News Archive


Toyota leads global car sales in October, outsells VW for fourth month


TOKYO Toyota Motor Corp (7203.T) outsold Volkswagen AG (VOWG_p.DE) for the fourth straight month in October to remain the world’s top-selling automaker so far this year, after sales at the German carmaker suffered following the diesel emissions scandal.

Toyota said on Friday its group vehicle sales totaled 8.35 million in the January-October period, more than the 8.26 million vehicles delivered by Volkswagen during the same period. Toyota has continuously out sold Volkswagen on a year-to-date basis since July.

Earlier this month, Volkswagen said its Volkswagen brand sales fell 5.3 percent year-on-year in October, the first full month after Europe’s biggest automaker admitted that it cheated diesel emissions tests in some of its cars sold in the United States since 2009.

Group sales at the Japanese automaker in the year through October eased 1.2 percent from the previous year, while Volkswagen group sales for same period eased 1.7 percent on the year.

(Reporting by Naomi Tajitsu; Editing by Gopakumar Warrier)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/sEaxFk8o2g4/story01.htm

Black Friday crowds thin after U.S. stores open on Thanksgiving


PITTSBURGH/CHICAGO Crowds were thin at U.S. stores and shopping malls in the early hours of Friday, initial spot checks showed, as shoppers responded to early Black Friday discounts with a mix of enthusiasm and caution.

Many shoppers headed out to stores on Thanksgiving evening, a month before Christmas, reflecting the new normal in U.S. holiday shopping, which was traditionally kicked off the next day, Black Friday.

In an effort to attract the most eager holiday shoppers and fend off competition from Amazon.com Inc (AMZN.O), U.S. retailers have increasingly extended their holiday deals by opening stores on the evening of Thanksgiving.

“It’s still early, and from what we are seeing so far the crowds are good but not great,” Craig Johnson, president of Customer Growth Partners, said late on Thursday. The retail consultancy had 18 members studying customer traffic in different parts of the country.

Milagros Munez, 39, a law clerk, was shopping for toys at the Target store in New York’s Harlem neighborhood. “We actually came early this morning to miss the crowds. Now that some stores are open all night, I feel like more people go in the evening.”

The Macy’s Inc (M.N) store at Water Tower Place mall in Chicago saw thin crowds in the early hours of Friday after a fairly busy Thanksgiving evening, store associates said.

Nia Darrell, a 23-year-old student, was shopping for coats and handbags at the store with two friends.

“I shopped online yesterday and picked up most of what I wanted,” she said.” I’m out because Black Friday is more like a tradition but the discounts are similar even online this year.”

ONLINE SALES STRONG

Shoppers in the United States spent more than $1 billion online, 22-percent more than last year, between midnight and 5 pm ET on Thursday, according to the Adobe Digital Index, which tracked 100 million visits to 4,500 U.S. retail sites.

Many stores around the country were full on Thanksgiving evening. Local media reported brawling shoppers at a packed Kentucky mall on Thursday evening, forcing a police officer to intervene and break up the fight.

Early Black Friday discounts at stores and online included buy one get 50 percent off on the second “Star Wars” toys at Target Corp (TGT.N), $200 off quadcopter drones at Best Buy Co Inc (BBY.N), and a 50-inch Samsung smart TV for $499 at Wal-Mart Stores Inc (WMT.N).

As much as 20 percent of holiday shopping is expected to be done over the Thanksgiving weekend this year, analysts said. The four-day shopping burst will help set the tone for the rest of the season, signaling to retailers whether they need to drop prices or change promotions.

The shopping season spanning November and December is crucial for many retailers because the two months can account for anywhere from 20 to 40 percent of their annual sales.

Shoppers are expected to be cautious with their spending again this year. The National Retail Federation is expecting holiday sales to rise 3.7 percent, slower than last year’s 4.1 percent growth rate, due to stagnant wages and sluggish job growth.

