Friday, December 4, 2015

US star power injected into struggling climate talks

US star power injected into struggling climate talks

[PARIS] Leonardo DiCaprio delivered a Hollywood-style jolt on Friday to divided UN climate talks in Paris, challenging negotiators to act boldly and swiftly to save mankind from disastrous global warming.
Joining Oscar-winner Robert Redford in the French capital, DiCaprio tried to inject much-needed urgency into efforts to strike a deal to curb greenhouse gas emissions that threaten to play havoc with Earth's delicate climate system.
"Please do not let fear and doubt slow you down. Be bold, be courageous, do everything in your power to change our current course," DiCaprio told a summit of local leaders at the Paris town hall, held on the sidelines of the UN conference.
DiCaprio, one of the world's most famous actors but also a longtime environment campaigner, told negotiators they had the option of being "timid" and settling for a face-saving agreement.
"Or they can lead. They can return to their home towns and with a real plan to save the planet," he said.
Redford, an Oscar-winning director and another passionate environment advocate, told the same gathering: "It is even more urgent than ever."
Adding more star power pressure on negotiators, Sean Penn arrives at the UN talks on Saturday to press for the safeguarding of forests, which play a vital role by soaking up carbon dioxide in the atmosphere, and Arnold Schwarzenegger is scheduled to swoop in early next week.
They will follow an historic summit of 150 world leaders who opened the talks on Monday with a chorus of calls for urgent action.
But at the venue for the 195-nation talks in Le Bourget on the northern outskirts of Paris, negotiators were on Friday entrenched in familiar battle-lines over who should shoulder the cost for the epic struggle ahead.
The planned agreement would establish a universal framework for cutting greenhouse gas emissions that trap the Sun's heat, warming Earth's surface and oceans.
Scientists warn Earth will become increasingly hostile for mankind as it warms, such as with rising sea levels that will consume islands and populated coastal areas, as well as catastrophic storms and severe droughts.
However, cutting emissions requires a shift away from burning coal, oil and gas for energy, as well the destruction of carbon-storing rainforests - costly exercises that powerful business interests are determined to press on with.
Rich nations have also been reluctant during two decades of UN negotiations to comply with demands from poorer countries that they must pay for the shift to renewable technologies, as well as to cope with climate change.
At stake is hundreds of billions of dollars that would need to start flowing from rich to developing nations from 2020, under the planned Paris pact.
With frustrations at the conference mounting, UN Secretary-General Ban Ki Moon called on the world's developed economies to honour the financing pledge they made at the last major climate summit six years ago.
"I have been urging the developed world leaders that this must be delivered," Mr Ban told reporters at UN headquarters in New York. "This is one very important promise."
Participants in the Paris conference say the negotiations are constructive but too slow, with a December 11 deadline for a pact looming.
"The negotiating status is still very far away from the target of trying to achieve a comprehensive, effective, balanced and legally binding agreement which is equitable to all parties," Chinese negotiator Xie Zhenhua told journalists.
Chief US negotiator Todd Stern said attempts to draw up a draft deal acceptable to all sides were advancing, however.
"It's moving in the right direction," he said." "There's an option that we like. There's an option that we hate. That's the way it goes." Another battleground is how much to try to limit global warming.
The biggest polluting nations, such as the United States and China, want to enshrine a target of 2 deg C above pre-Industrial Revolution levels.
Weaker nations most at risk want a much tougher target of 1.5 C, which would require the global economy to transform away from fossil fuels and be fully reliant on renewables by 2050.
Lower-level negotiators have until Saturday to eliminate as many disagreements as possible from a draft text, before handing it over to ministers for them to begin debate on Monday.
They wrapped up formal discussions on Friday night after some compromises that eased tensions slightly, but with none of the major points of dispute resolved.
AFP

Oil smuggled into Turkey not enough to be profitable: US official

Oil smuggled into Turkey not enough to be profitable: US official

[WASHINGTON] The amount of oil being smuggled into Turkey from Syria was not enough for anyone to profit from it significantly, a senior US State Department official said on Friday, rejecting claims by Russia that top Turkish officials were benefitting by smuggling oil from areas of Syria controlled by Islamic State.
The official, speaking on condition of anonymity, said the United States believed most of the oil smuggled from Islamic State-controlled areas was going into Syrian government-controlled territory and some into Iraq.
The Russian defense ministry claimed this week that it has proof Turkish President Tayyip Erdogan and his family were benefitting from smuggling oil from Islamic State-held territory. Mr Erdogan denied the charges, saying he would stand down if such allegations were proven true.
"Our assessment is that there is not a lot of smugging happening of any significant volume between ISIL controlled territories and Turkey," the official said. "The volume itself of the oil being smuggled is extremly low and has decreased over time."
The official estimated that to smuggle about 20,000 barrels of oil into Turkey per day it would take about 1,000 trucks, a number that had not been seen crossing the border. "The economics don't make sense for that to happen," the official said. "The evidence doesn't suggest that we would see thousands of trucks going through this territory and it would have to cross several different areas of control, and at every point have to pay fees." "I don't see a lot of narrative in the argument that there is significant smuggling going," the official added.
While the official acknowledged that some smuggling was occurring between the neighbours, he flatly rejected that it was of any significant volume that would be profitable.
"The oil is being consumed almost entirely inside areas of control of Syria and trading with the regime" of Syrian President Bashar al-Assad, the official said, adding, "ISIL is selling it into the economy."
US, French and British jets have targeted Islamic-controlled oil fields in Syria as part of a campaign to cut the financial lifeline of the militant group. Hours after the British parliament agreed to join a coalition fighting the militant group, British bombers attacked six targets in the Omar oil fields in eastern Syria controlled by Islamic State.
US officials have said that images posted by Russia of oil tankers crossing into Turkey from Syria were dated and were not of trucks crossing the border into Turkey.
"What I have not seen is imagery of the border crossing with trucks crossing the border, and that's because I don't believe that exists," the official added.
REUTERS

