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ZhongAn surges in HK debut, boding well for future tech listings

HONG KONG (Reuters) – ZhongAn Online Property Casualty Insurance Co jumped 18 percent on debut on Thursday after the biggest ever IPO by a financial technology firm in Asia, boosting Hong Kong’s hopes of luring future Chinese technology startups away from New York.

It also bodes well for expected listings from other fintech giants in Hong Kong, including Alibaba (BABA.N) affiliate Ant Financial and peer-to-peer lending and wealth management platform Lufax.

“I hope this is the beginning of another round of new economy companies choosing Hong Kong,” Charles Li, CEO of market operator Hong Kong Exchanges Clearing Ltd (HKEX) (0388.HK), said at the debut ceremony.

“Our market needs to stay competitive, our market needs to stay relevant and we obviously have to stay clear-minded how we go about attracting the right companies into Hong Kong and allowing Hong Kong to be part of the new economy.”

Both Ant Financial and Lufax are considering IPOs in the city, sources previously told Reuters, although the timing for the deals is uncertain.

ZhongAn’s (6060.HK) $1.5 billion initial public offering (IPO) follows the $630 million December listing of Chinese photo app maker Meitu Inc (1357.HK), which is up more than 30 percent as investors chase fast-growing technology firms even before they have made a profit.

“This deal (ZhongAn) and Meitu’s performance clearly show Hong Kong can emerge as a centre for tech deals,” said the head of equity capital markets at a global investment bank who could not be named discussing listings in the city.

The rarity of technology listings in Hong Kong gave ZhongAn’s IPO an extra appeal for investors looking to diversify their holdings, Chief Executive Jeffrey Chen told Reuters.

The Shanghai-based online insurer hopes to change the scarcity of such offerings in the city and invited about 30 Chinese tech companies to a party to celebrate its debut on Thursday night.

At the event, ZhongAn plans to share its listing experience and connect the startups with Hong Kong exchange officials and investment bankers. Attendees will wear coloured name tags: blue for fintech startups, red for investment bankers, etc.

“We’ve invited partners and many companies that are interested to list in Hong Kong to join the party. They became interested after they saw ZhongAn’s example,” Chen said in an interview.

A GOOD START

The stock climbed as high as HK$70.50 in early trade, compared with the HK$59.70 IPO price, before paring gains to HK$67.80. The benchmark Hang Seng index .HSI was down 0.3 percent.

ZhongAn priced the 199.3 million new shares on offer at the top of the IPO’s marketing range of HK$53.70 to HK$59.70 per share.

Demand from retail investors – who have a significant influence over first-day trading in Hong Kong – accounted for 393 times the number of shares on offer in the IPO, ZhongAn said in a securities filing.

Typically, companies going public set aside 10 percent of the shares on offer for retail investors, with the remainder going to institutional buyers, but that volume goes up depending on the level of oversubscription.

In the case of ZhongAn, it originally allocated 5 percent of the shares to retail investors but underwriters ended up having to raise that to 20 percent because of strong demand, meaning fewer shares were available for professional buyers.

The institutional tranche was “significantly” oversubscribed, ZhongAn said.

Tech firms’ fundraising accounted for an average 2.8 percent of all Hong Kong IPOs since the global financial crisis in 2008, Thomson Reuters data showed.

Additional reporting by Kane Wu; Editing by Stephen Coates

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/zXzif4rWatM/zhongan-surges-in-hk-debut-boding-well-for-future-tech-listings-idUSKCN1C305Z

ZhongAn surges in HK debut, boding well for future tech listings

HONG KONG (Reuters) – ZhongAn Online Property Casualty Insurance Co jumped 18 percent on debut on Thursday after the biggest ever IPO by a financial technology firm in Asia, boosting Hong Kong’s hopes of luring future Chinese technology startups away from New York.

It also bodes well for expected listings from other fintech giants in Hong Kong, including Alibaba (BABA.N) affiliate Ant Financial and peer-to-peer lending and wealth management platform Lufax.

“I hope this is the beginning of another round of new economy companies choosing Hong Kong,” Charles Li, CEO of market operator Hong Kong Exchanges Clearing Ltd (HKEX) (0388.HK), said at the debut ceremony.

“Our market needs to stay competitive, our market needs to stay relevant and we obviously have to stay clear-minded how we go about attracting the right companies into Hong Kong and allowing Hong Kong to be part of the new economy.”

Both Ant Financial and Lufax are considering IPOs in the city, sources previously told Reuters, although the timing for the deals is uncertain.