At around 6 am on Friday, several hundred cars were in the parking lot wrapping the Ross Park mall in Pittsburgh. There was a good crowd walking the mall although it was not overly crowded.

Jorgette Clark, 27, said her budget would probably be lower this year because her husband works in the energy industry.

“I feel like we scaled back this year. Our husbands work in the oil fields… It’s probably a smaller Christmas this year.”

(Additional reporting by Kylie Gumpert in New York, Writing by Nandita Bose in Chicago; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/jxDWhmxp5BQ/story01.htm

Pilots’ union confident of deal to join Lufthansa jobs summit: document


FRANKFURT German pilots union Vereinigung Cockpit is confident it can come to a deal that will allow it to take part in a round table organized by Lufthansa (LHAG.DE) management in a bid to defuse tensions with unions over job and growth prospects.

Lufthansa asked unions representing the pilots, cabin crew and ground staff to the meeting on Dec. 2 but the pilots’ union initially said it was be unlikely to take part because of legal concerns.

“Since then, management has approached us to overcome these legal hurdles,” VC said in an internal document seen by Reuters, adding it hoped to reach an agreement by the start of next week.

A court had in September halted a strike by the pilots saying the walkout was over strategic company decisions over which the union was not allowed to stage a strike. VC feared that if it took part in the roundtable to discuss jobs and other strategic decisions, its position could be undermined in the courts again.

(Reporting by Peter Maushagen; Writing by Victoria Bryan; Editing by Maria Sheahan)

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

Thanksgiving shopping crowds ‘good not great’; online sales strong


PITTSBURGH/CHICAGO Retailers across the United States offered early Black Friday discounts to lure bargain-hunters on Thanksgiving eve, but initial checks showed crowds in brick-and-mortar stores were subdued even as online sales jumped.

“It’s still early, and from what we are seeing so far the crowds are good but not great,” said Craig Johnson, president of Customer Growth Partners. The retail consultancy has 18 members studying customer traffic in different parts of the country.

However, many stores were packed. At the Toys R Us in New York’s Times Square, a line of about 200 shoppers, hemmed in by barricades, stretched to the corner of 45th Street and toward Sixth Avenue, where the Macy’s Inc (M.N) Thanksgiving Day parade had ended a few hours earlier.

The first shoppers through the door cheered as they were greeted by store employees donning Santa hats.

The rush on the night of the U.S. holiday, a month before Christmas, reflects the new normal in U.S. holiday shopping, which was traditionally kicked off the next day, Black Friday.

In an effort to attract the most eager holiday shoppers and fend off competition from Amazon.com Inc (AMZN.O), U.S. retailers have increasingly extended their holiday deals by opening stores on the evening of Thanksgiving.

This hurt customer turnout on Black Friday last year, a trend analysts and consultants expect will repeat this year.

“I can wait until tomorrow but it’s more exciting today,” said Daipayan Deb, a shopper in his mid-thirties at a packed Wal-Mart super center on the outskirts of Pittsburgh. “Previously, I used to start shopping on Black Friday, but now it’s Thursday.”

Early discounts at stores and online included buy one get 50 percent off on the second “Star Wars” toys at Target Corp (TGT.N), $200 off quadcopter drones at Best Buy Co Inc (BBY.N), and a 50-inch Samsung smart TV for $499 at Wal-Mart Stores Inc (WMT.N).

Shoppers in the United States spent more than $1 billion online, 22-percent more than last year, between midnight and 5 pm ET on Thursday, according to the Adobe Digital Index, which tracked 100 million visits to 4,500 U.S. retail sites.

Target’s Chief Executive Brian Cornell said online sales at the discount retailer were off to a “very strong” start. Early anecdotal evidence showed stronger customer traffic and more shoppers in stores than last year but it was still too early to comment on the overall trend.

“We will know a lot more after the evening,” he said on a media conference call.

As much as 20 percent of holiday shopping is expected to be done over the Thanksgiving weekend this year, analysts said. The four-day shopping burst will help set the tone for the rest of the season, signaling to retailers whether they need to drop prices or change promotions.

