Alibaba Plan Puts IPO Record in Sight

  The WSJ reports,""Alibaba Group Holding Ltd. is working on a plan that could make its initial public offering the largest in history".. .

No final decision has been made, but the addition of new Alibaba shares could help push the IPO beyond $20 billion, potentially topping Agricultural Bank of China Ltd record $22.1 billion offering in Shanghai and Hong Kong in 2010, according to Dealogic, which tracks IPO data. 

A Chinese company taking the record for a stock sale would be yet another sign of the growing importance to global investors of the world's most-populous country.

Still, the stakes are high for Alibaba as well as Wall Street. The company's market debut will be its unveiling to the world's public-stock investors. Its banks—Credit Suisse Group AG , Deutsche Bank AG, Goldman Sachs Group Inc.,Morgan Stanley, J.P. Morgan Chase & Co. and Citigroup Inc.  —also must stage a delicate dance between raising a large sum and ensuring that the sale goes smoothly.

The U.S. IPO market has started the year at its fastest pace since the dot-com era, according to Dealogic. But a recent correction in the price of growth stocks has cast a pall, with some deals—including Chinese Internet firms Weibo Corp. and Leju Holdings Ltd.—pricing below their most optimistic forecasts.

China Focus: Property market cools down amid rigid lending

The slowdown of the property market that was mainly seen in China's third- and fourth-tier cities last year has spread to more areas, and analysts warn of a tough 2014 for developers.

Figures released by the National Bureau of Statistics (NBS) last Friday showed that 178.25 million square meters of residential property were sold in the first quarter, down 5.7 percent year on year.

Wu Huimin, a board member of property service company DTZ, said although the first quarter is usually a slack season for the sector, the real reason behind the sliding transaction volume was because the market entered a period of adjustment after last year's robust sales and ever-rising prices.

According to the NBS, home prices in a pool of 70 major Chinese cities grew at a slower pace in March, with fewer cities reporting month-on-month price gains. Month on month, four cities saw new home prices decline.

Added to the property market woes is the credit crunch for both developers and buyers.

Stringent bank loans since the end of last year have dealt real estate firms, medium- and small-sized ones in particular, a blow in securing their fund chain, said Hu Baosen, board chairman of Central China Real Estate Ltd.

In the first quarter, paid-in investment to real estate enterprises was 2.87 trillion yuan (465 billion U.S. dollars), up 6.6 percent year on year, and the rate was 20.3 percentage points lower than the overall growth for 2013, according to the NBS.

Meanwhile, banks have not loosened their control over personal housing loans, making it more difficult to purchase property on mortgage.

Among the 35 major cities surveyed by Centaline Property Agency Ltd., 25 have seen their banks suspend housing loans.

"China's property market is adjusting after touching the ceiling, and the extent of adjustment will go beyond the anticipation," said Tian Ming, board chairman of Landsea Group.

"No property enterprises, big or small, are safe," Tian said.

In spite of the temporary hiccup, industry insiders however noted that the property market will embrace new opportunities thanks to China's urbanization and the government's loosening of controls.

Over the past decade, to curb high prices the government has controlled the real estate industry.

In this year's government work report, delivered at the annual parliamentary sessions, no new policies on property market control were mentioned, a sign that the government will give more say to the market, analysts said.

Source: Xinhua

WSJ: Ukraine Halts Military Push, Fearing Attack From Russia

   The Wall Street Journal reports,"Ukrainian forces moved in on a pro-Russian stronghold Thursday, killing several militants in a firefight at a roadside checkpoint, but quickly halted their advance after Russia activated the thousands of troops it has massed just across the border".

Moscow's saber-rattling—launching new land and air military drills—left Ukraine's new government in a quandary: whether to risk pressing ahead with what it calls its antiterrorist operation in the restive east, or risk more bloodshed and provoking an invasion.

Acting President Oleksandr Turchynov, who had ordered the military operation to restart on Tuesday, vowed it would continue even as a security official in Kiev said the operation in the eastern city of Slovyansk had been paused for reworking. Ukraine's Foreign Ministry gave Moscow 48 hours to explain the military exercises along the border.

The Pentagon called those drills "exactly the opposite of what we have been calling on the Russians to do."

