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Berry Plastics to buy Blackstone-owned Avintiv for $2.45 billion

Plastic packaging products maker Berry Plastics Group Inc (BERY.N) said it would buy Avintiv Inc, which makes materials used in products ranging from diapers to disinfectant wipes, for about $2.45 billion in cash from Blackstone Group LP (BX.N).

Berry Plastics, which makes products such as duct tapes, spray adhesives and food wrap films, said it would buy Avintiv on a debt-free, cash-free basis.

Berry Plastics’ shares rose nearly 2 percent to $34 in trading before the bell on Friday.

Avintiv, which changed its name from PGI Specialty Materials Inc last month, was bought by Blackstone Group in 2010 for $326.2 million in cash from private equity firm MatlinPatterson in 2010.

The company, as PGI, filed for an initial public offering in February. At that time the company said its net loss had nearly tripled to about $97 million in the nine months ended Sept. 27, while sales rose 2.2 percent to $1.5 billion.

Avintiv’s specialty materials are also used in feminine hygiene products, face masks and surgical gowns and its customers include Procter Gamble Co (PG.N), Kimberly-Clark Corp (KMB.N) and Cardinal Health Inc (CAH.N).

Avintiv has 23 locations in 14 countries and supplies to many of the consumer and industrial product manufacturers that Berry Plastics supplies to, Berry Plastics said.

Berry Plastics said it expects the deal to add to its earnings and free cash flow and that it had secured debt financing to fund the deal.

The company expects the deal to close by the end of this year.

Berry Plastics’ financial advisers are Credit Suisse and Barclays, while Bryan Cave is its legal adviser. Citi and BofA Merrill Lynch were Avintiv and Blackstone’s financial advisers and Simpson Thatcher Bartlett LLP is their legal adviser.

(Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Savio D’Souza)

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Barclays cuts 150 investment bank jobs under cost-cutting plan

LONDON Barclays Plc (BARC.L) is cutting about 150 staff from its investment bank as part of the British bank’s attempt to cut costs and improve profitability in the business, a person familiar with the matter said.

Affected staff, which included managing directors, were told this week, the source said on Friday.

Barclays last year said it would cut about 7,000 investment banking staff by the end of 2016. It cut about 2,500 in 2014 and expects to cut a similar amount this year and next, and this week’s redundancies are part of that.

It was not clear in what areas most of the cuts would be.

New chairman John McFarlane this week said the investment bank remained a core part of the bank and he was pleased with an improvement in its return on equity this year, but he said it would continue to scale back in areas where it is not strong.

Analysts expect more cuts in trading activities to allow capital to be diverted to higher-returning advisory and underwriting activities.

(Reporting by Steve Slater; editing by Jason Neely)

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Exclusive: China watchdog extends pursuit of short sellers to HK, Singapore

HONG KONG/SHANGHAI China is pressing foreign and Chinese-owned brokerages in Hong Kong and Singapore to hand over stock trading records, sources said, extending its pursuit of “malicious” short sellers of Chinese stocks to overseas jurisdictions.

China’s main share markets, both among the world’s five biggest, have slumped around 30 percent since mid-June and authorities have been flailing in efforts to prevent a further sell-off that could spill over into the wider economy.

The markets regulator, the China Securities Regulatory Commission (CSRC), wants the trading records to try to identify those with net short positions who would profit in case of further falls in China-listed shares, three sources at Chinese brokerages and two at foreign financial institutions said.

At its regular press conference on Friday, the CSRC said it had not directly contacted top executives at Hong Kong brokerages. It also noted that it was normal, in the course of an investigation, to reach out to “relevant parties”.

It denied other unnamed media reports that regulators had required Chinese brokerage heads to attend meetings in Beijing or Guangzhou.

The regulator has declared war on “malicious short sellers” or those it deems are trying to profit from a fall in share prices, rather than adopt a short position as a financial hedge.

“The implied threat by the CSRC is that anything that is not a hedge is a no-no,” said a source in Hong Kong with knowledge of the requests. This person added that foreign brokers were likely to comply as best they could with the requests.

“When the CSRC makes an offer, you cannot refuse it.”

The sources all have direct knowledge of the matter, but declined to be identified because of the sensitivity of the matter.


It is common for regulators to request information from their overseas counterparts that may aid investigations at home. But it is highly unusual for the CSRC to seek information from offshore and international brokers directly, one source in Hong Kong said.