Kimberley Turner, a mother in her forties who was shopping with her young son said she found the discounts less compelling. “I actually think the deals were better last year,” she said.

Online discounts averaging 23 percent are below last year’s 25 percent, but prices are expected to drop as more Black Friday sales come on board, said Tamara Gaffney, principal research analyst at Adobe Digital Index.

The shopping season spanning November and December is crucial for many retailers because the two months can account for anywhere from 20 to 40 percent of their annual sales.

Shoppers are expected to be cautious with their spending again this year. The National Retail Federation is expecting holiday sales to rise 3.7 percent, slower than last year’s 4.1 percent growth rate, due to stagnant wages and sluggish job growth.

(Additional reporting by Kylie Gumpert in New York, Writing by Nandita Bose; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/EmJqHwtQ2nw/story01.htm

Asia shares firm as traders add to ECB stimulus bets


TOKYO Asian shares held firm and U.S. stock futures edged higher in early trade on Friday as expectations of additional stimulus from the European Central Bank underpinned appetite for riskier assets, while the euro hovered near seven-month lows.

Benchmark share indexes in Japan .N225, South Korea .KS11 and Australia AXJO all rose around 0.2 percent, though the broadest index of Asia-Pacific shares outside of Japan .MIAPJ0000PUS was almost flat due to the dollar’s strength.

U.S. stock futures ESc1 rose 0.4 percent to their highest level since Nov. 9 after a market holiday on Thursday for Thanksgiving Day.

Although the U.S. holiday thinned global financial trade, the pan-European FTSEurofirst 300 index .FTEU3 gained 0.9 percent on Thursday to end at three-month high, led by German shares.

The European Central Bank meets next Thursday and most in the market expect it to expand its asset purchase program and lower its deposit rate, the rate at which banks park excess funds with it.

Traders are now speculating that the ECB could cut rates more than the previous market consensus of a 0.10 percentage point cut.

The euro’s three-month overnight indexed swap (OIS) rate EUROIS fell to a new low around minus 0.28 percent, more than 0.15 percent below the current fixing level of the Overnight Eonia rate EONIA=.

With keeping money in the euro seen increasingly costly because of negative interest rates, the common currency was on the defensive in the foreign exchange market.

The euro traded at $1.0606 EUR=, not far from Wednesday’s seven-month low of $1.0565. It also stood near a seven-month low against the yen, last fetching 130.07 yen.

“You keep losing money by holding the euro. It is hard to see the euro rising. True, it is already heavily shorted but I expect the euro to fall towards parity with the dollar,” said a trader at a Japanese bank.

The yen was little changed against the dollar at 122.63 per dollar JPY=, showing no response to a series of Japanese economic data including jobless rate, which unexpectedly fell to a two-decade low of 3.1 percent. [ECONJP]

Oil prices edged lower, with U.S. stockpile data published on Wednesday doing little to ease concerns about a supply glut.

U.S. crude futures CLc1 fell 1.1 percent to $42.57 a barrel as traders also unwound some of buying they had made after Turkey had shot down a Russian warplane earlier this week.

Brent futures LCOc1 edged down to $45.62 a barrel on Thursday, compared to their two-week high of $46.50 hit earlier this week.

Battered metal prices also rebounded as hedge funds covered their short positions for now.

Benchmark copper on the London Mental Exchange CMCU3 rose 1.9 percent on Thursday to $4,636.15 per tonne, recovering 4.3 percent from Monday’s 6 1/2-year low of $4,443.50.

Zinc CMZN3 and Nickel CMNI3 also jumped sharply on Thursday, helped by expectations of output cuts in China.

(Editing by Kim Coghill)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/AUWeB48Y_XQ/story01.htm

BTG Pactual redemptions rise in day after CEO arrest: source


SAO PAULO Clients stepped up withdrawals from Grupo BTG Pactual SA’s money management unit on Thursday, according to a source with knowledge of the bank’s strategy, as Latin America’s largest independent investment bank tries to contain fallout from the arrest of its top executive.

