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Goldman Sachs’ top Southeast Asia investment banker to leave: sources

SINGAPORE The head of Goldman Sachs’ (GS.N) investment banking division in Southeast Asia, Michael Smith, is set to leave the bank, two people familiar with the matter said on Tuesday.

Based in Singapore, Smith is a partner at Goldman and also heads the bank’s Asian real estate investment banking team.

Smith, who has been with the Wall Street bank since 2006, will leave later this year, one of the sources said. Smith was previously a banker at UBS for about a decade.

His departure is not connected to Goldman’s downsizing of the Asian team, the second source said. The sources said he was quitting the investment banking industry.

Reuters reported last week that Goldman was planning to cut almost 30 percent of its 300 investment banking jobs in Asia outside Japan, in response to a fall in activity in the region.

Goldman and Smith declined to comment. The sources declined to be identified as the information is not public.

In 2015, Goldman reduced the number of its investment bankers in Singapore – a hub for Southeast Asia – to about 35 from 50 and this has declined further this year, sources said.

Investment banks are going through a rough patch in a tough dealmaking environment and amid a slowdown in major economies such as China, Hong Kong and Singapore.

Reuters reported on Monday that Bank of America (BAC.N) was set to cut about two dozen investment banking jobs in Asia.

The volume of merger and acquisition (MA) deals in Southeast Asia dropped by a third last year from 2014, and is down by about a fifth this year as of Sept. 23 compared with the whole of last year, according to Thomson Reuters data.

In the equity capital market (ECM) segment, Southeast Asia volume fell 37 percent last year and has declined by 42 percent in the year to Sept. 23 versus last year, the data showed.

Goldman’s market share in the MA volume league table in Southeast Asia dropped to 3.6 percent in 2015 from 12.5 percent in 2014, while its share of ECM volume in the region dropped to 2.8 percent from 3.4 percent a year earlier, the data showed.

(Reporting by Anshuman Daga; Additional reporting by Sumeet Chatterjee in HONG KONG; Editing by Denny Thomas and Mark Potter)

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Saudis, Iran dash hopes for OPEC oil deal in Algeria

ALGIERS Saudi Arabia and Iran on Tuesday dashed hopes that OPEC oil producers could clinch an output-limiting deal in Algeria this week as sources within the exporter group said the differences between the kingdom and Tehran remained too wide.

“This is a consultative meeting … We will consult with everyone else, we will hear the views, we will hear the secretariat of OPEC and also hear from consumers,” Saudi Energy Minister Khalid al-Falih told reporters.

Iranian Oil Minister Bijan Zanganeh said: “It is not the time for decision-making.” Referring to the next formal OPEC meeting in Vienna on Nov. 30, he added: “We will try to reach agreement for November.”

The Organization of the Petroleum Exporting Countries will hold informal talks at 1400 GMT on Wednesday. Its members are also meeting non-OPEC producers such as Russia on the sidelines of the International Energy Forum, which groups producers and consumers.

Oil prices LCOc1 have more than halved from 2014 levels due to oversupply, prompting OPEC producers and rival Russia to seek a market rebalancing that would boost revenues from oil exports and help their crippled budgets.

The predominant idea since early 2016 among producers has been to agree to freeze output levels, although market watchers have said such a move would fail to reduce unwanted barrels.

Sources told Reuters last week that Saudi Arabia had offered to reduce its output if Iran agreed to freeze production, a shift in Riyadh’s position as the kingdom had previously refused to discuss output cuts.

On Monday, Iranian Oil Minister Bijan Zanganeh said expectations should be modest and several OPEC delegates said the positions of Saudi Arabia and Iran remained too far apart. Oil prices were down 2 percent in Tuesday trade. [O/R]

Three OPEC sources said Iran, whose production has stagnated at 3.6 million barrels per day, insisted on having the right to ramp that up to around 4.1-4.2 million bpd, while OPEC Gulf members wanted its output to be frozen below 4 million.

