Hong Kong's richest man under fire to raise US$12b bid

NOV 10, 20159:32 PM

[HONG KONG[ Hong Kong billionaire Li Ka-shing's efforts to reorganize his business empire hit a setback after an influential proxy advisory firm recommended investors reject a US$12.3 billion buyout offer from the tycoon for low-balling minority shareholders.

The all-stock offer from Li's Cheung Kong Infrastructure Holdings Ltd for affiliate Power Assets Holdings Ltd should be as much as 13 per cent higher, Institutional Shareholder Services Inc said in a report Monday. ISS, which provides advice to more than 1,600 institutional clients worldwide, also said that CKI's special dividend should be paid before a deal goes through, not after as proposed by CKI.

The recommendation from ISS, which also flagged concerns about conflicts of of interest, is the latest setback facing Hong Kong's richest tycoon in his pursuit to merge his utility businesses as the octogenarian billionaire prepares to hand over power to his eldest son Victor Li. Investor opposition prompted CKI in October to sweeten its offer.

"We believe that in the end they might raise the offer a little bit," said Niklas Hageback, who helps oversee about US$212 million - including Power Assets shares - at Valkyria Kapital Ltd. "In the end, they will probably go through with this because they need the deal."

CKI shares fell 2.4 per cent to close at HK$68.55 in Hong Kong, while Power Assets dropped 1.4 per cent to HK$73.85, meaning CKI is offering a 1.1 per cent discount for Power Assets shares based on Tuesday's close.

The board of Power Assets and its Independent Board Committee recommend that investors vote in favor of the offer because it's fair and reasonable, the company said in an e- mailed statement. A representative at CKI didn't respond to queries.

Considering ISS's influence and the low bar needed to derail the transaction, CKI's deal is "almost impossible" to pass unless it's sweetened, CLSA analysts wrote in a research note to clients on Tuesday.

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IEA: Oil will rise to around $80 by the end of the decade

• Amanda Cooper, Reuters

• 13h
• 259

Thomson ReutersA petro-industrial factory is reflected in a traffic mirror in Kawasaki near Tokyo

LONDON (Reuters) - Oil is unlikely to return to $80 a barrel before the end of the next decade, despite unprecedented declines in investment, as yearly demand growth struggles to top 1 million barrels per day, the International Energy Agency said on Tuesday.

In its World Energy Outlook, the IEA said it anticipates demand growth under its central scenario will rise annually by some 900,000 barrels per day to 2020, gradually reaching demand of 103.5 million bpd by 2040.

The drop in oil to around $50 a barrel this year has triggered steep cutbacks in production of U.S. shale oil, one of the major contributors to the oversupply that has stripped 50 percent off the price in the last 12 months.

"Our expectation is to see prices gradually rising to $80 around 2020," Fatih Birol, the executive director of the IEA, told Reuters ahead of the release of the report.

"We estimate this year investments in oil will decline more than 20 percent. But, perhaps even more importantly, this decline will continue next year as well."

"In the last 25 years, we have never seen two consecutive years where the investments are declining and this may well have implications for the oil market in the years to come."

Oil companies have grappled with the downturn and a "lower for longer" price outlook by slashing spending, cutting thousands of jobs and delaying around $200 billion in mega-projects around the world.

The IEA estimates investment has already fallen by 20 percent this year.

Higher-cost producers in Canada and Brazil, as well as the United States are likely to fall victim to low oil prices faster than most exporters, but these declines could be offset by supply growth in Iraq and Iran.

OIL SECURITY

Birol said the Middle East, which already provides about a third of the world's oil, could see exports equate to more than two thirds of total supply, particularly in a sustained environment of $50 oil prices.

"We have to think carefully about the oil security implications of a very few number of countries exporting a big chunk to the global markets alone," he said.

Yet unrest in Iraq, now OPEC's second-largest producer, and ageing infrastructure could hamper raising output there. Iran, expected to be free of Western sanctions this year, needs major investment to return to the 2.5 million bpd in production seen prior to 2012.

On the demand side, the IEA expects total energy consumption in China, the world's largest commodity consumer, to be double that of the United States by 2040.

But greater efficiency and a shift away from heavy industry for economic growth will mean China will need 85 percent less energy to generate each unit of future economic growth than it did in the past 25 years.

India will be the chief driver of rising demand, where the IEA expects consumption to increase more than anywhere else, hitting 10 million bpd by 2040.

Birol said that while the agency's base-case scenario was not one in which the oil price languished around $50 a barrel for the next decade, it could not rule out a sustained period of low oil prices.

Low near-term global economic growth and a lasting switch by OPEC to a policy of pumping oil at record rates to increase its market share and more resilient non-OPEC supply could conspire to keep the oil price lower for longer.

