JJL: The Highlights of 2013

It’s been another interesting year in Asia Pacific. We’ve seen quite a bit of change in economic dynamics across the region, while in the real estate sector it’s been a time of cautious corporates and busy investors. The 2013 highlights:

• China and Japan dominated the headlines. The region’s number 1 and 2 economies made good strides in addressing their challenges. China averted a hard landing and its government has pushed hard on a range of “austerity” measures. The Japanese government launched a massive stimulus program to reignite economic growth and we’ll get a better idea over the next 12 months as to the success of Abenomics.

• The leasing and investment disconnect widened. Ongoing global uncertainties have seen corporates remain cautious in their hiring and space requirements, and 2013 is likely to be the weakest year for AP office leasing activity since 2009. At the same time, QE and ultra-low borrowing costs have driven strong commercial real estate investment activity – so strong, in fact, that 2013 is likely to equal the previous record back in 2007. We’re forecasting leasing activity to pick up next year and investment volumes to strengthen further, so it will be interesting to see when the disconnect starts to narrow.

• Chinese outbound investment is set for a record year, with commercial volumes up 25% y-o-y as at the end of Q3. The major destinations for this capital have been Europe, the US, Australia and Singapore. Chinese buyers and developers have also been very active in overseas residential markets.

• e-commerce accelerated across the region, a trend which is sure to drive major change in the retail and logistics sectors in the years ahead. At the same time, international retailers have continued to set up shop in Asia Pacific, attracted by our region’s high economic growth and increasing wealth levels.

• The residential sector saw strong demand in many markets including China and South East Asia. Interest rate cuts also stimulated sales activity in Australia. Meanwhile in Hong Kong and Singapore, transaction levels have fallen following a series of cooling measures aimed at keeping a lid on home prices.

Source: JJL   Jane Murray is the Head of Research, Jones Lang LaSalle Asia Pacific.

Has the importance of physical retail space been vindicated by Alibaba?

Alibaba’s decision to significantly invest into Intime Retail, which operates 36 department stores throughout China provides an interesting insight into how internet retailers might be viewing the importance of multi-channel retailing and the role of physical retail stores.

China’s Alibaba Group, one of the world’s largest internet retailers, globally has agreed to invest US$ 692 million to acquire a 26% stake in Intime Retail (Group) Co., the Hong Kong listed operator of predominantly luxury orientated department stores, throughout mainland China.

While this news should not be read as a reversal of the significant global trend of retail spending switching from some physical retail stores to the internet, it is in our opinion a vindication from one of the strongest internet retailers as to the ongoing importance of physical retail space.

We anticipate that the most successful retailers in the future are going to be those with a complete multi-channel offering. Those providing efficient and convenient methods of sales, deliveries and returns through both a physical store portfolio and a strong internet platform will likely be the best performers.

In addition to retailing, the ownership and management of retail places is becoming increasingly specialized and challenging. Shopping mall owners need to ensure that their retail assets remain relevant in the rapidly evolving retail landscape. Nowhere is this more prevalent than in China, which has the world’s largest supply pipeline of shopping malls under development. As luxury brands and first mover fast fashion retailers look carefully at and rationalise their own expansion plans, developers might look to attract internet based operators as one way to ensure that their malls remain competitive. Don’t be surprised to see landlords chasing the signatures of internet retailers with as much vigor as they once did with global luxury brands and international department stores.

JLL global retail research team has completed a fascinating piece of research called Redefining Retail Places. While it can be read as presenting a daunting future for shopping malls, its themes should certainly be used to form part of the picture when owners are making: buy; sell; hold; joint venture and strategic management decisions.

Our most recent outlook to retail real estate investment in Asia Pacific also highlights an expected trend of specialist retail asset managers and co-investors playing a growing role alongside the investment capital and developers, in ensuring assets are built and managed to their best advantage.

Source: JLL.  David Raven lead director for retail investment for Asia

Rental Growth,Occupational fundamentals supporting higher investment volumes

Another year and another quarter of investment volume growth around the world. Investment markets which have grown consistently over the last four years have started 2014 brightly with 23% growth compared to this time last year.

Much of the growth over the last four years has been associated with a hunt for yield globally, not just within the property sector but across the global capital markets. With government bond yields at historic lows in many countries commercial property has provided an attractive source of risk adjusted investment returns, with many groups investing in the sector for the first time.

However, while investment volumes have continued to improve, occupational fundamentals have struggled post the financial crisis. The structural changes happening in the financial services industry have forced occupiers to consider their longer term space needs, in terms of quality, quantity and location. This has made for a depressed and stagnant leasing environment in many cities. This now seems to be changing with many more cities seeing an improvement in take up fundamentals and a return of rental growth across many of the office markets JLL covers globally. The improvement is not uniform, with many cities still providing plentiful options for occupiers it will be a long process, but we certainly seem to be seeing the first signs that the corner has been turned.

This should give renewed impetus to investment markets, stronger corporate demand coupled with financing markets returning to normality in most countries will provide an additional level of enthusiasm for investors to proceed with purchases. In addition the rise in values is encouraging vendors to place more stock into the market place, particularly in 2014 portfolios and larger lot sizes.