“Don’t expect anything unless Iran suddenly changes its mind and agrees to a freeze. But I don’t think they will,” an OPEC source familiar with discussions said.


Russian Energy Minister Alexander Novak was due to meet Zanganeh on Tuesday in what sources said was a new attempt to persuade Tehran to play ball. Several other sources said Algeria and Qatar were also talking to Iran in a bid to rescue a deal.

Iranian oil sources said Tehran wanted OPEC to allow it to produce 12.7 percent of the group’s output, equal to what it was extracting before 2012, when the European Union imposed additional sanctions on the country for its nuclear activities.

Sanctions were eased in January 2016.

Between 2012 and 2016, Saudi Arabia and other Gulf OPEC members have raised output to compete for market share with higher-cost producers such as the United States.

As a result, Iran believes its fair production share in OPEC should be higher than its current output, which it says should rise once Tehran agrees new investments with international oil companies. Saudi output has risen to 10.7 million bpd from 10.2 million in recent months due to local needs for summer cooling.

“Iran believes this is a just volume of production, which it had prior to the sanctions. This has been discussed more than once,” Novak said on Tuesday.

Gary Ross, a veteran OPEC watcher and founder of U.S.-based think tank PIRA, said Saudi output had risen too steeply in recent months and even if it were cut to pre-summer levels, Iran would see an offer to freeze its own output as unfair.

“It is a carefully calculated offer because Saudi Arabia knows it will not be acceptable to Iran … Saudi Arabia wants to put the blame of OPEC inaction in Algiers on Iran,” Ross said.

“There will be tremendous political and revenue pressure on Iran to do a deal but PIRA thinks it unlikely Iran will accept the Saudi offer for it clearly does not pass President Hassan Rouhani’s fairness test.”

The Saudi and Iranian economies depend heavily on oil, but Iran is seeing the pressure easing as it emerges from years of sanctions. Riyadh, on the other hand, faces a second year of record budget deficits and is being forced to cut the salaries of government employees.

Falih said he was, nevertheless, optimistic about the oil market although rebalancing was taking longer than expected.

He said record global stocks of oil had started to decline: “How fast will it take place, it also depends on the production agreement. If there is a consensus on one in the next few months, Saudi Arabia will be with the consensus view.”

(Writing by Dmitry Zhdannikov; Editing by Dale Hudson)

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Merkel hopes temporary problems at Deutsche Bank can be solved

BERLIN German Chancellor Angela Merkel expressed hope on Tuesday that problems at Deutsche Bank (DBKGn.DE) could be solved after the lender made clear it needed no state aid with a $14 billion U.S. demand to settle claims it missold mortgage-backed securities.

Asked during a news conference if Berlin was concerned about Deutsche Bank and was considering assistance for the lender, Merkel said: “I only want to say that Deutsche Bank is a part of the German banking and financial sector. And of course we hope that all companies, also if they face temporary problems, can develop in the right direction.”

“I don’t want to comment beyond that,” she added.

Deutsche Bank said on Monday it had no need for German government help.

(Reporting by Michael Nienaber; Editing by Joseph Nasr)

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VW says finances robust after media report knocks shares

FRANKFURT Volkswagen (VOWG_p.DE) said on Tuesday its finances remained robust as it sought to allay concerns after a share fall which some traders linked to a media report which said the U.S. Justice Department was assessing whether fines could put the automaker out of business.

“The financial strength of Volkswagen Group is still quite robust. Today, the total special items relating to the diesel issue amount to 17.8 billion euros ($20 billion) and all consequences of the diesel topic known so far are covered,” the company said in a statement.

Volkswagen shares fell 4.6 percent with some traders citing a Bloomberg sourced to two people familiar with the negotiations as saying that the U.S. Justice Department was assessing the automaker’s financial strength before imposing a fine.

The shares were down 4 percent at 111.60 euros at 1112 GMT.

