News Archive


Spain retail sales jump 1.9 percent in November


MADRID (Reuters) – Spain retail sales rose 1.9 percent year-on-year on a calendar-adjusted basis in November, National Statistics Institute (INE) reported on Monday, after registering a revised fall of 0.3 percent in October.

Retail sales had been falling every month for three years until September, when they rose due to residual effects from the impact of a rise in value-added tax (VAT) in September 2012.

Sales of food, personal items and household items all rose in November compared with the same month last year, and all kinds of retailers, from small chains to large-format stores, saw stronger sales, INE reported.

(Reporting by Fiona Ortiz; Editing by Jesus Aguado)

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Monte Paschi faces nationalization threat after cash call delay


MILAN (Reuters) – A delay to vital fundraising at Banca Monte dei Paschi di Siena (BMPS.MI) has increased the risk that Italy’s third-biggest bank has to be nationalized, a move the government would like to avoid.

Shareholders led by the biggest investor in the bailed-out bank rejected plans for a 3 billion euro ($4 billion) share sale in January and postponed the capital raising until after May 12.

The bank’s chairman and its chief executive may resign following the unprecedented clash with the main shareholder in the Siena-based lender, a charitable banking foundation with close ties to local politicians.

The focus of attention now turns to Rome where both the economy ministry, which has oversight of banking foundations, and the Bank of Italy are closely following events.

The world’s oldest bank needs to tap investors for cash to pay back 4.1 billion euros in state aid it received earlier this year and avert nationalization after being hammered by the euro zone debt crisis and loss-making derivatives trades.

The capital increase is part of a tough restructuring plan agreed with the European Commission in order to receive clearance for the state bailout.

A Treasury spokesman said the government’s priority was to give the bailout money back to taxpayers and it had no interest in nationalizing Monte Paschi, ANSA news agency reported on Sunday evening. Sources said the Treasury will continue to encourage all parties involved to find a solution, ANSA reported.

Monte Paschi Chairman Alessandro Profumo, an internationally respected banker who was formerly the chief of UniCredit (CRDI.MI), said on Saturday he and chief executive Fabrizio Viola would decide whether to step down next month. A board meeting is expected around mid-January.

Profumo and Viola had already secured a pool of banks to guarantee the rights issue, but only if it was carried out by the end of January.

They said the delay makes fundraising harder because of likely competition from other Italian and European lenders prompted to seek new capital by an upcoming sector health check, and could precipitate the Tuscan bank’s nationalization.

By forcing a postponement of the rights issue, the cash-strapped Monte dei Paschi foundation – whose stake in the bank is big enough to veto any unwanted decision – is hoping to win more time to sell down its 33.5 percent holding and repay its own debts.

The foundation head Antonella Mansi said that carrying out the capital increase in January would massively dilute the foundation’s holding, leaving it with virtually nothing to sell to reimburse debts of 340 million euros.

($1 = 0.7258 euros)

(Reporting by Valentina Za; Editing by Erica Billingham)

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Japan shares look to end bumper year on strong note


SYDNEY (Reuters) – Asian markets looked to run out the year with a flourish on Monday, with Japanese shares again set to lead the way as the yen skidded to fresh lows for a third straight session.

Nikkei futures were pointing to a firm start for the cash index, .N225 which notched up an eight straight session of gains on Friday in its longest such streak since March. The market is closed from Tuesday to Friday inclusive.

The major U.S. stock indexes .DJI .SPX ended Friday flat for the session but still up between 1.3 and 1.6 percent for the week. The MSCI World Index .MIDW00000PUS added 0.4 percent on Friday to be up nearly 20 percent for the year.

Australian stocks added 0.5 percent .AXJO and were on track to show a gain of 15 percent for the year.

Much of Asia, however, has underperformed, in part due to investors shifting funds from emerging markets and into Europe and the United States.

As a result, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS is almost unchanged for the year.

In stark contrast, Japan’s Nikkei has risen almost 56 percent in 2013, its best annual performance since 1972, urged on by aggressive monetary and fiscal stimulus.

There were more promising signs for the economy when the Asahi newspaper reported Japan’s most influential business lobby has agreed to encourage its members to raise workers’ base pay for the first time in six years.

Many economists say an increase in base pay is essential to Prime Minister Shinzo Abe’s pledge to end 15 years of deflation and to help the Bank of Japan meet its 2 percent inflation target.

Aiding the economy has been the fall in the yen this year, which has left it at five-year trough against the dollar and euro.

The dollar was up at 105.32 yen on Monday after reaching a fresh peak at 105.37. The yen posted its ninth consecutive week of falls against the dollar, the longest such period since 1974.

