Thursday, 29 May 2014

Google's ultimate energy ambitions

Google's $3.2 billion acquisition of smart-home startup Nest in February "ought to give utility officials a sinking feeling in the pit of their stomachs" since it makes clear the Technarians have begun to seriously eye at least the periphery of utility business if not its core, said Adrian Tuck, CEO of Tendril Networks Inc. a Boulder, Colorado-based energy-services management company.
Google Energy
While coy about its ultimate energy ambitions, Google is already a power generator through more than $1.4 billion in clean energy investments and holds a wholesale power license. Last month it contributed $100 million to a program to promote rooftop solar power with SunPower Corp.
Nest, maker of the Learning Thermostat that memorizes and adjusts to users' preferences, gives Google a leap-ahead presence in the burgeoning smart-home market at the precise time that power in the U.S. has begun to flow both ways with the rise of rooftop solar and other forms of decentralized, home-grown energy, collectively called distributed generation.
Though Tuck said he has no special insight into Google's thinking, he believes that its Nest acquisition may well be a "Trojan horse" that gives Google a back door into the utility industry with the ability to leverage its smart thermostats into massive quantities of salable demand response even as it begins to compete directly with utilities with its own green-power projects.

Despite hating gold mining sector, Citi OKs Goldcorp, Barrick, Newmont

  • Citigroup is bearish on the gold mining sector but it does prefer some miners to others, namely Buy-rated Goldcorp (GG -0.7%) and Barrick Gold (ABX+0.4%) as well as Neutral-rated Newmont Mining (NEM +0.8%).
  • Citi sees GG as one of the few large gold producers set to deliver meaningful low-cost production growth over the next several years, and management continues to expect positive free cash flow beginning in Q4 at $1,200/oz. gold; the firm thinks ABX is in a better position to manage free cash generation after divesting high-cost assets, focusing on cost reductions and dialing back major project spending; NEM expects to generate positive free cash flow in 2014 at $1,250/oz. gold and has done a good job managing costs and dialing back capex.
  • The firm slaps Sell ratings on Gold Fields (GFI -0.7%), Harmony Gold (HMY +1.1%) and Sibanye Gold (SBGL +1%).
  • Source: Seeking Alpha

WSJ: China’s ’Mini’ Stimulus Starts Expanding

        The WSJ reports,"Nomura Holdings Inc. economists said measures including central bank loans for low-income housing are “starting to amount to something quite significant” as they scrapped their forecast for a second-quarter cut in banks’reserve requirements. UBS AG said the government has gradually strengthened its mini-stimulus over the past couple of months and the central bank “has quietly eased liquidity conditions.”
The ruling Communist Party is trying to revive the economy without repeating the mistakes of its $586 billion stimulus begun in 2008, which caused a record buildup of debt and inflated property bubbles around the country. Premier Li Keqiang last week called on regional authorities to help stabilize expansion as he seeks to ensure that the government meets its goal of about 7.5 percent growth.
“It’s definitely getting bigger,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. “That’s quite natural, as Premier Li Keqiang has urged local governments to show real action.”
Increases in housing and railway investment alone should boost gross domestic product growth by 0.8 percentage point, Nomura said in a May 26 report. Dariusz Kowalczyk, senior economist at Credit Agricole SA in Hong Kong, estimated that the government’s quantifiable stimulus steps will add 1 percentage point to expansion, while UBS Chief China Economist Wang Tao said measures amount to 0.6 percent of GDP.
The Finance Ministry on May 28 called for faster spending of budgeted funds, a move Bank of America Corp. analysts said will be positive for expansion. Guangdong province, the largest regional economy, will allocate 64.7 billion yuan ($10.4 billion) to support growth, according to a May 27 report on the local government’s website.
The National Development and Reform Commission, China’s main economic-planning agency, is studying a fund of at least 100 billion yuan for transportation that will solicit some private investment, the state-run Economic Information Daily reported yesterday, citing an unidentified person.
“We see a timely allocation of fiscal expenditure as critical to the growth recovery the government is trying to generate,” Goldman Sachs Group Inc. economists including Song Yu in Beijing said in a note yesterday.
The stimulus may be starting to appear in indicators after April data showed a deepening slowdown with decelerations in industrial-output and investment growth.
China’s official manufacturing purchasing managers’ index probably rose in May to a five-month high, signaling a faster pace of expansion, based on analysts’ median estimate in a Bloomberg News survey ahead of a June 1 report. A similar gauge from HSBC Holdings Plc and Markit Economics also advanced to a five-month high in a preliminary reading released May 22.
The world’s second-largest economy is projected to grow 7.3 percent this year, which would be the weakest pace since 1990, according to an analysts’ survey this month. Expansion slowed to 7.4 percent in the first quarter from a year earlier, from 7.7 percent in the previous period.
Standard Chartered Plc said in a May 28 report that the interbank market shows the central bank is easing monetary policy. The seven-day repurchase rate, a gauge of funding availability, has dropped almost 1 percentage point this month to 3.22 percent, according to a daily fixing.
The yuan has weakened 3 percent against the dollar this year, the most among 11 Asian currencies tracked by Bloomberg, while the benchmark Shanghai Composite Index is down 3.6 percent.
Ding Shuang, senior China economist at Citigroup Inc., said recent actions don’t even add up to a mini-stimulus because budget spending is being accelerated rather than boosted. Li’s recent remarks haven’t signaled a policy shift, said Ding, who formerly worked at the People’s Bank of China.
The central bank, which this month asked lenders to approve mortgages faster, may continue “targeted easing,” including reserve-ratio cuts for some banks and bond purchases, according to a May 28 commentary in the state-run China Securities Journal.
The PBOC disbursed 100 billion yuan through a re-lending facility to China Development Bank in April for shantytown renovations".