With US$130 billion transacted in the first quarter of 2014, we are confident that we shall see another year of investment growth. At this stage we are estimating US$650 billion for the full year, 10% higher than we recorded in 2013.

Source:  JLL, David Green-Morgan is Global Capital Markets Research Director, based in Singapore.

Commercial Real Estate Investment The Smaller the Safer?

When planning a successful shopping centre, location is always a top priority. If a retail project sits in the middle of a busy commercial district, or a densely populated residential area, the starting point is a catchment with lots of potential customers. But in an era with oversupply looming in many cities in China, and landlords having a harder and harder time pre-leasing space, do smaller shopping malls have less execution risk?

During a recent field trip to Zhabei district, a densely populated and mature residential part of northern Shanghai, we found three cases of low occupancy, community-oriented shopping centres that from a location perspective can be considered “good” sites. The three projects have been operating for more than one year, but average occupancy is still less than 50%. After going through Shanghai’s retail supply list, we found a significant number of smaller projects (20,000 – 50,000 sqm) in residential areas that are struggling to find tenants throughout a long period of time to reach stabilisation.

What are the reasons behind these projects’ struggles? Inexperience on the part of the landlord can lead to a lack of understanding of the catchment area and poor planning of the project positioning, including:

A mismatch between the types of tenants and income level of the neighbourhood;

Ineffective or inexperienced leasing teams for finding non-anchor tenants, especially after a supermarket, cinema or KTV have been secured;

Rental expectations that are too high.

If the average housing price near a community mall is low, residents in the neighbourhood tend to spend most of their time and money in the anchor supermarket rather than the other stores. If the catchment area has many high-end residential projects, but the mall doesn’t offer interesting lifestyle tenants, consumers may instead drive to a destination shopping mall further away for more options. Another execution risk is when anchor tenants “steal away” consumers rather than securing foot traffic for the whole property. Supermarkets or cinemas will often have their own direct access points and consumers can easily bypass the rest of the property if there isn’t a sound conversion strategy to lure them in. In conclusion, while these malls will probably stabilsze eventually, once the landlord gets the positioning right, ‘going small’ is not a panacea – there is still plenty of execution risk. Careful planning and a strong retail asset management team are critical to ensure a successful shopping centre.

Source: Jones Lang LaSalle(JLL) by Chen Lou

Lukoil launches giant West Qurna 2 oilfield in Iraq

• Russia's Lukoil (LUKOY, LUKOF) finally launches commercial production from the giant West Qurna 2 oilfield in Iraq in a move expected to lift the country’s output to record levels of ~4M bbl/day this year.
• Production from one of the world’s largest untapped oilfields, with recoverable reserves estimated at ~14B barrels, is set to rise to 400K bbl/day by year-end from an initial rate of 120K.
• The launch of the field after lengthy delays also will allow Lukoil, which holds a 75% stake as operator, to more than double its overseas output.Source: 
• Source:Seeking Alpha   March 31, 2014

Russia accuses Ukraine of violating Geneva peace deal Sergei Lavrov says Kiev 'not lifting a finger' to control extremists as armed groups refuse to stand down in eastern Ukraine

     The Guardian reports,"the Russian foreign minister, Sergei Lavrov, has accused Ukraine of violating an accord reached in Geneva last week aimed at averting a wider conflict.

"Steps are being taken – above all by those who seized power in Kiev – not only that do not fulfil, but that crudely violate the Geneva agreement," he said on Monday.

Lavrov also told a news conference that a deadly gunfight on Sunday near Slavyansk, a Ukrainian city controlled by pro-Russian separatists, showed Kiev did not want to control "extremists".

"The authorities are doing nothing, not even lifting a finger, to address the causes behind this deep internal crisis in Ukraine," he said".

At least three people are thought to have been killed in the shootout, shaking an already fragile accord reached last Thursday betweenRussia, Ukraine, the US and the European Union.

The authorities in Kiev described the incident in the early hours of Sunday as a "crude provocation" staged for Russian TV. They said some of the details of the shootout were so implausible as to be ridiculous. Ukraine's intelligence service said its Russian military counterpart, the GRU, had staged it with help from criminals. The death toll and the allegiance of those involved were hard to confirm independently.

The Geneva agreement called for an immediate end to violence in Ukraine, where western powers believe Russia is fomenting a pro-Russian separatist movement, an allegation Moscow denies.

The accord also called for illegal armed groups to stand down in a process to be overseen by Europe's OSCE watchdog.

However, separatists have shown little sign of leaving public buildings in largely Russian-speaking eastern Ukraine.

Lavrov said the Ukrainian authorities had failed to remove illegal protests from squares in Kiev, Ukraine's capital. "This is absolutely unacceptable," he said.

Washington has warned of stronger economic sanctions than those already imposed if Moscow fails to uphold the Geneva deal.

"Before giving us ultimatums, demanding that we fulfil demands within two or three days with the threat of sanctions, we would urgently call on our American partners to fully accept responsibility for those who they brought to power," Lavrov said.