ZhongAn’s (6060.HK) $1.5 billion initial public offering (IPO) follows the $630 million December listing of Chinese photo app maker Meitu Inc (1357.HK), which is up more than 30 percent as investors chase fast-growing technology firms even before they have made a profit.

“This deal (ZhongAn) and Meitu’s performance clearly show Hong Kong can emerge as a centre for tech deals,” said the head of equity capital markets at a global investment bank who could not be named discussing listings in the city.

The rarity of technology listings in Hong Kong gave ZhongAn’s IPO an extra appeal for investors looking to diversify their holdings, Chief Executive Jeffrey Chen told Reuters.

The Shanghai-based online insurer hopes to change the scarcity of such offerings in the city and invited about 30 Chinese tech companies to a party to celebrate its debut on Thursday night.

At the event, ZhongAn plans to share its listing experience and connect the startups with Hong Kong exchange officials and investment bankers. Attendees will wear coloured name tags: blue for fintech startups, red for investment bankers, etc.

“We’ve invited partners and many companies that are interested to list in Hong Kong to join the party. They became interested after they saw ZhongAn’s example,” Chen said in an interview.

A GOOD START

The stock climbed as high as HK$70.50 in early trade, compared with the HK$59.70 IPO price, before paring gains to HK$67.80. The benchmark Hang Seng index .HSI was down 0.3 percent.

ZhongAn priced the 199.3 million new shares on offer at the top of the IPO’s marketing range of HK$53.70 to HK$59.70 per share.

Demand from retail investors – who have a significant influence over first-day trading in Hong Kong – accounted for 393 times the number of shares on offer in the IPO, ZhongAn said in a securities filing.

Typically, companies going public set aside 10 percent of the shares on offer for retail investors, with the remainder going to institutional buyers, but that volume goes up depending on the level of oversubscription.

In the case of ZhongAn, it originally allocated 5 percent of the shares to retail investors but underwriters ended up having to raise that to 20 percent because of strong demand, meaning fewer shares were available for professional buyers.

The institutional tranche was “significantly” oversubscribed, ZhongAn said.

Tech firms’ fundraising accounted for an average 2.8 percent of all Hong Kong IPOs since the global financial crisis in 2008, Thomson Reuters data showed.

Additional reporting by Kane Wu; Editing by Stephen Coates

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/zXzif4rWatM/zhongan-surges-in-hk-debut-boding-well-for-future-tech-listings-idUSKCN1C305Z

Trump proposes U.S. tax overhaul, stirs concerns on deficit

WASHINGTON (Reuters) – President Donald Trump proposed on Wednesday the biggest U.S. tax overhaul in three decades, calling for tax cuts for most Americans, but prompting criticism that the plan favors business and the rich and could add trillions of dollars to the deficit.

The proposal drew a swift, skeptical response from Senator Bob Corker, a leading Republican “fiscal hawk,” who vowed not to vote for any federal tax package financed with borrowed money.

“What I can tell you is that I’m not about to vote for any bill that increases our deficit, period,” Corker, who said on Tuesday he would not seek re-election in 2018, told reporters.

Trump said his tax plan was aimed at helping working people, creating jobs and making the tax code simpler and fairer. But it faces an uphill battle in the U.S. Congress with Trump’s own Republican Party divided over it and Democrats hostile.

The plan would lower corporate and small-business income tax rates, reduce the top income tax rate for high-earning American individuals and scrap some popular tax breaks, including one that benefits people in high-tax states dominated by Democrats.

Forged during months of talks among Trump’s aides and top congressional Republicans, the plan contained few details on how to pay for the tax cuts without expanding the budget deficit and adding to the nation’s $20 trillion national debt.

The plan still must be turned into legislation, which was not expected until after Congress makes progress on the fiscal 2018 budget, perhaps in October. It must then be debated by the Republican-led congressional tax-writing committees.

Analysts were skeptical that Congress could approve a tax bill this year, but that is what Republicans hope to achieve so they can enter next year’s congressional election campaigns with at least one legislative achievement to show for 2017.

Financial markets rallied on the plan’s unveiling, an event long anticipated by traders betting that stocks would benefit from both faster economic growth and inflation.

TRUMP IN INDIANA

  • Trump says he will not negotiate on 20 percent corporate tax rate
  • Factbox: Trump on Twitter (Sept 27) – Filibuster rule, Facebook, tax reform
  • Trump says unnamed country plans to build, expand five U.S. auto plants

At an event in Indianapolis, Trump called the plan the largest tax cut in U.S. history. “We want tax reform that is pro-growth, pro-jobs, pro-worker, pro-family and, yes, tax reform that is pro-American,” he said.