Xinhua: Russia, Belarus, Kazakhstan to form Eurasian economic bloc in 2015



Belarusian President Alexander Lukashenko, Kazakh President Nursultan Nazarbayev and Russian President Vladimir Putin (L to R) pose for photos in Astana, Kazakhstan, May 29, 2014. The heads of state from Belarus, Kazakhstan and Russia signed a treaty here Thursday to launch a European Union-style bloc to facilitate the free flow of people, capital and goods within the three countries

Chinese investment in Latin America open, constructive: ECLAC

Chinese investment in Latin America, part of the region's foreign direct investment (FDI), is becoming more and more open and constructive, a senior United Nations official said Thursday.
Alicia Barcena, executive secretary of the UN's Economic Commission for Latin America and the Caribbean (ECLAC), said this here in a report on regional FDI in 2013.
"ECLAC, in addition to analyzing China's FDI in the region, which has registered an average of 10 billion U.S. dollars in recent years, underscores the new structure of these investments," said Barcena.
In Brazil, "there is a Chinese automotive plant, which means the dynamic is changing ... It's not just the extraction of natural resources anymore ... China has presence through a new automotive company and with different technological innovation," Barcena added.
The ECLAC head further said Latin American-Chinese cooperation is "making progress" through various forums, including the Community of Latin American and Caribbean States (CELAC), and its potential "is enormous."
ECLAC is currently aiding talks between China and four CELAC countries -- Costa Rica, Cuba, Ecuador and Saint Vincent and the Grenadines -- to deepen economic and trade cooperation, she said.
"One issue that interests China very much, and logically so, is food security," said Barcena, adding ECLAC had helped organize an initial meeting of agriculture ministers from China and the region in 2012.
There may be another meeting of envoys of the two sides later this year in Beijing, said Barcena, noting that "each day there are deeper and more interesting encounters with China that include the areas of cooperation, investment and trade."
The report on FDI foresees Chinese investment to grow and "center on mining in Peru and the extraction of oil in Brazil, where there is also significant investment in the manufacturing sector."
China National Petroleum Corp has a 20 percent stake in the consortium that won exploration rights to Brazil's Libra pre-salt oilfield, and also acquired 2.6 billion dollars worth of shares in Peruvian oilfields, said Barcena.
Other Chinese companies, such as Minmetals, have invested as much as 5.85 billion dollars in Peruvian mines, according to figures from Peru and ECLAC.