The CSRC did not answer calls requesting comment and both the Monetary Authority of Singapore (MAS) and Hong Kong’s Securities and Futures Commission (SFC) declined to comment.

The sources said the CSRC was focusing on trading positions taken through both the Shanghai-Hong Kong Stock Connect trading link and via offshore-listed products that track mainland stocks, including index futures and exchange traded funds (ETFs).

“There have been a number of questions over the past two weeks. They are going after any type of trading activity that has a reference to China,” said an executive at an international brokerage based in Hong Kong.

One source at a mainland brokerage in Hong Kong said they had received enquiries over the phone directly from the CSRC seeking evidence of “naked shorting” – when an investor tries to profit from falling prices of a given stock without actually owning the shares necessary to complete the transaction, a practice that is restricted in most markets.

“We immediately said we have no clients doing ‘naked shorting,’ but they didn’t believe us. They asked for our records on trades through the Shanghai-Hong Kong Stock Connect and records of short-selling index futures via QFII and RQFII.”

The Qualified Foreign Institutional Investor (QFII) program and its yuan-denominated variant (RQFII), allow foreign institutions to buy Chinese shares and trade index futures with some restrictions, including how much can be invested.

Sources at mainland brokerages with Hong Kong operations said their firms had already turned over the records.


The CSRC’s campaign is the latest measure to try to stem the market rout. The ruling Communist Party has enlisted the central bank, the state margin-lender, commercial banks, brokers, fund managers, insurers and pension funds to buy up shares, or help fund their purchase, to keep the Shanghai and Shenzhen markets afloat.

The CSRC has no regulatory power in Hong Kong or other jurisdictions, such as Singapore and the United States, where investment products tracking mainland shares are listed, and can be legally shorted.

But market sources worry that Chinese regulators are intent on suppressing any attempt to profit from China’s sliding markets, including trying to suppress even legal investment behavior by referring to it as “malicious” or otherwise irregular.

At the same time, the government is trying to rally retail investors who dominate trading in China to put money back into the market, a task made more difficult if investors offshore are making bets on falling prices.

Foreign investors are technically allowed to take a short position in a select group of A-shares – yuan-denominated shares listed in China – through the Shanghai-Hong Kong connect scheme, a trading link set up last year to open up Shanghai’s market to overseas investors. But exchange data shows there has been no investor take-up of the shorting opportunity.

Investors can take bets that prices in mainland shares will fall through offshore listed products, such as the popular iShares FTSE A50, the Singapore-listed FTSE China A50 index futures, and over-the-counter derivatives.

Trading in Singapore FTSE A50 futures surged 79 percent to a record in April-June.

($1=6.21 yuan)

(Additional reporting by the Hong Kong, Shanghai and Singapore newsrooms; Editing by Neil Fullick)

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Commodities, China stocks lick wounds after brutal July

NEW YORK The dollar tumbled and benchmark U.S. Treasury yields touched multi-week lows on Friday as an unexpectedly weak government reading of American labor costs dulled prospects for higher U.S. interest rates.

Wall Street stock prices rose, also taking a cue from the Employment Cost Index data showing the smallest quarterly increase in 33 years. Oil prices declined for a second day on growing worries about global oversupply.

The dollar index declined 0.7 percent, with the basket of major currencies heavily weighed down by a 1 percent jump in the euro to $1.1036. The index, which has been rising steadily, earlier touched a near one-week high.

Treasuries prices rallied, with yields on benchmark 10-year Treasury notes falling to a three-week low of 2.2550 percent with the price rising by 17/32 of a point.

The 30-year Treasury bond yield fell to a fresh two-month low of 2.9040 percent from a yield of 2.9390 percent prior to the data. The price was last up 29/32 of a point.

The Employment Cost Index, which is the broadest measure of labor costs, rose just 0.2 percent last quarter, the U.S. Labor Department reported. Economists had forecast a 0.6 percent rise in the report, which follows a GDP report widely seen as allowing the Federal Reserve to hike rates beginning as early as September.

“The magnitude of the miss was definitely a bit of a surprise, especially as people were really gearing up for a September (rate) hike. This definitely puts a lower probability on that,” said Stanley Sun, interest rate strategist at Nomura Securities International in New York.

Wall Street’s Dow Jones industrial average rose 3.14 points, or 0.02 percent, to 17,749.12, the SP 500 gained 3.44 points, or 0.16 percent, to 2,112.07 and the Nasdaq Composite added 22.40 points, or 0.44 percent, to 5,151.18.