The real estate mogul-turned-politician, who promised big tax cuts as a candidate, told reporters he personally would not gain financially from the proposal.

“I think there’s very little benefit for people of wealth,” said Trump, who unlike many of his White House predecessors, has refused to make public his own tax returns.

Republicans have produced no major legislative successes since Trump took office in January, even though they control the White House and both chambers of Congress. Their top legislative priority, overhauling the U.S. healthcare system, collapsed again in the Senate on Tuesday.

A comprehensive rewrite of the U.S. tax code has eluded previous presidents and Congress for decades. The last one was passed in 1986 under Republican President Ronald Reagan.

Trump’s plan falls short of the sweeping, bipartisan package crafted by Reagan and congressional Democrats, analysts said.

The White House said that, under the proposal, typical middle-class families would have less income subject to federal tax. Trump said the first $12,000 earned by an individual and the first $24,000 by a married couple would be tax-free.

The plan would lower the top individual tax rate, paid by the nation’s top earners, to 35 percent from 39.6 percent.

It would lower the top corporate income tax rate to 20 percent from the current 35 percent. The existing rate is high globally, but many U.S.-based multinationals pay much less than the headline rate because of abundant loopholes and tax breaks.

DEMOCRATS SKEPTICAL

Trump has appealed to Democrats to back the plan, although they were not consulted in drafting it.

Republicans hold a thin 52-48 Senate majority and may need some Democratic support to win passage. But Democrats said the plan would expand the federal deficit in order to deliver tax cuts to wealthy Americans rather than the middle-class families that Trump and Republicans say they are trying to help.

“If this framework is all about the middle class, then Trump Tower is middle-class housing,” said Senator Ron Wyden, the top Democrat on the tax law-writing Senate Finance Committee.

Republican Kevin Brady, chairman of the tax-writing House of Representatives Ways and Means Committee, said he expected tax legislation to be passed by the end of this year.

The Committee for a Responsible Federal Budget, a Washington-based policy group, estimated on Wednesday the plan contained about $5.8 trillion of total tax cuts over a decade and would have a net cost of $2.2 trillion through 2027.

Analysts have warned huge tax cuts would balloon the deficit if economic growth projected by Republicans to offset the costs fails to materialize amid rising interest rates.

‘PASS-THROUGH’ RATE

The plan would set a new 25 percent tax rate for “pass-through” businesses, which are usually small, private enterprises, such as partnerships and sole proprietorships. They represent about 95 percent of all U.S. businesses.

Under current law, the profits of those companies “pass through” directly to their owners and are taxed as personal income, often at the top 39.6 percent individual income rate.

Cutting that to 25 percent could mean big tax savings for small-business owners, but also be vulnerable to abuse by other individuals and companies, analysts said.

Republicans proposed eliminating some tax deductions. They did not target the popular ones for mortgage interest and charitable giving, but called for scrapping the one for state and local tax payments. That could especially hurt people in high-tax states like California and New York.

In a step to simplify tax returns, the plan would shrink the current seven tax brackets to three: 12 percent, 25 percent and 35 percent. That would raise the bottom tax rate on low-earning Americans to 12 percent from 10 percent, but analysts said other parts of the plan would still mean a net tax cut.

Reporting by David Morgan and Richard Cowan; Additional reporting by Susan Heavey, Doina Chiacu and Amanda Becker; Writing by Will Dunham and Kevin Drawbaugh; Editing by Alistair Bell and Peter Cooney

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/8Jsh16uiK6w/trump-proposes-u-s-tax-overhaul-stirs-concerns-on-deficit-idUSKCN1C213M

Trump proposes U.S. tax overhaul, stirs concerns on deficit

WASHINGTON (Reuters) – President Donald Trump proposed on Wednesday the biggest U.S. tax overhaul in three decades, calling for tax cuts for most Americans, but prompting criticism that the plan favors business and the rich and could add trillions of dollars to the deficit.

The proposal drew a swift, skeptical response from Senator Bob Corker, a leading Republican “fiscal hawk,” who vowed not to vote for any federal tax package financed with borrowed money.

“What I can tell you is that I’m not about to vote for any bill that increases our deficit, period,” Corker, who said on Tuesday he would not seek re-election in 2018, told reporters.

