News Archive


China Huarong says Goldman, Warburg, others to buy $2.4 billion stake


HONG KONG (Reuters) – China Huarong Asset Management Co Ltd, the country’s biggest bad-debt manager, said on Thursday regulators have approved a deal for it to sell a 20.98 percent stake to a consortium of eight investors for 14.5 billion yuan ($2.4 billion).

The deal for new shares in the company is to raise funds for Huarong ahead of a planned initial public offering, Reuters reported in July.

The consortium includes China Life Insurance (Group) Co (601628.SS), U.S. private equity firm Warburg Pincus [WP.UL], Goldman Sachs (GS.N), CITIC Securities International Co Ltd (600030.SS), Malaysian sovereign wealth fund Khazanah Nasional Bhd [KHAZA.UL], COFCO Corp [CNCOF.UL], Fosun International (0656.HK) and International Capital Corp.

The investors will improve corporate governance and operations at the company, said Huarong chairman Lai Xiaomin.

Huarong, which was founded in 1999, will also launch partnerships with the investors in areas like asset management, investment and financing, investment banking and financial leasing, the firm said.

State-owned bad-debt managers like Huarong are benefiting from a rise in non-performing loans in China as the economy slows. The company had assets worth $65.7 billion under management at end-2013 and its net profit for last year jumped 44 percent to 10.1 billion yuan.

The deal was signed at Huarong’s Beijing headquarters on Thursday.

(Reporting by Stephen Aldred; Editing by Denny Thomas and Matt Driskill)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/6heiwBMreS0/story01.htm

JAL to buy 32 Mitsubishi Regional Jets, order 15 Embraer aircraft

TOKYO
Thu Aug 28, 2014 4:22am EDT

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/xOdpqmG532Q/story01.htm

German joblessness up slightly in August, rate steady at 6.7 percent


BERLIN (Reuters) – German unemployment posted a small but unexpected increase in August but the jobless rate held steady at just 6.7 percent, the Labour Office said on Thursday, suggesting the job market in Europe’s largest economy remains intact.

The number of people out of work increased by 1,000 to 2.901 million, seasonally-adjusted data showed. The mid-range forecast in a Reuters poll had been for a drop of 5,000.

(Reporting by Michelle Martin)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/yfSeBmuLQa0/story01.htm

Union calls for pilot strike at Lufthansa unit ahead of talks


FRANKFURT/BERLIN (Reuters) – Pilots at Lufthansa’s (LHAG.DE) budget carrier said they would walk off the job on Friday if an agreement on an early retirement scheme is not reached, upping the pressure on the airline’s management for talks planned on Thursday.

Like their colleagues in other Lufthansa units, the pilots at low-cost carrier Germanwings want the management to maintain the scheme that allows them to retire early at 55 and still keep some of their pay until they reach the age at which state pension payments start. [ID:nL5N0QW4F3]

Lufthansa and pilots’ union Vereinigung Cockpit (VC), which represents around 5,400 pilots at the airline, are due to return to the negotiating table later on Thursday. If talks fail to lead to an agreement, pilots at Germanwings will go on strike for six hours from 0400 GMT on Friday, VC said.

About 700 of the Lufthansa group’s over 9,000 pilots work at Germanwings.

A spokeswoman for Lufthansa said the airline was looking into what impact Thursday’s announcement would have on the talks with the union.

Pilots at Lufthansa held a three-day nationwide strike in April which grounded almost all the company’s flights and wiped off 60 million euros ($79 million) from its first-half profits.

However the action was widely condemned across Germany as people criticized the demands of what many regard as a highly-paid group of workers. The pilot’s union had said this week any subsequent strike was likely to be smaller, and for only a few hours at a time. [ID:nL5N0MV3L8]

Germanwings, which operates European short-haul flights outside of Lufthansa’s Frankfurt and Munich hubs with a fleet of 52 aircraft, has 164 flights scheduled for the strike period and said it was working on a plan for the possible strike.

Shares in Lufthansa were down 1.1 percent at 0910 GMT, among the top fallers on Germany’s Dax index .GDAXI. Fears of a widespread strike had hurt Lufthansa shares earlier this week.

Bankhaus Metzler analyst Juergen Pieper said the six-hour walkout could mean a hit of around 2-3 million euros to operating profit, and that this strike, at least, would not endanger the company’s aim to make profit of around 1 billion euros this year.

