Brent Extends Weekly Gain as Libya Fighting Worsens; WTI Steady

Brent extended its first weekly gain this month amid speculation escalating violence in Libya will further disrupt supplies from the holder of Africa’s biggest oil reserves. West Texas Intermediate was steady inNew York.

Futures in London advanced 1.7 percent last week. Libya accused a retired army general in the eastern city of Benghazi of planning a coup while the nation’s General Assembly was said to be suspended following clashes in Tripoli. Government forces in Ukraine fought insurgents as separatists prepared for an election later this year after declaring independence.

Libya’s crude production “is already impaired and certainly not positive, which should be supportive of higher prices,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone today. “Adding the potential for escalation in Ukraine, it’s quite clear the risks that oil is on the upside this week.”

Brent for July settlement was at $109.85 a barrel on the London-based ICE Europe Futures exchange, up 10 cents, at 10:47 a.m. Seoul time. The volume of all futures traded was about 3 percent below the 100-day average. Prices rose $1.86 to $109.75 last week, snapping a two-week losing streak.

WTI for June delivery, which expires tomorrow, was 2 cents higher at $102.04 a barrel in electronic trading on the New York Mercantile Exchange. The more-active July contract climbed 1 cent to $101.59. The U.S. benchmark crude was at a discount of $8.26 to Brent.

Libyan Output

Libya, a member of the Organization of Petroleum Exporting Countries, has struggled to restore security three years after the revolt that toppled former leader Muammar Qaddafi. Oil production declined to 215,000 barrels a day in April, about 13 percent of capacity, data compiled by Bloomberg show.

The North African country’s General Assembly has been replaced by a 60-member group that will work with an election commission, Colonel Mukhtar Fernana, who is loyal to dissident army general Khalifa Haftar, said in a speech aired on Al-Jazeera television.

Libya’s government, parliament and chief of staff issued a joint statement on May 17 “calling on the population of Benghazi to remain united and defeat the coup plotters,” according to LANA, the officialnews agency.

Ukraine Crisis

In Ukraine’s Donbass regions of Donetsk and Luhansk, masked men set fire to a candidate’s regional campaign office ahead of a May 25 presidential ballot. Pro-Russian separatists, who control buildings and radio and television towers in about 15 cities, said they may hold a vote on Sept. 14 to elect officials for their self-proclaimed “Donetsk People’s Republic.”

The North Atlantic Treaty Organization has expressed concern that the referendums may be a precursor to a land grab similar to Russia’s annexation of Crimea from Ukraine in March. Russia is the world’s largest energy exporter.

Source: Bloomberg

China Stocks Fall to Three-Week Low as Home-Price Growth Slows 22.18 Eastern Time

China’s stocks fell to the lowest level in three weeks, led by financial companies and liquor makers, amid concern weakness in the property market and curbs on interbank borrowing will worsen the economic slowdown.

China Vanke Co. and Poly Real Estate Group Co. paced declines for developers after new-home prices climbed in 44 of the 70 cities tracked by the government, the fewest since October 2012. China Minsheng Banking Corp. slid the most in two weeks as UBS AG said it was cautious on the lender’s shares after the government ordered interbank borrowing restrictions. Wuliangye Yibin Co. plunged 2.7 percent after the China Securities Journal said the liquor producer cut retail prices.

The Shanghai Composite Index (SHCOMP) fell 0.9 percent to 2,008.22 at 9:44 a.m. The ChiNext index dropped 0.4 percent, extending losses after entering a bear market on May 16. The property data add to concerns the economic slowdown is deepening after reports last week showed unexpected decelerations in industrial-output and investment growth, according to Zheshang Securities Co.

“Home prices released over the weekend weren’t good and it has created investor expectations that home prices will continue falling,” said Zhang Yanbing, an analyst at Zheshang Securities. “The government’s curbs on interbank borrowing will weigh on property companies too. The Chinext hasn’t bottomed and most importantly, after last week’s economic data, it simply shows the economy isn’t recovering.’

The CSI 300 Index slid 1.1 percent today, while the Hang Seng China Enterprises Index dropped 1.2 percent. The Shanghai measure has lost 5.1 percent this year on concern the growth slowdown will curb earnings and the potential resumption of initial public offerings will divert funds. The regulator hasn’t approved any listing of IPO shares since January as it reforms the process to make offerings more market-oriented.
Source: Bloomberg