Trump said his tax plan was aimed at helping working people, creating jobs and making the tax code simpler and fairer. But it faces an uphill battle in the U.S. Congress with Trump’s own Republican Party divided over it and Democrats hostile.

The plan would lower corporate and small-business income tax rates, reduce the top income tax rate for high-earning American individuals and scrap some popular tax breaks, including one that benefits people in high-tax states dominated by Democrats.

Forged during months of talks among Trump’s aides and top congressional Republicans, the plan contained few details on how to pay for the tax cuts without expanding the budget deficit and adding to the nation’s $20 trillion national debt.

The plan still must be turned into legislation, which was not expected until after Congress makes progress on the fiscal 2018 budget, perhaps in October. It must then be debated by the Republican-led congressional tax-writing committees.

Analysts were skeptical that Congress could approve a tax bill this year, but that is what Republicans hope to achieve so they can enter next year’s congressional election campaigns with at least one legislative achievement to show for 2017.

Financial markets rallied on the plan’s unveiling, an event long anticipated by traders betting that stocks would benefit from both faster economic growth and inflation.

TRUMP IN INDIANA

  • Trump says he will not negotiate on 20 percent corporate tax rate
  • Factbox: Trump on Twitter (Sept 27) – Filibuster rule, Facebook, tax reform
  • Trump says unnamed country plans to build, expand five U.S. auto plants

At an event in Indianapolis, Trump called the plan the largest tax cut in U.S. history. “We want tax reform that is pro-growth, pro-jobs, pro-worker, pro-family and, yes, tax reform that is pro-American,” he said.

The real estate mogul-turned-politician, who promised big tax cuts as a candidate, told reporters he personally would not gain financially from the proposal.

“I think there’s very little benefit for people of wealth,” said Trump, who unlike many of his White House predecessors, has refused to make public his own tax returns.

Republicans have produced no major legislative successes since Trump took office in January, even though they control the White House and both chambers of Congress. Their top legislative priority, overhauling the U.S. healthcare system, collapsed again in the Senate on Tuesday.

A comprehensive rewrite of the U.S. tax code has eluded previous presidents and Congress for decades. The last one was passed in 1986 under Republican President Ronald Reagan.

Trump’s plan falls short of the sweeping, bipartisan package crafted by Reagan and congressional Democrats, analysts said.

The White House said that, under the proposal, typical middle-class families would have less income subject to federal tax. Trump said the first $12,000 earned by an individual and the first $24,000 by a married couple would be tax-free.

The plan would lower the top individual tax rate, paid by the nation’s top earners, to 35 percent from 39.6 percent.

It would lower the top corporate income tax rate to 20 percent from the current 35 percent. The existing rate is high globally, but many U.S.-based multinationals pay much less than the headline rate because of abundant loopholes and tax breaks.

DEMOCRATS SKEPTICAL

Trump has appealed to Democrats to back the plan, although they were not consulted in drafting it.

Republicans hold a thin 52-48 Senate majority and may need some Democratic support to win passage. But Democrats said the plan would expand the federal deficit in order to deliver tax cuts to wealthy Americans rather than the middle-class families that Trump and Republicans say they are trying to help.

“If this framework is all about the middle class, then Trump Tower is middle-class housing,” said Senator Ron Wyden, the top Democrat on the tax law-writing Senate Finance Committee.

Republican Kevin Brady, chairman of the tax-writing House of Representatives Ways and Means Committee, said he expected tax legislation to be passed by the end of this year.

The Committee for a Responsible Federal Budget, a Washington-based policy group, estimated on Wednesday the plan contained about $5.8 trillion of total tax cuts over a decade and would have a net cost of $2.2 trillion through 2027.

Analysts have warned huge tax cuts would balloon the deficit if economic growth projected by Republicans to offset the costs fails to materialize amid rising interest rates.

‘PASS-THROUGH’ RATE

The plan would set a new 25 percent tax rate for “pass-through” businesses, which are usually small, private enterprises, such as partnerships and sole proprietorships. They represent about 95 percent of all U.S. businesses.

Under current law, the profits of those companies “pass through” directly to their owners and are taxed as personal income, often at the top 39.6 percent individual income rate.

Cutting that to 25 percent could mean big tax savings for small-business owners, but also be vulnerable to abuse by other individuals and companies, analysts said.

Republicans proposed eliminating some tax deductions. They did not target the popular ones for mortgage interest and charitable giving, but called for scrapping the one for state and local tax payments. That could especially hurt people in high-tax states like California and New York.

