News Archive

Alibaba tells vendors to halt drug sales online, cites government rule change

SHANGHAI Chinese e-commerce firm Alibaba Group Holding Ltd has told vendors on its Tmall website to stop selling medicine, saying a local regulator has issued an “urgent” directive halting drug sales via third-party platforms.

Alibaba, in a notice dated May 27 seen by Reuters, cited a circular from the Hebei province branch of the China Food and Drug Administration (CFDA) on “urgent control measures relating to drug products”. It did not elaborate on reasons.

The regulator’s surprise directive comes as the government promotes retail sales of over-the-counter (OTC) medicine, with a pledge to harness technology to solve issues as varied as high drug prices and snarling hospital queues. At present, drug sales are dominated by public hospitals.

The directive only applies to drug sales on marketplace websites, Alibaba said. Such sites, however, generally provide the bulk of traffic to pharmacies and drugmakers selling online.

“From today please do not sell or dispatch any more of these kinds of products,” Alibaba said. The directive does not apply to other medical products, it said.

A company spokeswoman told Reuters that Alibaba’s medical products site was “cooperating and complying with the government’s new policy to stop online drug sales on third-party platforms”.

“While the policy change might impact the whole medicine e-commerce business including, industry players are exploring new ways to use internet technology to help improve the traditional drug retail system,” the spokeswoman said.

The Hebei CFDA declined to comment.


The directive is the latest hold-up in the reform of China’s healthcare market. Industry insiders said last year that reform plans, including opening up the online drug market, were being held back partly because authorities were concerned about challenges of regulating the sale of drugs online.

At stake is an OTC market where sales are set to double by 2025 to almost 200 billion yuan ($30.40 billion), according to BMI Research, with online retailers widely expected to play a growing role.

A senior executive at a pharmacy chain with a store front on Tmall said the directive’s impact could be significant because many firms relied on Tmall for online sales.

“Most online pharmacies have a presence on Tmall,” said the executive, who declined to be identified due to the sensitivity of the matter. “It will affect the whole industry.”

It was not immediately clear how the directive would affect other firms licensed to run third-party, direct-to-consumer drug sales platforms. These include and Wal Mart Stores Inc’s, CFDA data showed.

Reuters could not immediately reach for comment, while declined to provide immediate comment.

(Reporting by John Ruwitch and Adam Jourdan; Additional reporting by Shanghai newsroom; Editing by Christopher Cushing)

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European shares hit one-month high, dollar firms on Yellen’s hike hint

LONDON European shares hit one-month highs on Monday, while the dollar index rose to a two-month peak after Federal Reserve Chair Janet Yellen suggested that an interest rate hike in the United States may be around the corner.

The Fed should raise rates “in the coming months” if growth picks up and the labor market continues to improve, Yellen said on Friday. St. Louis Fed President James Bullard chimed in, saying on Monday, global markets appear to be “well-prepared” for a summer rate hike, although he did not specify a date for the policy move.

The probability of a rate increase at the Federal Open Market Committee’s June 14-15 meeting rose to around 34 percent from 26 percent on Thursday, according to CME’s Fedwatch program. Bets on an increase at the July 26-27 policy meeting edged up to 60 percent, more than double the level of a month ago.

Against a basket of currencies, the dollar was up 0.4 percent at 95.879 .DXY, while the euro struggled near 2-1/2 month lows of $1.1097 hit in the Asian session EUR=.

The euro zone’s blue-chip Euro STOXX 50 index .STOXX50E was 0.1 percent higher, while Germany’s DAX .GDAXI was up 0.3 percent, hitting a one-month high. Trading volumes are expected to be thin as the London and New York markets are closed for a public holiday.

While higher U.S. interest rates would sap global liquidity, Wall Street and European investors took Yellen’s comments in their stride, as they suggested the world’s largest economy was strong enough to weather another rate hike, following from the December hike.

“The return to U.S. rate hike expectations have reopened the possibility of short-term outperformance for European stocks,” said Didier Duret, global chief investment officer at ABN-AMRO Private Banking, adding investors were keeping an eye on the dollar for it to break recent ranges.

The rise in European markets came after Japan’s Nikkei stock index .N225 ended up 1.4 percent, as the yen JPY= weakened to a one-month low and expectations rose that the government would delay a sales tax hike scheduled for April next year.

Japanese Prime Minister Shinzo Abe said he would delay the increase by 2-1/2 years, Masahiko Komura, vice president of the ruling Liberal Democratic Party, told reporters on Monday, echoing what a government source told Reuters on Sunday.

One uncertainty, however, is how markets would react if a postponement of Japan’s sales tax hike were to lead to a downgrade of the country’s sovereign rating.