"The oil price in this scenario remains close to $50 a barrel until the end of this decade, before rising gradually back to $85 a barrel in 2040," the IEA said in its report.

"In the low-oil price scenario, the Middle East's share in the oil market ends up higher than at any time in the last forty years," the report said.

(Reporting by Amanda Cooper; Editing by William Hardy)

Read the original article on Reuters. Copyright 2015. Follow Reuters on Twitter.

Greece can't convince creditors to release bailout funds

• Pan Pylas, Associated Press

• 11h
• 1,085

Dutch Finance Minister and chair of the eurogroup finance ministers Jeroen Dijsselbloem talks with journalists as he arrives for a meeting of eurogroup finance ministers at the EU Council building in Brussels on Monday, Nov. 9, 2015.

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Greece failed to convince European creditors Monday to release vital bailout funds to shore up the country's public coffers and its crippled banks but hopes are high that a deal will be concluded within a week.

Though the Greek government has met many of the conditions attached to the country's third international bailout, it still needs to push through some financial reforms, notably how to deal with those in arrears on their mortgages and the bad loans held by banks.

"There are open issues," Jeroen Dijsselbloem, the eurozone's top official, said after a meeting of the bloc's 19 finance ministers. Dijsselbloem said he hopes agreement on these remaining issues can be agreed on in the "coming days."

Greece is due 2 billion euros ($2.2 billion) from its bailout as well as 10 billion euros already set aside for the country's banks, who are reeling from capital controls and another likely recession.

But it needs to pass a series of economic reform measures to get the money from the three-year 86 billion-euro ($93 billion) bailout program agreed on this summer in the face of potential economic collapse.

Greece's finance minister, Euclid Tsakalotos, said he was hopeful the Greek government would meet creditor demands over issues relating to Greek banks and bad debts within the timeframe outlined by Dijsselbloem.

"I have every expectation that we will have very good news by this time next week," he said.

The Greek banks are perhaps the most pressing concern facing the Greek government. They remain badly hobbled by the crisis that played out over the country's euro future in the first half of the year. They need cash and fast so they can start operating normally — the most visible sign that they are nowhere near normal is that cash withdrawals remain confined to a paltry 60 euros a day or 420 euros a week.

Last month, the European Central Bank said Greece's banks need 14.4 billion euros in fresh money to get back on their feet and resume normal business. That's actually lower than many had anticipated. Up to 25 billion euros is available from the bailout.

Reuters/Cathal McNaughtonAn ATM which is no longer dispensing cash displays a message on its screen in central Athens, Greece.

Klaus Regling, the head of the European Stability Mechanism, the institution that actually pays out the bailout cash, said the smaller capital shortfall means Greece's latest rescue will "very likely" be less than the up-to-86 billion euros initially foreseen.

"That's good news for Greece because it means the debt increase will be less and also good for ESM as we keep more remaining firepower," he said.

Greece's European creditors have already put aside 10 billion euros into a special account managed that can be made available to Greece "relatively quickly" but only after conditions are met.

"We hope that this can happen in the course of this week," he added.

The bank recapitalization has to be completed by the end of the year as new rules are set to be introduced in 2016 that will mean depositors with over 100,000 euros in a bank will have to contribute to the bank's rescue.

Thomson ReutersA Greek national flag flutters atop the parliament building in Athens

Given the amount of pain that would inflict on Greeks who are already struggling with recession and high employment, it's a scenario the Greek authorities would like to avoid.

Greece has relied on bailout funds from its eurozone partners and the International Monetary Fund since the spring of 2010 and is heading back into recession after the government imposed painful controls on money transfers in late June, when it appeared the country was hurtling toward euro exit.

Once the promised reforms have been passed and the bank recapitalization has taken place, discussions between Greece and its creditors can move on to how to lighten Greece's public debt load, which after the anticipated recession will see it rise to around 190 percent of the country's annual gross domestic product.

As a condition of the bailout agreement — the country's third since 2010 — Greece has to enact a series of measures to overhaul its economy, such as reforming its labor markets, raising taxes, cutting spending and putting state investments up for sale. If it doesn't, Greece would be cut off from its bailout funds and would again face the prospect of bankruptcy and an exit from the euro.

Chinese inflation remains weak, opening the door to further stimulus

• David Scutt, Business Insider Australia
 

• 10h
• 340

Consumer prices rose just 1.3% from October 2014, missing expectations for an increase of 1.5%. The figure marked the slowest annual expansion seen since May, and was well below the 1.6% pace seen in September.

As it has done for the past 43 months, producer prices continued to decline, falling 5.9% from a year earlier. The reading, unchanged from September, missed expectations slightly, with markets expecting a fall of 5.8%.

Business Insider Australia

The weak readings open the door to further monetary policy easing, along with a further weakening in the renminbi.