In a step to simplify tax returns, the plan would shrink the current seven tax brackets to three: 12 percent, 25 percent and 35 percent. That would raise the bottom tax rate on low-earning Americans to 12 percent from 10 percent, but analysts said other parts of the plan would still mean a net tax cut.

Reporting by David Morgan and Richard Cowan; Additional reporting by Susan Heavey, Doina Chiacu and Amanda Becker; Writing by Will Dunham and Kevin Drawbaugh; Editing by Alistair Bell and Peter Cooney

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/8Jsh16uiK6w/trump-proposes-u-s-tax-overhaul-stirs-concerns-on-deficit-idUSKCN1C213M

Bombardier overshadows NAFTA talks as Quebec, Britain threaten retaliation

MONTREAL/BELFAST (Reuters) – Stiff U.S. duties imposed on Bombardier Inc’s (BBDb.TO) CSeries jet sparked retaliation threats from Britain and Canada’s Quebec province on Wednesday as the dispute, which may affect thousands of jobs, overshadowed North American trade talks.

The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties of 220 percent on the jets, which could effectively shut Bombardier out of the U.S. market if upheld, after rival Boeing Co (BA.N) launched a trade challenge accusing Canada of unfairly subsidizing the aircraft.

The topic loomed large at North American Free Trade Agreement (NAFTA) talks in Ottawa where the countries acknowledged relations between Washington and Ottawa had become strained over the U.S. action.

Canadian Foreign Minister Chrystia Freeland said she raised the issue with U.S. Trade Representative Robert Lighthizer. He told reporters: “I‘m not saying it doesn’t have an effect on relationships – it does – but not on this negotiation.”

The duties, which came on the same day Bombardier was left out of a rail tie-up, sent its shares and bond prices lower. The shares initially fell 14 percent before regaining ground to end down 7.5 percent at C$2.10. Many of its junk-rated bonds also fell, according to MarketAxess data.

“This puts a cloud over the company with regard to the CSeries,” said Bryden Teich, portfolio manager at Avenue Investment Management. “As long as there’s this uncertainty, it will affect the share price.”

The duties create “a level playing field in the aerospace market,” said another rival, Brazil’s Embraer (EMBR3.SA), which welcomed the move.

Bombardier is a major employer in Quebec, where Prime Minister Justin Trudeau’s Liberals say they need to win extra seats in an election set for October 2019.

Quebec Premier Philippe Couillard called on Ottawa to ensure that “not a bolt, not a part, not a plane from Boeing” be allowed into Canada until the dispute had been resolved.

“Boeing may have won a battle but, let me tell you, the war is far from over. And we will win,” Couillard told reporters, describing the duties as an attack.

Boeing, in a statement, reiterated it was not attacking Canada and the issue was a commercial dispute with Bombardier.

In Ottawa, Trudeau said the government was “disappointed and … will continue to fight for good Canadian jobs.” He has previously said Canada will not go ahead with plans to buy 18 Boeing F-18 Super Hornet fighter jets unless the challenge is dropped.

Canadian Trade Minister Francois-Philippe Champagne described it as a deplorable decision and one which shows that Boeing is not a “trustworthy partner.”

“Our message to the Americans is to tell them that this decision will also have an impact on American suppliers and jobs in the United States,” he added.

BROADENING TRADE BATTLE

The Boeing-Bombardier spat has snowballed into a bigger trade battle. Bombardier is a major employer in Northern Ireland, where a handful of legislators is keeping British Prime Minister Theresa May’s minority Conservative government in power.

Britain told Boeing on Wednesday that it could lose out on British defense contracts because of the dispute. May said in a tweet that she was “bitterly disappointed” by the ruling.

Boeing said it was committed to Britain.

The duties on Bombardier mark the second U.S. trade action against Canadian companies since President Donald Trump took office. Earlier this year, the United States imposed preliminary anti-subsidy duties on Canadian softwood lumber.

Boeing launched its challenge in April, alleging Bombardier had dumped airliners on the U.S. market when it struck a deal for 75 CSeries planes with Delta Air Lines Inc (DAL.N).

Delta’s CEO on Wednesday said Boeing’s challenge was “absurd” and predicted the duties would not be made permanent when Commerce reaches a final decision next year.

Bombardier, which considered bankruptcy in 2015 and is undertaking a five-year plan to improve performance and margins, is still grappling with nearly $9 billion in debt.