China's machinery industry sustains mild recovery

 China's machinery industry has sustained mild recovery since last year but some key indices are showing signs of retreat, moderating any optimism, an official said on Thursday.
In the first four months, the value-added output of the machinery sector grew 11.5 percent year on year, outperforming the 8.7 percent rise in the broader industry, according to Cai Weici, vice president of China Machinery Industry Federation.
Some key indexes, such as investments and new orders are slowing. Fixed asset investments during January-April rose 14.1 percent year on year, down 2.42 percentage points from the rate during the same period last year.
"This shows business expectations are not high," Cai pointed out.
After a decade of development from 2001, machinery enterprises began to suffer from oversupply and homogeneous products that led to bankruptcies in 2011 before gradually gaining strength last year.
While cautioning enterprises to seek diversified or unique products, Cai predicted profit growth of 12 percent for the industry in 2014, with exports expected to increase 8 percent.
Source: Xinhua

Sasol, a sul-africana que apostou alto no gás dos EUA

"A protagonista é uma empresa chamada Sasol, antiga estatal de petróleo da África do Sul, que está embarcando no que poderia ser o maior projeto de investimento estrangeiro individual da história dos EUA.
A Sasol está construindo um complexo energético de mais de 1.200 hectares numa área pantanosa de Lake Charles, na Louisiana. Aproveitando o gás natural barato extraído de formações de xisto através da técnica do fraturamento hidráulico — ou "fracking"—, bem como os gasodutos e a infraestrutura de transporte existente ao longo da costa do Golfo, a Sasol planeja gastar até US$ 21 bilhões no projeto.


É uma missão cara, complexa e suja. A Sasol espera transformar o gás em etileno, um químico bruto usado na fabricação de plásticos, tintas e embalagens de alimentos. Ela também planeja converter o gás em diesel de alta qualidade e outros combustíveis, empregando um processo aprimorado por cientistas nazistas para abastecer seus tanques Panzer. O Estado da Louisiana até liberou US$ 2 bilhões em incentivos para que o plano se concretize.
A Sasol é, assim, uma metáfora para o que ainda não compreendemos sobre o boom de gás dos EUA. A maioria sabe o que o fraturamento hidráulico significou para os preços do petróleo e gás. Mas como grande parte do trabalho ainda não começou, poucos apreciam a verdadeira magnitude da industrialização que está prestes a começar.
Podemos interpretar a coisa desta forma: Um Qatar está sendo construído na Louisiana. Do nada, empresas estão levantando cidades inteiras com fábricas de fertilizantes, polímeros, papel e amônia, centros manufatureiros de boro e terminais de metanol.
Ao todo, 66 projetos industriais — avaliados em cerca de US$ 90 bilhões — começarão a ser construídos na Louisiana nos próximos cinco anos, de acordo com uma entidade que representa a indústria do Estado. Bilhões de outros novos investimentos podem surgir, diz o secretário de desenvolvimento econômico da Louisiana, Stephen Moret. Resta saber quantos projetos serão realmente concluídos.
Em meio ao boom, a visão da Sasol é especialmente audaciosa. O histórico das indústrias que transformam gás em líquido é conflitante, permeado de excesso de custos e problemas tecnológicos. Se os preços do gás sobem, ou os preços do petróleo caem, elas podem rapidamente gerar enormes prejuízos. Atualmente, os ventos estão a favor da Sasol. O petróleo está sendo vendido em torno de 24 vezes o preço do gás natural. Em 2007, a relação era de cerca de sete vezes. A Sasol precisa que ela esteja em pelo menos 16 vezes para ganhar dinheiro.
A Sasol já atuou muito na conversão de carvão em combustível, algo necessário durante o apartheid na África do Sul, quando o fornecimento de petróleo era restrito devido a um embargo. A empresa também é uma desbravadora, tendo levado seus negócios para o Qatar, Irã, Uzbequistão e Nigéria.
As sanções americanas forçaram a Sasol a deixar o Irã. Os imãs iranianos não são sócios fáceis de lidar e é por isso, em parte, que a o diretor-presidente da empresa, David Constable, gosta de fazer negócios nos EUA. "Do ponto de vista de logística [...] é o número um do mundo", diz ele. O acesso ao gás barato, clientes, capital, legislação e facilidade de construção "preenchem todos os requisitos. Não poderia ter acontecido em um país melhor".
Os rios e canais da Louisiana são uma enorme vantagem, tornando mais fácil para a Sasol transportar o material necessário — incluindo quatro reatores químicos de 2.000 toneladas — e produtos por barcos.
E há os gasodutos, que tornam mais fácil o acesso ao gás dos campos de xisto do Texas."
"É por isso que é muito mais difícil apostar alto no gás de xisto na China ou na Europa. [...] Se observarmos os gasodutos em todo o país, é como uma teia de aranha", diz Constable.
Fonte: WSJ

