Hackers hit three Greek banks with ransom demands

Hackers have staged cyber-attacks on three Greek banks and demanded a ransom in bitcoins, a virtual monetary unit, to stop their disruption, banking sources said on Monday. 

PHOTO: REUTERS

DEC 1, 20157:25 AM

[ATHENS] Hackers have staged cyber-attacks on three Greek banks and demanded a ransom in bitcoins, a virtual monetary unit, to stop their disruption, banking sources said on Monday.

The sources said the hackers managed to block the Internet banking activity of three Greek lenders for a few hours last Thursday but did not penetrate the banks' security or obtain confidential client data or access to accounts.

"All they achieved was to block the web banking for a few hours. Nothing else," one banker told Reuters, speaking on condition of anonymity. The sources said the hackers had given the name of their group as Armada Collective.

The banks had refused to pay up and alerted the security services and the Greek central bank, which are investigating.

"We informed the police and the country's secret services are involved," a second banker said. "It's an easy to handle situation. There is no need for bank clients to worry."

A hacking extortion group using the same name was reported in mid-November to have staged sustained Distributed Denial of Service attacks on several private email services.

The attacks work by overloading the websites until they are forced to inhibit access or go offline.

REUTERS

    
 

IMF approves China's yuan as elite reserve currency

The International Monetary Fund welcomed China's yuan into its elite reserve currency basket on Monday, recognising the ascendance of the Asian power in the global economy. 

PHOTO: BLOOMBERG

DEC 1, 20157:11 AM

[WASHINGTON] The International Monetary Fund welcomed China's yuan into its elite reserve currency basket on Monday, recognising the ascendance of the Asian power in the global economy.

The yuan, also known as the renminbi, will join the US dollar, euro, Japanese yen and British pound next year in the basket of currencies the IMF uses as an international reserve asset.

IMF Managing Director Christine Lagarde called the decision "an important milestone in the integration of the Chinese economy into the global financial system." "It is also a recognition of the progress that the Chinese authorities have made in the past years in reforming China's monetary and financial systems."

The decision by the IMF executive board solidifies China's ambition to see the government-controlled yuan achieve global status as one of the world's top currencies alongside the United States, Europe and Japan.

China, the world's second-largest economy, asked last year for the yuan to be added to the Fund's Special Drawing Rights basket.

But, while already meeting the SDR criteria for being widely used, as recently as August the Fund considered the currency too tightly controlled to qualify.

However, IMF staff experts in early November said that Beijing had taken the steps necessary for the yuan to be called "freely usable", opening the way for Monday's decision.

Ms Lagarde said the yuan's inclusion in the basket was expected to help China open up further to the world economy.

"The continuation and deepening of these efforts will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy," she said.

The unexpected devaluation of the yuan last August received good marks from the IMF as it expanded the currency's movements based on market forces.

In addition, Beijing last Wednesday announced that an initial group of foreign central banks has been allowed to enter the Chinese currency market, which likely will promote further internationalisation of the yuan in global trading.

IMF members can use the Special Drawing Rights basket to obtain currencies to meet balance-of-payments needs. The Fund also issues its crisis loans - crucial to struggling economies like Greece - valued in SDRs.

The yuan's entry into the basket takes effect on October 1, 2016.

But China is expected to face challenges with the yuan included as an IMF reserve currency.

It puts the Bank of China under pressure to provide more transparency in line with its peers, such as the Federal Reserve and the European Central Bank.

"If part of their policy is to gradually liberalise the capital account and the financial sector, this is setting in motion a process of opening up that cannot be reversed," Angel Udibe, a financial markets expert at the Peterson Institute for International Economics, told AFP.

"It really make the case at home that they need to continue with the process of liberalisation."

The composition and weightings of the SDRs basket are reviewed every five years. The last time the currencies in the basket were changed was in 2000, when the euro replaced the German deutschemark and the French franc.

The value of the SDR is based on a weighted average of the currencies in the basket. With the inclusion of the yuan, the dollar's weight in the new basket will be little changed from its current 41.7 per cent.

The euro will be 30.9 per cent, the yuan 10.9 per cent, the yen 8.3 per cent, and the pound 8.1 per cent.