The company also got snubbed by Siemens AG (SIEGn.DE) on Tuesday, which opted to merge with France’s Alstom instead.

Bombardier may need to raise more equity to support a capital-intensive business, according to Lorne Steinberg, president of Lorne Steinberg Wealth Management Inc in Montreal.

Writing by David Ljunggren; Additional reporting by Anna Mehler Paperny and Nichola Saminather in Toronto and Leah Schnurr in Ottawa; Editing by Meredith Mazzilli and Matthew Lewis

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Q0-PM2N3wr0/bombardier-overshadows-nafta-talks-as-quebec-britain-threaten-retaliation-idUSKCN1C22QB

Bombardier overshadows NAFTA talks as Quebec, Britain threaten retaliation

MONTREAL/BELFAST (Reuters) – Stiff U.S. duties imposed on Bombardier Inc’s (BBDb.TO) CSeries jet sparked retaliation threats from Britain and Canada’s Quebec province on Wednesday as the dispute, which may affect thousands of jobs, overshadowed North American trade talks.

The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties of 220 percent on the jets, which could effectively shut Bombardier out of the U.S. market if upheld, after rival Boeing Co (BA.N) launched a trade challenge accusing Canada of unfairly subsidizing the aircraft.

The topic loomed large at North American Free Trade Agreement (NAFTA) talks in Ottawa where the countries acknowledged relations between Washington and Ottawa had become strained over the U.S. action.

Canadian Foreign Minister Chrystia Freeland said she raised the issue with U.S. Trade Representative Robert Lighthizer. He told reporters: “I‘m not saying it doesn’t have an effect on relationships – it does – but not on this negotiation.”

The duties, which came on the same day Bombardier was left out of a rail tie-up, sent its shares and bond prices lower. The shares initially fell 14 percent before regaining ground to end down 7.5 percent at C$2.10. Many of its junk-rated bonds also fell, according to MarketAxess data.

“This puts a cloud over the company with regard to the CSeries,” said Bryden Teich, portfolio manager at Avenue Investment Management. “As long as there’s this uncertainty, it will affect the share price.”

The duties create “a level playing field in the aerospace market,” said another rival, Brazil’s Embraer (EMBR3.SA), which welcomed the move.

Bombardier is a major employer in Quebec, where Prime Minister Justin Trudeau’s Liberals say they need to win extra seats in an election set for October 2019.

Quebec Premier Philippe Couillard called on Ottawa to ensure that “not a bolt, not a part, not a plane from Boeing” be allowed into Canada until the dispute had been resolved.

“Boeing may have won a battle but, let me tell you, the war is far from over. And we will win,” Couillard told reporters, describing the duties as an attack.

Boeing, in a statement, reiterated it was not attacking Canada and the issue was a commercial dispute with Bombardier.

In Ottawa, Trudeau said the government was “disappointed and … will continue to fight for good Canadian jobs.” He has previously said Canada will not go ahead with plans to buy 18 Boeing F-18 Super Hornet fighter jets unless the challenge is dropped.

Canadian Trade Minister Francois-Philippe Champagne described it as a deplorable decision and one which shows that Boeing is not a “trustworthy partner.”

“Our message to the Americans is to tell them that this decision will also have an impact on American suppliers and jobs in the United States,” he added.

BROADENING TRADE BATTLE

The Boeing-Bombardier spat has snowballed into a bigger trade battle. Bombardier is a major employer in Northern Ireland, where a handful of legislators is keeping British Prime Minister Theresa May’s minority Conservative government in power.

Britain told Boeing on Wednesday that it could lose out on British defense contracts because of the dispute. May said in a tweet that she was “bitterly disappointed” by the ruling.

Boeing said it was committed to Britain.

The duties on Bombardier mark the second U.S. trade action against Canadian companies since President Donald Trump took office. Earlier this year, the United States imposed preliminary anti-subsidy duties on Canadian softwood lumber.

Boeing launched its challenge in April, alleging Bombardier had dumped airliners on the U.S. market when it struck a deal for 75 CSeries planes with Delta Air Lines Inc (DAL.N).

Delta’s CEO on Wednesday said Boeing’s challenge was “absurd” and predicted the duties would not be made permanent when Commerce reaches a final decision next year.

Bombardier, which considered bankruptcy in 2015 and is undertaking a five-year plan to improve performance and margins, is still grappling with nearly $9 billion in debt.

The company also got snubbed by Siemens AG (SIEGn.DE) on Tuesday, which opted to merge with France’s Alstom instead.