Ukraine military helicopter shot down by pro-Russia rebels over Slavyansk

"A Ukrainian military helicopter has been shot down by rebels over Slavyansk amid heavy fighting around the insurgent-held city in easternUkraine.
Ukraine's acting president, Oleksandr Turchynov, said 14 people on board, including an army general, were killed when the helicopter was shot down on Thursday. He told the parliament in Kiev that rebels used a portable air defence missile to down the aircraft.
An Associated Press reporter witnessed the helicopter being shot down. It was not immediately clear exactly where it fell.
Slavyansk has become the centre of fighting between pro-Russiainsurgents and government forces in recent weeks. The city, located 100 miles (160km) west of the Russian border, has seen constant clashes and its residential areas have often come under mortar shelling from government forces, prompting some residents to flee.
The Kiev government has condemned the insurgency in east Ukraine as the work of "terrorists" bent on destroying the country and blames Russia for fomenting it. Moscow denies the accusations, saying it has no influence over rebels, who insist they are only protecting the interests of the Russian-speaking population of the east. However, fighters from Russia, including the battle-hardened region of Chechnya, have been appearing recently in the ranks of the separatists.
A tense standoff developed on Thursday afternoon outside the Donetsk regional administration building, which pro-Russian rebels have been occupying since April. The dispute between locals and a group including many volunteers from Russia appeared to be a sign of growing divisions within the rebel camp.
Armed and masked men of the Vostok Battalion, including a large contingent of Russians who were greeted as heroes when they appeared in Donetsk on Sunday, arrived at the building in cars, a van and a fighting infantry vehicle. They set up a perimeter around the barricades and trained their machine guns on the regional HQ, while snipers appeared briefly on a nearby apartment building roof.
One of the commanders of the men outside the building who identified himself only as Maksim said they had come to resolve a dispute about looting.
"Negotiations are taking place," he said. "I can't say how they will end."
Klavdia Kulbatskaya, a spokeswoman for the self-declared Donetsk People's Republic, said the Vostok Battalion men were "checking" rebels from the Donbass People's Militia who had been accused of looting yesterday. She denied there was a power struggle between different rebel groups and didn't know what punishment could be meted out to the violators.
"It's purely a struggle against looting," she said.
Pro-Russian rebels and local citizens in Donetsk began to bury their dead on Thursday after vicious fighting with Ukrainian government forces on Sunday and Monday.
Morgue workers and rebels outside the Kalinin morgue said more than 50 people had been killed in the fighting near the Sergei Prokofiev airport outside the city. At least one civilian was reportedly killed in the crossfire, but most of those dead were volunteer fighters from Russia, including members of a group from the Chechen republic, where Russia put down two bloody insurgencies in the 1990s and early 2000s.
A member of the Vostok Battalion said 33 Russian citizens had been identified among the dead. Thirty coffins were stacked outside the morgue. Alexander Borodai, the prime minster of the self-declared Donetsk People's Republic, told journalists that the 33 bodies would be taken in a convoy to be buried in Russia.
The Vostok Battalion fighter, a Russian citizen who identified himself only by his nickname, "Ram," said he had known several of those killed. He accused Ukrainian forces of shooting at civilians and said heavy losses at the airport had only hardened the rebels' resolve.
"No one is talking about surrendering. They've gotten angry, and this will be reflected in battle," he said, adding that the rebels' ranks were growing.
A group of residents took the body of Mark Zveryev, 43, a taxi driver who was killed with pro-Russian forces near the airport on Monday, to a local cemetery to be buried. Zveryev left behind a wife, a teenage son and a teenage stepdaughter, according to friends.
an insurgent leader in eastern Ukraine who said his fighters were holding four observers from the Organisation for Security and Cooperation in Europe promised that they would be released imminently.
Vyacheslav Ponomarev, the self-proclaimed "people's mayor" of Slavyansk, told AP the monitors – who were from Turkey, Switzerland, Estonia and Denmark – were safe.
"I addressed the OSCE mission to warn them that their people should not over the coming week travel in areas under our control. And they decided to show up anyway," Ponomarev said.
"We will deal with this and then release them," he said, without setting any specific time frame.
The OSCE said it lost contact with one of its four-man monitoring teams in Donetsk on Monday evening. Rebels have previously kidnapped military observers working under the auspices of the OSCE.
The OSCE observers were deployed to Ukraine to monitor the security situation following Russia's annexation of Crimea and a pro-Russia separatist insurgency that has engulfed regions in the east of the country. They also observed Sunday's presidential vote, won by billionaire confectionery magnate Petro Poroshenko.
Poroshenko, who is due to be inaugurated by 8 June, has promised to negotiate with people in the east, where insurgents have seized government buildings and fought government troops for a month and a half. But he also vowed to continue a military operation to uproot the armed rebels and bring it to a quick end.
In the most ferocious battle yet, rebels in Donetsk tried to take control of its airport on Monday but were repelled by Ukrainian forces using combat jets and helicopter gunships. Dozens of men were killed and some morgues were overflowing on Tuesday. Some insurgent leaders said up to 100 fighters may have been killed.
The mood in Donetsk was calm on Thursday, although many businesses have stopped opening their doors for fear of renewed fighting.
Pro-Russia separatists have declared the Donetsk and Luhansk regions independent of Ukraine. They have pleaded to join Russia, but Vladimir Putin has ignored their appeal in an apparent bid to defuse tensions with the west and avoid a new round of western sanctions.
The Russian president has supported an OSCE peace plan that calls for ending hostilities and launching a political dialogue. Russia also said it would be ready to work with Poroshenko, but strongly urged the Ukrainian government to end its military operation in the east".
Source: theguardian

