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Microsoft’s Gates to start multi-billion-dollar clean tech initiative

NEW YORK/PARIS Microsoft co-founder Bill Gates will launch a multi-billion-dollar clean energy research and development initiative with heads of state on Monday, the opening day of the U.N. climate change summit in Paris, the French government said Friday.

Gates and a group of developing and developed countries will launch the Clean Tech Initiative, in which countries will commit to doubling their clean energy technology research and development budgets by 2020 and private investors will boost their own investments in the sector.

Access to clean energy technology will play a key role in a global agreement to combat climate change. More than 190 countries will negotiate a new pact in Paris from Nov. 30 to Dec. 11 at the 21st U.N. Conference of the Parties summit.

France, the United States, India, South Korea, Indonesia, Saudi Arabia, Australia, Canada and Norway have said they will join, a source close to the conference presidency told Reuters.

“Gates’ announcement should prompt other countries to follow suit,” the source said.

Gates will join Indian Prime Minister Narendra Modi, U.S. President Barack Obama and French President Francois Hollande to announce the initiative on the opening day of the two-week summit, according to an agenda released Friday.

For India, the world’s third largest greenhouse gas emitter, access to clean energy technology is at the core of its national strategy to combat climate change.

India has argued that developed countries need to help poorer countries gain access to renewable energy or zero-emission technologies by helping reduce costs and removing barriers such as intellectual property rights.

On the sidelines of the U.N. General Assembly in September, Gates attended a bilateral meeting focused on climate change between Hollande and Modi.

The French presidency source said India will be one of the founding beneficiaries of the new initiative.

“This is one of the main points of the negotiation: how to improve clean technologies and give the poorest countries access to these technologies,” the source said.

This summer Gates pledged $2 billion of his personal wealth over the next five years to “bend the curve” on climate change.

In a blog post in July, he said more breakthrough technologies are needed to combat climate change and that current technologies reduce emissions at a cost that his “beyond astronomical.”

He said accelerating government funding for clean energy research and development is crucial to attracting private investment.

(Reporting by Valerie Volcovici and Emmanuel Jarry; Editing by Bill Trott)

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Dutch government to appeal EU ruling on Starbucks tax deal

AMSTERDAM The Dutch Finance Ministry said on Friday it will appeal against a European Commission ruling ordering it to recover up to 30 million euros ($31.8 million) in taxes from Starbucks.

Antitrust commissioner Margrethe Vestager ordered the Netherlands in October to recover 20 million to 30 million euros ($23 million to $34 million) in back taxes from Starbucks, accusing the U.S. coffee shop chain of benefiting from an illegal tax deal.

Starbucks has already said it would appeal the EU’s decision.

A ministry statement said that while the Dutch government supports the fight against tax avoidance, it “greatly values its practice of offering certainty in advance,” by providing so-called tax rulings to multinational corporations.

The Netherlands has come under pressure in recent years to reform its tax system, which disadvantages developing countries by lowering tax rates for some multinationals to single digits.

The Commission said the tax deal with Starbucks is effectively state aid.

“The government is of the opinion that the Commission does not convincingly demonstrate that the tax authority deviated from the statutory provisions. It follows that there is no state aid involved,” the ministry said.

The Dutch government said it will appeal the ruling in order to get certainty on the case law, under which it now provides thousands of tax rulings.

($1 = 0.9446 euros)

(Reporting by Anthony Deutsch; editing by Susan Thomas and Adrian Croft)

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Halliburton refiles bid for EU approval of $35 billion Baker Hughes buy

BRUSSELS – U.S. oil services provider Halliburton Co (HAL.N) has refiled a request for EU antitrust approval of its $35 billion bid for smaller rival Baker Hughes (BHI.N), four months after regulators rejected an earlier application because of insufficient data.

The European Commission will decide by Jan. 12 whether to clear the deal or open a full investigation, according to a filing on its website.

Halliburton has said it is prepared to sell three drilling businesses in Mexico and an expandable liner hangers unit as well as three Baker Hughes businesses which includes offshore cementing activities in Australia, Brazil, the Gulf of Mexico, Norway and the United Kingdom.

It has previously said it was willing to sell businesses with total revenues of $7.5 billion to appease regulators.

The companies, the No. 2 and No. 3 in the oilfield services industry, would leapfrog current leader Schlumberger (SLB.N) after the merger.

Halliburton asked for EU approval for the deal on July 23 but the file was declared incomplete on July 31.