Bombardier may need to raise more equity to support a capital-intensive business, according to Lorne Steinberg, president of Lorne Steinberg Wealth Management Inc in Montreal.

Writing by David Ljunggren; Additional reporting by Anna Mehler Paperny and Nichola Saminather in Toronto and Leah Schnurr in Ottawa; Editing by Meredith Mazzilli and Matthew Lewis

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Q0-PM2N3wr0/bombardier-overshadows-nafta-talks-as-quebec-britain-threaten-retaliation-idUSKCN1C22QB

Exclusive: Royal Bank of Canada using blockchain for U.S./Canada payments

TORONTO (Reuters) – Royal Bank of Canada (RY.TO) is experimenting with blockchain to help move payments between its U.S. and Canadian banks, one of the bank’s senior executives told Reuters on Thursday.

Martin Wildberger, RBC’s executive vice president for innovation and technology, said use of distributed ledger technology, or DLT, would improve the speed of payments, reduce complexity and lower costs.

The bank developed the system over the past six months at an RBC blockchain technology center in Toronto, deploying software developed by a cross-industry open-source blockchain consortium known as Hyperledger.

The technology was integrated into RBC’s existing systems several weeks ago as a “shadow” to RBC’s primary ledger, letting the bank monitor payments in real-time as they travel between the United States and Canada, he said.

“We wanted to set it up as a shadow ledger so that we can demonstrate our leadership in exploiting that technology while at the same time recognizing that the technology is still early in its adoption phase,” Wildberger said.

Blockchain emerged in 2009 as the system underpinning the cryptocurrency bitcoin, allowing people to quickly and anonymously exchange electronic currency. It is a shared ledger of transactions maintained by a network of computers rather than a central authority.

Investors have since put billions of dollars into developing blockchain, betting the technology could make banking operations faster, more efficient and more transparent.

Although concerns remain about the legitimacy of bitcoin, which JP Morgan (JP.N) Chief Executive Jamie Dimon described as a fraud earlier this month, the credibility of the blockchain technology itself has increased.

A growing number of senior bankers have said they believe it will eventually revolutionize the way payments are made across the industry, reducing complexity and costs of back-office processes.

“Everybody recognizes blockchain will be transformative and critical,” said Wildberger. “At the same point in time, I think everybody recognizes these are early days.”

RBC is looking to use blockchain to improve its rewards and loyalty offers and trade finance capabilities, he said.

Canada’s central bank said in May that it had decided against using blockchain to provide the underlying infrastructure for the country’s interbank payment system after a year-long investigation, saying “too many hurdles” had to be overcome to make the approach viable.

Reporting by Matt Scuffham; Editing by Jim Finkle

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/T03FDj7qjwg/exclusive-royal-bank-of-canada-using-blockchain-for-u-s-canada-payments-executive-idUSKCN1C237N

Exclusive: Royal Bank of Canada using blockchain for U.S./Canada payments

TORONTO (Reuters) – Royal Bank of Canada (RY.TO) is experimenting with blockchain to help move payments between its U.S. and Canadian banks, one of the bank’s senior executives told Reuters on Thursday.

Martin Wildberger, RBC’s executive vice president for innovation and technology, said use of distributed ledger technology, or DLT, would improve the speed of payments, reduce complexity and lower costs.

The bank developed the system over the past six months at an RBC blockchain technology center in Toronto, deploying software developed by a cross-industry open-source blockchain consortium known as Hyperledger.

The technology was integrated into RBC’s existing systems several weeks ago as a “shadow” to RBC’s primary ledger, letting the bank monitor payments in real-time as they travel between the United States and Canada, he said.

“We wanted to set it up as a shadow ledger so that we can demonstrate our leadership in exploiting that technology while at the same time recognizing that the technology is still early in its adoption phase,” Wildberger said.

Blockchain emerged in 2009 as the system underpinning the cryptocurrency bitcoin, allowing people to quickly and anonymously exchange electronic currency. It is a shared ledger of transactions maintained by a network of computers rather than a central authority.

Investors have since put billions of dollars into developing blockchain, betting the technology could make banking operations faster, more efficient and more transparent.

Although concerns remain about the legitimacy of bitcoin, which JP Morgan (JP.N) Chief Executive Jamie Dimon described as a fraud earlier this month, the credibility of the blockchain technology itself has increased.

A growing number of senior bankers have said they believe it will eventually revolutionize the way payments are made across the industry, reducing complexity and costs of back-office processes.

