Barclays said to gauge interest for Asia wealth-management sale

NOV 6, 201511:27 PM

[LONDON] Barclays Plc is sounding out potential buyers for its Asian wealth-management business as Chairman John McFarlane refocuses Britain's second-largest lender on the most profitable businesses in the US and UK, said two people with knowledge of the matter.

While several parties have expressed interest in the business, the bank hasn't taken a final decision on a sale, said the people, who asked not to be identified because the matter is private. Will Bowen, a spokesman at Barclays in London, declined to comment.

Jes Staley, 58, who will take over as chief executive officer next month, has pledged to restore profit growth at the lender, hurt by rising costs tied to restructuring and past misconduct. A sale would put Barclays at odds with Credit Suisse Group AG and other European lenders that are seeking to tap a larger share of wealthy clients across Asia to bolster earnings.

Global wealth management revenue fell 17 per cent to 227 million pounds (S$485 million) in the third quarter from a year earlier, Barclays said last week. The unit has posted declining revenue for the past four quarters, contributing just 4 per cent of the bank's 5.6 billion pounds in revenue in the three months through September. Barclays didn't give a breakdown for Asia wealth management.

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Barclays has offered wealth management services in Asia since the early 1970s, with offices in cities ranging from Hong Kong to New Delhi and Singapore, according to its website.

McFarlane said in June that the bank is looking at contributions of investment-banking operations in Asia and the Middle East because they don't have acceptable returns and "we don't like places that don't make money." The lender the same month sold its US wealth-management business with about US$56 billion in client assets to Stifel Financial Corp for an undisclosed price.

Barclays last week reported a third-quarter pretax profit, including restructuring costs, of 1.43 billion pounds, down 10 per cent from a year earlier and below analysts' estimates. It also cut a profitability target for 2016.

BLOOMBERG

    
 

Japan, US lead economic rule-making under TPP: Japan PM

Japan's Prime Minister Shinzo Abe delivers a speech during the Yomiuri International Economic Society (YIES) lecture meeting entitled "What We Should Do Next" in Tokyo on Nov 6, 2015. 

PHOTO: AFP

NOV 6, 20154:49 PM

[TOKYO] Prime Minister Shinzo Abe on Friday hailed a huge Pacific Rim free-trade deal, saying it showcased a bid by Japan and the United States to set rules for the global economy.

His comments come a day after the long-secret text of the Trans-Pacific Partnership (TPP) was made public.

The massive document, posted online by several governments, offered the first detailed look at the world's biggest free trade area, which aims to break down barriers to commerce and investment between a dozen countries comprising about 40 per cent of the global economy.

The US and Japan are the proposed bloc's two biggest economies.

"Rules should not be something that are imposed on you - you make them," Mr Abe told an economic forum in Tokyo.

"The TPP is the structure where Japan and the US can lead in economic rule-making." Abe also said he would "enthusiastically welcome" South Korea and Indonesia, which have signalled interest in joining, into the zone, so long as they "accept the rules" that Tokyo helped write.

The pact, agreed a month ago, aims to break down trade and investment barriers among participating nations Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

The deal now awaits legislative approvals in each one of the dozen members - a potentially contentious and lengthy process.

Mr Abe and many Japanese experts have long supported the TPP, which should give greater foreign market access for "Japan Inc." But politically connected farm lobbies and some consumer groups have passionately opposed the zone, fearing it would destroy Japan's agriculture by opening a floodgate for cheap foreign imports and altering Japan's rules for consumer protection.

Mr Abe stressed that the TPP will bring "transparent and fair rules" of trade among the participating economies.

"The TPP truly constitutes a grand plan for the long-term future of our nation," he said.

On the domestic front, Mr Abe suggested that he might compile an extra budget "if necessary" to fund social and economic programmes to be drafted by the end of this month.

Mr Abe also touched on what he described as "increasing concerns" over China's economic slowdown.

"I would like the Chinese government to steadily implement structural reforms while ensuring transparency," Mr Abe said of Japan's giant neighbour and world's second-largest economy.

"China's peaceful development is an opportunity for Japan and is necessary for growth of the global economy," he added.