RAIL STRIKE TOO?

News of the strike comes as travelers in Germany, many of whom are returning from summer holidays, also face a possible walkout by employees at rail operator Deutsche Bahn, though VC has said it was in touch with the rail union to avoid entirely shutting down domestic transportation routes.

During previous strikes, Lufthansa has rebooked passengers on domestic German flights onto trains instead.

The early retirement scheme was introduced more than 50 years ago because pilots could not work beyond the age of 55 and so were left with a gap of up to eight years before they could draw a pension. The scheme provided for them to receive 60 percent of their wages during the interim years.

Lufthansa wants to scrap the scheme and increase the early retirement age to 61 now that a European court has ruled pilots may work up until the age of 65. The airline initially canceled it with effect from the start of 2014 but now says it will remain in place until 2016 to allow time for negotiations.

Lufthansa has been overhauling its business to boost group operating profit to 2.3 billion euros ($3 billion) by 2015, up by 1.5 billion compared with 2011, and compete with budget airlines and Gulf carriers.

It says the negotiations on the early retirement scheme do not form part of the SCORE cost-cutting program.

Lufthansa is in the process of transferring much of its European short-haul business to Germanwings, except for flights to and from its hubs in Frankfurt and Munich.

However, it says costs at Germanwings, around 20 percent below that of Lufthansa, are still too high. The group is therefore planning to expand the use of its smaller Eurowings budget brand, where costs are 20 percent below Germanwings, and is considering setting up a new low-cost long-haul business.

($1 = 0.7567 euro)

(Additional reporting by Maria Sheahan and Hans Seidenstuecker; Editing by Pravin Char)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/NPdlUKfg9PU/story01.htm

Bitcoin shows staying power as online merchants chase digital sparkle


NEW YORK (Reuters) – Bitcoin is catching on at U.S. online merchants including Overstock.com and Expedia, as customers use a digital currency that just a few years ago was virtually unknown but is now showing some staying power.

    Though sales paid for in bitcoin so far at vendors interviewed for this article have been a fraction of one percent, they expect that as acceptance grows, the online currency will one day be as ubiquitous as the internet.

    “Bitcoin isn’t going anywhere; it’s here to stay,” said Michael Gulmann, vice president of global products at Expedia Inc. in Seattle, the largest online travel agent. “We want to be there from the beginning.” Expedia started accepting bitcoin payments for hotel bookings on July 11.

    Until recently a niche alternative currency touted by a fervent group of followers, bitcoin has evolved into a software-based payment online system. Bitcoins are stored in a wallet with a unique identification number and companies like Coinbase and Blockchain can hold the currency for the user.

    When buying an item from a merchant’s website, a customer simply clicks on the bitcoin option and a pop-in window appears where he can type in his wallet ID number.

Still, broad-based adoption of bitcoin is at least five years away because most consumers still prefer to use credit cards, analysts said.

    “Bitcoin is a new way of making payments, but it’s not solving a problem that’s broken,” said George Peabody, payments consultant at Glenbrook Partners in Menlo Park, California. “Retail payments aren’t broken.”

    There are also worries about bitcoin’s volatility: its price in U.S. dollars changes every day. On Wednesday, bitcoin was up 0.4 percent at $514.09.

    That risk is borne by the consumer and the bitcoin payment processor, such as Coinbase or Bitpay, not the retailer. The vendor doesn’t hold the bitcoin and is paid in U.S. dollars. As soon as a customer pays in bitcoin, the digital currency goes to the payment processor and the processor immediately pays the merchant, for a fee of less than 1 percent.

    “We don’t have to deal with the actual holding of the bitcoin: it’s the payment processor that takes the currency risk for us,” said Bernie Han, chief operating officer at Dish Network Corp, in Englewood, Colorado. “That’s what makes it appealing for us and I guess for other merchants as well.”

Dish, with about $14 billion in annual revenue, started accepting bitcoins in mid-August.

    Payment processors do some form of hedging though, said Gil Luria, a financial technology analyst at Wedbush Securities in Los Angeles. These entities would, for instance, sell bitcoins in the market to offset the ones they have processed and in their books, so they’re not left with much exposure, Luria said.

    The only risk for the retailer is if the counterparty, or payment processor, doesn’t fulfill its obligation. That risk is minimal, Luria said,

    “Coinbase and Bitpay are now well-funded start-ups and they have put a lot of resources behind security,” Luria said. “You can consider them as secure counterparties, as opposed to a year ago, when they were very small.”