U.S. antitrust authorities are also investigating the deal while Canada, Kazakhstan, South Africa and Turkey have given the green light. Australia’s antitrust agency, however, raised concerns last month and will issue its decision on Dec. 17.

(Reporting by Foo Yun Chee; Editing by Mark Potter)

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Collapsing cost of euro funding lures U.S. firms over the ocean

LONDON The euro’s slide against the dollar this year has been a competitive boon for corporate Europe, but it has also opened up an alternative financing window for corporate America.

This will be a record year for U.S. companies raising funds in euros, a financing option that should be widely used again next year if the euro weakens further against the dollar, as most analysts expect, and interest rate differentials remain wide.

U.S. non-financial firms have already raised a record 69.8 billion euros ($73.8 billion), up sharply on the previous record of 41.7 billion euros last year, according to Thomson Reuters data up to November 24.

That marks a rise to 25 percent of total issuance, also a record, from 15 percent. The number of deals stands at 68, well up from 50 last year and within sight of the record 73 set in 2000.

This surge has been prompted by the sharp fall in the euro and euro funding costs this year which has made it more attractive than ever for U.S. firms with a global presence to raise cash on the other side of the Atlantic.

The euro is on course for its biggest annual fall against the dollar since the year of its launch in 1999, while the gap between euro zone and U.S. bond yields is its widest in years.

For companies, the euro’s “cross-currency basis swap” rate -the cost of swapping euros into dollars without the exchange rate risk – has been central to their renewed appetite for euro funding.

This week the three-month basis swap showed the highest premium for dollars since mid-2012. Earlier this month longer-dated bases that corporates use more, such as 5- or 7-year rates, hit their highest in almost four years.

This has made U.S. firms think twice about swapping the euros back. Instead many opt to keep them for other purposes such funding business operations in Europe or hedging their European exposure.

“It’s an integral part of how U.S. companies view their funding now,” said Rupert Lewis, head of European Syndicate at BNP Paribas in London. “Most of them are huge global companies.”

Activity has slowed for the U.S. Thanksgiving holiday and as the Christmas holidays approach. But Mastercard (MA.N) raised 1.65 billion euros this week, and earlier this month UPS (UPS.N) raised 1 billion and Priceline (PCLN.O) 750 million.

The benchmark three-month euro/dollar cross-currency basis swap rate — the premium an investor demands to swap euro-interest rate exposure into dollar-denominated exposure —

hit -56 basis points this week, a level not seen since the summer of 2012.

Much of this year’s issuance came in the first quarter, when the euro plunged 15 percent and the 10-year German bond yield sank to just 0.05 percent.

While the euro and borrowing costs are now sliding again – two-year German yields are a record low -0.4 percent – the scale and speed of the move hasn’t been as great. So there’s been less of a sudden urge to take advantage of pricing anomalies.

And because the cost of swapping euros back into dollars is now nearly double what it was earlier in the year, U.S. firms issuing in euros may be more tempted to keep the cash in euros.

Brendon Moran, Global Co-Head, Corporate Origination Debt Capital Markets at Societe Generale in London, notes that while the nominal value of deals this year will smash records, the number of deals hasn’t exploded.

“Whether we see a repeat in the surge in volumes we saw this year will be driven more by pricing arbitrage, which may or may not be there. I doubt we’ll see a material change,” he said.

($1 = 0.9457 euros)

(Reporting by Jamie McGeever; editing by John Stonestreet)

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Wall St. opens flat; holiday sales in focus

U.S. stocks opened little changed on Friday, a shortened trading day, as investors turn their focus to the crucial U.S. holiday shopping season.

The Dow Jones industrial average .DJI fell 19.24 points, or 0.11 percent, to 17,794.15, the SP 500 .SPX gained 0.81 points, or 0.04 percent, to 2,089.68 and the Nasdaq Composite .IXIC added 6.36 points, or 0.12 percent, to 5,122.50.

(Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Saumyadeb Chakrabarty)

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HSBC whistleblower Falciani sentenced to five years in prison

Herve Falciani, an ex-employee of HSBC’s Geneva private bank who leaked information on clients and their tax situation, has been sentenced to five years in prison for aggravated industrial espionage, the bank said on Friday.

HSBC said it welcomed the ruling on Falciani, who had been on trial in Switzerland.

HSBC’s Swiss unit has been in the spotlight since 2008, when Falciani, a former IT employee there, fled Geneva with files that were leaked to the media and were alleged to show evidence of tax evasion by clients. French newspaper Le Monde has said it identified more than 106,000 clients.