He added that attempts to isolate Russia would fail because it was "a big, independent power that knows what it wants".

Schwab:U.S. Market Brief

Coming off a solid Easter shortened week, the U.S. equity markets are mixed in late-morning action, with 1Q earnings season set to heat up this week, while a stronger-than-expected read on domestic Leading Indicators is having a limited impact. However, international market action was light as European, Hong Kong, and Australian markets remained closed for the holiday weekend. Treasuries are gaining ground despite the data, which was the lone release on today's docket. Meanwhile, Sun Trust Banks, Hasbro, and Advanced Micro Devices all topped the Street's bottomline expectations, while Sarepta Therapeutics offered an upbeat outlook for its experimental muscular dystrophy treatment. In other equity news, Britain's Sunday Times reported that Dow member Pfizer approached AstraZeneca with a $100 billion takeover proposal. Gold is lower, while crude oil prices and the U.S. dollar are higher. Overseas, Japanese stocks finished flat as some weakness in the yen was offset by a disappointing trade report, while Chinese markets dropped ahead of this week's preliminary April manufacturing report from HSBC.

Source: Schwab

A Contrarian Oil Play

• "The Russian stock market has been recently out of favor, but valuations seem to be too much cheap to ignore.
• Investors should look for companies with low governmental influence like Lukoil, which is mainly owned by its management.
• Lukoil is one of the world's largest oil & gas companies and has very good growth prospects.
• It currently trades at only 4x its estimated 2014 earnings and offers a dividend yield of 5%.

The recent crisis between Russia and Ukraine has led to significant drops in Russian shares. Russian stocks were already cheap before the recent crisis, and took further beating after the Crimea standoff. For contrarian and value investors this may represent a good time to buy, especially quality companies with below-average political risk. One interesting opportunity may be Lukoil (OTCPK:LUKOY), one of the world's largest oil & gas companies. Its current market capitalization is about $45 billion, and is traded in the U.S. in the over-the-counter [OTC] market.

Lukoil is Russia's second-largest oil company, and one of the world's biggest vertically integrated companies for the production of crude oil and gas as well as for the refining of petroleum products and petrochemicals. Headquartered in Moscow, Lukoil is the second-largest public company, after Exxon Mobil (XOM), in terms of proven oil and gas reserves. In 2012, the company had 17.3 billion barrels of oil equivalent [boe], accounting for some 0.8% of global oil reserves. The company has operations in 38 countries around the world".

Source: Seeking Alpha

VimpelCom And Global Telecom Holding Announce A Strategic Partnership With The Algerian Fonds National d'Investissement And A Successful Resolution In Algeria

 April 18, 2014 /PRNewswire/ -- VimpelCom Ltd ("VimpelCom") (NASDAQ: VIP) and Global Telecom Holding S.A.E. ("GTH") (EGX: GTHE, LSE: GLTD) today announce the signing of a share purchase agreement (the "Share Purchase Agreement") for the sale by GTH of a 51% interest in Orascom Telecom Algerie SpA ("OTA" or "Djezzy") to the Fonds National d'Investissement (the "FNI"), the Algerian National Investment Fund, for a purchase consideration of USD 2.643 billion.

OTA will distribute a dividend of USD 1.862 billion to GTH immediately prior to the closing of the transaction ("Closing"), which is expected to occur by the end of 2014.

The total dividends and proceeds due to GTH at Closing are expected to amount to USD 4.0 billion, net of all taxes and after the settlement of all outstanding disputes between the parties and the payment of associated fines. All proceeds will be used to pay down the outstanding shareholder loans provided by VimpelCom to GTH.

GTH and the FNI will enter into a shareholders agreement ("the Shareholders Agreement"), effective as of Closing, which will govern their relationship as shareholders in OTA going forward. GTH will continue to exercise operational control over OTA and, as a result, both GTH and VimpelCom will continue to fully consolidate OTA. This partnership with the FNI provides OTA with a strong and stable shareholder structure on which to build and strengthen its operations in Algeria.

Jo Lunder, Chief Executive Officer of VimpelCom, commented: "This favorable long-term agreement and settlement represents a successful outcome for all stakeholders. For VimpelCom and GTH, this value accretive transaction releases USD 4.0 billion in cash proceeds to pay down gross debt. For GTH and Djezzy, it resolves our dispute in Algeria and allows us to solidify our strong leadership position in Algeria by enabling us to further invest in a high speed 3G network to take full advantage of the potential for mobile data growth in the country. We look forward to working with our new partner, the Algerian National Investment Fund, to drive the business forward and to create significant long-term value for all of our stakeholders in line with our strategic Value Agenda."

The terms of the Share Purchase Agreement and the Shareholders Agreement have been approved by the Algerian Conseil des Participations de l'Etat, the Conseil de Direction of the FNI, the VimpelCom Supervisory Board and the Global Telecom Holding Board of Directors.

Prior to Closing and in order to facilitate the Closing OTA will contribute its operations (the "Contribution") to Optimum Telecom Algerie S.p.A. ("Optimum"), a wholly-owned subsidiary of OTA. In addition, at or prior to closing, Optimum intends to establish a credit facility with a syndicate of local banks in an amount of up to 82 billion dinars (approximately USD 1.0 billion).