Greece: Coalition buffeted but still standing after local polls

The first round of Greece’s local elections produced a mixed result that allowed both the country’s governing parties, New Democracy and PASOK, as well as the main opposition, SYRIZA, to claim that they had performed well ahead of the second round on Sunday, when European Parliament elections will also be held. SYRIZA produced surprises in the Municipality of Athens and the Region of Attica, where its candidates performed better than had been expected. Rena Dourou, the former SYRIZA MP, was projected to take first place in the contest for the Attica governorship, pushing the far more experienced Yiannis Sgouros, who was backed by PASOK and Democratic Left (DIMAR), into second place. With around 20 percent of the votes counted, an Interior Ministry projection for the final result gave Dourou 23.2 percent and Sgouros 22. An early exit poll, when polling centers closed at 7 p.m., gave Dourou a much bigger lead, suggesting that it would turn into a memorable night for SYRIZA. Nevertheless, Dourou’s expected win was a significant achievement. She still faces a challenge to overcome Sgouros in Sunday’s run-off vote. “The best goals are scored in the second round,” said SYRIZA leader Alexis Tsipras as he left the party’s headquarters. The leftists also toasted the achievement of Gavriil Sakellaridis, a virtual unknown outside the party before he became its candidate for the City of Athens. Interior Ministry projections showed that Sakellaridis would be narrowly pipped into second place by incumbent Giorgos Kaminis, supported by PASOK and DIMAR. Kaminis was expected to get 21 percent and Sakellaridis, who beat off competition from the more experienced Aris Spiliotopoulos of New Democracy, 20.2 percent. Kaminis and Sakellaridis will face each other on Sunday. An acrimonious battle in Piraeus saw Yiannis Moralis, an Olympiakos soccer club official, leading incumbent Vassilis Michaloliakos, who is supported by New Democracy. The failure of conservative candidates continued in northern Greece, where the party’s candidate for the Central Macedonia Region, Yiannis Ioannidis, trailed Apostolos Tzitzikostas, who is running as an independent, by some distance. New Democracy’s candidate for Thessaloniki mayor, Stavros Kalafatis, also came in behind incumbent Yiannis Boutaris, who is supported by PASOK and DIMAR. In Thessaloniki, residents were also asked to vote on whether they were in favor of plans to privatize the local water and sewage company, EYATH. The non-binding vote was organized by local officials and opponents of the sell-off. A last minute objection from the Interior Ministry meant that the ballot boxes had to be placed outside polling centers. Initial results indicated that as many as 98 percent of those who took part in the vote opposed EYATH’s privatization. However, critics of the plebiscite pointed out that apart from being unofficial there were also questions about the vote’s reliability as the ballot boxes were transparent and ballot papers were not placed in envelopes. Despite its failure to break through in the country’s major cities and regions, New Democracy will be encouraged by its stronger performances in other parts of Greece. While a number of conservatives made it into the second round of regional governorship races, SYRIZA only saw one more candidate apart from Dourou qualify for the run-off. PASOK is also likely to take heart from the fact that a number of the high-profile candidates it backed, such as Kaminis and Boutaris, are in a strong position to win next weekend. The coalition, as well as SYRIZA, will be concerned that neofascist Golden Dawn produced a strong showing in the Greek capital. Spokesman Ilias Kasidiaris was expected to win more than 15 percent of the vote in the contest for the Athens mayorship, while MP Ilias Panagiotaros was on course to get over 10 percent in the Attica region.

Source:

European Elections to Test Greek Coalition

There seems to be a broad consensus—both among voters and in the markets—that this week's European parliamentary elections don't matter very much.

In Greece, the elections will determine the future of the uneasy coalition government led by Prime Minister Antonis Samaras since June 2012. If the two coalition parties—New Democracy and Pasok—get a lower combined vote than the radical left-wing opposition party Syriza, the government would be in real trouble, acknowledges a senior minister. The outcome could be early national elections and a prolonged period of political instability.

As things stand, that seems unlikely: The latest polls suggest New Democracy will get 21% of the vote and Pasok 5.5%, compared with 21.5% for Syriza.

But even this may not be enough to guarantee the coalition's survival.

Pasok and its leader, Evangelos Venizelos, have become lightning rods for public anger for the crisis; its current share of the vote compares with 12% in the June 2012 election and 39% in 2009.In response, Mr. Venizelos last week said he would quit if the public didn't give his party sufficient backing, without specifying how low Pasok's vote share would have to fall to trigger his threat.

From an economic perspective, there can be little doubt that fresh political turmoil would pose a serious risk to what is proving to be a remarkable turnaround in Greece's fortunes this year.

Following a smaller-than-expected contraction in the first quarter of 2014, the economy looks on track to return to growth in the third quarter, with growth of at least 0.6% expected for the full year.

Unemployment has fallen for six months in a row. The budget—excluding interest payments—and current account are both in surplus, paving the way for the euro zone to honor a commitment to ease the burden of Greece's official-sector loans and put its national debt on a long-term sustainable footing.

In the past few weeks, international investors have poured an astonishing €15 billion ($20.54 billion) into government bonds, bank shares and bank bonds—a vote of confidence that Greeks hope is a sign the worst is finally over.

At the same time, it is becoming apparent that the crisis has brought about many long overdue reforms, eliminating privileges for special interest groups, improving transparency and removing barriers to competition in many sectors, including retail, transport, energy and professional services.

As a result, prices are finally falling for many items, easing the pressure on the cost of living for a population hit by savage cuts in income. The labor market is more flexible and entrepreneurs say it is easier to start a business. The full benefits of many reforms will only start to become apparent as the economy picks up.

The stalled privatization program appears back on track, with ports, airports, railways and marinas currently for sale. There has been a surge in inquiries from foreign investors in recent weeks, according to the privatization agency.

Importantly, the newly recapitalized banking sector appears determined to tackle its mountain of bad debts, now expected to peak toward the end of this year at over 35% of all loans. All four major banks have set up internal "bad banks" to speed up the liquidation of insolvent companies and restructuring of viable companies, essential to allow healthy companies to invest and grow again.

In a landmark deal, Piraeus BankTPEIR.AT -13.69% last week executed an aggressive debt-for-equity swap that gave it a controlling stake in Marfin Industrial Group, previously controlled by one of Greece's leading oligarchs.

What's more, Mr. Samaras appears determined to push ahead with his reform program, despite concerns among some euro-zone officials that easier financial conditions will lead to complacency.

A new bankruptcy code expected in October will give the banks further powers to restructure bad debts. The government says it is committed to implementing the remaining recommendations out of 329 proposed last year by the Organization for Economic Cooperation and Development. Substantial reform of the public administration is planned to improve its efficiency. Mr. Samaras has also proposed sweeping constitutional reforms in response to public anger over the current system.

But can Mr. Samaras persuade voters to give him more time?

After six years of recession and with unemployment still at 26%, it is hard to underestimate the rage that Greeks feel toward the two coalition parties that dominated politics for decades.