Falciani, who is based in France, did not attend his trial.

(Reporting by Sudip Kar-Gupta; editing by Susan Thomas)

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VW labor boss says C02 cheating has hit new car orders

WOLFSBURG, Germany Volkswagen (VOWG_p.DE) is facing slowing orders for new cars, with consumers shunning purchases after the automaker admitted this month it understated fuel usage and carbon dioxide (CO2) emissions, VW’s top labor representative said on Friday.

“There is caution in buying,” the German company’s works council chief Bernd Osterloh told reporters. “The CO2 issue has triggered a greater crisis of confidence (in VW products) than the nitrogen (emissions) issue.”

VW said on Nov. 3 it had manipulated the level of CO2 emissions in about 800,000 cars sold mainly in Europe, and is expecting costs of at least 2 billion euros ($2.1 billion), including compensation payments to customers.

Two weeks later, VW said the CO2 cheating, which mainly involved diesel cars, affected more petrol-powered vehicles than previously disclosed.

The revelations about fuel economy and CO2 emissions have deepened the crisis at VW, which initially centered on software used on up to 11 million diesel vehicles worldwide that VW admitted in September had vastly understated their actual emissions of the pollutant nitrogen oxide.

Global sales of VW group vehicles fell 3.5 percent in October, though they edged up 0.5 percent in Germany. VW has denied reports that orders and sales have started to plunge in the wake of the CO2 admissions.

Osterloh, who also sits on the VW supervisory board’s influential steering committee, said there could be risks to jobs should the decline in orders persist.

“Employment is safe provided we are selling cars,” he said. “If we sell no cars, it will get relatively difficult.”

“We will have to look at incoming orders of the next days, weeks and months,” he added.

($1 = 0.9452 euros)

(Reporting by Andreas Cremer; Editing by Kirsti Knolle and Mark Potter)

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HSBC to close India private banking unit as competition grows

MUMBAI HSBC Holdings Plc (HSBA.L) is closing its private banking unit in India as part of its group strategy, the bank said, marking the exit of another foreign bank from the cut-throat wealth management business in Asia’s third-largest economy.

The bank would offer private banking clients the choice to move to HSBC Premier, the bank’s global retail banking and wealth management platform, a Mumbai-based spokesman said. The process is likely to be completed in the first quarter of 2016.

“After a strategic review of the global private banking operations in India, we have decided to close the business,” the spokesman said. “This marks further progress in the HSBC group strategy to simplify business and deliver sustainable growth.”

Many foreign wealth managers scrambled to open up shop in India a few years ago lured by its long-term growth prospects.

Even though India has been minting millionaires at a strong pace, it has failed to translate into profits for the foreign wealth managers that have set up teams of well-paid bankers to help manage those riches.

Banks including Royal Bank of Scotland (RBS.L) and Morgan Stanley (MS.N) have recently sold their onshore India private banking units as part of their global business restructuring.

HSBC’s private banking business in India has about 70 staff, a source with direct knowledge of the development said, adding many of them would be redeployed to other bank operations.

The bank employs about 32,000 people – many of them in its back-office outsourcing unit – in India, where it also offers corporate, retail and investment banking services.

The value of assets managed by HSBC’s private banking unit in India was not immediately clear, but wealth management industry sources said the bank was not one of the top three players in the segment.

The bank posted pre-tax profit of $7 million in its India private banking business in the six months to June, accounting for 4.5 percent of the Asia private banking business and up from $5 million in the same period a year ago.

HSBC, Europe’s biggest lender, did not immediately respond to a Reuters request for comment on its private banking staff in India and its market position.

HSBC private banking in India lacked scale and closing it ties in with a review the bank is undertaking of operations around the world – selling or closing units where it lacks scale or the businesses are unprofitable, people familiar with the move said.

HSBC’s decision to exit India private banking business comes at a time when India’s homegrown wealth managers are hiring more staff and expanding in smaller cities, seeking to attract rising numbers of new millionaires.

These local firms already control some 75 percent of the market, industry executives say, and their expansion plans will put more pressure on the global banks, which are struggling with higher wages and compliance costs, and a narrower client base.

India taxmen in February searched the local headquarters of HSBC as part of a probe related to allegations that the bank’s Swiss business helped clients dodge taxes. The move came after details of its Swiss private banking operations and top clients were widely published in the media.