“Everybody recognizes blockchain will be transformative and critical,” said Wildberger. “At the same point in time, I think everybody recognizes these are early days.”

RBC is looking to use blockchain to improve its rewards and loyalty offers and trade finance capabilities, he said.

Canada’s central bank said in May that it had decided against using blockchain to provide the underlying infrastructure for the country’s interbank payment system after a year-long investigation, saying “too many hurdles” had to be overcome to make the approach viable.

Reporting by Matt Scuffham; Editing by Jim Finkle

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Mexico opens way for NAFTA talks to run into 2018

OTTAWA (Reuters) – Mexico on Wednesday opened the possibility that talks to revamp the NAFTA trade agreement were so complex that they could run into 2018, beyond an end-December deadline designed to avoid Mexico’s presidential election campaign which kicks off in March.

The United States, Canada and Mexico said at the end of a five-day session in Ottawa there had been progress made in the talks but acknowledged that much work remained to conclude the negotiations by the end of the year.

Mexico’s Economy Minister Ildefonso Guajardo said there would be “substantial challenges” in the next round in Washington on Oct. 11-15.

“We have the ambition, we have the strength to try to move forward with a view to closing a negotiation but no one can assure with total certainty that we will be able to do it,” Guajardo told reporters.

“That is our expectation and, therefore, it must also be considered that in this process dates will have to be considered, if necessary, for the start of the next year,” he added.

The three countries have rushed to finish talks to modernize the 23-year-old North American Free Trade Agreement even though trade experts dismissed the deadline as impossible.

The Trump administration has been criticized by Canadian and Mexican officials for not yet presenting some of the most contentious issues in NAFTA, including content rules of origin.

“Staff are working at a pace that is unheard of (in trade negotiations) … and any suggestion that we’re not operating beyond a normal pace is just flat wrong,” U.S. trade envoy Robert Lighthizer told reporters.

Strains between Ottawa and Washington also emerged on Wednesday, a day after a U.S. trade panel said it would impose preliminary subsides on Canadian jet manufacturer Bombardier Inc after rival Boeing Co accused Canada of unfairly subsidizing its CSeries jets.

Lighthizer said Canada had “mentioned” the U.S. ruling during talks on Wednesday.

Asked whether the dispute could affect NAFTA talks, Lighthizer told reporters: “I‘m not saying it doesn’t have an effect on relationships, it does, but not on this negotiation.”

Negotiators said they had wrapped up one chapter on small and medium-sized enterprises in Ottawa and expected to finish another on competition before the next round.

Lighthizer said the United States would “hopefully” present draft text by the next round on the thorny issue of rules of origin, which outlines how much of a product needs to originate in a NAFTA country, and on a dispute settlement mechanism.

Canada’s Foreign Minister, Chrystia Freeland, has said it was typical of trade talks to wrap up the “bread and butter” issues first before getting into more challenging topics.

“We never said this was going to be easy,” Freeland told reporters.

Trade among the three nations has quadrupled since NAFTA came into effect in 1994, surpassing $1 trillion in 2015.

But U.S. President Donald Trump regularly calls the treaty a disaster and has threatened to walk away from it unless major changes are made, claiming NAFTA has resulted in U.S. job losses and a trade deficit with Mexico.

The Bombardier decision is likely to further harden Canada’s stance on keeping a key dispute-settlement mechanism in NAFTA, which the Trump administration wants to eliminate.

Lighthizer said the U.S. decision on Bombardier still had several stages to go through before it was finalized.

“There are several more stages, we don’t even know whether it is going to be successful, and in addition there are off-ramps in the litigation,” he said. “It’s too early to tell.”

Freeland has suggested that Canada could walk away from the NAFTA talks over the so-called Chapter 19 dispute mechanism, under which binational panels make binding decisions on complaints about illegal subsidies and dumping. The United States has frequently lost such cases.

A lengthy fight over Chapter 19 could also drag out the negotiations.

The U.S. delegation presented draft text on NAFTA labor standards on Tuesday and put forward proposals on investment and intellectual property at the weekend.

Laxer labor standards and lower pay in Mexico have swelled corporate profits at the expense of Canadian and U.S. workers, the U.S. administration claims, making the issue one of the major battlegrounds of the NAFTA talks.

While the U.S. draft text on labor standards did not detail wage levels, Lighthizer said all sides were interested in getting into wage specifics to help Mexican workers

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/B22AcRPe_Co/mexico-opens-way-for-nafta-talks-to-run-into-2018-idUSKCN1C22SX