The inclusion of the yuan came with the support of the United States, the IMF's largest shareholder.

Until recently Washington accused China of keeping the yuan artificially low to gain a trade advantage. But in October the US Treasury Department softened its tone, saying that after Beijing's moves to loosen controls, the yuan "remains below its appropriate medium-term valuation."

Still, the IMF decision risks angering some lawmakers in the US Congress amid fierce maneuvering for the 2016 presidential election.

"With this decision, the IMF is choosing to reward China's currency manipulation instead of combatting it," said Senator Chuck Schumer, a New York Democrat and longtime China critic.

"This decision is an affront to the millions of US workers who have lost their jobs at the hands of China's rapacious trading practices, and sends a terrible signal to the rest of the world that currency manipulation is acceptable behavior in the eyes of the IMF."

AFP

    
 

US dollar rides high as ECB set to boost eurozone stimulus

The US dollar rode high on Monday as the European Central Bank looked set to inject more stimulus into the eurozone this week. 

PHOTO: AFP

DEC 1, 20156:53 AM

[NEW YORK] The US dollar rode high on Monday as the European Central Bank looked set to inject more stimulus into the eurozone this week.

Amid widespread expectations the ECB will announce additional stimulus measures after its policy meeting Thursday, the euro fell to a fresh seven month low against the dollar.

The euro sank to US$1.0558 before edging up to US$1.0566 around 2200 GMT. The shared currency bought US$1.0595 at the same time on Friday.

"The dollar called it a month on top of most major currencies amid expectations for lower rate policies to soon become reality in the eurozone," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

Analysts said there was some caution in the market ahead of news-packed week. In addition to the ECB meeting, the Reserve Bank of Australia holds a policy meeting on Tuesday and the Bank of Canada holds its on Wednesday.

Federal Reserve Chair Janet Yellen speaks Wednesday and testifies in Congress on Thursday.

On Friday, the US jobs report for November is published, which could be pivotal in the Fed's deciding whether to raise near-zero interest rates in December. Markets have already baked in a liftoff.

"We have heavy event risk in the opening week of December, the lingering threats of systemic risks listed by the IMF and other groups, as well as the eagerly anticipated December 16 Fed rate decision," said John Kicklighter, senior currency strategist at DailyFX.

The International Monetary Fund earlier Monday announced a landmark decision to add China's yuan to its elite currency reserve basket.

The yuan, also known as the renminbi, will join the Special Drawing Rights basket on October 1, 2016.

"While the renminbi's inclusion is arguably supportive of the currency, and the Chinese central bank's ongoing actions have also offered support for the renminbi at times, our overall view remains for moderate renminbi weakness over the medium- term," said Nick Bennenbroek, head of currency strategy at Wells Fargo Securities.

The yuan was little changed, at 6.398 per dollar.

AFP

    
 

Yuan's IMF SDR entry no immediate major effect on sovereign credit profile: Fitch

By

Angela Tanangelat@sph.com.sgangelat@sph.com.sg

The inclusion of the Chinese yuan in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) currency basket will have no immediate significant effect on the sovereign credit profile, says Fitch Ratings. 

PHOTO: BLOOMBERG

DEC 1, 201510:28 AM

THE inclusion of the Chinese yuan in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) currency basket will have no immediate significant effect on the sovereign credit profile, says Fitch Ratings.

The credit rating agency says new incremental demand for the yuan arising directly from joining the SDR is likely to be marginal, and it remains unclear to what extent it will boost broader long-term usage of the currency among reserve managers.

It says being a part of the SDR basket is not a sufficient condition for the yuan to be considered a reserve currency, nor will it necessarily result in a sudden spike in the allocation of reserves to yuan assets. It cited the examples of other currencies like the Canadian dollar and Australian dollar, which are held more widely as central bank reserve assets without being a part of the SDR basket.

Furthermore, yuan-denominated assets do not currently qualify as foreign reserves according to the IMF - despite the inclusion of the yuan in the SDR weighting - because of China's capital controls, it adds.

"Inclusion in the SDR basket is neither a quick fix nor an alternative to the broader structural reform agenda,'' Fitch says.