European shares fell slightly with commodity stocks leading the market lower, but remained on track for a 4-percent monthly rise with worries receding about Greece’s membership of the euro area.

China’s CSI300 index ended flat after a late dip to leave it down 14.7 percent on the month. The Shanghai Composite Index lost 1 percent, extending its July losses to 13.4 percent despite recent support measures by the country’s authorities.

China’s securities regulator said on Friday it was investigating the impact of automated trading on the market and had clamped down on 24 trading accounts found to have abnormal bids for shares or bid cancellations.

Crude oil also slipped for a second session as concern over global oversupply intensified after the head of the OPEC oil exporters’ cartel indicated there would be no cutback in production.

Brent crude oil was down 50 cents at $52.81 a barrel. U.S. light crude CLc1 was down 75 cents at $47.81 a barrel

(Additional Reporting By Daniel Bases in New York; Editing by Nick Zieminski)

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Uber to invest $1 billion in India to expand services

Uber Technologies Inc [UBER.UL] will invest $1 billion in India in the next nine months, as the online taxi-hailing company looks to expand its services in its biggest market outside the United States.

Uber said it would use the additional investment to improve operations, expand beyond the 18 Indian cities where it now operates, and develop new products and payment solutions.

“We are extremely bullish on the Indian market and see tremendous potential here,” Amit Jain, president of Uber India said in a statement on Friday.

“Uber has grown exponentially in India.”

Uber said India and China are its priority markets. It had said last month that it would invest more than $1 billion in China this year as it looks to rev up growth in the world’s second largest economy.

Uber operates in 57 countries, with an estimated value of more than $40 billion. But it has tangled with transport authorities across the globe, along with attorneys seeking to deem Uber drivers as employees entitled to benefits.

In India, Uber has been at odds with authorities in the capital, New Delhi, where the government banned its services after an Uber driver was accused of rape in December. But a court revoked the ban this month.

After the incident, Uber tightened its driver screening and in-app safety features. It has also modified its global business model to accept cash payment in some Indian cities.

The company on Friday said it aimed to attain 1 million rides daily in India within six to nine months. An industry source said Uber now records 200,000 trips daily.

(Reporting by Shivam Srivastava and Rama Venkat Raman in Bengaluru, Aditya Kalra in New Delhi; Editing by Anupama Dwivedi and Clarence Fernandez)

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Honda profit up 20 percent as robust U.S. sales, weak yen offset quality costs

TOKYO Honda Motor Co (7267.T) said on Friday its quarterly net profit jumped 20 percent, beating estimates, as strong sales in the United States and a weak yen helped it absorb the impact of higher quality-related costs.

April-June net profit at Japan’s third-biggest automaker rose to 186.04 billion yen ($1.50 billion), from 155.60 billion yen a year earlier. Honda reported the first-quarter results under international accounting standards for the first time.

That result beat an average estimate of 145.75 billion yen in a survey of 11 analysts polled by Thomson Reuters. Like other Japanese automakers, Honda has benefited from the cheaper yen, which boosts the value of repatriated earnings.

Honda is still soaking up hefty quality-related costs as it continues to recall cars equipped with air bag parts made by top supplier Takata Corp (7312.T). The Tokyo-based automaker has recalled tens of millions of cars globally since 2008 to replace potentially faulty inflators, including almost 5 million vehicles just two months ago.

Regulators have linked eight deaths – all on Honda’s cars – to Takata’s inflators, which can explode with too much force and send metal fragments inside the vehicle. Honda, which didn’t break out details of quality-related costs for the first quarter, restated its earnings for last year to reflect additional costs for the expanded recalls.

Honda said on Friday that its global car sales rose 4.9 percent to 1.147 million.

Sales in North America advanced 11 percent in the first quarter, driven by increased production of its popular HR-V compact sport utility vehicle (SUV) at its new plant in Mexico. The U.S. market – its biggest – has been buoyant, with a range of automakers reporting higher sales there.

Meanwhile, car sales in Asia jumped 19 percent, thanks partly to a strong performance in China helped by the refreshed Vezel SUV and other models. The gains in Asia and North America more than cancelled out a 27 percent drop in Japan and a 16 percent decline in Europe.

Honda its financial forecasts unchanged for the year ending March 2016, calling for a modest 3.1 percent rise in net profit to 525 billion yen.