President Barack Obama said Thursday in Tokyo that Russia hasn't been abiding by the spirit or letter of the international agreement reached a week ago in Geneva and intended to reduce tensions. Mr. Obama reiterated warnings that the U.S. is prepared to impose additional sanctions in days. Secretary of State John Kerry said Ukraine was holding up its end of the deal, but that Russia hasn't taken a "single concrete step."

Mr. Putin's tone Thursday was less strident than that of his foreign minister, Sergei Lavrov, a day before.

Mr. Putin said the use of the Ukrainian army against its own citizens would be "a very serious crime," but he stopped short of threatening military action. Mr. Lavrov had said an attack on Russians in Ukraine would be seen as an attack on Russia itself and require a response.

National Bank Of Greece: S&P affirms 'CCC/C' Ratings on NBG with Outlook Negative......

S&P affirms 'CCC/C' Ratings on NBG with Outlook Negative.
Doesn't anticipate Bank of Greece capital increase will create
sufficient cushion.
It expects that the Hellenic Financial Stability Fund will be willing and
able to provide capital support to NBG.
Its negative outlook for NBG reflects the possibility of a downgrade
 in the next 18 to 24 months.
Final decision on capital increase will be decided in a Extraordinary
Meeting on May 10.

Apple: China Delivers

• "China and Japan helped Apple beat estimates and set revenue records for the March quarter.The market has cheered Apple's results for the latest quarter, sending the stock up 8%".
• "China Mobile (CHL) carries around 780 million subscribers on its network, and so the fanfare was somewhat warranted when the deal has hatched with Apple and the iPhone launched back in January of this year. And as we peruse the earnings and pore over the call, it is easy to see that China and Japan are proving to be solid revenue growth drivers".
  "Widely expected to add around 12 million iPhone sales for Apple this year, China Mobile helped push Apple's iPhone numbers past 43 million for the March quarter. Revenues for the quarter, as compared to last year, are up 17%. Total revenue from China alone approached $10 billion, almost 1/4th of Apple's entire revenue for the quarter. China's growth represented 13% growth year-over-year, with Japan clocking in at 26% growth over the same time frame. CEO Tim Cook explained that the traction and growing market share for the iPhone in many emerging markets, including Greater China, sparked a record quarter for the company. Indeed, Cook stated that market share in Japan reached "an incredible 55%."

• iPhone sales were up 28% [in China], that's versus the IDCs market forecast of 20% growth.

  The traction of the iPhone in China simply beat everyone's expectations. The iPhone enjoyed a high level of success in China, and investors should expect it to remain so.
  Secondly, the growth of Apple's retail segment and point-of-sales numbers in China demonstrate the continued potential the country presents. Apple seeks to triple the number of stores in the country in two years, and observers are certainly aware of the success the retail strategy has been for the company over the years, consistently at or near the top of all companies on a sales-per-square-foot basis. Cook's explanation is that only 40,000 points-of-sale exist in a country with hundreds of millions of cellphone users. Clearly, there is room to grow to reach all these consumers.
  Also, Cook's numbers on adoption of first-time iPhone owners were startling: over 60% of 4s and 5c purchasers switched from Google (GOOG, GOOGL) Android. This fact appears to be antithetical to what we have heard from the last few years about Apple consistently losing market share to Android phones, and could portend more positive traction for the iPhone in China"
• Source: Seeking Alpha

Real Estate data 2013 (Infographics)

Commercial Real Estate Trends

Lawrence Summers: Economic pickup could come on unstable ground

 Interview on Marketwatch to Lawrence Summers

   On U.S. Economic Growth.
"Even if rapid growth does materialize, the secular-stagnation argument is not that rapid growth is impossible; it is that growth with financial stability is very problematic. My fear is that if we do achieve sustained growth based on current financial conditions, before long it would give rise to significant bubbles. That’s why I think we need a more investment-oriented approach to supporting growth and the reason I put such emphasis on fiscal policy".