VW has already agreed to spend up to $16.5 billion to address environmental, state and owner claims in the United States related to emissions from its diesel engines.

It still faces billions in potential fines and must resolve the fate of 85,000 polluting 3.0-litre vehicles.

Volkswagen said in its statement that it could only comment on the size of penalty payments once ongoing procedures and investigations conclude.

“While the headlines should be taken seriously, we believe the language being reported infers a certain degree of ‘showboating’. No one wants to be seen to be ‘going light’ on VW,” said a note from analysts at Evercore ISI who hold a buy rating on the stock and a target price of 160 euros.

(Reporting by Patricia Uhlig and Jan Schwartz; writing by Edward Taylor; editing by Jason Neely)

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Oil prices slip as hopes for a deal in Algiers fade

LONDON Crude oil futures fell on Tuesday as optimism faded for an output-limiting deal from an oil producer meeting in Algeria that has so far failed to yield any agreement to curb one of the worst supply gluts in history.

Saudi Arabia on Tuesday dashed hopes that OPEC oil producers could clinch a deal in Algeria this week after sources within the exporter group said differences between the kingdom and rival Iran remained too wide.

Brent crude futures slipped 85 cents to $46.50 a barrel by 1113 GMT, having closed up $1.46, or 3.2 percent, in the previous session.

U.S. West Texas Intermediate (WTI) crude fell 79 cents to $45.14 a barrel, after rising $1.45, or 3.3 percent, in the previous session.

“It’s all about what’s going on in Algiers really … the prospect or no prospect of a supply deal,” Olivier Jakob, oil analyst at Petromatrix, said. “There is no new fundamental development that is more important than Algiers.”

Sources told Reuters last week that Saudi Arabia had offered to reduce its output if Iran agreed to freeze production. But Iran played down the chances of a deal, saying the meetings in Algiers were only advisory.

Russia’s oil minister on Tuesday also said that the country would want to freeze oil output at current levels; Russia’s oil output recently touched an all-time high of 11.75 million barrels per day (bpd).

Analysts also said that current high production in Russia and Saudi Arabia, combined with potential increases from Libya and Nigeria, made discussions in Algiers somewhat hollow.

“The announcements in Algeria contrast sharply with reality,” analysts at Commerzbank said in a note, adding “all the signs point therefore to the comfortable supply situation continuing, that is to say to ongoing overproduction.”

U.S. investment bank Goldman Sachs on Tuesday cut its price forecast for WTI crude in the fourth quarter to $43 a barrel, from a $45-$50 range, saying that it expects global supply to exceed demand by 400,000 barrels per day (bpd) in the quarter.

Aside from OPEC, a strong U.S. dollar, which makes commodities like crude oil more expensive for holders of other currencies also pressured oil prices.

Traders were also watching for U.S. oil stock data due later on Tuesday from the American Petroleum Institute (API).

U.S. commercial crude oil stocks likely rose by an average of 2.8 million barrels to 507.4 million barrels in the week to Sept. 23, reversing three weeks of unexpected drawdowns, a Reuters poll of seven analysts showed.

(Additional reporting by Keith Wallis, editing by Louise Heavens and Jane Merriman)

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World stocks, Mexico peso bounce as markets score one for Clinton

LONDON World shares swung higher and the Mexican peso surged more than two percent on Tuesday, as investors awarded the first U.S. presidential debate to Democrat Hillary Clinton over Republican Donald Trump.

Markets have tended to see Clinton as the candidate of the status quo, while few are sure what a Trump presidency might mean for U.S. foreign policy, international trade deals or the domestic economy.

Snap polls after the debate suggested Clinton had bolstered her chances. She accused Republican Trump of racism, sexism and tax avoidance while the real estate tycoon, making his first run for public office, said Clinton’s long years of service represented “bad experience”.

For markets the clear winner was the Mexican peso MXN=D2. It surged 2.3 percent having hit an all-time trough in recent days on concerns that a Trump presidency would threaten Mexico’s exports to the United States, its single biggest market.