Ukraine peace deal falters as rebels show no sign of surrender

 An agreement reached last week to avert wider conflict in Ukraine was faltering as the new week began, with pro-Moscow separatist gunmen showing no sign of surrendering government buildings they have seized.

Washington says it will hold Moscow responsible and impose new economic sanctions if the separatists do not clear out of government buildings they have occupied across swathes of eastern Ukraine over the past two weeks. U.S. Vice President Joe Biden was due in Kiev later on Monday.

Kiev and Moscow traded accusations over a deadly shooting on Easter Sunday morning, when at least three people were killed at a checkpoint manned by armed separatists. Moscow and its separatist allies accused Ukrainian nationalists of attacking the checkpoint; Kiev said Russia had provoked the violence.

In a later incident, the Ukrainian defence ministry said gunmen on motorcycles fired on an army checkpoint between Donetsk and Slaviansk shortly after dark on Sunday. The troops opened fire, wounding one attacker and capturing two, it said.

Russia, Ukraine, the European Union and the United States signed off on an agreement in Geneva on Thursday, designed to lower tension in the worst confrontation between Russia and the West since the Cold War.

The agreement calls for occupied buildings to be vacated under the auspices of envoys from the Organization for Security and Cooperation in Europe, a security body. All sides are meant to refrain from force.

But no sooner had the accord been signed than both sides accused the other of breaking it, while the pro-Moscow rebels said the pledge to withdraw from occupied buildings was not binding on them.

"Steps are being taken - above all by those who seized power in Kiev - not only that do not fulfil, but that crudely violate the Geneva agreement," Russia's Foreign Minister Sergei Lavrov said on Monday, describing the attack on the separatist checkpoint as a crime.

President Vladimir Putin overturned decades of post-Cold War diplomacy by announcing last month that Russia has the right to intervene on the territory of its neighbours to protect Russian speakers. He then seized and annexed Ukraine's Crimea peninsula.

Moscow has since massed tens of thousands of troops on the Ukrainian border, and Kiev and its Western allies say Russian agents are directing the uprising in the east, including the

"green men" - heavily armed, masked gunmen in unmarked uniforms.

In his latest move, likely to be seen by the West as a further threat to the post-Cold War order, Putin signed a law on Monday making it easier for Russian speakers across the former Soviet Union to obtain Russian citizenship. [ID:nL6N0ND0WH]

Eastern Ukraine is largely Russian speaking and many residents are deeply suspicious of the pro-European government that took power in Kiev in February when Moscow-backed President Viktor Yanukovich fled the country after mass protests.

Separatists have declared an independent "People's Republic of Donetsk" in the east's biggest province and have named themselves to official posts in towns and cities, setting up checkpoints and flying Russian flags over government buildings.

Ukraine announced an "anti-terrorist" operation to retake the territory last week, but that modest effort largely collapsed in disarray when a column of paratroops surrendered rifle parts and some armoured vehicles to a separatist crowd.

Kiev has declared an "Easter truce", though it is far from clear it could muster any real force if it tried. The army is ill-equipped, untested and untrained for domestic operations, while the government in Kiev doubts the loyalty of the police.


SANCTIONS

The United States and European Union have imposed visa bans and asset freezes on a small number of Russians over the annexation of Crimea, measures that Moscow has openly mocked.

Washington and Brussels both say they are working on tougher economic measures to impose unless Russia's allies in eastern Ukraine back down, although building a consensus is tricky in Europe where many countries rely on Russian energy exports.

One European diplomat said the Geneva deal was a way for Putin to buy time and undermine momentum towards sanctions:

"Talks and compromises are just part of his tactics," said the diplomat. "He wants to have Ukraine."

The OSCE, a European security body that includes both NATO members and Russia, has deployed around 100 monitors and mediators in Ukraine in 10 different cities including the capital Kiev and eastern and southern towns.

An OSCE spokesman said the mediators were visiting separatist-occupied buildings with copies of last week's Geneva accord to explain it to the people inside.

"It's a mixed experience dealing with checkpoints and so forth and there is a varying reaction to teams. There is a hardened attitude in Donetsk or Slaviansk but some other areas are more accommodating," spokesman Michael Bociurkiw said. "When teams go to smaller centres people are more willing to talk."

He said there were reports of "a handful of buildings" being evacuated, though he was unable to give any details. So far Reuters has not been able to confirm any reports of separatists standing down.


JOURNALIST HELD

The separatists in the east have grown increasingly assertive and hostile to outsiders. A lawyer said on Monday the rebels had detained a Ukrainian journalist, accusing her of "war crimes" during protests that toppled Yanukovich. There were also reports of other journalists being held.

Irma Krat, 29, was held late on Sunday by militants in the city of Slaviansk, said Oleg Veremienko, a lawyer for the online television news site Krat runs. Russian Internet channel Life News posted video of her being escorted by masked men in combat gear and of an activist saying she was under arrest.