  On Bubbles Concerns

 "You already see some things that are concerning. The various credit spreads are at very low levels. Covenants that protect lenders are increasingly coming out of corporate-bond agreements. You are seeing the slow-motion LBO of America as companies issue more and more debt and buy back equity. None of these things are a reason for immediate alarm, but they are trends that, if continued, could prove worrisome and likely would continue if the economy started to grow rapidly in the context of current low interest rates"

"Periods when nominal rates are near zero, and when short-term real interest rates are negative, tend to be periods when there is a great deal of risk chasing. That is not, in my judgment, an argument for simply removing monetary support for the economy — to do so would be courting needless substantial unemployment. It is a reason to pass the baton to fiscal policies and structural policies that promote investment in exports rather than trying to support the economy through ever-lower capital costs".

WSJ: Russia Launches Military Exercises at Ukraine Border

   The WSJ reports,"Russia said it launched military exercises along the Ukrainian border on Thursday after Ukrainian forces killed pro-Russian militants and overran three roadblocks outside the eastern city of Slovyansk, in part of a renewed military operation to regain control".

Russia's Defense Minister Sergei Shoigu said exercises involving land and air forces along the border had already begun. Russia has had tens of thousands of troops massed along the border since last month and has threatened to intervene in Ukraine's eastern region if it felt ethnic Russians there were under threat.

Referring to the situation in Ukraine, he said that "if this military machine isn't stopped today, it will lead to a greater number of dead and wounded." 

There were conflicting reports about how broad the operation was, with Ukrainian police saying there had been incidents in two other cities. Even before Russia announced the military exercise, a senior security official in Kiev said Ukraine had paused its operation to take back Slovyansk because of a "heightened risk" of Russia sending in troops.

WSJ: Neither Europe nor Russia has any interest to cut the gas supplies

“In the short term, neither Europe nor Russia has any interest to cut the gas supplies,” GDF Suez’s Chairman and Chief Executive Gérard Mestrallet said in an interview with The Wall Street Journal.

The current crisis has ignited fears that Moscow could stop gas flowing to countries in the European Union, as the bloc has backed Ukraine in its spat with Russia over Crimea and Russian-speaking regions of Ukraine.

Some European nations, such as the Baltic countries, fully rely on Russian gas for their energy. For its part Russia, which is currently experiencing substantial capital outflows, relies on oil and gas for about 70% of its external revenues.

Mr. Mestrallet said the deputy chief executive of Russia’s state-controlled gas giant Gazprom, Alexander Medvedev, had reassured French customers that the company would keep gas flowing to Europe during a visit to Paris this week. About 14% of France’s imported gas comes from Russia, according to French industry figures.

WSJ: Ukraine Pauses Slovyansk Operation

Ukraine Pauses Slovyansk Operation Amid “Heightened Risk” of Russia Attack – Senior Security Official

KIEV—Ukraine Thursday paused its operation to take back the eastern town of Slovyansk from armed pro-Russia militants amid a “heightened risk” of Russia sending troops into Ukraine, a senior security official in Kiev said. 

Seven militants were killed in the operation Wednesday, which was aimed at retaking the town by removing the armed men from government buildings there, the official said. However, there were conflicting reports on the number of dead. The Ukrainian Interior Ministry said up to five militants had been killed outside Slovyansk after Ukrainian forces seized three check points on roads into the city. 

The operation was “paused to reformulate the plan,” the official said, after the risk of Russian troops crossing the border greatly increased. 

Russian officials have criticized the operation, and Russia’s defense minister said it would launch military exercises near its border with Ukraine in response.

WSJ: Gazprom Bills Ukraine's Naftogaz US$ 11.4 billion ffor not .........

U.S. Jobless claims jump 24,000 to 329,000

The number of people who applied for U.S. unemployment benefits jumped by 24,000 to a three-week high of 329,000, the Labor Department said Thursday. Economists polled by MarketWatch had expected claims to rise to a seasonally adjusted 315,000 in the seven days ended April 19 from a revised 305,000 in the prior week. Claims often rise around Easter because the holiday falls on different dates each year and makes it harder for the government to conduct seasonal adjustments. The average of new claims over the past month rose by 4,750 to 316,750, just one week after falling to a six-and-a-half-year low. The monthly figure smooths out the jumpiness in the weekly data and offers a better look at the underlying trend, which has moved lower since late last year. Also, the government said continuing claims decreased by 61,000 to a seasonally adjusted 2.68 million in the week ended April 10. That's the lowest level since December 2007, when the Great Recession started. Continuing claims reflect the number of people already receiving benefits. Initial claims from two weeks ago, meanwhile, were revised up slightly to 305,000 from 304,000.