The euro was also firm at 144.82 yen, having been as far as 145.67 yen on Friday.

Thin year-end conditions made for some wild moves, with the euro vaulting as high as $1.3892 on Friday before falling back. On Monday, the single currency was somewhat calmer at $1.3753 with offers crowded in the $1.3810/35 area.

The single currency could find further support from comments by European Central Bank President Mario Draghi that he saw no urgent need to cut interest rates again and no signs of deflation. TOP/CEN

Less positive was news Italy’s third-biggest bank, Monte dei Paschi di Siena, (BMPS.MI) was forced to delay a vital 3 billion euro ($4.1 billion) share sale because of shareholder opposition, plunging its turnaround plan into uncertainty.

The world’s oldest bank needs to tap investors for cash to pay back state aid and avert nationalization.

Underpinning both the dollar and euro have been widening yield premiums over Japanese debt.

Yields on the U.S. benchmark 10-year Treasury note have climbed to their highest in more than two years at 3.02 percent. The comparable Japanese yield is at just 0.715 percent.

Analysts at RBS note that yields on the 30 year Treasury bond were approaching a hugely important level at 4.05 percent, which marks the top of a bull channel going back two decades. A breach there would be viewed as very bearish for bonds.

In commodity markets, London copper was up at its highest level in four months, with signs of economic revival in Asia and the United States burnishing the demand outlook for industrial metals.

Gold added a couple of dollars to $1,215, but was still on track for its biggest annual loss in three decades.

Brent crude oil was 2 cents lower at $112.16 a barrel, while U.S. light sweet crude eased back 13 cents to $100.19 a barrel.

(Editing by John Mair)

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Japan mid-tier camera makers face shakeout as smartphones shatter mirrorless hopes


TOKYO (Reuters) – Panasonic Corp and Japan’s other mid-tier camera makers have a battle on their hands to win over a smartphone “selfie” generation to mirrorless cameras that held such promise when they were launched around five years ago.

Panasonic, like peers Fujifilm Holdings and Olympus Corp, has been losing money on its cameras since mobile phones that take high-quality photos ate into the compact camera business. This year, compact camera sales are likely to fall more than 40 percent to fewer than 59 million, according to industry researcher IDC.

Meanwhile, sales of mirrorless cameras – seen as a promising format between low-end compacts and high-end single-lens reflex (SLR) cameras – are sputtering as buyers put connectivity above picture quality.

A 40 percent drop in Panasonic’s overall camera sales in April-September left the imaging division vulnerable as the company’s mid-term plan to March 2016 demands unprofitable businesses turn themselves around or face the axe.

“If you look mid-to-long term, digital camera makers are slipping and the market is becoming an oligopoly,” said Credit Suisse imaging analyst Yu Yoshida.

Panasonic held 3.1 percent of the camera market in July-September, down from 3.8 percent a year earlier, according to IDC. Canon Inc, Nikon Corp and Sony Corp controlled over 60 percent between them.

“Only those who have a strong brand and are competitive on price will last – and only Canon, Nikon and Sony fulfil that criteria,” added Yoshida.

Canon and Nikon dominate the SLR camera market, while Sony could survive any shakeout thanks to its strength in making sensors for a number of camera manufacturers as well as collaboration with its smartphone division.

SPUTTERING MIRRORLESS

Panasonic, Fujifilm and Olympus are trying to fend off the smartphone threat by cutting compacts, targeting niche markets such as deep-sea diving, and launching the higher-margin mirrorless models.

The mirrorless format promised mid-tier makers an area of growth as the dominance of Canon and Nikon all but shut them out of SLRs, where Sony is a distant third. Neither Panasonic nor Fujifilm makes SLRs, and Olympus stopped developing them this year.

Mirrorless cameras such as Panasonic’s Lumix GM eliminate the internal mirrors that optical viewfinders depend on, so users compose images via electronic viewfinders or liquid crystal displays. This allows the camera to be smaller than an SLR, while offering better quality than compacts or smartphones due to larger sensors and interchangeable lenses.

“SLRs are heavy and noisy, whereas mirrorless are small and quiet. While some people say SLRs still have better image quality, mirrorless (cameras) have improved to the point where they’re equivalent, if not superior,” said Hiroshi Tanaka, director of Fujifilm’s optical division.

Critics grumble that LCD screens can never compete with the clarity of an optical viewfinder, and that picture-taking speeds are too slow for fast-action subjects such as sports.