Details remained disputed in Sunday's shootout in Slaviansk, a town on an eastern highway north of Donetsk which has become a heavily militarised rebel redoubt.

The separatists said armed men from Ukraine's Right Sector nationalist group had attacked them. The Right Sector denied any role, saying Russian special forces were behind the clash.

The town's self-appointed pro-Russia mayor placed a curfew on the town and appealed to Putin to consider sending troops.

Separatist militiamen told Reuters four vehicles had approached their checkpoint at around 2:00 a.m. (2300 GMT) and opened fire.

"We had three dead, four wounded," one of the separatist fighters, called Vladimir, told Reuters at the checkpoint, where there were two burned-out jeeps.

Source: Reuters

WSJ: Another Selloff Averted. The Bullish Approach

"While the beating that momentum stocks have taken over the past month has garnered plenty of attention, the major U.S. stock indexes are once again perched near record levels.

Much of the turbulence has been concentrated in social-media companies, cloud-computing firms and early-stage drug producers. As these so-called momentum stocks have dropped sharply, the worry has been that they’d take the broad market down with them.

That hasn’t played out.

Many investors now believe that the big flows of money into and out of these stocks will have little impact on the appetite for bigger, more-established companies. There is renewed confidence that the broad indexes are poised to move higher once the so-called momentum stocks stabilize.

The Dow Jones Industrial Average, coming off its biggest gain of the year during the holiday-shortened week, is only 1% from its all-time high. The S&P 500 is positive for the year and is only 1.4% from its own record hit earlier this month.

By comparison, the Nasdaq Biotechnology Index, which doubled from early 2013 through the beginning of this year, is down 14% over the past month. The Nasdaq Internet Index is down 9% over the same time frame.

“Investors have collectively realized that earnings and growth assumptions in these highflying stocks were too aggressive and hard to come by in a world of low nominal growth and weak pricing power,” Mr. Zhao said. “As a result, they have run for the exits, causing prices to fall.”

The difference is that the broad market hasn’t felt the same pain.

“Such localized shakeouts are an inherent part of any bull market,” he added. “Although high-valuation stocks have been hit hard in the U.S. equity market, the rest of the global financial markets remain very much focused on exploiting yield, playing various carry trades and taking on risk. This is another reason why the crack in social network stocks may not be foretelling of some­thing bigger about to happen.”

The bull market, in its sixth year following the financial crisis, has shown signs of fatigue in 2014. After last year’s 30% rally, the S&P 500 is up just 0.9% this year. As MoneyBeat columnist E.S. Browning pointed out, the S&P 500 hasn’t dropped 10% or more since September 2011. That is twice as long as usual".

Fish Farming Explores Deeper, Cleaner Waters

Amid growing global demand for food, aquaculture companies aim to be bigger players by investing in new feeding processes and betting on elaborate new farming techniques. By 2016, for instance, SalMar AS 

—one of the world's largest salmon producers—will launch a pricey and largely untested offshore fishing platform designed by a longtime oil executive.

Aquaculture, or fish farming, has grown faster than the wild-catch industry in recent decades, and Norway's fish farmers benefited as the nation has become the second-largest exporter of farmed fish behind China. Global output of aquaculture expanded 12-fold between 1980 and 2010 to 60 million tons, while captured fish intake stabilized at 90 million tons, according to the latest data available from the United Nations Food and Agriculture Organization, which tracks fish production.

Total fish trade, including both fish farming and wild catch, grew to $217.5 billion in 2010 from $71.5 billion in 2004, the organization said.

At last count, fish farming accounted for 47% of global fish production, compared to 9% of the stock in 1980, with salmon farmers representing the fastest-growing segment of the industry as their product has grown well beyond being a luxury item.

But current farming techniques might be limiting the industry's ability to keep up with demand. Government farming quotas—largely aimed at limiting fish disease and pollution from fish farms—cap the output of companies such as SalMar and Marine Harvest AS  A, a Norwegian competitor that ranks as the biggest farmer in the world.

Supply constraints have boosted prices at a time when salmon is becoming a common source of protein world-wide. Global salmon consumption is now three times higher than it was in 1980, according to the World Wildlife Fund. That leads to big paydays for farmers, but there is concern the good times may come to an end.

Gunnar Myrebøe, SalMar's platform designer, spent much of his career overseeing development at Norwegian oil giant Statoil AS  before turning to aquaculture after learning of the idea of a fish-farming platform. "We had to do something like this, otherwise the industry would never be able to grow," he said

ARE INTRAPRENEURS THE NEW ROCK-STARS? by RAJEEB DEY

"The past few years has seen the emergence of the ‘cult of the entrepreneur’ with growing visibility of entrepreneurs in the media; ‘celebrity’ entrepreneurs such as Sir Richard Branson and stars from shows such as Dragon’s Den in the UK (Shark Tank in the US) are receiving recognition which, in the past, may have been the preserve of Hollywood royalty. But what about intrapreneurs?