The speed at which the yuan develops into a global reserve currency will depend on the extent to which central banks and sovereign wealth funds begin to see the currency as a viable store of liquidity and value to rival that of the US dollar.

"Such a shift is only likely to be gradual. It is especially unlikely in the short term so long as doubts persist over China's prospects for a smooth and orderly macroeconomic rebalancing,'' it says.

According to Fitch, China's authorities aim to lift capital controls only by 2020, which means that the full convertibility of the yuan remains a way off. Furthermore, access to yuan assets among foreign investors remains very small despite the tremendous growth in China's economy and the role it plays in global trade.

"The market for yuan-denominated debt securities remains small, and it was only this year that China allowed foreign central banks access to its domestic bond market.''

In conclusion, Fitch says the yuan's inclusion in the IMF's SDR basket may be symbolically significant for China, and marks a growing role for the country in international financial institutions more commensurate with the size of its economy. The policy process that enabled joining the SDR basket also contributed to a number of reforms to liberalise and partially open China's capital markets.

"As such, Fitch believes that joining the SDR could strengthen the economic reform process, and will enable the authorities to resist pressures to reverse any reforms to market liberalisation.''

    
 

China official factory PMI at three-year low

DEC 1, 20159:52 AM

[BEIJING] Activity in China's manufacturing sector contracted for a fourth straight month to a three-year low, an official survey showed on Tuesday, adding to signs of persistent economic sluggishness despite a flurry of stimulus moves.

The official Purchasing Managers' Index (PMI) fell to 49.6 in November from the previous month's reading of 49.8, according to the National Bureau of Statistics (NBS), lagging expectations of 49.8 from analysts polled by Reuters.

A reading below 50 points suggests a contraction in activity while a reading above signifies an expansion on a monthly basis.

With subdued demand at home and abroad, activity in China's factories shrank in October for a third straight month, fuelling fears that the economy may be cooling more rapidly than expected.

The sub-index for new orders- a proxy for domestic and foreign demand- fell to 49.8 in November from October's 50.3.

As for the services sector, whose growth has helped offset persistent weakness in manufacturing, the official non-manufacturing PMI rose to 53.6 in November from October's 53.1.

Despite a long series of stimulus measures, including cutting interest rates six times since November last year, muted monthly data for October suggests China's economy has lost further momentum.

Some analysts expect China's economy will bottom out in the fourth quarter as a burst of stimulus measures rolled out by Beijing gradually takes effect, but many remain wary about the outlook.

China's Premier Li Keqiang said last week that China was on track to reach its economic growth target of about 7 per cent this year, and that the economy was going through adjustments to maintain reasonable medium- to long-term growth.

But that would still mark China's weakest economic expansion in a quarter of a century, and some analysts believe real growth levels are much weaker than official data suggest.

Zhou Hao, Senior Emerging Markets Economist at Commerzbank in Singapore, said the manufacturing PMI is at its lowest level in three years.

REUTERS

    
 

Singapore business optimism hits historical low: credit bureau

By

Angela Tanangelat@sph.com.sgangelat@sph.com.sg

Local firms in Singapore are increasingly more pessimistic, depressing a widely-followed optimism index into a contractionary zone for the first time in three years after it took a turn for the worse in the fourth quarter of 2015. 

PHOTO: SPH

DEC 1, 20159:49 AM

LOCAL firms in Singapore are increasingly more pessimistic, depressing a widely-followed optimism index into a contractionary zone for the first time in three years after it took a turn for the worse in the fourth quarter of 2015.

According to Singapore Commercial Credit Bureau's (SCCB) latest quarterly Business Optimism Index (BOI) study, BOI hit a historical low as it fell into negative territory of -2.93 percentage points for Q1 2016, from +0.14 percentage points for Q4 2015.

On a year-on-year (y-o-y) basis, BOI slid from +1.11 percentage points for Q1 2015 to -2.93 percentage points for Q1 2016.

"We are seeing greater pessimism among local firms due primarily to constrained consumer demand globally as well as prolonged weakness and flat growth seen in sectors such as manufacturing and wholesale for the most of 2015,'' said Audrey Chia, SCCB's chief executive officer.

