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Renault sees strong China potential despite late arrival

WUHAN, China Renault still sees plenty of growth in Chinese vehicle demand, the French carmaker said as it prepared to cut the ribbon on its first assembly plant in the world’s biggest auto market, where growth has slowed over the past year.

Inaugurating the 870 million euro ($942 million) factory in Wuhan, eastern-central China, Jacques Daniel, head of Renault’s joint venture with local partner Dongfeng, said capacity could double or ultimately even triple from its initial output of 150,000 vehicles per year.

“Are we arriving after the battle? Not at all, because this market is not going to stop,” Daniel told reporters ahead of the opening ceremony. “Entering a market of 20 million vehicles a year is no bad thing for a manufacturer.”

Renault has until now remained a marginal player in China. Unlike Nissan, its 43.4 percent-owned Japanese affiliate, Renault has lacked any local production capacity, relying instead on less profitable imports such as the South Korean-built Koleos sport utility vehicle.

But its arrival as a manufacturer – one of the last among major western automakers – coincides with a weakening of the Chinese economy and car demand.

After an abrupt slowdown in mid-2015 and partial recovery later in the year, the market is likely to grow 4-6 percent in 2016, Renault-Nissan predicts, a healthy clip by European standards but a far cry from the double-digit expansions of preceding years.

Renault’s catch-up strategy is to bet on the SUV segment, however, which accounts for one-third of the Chinese market and is still growing at a rate approaching 50 percent.

On its first production line, employing some 2,000 workers, the Dongfeng-Renault plant is about to begin assembling the French brand’s Kadjar compact SUV, followed by a larger version later this year and an electric Fluence sedan in 2017.

“A second (line) would very easy to install,” Daniel said on the eve of the inauguration. “And we have enough space for a third if needed.”

Renault is already in the process of increasing its China sales network to 150 dealerships from 125 last year, he added, and would add more with any future plant expansions.

(This story has been refiled to drop extraneous word ‘the’ from lead paragraph)

(Writing by Laurence Frost, editing by Louise Heavens)

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JPMorgan launches blockchain trial project: FT

JPMorgan Chase is partnering with start-up Digital Asset Holdings to launch a trial project using blockchain technology that could reduce the cost and complexity of trading, the Financial Times reported on Sunday.

The agreement comes as another sign that blockchain, which is best known as the basis of the digital currency Bitcoin, has wide-ranging applications for some of Wall Street’s biggest banks.

One potential use for the technology is addressing liquidity mismatches in some of JPMorgan’s loan funds, the Financial Times said.

“To sell a loan is a very cumbersome, time-consuming process; settlement can take weeks,” Daniel Pinto, head of JPMorgan’s investment bank, told the Financial Times. It “makes all the sense in the world” to explore blockchain’s potential to improve that process.

Digital Asset Holdings is run by Blythe Masters, JPMorgan’s former head of commodities.

(Reporting by Carl O’Donnell; Editing by Peter Cooney)

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Ackman, Herbalife unscathed by probes: WSJ

Two government probes into the conduct of longtime antagonists Pershing Square Holdings and Herbalife have failed to find sufficient evidence of criminal wrongdoing by either party, the Wall Street Journal said, citing people familiar with the matter.

The probes included an investigation of claims that Herbalife, a nutrition and weight loss company, has a fraudulent business model, and an inquiry into allegations that investment firm Pershing Square manipulated Herbalife’s stock, the Journal said.

The queries mark yet another point of tension in the feud between the two parties. Pershing Square’s chief executive, William Ackman, has bet $1 billion of his firm’s $15 billion in assets under management against Herbalife and has been one of the company’s most vocal critics, comparing its business model to a pyramid scheme.

The U.S. attorney’s office in Manhattan and the Federal Bureau of Investigation conducted the probes with help from the feuding parties, each of which hoped that investigations into the other would bear fruit, the newspaper said.

The Journal added that the investigations could be rekindled if additional evidence was brought to bear, citing people familiar with the matter.

(Reporting by Carl O’Donnell; Editing by Jonathan Oatis)

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Porsche aims to offer hybrids across model range: CEO in paper

FRANKFURT Volkswagen’s sportscar maker Porsche aims to offer hybrid versions of all its models in the foreseeable future, Porsche Chief Executive Oliver Blume told a German newspaper.

A plug-in hybrid of the 911 model with a range of 50 kilometers (31.1 miles) will hit the market in 2018 already, Westfalen-Blatt quoted Blume as saying in a summary of an interview to be published on Monday.

Porsche said last month it would spend about 1 billion euros ($1.08 billion) on production facilities at its biggest plant to make its first ever all-electric sports car, reflecting parent VW’s growing commitment to increase its electric offerings as it struggles to overcome an emissions scandal.

Porsche plans to bring the Mission E model, with more than 600 horsepower and a range of over 500 km, to market by the end of the decade.

At the same time, CEO Blume said he did not believe driverless cars were in Porsche’s future, saying “an iPhone belongs in your pocket, not on the road”, and that Porsche did not need to team up with any big technology companies.

“Partnerships are generally not a bad idea if one’s own competencies are insufficient. But we are on the one hand part of a strong company and on the other hand have no plans to lead the charge in this area. We’ll leave that to others,” he said.