Outflows reached a cumulative 3.5 percent of assets under management over the past two days, the source said. Redemptions had hit around 1 percent on Wednesday, when Chief Executive Officer André Esteves was arrested on suspicion of obstructing a sweeping corruption investigation.

BTG Pactual oversees 230 billion reais ($61 billion) at its asset management unit.

The bank is using cash “conservatively” and has a wide array of easily tradable investments at hand to face client money outflows, the same source added, without elaborating.

Analysts have said redemptions at BTG Pactual pose no systemic risks for Brazil’s banking system and noted the bank’s robust liquidity and solvency indicators. Still, earlier in the day, Fitch Ratings put BTG Pactual’s rating on review for a downgrade because of the uncertainty ensuing from Esteves’ arrest.

Shares of BTG Pactual shed 2.9 percent on Thursday, on top of Wednesday’s 21-percent plunge.

Earlier in the day, a Federal Supreme Court justice denied a lawyer request for the release of Esteves, and ordered he be transferred from a police station to a prison in Rio de Janeiro.

(Reporting by Guillermo Parra-Bernal; Editing by Marguerita Choy and Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Jdndi3bhNak/story01.htm

Two-decade Pfizer mission pays off for Guggenheim’s deal king


LONDON/NEW YORK Alan Schwartz knows how to play a long game. The executive chairman of boutique investment bank Guggenheim Partners spent almost 20 years cultivating Pfizer (PFE.N) boss Ian Read as a client. His strategy paid off handsomely when Guggenheim was named lead adviser for one of the biggest deals in history – Viagra-maker Pfizer’s $160 billion acquisition of Botox-maker Allergan (AGN.N).

Schwartz, 65, had been working with Read since 2013 to find a European-registered company with which U.S. firm Pfizer could combine and shift its headquarters to a country with a lower tax rate, so-called inverting.

But their relationship stretches far further back, to the late 1990s, when Schwartz was a banker at Bear Stearns and Read was an executive working his way up at Pfizer, according to three people who have worked with Schwartz.

Such ties with key executives partly explain why small investment boutiques like Guggenheim can sometimes trump full-service investment banks such as Bank of America (BAC.N) for advisory roles on mega-deals.

Getting close to people in business development is very much part of the playbook of Schwartz, who has also spent the last two decades working closely with the likes of Verizon (VZ.N), Walt Disney (DIS.N) and Cablevision (CVC.N).

He works with operational managers on a long-term basis – without doing deals – to discuss strategy and cultivate trust, according to the sources. Then, when they reach positions of power and an MA opportunity comes up, an advisory role is the prize.

Guggenheim, whose partners rarely speak publicly, declined to comment.

‘CODEWORD: PONY’

The dealmaker was first noticed by Pfizer executives in the late 1990s, when he started presenting them with dossiers of possible takeover targets, according to one of the sources.

In 2000 Pfizer decided to buy Warner Lambert, a company Schwartz was advising. Since then the U.S company has used Schwartz on many of their deals.

He led negotiations on Pfizer’s $15 billion acquisition of Hospira this year, and before that he advised on their $60 billion takeover of Pharmacia in 2003. He also played a key role on the $16.6 billion sale of Pfizer’s consumer healthcare unit to Johnson Johnson in 2006 and helped the firm on the $2.4 billion sale of its Capsugel pill unit in 2011.

The close ties he had cultivated with Pfizer and Read paid off most spectacularly recently when Guggenheim was named lead adviser on the Allergan deal – which ranks as the second-biggest MA transaction ever.

Schwartz was the last CEO of Bear Stearns before it was sold to JPMorgan Chase (JPM.N) in 2008, and the following year he joined Guggenheim, which is based in New York and Chicago.

Wall Street veterans who know Schwartz describe him as a masterful adviser who uses his strategic insight and dealmaking skills, rather than wining and dining, to cultivate company executives.