She added that optimism levels will remain muted for the months ahead. According to SCCB, 90 per cent of the local firms surveyed had anticipated investments for business expansion to remain unchanged. This was up from last year when 81 per cent of local firms expected investments to remain unchanged.

For Q1 2016, only one of six business indicators is in positive territory compared with two of six indicators in Q4 2015. With the exception of selling price, the remaining indicators - volume of sales, net profits, employment, inventory levels and new orders - are contractionary.

The services sector emerged as the most optimistic sector in terms of its Q1 2016 outlook. Next was the transportation sector, given the upturn in the air and land transport segments.

However, business confidence within the construction sector has taken a turn for the worse after emerging as one of the least optimistic sectors for Q4 2015. The weaker showing was largely attributed to muted public building activities. New orders within the construction sector are expected to be contractionary for Q1 2016 at -8.33 percentage points.

As with the previous quarter, the manufacturing sector emerged as the least optimistic sectors with all six business indicators in the contractionary region. This was largely due to a sustained decline in manufacturing output, most notably in the transport engineering, electronics and precision engineering segments. New orders fell to a historical low, from -22.22 percentage points for Q4 2015 to -56.0 percentage points for Q1 2016.

    
 

Indonesia seeks funds in Paris to tackle peat fires

Indonesian President Joko Widodo is using a meeting of leaders in Paris on climate change to seek funds to restore Indonesia's forests, after fires turned the country into the world's worst polluter in recent months. 

PHOTO: SPH

DEC 1, 20157:47 AM

[JAKARTA] Indonesian President Joko Widodo is using a meeting of leaders in Paris on climate change to seek funds to restore Indonesia's forests, after fires turned the country into the world's worst polluter in recent months.

But while the Paris talks could produce broad agreements for the leaders present, Mr Joko may come up short on funds unless he produces more detailed plans on how to reduce mass deforestation of peat forests, and on boosting clean energy, said Fabby Tumiwa, director at the Jakarta-based Institute for Essential Services Reform.

Like some other emerging market countries, Indonesia has tied progress on tackling climate change and environmental devastation to help from others. While the country has pledged to cut greenhouse gas emissions by 29 per cent from a business- as-usual scenario by 2030, it says with international assistance it could achieve a 41 per cent reduction.

Mr Joko joins more than 140 world leaders including US President Barack Obama and Xi Jinping of China in Paris in an effort to reach the first truly global deal to curb the greenhouse gases blamed for global warming.

Most of Indonesia's emissions come from destroying carbon-rich peat forests to be replaced by plantations, with recent fires burning an area four times the size of Bali island and sending a hazy smog across the region.

"The government has to be transparent and honest in giving an explanation," said Tumiwa, adding the struggle to prevent the perennial fires could reflect badly on Jokowi in Paris.

"The disaster will also open opportunities for other countries to assist, as long as Indonesia has action planning.''

FAILED EFFORTS

While Mr Joko promised in September to extinguish the worst of the forest fires within weeks, government efforts to seed rainclouds and arrest perpetrators proved ineffectual until monsoon rains doused the blazes in November. Indonesia, which has some of the world's largest and oldest rainforests, was slow to accept regional help in firefighting and declined to name most companies involved, creating tension with neighbour Singapore.

The nation's total daily carbon dioxide emissions exceeded those of the US on 47 of the 74 days through Oct 28, according to an analysis of national emissions data from the World Resources Institute in Washington and Indonesian fire- emissions data from VU University in Amsterdam.

Indonesia says it needs 50 trillion rupiah (S$5.1 billion) to restore and protect its peat, a young form of coal that can smolder for months.

It is seeking up to US$1 billion from Norway as well as funding from the US, UK and World Bank for a peat restoration body.

Mr Joko held meetings with leaders from Norway, the Netherlands and Peru on Monday.

RENEWABLE ENERGY

Pledges by Indonesia to limit emissions caused by agriculture, forestry and other land uses lack concrete measures for tackling deforestation, according to a study by the Union of Concerned Scientists released last month.