Chinese premier discusses bilateral ties with new Indian PM

Chinese Premier Li Keqiang, in a telephone hook-up Thursday, told new Indian Prime Minister Narendra Modi that China was willing to enhance mutual trust and regarded each other's development as opportunities.
On the occasion of the 60th anniversary of the creation of the Five Principles of Peaceful Coexistence, which was jointly initiated by China, India and Myanmar in 1954, Li said China was willing to further strengthen cooperation with India and jointly push ahead the construction of the Bangladesh-China-India-Myanmar economic corridor.
China was also willing to enhance exchanges in the humanistic field and other areas and look for more converging points of interest to jointly make contributions to the peace, stability and prosperity in the region and the world, Li said.
Li congratulated Modi's swearing-in as India's new prime minister, saying that, with concerted efforts by both sides, relations between China and India had developed significantly in recent years, and the two countries had jointly explored a way to relate to each other, in which cooperation was actively explored and differences were properly managed and controlled.
China and India were both countries with a long history of civilization, and they were also the two largest developing countries and most vigorous emerging economies in the world, the Chinese premier said, adding the two countries were natural cooperation partners.
The cooperation between and common development of China and India would not only benefit their peoples, but also make a major contribution to settling the issue of development of the entire mankind, Li said.
Modi said India and China were friendly neighbors and friendly exchanges between their peoples had a long history.
India was delighted with the achievements China had made in development, Modi said, adding developing relations with China was one of the important tasks of India's diplomacy.
India's new government attached great importance to India-China relations from a strategic high perspective, and was willing to work with China to advance bilateral cooperation in various fields, solve existing issues through dialogue, and achieve friendly and harmonious co-existence and common development, Modi said.
In 1954, China, India and Myanmar initiated the Five Principles of Peaceful Coexistence, which stand for mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other's internal affairs, equality and mutual benefit, and peaceful coexistence.
Modi, the 63-year-old Hindu nationalist leader of the Bharatiya Janata Party, was sworn in Monday as India's new prime minister.
Source: Xinhua