Nevertheless, the mirrorless format has been a hit in Japan since Panasonic launched the first domestically produced model in 2008, the G1. They made up 36 percent of Japan’s interchangeable lens camera shipments in January-October, according to researcher CIPA.

But the format is yet to catch on in the United States and Europe, where shipments made up just 10.5 percent and 11.2 percent of all interchangeable camera shipments, respectively, and where consumers tend to equate image quality with size and heft.

Sales, which globally are less than a quarter of those of SLRs, fell by a fifth in the three weeks to December 14 in the United States, which included the busy ‘Black Friday’ shopping week, while SLR sales rose 1 percent, according to NPD, another industry researcher.

“I would focus on the detachable lens market proper, excluding mirrorless, and focus on connectivity,” said Ben Arnold, director of imaging analysis at NPD. “How do you bridge that gap between high photo-capture quality and high-quality camera devices and the cloud where every amateur photographer’s images live?”

SMARTPHONE COMPROMISE

Panasonic, Olympus and Fujifilm do not yet have a definitive answer.

Consumers don’t want to connect cameras to phones, analysts say; they want a single interface that can instantly upload photographs to social networking sites such as Facebook Inc and Twitter Inc.

Sony’s compromise is its two QX lenses released this quarter. These come with their own sensors and processors, and clip onto smartphones through which the user operates them wirelessly. They are pocket-sized and produce photographs of a quality rivaling that of a compact camera.

“There was a lot of internal disagreement over the product. It’s the kind of product you either love or hate,” said Shigeki Ishizuka, president of Sony’s digital imaging business.

But Sony appears to have connected with consumers as demand soon outstripped production. Some are even using the lenses in a way Sony didn’t intend: placed at a distance while they press the shutter on their smartphone to take self-portraits, or selfies.

“We had no idea how much the QX would sell initially when we put it out. We didn’t set any targets,” said Ishizuka.

It is little surprise Sony was the camera maker to break the mould as it is the only one to also have a profitable smartphone division.

“There are so many consumers that were hungry for Sony to do this,” said Chris Chute, IDC’s digital imaging research director. “They’ve (waited for Sony) to come out with something really innovative, almost like the Walkman (portable music player).”

(Editing by Christopher Cushing and Edmund Klamann)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/YeN3Lf3VjRg/story01.htm

Swatch fire strikes at "heart" of watch mechanism production


ZURICH (Reuters) – A fire has destroyed one workshop and damaged another at Swatch Group’s (UHR.VX) watch mechanism subsidiary, the Swiss firm that has a near monopoly on the supply of mechanisms to other watchmakers said.

Swatch Chief Executive Nick Hayek told Swiss radio on Sunday that the blaze had struck at the “heart of production” at ETA Manufacture Horlogere and the impact on output would be examined more closely on Monday. “Everything is devastated,” Hayek said.

Hayek said the Swiss watchmaker, known for its colorful plastic timepieces and high-end Omega brand, had other factories it could fall back on.

ETA is the world’s biggest supplier of watch “movements”, the internal mechanisms that drive the moving parts of a watch, and Swatch counts high-profile luxury groups Richemont (CFR.VX), LVMH (LVMH.PA) and Hermes (HRMS.PA) among its customers.

Swatch was given the go-ahead in October to gradually reduce component deliveries to rivals, a move which could cause supply shortages for some players in the industry.

Flames ravaged the galvanic workshop of ETA in Grenchen, Switzerland, where watch parts are protected against rust, while another workshop had been damaged by smoke, Swatch said.

Local police said the damage from the fire could cost several hundred thousands Swiss francs.

Swatch said no-one was harmed in the fire and the cause was unknown.

(Reporting by Alice Baghdjian; Editing by David Goodman and Erica Billingham)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ieYGg1RHZpc/story01.htm

Saudi prince’s firm says to file complaint vs France’s EDF


KHOBAR, Saudi Arabia (Reuters) – Soroof International, a conglomerate controlled by a Saudi Arabian prince, said on Sunday that it would file a complaint before Saudi courts against France’s state-run utility EDF (EDF.PA).

The Saudi company cited the “faulty execution” by EDF of an agreement between the two sides to form a joint venture in Saudi Arabia that would develop electricity projects.

In a statement, Soroof said the complaint would be filed in coming days. It did not give details of the dispute, saying it had to respect the confidentiality of an arbitration procedure already launched at its request at the International Chamber of Commerce.

The Saudi company is headed by Prince Bander Bin Abdullah Al-Saud. He is directly related to King Abdullah through his mother, though his branch of the sprawling royal family is not at the center of political power.