Yet at the same time, polls indicate that voters too are wary of unleashing fresh instability: 70% of voters say they don't want new elections, 69% want to stay members of the euro zone and only 30% believe that the radical leftist Syriza party led by Alexis Tsipras is ready to lead the country.

Meanwhile a new party, To Potami, is currently running third in the polls at 8.5% despite offering no policies, only new faces and a promise to cooperate with other parties.

What's clear is that Mr. Samaras is determined to avoid new elections. Even if Mr. Venizelos quits, Mr. Samaras will seek a vote of confidence in Parliament that he would expect to win, appealing to smaller parties and even some of Mr. Venizelos's Pasok colleagues for whom early elections would be political suicide, according to someone familiar with his thinking.

Mr. Samaras may fancy his odds of winning such a vote. But the next few weeks could be bumpy.

APEC roadmap to plan free trade area

A ministerial meeting of Asia-Pacific Economic Cooperation (APEC) has reiterated the resolution to draft a roadmap concerning the establishment of a Free Trade Area of the Asia-Pacific (FTAAP).

The annual APEC Ministers Responsible for Trade Meeting, which wrapped up Sunday in China's eastern city of Qingdao, released a statement saying the move formed part of "concrete steps towards eventual realization of an FTAAP."

Gao Hucheng, China's minister of commerce, said it will lay the foundation for the FTAAP and a "Committee on Trade and Investment Friends of the Chair Group" will be set up to advance the process.

The roadmap is expected to be finalized within this year, the statement said, eight years after the idea of a free trade area of APEC economies was first proposed.

Established in 1989, APEC has played a significant role in driving global and regional economic growth. Its 21 members contributed approximately 57 percent of the world's GDP and 46 percent of world trade last year.

Source: Xinhua

Brazil oil, gas market welcomes Chinese investment: energy official

Brazil welcomes Chinese investment in oil and gas exploration, which offers gainful business opportunities and a favorable regulatory environment, a senior Brazilian energy official said.

"All companies interested in investing in Brazil are welcome and important for the country's development. There are currently 39 local and 38 foreign companies operating in Brazil's oil and gas market," said Magda Chambriard, director-general of Brazil's National Petroleum Agency (ANP).

"That shows how dynamic the Brazilian market is, as it offers a trustworthy regulatory environment and good business opportunities for both Brazilian and foreign companies," she told Xinhua in an interview.

Chambriard highlighted October's bidding on the Libra oilfield, in which Brazil for the first time auctioned exploration rights to an offshore pre-salt reserve.

The multinational five-firm consortium that won the right to explore the Libra field includes Chinese companies CNOOC and CNPC, as well as Brazil's own state oil giant Petrobras, France's Total and Anglo-Dutch Shell. Petrobras is the operator of the business, as required by law in Brazilian pre-salt exploration.

The ANP faced criticism at the time for labeling the auction as a success, despite the fact that only one consortium submit a bid and many major oil firms, such as BP and Exxon Mobil, did not participate.

"The consortium that won the Libra auction is formed by five of the world's top 10 energy companies in market value, which have the three key elements for a successful venture: high technology, long-term vision and financial capacity," Chambriard said.

Libra, Brazil's largest oilfield to date, has an estimated reserve of 8to 12 billion barrels of recoverable oil, and its production may reach a million barrels of oil per day. According to Chambriard, Libra is such a large field that its exploration became "a structuring project" for the country, with the potential to generate substantial revenue and numerous jobs.

Chambriard also touched on the outlook for shale gas exploration in Brazil, saying studies in the field are still in the preliminary stage, but the future potential could be enormous.

"The possibility of exploring for natural gas in Brazil's extensive areas of sedimentary rocks is a huge opportunity for the development of those regions, which is why the ANP considers it a structuring project for the country," she said.

Asked whether Brazil is concerned about shale gas exploration in the United States, which could make the country self-sufficient in energy and no longer need to buy oil from Brazil, Chambriard indicated it was not an issue.

Brazil's position in the global oil and gas market is already consolidated, representing enormous opportunities and potential for business, she said.

China Focus: Trilateral investment pact preludes China-Japan-ROK FTA

A trilateral agreement took effect Saturday to facilitate investment among China, Japan and the Republic of Korea (ROK).

The China-Japan-ROK agreement for promotion, facilitation and protection of investment, is widely believed by economists to be a prelude to the foundation of the free trade agreement (FTA) among the three countries.

"It will certainly give a major boost to the economic development of all three countries," said Li Tie, vice president of the China International Trade Association.

Foreign investment has played an irreplaceable role in boosting China's reform, opening up and economic growth in recent decades, he said. "It has an even larger role to play in years to come."

At the opening of the Summer Davos Forum last September, Chinese Premier Li Keqiang said China's external FDI was expected to reach 500 billion dollars in the coming five years. The figure is roughly equal to the total scale of the country's external FDI over the past 20 years.

The trilateral investment agreement will be particularly important to China's northeastern region, a rust belt that used to be China's heavy industry base, said Li.

"Jilin Province, for example, is home to more than 900 ROK-invested companies and 200 Japanese-funded businesses," he said. "It's time for the local governments to encourage these companies to expand investment under the framework of the new agreement."

Lack of foreign investment has to some extent aggravated the economic gap between China's interior and coastal regions.

"The northeastern provinces should open up wider to the outside world and take advantage of their geographical location to expand collaboration with Japanese and ROK businesses," said Zhang Huizhi, vice dean of Jilin University's Northeast Asian Studies College.

The trilateral agreement, the first of its kind, was signed in May 2012 after 13 rounds of negotiations.