China: Shanxi relaxes one-child policy

North China's Shanxi Province on Thursday relaxed its family planning policy to allow couples to have a second baby if either parent is an only child, the local legislature said.
An amendment to the provincial Population and Family Planning Regulations was passed at a meeting of the Standing Committee of the Shanxi Provincial People's Congress on Thursday.
The amendment allows couples to have a second baby if either parent is an only child. Under the new policy, the province is expected to see an additional 189,600 to 238,000 newborns by the end of 2020, according to an official with the provincial health and family planning commission.
The population growth will not add pressure to public resources allocation, the official said.
China's family planning policy, put in place in the late 1970s, is designed to curb population growth.
In addition to Shanxi, the municipalities of Beijing, Tianjin, Shanghai and Chongqing as well as Zhejiang, Jiangxi, Anhui, Sichuan, Guangdong and Jiangsu provinces and Ningxia Hui Autonomous Region have also changed their policies.
Source: Xinhua

WSJ: Alibaba Adds a Dash of Foreign Flavor

        The WSJ reports, "Alibaba Group has gone from dipping a toe in international waters to dunking a whole foot. It may be some time before it's worth diving in all the way.
The Chinese e-commerce giant, which is preparing for what could be the largest ever U.S. initial public offering, sent the strongest signal yet of its intention to expand outside China by acquiring a 10% stake in Singapore Post  for $249 million. The likes of Amazon and eBay shouldn't quiver in their boots just yet.
Earlier this week Alibaba stuck a deal with Australia Post aimed at helping Australian companies sell wares into China through its online retail sites, Taobao and Tmall. But the SingPost deal seems oriented the other way—at helping Chinese merchants reach Southeast Asian customers. Singapore is the region's hub, and the joint announcement boasts of state-linked SingPost's ability to offer warehousing, delivery and product returns.
Alibaba was founded as a site that connects global companies to Chinese parts and components suppliers, but the bulk of its business today is retail and consumer-to-consumer trading within China. It has been cautious in expanding consumer operations outside mainland China, with Chinese-language Taobao sites in Hong Kong and Taiwan".
"Alibaba's foreign forays offer intriguing hints of its long-term ambitions. And the deal with SingPost creates a platform it might learn from, expand or replicate elsewhere. But potential IPO investors should stay focused on domestic growth. Alibaba's home fires burn brightest".

S&P 500 closes at an all-time high, closing high after late surge.

 The U.S. stock market closed modestly higher on Thursday with the S&P 500 hitting an intraday record and finishing at an all-time high for the 13th time this year. Investors shrugged off data showing the economy contracted in the first quarter and focused instead on better-than-expected jobless claims and deal news in the food industry. The benchmark S&P 500 closed 10.25 points, or 0.5%, higher at 1,920.03. The Dow Jones Industrial Average  added 65.50 points, or 0.4%, to 16,698.68. The Nasdaq Composite ended the day up 22.87 points, or 0.5%, at 4,247.95. 

Source:  Marketwatch

U.S. Justice Dept. Seeks More Than $10 Billion Penalty From BNP Paribas

        The WSJ reports, "U.S. authorities are pushing BNP Paribas SA to pay more than $10 billion to end a criminal probe into allegations the bank evaded U.S. sanctions, according to people familiar with the negotiations, a sign of increasing pressure the government is putting on large financial firms it suspects of wrongdoing.
A settlement of $10 billion or more, along with the guilty plea prosecutors are also seeking, would eclipse the punishment inflicted on other banks for similar conduct. To date, the most severe penalty on a bank suspected of sanctions violations or money laundering has been a $1.9 billion settlement with HSBC Holdings PLC, which included an admission of wrongdoing but not a guilty plea.
The amount sought by the government would approach the largest penalty the U.S. has levied on a single bank: the $13 billion deal J.P. Morgan Chase & Co. struck last year to resolve a civil probe into its handling of mortgage securities, which it admitted misrepresenting to investors.
European banks have been the target of many of the recent U.S. fines. The pursuit, with cumulative penalties in the ballpark of $10 billion, has triggered private grumbling among European finance executives and some regulators there. The mounting frustration helps explain why some French leaders appear to be rallying around BNP. Christian Noyer, the governor of the Bank of France, said this month that BNP's alleged actions didn't violate European or French laws.
A final resolution of the yearslong U.S. investigation of the French bank is likely weeks away, and it is possible the ultimate settlement amount could total far less than $10 billion. BNP is looking to pay less than $8 billion, according to the people familiar with the settlement discussions, although a person close to the bank said its negotiators haven't mentioned the $8 billion figure in talks with U.S. authorities.
BNP and the U.S. authorities also are negotiating whether the bank will temporarily lose the ability to transfer money into and out of the U.S., the people said".

