.

But, in a televised news conference lasting more than 1-1/2 hours, he showed no readiness to meet opposition leaders' demands for the resignation of his government or early elections. He said their actions were "revolutionary".

His only slightly conciliatory gesture was to say that he would not run for re-election in 2015 if he felt he might lose.

"If my ratings are low and I have no prospects (of winning), then I shall not get in the way of the country developing and moving forward," he told a questioner.

Source: Reuters

Latin America’s Technology Leaders

 Latin America is one of the fastest-growing technology markets in the world. But how do the countries in the region compare with each other in wireless telephony and PC and Internet penetration?
The Latin Technology Index from Latin Business Chronicle, the digital sister publication of Latin Trade magazine, provides a unique comparison of the technology level of 19 Latin American countries by looking at the penetration rates of Internet, broadband Internet, personal computers (PCs), wireless subscribers and fixed telephone lines. It uses 2010 technology data from the International Telecommunications Union, Computer Industry Almanac and the Santiago Chamber of Commerce and population data from the International Monetary Fund and the Population Reference Bureau.
On this year’s index, Panama replaced Uruguay as Latin America’s technology leader, while Chile replaced Uruguay as the Internet penetration leader in Latin America, but Uruguay replaced Chile as the region’s broadband leader.

AMBITIOUS PANAMA
Panama seeks to remain Latin America’s technology leader by expanding Internet use and drawing in companies to transform the capital into a logistics hub.
Internet penetration in Panama was up 43 percent last year and personal computer sales jumped 21 percent, the data show.
Eduardo Jaen, who heads Panama’s National Authority for Government Innovation, attributes the rise to government support for Internet access and success at luring new businesses into the modern capital. More than 60 corporations, including tech giants Dell and 3M, shifted regional headquarters to Panama since a tax exemption law was passed in 2007.
“There’s a broad array of companies that have decided to position themselves here and use Panama as a hub,” Jaen says. “We intend to be ahead of Uruguay for years to come.”
Panama President Ricardo Martinelli has made “closing the digital gap” a key priority of his administration. Having established hundreds of free Internet hot spots throughout the country, the government will start offering discount loans to help workers buy computers. About 21 percent of Panamanians currently have at least one computer at home, according to 2010 census data.
Martinelli’s administration began offering free computers and Internet access in schools, which helped move Panama up one notch on a separate technology index compiled by the World Economic Forum.
Even so, much of the Internet growth is driven by multinational corporations and small start-ups that move to Panama because of lower tax rates and cheaper operating costs.
Panama eased requirements for starting a business in 2007. About 35,000 individuals and legal entities have since registered as Panamanian companies online, according to government figures. Among those are a growing number of young American web developers and movie production crews that are demanding faster Internet.
Roman Kogan, who runs Internet service provider PaNetma, says his business has grown 150 percent from last year.

COMPETITIVE RATES
Panama’s Internet rates are competitive with other Latin American countries, and many people find they can save money while running a successful business out of the endless high-rise buildings that pop up in Panama City. “The Internet here is quite reliable and fast enough,” says Jesse Schoberg, who moved his web development company, LJ Host, from Madison, Wisconsin, to Panama in 2009. Rent, food and basic living expenses all are less than in his home state.
Meanwhile, wireless networks connected by BlackBerries and iPhones allow Schoberg to keep working on remote beaches and in the mountains. “You have the perfect storm for Internet entrepreneurs who want a high quality of life,” Schoberg says.
Internet penetration and computer sales are expected to climb as Panama’s economic growth outpaces the region. Backed by an expansion of the Panama Canal, finance officials predict at least 9 percent growth this year.
“We are advancing,” Jaen says of Panama’s technology agency. “The government is committed to growth.”
—Eric Sabo, Latin Business Chronicle

Lijiang, Yunnan China.

By  jonlijiang

ECB's Draghi welcomes deal to cope with bad banks

The European Central Bank welcomed on Thursday a deal among EU finance ministers to set up an agency and network of funds to close troubled banks in the euro zone.

"The European Central Bank strongly welcomes the agreement that has been reached," European Central Bank President Mario Draghi told Reuters as he arrived for the EU leaders summit.

"It's an important step towards completion of our banking union," he said, urging quick talks with the European Parliament to finalise the law.

Source: Reuters

Alibaba and WeChat go head-to-head and tit-for-tat over movie tickets

Somewhere in China, someone is about to purchase a movie ticket on his or her smartphone. And that ticket purchase could tip the power balance between two of the country’s biggest companies.

Last week during a televised awards ceremony (China’s popular, annual "Academy Awards for businessmen''“) Wanda Group chairman Wang Jianlin, the don of China's booming movie theater industry, appeared onstage with Alibaba’s Jack Ma. In spirit with the show’s theatrics, Wang announced that the two high-profile figures would collaborate in the near future, but didn’t give further specifics.

Yesterday, at least one form of the collaboration was revealed. Alipay, Alibaba’s online payments branch, told Chinese news outlet NBD that it would collaborate with Wanda to let users purchase movie tickets through its Alipay Wallet mobile app.

According to the report, Wanda Group will have its own public account in the app, through which users can choose a movie and screening time at a local theater, purchase tickets, and claim a seat. Once at the movie theater, users need not wait in line to print a ticket – instead, they can hand their phone to an theater attendant, who then swipes the phone using a machine by the gate. The ticket is then activated using sound wave technology (a simple alternative to filly things like Bluetooth or NFC).

Currently the feature is available in Shanghai, Beijing, Guangzhou and Shenzhen. Alipay representatives state that it will soon roll out to other cities, and that it is in talks with other movie theater chains to implement the feature.

WeChat gets into the movies too

The move is significant not necessarily because of the technology, but because of its timing – WeChat, the country’s top messaging app, introduced a nearly identical feature days ago, albeit with much less fanfare.

According to Tencent Tech , WeChat automatically detects the location of the user, who can then select a movie, time and seat from a list of cooperating movie theaters. After successfully purchasing the ticket through WeChat’s payment function, users will receive a password and QR code. Once they arrive at the movie theater, they can manually enter the password or wave the QR code at a ticket-vending machine which then prints out a paper ticket.

This WeChat feature is also already in Beijing, Shanghai, Guangzhou and Shenzhen, and Tencent representatives state that they hope to expand it to Tianjin, Chongqing, and up to 20 other cities by year’s end. The company has inked cooperation deals with a large number of cinema chains who will potentially provide discounts to consumers.

Sitting on the edge of one’s seat

The past few months have seen Alibaba and Jack Ma make several very public attempts at ruffling WeChat’s feathers. Not long after Ma announced he would quit using WeChat to [promote Alibaba’s Laiwang messenger app], the companies have fought each other tit-for-tat : Alibaba removed WeChat integration from its e-commerce apps, and Tencent removed Alipay Wallet from its My Appapp store.

This particular instance of one-upmanship doesn’t contain the shock and spectacle of some of the previous ones in China’s scrappy tech industry. Jack Ma could have announced the specifics of the collaboration at the widely-broadcast awards ceremony. But that might have proven a bit tasteless – after all, Wanda is included on WeChat’s roster of participating movie theater chains.

However, those searching for drama might look to the article in NBD, which appears to have been obtained as an exclusive. It mentions several times how Alipay’s sound wave technology is “more advanced” than similar payment options, and the article’s headline refers to the deal as “the first step” in Alibaba’s collaboration with Wanda.