EDF was unable to comment immediately on the issue on Sunday, a working day in the Gulf but the weekend in Europe.

French President Francois Hollande and other senior French officials were expected to arrive in Saudi Arabia later on Sunday to discuss diplomatic issues and business ties with Saudi leaders.

Saudi Arabia’s atomic energy plans are expected to provide multi-billion dollar contracts to foreign nuclear reactor vendors, possibly including EDF and French rival Areva.

(Reporting by Reem Shamseddine; Writing by Andrew Torchia; Editing by Erica Billingham)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/x5Cd8TD-loA/story01.htm

Henkel CEO dampens prospects for acquisitions: paper


BERLIN (Reuters) – German consumer goods group Henkel (HNKG_p.DE) dampened expectations it was looking at acquisitions soon, saying the market currently offers few takeover opportunities, Handelsblatt reported, citing Chief Executive Kasper Rorsted.

Rorsted’s comments contrast with remarks made by Henkel’s supervisory board chairwoman, Simone Bagel-Trah, who was quoted three weeks ago as saying that the time had come to focus on takeovers again.

“With the low interest rates, hardly anyone wants to swap businesses for money,” the Handelsblatt business daily quoted Rorsted as saying in an interview to be published on Monday.

“Opportunities will yet emerge over the coming three years,” the CEO said.

Last month, Rorsted himself said the group was looking at takeover opportunities if they were a good strategic fit and that it had a 4 billion euro ($5.5 billion) war chest for purchases.

In its last major acquisition, Henkel bought National Starch in 2008 for 3.7 billion euros to expand its adhesives division. ($1 = 0.7258 euros)

(Reporting by Andreas Cremer; Editing by Matthew Tostevin)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/BtAihy78gf0/story01.htm

Analysis: After Web stocks boom, investors wary but rout unlikely


SAN FRANCISCO/NEW YORK (Reuters) – For investors in internet stocks, it was a banner year: shares of many companies doubled as revenue climbed and on forecasts for rip-roaring growth in earnings. But the gains haven’t been anxiety-free, thanks to uncomfortable memories of the 1999 Internet bubble and subsequent bust.

Market strategists and tech experts say the comparison is overblown. While there is the potential for a decline in some Web company stock prices that are out of line with their earnings outlook, they say there is little chance of a bloody retreat.

Most importantly, this year’s stars, such as Facebook and Netflix, actually make money. Many of the web companies that were emblems of the previous era had little prospect of ever being profitable and some hardly had any revenue – basing their boasting on non-financial metrics such as numbers of eyeballs, or page clicks.

The Internet and the ways people use and access it have been transformed in the past 14 years. In 1999, it was mainly through slow dial-up services using a desktop computer, now there is faster broadband and mobile access from phones and tablets. Web-based advertising has grown into a mature, viable business, and computing speeds support video and sophisticated gaming.

The market is much more rational than it was in 1999, argues Jeff Dachis, who co-founded and was chief executive of Razorfish, an online ad firm that went public in 1999, and is now part of France’s Publicis Groupe.

“What you had then was 100 times the volume of stock with little to none of the credibility or weight in the marketplace that a Facebook or a Twitter has today,” said Dachis. “Nobody denies now the growth of online advertising or digital marketing.”

WARNING SIGNS

Facebook, Google and Netflix are among the internet companies set to finish 2013 at or near record highs. Less-weighty Web companies such as Yelp and Pandora saw their shares triple.

That is not to say there aren’t warning signs. The 160-percent gain in shares of Twitter since its November initial public offering raises awkward questions about the levels of speculative froth given the company has not yet earned a cent.

Also, consumer names like Snapchat and Pinterest are raising eyebrows by garnering millions of dollars in financing at multi-billion dollar valuations – despite being decidedly in the red.

According to CB Insights, there are 26 U.S. tech companies that have raised financing at valuations of $1 billion or more and that could go public in 2014, including Uber and Square.

Hedge fund manager David Einhorn, who has often taken short positions on richly valued stocks, in October asked in a letter to investors whether history was being repeated. “When … conventional valuation methods no longer apply for many stocks, we can’t help but feel a sense of déjà vu,” he said.

Still, internet companies are trading at much cheaper valuations than their counterparts in the late 1990s. The stratospheric multiples that defined companies such as Webvan (388 times revenue in 1999) and VerticalNet (268 times sales) are unheard of today.

Twitter, which trades at 73 times its past year’s revenue, is among the most richly valued Web stocks by that measure. Google, Netflix and Salesforce.com all trade at below 10 times their trailing twelve-months’ revenue.