An intrapreneur refers to employees who operate as entrepreneurs but within existing businesses. Whilst I’ve never ‘had a proper job’ and always worked for myself I suspect being an intrapreneur must be tough. Balancing corporate bureaucracy, politics, and often conflicting agendas to drive through change which can often carry high risks. But given the potential for corporations to be key agents of driving change it was no surprise that the topic of intrapreneurship was a common theme across a number of discussions at Skoll on Thursday, kickstarted by the “Big Business, Bigger Impact: The Pursuit, Peril and Power of Partnership,” session moderated by Bob Annibale from Citigroup.

Bob suggested that being a successful intrapreneur is about “understanding the beast and getting senior support.” Senior support however depends very much on the culture of the organizations in which you are operating. During the afternoon session on Future Proofing Businesses: Beyond CSR, PR, and Charity, we heard from a panel of trailblazers in the field such as Mike Barry (M&S), Marcela Manubens (Unilever) and Feike Sijbesma (CEO of DSM). At the helm of these businesses are visionary leaders such as Paul Polman of Unilever and Feike who asserted that “one of the primary objectives of all businesses should be positive social impact.” With CEOs such as Feike publicly demonstrating his commitment to this arena, it creates permission and gives a direct mandate to intrapreneurs working inside DSM to make that a reality. Unfortunately that is not the case in all businesses.

Many corporations still see social impact as a siloed ‘CSR’ activity rather than a cross-cutting imperative. The corporate mindset inhibits the often risky and entrepreneurial behavior we need to achieve transformative change. However, efforts are being made to create ‘safe spaces’ to push boundaries within some corporations. One of the delegates during the lunchtime session on “Breaking Silos: Partnering with corporate intrapreneurs” talked about Shell’s internal incubator for “Game Changer” projects. He went on to point out that whilst taking the first step for an intrapreneur through experimentation can be hard (prone to risk and failure) the scaling of what works is easier whereas entrepreneurs have the opposite problem – flexibility to innovate, test (and fail) but often a challenge to scale. The key therefore lies in creating win-win-win partnerships between the corporate intrapreneurs, social entrepreneurs and society; no surprise then that “partnerships” was a strong theme of discussions throughout.

When partnerships work well, the outcomes can be remarkable. I have witnessed first-hand the power of an intrapreneur breaking new ground in the form of Simon Devonshire, Director of Wayra Europe – Telefonica’s global accelerator programme. Spotting the burgeoning field of social tech startups in London he struck up a powerful partnership with UnLtd -the world’s largest supporter of social entrepreneurs to create Wayra UnLtd – to accelerate tech businesses with positive social impact. Providing social entrepreneurs with the potential to unlock the power of 300 million Telefónica customers globally is something we need to celebrate and a true example of partnership in action.

Partnership work isn’t necessarily easy. We need to share more examples of success and encourage more to open up to collaboration. I’ve been supporting the work of the World Economic Forum who have looked into this issue of supporting startups to partner with corporates to boost innovation. They have developed a useful checklist for both sides in their report on ‘Fostering Innovation-Driven Entrepreneurship in Europe’ which provides a good basis on which to understand the perspectives of both the corporate and entrepreneur perspective.

All said, it’s clear to me that truly entrepreneurial individuals with the best of intentions working within large corporations for social good need to be celebrated with the view to encouraging more to follow suit. Whilst it’s easy for the media to focus on an entrepreneur pushing the boundaries to achieve their dreams, it’s more difficult to shine a spotlight on the work of an intrapreneur who often is working behind the scenes of a large recognized brand. If things go right, the corporate brand gets the credit for the work; if things don’t go as planned, it’s often the intrapreneur whose job can be at risk.

Why don’t we celebrate the intrapreneurs more? Coming to Skoll has helped me empathize more with the challenges intrapreneurs face and I urge us all to support the intrapreneurial movement. Campaigns such as The League of Intrapreneurs are playing their part in doing this but I feel that the time has come for us to turn the spotlight on these unsung heroes".

Skoll World Forum: TAKING AN OPEN-SOURCE APPROACH TO TACKLING YOUTH UNEMPLOYMENT

"With alarming rates of youth unemployment globally it was encouraging to see a standing-room only session during Friday’s lunchtime workshop on Solving the Global Youth Unemployment Crisis facilitated by Nik Kafka (Teach a Man to Fish.)

Looking at the situation in the UK the youth unemployment situation is a complex one. On the one hand we are facing youth unemployment levels close to 1 million, yet an increasing number of employers are complaining of an inability to fill job vacancies. The mismatch of skills and lack of preparedness for the world of work points to a failure in our education system and the need to radically rethink the way we prepare young people for work and the role employers can play in this.

We have institutions in place that guide young people through their formative years – hold their hands through examinations, through certificates, through the cornerstones that make up how they learn. But once out in the ‘real’ world, there is no support. There is no backbone to rest on, no more tailored advice, or pointers as to what to do next, instead there is just the chaos of grappling for increasingly scant graduate schemes, the worried scramble for reputable internships, the endless, endless sending out of CVs to harassed hiring managers, who don’t have the time or the inclination to train up a young person waiting for their ‘real’ lives to start.