(Reporting by Maria Sheahan, editing by Louise Heavens)

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Barclays, Credit Suisse to strike record deals with SEC, NY over dark pools

WASHINGTON Barclays (BARC.L) and Credit Suisse (CSGN.VX) are poised to settle federal and state charges that they misled investors in their dark pools, with Barclays admitting it broke the law and agreeing to pay $70 million, according to a person familiar with the matter.

The settlements between the banks and the Securities and Exchange Commission and New York Attorney General, which are expected to be formally announced on Monday, will mark the two largest fines ever paid in connection with cases involving dark pools.

All together, the banks are expected to pay a combined total of $154.3 million, said the source, who spoke anonymously because the deal has not yet been finalized and made public.

(Reporting by Sarah N. Lynch in Washington and Herbert Lash in New York; Editing by Andrea Ricci)

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Brazil’s Petrobras to reduce investment plan by 5 percent: newspaper

BRASILIA Petroleo Brasileiro SA (PETR4.SA) will cut its 2016-2020 investment plan by 5 percent to $93 billion as the state-run oil company contends with dwindling oil prices and a massive corruption investigation, the O Globo newspaper reported on Sunday.

The embattled Brazilian company, known as Petrobras, could reduce its investments even further if a series of planned debt-reducing asset sales are completed, the paper reported without citing sources.

The press office of Petrobras did not respond immediately to an emailed request for comment.

The company, which has a $130 billion debt pile, has already cut its investment plans to $98.4 billion from $130.3 billion and last month had its Moody’s credit rating reduced to non-investment grade.

The potential for a boost from big oil discoveries off the coast of Brazil appear to have faded, meanwhile, with the company’s announcement of on Friday of a 20 percent cut to its oil and gas reserves.

(Writing by Alonso Soto; Editing by David Goodman)

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HSBC to freeze salaries, hiring in 2016 in battle to cut costs: sources

LONDON Europe’s largest lender, HSBC, is imposing a hiring and pay freeze across the bank globally in 2016, two sources familiar with the matter told Reuters.

An email was sent to staff on Friday detailing the latest cost-saving measures, according to the sources who spoke on condition of anonymity.

Like numerous other global banks, HSBC (HSBA.L) is in the midst of a cost-cutting drive to boost profitability and returns to shareholders, and is pushing through with plans for annual cost savings of up to $5 billion by 2017.

Europe’s biggest bank said in June that it planned to slash nearly one in five jobs and shrink its investment bank by a third in response to sluggish economic growth and tighter global regulation of bank balance sheet risk.

“As flagged in our Investor Update we have targeted significant cost reductions by the end of 2017,” a spokeswoman for HSBC told Reuters, confirming the content of the staff email.

In October, contractors at its investment banking division in London had their pay cut by 10 percent in line with the bank’s efforts to rein in costs, a source familiar with the matter told Reuters at the time.

News of the pay and hiring freeze follows a significant week for HSBC, after its board met last week to consider moving headquarters to Hong Kong and to focus on the bank’s strategy.

A decision on the domicile issue could come early next week, a senior source at the bank told Reuters on Jan. 27.

(Reporting by Anjuli Davies and Carolyn Cohn; Editing by Sinead Cruise and Catherine Evans)

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UK supermarket group Morrisons cuts fresh food prices

LONDON Britain’s fourth-largest supermarket operator Morrisons (MRW.L) on Sunday said it was cutting the price of more than 1,000 products, with an average drop of 19 percent across fruit and vegetable lines.

The firm said it was launching a rolling program of reductions that will see the price of selected items cut for a minimum of three months. Morrisons said it would use it own fresh food manufacturing business to help keep prices down.

The announcement of discounts come as the country’s four main supermarkets, Asda (WMT.N), Tesco (TSCO.L), Sainsbury’s (SBRY.L) and Morrisons battle to stem a loss of customers to discounters Aldi ALDIEI.UL and Lidl LIDUK.UL.

Earlier this month, Morrisons posted a surprise rise in sales over the festive period, ending three years of declines.

(Reporting by William James, editing by Louise Heavens)

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VW not under pressure to sell trucks business: trucks chief tells paper

FRANKFURT Volkswagen (VOWG_p.DE) is not under pressure to sell its trucks business to raise cash as it faces billions of euros in costs after admitting to rigging emissions tests, management board member Andreas Renschler told a German newspaper.

“The operating results of the Volkswagen group are good, despite everything. There won’t be a fire sale,” Renschler, who also heads the trucks business at VW, was quoted as saying in an interview with the Frankfurter Allgemeine Sonntagszeitung (FAS) published on Sunday.

VW hired ex-Daimler (DAIGn.DE) executive Renschler last year to align its truckmaker MAN (MANG.DE) with its Swedish subsidiary Scania, and carve out a global business to better compete with industry leaders Daimler and Volvo (VOLVb.ST).

Asked whether the new structure could mean that the trucks business, now separated from VW’s passenger car operations, could be spun off and floated on the stock exchange, Renschler told FAS: “Everything is possible, but only if it makes strategic sense.”

Renschler said the situation in South America, especially in Brazil, was “extremely difficult” but that it was the right move to wait out the downturn and keep production going in Brazil until the economy recovers.

The market in Russia, meanwhile, appears to have bottomed out, Renschler said, while the American market is likely to decline slightly and Africa shows some promise.

“And then we have hopes for Iran, of course, even if there won’t be quite the gold-rush atmosphere that some are expecting,” he added.

(Reporting by Maria Sheahan; Editing by Andrew Bolton)

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