“He has an ability to immerse himself in the details of a company’s business, the competitive landscape and a potential transaction while simultaneously framing these issues in the big picture as a consigliere to CEOs,” said Flexis Capital Managing Partner Louis Friedman, a former Bear Stearns investment banker who worked with Schwartz for years.

Schwartz and other bankers working for Pfizer in its negotiations with Allergan would refer to the merger project as “Pony” in written communications to keep its identity secret, according to one of the sources. His main counterpart on the Allergan side was Steve Frank, co-head of global healthcare investment banking at JPMorgan.

Pfizer’s acquisition of Allergan will be financed mostly with Pfizer’s stock, so Guggenheim was not handicapped by its limited ability to provide debt financing compared with bigger rivals.

In addition to Guggenheim as top adviser, Goldman Sachs Group (GS.N), Centerview Partners Holdings LLC and Moelis Co (MC.N) also advised on the deal.

TEAMWORK

Although Schwartz’s previous attempt at inverting Pfizer had been unsuccessful, it led to him hiring an investment banker, a move that helped cement Guggenheim’s relationship with the drugmaker.

Schwartz advised Pfizer last year when it approached Britain’s AstraZeneca Plc (AZN.L) about a 70-billion-pound ($106 billion) bid, only for it to be snubbed. Also advising Pfizer however was Bank of America Corp’s executive vice chairman of corporate and investment banking, Fares Noujaim, who Schwartz subsequently recruited to Guggenheim.

Noujaim, 52, is a Lebanese-American banker who had moved up through the ranks at Bear Stearns. In 2008, before moving to Bank of America, he was vice chairman of Bear Stearns’ board of directors while Schwartz was the bank’s CEO.

Noujaim’s departure last year cost Bank of America its close relationship with Pfizer as the bank was no longer included in its advisory line-up.

Pfizer and Bank of America declined to comment.

Guggenheim was launched in 1999 by Peter Lawson-Johnston Sr, a great-grandson of gold mining magnate and New York museum founder Solomon Guggenheim. He injected $30 million of family money to fund the firm’s operations in investment management, investment banking and insurance services.

But it was only when Schwartz joined that the firm focused on building its advisory business and winning major investment banking assignments. For each deal, Schwartz typically surrounds himself with a team of five to 10 people.

Guggenheim was at the bottom of U.S. MA league table rankings between 2010 and 2012, but entered the top 10 in 2013 with 17 deals.

The Pfizer deal moves Guggenheim to No. 12 from 18 in the worldwide MA league table. It ranked 45 this time last year.

Guggenheim and Pfizer’s three other advisers will share between $125 million and $150 million in fees on the Allergan deal, according to a separate source familiar with the matter.

“This deal is only the latest step in a series of long-lasting relationships with big corporations that often lead to mega-deals,” said another source close to Guggenheim.

(Additional reporting by Olivia Oran in New York; Editing by Greg Roumeliotis, Carmel Crimmins and Pravin Char)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/0lX205PVjaM/story01.htm

Merck plans to sell its allergy business unit to cut debt: Bloomberg


German drugs and chemicals maker Merck KGaA (MRCG.DE) is planning to sell its allergy business, Allergopharma, Bloomberg reported, citing sources.

The sale, which could fetch about 600 million euros ($636.42 million), is an attempt by the company to offload its debt after the Sigma Aldrich Corp takeover, the multimedia news website said on Thursday.

The allergy business unit sale process, which could draw interest from drug companies and private-equity firms, is still at an early stage and the company could decide against it, Bloomberg said.

The company raised its full-year guidance for core earnings before one-offs, two weeks ago, to include the $17 billion acquisition of Sigma-Aldrich, which has cleared regulatory hurdles.

Merck could not be reached immediately for a comment outside regular business hours.

(Reporting by Rishika Sadam in Bengaluru; Editing by Marguerita Choy)

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

Mis-selling risks grow with China’s insurance sales army


HONG KONG/SHANGHAI Chinese insurers are on a hiring binge, recruiting an army of agents to sell their products to a burgeoning middle class, but the risk of mis-selling by inexperienced agents on commission could prove costly to the industry and its customers.