This, to me, isn’t just unfair – it is a total and utter waste of potential. As of 2011, obligatory careers advice was removed from the national curriculum. What could be more important to a young person than what they are going to do with the rest of their lives? How can these young people know what direction to push, when the options were never really explained to them to begin with?

Meanwhile, in a different landscape, on a more digitised horizon, something has started to change. With the recent boom in online learning via Massive Open Online Courses (MOOCs) and the endless learning possibilities that the web can offer, the power is starting to shift. We no longer have to rely on our educational institutions to provide us with learning tools. If anything, the more exciting possibilities are starting to exist outside university walls.

There is now the opportunity for employers to take greater ownership in preparing the talent it is looking to hire. Companies have at their disposal learning materials but guard these behind corporate intranets; they have insights into the skills they require but often keep this knowledge to themselves. What would happen if we adopted a more open-source approach to learning, development and hiring? Instead of guarding training materials why not make it openly available to candidates to interact with even before they have joined your company? In doing so their interaction with your brand becomes one based around learning rather than merely a transaction of applying for a job whereby one person wins (and is hired) and everyone else, many of whom may be existing or future customers are left feeling like a reject (and ultimately negative about your employer brand.)

More than half of all graduates don’t feel like higher education has prepared them for the world of work. More than half of all employers agree. However you want to describe the current system of student and graduate employment – or lack thereof – one thing is clear: what we’re doing isn’t working. It’s time for a big, big change.

At Enternships.com we are developing a new ‘positive’ learning-based approach to recruitment where all candidates can benefit from the process of applying for a job irrespective of if they are hired. Through the process of acquiring new skills and insights from employers we want to convert those who would otherwise be dejected into advocates. We’re launching a new real-time employer led skills development platform later this year and invite employers big and small to join us in this movement and join our radical new approach to tackling youth unemployment and finding innovative approaches to meeting their talent needs.

We simply cannot maintain the status quo; an entire generation is depending on us to act now".

  By Rajeeb Dey, Founder and Chief Executive Officer, Enternships.com

The Guardian: Ukraine agreement falters after shoot-out in Slavayansk

     The Guardian reports,"an international agreement to defuse the crisis in Ukraine was all but shredded on Sunday after a shoot-out in the separatist town of Slavyansk in which three people were allegedly killed.

Three days after the Geneva deal brought modest hopes for a resolution to the gravest east-west stand-off since the end of the cold war, the midnight incident at a checkpoint – in which some reports said as many as five people were killed – unleashed a torrent of accusations and counter-accusations that bodes ill for international peacemakers.

Russia claimed that far-right Ukrainian nationalists opened fire at the checkpoint just outside the town, seized by an armed pro-Russian militia two weeks ago. The foreign ministry in Moscow accused Kiev of failing to disarm "extremists and terrorists" and blamed the clash on the Right Sector, a nationalist Ukrainian group that has supported the pro-Western interim government in Ukraine".

The new self-proclaimed mayor of Slavyansk, Vyacheslav Ponomaryov, said Russian troops were urgently needed to protect the civilian population. He threatened to "personally shoot" Ukraine's interior minister Arsen Avakov if he could.

The authorities in Kiev described the incident in the early hours of Sunday as a "crude provocation", made for Russian TV. They said some of the details of the shoot-out were so implausible as to be ridiculous. Ukraine's intelligence service said its Russian military counterpart, the GRU, had staged it with help from criminals.

Russian channels claimed that a business card belonging to Dmitry Yarosh, the leader of the far-right Right Sector, had been left by the "attackers". Also discovered were crisp new $100 bills, a satellite map of the area, and a second world war German gun, they reported.

The death toll and the allegiance of those involved were hard to confirm independently. Armed militias manning checkpoints and flying the Russian flag outside Slavyansk were reluctant to allow the Guardian to investigate on Sunday. At the bridge into the town, one commander armed with a pistol told the Guardian to leave. He punched the car with his fist, leaving a dent. "Get out of here," he screamed.

Ukraine's new leaders, and many in the west, fear such an incident could be used as a possible pretext for the kind of Russian military manoeuvre that rapidly led to the annexation of Crimea last month. Under the Geneva agreement between Russia, Ukraine, the US and EU, illegal groups are meant to end occupations of official buildings and give up weapons. But pro-Russian militias which grabbed administrations in at least 10 eastern towns two weeks ago have mostly refused to budge.

Ukraine's new prime minister, Arseniy Yatsenyuk, who is hosting the US vice-president, Joe Biden, this week, told US television that he wanted greater support from America in the face of Russian aggression. "We need a strong and solid state," he told NBC. "We need financial and economic support. We need to overhaul the Ukrainian military. We need to modernise our security and military forces. We need real support."

But the US ambassador to Kiev warned later that the US could do little to tilt the military balance in Ukraine's favour. "The geography and balance of power is such, there is no military solution to this crisis," Geoffrey Pyatt told CNN. "The fact is that militarily, as Crimea showed, Ukraine is outgunned."

Ukraine's interior ministry said none of its forces had carried out an operation around Slavyansk over the weekend. It described the town 90km north of the regional capital Donetsk, as "the most dangerous place in Ukraine, in view of the presence in the town of foreign saboteurs and illegal armed groups."