“What would be scary is if there were to be a downgrade. I think equities would fall if that happens. That remains a risk,” said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.


This week investors will keep an eye on the all-important U.S. non-farm payrolls and the Institute for Supply Management surveys. The May jobs report is due on Friday and a solid reading could heighten expectations for a June move.

Economists expect U.S. employers to have added 170,000 jobs this month, slightly more than they did in April. Hourly wages are expected to show a 0.2 percent increase from the previous month. ECONUS

Crude oil futures remained shy of the $50 per barrel level after marking weekly gains, feeling some pressure from the stronger U.S. dollar that made it more expensive for holders of other currencies.

Brent crude LCOc1 slipped to $49.10 a barrel, after gaining 1 percent last week. U.S. crude CLc1 was down 0.3 percent at $49.18 after rising about 3 percent for the week.

The dollar’s strength took a toll on spot gold XAU=, which dropped 0.9 percent to $1,201 an ounce. It plumbed a low of $1,199.60 earlier in the day, its lowest since late February.

(Additional reporting by Atul Prakash and Lisa Twaronite; Editing by Hugh Lawson)

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How Wellcome and Gates charities profit from helping biotech

LONDON The Wellcome Trust medical charity is to profit from U.S. approval of a new diagnostic cancer test, the first commercial product funded by the organization since the sale of its pharmaceuticals business to Glaxo in 1995.

The regulatory green light shows how the world’s healthcare leading charities are becoming important sources of finance for biotech start-ups and can gain when the young firms they back succeed.

The Bill Melinda Gates Foundation recently made a $80 million profit from selling a stake in Anacor Pharmaceuticals (ANAC.O), a firm it had backed for its work on neglected diseases, which is now being bought by Pfizer (PFE.N).

With an endowment of $40 billion, the Gates foundation is the world’s largest charity, while Wellcome has an 18 billion pound ($26 billion) investment portfolio. Their scale makes both organizations powerful forces in global medicine.

The new cancer test called Axumin, which got a green light from the U.S. Food and Drug Administration on Friday, was developed by start-up firm Blue Earth Diagnostics, which is owned by Syncona, Wellcome’s biotech investment arm.

It is injected as part of a PET scan and helps reveal recurrent prostate cancer.

“It’s a validation of our investment approach,” said Martin Murphy, chief executive of Syncona, who said profits would flow back to the main organization for its charitable work.

Syncona is a major investor in several other companies developing innovative products that it believes offer substantial patient benefits, including two firms working on gene therapies for blindness and liver problems.

With 250 million pounds to invest over the long term, Syncona aims to achieve returns that can help fund the charity, while also focusing on unmet medical needs and helping companies that would otherwise struggle to raise money.

The Gates Foundation approach is somewhat different. Its “program-related investments” are designed to spur entrepreneurs and companies to pursue ideas in the public good, rather than necessarily to make a profit.

But it still stumbled on a big financial win with Anacor, thanks a soaring share price as the company’s drugs made progress, and the foundation sold 99 percent of its stake for $86.7 million last November, 17 times its initial 2013 investment of $5 million.

The Wellcome Trust sold the majority of its stake in the Wellcome drug company to Glaxo in 1995. That led to the creation of Glaxo Wellcome, which later merged with SmithKline Beecham in 2000 to form GlaxoSmithKline (GSK.L).

(Editing by Jason Neely)

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Boeing set to win $2.9 billion contract from UK MoD: the Telegraph

Boeing Co (BA.N) is set to win a 2-billion-pound ($2.92 billion) contract from the UK Ministry of Defence (MoD) for new Apache helicopters, the Telegraph reported.

The MoD has decided to give Boeing a 50-aircraft contract, including servicing, and the announcement could come as early as July, the newspaper said. (

Italian aerospace manufacturer Leonardo Finmeccanica SpA (LDOF.MI) had been a contender for the contract, the Telegraph said.

U.S. planemaker Boeing is offering the helicopters at a lower price by tacking them on to the end of a larger Apache order from the US military, the paper added.

The British government has committed to NATO’s defense spending pledge of 2 percent of GDP for the next five years, but the MoD will be under pressure to opt for the most cost effective option as it juggles spending on a number of big projects.

Boeing and the MoD could not be immediately reached for comment.

($1 = 0.6843 pounds)

(Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Sunil Nair)

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Dalian Wanda makes $4.4 billion offer to take Hong Kong-listed property arm private

HONG KONG China’s Dalian Wanda Group is offering $4.4 billion in cash to buy out Hong Kong-listed unit Dalian Wanda Commercial Properties (3699.HK), part of a plan to take it private before relisting it in Shanghai where it hopes to gain better valuations.