“The end markets – internet advertising, online retail, online travel – those markets are just dramatically more developed today than they were in ‘99, 2000,” said Mark Mahaney, who began his career covering internet stocks in the 1990s at Morgan Stanley, working with star internet analyst Mary Meeker.

TOIL AND TROUBLE

The bursting of the dotcom bubble ranks among investment history’s greatest debacles. From its peak of 5123.52 on March 10, 2000, the Nasdaq Composite Index lost 78 percent of its value in just over two-and-a-half years.

Nearly 14 years later, the Nasdaq has still not regained those lofty levels even as most other major U.S. averages have surpassed previous highs, another indication that the market is far from where it was back then.

The turn of the decade came replete with stories about extravagant parties, unabashed flogging of dubious names by investment professionals and startup CEOs, and tales of cash outlays that boggle the mind today, including a Super Bowl 2000 that saw nearly 20 dotcom companies spending about $1.1 million apiece on advertising spots – just before many went under.

At the end of 1999, 8 out of 10 of the most highly valued stocks were tech companies, led by Yahoo trading at almost 577 times projected 2000 earnings, according to SP Dow Jones Indices. Fellow dotcom-era corporations America Online and Cisco Systems Inc – the latter prized because it dominated the market for networking equipment that enabled internet connections – clocked in at 223 times and 102 times, respectively.

Fast-forward to 2013, and just four dotcoms rank among the year’s 20 biggest gainers on the SP 500, led by Netflix’s quadrupling. Yahoo is at No. 10 after having doubled. Facebook has more than doubled.

Other big gainers include Best Buy and Micron Technology.

“The consensus view in the market is that things are bubbly but since the valuations are not as expensive as 1999, there is room to run,” said Mike O’Rourke, chief market strategist at Jones Trading.

But he said such thinking may be flawed and cautioned that using one of the most expensive periods in stock market history as a comparison is extremely risky, with a limited reward. “When bubbles pop a large portion of the gains are erased very quickly,” O’Rourke said.

IPOS MUCH FEWER

The lack of newly listed internet stocks provides some relief for those concerned about a possible bubble.

There were only five U.S. internet IPOs in 2013, including Twitter, compared with 86 in 1999, according to Thomson Reuters data. In fact, the number of IPOs in 1999 is greater than the combined number of public offerings every year since then.

Many companies may simply be waiting longer to take the plunge, debuting at a far more advanced stage of development than the wave of 1999 dotcoms. Facebook, an extreme example, went public with a valuation of more than $100 billion.

“Anything and everything – regardless of how asinine the business model was – was going public and getting ridiculous valuations” back in 1999, said Ryan Jacob, chief executive of the Jacob Funds.

Take eToys, the online toy store whose shares quadrupled on their debut in 1999. It spent tens of millions of dollars on pricey TV ads only to file for bankruptcy in early 2001.

With low interest rates and signs that the U.S. economy is strengthening, internet valuations could go higher in 2014 – though nowhere close to 1999 levels, Jacob says.

He points to LinkedIn’s 14 percent decline since more than doubling in the first nine months of the year, as sign that investors aren’t losing their heads. “You did have a part of the market that got ahead of themselves, and then took a breather” in 2013, Jacob said.

(Editing by Edwin Chan, David Gaffen and Tim Dobbyn)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/A9Bj7KWWHFE/story01.htm

Japan auto makers to boost domestic output before sales tax hike: media


TOKYO (Reuters) – Japanese automakers will ramp up production early next year because they expect a big increase in car purchases before a sales tax hike in April, media reported on Sunday.

Toyota Motor Corp (7203.T) will increase domestic output in January-March by about 10 percent compared with this month, the Nikkei business daily reported.

Toyota has already told its parts suppliers that daily output in January-March will total around 14,000 vehicles, the Nikkei said without citing the source of its information.

For December the automaker had planned to produce about 12,500 cars per day, the newspaper said.

In January, Honda Motor Co (7267.T) will operate two of its domestic plants two days longer than originally scheduled to meet demand for one of its smaller models, the Nikkei said.

Mitsubishi Motors Corp (7211.T) and Suzuki Motor Corp (7269.T) will also keep domestic production lines running three days longer than originally planned in January to meet demand for newly introduced sub-compact models.

Japan will raise its 5 percent sales tax to 8 percent in April to help pay for rising healthcare costs. The tax increase has prompted consumers to bring forward purchases of homes, cars, other durable goods and luxury items before they become more expensive.

(Reporting by Stanley White; Editing by Paul Tait)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/JS0EiOl9ERw/story01.htm