It has 27 articles and a protocol to "create stable, favorable and transparent conditions for investment."

Negotiations for a much-expected FTA are still going on.

At last year's ninth China-Northeast Asia Expo, Hiromasa Yonekura, chairman of the Japan Business Federation, or Keidanren, said a "regional economic cooperation agreement" would be key to Japan's economic growth.

He said that the Keidanren was working with governments and economic circles for the conclusion of the China-Japan-ROK FTA and the founding of a regional comprehensive economic partnership (RCEP) in East Asia.

The proposed trilateral FTA would be a blessing for ROK businesses, with more opportunities, higher profits and lower tariffs, said Na Hee-Jong, director of the Overseas Sales Department of Samkwang Glass Co., LTD.

China's Ministry of Commerce said in March that the China-Japan-ROK FTA had undergone four rounds of negotiations over trade, investment and tariff cuts.

"There are still pending issues in areas concerning their respective interests," said Zhang Yushan, a Korean studies expert with the Jilin provincial academy of social sciences.

"China enjoys more advantages in agriculture and textile industries, while Japan and the ROK are stronger in the service sector. Detailed clauses are yet to be worked out concerning intellectual property rights, environmental protection, technical standards and government procurement."

Official statistics show the three countries' combined GDP totalled 15 trillion U.S. dollars last year, about 20 percent of the global total and 70 percent of Asia's total.

Meanwhile, the three countries are also among the world's biggest traders, with a combined foreign trade of over 5 trillion U.S. dollars, about 35 percent of the world's total.

Source: Xinhua

Chinese industries lack technological investment: former minister

 Chinese enterprises are not investing enough in technology upgrades, said a former industry minister on Saturday, on the sidelines of the awarding ceremony of the "Chinese Industry Grand Prize."

Li Yizhong, chairman of the China Federation of Industrial Economics, said technological upgrading holds the key to restructuring of traditional industries, but investment in this field remains evidently inadequate.

He cited figures showing that investment into such upgrading in 2013 only accounted for 42.5 percent of all industrial investment. Deducting that invested in expansions, technology investment represented just 27.7 percent of the total.

Li suggested China's relatively developed regions should raise the share of technology investment to 65 percent, whereas the United States achieved a 69-percent standard during the period between 1947 to 1978.

The expert also advocated a framework of quantifiable, achievable and verifiable indicators be put forward for the goal of realizing industrialization by 2020.

The indicator framework could consider aspects, including per capita GDP, industrial economic and technological standards, industrial mix, and improvement of people's lives, according to Li.

At Saturday's awarding ceremony, the "Chinese Industry Grand Prize" was awarded to 11 enterprises including Chinese home appliances giant Haier Group, as well as four projects including Jiaolong, the country's most advanced manned submersible.

The prize, awarded every three years, was initiated in 2005 to encourage Chinese companies to innovate, develop world-class brands and improve their global competitiveness.

Source: Xinhua

China's agricultural investment in Africa not "land grabbing": expert

China's investment in African agriculture has nothing to do with "land grabbing," an agricultural expert said at a seminar on China's agricultural investment in Africa Friday.

"I think the land grabbing idea is a little hard to sustain because there has been quite a little China's agricultural investments in Africa," said Deborah Brautigam, a professor and director of the International Development Program of the Johns Hopkins University School of Advanced International Studies (SAIS).

Brautigam, who has followed China's agricultural relationship with Africa for 30 years, said some farmlands that Chinese companies have bought or rented are quite old, as some were even set up in colonial period.

"So that's hard to say that's land garb. That's just normal investment and hasn't displace anybody," said Brautigam

Brautigam also said if China companies want to be more successful in investing Africa's agriculture they need to bear more social responsibilities for the local community as the local governments may not keep their promises.

"Local governments don't always have the capacity to do it. They don't have the finance to do it. They don't have the incentives to do it. So if Chinese companies want to be seen as responsible investor they are probably going to take those responsibilities themselves," she said.

Brautigam suggested Chinese companies do more on training local people and transferring technologies, as well as offering long-term jobs for local people.

She said such actions will increase the cost of China enterprises to invest in Africa's agriculture. To reduce companies' burden, the Chinese government should partner more with these companies by providing subsidies.

"I think the subsidies can be on the side of the corporate's social responsibility, in terms of subsidies for training workers, or for doing environmental studies, or medication, compensation," Brautigam said.

Source: Xinhua

In-depth Xinhua Insight: Chinese cities expected to ease property regulations

At least six cities in China have loosened controls over the property market and more are expected to do the same as local governments are worried that sluggish home sales may drag on the economy.

Zhang Dawei, chief analyst with Centaline, a leading property agent in China, told Xinhua on Sunday that policies once aimed at curbing excessive growth of the property market appear to be loosening across China.

"More than 30 cities nationwide are expected to loosen controls on the property market as the market will continue cooling in the near future," said Zhang.

China's property market has been booming since 2003, and the government has been trying to rein things in by rolling out measures such as home purchase restrictions. After a decade of rapid growth, the overheated market has started to cool in 2014.

According to the National Bureau of Statistics, the growth of new housing starts, a leading indicator of property investment, fell 27.2 percent year on year in the first quarter, while sales in residential areas contracted by 5.7 percent.

The slowdown has already taken a toll on local governments' fiscal revenues. Statistics released by the Ministry of Finance on Monday showed taxes related to the property market were contributing less to the growth of local fiscal revenue, with business tax for real estate down by 4.2 percent in April.

"In one to two years, this will have a tremendous negative effect on real estate investment and local governments' infrastructure investment, which relies heavily on revenue from the real estate sector," said Chen Wenzhao, an analyst with China Merchants Securities.