SMRT, SBS shares soar as Khaw ignites revamp hopes

SMRT, SBS shares soar as Khaw ignites revamp hopes

SGX queries both transport operators as observers speculate that a restructuring of the rail sector is afoot

By
Singapore
THE share prices of SBS Transit (SBST) and SMRT Corp, typically lightly traded, surged on Friday after Transport Minister Khaw Boon Wan suggested that the regulator, the Land Transport Authority (LTA), would also oversee train operators' assets, igniting speculation that a sector revamp is imminent.
The unusual price movements prompted the Singapore Exchange (SGX) to query both companies.
SBST, which runs the newer Downtown MRT line, led the rally, rising to its highest level in more than four years; its shares gained 9.4 per cent to S$2.10, its highest intra-day price since February 2011. The shares closed at S$2.02, up 10 cents, or 5.21 per cent. About 245,000 shares were traded.
SMRT, Singapore's largest train operator, rose 6.4 per cent on speculation that a revamp could potentially unlock about S$1 billion of its assets. The shares ended at S$1.56, up 8 cents or 5.41 per cent; more than eight million shares changed hands.
UBS analyst Cheryl Lee said in a note: "Given the increasingly frequent breakdowns, we reckon this (the restructuring of the rail industry) will happen soon - which will be positive for SMRT. Mr Khaw's comments suggest that something is in the works. We may see some major initiatives in the first six to nine months of his watch."
UBS has a buy call on SMRT, with a target price of S$1.80 a share.
Responding to SGX's query, SMRT said it was unaware of fresh information which could have affected trading. "As previously announced on Oct 27, we are continuing our discussions with the authorities on the transition to a new Rail Financing Framework and progress is being made," it said.
Under the existing financing framework, rail operators own the operating assets of the system and are responsible for buying additional trains to meet ridership growth.
SBST, on its part, pointed to a May 21 statement by the LTA, which said it would "negotiate with the incumbents to run the nine packages under the contracting mode". "When finalised, an announcement will be made accordingly," SBST said.
Speaking at Friday's forum on infrastructure maintenance, Mr Khaw, who took over the troubled transport portfolio in September, again hinted at a restructuring, calling for a "One Team" approach to raising rail reliability. He called on the LTA to beef up its pool of engineers to take on operations and maintenance.
"They must establish a team that is able to take on operations and maintenance, if we decide to move in that direction," said the minister, who is also Coordinating Minister for Infrastructure.
He had made similar remarks a few weeks ago about this integrated approach in a blog post, where he set out a seven-element strategy entailing an immense multi-year effort from the LTA, SMRT and SBST.
Most analysts said they believed that the government will eventually take over SMRT's rail assets, and fund future capital expenditure to ensure network reliability; this will turn SMRT into a pure operator.
This is crucial, given that mounting maintenance and repair costs, as well as the need to upgrade the ageing network, make it unsustainable for SMRT, a listed entity already bogged by a weak balance sheet from recent breakdowns. SMRT has indicated that maintenance costs will go up from 41 per cent to 50 per cent of rail revenue.
UBS's Ms Lee estimated that rail losses could spike to between S$70 million and S$75 million from S$10 million to S$15 million, wiping out most of SMRT's FY16 profits.
"We reckon the government will consider the total cost of running the trains and also take into account the rental/advertising revenue to arrive at a feasible return. We reckon a margin of 10 to 12 per cent is possible," she said.
She added that a revamp could lead to a jump in SMRT's discounted cash flow as it would no longer have to fund the rail capex.