(Editing by Kenneth Maxwell and Chang-Ran Kim)

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Fed’s ‘nearly balanced’ language no bar to September rate rise

WASHINGTON The U.S. Federal Reserve will not need to see balanced risks to the economy to proceed with an interest rate hike in September, according to former Fed officials and a review of central bank statements through recent turns in policy.

In its latest statement, released Wednesday, the Fed said it continued to judge the risks to the U.S. economy as “nearly balanced,” meaning it still sees a greater threat of a new downturn than it does of accelerating inflation and excessive growth.

Wall Street closely watched the language as a possible tip-off to a September rate hike. Removal of the word “nearly” would have been seen as a sign that liftoff was almost certain, ending more than six years of near zero rates.

But a review of Fed statements over the past 10 years indicates the risk language used by the Fed is a poor predictor of “regime change.” (Graphic:

A major change in Fed policy in June 2004 was with language about risks that is similar to that of the current statement. Prior to its decision to begin raising rates at that meeting, the Fed had for several months judged the risks to the economy as “roughly equal.” It kept that characterization at the June meeting, and for nearly a year after that.

Today’s situation may be similar. Potential risks from overseas are unlikely to disappear between now and the Fed’s next meeting in September, for example. But that will not necessarily hold the Fed back.

“Risks seem a little tilted to the downside. China, oil, Europe,” said Cornerstone Macro economist Roberto Perli, a former Fed board staffer. But the current risk language “doesn’t represent a major constraint… Policy is so accommodative, to say risks are ‘nearly balanced’ could justify a 25 basis point increase.”

The Fed will have nearly a two-month dose of data to pore over at its Sept. 16-17 meeting to either confirm the economy’s strength or decide on a continued pause. That includes Thursday’s report showing that U.S. growth rebounded over the last three months to a 2.3 percent annualized rate, a positive surprise.

Two employment reports, in August and September, could all but cement a rate hike if both show job growth holding steady at this year’s average pace of around 208,000 per month, or could complicate the Fed’s plans if they dip appreciably below that.


“To be honest, the risks are never perfectly balanced,” said David Stockton, the Fed’s former research director and now a fellow at the Peterson Institute for International Economics.

But “unless we get some seriously disappointing news on the labor market it looks like a Fed that is ready to move and more likely than not in September.”

The Fed’s annual conference in Jackson Hole will offer the central bank a chance to fine-tune, if needed, its message on the economy. Fed chair Janet Yellen, though, has said she does not plan to attend the Aug. 27-29 meeting and has no major policy speeches on the calendar at this point.

Fed officials would like to see the country’s steady job growth lead to higher wages and rising prices. Yet generating more inflation may prove difficult given the drag on global demand from the downturn in China and the collapse in oil and other commodity prices. All that will make it harder for the Fed to conclude that risks are in balance.

But that does not preclude a policy move. In the past, changes in economic conditions have even caused the Fed to see risks tilted in one direction at one meeting, but then move in the other at the next.

With the housing and financial crisis in its early stages in 2007, the Fed at an August meeting that year left rates intact and said that rising inflation – not the looming economic meltdown – remained its “predominant policy concern.”

A month later it cut rates by a half a percentage point, and kept doing so until it reached bottom. Rates have stayed near zero since December 2008.

More than five years later, in July 2013, the Fed for the first time since the crisis noted that the downside risks to the economy were beginning to recede.

In December 2013 the central bank upgraded the outlook with the conclusion that the Fed saw risks “as having become more nearly balanced.” In March 2014, it switched to the “nearly balanced” phrase that remains today.

That phrasing may not have to change until inflation becomes a real concern. But that does not mean the Fed will delay the start of a rate increase cycle that is expected to proceed slowly over the next few years, said Jon Faust, a former adviser to Yellen and an economics professor at Johns Hopkins University.

“It is going to be hard to call the risks balanced until we are comfortably away from zero (interest rate) and closer to normal.”

(Reporting by Howard Schneider; Editing by Tomasz Janowski)

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Pacific trade negotiators chase elusive final deal in tough talks

LAHAINA, Hawaii Pacific Rim trade ministers neared the final spurt of negotiations on an ambitious free trade pact on Thursday, but differences over farm exports and monopoly periods for next-generation drugs kept them short of an elusive final deal.

Ministers from the 12 countries negotiating the Trans-Pacific Partnership (TPP), which would cut trade barriers and set common standards for 40 percent of the world economy, are meeting in Hawaii to try to hammer out a deal.