"The outlook for a housing price drop will affect people's willingness to buy properties, pressing economic growth to slow down," he added.

The market slowdown has prompted local governments into action. Nanning, the capital city of Guangxi Zhuang Autonomous Region, became the first city to ease home purchase restrictions by allowing more non-residents to buy homes starting May.

Nanning was later joined in efforts to loosen control on the market by cities including Wuxi, Ningbo and Tongling, and many more were reported to be considering similar relaxations.

The latest came on Thursday, when media reported that Tianjin was considering allowing residents to buy three properties, one more than it currently allows. The government did not confirm the report.

In south China, an industry insider claimed in an online post last Sunday that Nansha District in the south China metropolis of Guangzhou will lift property purchase restrictions for Hong Kong and Macao residents.

However, the housing administrative bureau of Guangzhou told Xinhua that it had not received applications from the district.

The denial came days after Gaoming District in Foshan, a neighboring city, was pressured to abandon plans to relax restrictions on buying homes, saying the policy is "suspended due to objective reasons."

Most local governments remain extremely cautious, as the central government has not yet made clear where it stands on local authorities' moves to loosen market control, said Hu Gang, a professor with the Administrative Management Department of Jinan University in Guangzhou.

"In this year's government report, the central government only said it will regulate housing differently in different cities in light of local conditions. Although that leaves more room for local governments, it did not draw a line of what can be done and what cannot be done," explained Hu.

He added that many cities are still exploring possible actions within the red line, and are testing the reactions of the public and the central government.

Chen Sheng, executive director of China Real Estate Data Academy in Shanghai, believes that easing controls on the market will be a common practice among local governments.

"Especially in markets where the supply is more than demand, any administrative interference should be withdrawn," said Chen. "Otherwise, systemic risks will arise."

According to Zhang Dawei, pressure to ease grips on the market will mount for cities that have overly large inventories while sales of residential areas have been dropping too fast in the first quarter.

"Cities where the housing price stops rising might also put forward policies to save the market. I think local governments will take all possible measures to adjust their regulations on the market," Zhang said.

Source: Xinhua

Xinhua:New home prices drop in more Chinese cities

 China's property sector shows more signs of cooling in April, with more Chinese cities reporting month-on-month drop and fewer cities reporting gains in new home prices, the National Bureau of Statistics (NBS) said in a statement on Sunday.

Of a statistical pool of 70 major Chinese cities, new homes in eight cities saw month-on-month price decline in April, double of that for March, the NBS data showed.

A total of 44 cities saw month-on-month price gains in new home prices in April, down from 56 for March and 57 for February, the NBS data showed.

For existing homes, prices increased in 35 cities month on month in April, notably down from 42 cities in March and from 46 in February, the data showed.

Source: Xinhua

WSJ: Chocolate Tycoon Vies in Vote to Lead Ukraine Back From Brink

     The WSJ reports, "with Ukraine's presidential vote less than a week away, front-runner Petro Poroshenko says he knows the first step to pulling together the fractured country: Elect him in the first round of voting.

Ukraine's survival, he says, all but depends on it.

It is a message the 48-year-old billionaire and politician has been repeating as he hopscotches across eastern parts of Ukraine in his private jet with his wife and a clutch of advisers. His message resonates with a worried public in Dnipropetrovsk, not far from regions further east that have been declared separatist republics by pro-Russia militias.

It remains unclear whether the Chocolate King—Mr. Poroshenko's nickname because of the Roshen confectionary empire he owns—can surpass the 50% threshold of votes required on Sunday to prevent a runoff against his rival and second-place candidate, former Prime Minister Yulia Tymoshenko.

One recent poll suggested he would get 54.7% of the vote, which would deliver him a first-round victory, but earlier polls have said otherwise. A runoff, Mr. Poroshenko has warned, would likely spell months of delays when Ukraine can't afford any more uncertainty".

"He is running for president in a country that has lost territory in Crimea and gained a separatist pro-Russia rebellion in the east—all in the three months since pro-Europe demonstrators in the capital toppled former President Viktor Yanukovych.

Mr. Poroshenko emerged as perhaps the brightest leader after those demonstrations and built a campaign promising to meet the protesters' demands for a political overhaul. But he has now found himself fighting for the survival of his country.

A win for Mr. Poroshenko would place the country in the hands of a veteran of Ukraine's sordid political arena who has earned a reputation as a deal maker prepared to ally with lawmakers of all stripes. Supporters say that experience gives him the skills to maneuver and execute pressing reforms. Critics say his history signals a return to the same old politics that for years have hobbled Ukraine.

"He doesn't have an ideology," said Oleh Rybachuk, a civil activist and former Ukrainian deputy prime minister. "Does he have managerial capabilities? Yes he does. Does he have political instincts? Yes he does." A spokesman for Mr. Poroshenko declined to make the candidate available for an interview.

Mr. Poroshenko is certainly one of the country's foremost political survivors. The chocolate magnate supported then-President Leonid Kuchma in the late 1990s and early 2000s before joining the movement that toppled him. He then served as foreign minister under former President Viktor Yushchenko —the godfather of his daughters and Mr. Kuchma's successor. Later, he became trade minister under Mr. Yanukovych before leading the pro-Europe protests that toppled him in February.

Despite this veteran status, Mr. Poroshenko's campaign slogan—"Live Differently!"—promises a break from the past. He pledges to salvage Ukraine's economy by following a trade pact with the European Union and an International Monetary Fund recovery program".

"He says he has plans to make Ukraine so prosperous that Crimeans "will realize their mistake" and return on their own. To solve the crisis in the separatist regions of the east, he has proposed using force against the rebels, whom he calls terrorists, and changing the constitution to appease residents of those regions with more autonomy.