Mr Joko should also show how the country will achieve a goal of a 23 per cent share of renewable energy in its energy mix in 2025, said Tumiwa. Southeast Asia's biggest economy lags neighbors such as Thailand and the Philippines in the number of renewable energy projects.

Indonesia is looking for a fair deal in Paris that will give a higher commitment from developed countries and assistance to developing countries to reducing emissions and mitigating climate change, said Arrmanatha Nasir, a spokesman for the foreign ministry.

There is already an Indonesian moratorium on new permits to develop natural forests and bans on using deep peatlands or large-scale burning, yet weak law enforcement and widespread corruption mean the laws are routinely overlooked. Jokowi, who majored in forestry, has pledged to issue a decree banning all land burning and use of peatlands.

"We need to see President Jokowi make good on his promise," said Rusmadya Maharuddin, a Greenpeace forest campaigner.

"He must codify zero deforestation in law, by strengthening the existing moratorium on forest and peatland development to include secondary forests and forests inside existing concessions."

BLOOMBERG

    
 

China smog at crippling levels as climate talks open

Choking smog blanketed Beijing and much of northern China Monday as climate change talks opened in Paris and a new Chinese report raised the alarm about rising sea levels. 

PHOTO: AFP

DEC 1, 20157:19 AM

[BEIJING] Choking smog blanketed Beijing and much of northern China Monday as climate change talks opened in Paris and a new Chinese report raised the alarm about rising sea levels.

As the global summit began, the US embassy in Beijing recorded concentrations of PM2.5, tiny airborne particles which embed deeply in the lungs, at 625 micrograms per cubic metre - 25 times above the World Health Organisation's 25 microgram recommended maximum.

Plummeting visibility grounded flights and local authorities said levels in one southwestern district had reached 976 micrograms per cubic metre - more than 39 times the WHO limit.

In the centre of the capital the air had an acrid taste, and skyscraper summits were invisible from the ground as a grey haze washed out colour.

"You can't even see people standing directly in front of you," wrote one disgruntled commuter on Chinese Twitter-equivalent Sina Weibo. "It feels like even the subway station is full of haze." Multiple flights into the capital's second airport were cancelled, an airline said, with the city's main air hub adding more than 50 planes could not take off.

China is the world's largest emitter of greenhouse gases and will be central to the discussions in Paris, where President Xi Jinping met US President Barack Obama on the sidelines of the summit.

"As the two largest carbon emitters, we have both determined that it is our responsibility to take action," Obama said as he sat at a table with Xi.

But Xi also told the summit that that poor nations should not have to sacrifice economic growth.

"Addressing climate change should not deny the legitimate needs of developing countries to reduce poverty and improve their people's living standards," Xi said.

A Chinese government report released shortly before the summit raised concern at rising sea levels caused by climate change, which could threaten the country's developed east coast.

Beijing's "Third National Climate Change Assessment Report" said the sea levels have risen 2.9mm annually from 1980 to 2012, according to the official China Climate Change website last week, while glaciers had shrunk over 10 percent since the 1970s.

Temperatures could rise by as much as five deg C by the end of this century, the report added. Experts say this could fuel more dramatic sea level rises threatening China's most populated regions.

Smog also blanketed the Indian capital New Delhi on Monday with PM2.5 levels soaring to 317.

India is the world's fourth largest emitter of greenhouse gases, and its coal use is rising rapidly alongside economic growth.

Delhi's air quality drops dramatically during winter when thousands of poor residents light fires to keep warm, and cloud cover traps the pollution from diesel trucks.

Authorities in the city have not issued any public health notices and thousands of runners took part in Delhi's half marathon on Sunday.

"A few days of breathing in the refreshing Delhi smog and suddenly I don't miss my daily cigarettes," resident Rahul Dutta Gupta said on Twitter.

In China PM2.5 levels in several cities in Hebei province bordering Beijing were also well above 500, official figures showed.

Motorways were forced to close in nearby Shandong province where visibility fell to less than 200m, the official Xinhua news agency said.

Beijing issued an orange-level pollution alert this weekend, its highest of the year, with residents advised to stay indoors.