Source: Marketwatch

U.S. New orders for manufactured durable goods in March 2014 increased 2.6 percent

U.S. New orders for manufactured durable goods in March 2014 increased 2.6 percent, to $234.8 billion. Excluding transportation, new orders rose 2.0 percent. Overall shipments increased 1.1 percent, while capital goods shipments increased 1.7 percent. Unfilled orders rose 0.6 percent, and inventories increased 0.5 percent in March 2014.

      Source: EconomicIndicators.gov

In Japan, Obama Reassures Abe on Islands Disputed With China

      The WSJ reports,"U.S. President Barack Obama offered Japanese Prime Minister Shinzo Abe an unequivocal affirmation that if islands at the center of Japan's territorial dispute with China were ever attacked, the U.S. would come to Japan's aid".

Mr. Obama walked a careful line, stopping short of taking Japan's side on which country has sovereignty over the East China Sea islands—claimed by both China and Japan and administered by Tokyo—and emphasizing there had been no shift in the U.S. position. And he nudged his counterpart to open up Japan's markets as the two leaders emerged from talks Thursday without being able to present agreement on a broad trade deal.

Still, his statement that the U.S.-Japan security treaty "covers all territories under Japan's administration, including the Senkaku Islands"—using the Japanese word for the islands known as Diaoyu in China—both reassure Mr. Abe, who said he fully trusted Mr. Obama's pledge, as well as provoke a swift reaction in Beijing, which expressed "strong opposition" to Mr. Obama's statement.

Foreign Ministry spokesman Qin Gang said during a regular media briefing that the U.S.-Japan treaty "should not target a third party or harm China's sovereignty."

Mr. Obama urged a peaceful resolution to the dispute over the uninhabited territory while emphasizing that the U.S. wanted good relations with China.

He said the U.S. doesn't take a position on which country holds sovereignty over the islands. "Historically they have been administered by Japan, and we do not believe that they should be subject to change unilaterally," he said, adding that the U.S. wants to continue to encourage the peaceful rise of China.

Ukraine Says Up to 5 Militants Killed in East

              The WSJ reports "Ukrainian authorities said Thursday that up to five pro-Russian militants were killed and three roadblocks overrun outside an eastern city at the heart of a local insurgency, as Kiev restarted a military operation to regain control in the region".

      Also on Thursday, Russian President Vladimir Putin said the use of military force against Ukrainian civilians would have consequences for the leadership in Kiev. He didn't elaborate on what they would be.

"If the Kiev regime begins to use the army against its own citizens, that is, without a doubt, a very serious crime," he said. "This will certainly have an impact on those who make such decisions and on our bilateral relations."

Mr. Putin didn't repeat his previous statements that Moscow reserves the right to defend ethnic Russians or Russian-speakers in eastern Ukraine. There was no immediate indication that Moscow was preparing to use military force, though it has built up troops along the border with Ukraine.

The renewed action is among growing signs that an agreement reached last week in Geneva laying out steps to reduce the tension is falling apart. Among other things, the broadly written agreement called for militants to disarm and vacate illegally occupied buildings.

Officials in Kiev have repeatedly accused Russia of having agents operating on the ground in the east to foment unrest. Russia denies this, but has moved tens of thousands of troops to the Ukrainian border, raising fears that it could quickly mobilize.

But Alexei Pushkov, the head of the foreign affairs committee of Russia's lower house of parliament said Thursday as news of the Ukrainian military operation emerged that there are no plans to send in troops.

"[Foreign Minister] Sergei Lavrov and President Vladimir Putin have both made statements that we have no intention to send troops into eastern Ukraine. As far as I know, no other statements have been made in this regard," he said, according to the Interfax news agency.

Ukraine's Interior Ministry said that police and military units had killed up to five "terrorists" in the early morning operation outside of Slovyansk and that three checkpoints leading into the city had been destroyed. The ministry said that one person from the Ukrainian force had been injured.