Still, many residents of Ukraine's east say they don't plan to vote because no candidate represents their interests, calling into question whether the presidential election can help unite the fractured country. Separatists, meanwhile, have vowed to prevent the vote in the Donetsk and Luhansk regions.

Elsewhere, some see Mr. Poroshenko as the best, if not ideal, choice. "Whether people like him or not, most think he is the least bad of the alternatives," said Andrey Bogatyryov, chief editor at Populyarnaya Gazeta in Dnipropetrovsk.

Born in a town near the Ukrainian border with Romania, Mr. Poroshenko found success in business after the Soviet Union's collapse, initially by importing cacao and later building a candy company that became Ukraine's largest. His sweeping business interests grew to include a bus maker and television station. In early 2013, Forbes magazine's Ukrainian edition put his net worth at $1.6 billion.

Part of Mr. Poroshenko's appeal is his business background. Ukrainians may be suspicious of the country's tycoons, but they lately have been seen as a mainstay against Russian aggression, with a few appointed as caretaker governors of eastern regions. At each of his rallies, Mr. Poroshenko repeats that workers in his candy company make 7,000 hryvnia ($595) a month, a gob-smacking amount for most Ukrainians, whose average wage is around 3,300 hryvnia".

"At a recent appearance, the tycoon and his squad of bodyguards waded through the audience to the stage. He then spoke for more than 40 minutes, rousing the crowd with promises to revive the army and the economy and raise living standards. Written questions from the crowd, putatively spontaneous, were the same as at other rallies: Why not ban the Communist Party? Why are the same bureaucrats in power as before? How will Ukraine regain Crimea?

Mr. Poroshenko explained: "There are no easy answers.""

IMFdirect: When You Move, I Move: Increasing Synchronization Among Asia’s Economies

In recent decades, trade integration within Asia has increased more than in other regions. In valued-added terms, intraregional trade grew on average by over 10 percent a year from 1990 to 2012, twice the pace seen outside of Asia. Likewise, financial integration within the region has started to catch up, although it still lags behind trade integration. Concomitantly, business cycles in Asia have become steadily more synchronized over the past two decades, with the correlation between ASEAN economies’ growth rates almost reaching the very high levels seen within the Euro Area.

As outlined in the IMF Asia and Pacific Department’s latest Regional Economic Outlook, these facts are related. Namely, increases in trade and financial integration have strengthened the propagation of growth shocks between regional partners, leading Asian economies to move more in lockstep. One driver of this synchronization of business cycles has been the increase in size and connectedness of China’s economy. Looking ahead, we expect regional integration agenda and a bigger China to further increase spillovers and growth co-movement across the region. Greater international cooperation, particularly regional and global financial safety nets, can help countries respond to the associated risk of more synchronized, sharper downturns, and thereby help Asia make the most of greater regional integration.

China’s rise means larger spillovers and greater business cycle co-movement

A further source of cyclical co-movement is the growing importance of China’s domestic demand for the rest of the region. In its (declining) role as the “assembly hub” of Asia, China’s economy does not directly affect its trade partners much, since it primarily propagates shocks coming from advanced economies through the regional supply chain. But as a growing source of final demand, China now has a bigger direct impact than in the past. Indeed, economies whose trade dependence on China’s final demand has increased over the past decade have generally experienced a greater increase in their cyclical co-movement with China.

Because many Asian economies (such as Korea, Malaysia or Thailand) depend more on China for their exports of final goods and services than exporters in other regions, they would be more affected by growth shocks originating from China. Based on our empirical results, a one percentage point decline in China’s growth lowers GDP growth in the median Asian economy by about 0.3 percentage point after a year, compared to 0.15 in the median non-Asian economy. 

Financial integration has been a more ambivalent force. Across the world, it has magnified the impact on business cycle synchronization of large global shocks like the global financial crisis, as global banks pulled funds back across the board. But in normal times, it has lowered synchronization somewhat, possibly by facilitating international reallocation of capital when a shock hits one country. However, this has been less of a factor in Asia, where cross-border financial claims and flows have so far been comparatively small. 

Preparing for the future

Given the room across the region for further trade liberalization and catching up on financial integration, spillovers are likely to rise and business cycles to become more correlated, particularly during crises. A bigger China, when hit by shocks, will be a further source of synchronization.

The main challenge for policymakers will be to reap the major gains from further integration while minimizing the side effects from greater spillovers. International policy cooperation can play a role here. Stronger co-movement means Asian economies would tend to face synchronized downturns and—depending on the nature of the shocks they would face—simultaneous external financing pressures. Self-insurance through further reserve accumulation can help individual countries buffer such shocks, but this approach is costly and does not provide risk sharing between countries. This points to a potential stabilizing role for regional financial safety nets, such as the Chiang Mai Initiative Multilateralisation (CMIM) or bilateral swap lines between regional central banks. These initiatives can usefully complement bilateral swap lines with non‑regional central banks and the global financial safety net provided by the IMF, which will be most useful in the event of shocks spilling over to the region as a whole—such as, for instance, shocks originating from China.

Source: IMFdirect  By Romain Duval

Greek voters spell out their disapproval of austerity

"Greek voters gave a clear sign of their disapproval of the government's austerity policies on Sunday , voting heavily in favour of anti-bailout candidates in local and regional elections that are widely seen as offering a foretaste of next week's European elections.

Exit polls put candidates backed by Syriza, the radical-left party that is the main opposition, ahead in Athens and the wider Attica region, in what was seen as a major setback for the country's governing coalition.