Mainland-listed firms typically command higher valuations than those in Hong Kong, helped by a large pool of retail investors. An index tracking dual-listed companies .HSCAHPI, shows mainland listings trade at an average 34 percent premium to the same company listed in Hong Kong.

The move comes just 15 months after Wanda Commercial’s market debut. The group, led by tycoon Wang Jianlin, has set up a special purpose vehicle to buy all the Hong Kong-listed shares of the property unit.

Investors in the special purpose vehicle will receive up to 12 percent annual interest on their holdings if the property arm fails to relist in China within two years.

The HK$52.80 per share offer represents a 10 percent premium to Wanda Commercial’s IPO price and values China’s biggest commercial property developer at about $31 billion.

It is also a 44.5 percent premium to the unit’s closing price on March 29.

But the stock, which only just resumed trade after a one-month suspension, lost 2.6 percent on Monday to stand at HK$48.70.

Dalian Wanda said in a statement that it would not increase the offer price.

A document to investors seen by Reuters showed Wanda Commercial’s shares were valued at an estimated 8.6 times earnings in 2016, much lower than an average of 29.1 times for commercial property developers listed on China’s domestic A-share market.

The company may seek a backdoor listing on the Shanghai exchange if it does not get regulatory approval to launch a planned initial public offering there soon, according to two people with knowledge of the matter.

Rating agency Standard Poor’s has said that Wanda Commercial’s transparency could weaken following the delisting as Hong Kong requires more financial disclosure and communication to investors than the mainland.

The idea of delisting emerged at the Wanda group level over six months ago, according to a person familiar with the matter, as Wanda Commerical’s share price softened and as expectations grew that the difference in valuations between China- and Hong Kong-listed companies would widen even more.

The person, who was not authorized to talk to the media, declined to be identified.

($1 = 7.7679 Hong Kong dollars)

(Reporting by Clare Jim and Denny Thomas; Editing by Edwina Gibbs)

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Oil prices dip on strong dollar, rising Canadian output

SINGAPORE Oil prices dipped on Monday as a strong dollar weighed on markets and Canadian oil sands production was expected to increase this week.

Crude markets, however, did receive some support from the start of the U.S. summer driving season coinciding with a fall in U.S. crude output to its lowest since September 2014.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $49.22 per barrel at 0656 GMT (02:56 a.m. EDT), down 11 cents from their last settlement.

International Brent futures were at $49.10 a barrel, down 22 cents.

The dollar hit a one-month high against the yen on Monday and stood tall against other leading currencies .DXY after comments by Federal Reserve Chair Janet Yellen increased the likelihood of a near-term U.S. interest rate hike.

A strong greenback makes it more expensive for countries using other currencies to import dollar-traded fuel, a potential knock on demand.

An expected rise in Canadian oil sands production also weighed on WTI, traders said. Oil producer Suncor Energy (SU.TO) is planning to ramp up output at its fields in Alberta this week after it was forced to shut them down earlier in May due to massive wildfires.

Despite the expected rise in Canadian output, ANZ bank said that WTI price support “still lingers” after a large fall in U.S. oil inventories by 4.2 million barrels to 537 million barrels due to strong demand.

Traders said the official start to the U.S. peak demand summer driving season, which kicks off with Memorial Day on Monday, was the main reason for rising seasonal demand.

This also came just as U.S. oil production fell to 8.77 million barrels per day (bpd), the lowest level since September 2014, and down 8.77 percent since a June 2015 peak.

“The yoy (year-on-year) declines in production would be 470,000 bpd in 2016 and 305,000 bpd in 2017 if we account for the impact of the estimated county-level well backlog being gradually brought back online between June 2016 and December 2016,” Goldman Sachs said.

In global oil markets, Brent prices have been supported by a series of supply disruptions in Nigeria, where militants have been staging a wave of attacks on oil pipelines, cutting the country’s output to the lowest in more than two decades.

Attention will also be on a meeting by the Organization of the Petroleum Exporting Countries (OPEC) in Vienna this week, although most analysts do not expect any decisions that would lead to changes in production.

(Reporting by Henning Gloystein; Editing by Tom Hogue and Subhranshu Sahu)

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Fed’s Bullard says global markets seem well-prepared for summer rate hike

SEOUL St. Louis Federal Reserve President James Bullard said on Monday global markets appear to be “well-prepared” for a summer interest rate hike from the Fed, although he did not specify a date for the policy move.