EMini futures for the SP 500 ESc1 recovered to gain 0.6 percent, in unusually energetic Asian hours, though European shares saw a 0.5 percent early bounce .FTEU3 wiped out as worries about banks such as Deutsche Bank (DBKGn.DE) returned. [.EU].SX7E

“Markets started to call the debate for Hillary within the first 15 minutes or so, with the Mexican peso surging in what is probably its busiest Asian session in years,” said Sean Callow, a senior currency analyst at Westpac in Sydney.

Europe was also digesting news that a referendum over Italian Prime Minister Matteo Renzi’s flagship constitutional reform will be held on Dec. 4, with the fate of his administration likely to hinge on the outcome.

It was one of the latest dates he could have picked and Italian bond yields fell to a 2-1/2-week low IT10YT=TWEB as investors took a crumb of comfort that it will give him maximum time to try and turn around what now looks like a defeat.

“It is being kicked down the road quite a bit this can,” said Rabobank’s head of macro strategy research Elwin de Groot.

“He is trying to buy time but that could also be a risk. He is banking that he will win back a bit of public support but there is the possibility that he might not.”

There was mixed news, meanwhile, for the European Central Bank as data showed loans to euro zone businesses dipped slightly in August despite its massive stimulus program.

The euro fell for the first time in five days, slipping to $1.1237 EUR= and to 1.1538 per pound GBPEUR=.


Oil markets were also in flux as the world’s largest producers gathered in Algeria to discuss ways to tackle a crude glut that has battered prices for two years now. [O/R]

A source from Iran, where production is on the comebank after years of international sanctions, told Reuters it wanted 12.7 percent of any new OPEC output ceiling to help it reclaim its market share. Saudi Arabia has suggested it would need Iran to freeze its production for it to do the same.

Brent crude futures LCOc1 slipped 75 cents to $46.61 a barrel having jumped or 3.2 percent in the previous session. U.S. West Texas Intermediate (WTI) crude CLc1 which has seen a similar rise fell 60 cents to $45.80 a barrel.

In Asia, as early risk aversion faded, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS recouped early losses to rise 0.6 percent.

Japan’s Nikkei .N225 swung 0.8 percent higher, having been down 1.5 percent at one stage. The U.S. dollar rebounded to 100.83 yen from a one-month low around 100.08 JPY= though it was the peso that was making all the running.

“There’s a thing called ‘Trump thermometer’,” said David Bloom, London-based global head of forex strategy at HSBC. “If you want to know who won the presidential debate, don’t go to Twitter or Facebook. Just look at the dollar/Mexico peso.”

Much the same goes for the Canadian dollar CAD=, which touched its lowest since March in early trade before rallying to $1.3171 on its U.S. counterpart.

Other safe-havens ebbed, with yields on U.S. 10-year Treasuries US10YT=RR rising a basis point to 1.60 percent.

Online betting companies shortened the odds on a Clinton win in the wake of the debate, leaving her as the clear favorite among punters.

A CNN poll of viewers, which the broadcaster noted was likely skewed somewhat to Democrats, showed 62 percent thought Clinton won the debate with 27 percent for Trump.

(Additional reporting by Wayne Cole in Sydney; Editing by Richard Balmforth)

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Caesars inches closer to deal with bankrupt unit’s creditors

Caesars Entertainment Corp (CZR.O) said on Tuesday its major creditors supported the proposed terms of a plan to push its main operating unit out of bankruptcy, making it “optimistic” of winning approval from other creditors.

Caesars offered a sweetened $5 billion settlement last week to hold-out creditors of its main operating unit, Caesars Entertainment Operating Co Inc (CEOC).

In exchange, creditors would have to drop their allegations of fraud prior to the unit’s bankruptcy in January 2015 with $18 billion of debt.

Caesars said on Tuesday that the parties were working on the support agreements and amending CEOC’s current reorganization plan to adopt the proposed terms they had agreed on.