Before next week's much-anticipated European election, a Kapa research poll showed Gabriel Sakellaridis, the radicals' candidate for Athens mayor, leading by 1.8 percentage points over the moderate leftwing incumbent, George Kaminis.

In the wider Attica region, Rena Dourou, a rising star in Syriza, led by 7.4 points over her nearest rival in the two-round race to become prefect.

"It is a punishment vote and reflects the internal divisions within the ruling parties," Constantinos Routzounis, head of Kapa Research, told Reuters. "The following Sunday, we will see whether this vote has a deeper political significance."

In a further shock for prime minister Antonis Samaras's two-party administration, the neo-Nazi Golden Dawn party also appeared to have gained support. Ilias Kasidiaris, the far-right movement's swastika-bearing spokesman – who was also contesting the Athens mayoralty – took about 15.5% of the vote with some exit polls suggesting he had come in third. Ilias Panayiotaros, Golden Dawn's candidate for Attica prefect, put in a similarly impressive performance, winning about 10%.

The result is all the more surprising because the ultra-nationalist group, whose symbol resembles the swastika, is the focus of a judicial investigation that has already seen all 18 of its MPS being charged with "leading and operating" a criminal organisation.

Alexis Tsipras, the radical left's main opposition leader, called the ballot a referendum on the EU-IMF sponsored rescue programme that is keeping the Greek economy afloat.

"In these four years, austerity policies have caused the greatest humanitarian crisis the country has ever suffered," he told voters last week. "The government has called this dramatic situation a success story."

The 39-year-old politician, campaigning as the European Left party candidate to be the next president of the European commission, replacing José Manuel Barroso, has been credited with boosting his party at home".

Source: theguardian

Why Philippines hosting WEF East Asia Summit is a big deal

The Philippines is hosting the World Economic Forum on East Asia (WEF-EA) next week, which is expected to attract top business leaders and investors from all over the world.

Guillermo Luz, Co-chairman of the National Competitiveness Council (NCC), said this is the first time WEF has chosen the Philippines as the host for one of its meetings. The event is seen as an opportunity to showcase the Philippines, whose economic growth was one of the fastest in the region last year, as the "next Asian miracle".

"They've held it for 23 years in East Asia, but never in the Philippines, so I think it's important to have it here. We've packaged it with many other conferences. We're looking at the cumulative effect of WEF and others over the next couple of years to bring the Philippines to the attention of investors," Luz said on ANC's Headstart.

The WEF East Asia Summit will gather top business leaders from all over the world for a three-day conference to discuss various issues such as the East Asia economic outlook, transparency, gender gap and global citizenship. It will be held on May 21 to 23 at the Makati Shangri-La Hotel

Luz noted majority of those who will attend the WEF event are foreigners, and many are first-time visitors to the Philippines.

"Many of them do not have businesses here... The idea is to talk to people and introduce the Philippines to them," he said.

Luz said the WEF event will highlight the Philippines' economic success.

"We've had 7 percent plus growth. We had credit ratings upgrade to investment grade. Our competitiveness ranking has gone up, not just with WEF," he said.

Source: CBN News

Pravda: American eagle, Russian bear and Chinese dragon: One will have to go

The visit of the Russian President Vladimir Putin to China is seen as a landmark event in terms of changing the vector of Russia's development towards Asia. State Duma deputy Mikhail Emelyanov explained in an interview with Pravda.Ru why the United States tried to prevent Russia's initiative to move closer to China and how the States "accidentally" accelerated this process.

"Today, Russia and China actively discuss opportunities to build the new Silk Road, Vladimir Putin is expected to pay a visit to China, during a variety of vital questions will be discussed, including the issues of gas supplies to China. What do you think are the prospects of relations between Russia and China? Is there a danger of such an association for the U.S.?"

"The United States had been trying to put obstacles of the way of Russian-Chinese cooperation. There was this G2 formula during George Bush's presidency. 
It was about two great states that will rule the world. That is what they offered to China. The United States and China were to become the two great nations. But the Chinese are farsighted, they declined the offer.

"The United States and its allies actively worked against Russia and the Russian elite, fanning up the idea about the alleged Chinese threat to our eastern borders, thereby trying to alienate Russia from China.

"Without understanding our interests in the West, not knowing our interests in Ukraine, they broke the balance of power in Eastern Europe, trying to bring openly pro-Western politicians to the throne in Ukraine, they, of course, push Russia straight into the arms of China, making it a very fast process. After all, the cooperation between Russia and China has been developing by leaps and bounds recently.

"We very quickly resolve our gas problems, our oil problems and many more. We will work closely in the field of armaments. Naturally, there is a continental block appearing, if you like, although President Putin said that we do not seek military- political alliance with China. But the statement itself is indicative." 

"Is cooperation in this field possible?"

"Very often, if politicians even mention this possibility, it says that it is possible. Even in denial. If this question was not on the political agenda, perhaps one would neither ask nor answer it. But there is such an option. If we take Iran into account, we will have a very interesting geopolitical combination. In Russian classical geopolitics, this is land power against maritime powers. This is not the best scenario for the world. But again, we were not the attacker. They are trying to drag Ukraine into the Western bloc. Following this, following the association with the EU, they would drag it into NATO. In the long run, all Eastern European countries have experienced this classic combination. Accordingly, Russia had no choice, and our political leadership made the right decision."

"Can Russia compensate China's huge demand that it gets from the United States - a huge sales market? Is it possible for the United States and China to estrange themselves?" 