    ADDING TO EARNINGS

    For some, it has become a beneficial situation for retailers, as they take advantage of lower transaction fees and sales from new customers. In at least one instance, bitcoin sales are expected to pad a company’s bottom line, adding 4 cents a share to 2014 earnings at Salt Lake City-based online merchant Overstock.com, said chief executive officer Patrick Byrne.

    Overstock was the first U.S. company with annual sales of at least $1 billion to accept bitcoins. Soon after, other companies including computer maker Dell Inc, Dish, and Newegg Inc, an online retailer of computer hardware and software, began to accept payments in bitcoin.

    To date, there are about 63,000 merchants globally accepting bitcoin, estimates from data provider CoinDesk show. It forecasts that figure to rise to 100,000 by year-end.

    Overstock’s Byrne estimated bitcoin sales of between $6 million and $8 million by the end of 2014, a fraction of the company’s total revenue.

More importantly for Byrne, the bulk of bitcoin sales comes from new customers, who would otherwise not shop at Overstock if the website didn’t offer bitcoin payments. Bitcoin owners tend to be high net-worth individuals and tech-savvy consumers.

    In a way, bitcoin has been used by retailers as a marketing strategy to bring some much-needed buzz to brands that may be struggling.

    “Every retailer knows that if they make some sort of announcement on bitcoin these days, they know it’s going be picked up more broadly by the media, than if they decided to accept Discover cards,” said Glenbrook’s Peabody.

    One disadvantage from a consumer’s point of view is that, in general, Bitcoin sales are final and irreversible. Still, there are some vendors that do return bitcoin payments for faulty products, said Adam White, director of business development and strategy at Coinbase, an online wallet company in San Francisco.

       

    SAVING ON TRANSACTION COSTS

    For retailers, the biggest benefit in accepting bitcoins is lower transaction costs. Coinbase and Bitpay, for instance, charge less than 1 percent per transaction. A credit card payment, in contrast, typically carries a 3 percent fee.

    Dell, which started accepting bitcoins in July, Dish, and Expedia all say their bitcoin revenue so far have exceeded their expectations. The three companies declined to give specific figures, but said bitcoin sales are modest relative to their overall revenues.

    “From the first day…we saw traffic at the site, it has been growing since,” said Paul Walsh, chief information officer at Dell Commerce Services in Texas. He cited a recent single purchase in bitcoins of a server worth more than $50,000.

    At online travel agent Cheapair.com in Calabasas, California, bitcoin sales totaled $1.5 million so far since it started accepting them in November 2013, said CEO Jeff Klee. In July alone, bitcoin sales at the company jumped 20 percent.

    Data from BlockChain.info, a bitcoin wallet which stores the digital currency for customers, showed that over the last three months, there were between 50,000 and 75,000 bitcoin transactions a day on average, worth between $45 million and $85 million. That compares with U.S. retail sales of about $15 billion a day during July, according to U.S. Census Bureau estimates.

    As of the end of June, bitcoin wallets, representing the number of users who have bitcoin accounts, have grown to 5.32 million, from 765,039 users a year ago, CoinDesk data show. It predicted that wallets would increase to 8 million by year-end.

    “I don’t see too much risk for us right now on bitcoin,” said Dish’s Han. “We are not expecting bitcoin to revolutionize the way our customers handle their accounts, but based on what we have seen so far, there is no reason for us to change.”

(Reporting by Gertrude Chavez-Dreyfuss and Michael Connor. Editing by David Gaffen and John Pickering)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/qP_P6uRU1fk/story01.htm

China supplier of Samsung, Lenovo denies using child workers


BEIJING/SEOUL (Reuters) – A China-based supplier for Samsung Electronics Co Ltd and Lenovo Group Ltd said on Thursday it had never hired child laborers, denying allegations by a U.S.-based activist group.

Samsung Electronics also said it had found no children or students working on the Samsung production line at the Huizhou-based factory of supplier HEG Technology, which was cited as violating China’s labor laws by the New York-based watchdog China Labor Watch.

A Lenovo spokeswoman said the company would look into the report.

In a statement, China Labor Watch said it had found more than 10 children working at the HEG factory during an investigation that took place in July and August. It also said the probe had found over 100 student workers who were not being paid overtime wages or a night shift subsidy.