“My sense is that markets are well-prepared for a possible rate increase globally, and that this is not too surprising given our liftoff from December and the policy of the committee which has been to try to normalize rates slowly and gradually over time,” Bullard told a news conference after speaking at an academic conference in Seoul.

“So my ideal is that if all goes well this will come off very smoothly.”

Bullard added a rebound in U.S. GDP growth seems to be materializing in the second quarter, but reserved his opinion on whether the Fed should hike in June or July for the next policy meeting at the U.S. central bank.

His comments followed revised data on Friday that showed first quarter growth in the U.S. was not as weak as initially expected.

Responding to the GDP data, economists said strong income growth, together with signs the economy was picking up steam in the second quarter, could give the Federal Reserve ammunition to raise interest rates as early as next month.

Answering a question on whether he thought U.S. presidential candidate Donald Trump would bring change to monetary policy if elected, Bullard said the Fed was independent and did not follow any particular political prescription.

“I don’t think a change in the White House either way will affect Fed policy,” he said. “My hope is that neither campaign is interested in politicizing the Fed.”

Meanwhile, Bullard noted he had been critical of the Fed’s “dot plot” summaries of policymakers rate outlooks recently, saying they may be giving too much forward guidance, removing the Fed’s ability to make data-dependent decisions.

The dollar rallied against Asian currencies early on Monday after the revised GDP data and on Fed Chair Janet Yellen’s comments on Friday that a rate hike in the U.S. in coming months would be appropriate.

The Korean won KRW= extended losses after Bullard’s comments, trading down 0.9 percent against the dollar as of 0142 GMT (09:42 p.m. EDT).

The Fed most recently raised interest rates in December last year, which was the first rate hike in nearly a decade.

(Reporting by Christine Kim and Se Young Lee; Editing by Eric Meijer)

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AirAsia has had $1 billion takeover offer for leasing unit: report

SINGAPORE Asia’s largest budget airline AirAsia Bhd (AIRA.KL) has received a $1 billion offer for its aircraft leasing unit, Bloomberg News quoted Chief Executive Tony Fernandes as saying.

AirAsia intends to divest the business, Asia Aviation Capital Ltd, at some point, Fernandes told Bloomberg on Monday but added that the offer needs to be discussed further with the board.

He was quoted as saying that the business was a “powerful cash generator”.

Reuters reported in October that AirAsia has been in talks with lessors, including cash-rich Chinese companies, to sell a stake in its leasing subsidiary.

Chinese companies are seeking to grow aggressively in the leasing industry that provides about 40 percent of the planes used by airlines globally.

Following the Reuters report, AirAsia said late last year that it had received approaches from investors to co-invest in the leasing unit.

(Reporting by A. Ananthalakshmi and Anshuman Daga; Editing by Edwina Gibbs)

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Suncor ramping up operations after Canada wildfire

TORONTO Suncor Energy Inc’s (SU.TO) facilities north of Fort McMurray, Alberta, are expected to partially restart by the end of the week, the company said on Sunday, the latest sign Canadian oil sands producers are coming back online after a massive wildfire.

The start-up of Suncor’s base plant and MacKay River sites is under way, with “initial production” expected by the end of the week, the company said in a statement, which noted initial production at its Firebag site began early last week.

A spokeswoman declined to specify the production volume expected as operations resume.

Bitumen capacities at Firebag and MacKay River are 203,000 and 38,000 barrels per day, respectively, and the base plant upgrader facility’s capacity is 350,000 barrels a day, Suncor said.

Energy companies have begun restarting operations as the threat from the wildfire recedes. Fort McMurray itself still sits largely empty after its entire population of nearly 90,000 was evacuated earlier this month.

The wildfire, expected to be Canada’s costliest natural disaster, cut Canadian oil output by a million barrels a day.

The inferno has charred more than 500,000 hectares (1,930 square miles) across the northern part of the province of Alberta and crossed into the neighboring province of Saskatchewan.

Rain and higher humidity in recent days have helped firefighting efforts. The Alberta government said firefighting conditions would improve through the weekend.

Authorities last week lifted evacuation orders on all work camps in the area and many oil facilities, including those of Suncor and its majority-owned Syncrude.

“There has been no damage to Suncor’s assets and all sites have enhanced fire mitigation and protection,” the company said.

Suncor said it had moved more than 4,000 employees and contractors back into the region for its restart efforts and would move 3,500 more in the coming week.

It also said Syncrude was planning its own return to operations. A Syncrude spokesman declined to comment on a time line for restarting operations.

Some of the evacuees from Fort McMurray may be allowed to return as soon as Wednesday, if air quality improves and other safety conditions are met.

(Reporting by Ethan Lou in Toronto; Editing by Peter Cooney)

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