(Reporting by Sumeet Chatterjee; Additional reporting by Steve Slater in LONDON and Saeed Azhar in SINGAPORE; Editing by Miral Fahmy, Muralikumar Anantharaman and Adrian Croft)

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Black Friday for China stocks but metals not so heavy

LONDON Chinese shares slumped 5 percent on Friday, hit by regulatory and industrial sector worries, though it wasn’t enough to derail the first weekly rise for metals like copper and zinc since early October.

The Shanghai Composite index .SSEC and the CSI300 .CSI300 both saw their biggest one-day drops in more than three months and ensured it was set to be a subdued post- Thanksgiving session for Wall Street.

Europe had a flat feel too. Britain’s FTSE 100 .FTSE was down 0.2 percent by 1230 GMT though 0.2 percent gains for France’s CAC40 .FCHI and Germany’s DAX .GDAXI left the pan-regional FTSEurofirst 300 heading for a token weekly gains.

“There is clearly a risk that China will try and devalue the currency further,” said Ankit Gheedia, equity and derivative strategist at BNP Paribas.

“(However) Europe is still trading on the ECB next week, which is why the market is relatively resilient,” he said referring to expectations of another round of stimulus.

The intensive selling in China had come amid signs its securities regulator was making a fresh clampdown on leveraged buying and combined with data showing a 4.6 percent drop in profits among big industrial firms.

The mining industry was the laggard with profits down 56.3 percent in the first 10 months of the year. Overall it was also the fifth straight monthly drop in profits, underscoring the pressure currently on China’s giant economy.

The slump in Shanghai stocks brought a 25 percent rebound rally since late August to a shuddering halt and contributed the lion’s share of a 1.1 percent weekly drop in MSCI’s broadest index of Asia-Pacific shares outside of Japan .MIAPJ0000PUS.

Japan’s Nikkei .N225 closed down 0.3 percent too though it ended the week marginally highly to extend a winning streak that started in the second half of October.

The jittery China mood ensured euro zone bond yields, which move inverse to price, nudged lower again as investors also kept positioning for the next salvo of ECB stimulus, expected at the central bank’s Dec. 3 meeting.

They are paying more than ever for the privilege of owning shorter-term German DE2YT=RR, French FR2YT=RR, Dutch NL2YT=RR government bonds and yields on benchmark 10-year yields are also sliding again.

“The market is anticipating the ECB to act swiftly and decisively next week,” said DZ Bank strategist Christian Lenk, highlighting bets that Mario Draghi and his colleagues will continue to hike up the cost of sitting on cash for banks.

“If you take the two-year Schatz (German) yield as the benchmark for the (ECB) deposit rate, the market expects a cut in the deposit rate by 20 bps to minus 0.40 percent, which we think is thinkable.”


The major currency pairs like the euro-dollar and dollar-yen were largely quiet as traders opted for caution over valor ahead of the ECB meeting and what is expected to be the first rise in U.S. interest rates in almost a decade next month.

The Swiss franc CHF= fell to its lowest against the dollar since August 2010 and dropped more than half a percent against the euro on speculation the Swiss National Bank will cut its rates even deeper into negative territory if the ECB moves.

The day’s China theme was also compounded as the yuan hit its lowest level in almost three months as investors braced for the International Monetary Fund’s decision on Monday on whether to include the currency in its reserve basket.

Spot yuan CNY=CFXS was changing hands at 6.3942, 46 pips weaker than the previous close and about 0.04 percent away from People’s Bank of China’s midpoint rate of 6.3915.

“It’s uncertain if the Chinese government is keen to show the market influence in their rate setting or whether now that they know they have gained special drawing rights inclusion they are keen to weaken their overvalued currency knowing it will not jeopardize their case,” Angus Nicholson, market analyst at IG in Melbourne, wrote in a note.

For industrial metals, which have been being battered this year by worries about China’s slowing economy and oversupply, it was a day in the red but not all gloomy news.

Global and particularly China growth-linked copper, aluminum and zinc all headed for their first weekly gain since early October.

With the dollar hovering near an 8-1/2 month high the pressure remains on commodity prices though.

Gold XAU= was near a six-year low and oil edged lower, though both U.S. crude futures CLc1 which were at $42.30 a barrel and Brent LCOc1 at $45.43 a barrel, were up roughly 4 percent and 1 percent respectively for the week.

(Additional reporting by Alistair Smout and Dhara Ranasinghe; Editing by Toby Chopra)

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