The watchdog said it had shared the evidence with Samsung last week and that Samsung demanded the supplier pay some students’ wages. It did not say whether Samsung took any action on the matter of child labor or whether it had reached out to Lenovo with the information.

An employee surnamed Zeng at HEG Technology’s human resources department told Reuters the company had never hired children, and that it had facial recognition systems in place to ensure workers were not underage.

For Samsung products, HEG employs workers aged 18 and over while the minimum age for workers on Lenovo’s product lines is 16 years, she said. The company relies on an outsourcing company to hire students, she added.

In its statement, Samsung said it had proposed to China Labor Watch that they conduct a joint onsite investigation “for more precise verification” of the allegations.

Samsung also said it had informed the watchdog about the results of its own investigation, adding: “We find it regrettable that CLW issued the allegations today without any mention of our statement.”

This is the second time in as many months that China Labor Watch has said it found children working at Samsung’s Chinese suppliers. Samsung halted business with one supplier and later reinstated it, but with a 30 percent reduction in orders.

Other multinational companies, including Apple Inc, have been plagued by revelations of underage workers in their supply chains.

Child workers have previously been discovered at Foxconn, the supplier for some of the world’s biggest tech brands, including Apple. Foxconn is the trading name of Taiwan’s Hon Hai Precision Industry.

Two years ago, China Labor Watch accused HEG of using child labor. Samsung subsequently said it had not found any workers below the legal working age of 16 in its audit of the facility.

The problem goes beyond electronics, according to the U.S. Department of Labour’s Bureau of International Labor Affairs. Bricks, cotton, fireworks, textiles and toys also feature on its list of goods which it says it has reason to believe are produced by child labor in China.

(Reporting by Se Young Lee in SEOUL and Beijing Newsroom and Gerry Shih in BEIJING; Editing by Miral Fahmy)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/eD8tsOmkxaY/story01.htm

FBI, Secret Service investigate reports of cyber attacks on U.S. banks


(Reuters) – The U.S. Federal Bureau of Investigation said it is investigating media reports that several U.S. financial firms have been victims of recent cyber attacks.

“We are working with the United States Secret Service to determine the scope of recently reported cyber attacks against several American financial institutions,” FBI spokesman Joshua Campbell said in a statement late on Wednesday.

He did not name any firms or give further details. A Secret Service spokesman could not be reached for comment.

JPMorgan Chase Co was the victim of a recent cyber attack, according to two people familiar with the incident who asked not to be identified because they were not authorized to speak publicly about the matter. They declined to elaborate on the severity of the incident, saying JPMorgan was still conducting an investigation to determine what happened.

JPMorgan spokesman Brian Marchiony declined comment when asked about the attack.

“Companies of our size unfortunately experience cyber attacks nearly every day. We have multiple, layers of defense to counteract any threats and constantly monitor fraud levels,” he said in a statement.

Earlier on Wednesday, Bloomberg News reported that Russian hackers were believed to have carried out cyber attacks against JPMorgan Chase and another unnamed U.S. bank in mid-August, resulting in the loss of sensitive data.  Authorities are investigating whether the breaches were linked to recent attacks on major European banks, the Bloomberg report said.

The New York Times reported late on Wednesday that the networks of JPMorgan and at least four other U.S. banks had been infiltrated in a string of coordinated attacks this month, citing four people familiar with the investigation.

The attackers stole large quantities of data, including checking and savings account information, though their motivation is not yet clear, according to the Times report, which said several private security firms have been hired to conduct forensic reviews of infected networks.

Reuters was not able to independently verify the details in the Bloomberg and Times reports.

(Reporting by Jim Finkle in Boston and David Henry in New York. Additional reporting by Mark Hosenball in Washington; Editing by David Gregorio and Jeremy Laurence)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/7YV-1QEQqzo/story01.htm

Asia shares edge up on steady Wall Street, euro clings to gains


TOKYO (Reuters) – Asian stocks crept up on Thursday following another steady performance by Wall Street shares which hovered near record highs, while the euro clung to modest gains after rebounding from 13-month lows.

The Australian dollar rose to a three-week high versus the U.S. dollar after second quarter business investment data beat forecasts.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.

Tokyo’s Nikkei shed 0.5 percent, weighed by overnight gains in the yen.