Caesars and its private equity owners Apollo Global Management (APO.N) and TPG Capital Management [TPG.UL] offered junior creditors an increased recovery of 66 cents on the dollar, the casino operator said.

Hamlet Holdings, through which funds managed by Apollo, TPG and other co-investors hold their interest in Caesars, will contribute the full 14 percent of the equity it would have received through its ownership in Caesars in the current plan. The contribution is valued at about $950 million, Caesars said.

(Reporting by Subrat Patnaik in Bengaluru; Editing by Savio D’Souza)

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WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call

GENEVA The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States.

The new figure of 1.7 percent, down from the WTO’s previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag the growth of the world economy, the trade body said.

The figures should be a wake-up call for governments, WTO Director-General Roberto Azevedo said in the six-monthly trade outlook report.

“We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system,” the report quoted him as saying.

The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors.

Although all governments deny protectionism, trade is no longer outpacing economic growth as it used to. Trade has grown 1.5 times faster than gross domestic product over the long term, and twice as fast when globalization picked up in the 1990s.

This year trade will grow only 80 percent as fast as the global economy, the WTO said, the first reversal of globalization since 2001 and only the second since 1982.

“I am absolutely convinced that this is not a moment to turn inward,” Azevedo told a WTO conference.

The benefits of trade should be shared more widely, he said, with a system that does more to include poor countries, small firms, marginalized groups and entrepreneurs – an apparent nod to anti-globalization activists who say that secretive trade talks are exclusively aimed at helping big business.

Azevedo said four out of five job losses in industrialized countries were not due to competition from cheap imports but to automation and efficiency campaigns that allowed firms to cut their workforce.

“This is not a rose garden,” he said.

European Trade Commissioner Cecilia Malmstrom, speaking alongside Azevedo, said trade had to be efficient, valuable and transparent.

“The time that we locked ourselves in a room and came up with a trade agreement… and only the most devoted nerd really cared, those times are gone. That’s not how it works any more.”

Many people do not feel included in trade policy debates any more, Malmstrom said. “There’s a growing anti-globalisation movement. There are fears, questions, and we also see the figures that you presented this morning that absolutely give reason to be concerned.”

The WTO further said it anticipated slower 2017 trade growth than in its previous forecast, with a rise of 1.8-3.1 percent rather than the 3.6 percent it had estimated in April.

(Reporting by Tom Miles; editing by Mark Heinrich)

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German regulator orders Facebook to delete WhatsApp user data

FRANKFURT A German privacy regulator ordered Facebook (FB.O) on Tuesday to stop collecting and storing data of German users of its messaging app WhatsApp and to delete all data that has already been forwarded to it.

The Hamburg Commissioner for Data Protection and Freedom of Information said Facebook was infringing data protection law and had not obtained effective approval from WhatsApp’s 35 million users in Germany.

“After the acquisition of WhatsApp by Facebook two years ago, both parties have publicly assured that data will not be shared between them,” commissioner Johannes Caspar said in a statement.

Facebook, the world’s biggest social network, bought WhatsApp for $19 billion in cash and stock in an effort to reach a younger audience.

“The fact that this is now happening is not only a misleading of their users and the public, but also constitutes an infringement of national data protection law,” Caspar added.

Facebook, which has its German headquarters in Hamburg and therefore falls under Caspar’s jurisdiction, said in a statement that it complied with EU data protection law.

“We are open to working with the Hamburg DPA in an effort to address their questions and resolve any concerns,” it said.

The data watchdog said Facebook and WhatsApp were independent companies that should process their users’ data based on their own terms and conditions and data privacy policies.

The Hamburg commissioner’s move comes after EU and U.S. regulators said they would scrutinize changes to privacy settings that WhatsApp made in August.

(Reporting by Harro ten Wolde; Additional reporting by Hans-Edzard Busemann; Editing by Georgina Prodhan)

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