China’s central bank, the PBOC, has cut interest six times since November last year and repeatedly reduced banks cash reserve requirements in an attempt to underpin flagging economic growth.

Given the PBOC’s easing cycle has been staggered evenly since it began late last year – occurring roughly every second month – if the bank does decide to ease monetary conditions further it’s likely to arrive around late December based on recent patterns.

Read the original article on Business Insider Australia. Copyright 2015.

NOW WATCH: The killer jobs report could mean a rate hike in December

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World energy use to grow one-third over 25 years, renewables making inroads: IEA

Global energy use is set to grow by one-third over the next 25 years, driven mostly by emerging economies, the International Energy Agency said on Tuesday. 

PHOTO: EPA

NOV 10, 20159:44 AM

[PARIS] Global energy use is set to grow by one-third over the next 25 years, driven mostly by emerging economies, the International Energy Agency said on Tuesday.

Energy consumption in the most developed nations is expected to decline over the same period, it said in its annual World Energy Outlook.

The main drivers for increased overall energy consumption will be India, China, Africa, the Middle East and Southeast Asia, the report said.

But energy use is projected to drop by 15 per cent by 2040 in the European Union, 12 per cent in Japan and 3 per cent in the US on the back of increased energy efficiency, energy savings and demographic trends.

The use of low-carbon fuels and technologies is on the rise, and the share of non-fossil fuels in the total mix is set to increase to 25 per cent by 2040 from 19 now, the Paris-based IEA said.

This trend confirmed what the IEA called a "tantalising hint" that economic growth will longer systematically translate into higher CO2 emissions.

"Pledges made in advance of COP21 promise to give new impetus to the move towards a lower-carbon and more efficient energy system, but do not alter the picture of rising global needs for energy," the IEA noted.

COP21 refers to a key UN climate change summit taking place in Paris from the end of this month, tasked with producing a climate rescue pact.

Among fossil fuels, natural gas, the least carbon-intensive, is the only one expected to see its share rise, the IEA report added.

"Where it replaces more carbon-intensive fuels or backs up the integration of renewables, natural gas is a good fit for a gradually decarbonising energy system," the IEA said.

As demand for oil picks up, the oil price is expected to recover gradually to reach US$80 per barrel in 2020, the IEA said. In the following two decades oil demand is likely to level off as governments continue to reduce subsidies and there is further momentum towards energy efficiency and alternative energy sources.

With less than three weeks to go before the crucial COP21 conference, the IEA said an ongoing policy shift was not enough to avoid the worst effects of climate change.

"There are unmistakeable signs that the much-needed global energy transition is underway, but not yet at a pace that leads to a lasting reversal of the trend of rising CO2 emissions," it said.

The world still needed a "clear and credible vision of long-term decarbonisation" to combat climate change.

AFP

    
 

Snapchat vanishing video viewing hits 6 billion daily  

Snapchat on Monday confirmed that six billion vanishing videos are viewed daily at the service in a three-fold surge from early this year. 

PHOTO: BLOOMBERG

NOV 10, 20156:53 AM

[SAN FRANCISCO] Snapchat on Monday confirmed that six billion vanishing videos are viewed daily at the service in a three-fold surge from early this year.

The highly-valued startup declined to comment on what it thought was powering the rapid growth.

"It is a huge number for them," analyst Rob Enderle of Ederle Group said of the Snapchat video viewing number.

"But, you have to be concerned about the nature of the videos; and if they are illicit in nature, a huge number could go away." The analyst considered it challenging to make money from videos that vanish after being sent from one person to another, instead of lingering for arrays of people to watch the way they do at online venues such as YouTube or Facebook.

Facebook revealed during a quarterly earnings call last week that more than eight billion videos are viewed daily at the leading social network, jumping to a level twice as high as it was early this year.

Videos are considered viewed at Snapchat after being displayed for fractions of seconds, while its takes several seconds to achieve that status at Facebook and approximately half-a-minute at YouTube.

Snapchat's appeal has been the promise that messages shared disappear shortly after being viewed, providing users a sense of being able to keep pictures or videos private and ephemeral.

Snapchat last month introduced a "replay" feature for those disappearing messages, giving users an option to get another look at three "snaps" for a fee of 99 cents.

The feature was the first by the Los Angeles-based social network to get revenue from its user base in addition to advertising messages.

Snapchat in May said it raised US$537 million in a new round of equity funding.

The vanishing-message service did not disclose who bought stakes in the Los Angeles-based company, which came at a price estimated to give Snapchat a value of more than US$15 billion, according to media reports.

Snapchat rejected a US$3 billion takeover offer from Facebook in 2013.

Snapchat rocketed to popularity in the United States, especially among teenagers, after the initial app was released in September 2011.

Smartphone app Snapchat late last year began letting users in the United States send money to friends by simply typing dollar amounts into new "Snapcash" messages.