Ukraine Closer to compromise over Gas Debt to Russia

Source: reuters

WSJ: ECONOMY GDP Contracted at 1% Pace in First Quarter

       The WSJ reports,"the U.S. economy contracted in the first quarter of 2014, the latest stumble for a recovery that has struggled to find its footing since the recession ended almost five years ago.
Gross domestic product, the broadest measure of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 1.0% in the first three months of the year, the Commerce Department said Thursday. It was the first time economic output contracted since the first quarter of 2011, when it declined at a 1.3% pace.
Government economists had previously estimated GDP slowed to a 0.1% growth rate in the first quarter as harsh winter weather disrupted work sites, curtailed foot traffic at retail stores and snarled transportation networks across much of the U.S. The newly revised estimate incorporates additional economic data released in recent weeks. Higher-than-expected imports and slower-than-expected inventory growth dragged the economy into negative territory.
Economists surveyed by The Wall Street Journal had predicted Thursday's report would revise GDP growth down to a 0.6% decline.
U.S.-based corporations, meanwhile, posted slightly lower profits during the first quarter. The Commerce Department said corporate profits after tax, without inventory valuation and capital consumption adjustments, totaled a seasonally adjusted annual rate of $1.880 trillion for the quarter. That is down from profits of $1.905 trillion in the fourth quarter of 2013.
The three-month contraction isn't expected to herald a prolonged downturn or new recession. Most economists predict the U.S. economy will bounce back in the second quarter, though it isn't clear how strong of a rebound is in the works. Gauges of industrial production, retail sales and durable-goods orders all rose in February and March before weakening in April.
Even if it is temporary, the first-quarter downturn reflects a pattern seen repeatedly over the past five years. The worst recession since the Great Depression ended in June 2009, but the economic recovery has struggled to gain traction. Job growth has been largely lackluster even as the unemployment rate has slowly fallen. Sluggish wage growth has restrained consumer spending. The housing market surged in 2012 and into 2013, but has slowed over the last year.
Many economists had hoped 2014 would be a breakout year for growth, encouraged by an economy that grew at a 3.4% pace in the second half of 2013. Those hopes have been deferred—if not yet dashed—by the recent weak stretch".

Rio Alto Acquires 8.6% of Sulliden Shares From Agnico Eagle

News Release

Rio Alto Mining Limited ("Rio Alto" or the "Company") (TSX: RIO)(NYSE: RIOM)(LMA: RIO)(DBFrankfurt: MS2) is pleased to announce that it has entered into an agreement to purchase 26,966,292 common shares of Sulliden Gold Corporation Ltd. ("Sulliden") (TSX: SUE)(LMA: SUE)(OTCQX: SDDDF), representing 8.6% of Sulliden's basic shares outstanding, from Agnico Eagle Mines Limited (TSX: AEM)(NYSE: AEM) for cash consideration of C$1.10 per common share for an aggregate purchase price of approximately C$29.7 million. The purchase of the Sulliden common shares is expected to close May 29, 2014.
Alex Black, President and Chief Executive Officer of Rio Alto commented, "We are extremely pleased to have received the support of Agnico Eagle in respect to our proposed acquisition of Sulliden. The acquisition of Agnico Eagle's shares brings us one step closer to completing our goal of creating a new leading mid-tier gold producer."
Rio Alto intends to vote the purchased shares in favour of resolutions approving the Plan of Arrangement pursuant to which Rio Alto proposes to acquire all of the outstanding common shares of Sulliden (the "Transaction"). Please refer to the joint news release of Rio Alto and Sulliden dated May 21, 2014 for additional details regarding the friendly acquisition by Rio Alto of all the issued and outstanding common shares of Sulliden.

Jack's Ma buyout firm Yungfeng raises US$ 1.1 billion



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