Bilateral tensions over a maritime territorial dispute, clashing interpretations of World War II-era history and Abe's visit to a controversial Tokyo war shrine have hamstrung ties.

But Mr Abe and Chinese President Xi Jinping have held two formal meetings since last year amid an effort to improve icy relations.

AFP

    
 

Bank of China, Singapore boost commodity financing cooperation

NOV 6, 20155:00 PM

[SINGAPORE] Bank of China (BOC) and Singapore's government trade agency International Enterprise have signed a memorandum of understanding to help develop Singapore's commodity trading and financial sectors, the companies said on Friday.

China has been pushing to increase its footprint in the commodity sector for years to reflect its position as the world's top energy and raw materials consumer.

Singapore is Asia's main oil trading hub and its exchange, Singapore Exchange (SGX), also deals in other commodities like iron ore or natural gas.

To boost its international commodities presence, BOC launched two global commodity business centres in Singapore on Friday, the first such undertaking by a Chinese bank abroad, BOC said.

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The bank would offer financial solutions and services for commodity firms through the two centres, helping them to expand into new markets and grow globally, it added without giving details.

As part of the MOU, BOC would support IE Singapore's move in building new trade flows in new classes of commodities, including gold and diamond financing, said Satvinder Singh, IE Singapore's assistant chief executive officer.

BOC will also be a clearing member for physically settled commodities contracts launched out of exchanges in Singapore, including commodities bourses SGX and Intercontinental Exchange (ICE).

IE Singapore will also partner with BOC to help the growth of Chinese companies using Singapore as a trading hub. "Because of regulatory requirements, some of the western banks all over the world are no longer providing the same size of lines, liquidity as they used to," said Singh. "I think it's very welcoming to see Asian financial institutions like the Bank of China stepping up and being able to commit in building up both in terms of quality of sophistication and in terms of size of liquidation that the market needs."

REUTERS

    
 

Infrastructure firms gloomy despite improving economic data in Indonesia

NOV 7, 201512:06 AM

[JAKARTA] Stronger state spending lifted Indonesia's growth in the third quarter to its fastest pace this year but many of the companies involved in President Joko Widodo's infrastructure push say they are still waiting for business to improve.

The statistics bureau on Thursday reported Southeast Asia's largest economy grew at 4.73 per cent on an annual basis in the third quarter, up slightly from 4.67 per cent the previous quarter, but not enough to show a real turnaround has begun.

The government has made some progress overcoming bureaucratic obstacles that have stalled improvements to roads, ports and power plants, but firms say it is not enough. "For construction, it is still very slow," Singgih Prasetyo, general manager of PT Jaya Trade Indonesia, which supplies heavy machinery to building sites, told Reuters on the sidelines of Jakarta's largest annual infrastructure convention.

Hundreds of firms exhibiting everything from shiny bulldozers and electrical switches to safety vests and portable toilets turned up to at the convention but many were gloomy. "We hope there is more business coming because it's slow right now," said Marc Besserer, president director of PT Bonna Indonesia, which makes precast concrete pressure pipes for power stations, adding that government tenders took far too long.

Government capital spending rose to US$3.76 billion in July-September, double what was achieved in January-June, but after nine months, more than 70 per cent of the capital budget remains unspent. "I hope it will get better next year with new projects," Prasetyo said.

Parliament recently approved US$22 billion in capital spending as part of the budget for 2016, but lawmakers vetoed a series of capital injections for state-owned enterprises in a move that is likely to slow upgrades to the archipelago's crumbling infrastructure next year.

With the private sector under pressure and with PMI readings in October showing 13 straight months of deterioration, infrastructure firms are counting on government contracts to counter sluggish commercial sales.

Jokowi's administration has promised to dole out government spending on infrastructure projects much earlier next year, preventing a repeat of this year's delays. "It would be better if government projects are running faster, with no more delays, because all the other slices of the pie are gone," said Hardiman Utomo, General Manager of PT Steel Pipe Industry Indonesia, which is supplying parts for bridges and ports for the government.

REUTERS

    
 

UK manufacturing growth surges to 1-1/2-year high, trade deficit narrows

NOV 6, 201511:12 PM

[LONDON] British manufacturing output rose in September at the fastest monthly pace since April 2014 and the country's goods trade deficit narrowed more than expected, official data showed on Friday.