The new feature came from a collaboration between Snapchat and Square, a mobile payments company headed by Twitter co-founder Jack Dorsey.

Smartphone app Snapchat has since added features such as letting users in the United States send money to friends by simply typing dollar amounts into new "Snapcash" messages.

The feature came from a first collaboration between Snapchat and Square, a mobile payments company headed by Twitter co-founder Jack Dorsey.

Snapchat also added a "Stories" feature that strings together a series of "snaps" to create a narrative that is available for repeated viewing by recipients for 24 hours.

AFP

      

IIF introduces emerging market debt monitor for investors

NOV 10, 20157:31 AM

[NEW YORK] The Institute of International Finance has introduced an emerging market debt monitor to analyze risks associated with investing in the sector.

The quarterly monitor tracks sectoral and external debt in 18 emerging market countries with focus on changing dynamics impacting the rapid buildup in emerging market debt. Total emerging market debt has risen by US$28 trillion to 195 per cent of GDP since 2009, according to data from the IIF, a Washington, DC-based global trade group of financial institutions.

The IIF created the monitor after receiving requests for information about emerging market debt from its members who are investing "in a world where capital flows to emerging market countries have become more volatile and subjective to changing appetite for emerging market debt," said Sonja Gibbs, director for global capital markets at the IIF.

The monitor will provide country-to-country and sector-to-sector comparisons with details about global debt across household, government, financial and non-financial corporate sectors, which has risen by US$50 trillion since 2009.

The public sector in developed markets and the non-financial corporate sector in emerging markets have each risen by US$13 trillion since 2009, driving the buildup of global debt and are key elements in the IIF's monitor.

"When you try to analyze debt you have to provide a comparison across emerging markets and relate it to developed markets for a full understanding," said Emre Tiftik, financial economist for Global Capital Markets at the IIF.

Although debt issuance in emerging markets has declined this year, investors are returning to the sector where they are finding value and returns in bonds denominated in local currency in countries including Brazil, Turkey and Mexico.

The IIF will continue to modify the monitor over the next year or two with interest in finding a way to highlight specific debt ownership in emerging market countries.

REUTERS

    
 

Japan Sept current account surplus 1.47t yen

Japanese 10,000 yen banknotes are arranged for a photograph in Tokyo, Japan, on Friday, on May 31, 2013. 

PHOTO: BLOOMBERG

NOV 10, 20158:23 AM

[TOKYO] Japan posted a current account surplus for the 15th straight month in September as the trade balance swung to a surplus, Ministry of Finance data showed on Tuesday.

The current account surplus stood at 1.47 trillion yen (S$16.99 billion), up from a 978.0 billion yen surplus in September last year.

The median forecast was for 2.2 trillion yen.

REUTERS

Asia's rapid debt buildup tops developing markets, IIF says

NOV 10, 20159:29 AM

[NEW YORK] Debt in developing markets is estimated to have reached US$58.6 trillion at the start of 2015, with credit in China, Hong Kong, India, Indonesia, Malaysia, Singapore, South Korea and Thailand exceeding that of Latin America, emerging Europe and the Middle East, according to the Institute of International Finance.

Emerging-market debt has grown $28 trillion since 2009, according to the IIF, which on Monday introduced a database tracking 18 developing markets. Global debt has soared US$50 trillion during the period to surpass a total of US$240 trillion, or 320 per cent of gross domestic product, in early 2015.

While credit has increased for almost all countries included in the new monitor over the past decade, debt-to-GDP ratios in developing Asia for non-financial corporate, household and financial corporate sectors have risen the most. Debt in Asia topped all categories except in the public sector, which has "limited" exposure across emerging nations compared with developed markets, the report said.

Non-financial corporate sector debt in emerging markets has risen US$13 trillion since 2009, increasing more than five-fold over the past decade to surpass US$23.7 trillion in the first quarter of 2015. The advance has been most concentrated in emerging Asia, where it rose to 125 per cent of GDP.

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Myanmar opposition says heading for over 70% of parliamentary seats

Aung San Suu Kyi, Myanmar's opposition leader and chairperson of the National League for Democracy (NLD), center, delivers a speech flanked by Tin Oo, co-founder of the NLD, center left, from a balcony at the party headquarters in Yangon, Myanmar, on Monday, Nov. 9, 2015. 

PHOTO: BLOOMBERG

NOV 9, 20154:41 PM

[YANGON] Results so far from polling stations across Myanmar show the opposition party of Aung San Suu Kyi winning more than 70 per cent of parliament seats, enough to form a government, the National League for Democracy's spokesman said on Monday.

The election commission has not yet announced any official results from Sunday's general election.

However, NLD spokesman Win Htein said the party had collated results posted by polling stations to arrive at its latest estimate, which showed it winning more than 90 per cent of seats in the highly populated central region of the country.

REUTERS