"The United States has not raised a question of sanctions against China yet. This is a matter of remote future. If the Americans go the way of expanding sanctions, they will take the world to World War III. Therefore, they do not touch China and they  hardly ever will. The Americans are afraid of China. This can be seen from their low-key response to China's actions in the Pacific theater of political action, in the case of the Senkaku Islands, for example. They just dumped the Japanese and told them that they would not be protecting them, in spite of the agreement between Japan and the United States.

"The U.S. is very cautious when it comes to China; and Russia, too. I think that the States will take effort to blow up Russia from the inside. John Tefft is supposedly coming to us as an ambassador - this is very revealing. He was in Lithuania, he was in Georgia, he was in Ukraine, by the way, as an ambassador. He arranged all these orange, white ribbon and other revolutions. I think that the United States will stake on the work with the so-called civil society in Russia. They will try to play on our internal contradictions and take people to the streets."

Gérard Depardieu on Welcome to New York: 'In all of us there is a monster'

The actor Gérard Depardieu has expressed sympathy for sex addiction sufferers, such as the fictionalised version of Dominique Strauss-Kahnhe plays in a new film at the Cannes film festival.

The film's director, Abel Ferrera, confirmed in a press conference late on Saturday evening that Welcome to New York was in part inspired by the story of Strauss-Kahn, who quit as head of the International Monetary Fund in 2011 after being arrested for the sexual assault of a maid in a Manhattan hotel. The charges were eventually dropped and the two parties reached a settlement at the end of 2012. Other cases against Strauss-Kahn were dismissed, although one relating to "aggravated pimping" in Lille is still outstanding.

Ferrera's film stars Depardieu as an international financier called Devereaux who has designs on the French presidency. Despite protestations that he's "no spring chicken", Devereaux exhibits remarkable stamina for drink, drugs and sex. On a business trip to New York, he sleeps with at least four women on the night before he assaults a hotel maid after his morning shower.

Making his first appearance at Cannes since becoming a Russian citizen in early 2013, Depardieu said he had been attracted to the role in part because it explored lust, and it showed "that one is not necessarily responsible for that lust. In a way I pity those who suffer from such a sickness."

"We all have compulsion," he continued. "I never questioned the morality of my character – that was not the point. What I saw was that this man was not like me at all. But I do understand impulses and that you can get crazier and crazier as they come.

"I think anybody could have these kind of impulses. And there's something very tough in the act of surviving when you have this sickness. In all of us we know there is a monster there; that there's something not quite normal."

Questioned about why the bedroom scenes were of such length and frankness, Bad Lieutenant director Ferrara, who spent two years researching this film, said he felt they were required on account of the "documentary" style. He had shown the film to Bernardo Bertolucci, he said, who compared its verisimilitude to the work of Andy Warhol. "It's fly-on-the-wall. It is what it is."

Depardieu emphasised both his own hatred for sexual violence and his conviction that the film was not pornographic as he – as a "normal actor" – would therefore have been incapable of making it.

Depardieu added that although he had Strauss-Kahn "in the back of my mind at all times" during the shoot, the intention was "absolutely not to be like him, to look or sound like him".

A veteran of the Cannes festival, Depardieu was sanguine about his film's status in this 67th edition as a "special screening" - meaning that's ineligible for an awards: "I don't think about this at all, frankly."

Source: theguardian

Steelworkers Attempt to Calm Tensions in Eastern Ukraine

       The WSJ  reports, "steelworkers from the mills of Ukraine's richest man are helping to bring order to the streets of Mariupol in eastern Ukraine, which one week ago saw deadly clashes between armed separatists and government forces.

The initiative followed a rare public intervention by the owner of their mills, Rinat Akhmetov, who in a video address called for the country's volatile eastern regions to remain part of Ukraine.

Mr. Akhmetov is seen as the most powerful figure in the region, and his statement was quickly followed by the signing of an agreement by the factories, trade unions, local authorities and activists, including a representative of the Donetsk People's Republic, the self-proclaimed separatist group that held a vote last week to secede from Ukraine.

Clad in gray uniforms and hard hats, the men have cleared barricades and are patrolling the streets alongside police in a move that local officials say has made Mariupol a rare island of calm in the violence-hit region, where armed pro-Russia militants control at least a dozen towns.

The "memorandum on order and safety," the first to be struck with a representative of the separatists, was signed Thursday, calling for an end to armed conflict and a return to peace and order in the city. It was signed by the chief executives of the steel mills, top city officials, and the leader of the Donetsk People's Republic in the city.

The streets of Mariupol, a coastal city of some 500,000 people, are now patrolled by around 100 units of six steelworkers and two police officers working in shifts. The workers, from the Azovsteel and Ilich mills owned by Mr. Akhmetov's Metinvest have also cleared away the barricade of tires and other objects.

The militant separatists, who battled for control of government buildings in the city with police, have largely melted away, local media reported.

The patrol strategy is also being employed in three smaller towns near where Mr. Akhmetov's company owns facilities, a spokesman for Mr. Akhmetov's company said.

Mr. Akhmetov is the main force behind the Party of Regions, which backed pro-Russia former President Viktor Yanukovych, who fled Kiev in February amid street protests and was ousted. Mr. Akhmetov had previously called for national unity in brief, written statements.

Thursday, he called in a televised address for reforms to hand local authorities more powers, overhauls in line with the plans of the Kiev government. "I strongly believe that Donbas can be happy only in a united Ukraine," he said.

He warned that a separatist Donetsk People's Republic, as an independent territory or part of Russia, would face economic hardship as it wouldn't be recognized".

The United Nations on Friday reported "an alarming deterioration in the human rights situation in the east of the country." The report cited "targeted killings, torture and beatings, abductions, intimidation and some cases of sexual harassment," adding that they were "mostly carried out by well-organized and well-armed antigovernment groups in the east."