The Office for National Statistics said manufacturing output surged 0.8 per cent in September, compared with a 0.4 per cent increase in August. Economists polled by Reuters had expected only a 0.4 per cent increase.

Manufacturing and trade have mostly dragged on Britain's strong economic recovery over the past couple of years.

Manufacturers have struggled this year due to weak demand from crisis-stricken Europe and a sharp strengthening of the pound, although one survey this week suggested their fortunes improved in October.

Britain's trade in goods deficit narrowed to 9.351 billion pounds in September from 10.786 billion pounds in August, undershooting the Reuters poll consensus for a 10.6 billion pound gap.

Despite the improvement, the ONS said trade will likely make a negative contribution to British economic output in the third quarter.

It said the latest industrial production figures would have a negligible impact to its estimate for economic growth in the July-Sept period, which slowed to 0.5 per cent on the quarter.

Industrial output fell 0.2 per cent on the month, after rising 0.9 per cent in August. On the year, output rose 1.1 per cent, down from a 1.8 per cent annual increase in the previous month.

REUTERS

    
 

Robust US jobs report bolsters December rate hike case

US job growth surged in October after two straight months of tepid gains, with the unemployment rate hitting a 7-1/2-year low in a show of domestic strength that makes it almost likely the Federal Reserve will hike interest rates in December. 

PHOTO: REUTERS

NOV 6, 201510:10 PM

[WASHINGTON] US job growth surged in October after two straight months of tepid gains, with the unemployment rate hitting a 7-1/2-year low in a show of domestic strength that makes it almost likely the Federal Reserve will hike interest rates in December.

Nonfarm payrolls increased 271,000 last month, the largest rise since December 2014, the Labour Department said on Friday.

In addition, average hourly earnings increased 9 cents last month. The solid gains added to robust automobile sales in painting an upbeat picture of the economy at the start of the fourth quarter.

The unemployment rate fell to 5.0 per cent, the lowest level since April 2008, from 5.1 per cent the prior month. The jobless rate is now at a level many Fed officials see as consistent with full employment.

Payrolls data for August and September were revised to show 12,000 more jobs created than previously reported.

With speeches from several Fed officials, including Chair Janet Yellen, suggesting a low bar for a December rate increase, economists say monthly job gains above 150,000 in October and November would be sufficient for the central bank to lift benchmark overnight borrowing costs from near zero.

Minutes from the Fed's Oct 27-28 meeting and subsequent comments from Yellen have firmly put a rate hike on the table at the central bank's Dec 15-16 policy meeting.

Economists polled by Reuters had forecast nonfarm payrolls increasing 180,000 last month and the unemployment rate unchanged at 5.1 per cent.

The employment report joined October's strong services sector and auto sales data in supporting views that economic growth will regain momentum in the fourth quarter after braking sharply to a 1.5 per cent annual pace in the July-September period.

Last month's rise in wages, which have been almost stagnant despite a tightening labor market, lifted the year-on-year reading to 2.5 per cent. That was the biggest increase since July 2009 and could give Fed officials confidence that inflation will gradually move towards their 2 per cent target.

There were improvements in other labour market measures that Fed officials are eyeing as they contemplate raising rates for the first time since 2006.

A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment fell two-tenths of a percentage point to 9.8 per cent, the lowest level since May 2008.

But the labour force participation rate, or the share of working-age Americans who are employed or at least looking for a job, held at a near 38-year low of 62.4 per cent.

Employment gains in October were broad-based, though manufacturing added no jobs and mining shed 4,000 positions.

Manufacturing has been hit by a strong dollar, efforts by businesses to reduce bloated inventory and spending cuts by energy companies cutting back on well drilling and exploration in response to lower oil prices.

Mining employment has declined by 109,000 since peaking in December 2014. Oilfield services provider Schlumberger last month announced further layoffs in addition to the 20,000 jobs it has already eliminated.

Construction payrolls, however, increased 31,000 last month, the biggest gain since February.

The services sector added 241,000 jobs last month, with large gains in retail, health and leisure. Government payrolls increased 3,000 last month.

REUTERS