In an immature market with less than half the penetration of the United States, and about a quarter of Japan’s, China’s insurers tapped the rising demand mainly by selling through banks, until regulators curtailed that channel last year over concerns that inexperienced customers assumed the products were as safe as bank deposits.

That triggered the recruitment drive as insurers needed direct access to customers to keep the $290 billion market growing. The largest, China Life Insurance Co (2628.HK) (601628.SS), increased its salesforce by 28 percent to nearly a million in the six months to June, while next in line, Ping An (2318.HK), swelled its sales ranks by 25 percent to 800,000.

Industry specialists say the drive brings with it the danger of a part-time salesforce whose enthusiasm for commissions outstrips their financial expertise or training.

“Agents in China rely largely on personal networks to sell products; there’s not a high bar to hiring them, and some don’t get much training,” said insurance industry specialist Cliff Sheng, Greater China partner at consultant Oliver Wyman.

A spokeswoman for Ping An said the company has strict procedures for recruiting agents including a three-tier interview system, and a comprehensive training system to help agents acquire industry knowledge and professional ethics.

China Life declined to comment.

HIGH TURNOVER

Sheng likens the business to what he called the ‘housewife’ sales model seen in Korea and Japan in the last two decades, where a predominantly part-time army of independent agents sold policies.

Both markets have been plagued by mis-selling and low customer retention, with Korea’s Financial Services Commission in 2014 setting new rules for suspending and fining sales agents for mis-selling products.

Beijinger Coco Lu, who sells for a few hours a week while her daughter is in school, is typical of the new breed of recruits, most of whom sell part-time.

She started selling in February, first to friends and family, then fellow parents at school events and even shop staff she befriends.

She said she received a high commission of 20-30 percent of the premium for some insurance in the first year.

Lu has no finance background but said Ping An’s training was renowned for its rigor.

“The training at Ping An is really good. In the industry, Ping An is called the Huangpu Military Academy.”

While Lu’s fledgling career has got off to a bright start, sector specialists said there could be problems for her cohort when they exhaust their personal networks. Many drop out, to be replaced by more novices.

“Mass recruitment attempts are reaping high agency turnover and reduced agency quality,” consultants Towers Watson wrote in a February report on China’s insurance industry.

Towers Watson cited an industry retention rate for first-year recruits of only 30 percent, and Ping An training manager Zhang Jian said theirs was just 15-20 percent.

COMPLAINTS RISING

To keep the commissions coming, some agents can be tempted to sell unsuitable products to the customer.

“If commission based, mis-selling tends to occur more frequently,” said Tony Tan, head of standards and advocacy in Asia Pacific for investment professionals body CFA Institute.

China’s insurance regulator said total complaints rose 4 percent in the first half of 2015.

Mis-selling scandals have cost insurers billions of dollars in fines in the West, but in China the damage is more likely to be in lost business and reputation.

Customers regularly make very public demonstrations against businesses they think have let them down.

Reuters met a woman who gave her surname as Wang protesting in a group of about 50 people outside a Ping An branch in Beijing.

She said two of the company’s salespeople she had befriended at a social event went on to sell her third-party wealth management products they wrongly said carried guaranteed returns and protected capital. Wang said she lost 900,000 yuan ($140,000).

“I feel like I’ve been cheated,” she said. “No one told me of any risk; at the time they told me there was no risk.”

A spokeswoman for Ping An Life Insurance said the company has strict rules prohibiting agents from selling third-party products, and it was cooperating with China’s Public Security department in investigating what had happened in this situation.

“We are trying our best to help investors safeguard their rights and repair their loss as soon as possible,” she said.

(Reporting by Lawrence White and Engen Tham; Additional reporting by Beijing newsroom; Editing by Will Waterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/vR9RwkC2QBk/story01.htm