It added: "At the same time one cannot but suspect the speed with which camera crews from Russian TV stations appeared at the scene of the shooting, and the obviously staged subject matter of news reports in the Russian media."

It noted that the Russian journalist Dmitry Kiselyov had broken the story. Kiselyov is close to Vladimir Putin and notorious for his radical nationalist views. The US and EU last month imposed a visa ban on him as part of the sanctions package designed to punish Russia for annexing Crimea.

But the Russian foreign ministry insisted that Ukrainian ultra-nationalists were behind the incident, which took place between Slavyansk and the town of Bylbasovka. "The Russian side is outraged by the provocation, which indicates that Kiev is unwilling to put in check and disarm nationalists and extremists," it said. Moscow, it added, "insists on the strict implementation of the Ukrainian side of its commitments to de-escalate the situation in eastern Ukraine."

The Right Sector denied any involvement. Its spokesman, Artem Skoropadsky, told Reuters: "It is a blasphemous provocation from Russia: blasphemous because it took place on a holy night for Christians, on Easter night. This was clearly carried out by Russian special forces."

WSJ: Samsung Is Developing Own Platform, Apps

      The Wall Street Journal reports,"."Samsung's latest initiative is a free music streaming service called Milk Music, which launched last month in the U.S. It allows users of its Galaxy smartphones to listen to the radio and download music.

In its push into gaming, the company also recently launched an app and a game pad that allows users to play online games on their smartphones or TVs".

Wonpyo Hong, president of Samsung's Media Solution Center, which is responsible for developing apps and services, recently spoke to The Wall Street Journal at the company's Suwon, South Korea, headquarters about the firm's latest software initiatives. Edited excerpts:

WSJ: How important is software for you?

Mr. Hong: Software is a critical component of course. If you look at our R&D structure, there are a lot more software engineers than hardware engineers. The investment amount we are making in software R&D is huge. However, probably from a consumer perspective there is room to improve to deliver a unique experience. That's the area that we're really trying to focus on more.

My organization's goal is to foster the software platform to bring innovation on top of our hardware.

WSJ: Where are you hiring mostly?

Mr. Hong: Software comes from many different areas—design, in addition to coding and software engineering.

In-house, we have a big data center and we recently set up a big data platform to collect data on user patterns on our devices. We're looking for talented people who have better knowledge than we do because it's a new area.

WSJ: How important is Tizen (an operating system that Samsung is codeveloping with Intel Corp. and others)?

Mr. Hong: Tizen is another platform that we'd like to offer to the market as one of the multiple platforms.

Internally, we'd like to have a common platform throughout all of our consumer products including mobile, television and even home appliances.

We believe HTML 5 will be emerging more and more as the platform so that lots of applications and services can be implemented easily based on HTML 5. But it will take some time. So it's another area we're making an investment to offer multiple choice to consumers.

WSJ: What do you think is your timetable for Tizen?

Mr. Hong: We already launched a wearable device using Tizen. The company is also thinking about other products using the Tizen platform.

When the time comes to commercialize some products we'll let you know, but we definitely plan to expand into other product portfolios.

WSJ: But not necessarily with the consumer brand Tizen?

Mr. Hong: I don't necessarily think the name Tizen is an important brand to consumers. Integrating software with hardware to make a great product—that's what we want to communicate with consumers.

WSJ: What other areas is Samsung focused on when it comes to software?

Mr. Hong: We're going to collaborate with multiple hardware and software companies to bring interesting smart-home applications. We launched our first smart-home application this month. Samsung considers the Internet of Things [a network of smart devices that communicate with each other with little human intervention] as another huge area that we should actively participate in and bring some innovation.

WSJ: These services are only for Samsung devices or will you be platform-agnostic like Google?

Mr. Hong: At the moment, we'd like to create an experience uniquely on our device because the fundamental core part of our business is selling hardware. So the main purpose of this software innovation is to create value on our device. Later on, we might try something different but right now, that's our strategy.

WSJ: Top Hedge Funds Take Hit on Tech Downturn

    The Wall Street Journal reports,"a number of multibillion-dollar funds are down sharply this month, pushing losses into double digits on a percentage basis for the year at some firms, according to investor communications reviewed by The Wall Street Journal.

Some of the common losing positions in recent weeks were in technology and biotechnology shares, including Google Inc. andValeant Pharmaceuticals International Inc".

The downturn at many funds, including Viking Global Investors LP and JAT Capital Management LP, surpasses the decline in the broader market, where the S&P 500 index was down 1.2%, including dividends, for the year through the end of last week. That is the same period covered in the latest investor communications.

Entering the year, many fund managers were betting that last year's bull-market rally would continue, and they boosted their exposure to certain top-performing stocks.

For the first three months of the year, hedge funds across the industry gained on average 1.1%, the lowest since 2009, according to research firm HFR Inc. The slide accelerated for some firms this month, especially those focused on stocks. The median equity-focused hedge fund lost more than 2% in the first two weeks of April, according to Morgan Stanley.