The SP 500 crept up to another record closing high overnight, with U.S. stocks supported by brighter prospects for the economy.

The euro received some reprieve after three sessions of losses as feverish speculation of an imminent round of easing by the European Central Bank was tempered for now.

Sources told Reuters on Wednesday that the ECB is unlikely to take new policy action next week unless inflation figures on Friday show the euro zone sinking significantly towards deflation.

The euro gained 0.2 percent to $1.3216 , creeping up from a one-year low of $1.3152 plumbed on Wednesday.

The markets looked to the German inflation data due later in the session, which foreshadow the closely watched euro zone inflation figures due Friday, to see whether the euro can extend its rebound or continue probing fresh lows.

“If the German CPI underlines strengthening deflation, it will fuel caution towards the euro zone consumer data due tomorrow and add selling pressure on the euro,” said Junichi Ishikawa, a market strategist at IG Securities in Tokyo.

Euro zone inflation figures on Friday are expected to show the annual rate dipping to 0.3 percent in August from 0.4 percent.

The dollar slipped 0.1 percent to 103.785 yen , having pulled back from a seven-month peak of 104.49 struck at the start of the week.

The greenback has so far failed to build a steady foothold above 104 yen, partly due to persistently low U.S. yields.

U.S. Treasuries rallied overnight, driving yields lower, as European government bond yields continued to probe record lows and month-end buying helped send 30-year Treasury yields to their lowest levels in over a year. [US/]

The Australian dollar gained in response to stronger-than-expected second quarter business investment which leant hope the antipodean country’s economy could weather an ongoing pullback in the once-booming mining sector.

The Aussie rose about a quarter of a cent to an intraday peak of $0.9373, its highest in three weeks.

“There are two parts of the growth transition, a pick-up in residential construction, which has been confirmed … and a pick-up in the non-mining capex side of things, and that’s where the big question mark was. These numbers today suggest prospects in that area are looking quite encouraging,” said Michael Blyth, chief economist at the Commonwealth Bank of Australia.

In commodities, U.S. crude oil dipped after choppy trading overnight following a report that showed declining U.S. gasoline demand. [O/R]

U.S. crude dipped 2 cents to $93.86 a barrel with the market looking to U.S. economic data due later in the session to gauge the outlook for demand in the world’s largest oil consumer.

Spot gold edged up as a lower dollar and lingering geopolitical tensions helped offset selling pressure from bullish U.S. equities. [GOL/]

Spot gold gained 0.3 percent to $1,286.01 an ounce.

(Additional reporting by Wayne Cole in Sydney; Editing by Eric Meijer)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/rB9D-jLXFng/story01.htm

Qantas converts Airbus A320 orders to upgraded A320neo variant


SINGAPORE (Reuters) – Qantas Airways said on Thursday that it has converted orders for 21 Airbus A320 aircraft into the re-engined A320neo variant and deferred the delivery by four years.

This means Australia’s flag carrier now has orders for 99 Airbus A320neos, and the airline said the move is part of the latest restructuring of its order book.

The decision will help cut capital expenditure at Qantas. The carrier reported a record annual loss of A$2.8 billion ($2.6 billion) on Thursday, partly due to A$2.6 billion that it wrote off the value of its fleet following a company restructuring.

The airline also said on Thursday that it has delayed the first of its options and purchase rights for 50 Boeing 787 planes by a year to 2017.

Earlier this year, Qantas deferred the delivery of its final eight Airbus A380 jumbo jets as it reviewed its potential future requirements. Three 787s that were part of a 14-aircraft order for its low-cost subsidiary Jetstar were also deferred.

“Of the A$2 billion permanent cost reductions we are seeking over three years, A$600 million will come from fleet and network initiatives,” Qantas Chief Executive Alan Joyce said in a statement on Thursday.

The airline is accelerating the retirement of some older Boeing 747-400s and Boeing 767-300s to reduce costs.

It is also using more Airbus A330s on routes to Asia and refurbishing the Boeing 737-800s it uses on domestic services, giving passengers a newer product as the airline copes with intense competition in the Australian market.

“We are using our fleet more efficiently to help deliver the goals of our accelerated Qantas Transformation program,” said Joyce, referring to a business plan that the management hopes will make the company profitable on a sustainable basis.

(Reporting by Siva Govindasamy; Editing by Ryan Woo)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/OXNW-8uQDq4/story01.htm