Morgan Stanley said to start fixed-income job cuts in London

Morgan Stanley said to start fixed-income job cuts in London

[LONDON] Morgan Stanley began cutting its fixed-income business in London and may continue reductions on Monday as it pares back global operations, according to people familiar with the matter.
Isabel Mahony, head of financial credit trading; Thomas Moore, head of desk research for investment-grade and high-yield credit; and Adam Clary, head of European credit sales to real-money investors, are among those leaving the firm, said the people, who asked not to be identified because the details are private. Kevin Edwards, who traded financial bonds, is also being let go, according to the people.
Morgan Stanley is planning a reduction of as much as a quarter of its fixed-income staff after years of revenue declines and insufficient returns, people with knowledge of the plans said this week. The US lender reported a 42 per cent plunge in bond-trading revenue in October, in what Chief Executive Officer James Gorman called its worst quarter for fixed income, currencies and commodities since he took over in 2010.
Kay Haigh, Morgan Stanley's global head of emerging markets in London, is also leaving the bank, according to two people familiar with the matter. Finance Magnates reported the move on its website on Thursday.
Tom Walton, a spokesman at Morgan Stanley in London, declined to comment on the job cuts.
Morgan Stanley joins Credit Suisse Group AG, Royal Bank of Scotland Group Plc and Nomura Holdings Inc in scaling back their fixed income businesses this year. Banks are responding to rules requiring them to hold more capital and take less risk by pulling back from some trading operations and reducing their bond holdings.
BLOOMBERG

Dollar firms after robust US jobs report backs rate hike

Dollar firms after robust US jobs report backs rate hike

[NEW YORK] A strong US jobs report flashed a green light Friday for the Federal Reserve to increase interest rates this month, pushing the dollar up from its sell-off the previous day.
Analysts said that the Labour Department's report of solid jobs growth of 211,000 payrolls in November signaled the US economy was strong enough to weather the first US rate hike in more than nine years.
"The dollar closed out a wild week with fewer losses as strong US jobs data cleared the final hurdle to a Fed rate hike," said Joe Manimbo at Western Union Business Solutions.
The greenback climbed to US$1.0874 per euro around 2200 GMT, from US$1.0947 at the same time Thursday. The dollar bought 123.16 yen, up 0.4 per cent.
Market expectations firmed for the Fed to raise the federal funds rate at its December 15-16 meeting. The benchmark rate has been pegged at zero since December 2008 to underpin the recovery from the Great Recession.
Still, the jobs report showed US wage growth remains subdued, one of the signs of slack in the jobs market the Fed is watching before moving to raise the rate.
"The slowdown in average hourly earnings may push the Federal Open Market Committee to implement a 'dovish rate hike' at the December 16 interest rate decision amid the disinflationary environment," said David Song, currency analyst at DailyFX.
The euro meanwhile lost some of its Thursday gains that came after the European Central Bank's new stimulus initiatives disappointed investors who had expected more firepower.
On Friday, ECB President Mario Draghi appeared to be stumping to counter criticism, insisting the central bank would increase efforts to support the eurozone economy if conditions did not improve.
"There is no doubt that if we had to intensify the use of our instruments to ensure that we achieve our price stability mandate, we would," he said in a speech at the Economic Club of New York.
AFP

US: Stocks surge 2% on strong jobs report

US: Stocks surge 2% on strong jobs report

[NEW YORK] Wall Street equities jumped two per cent on a strong US jobs report Friday that underscored the differences between the sturdy US economy and sluggish growth elsewhere.
With markets around the world in the red - including 2.2 per cent plunges in Japan and Brazil and a 0.6 per cent drop in London - Wall Street headed in the opposite direction even though the official November employment report raised the likelihood that the Federal Reserve will decide to begin increasing interest rates at its December 15-16 meeting.
Analysts said the report, which showed a solid 211,000 new jobs were created last month and the unemployment rate holding at 5.0 per cent, was just the proof Fed Chair Janet Yellen needed to make the first rate increase in over nine years.
"The 'data dependent' Fed will be reassured that the economy is showing no sign of succumbing to worries about the global outlook," said Chris Williamson, chief economist at Markit.
"Here we see again the incredible resilience and optimism in this (US) market," said Michael James, managing director of equity trading at Wedbush Securities.
"Any pullback for the most part has been a buying opportunity for most of the year, and today's action demonstrates that again today."
US banks and technology companies were big gainers, but many oil-sector stocks lost sharply again as crude prices sank on Opec's lack of action to reel in production.
At the end of a reportedly contentious Vienna meeting, Opec dropped all talk of production targets or ceilings and indicated it would wait to see what happens to the market over the next six months, during which Iran is expected to resume exporting large amounts of oil when economic sanctions are dropped as a part of its nuclear deal.
US benchmark West Texas Intermediate crude tumbled 2.7 per cent to US$39.97 a barrel, while in London Brent crude lost 1.9 per cent at US$43.00 a barrel.
Elsewhere equities mostly slumped. European stocks came off their lows after the US jobs report, but failed to make up Thursday's losses which came after the European Central Bank disappointed with what investors saw as overly timid action to stimulate growth.
Speaking in New York Friday after European markets closed, ECB President Mario Draghi sought to push back the view that the bank was not making headway in fighting deflation.
He insisted that stimulus efforts were working and that, if necessary, the ECB would do more: "There is no particular limit to how we can deploy any of our tools," he said.
"There cannot be any limit to how far we are willing to deploy our instruments, within our mandate, and to achieve our mandate."
Those comments helped send the euro lower after its ECB-sparked 3.1 per cent jump against the dollar Thursday. The common currency fell to US$1.0875 from US$1.0947 late Thursday.
AFP

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