Air pollution has been linked to hundreds of thousands of premature deaths, becoming a major source of popular discontent with the government.

Beijing's severe pollution follows record-breaking smog in northeastern China last month, when PM2.5 levels reached 1,400 micrograms per cubic metre in the city of Shenyang - the highest ever registered.

Intense pollution - dubbed the "airpocalypse" - also garroted the capital in 2013 when readings approached 1,000 micrograms per cubic metre.

Such outbreaks are common across China, where Greenpeace recently found nearly 80 per cent of cities to have had pollution levels that "greatly exceeded" national standards over the first nine months of this year.

Mr Xi is in Paris for the first day of the UN Conference of Parties (COP21) summit, which aims to strike a global deal limiting dangerous climate change.

China is estimated to have released between nine and 10 billion tonnes of carbon dioxide in 2013, nearly twice as much as the United States and around two and a half times the European Union.

It pledged last year that carbon dioxide output would peak by "around 2030" - suggesting at least another decade of growing emissions.

Most emissions come from coal burning which spikes in winter along with demand for heating, which also causes smog.

Beijing's severe pollution is expected to last until a cold front arrives Tuesday, the city's environmental protection bureau said on its website.

AFP

    
 

US tightens rules for visa-free visits after Paris attacks

After extremist attacks in Europe, the United States will tighten security procedures for its visa waiver programme for visitors from friendly countries, officials said on Monday. 

PHOTO: BLOOMBERG

DEC 1, 20157:05 AM

[WASHINGTON] After extremist attacks in Europe, the United States will tighten security procedures for its visa waiver programme for visitors from friendly countries, officials said on Monday.

The United States already screens visa applicants from war zones carefully, but will now ask more questions of travelers from countries eligible for visa waivers.

Washington will also seek greater cooperation and intelligence sharing with allied countries to try to intercept "foreign fighters" returning from places like Syria.

This month's deadly attacks in Paris are thought to have been the work of European Muslims trained and radicalised by the Islamic State group in its Syrian and Iraqi bases.

As French or Belgian citizens, they could have flown to the United States by registering with the ESTA visa waiver system and avoided the close scrutiny imposed on refugees.

But travelers will now be required to declare previous visits to any country the US Department of Homeland Security has deemed a "terrorist safe haven." Their registrations will also come under greater scrutiny from US agencies, which in turn will work in closer cooperation with allied police and intelligence outfits.

Speaking in Paris, White House Deputy National Security Advisor Ben Rhodes said the Department of Homeland Security had tightened some rules even before the Paris attacks and would now act quickly.

"We've always been concerned about the fact that there is a significant higher flow of foreign fighters into and out of Europe than the United States," he said.

"We benefit in some respects from geography and in some respects from simply having a population that has not had the same desire to join the effort in Syria under ISIL.

"So we see a much more significant threat of foreign fighters coming into Europe than the numbers of foreign fighters coming into the United States." US federal agents will also work with the authorities in countries whose citizens are eligible for visa-free travel to help them collect biometric data, officials said.

And US "foreign fighter surge teams" will deploy to areas where there is a concern that jihadists returning from war zones may seek onward travel to the United States.

Homeland Security Secretary Jeh Johnson also urged Congress to fund greater pre-screening of flight passengers and tougher airport security controls.

"This means deploying our US Customs officials to foreign airports with direct flights to the United States," he said, adding that 15 overseas airports already permit this.

White House spokesman Josh Earnest called on Congress to act quickly to pass funding measures to allow an expansion and deepening of intelligence and screening programmes.

"If there are steps that we can take that will improve information sharing, that would obviously be an important part of more carefully vetting individuals," he said.

The visa waiver program applies to 38 countries, largely US allies and relatively stable developed democracies whose citizens have hitherto been seen as posing little threat.

Mr Earnest said 20 million people a year visit the United States under the program and represent a boon to the US economy through tourist spending and building business ties.

But he complained that President Barack Obama's Republican opponents in Congress have focused on halting the arrival of Syrian refugees rather than reforming the waiver programme.

Shortly after the White House announcement, Democratic Senator Chris Murphy vowed to move quickly to promote the reforms that Homeland Security is seeking.

AFP