But major issues are still unresolved, including dairy exports and exclusivity periods for biologic drugs. The United States is pushing for 12 years but Australia and other countries worried about the impact on medicine prices want five.

“They are few but very contested,” Mexican Trade Minister Ildefonso Guajardo told Reuters of the outstanding issues.

“I think that the negotiators will have to work through the night,” Japanese Economy Minister Akira Amari said.

A final news conference is scheduled for 1:30 p.m. on Friday (7.30 p.m ET). Ministers appeared relaxed as they were garlanded with leis for an official photo.

“It’s tough,” said one official involved in the talks, who declined to be identified because of the sensitivity of the discussions, which seek to meld one-on-one negotiations over market access with a one-size-fits-all approach to rules.

“There are issues on dairy, on intellectual property, but it’s not always clear where things stand. I know about my issues but I don’t always know what’s happening with other countries.”

About 650 officials from 12 nations are taking part in the negotiations on the Hawaiian island of Maui, with numerous lobby groups and stakeholders also attending.

Negotiators have stressed they are doing their utmost to close the deal this week but also warned that not all industries will get what they want, amid a flurry of last-minute appeals.


U.S. lawmakers, including from tobacco-growing states such as North Carolina, renewed warnings against excluding tobacco from rules allowing foreign companies to sue a host government.

An official briefed on the talks said there was discussion of a U.S.-initiated exception in Maui. It would be narrower than the broad exclusion for health and environmental policy sought by Australia, which is being sued by Marlboro maker Philip Morris (PM.N) over tobacco plain packaging laws.

Australian Trade Minister Andrew Robb said on Tuesday that

countries were “well down the track” on securing protection from litigation over health and environment policy. He said on Thursday investment rules and sugar remained open.

Australia’s bid to export more sugar to the United States has the backing of U.S. confectioners and beverage companies.

“The United States needs to grant Australia commercially meaningful access,” Sweetener Users Association chairman Perry Cerminara, who also handles sugar for chocolate maker The Hershey Co (HSY.N), wrote in a letter to U.S. Trade Representative Michael Froman.

U.S. canegrowers oppose more imports, and Mexico is keen to safeguard its preferential access to the U.S. sugar market.

“Of course we all have to make an effort, but the effort has to be in line with the principle … that the very, very, very sensitive products are subject to a less aggressive schedule of market opening,” Guajardo said when asked about sugar.

Dairy is another tricky issue, with New Zealand, Australia and the United States frustrated with Canada, and New Zealand and Australia also looking for more access to U.S. and Japanese markets. Robb said dairy was moving in “very tiny steps.”

Australian Dairy Industry Council chairman Noel Campbell said discussions had gone backwards in some cases and he had hoped for more progress.

Canada hit back at complaints that it is holding up a deal. “To say that one particular issue is a sticking point to a potential deal just isn’t based in reality.  A number of very serious issues remain for countries to negotiate,” said Rick Roth, spokesman for Trade Minister Ed Fast.

(Reporting by Krista Hughes; Additional reporting by Christine Prentice in New York; Editing by Ken Wills and Robert Birsel)

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Uber to invest $1 billion in India in next nine months

Uber Technologies Inc [UBER.UL] will invest $1 billion in India in the next nine months as the online ride hailing company is bullish on the Indian market.

Uber said it would use the additional investment to improve operations, expand into newer cities, and develop new products and payment solutions.

“Uber has grown exponentially in India, a global priority market for us, which has also quickly become the largest market geographically for Uber outside the U.S.,” Amit Jain, President of Uber India said in a statement.

The news of Uber’s investment in India was first reported by the Financial Times, which said it was the first time the company had set such a target for India.

Earlier this month, a Delhi court revoked a government ban on Uber, clearing the way for the company to operate in the capital city and reapply for a license.

India asked unregistered web-based taxi services to halt operations in December after a driver contracted with Uber was accused of rape. Uber applied for licenses in New Delhi but continued its operations while approvals were pending.

Uber said India and China are its priority markets. It had said last month that it would invest more than $1 billion in China this year as it looks to rev up growth in the world’s second largest economy.

One of the fastest-growing sharing-economy companies, Uber operates in 57 countries, with an estimated value of more than $40 billion. It has also tangled with transportation authorities across the globe, along with attorneys seeking to deem Uber drivers employees entitled to benefits.

(Reporting by Shivam Srivastava and Rama Venkat Raman in Bengaluru; Editing by Lisa Shumaker and Anupama Dwivedi)

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