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‘Bondcano’ could hit mining stocks

Markets for government bonds and mining companies might seem to have little in common, but if interest rates on bonds continue to rise, compounding pressure already being felt by investors, then some mining companies could be hit hard.

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China’s young shoppers breathe new life into luxury market

SHANGHAI/HONG KONG (Reuters) – Guo Jiaxi is typical of a new generation in China that is driving a sharp revival in luxury spending: young, female and unafraid to spend.

An accountant in eastern Suzhou, Guo, 24, likes Coach and Louis Vuitton, and has bought Acne Studios scarves, a Daniel Wellington watch and a Mont Blanc belt as gifts. Of an annual salary of 50,000 yuan ($7,898), she spends one-fifth on luxury items.

“Luxury is not a total necessity for me, I suppose, but whenever I’ve got enough money to spare, then I’ll buy,” she said.

Guo and her peer group are behind a dramatic spike in luxury spending in China last year, according to consultancy Bain Co. They are the key demographic for luxury brands from LVMH to Gucci owner Kering and France’s Hermes in tapping the world’s top luxury consumers.

Their willingness to spend – often more than they can afford – comes with a note of caution. These consumers are typically less loyal to traditional brands, swayed by shifting trends online and increasingly looking for deals.

“Some of these youngsters, even when they don’t really have enough funds, they’re still going out and buying luxury products,” said Huang Yue, 27, who runs the fashion section at the website “Loving Luxury.”

Yue added that the shift to millenials, those aged roughly 20-34, had been dramatic. It spurred the rise of new areas such as luxury “streetwear” and sporting attire, which Bain said were behind the recent fast growth.

“In terms of the impact on the market, it’s really given it a shot in the arm,” Yue said.

Driven by general optimism, attracted by the ease of online shopping and helped along the way by parents who benefited from the country’s fast growth and rising home prices, Chinese millennials are buoying the luxury market at home and abroad.

Millennial shoppers pushed the Chinese market up to 142 billion yuan ($22.07 billion) in sales last year, about 20 percent higher than the year before. It is by far the steepest jump in over half a decade of sluggish growth, according to Bain.

Luxury goods purchased in China make up 8 percent of the global total, while Chinese shoppers – who make three-quarters of their luxury purchases overseas – drive 32 percent of sales worldwide.

LVMH’s chief executive, Bernard Arnault, said China was a “very dynamic” market in which the Louis Vuitton brand was doing well.

“China has had a good comeback,” he told reporters last week. The company has seen a slow recovery in China since a weak start to 2016.

Gucci and cognac maker Remy Cointreau are among other well-known companies citing stronger growth in the market.

Analysts and industry insiders, however, said shoppers were widening the range of brands they looked at, a challenge for some more traditional players.

Tapestry Inc’s Coach and British fashion house Burberry both reported weaker ends to last year. Prada – which had seen sales slump in China – has been building partnerships with influential internet personalities and launched an online shop in December.

Online retailers like Alibaba Group Holding Ltd and have launched their own luxury platforms and lured in brands such as Yves Saint Laurent, Stella McCartney and Alexander McQueen.

“Chinese consumers are going through several changes,” Liao Jianwen, chief strategic officer at, told the Reuters Global Markets Forum at the World Economic Forum in Davos, adding that shoppers now want high-quality products at “competitive prices.”


Even as consumers spend more, they are becoming thriftier.

Zhang Xia, 24, an investment professional in the southern metropolis of Chongqing, has bought Dior bags, Louis Vuitton, Bulgari jewelry, and once paid 150,000 yuan ($23,695) for a Piaget watch. She’s now less easily won over.

“Increasingly what I‘m after now is original patterns and designs,” she said, adding that, like Guo, she sometimes gets help paying for her purchases. “It’s more about the quality and feel of the product, so if I can find that I won’t necessarily choose a luxury brand.”

The shift has meant the rise of areas not previously seen as being in the same space as traditional luxury, including casual wear, “streetwear” and even premium sports clothing.

Shoppers are also more willing to buy used goods. That means people making new purchases can sell their goods later, defraying the cost of a big-ticket item.

“Because people know that they can sell things on second hand, they’re not so strict with their luxury budgets,” said Deng Yun, 33, the chief operating officer of used luxury goods trading platform

He said the most popular brands on the site were handbags from Louis Vuitton, Chanel, Gucci and Fendi. Chloe, owned by luxury house Richemont, is popular with younger shoppers, while Hermes still has good cachet, he added.

The premium sportswear firm Lululemon, seeing strong demand from China’s youth, is now “focused on exploring and developing new approaches to capture this audience,” said Amanda Casgar, Lululemon’s Asia Pacific director of brand community.

Winning over the parents of young shoppers like Guo could be helpful too – they are often a source of funds for a generation increasingly inclined to borrow or use credit.

“Of course my salary is pretty low, so mum and dad do help me out a little,” Guo said.

Reporting by Adam Jourdan; Additional reporting by Farah Master and Donny Kwok in HONG KONG and SHANGHAI newsroom; Editing by Gerry Doyle

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South Korea says no plans to ban cryptocurrency exchanges, uncovers $600 million illegal trades

SEOUL (Reuters) – South Korea’s finance minister said the government has no plans to shut down cryptocurrency trading, welcome news for investors worried that authorities might go as far as China’s tough action in blocking virtual coin platforms.

The comment by Kim Dong-yeon on Wednesday comes as traders at home and around the world have been spooked by conflicting comments from government officials in South Korea, a major hub for cryptocurrency trade, that Seoul was planning to ban local digital coin exchanges.

“There is no intention to ban or suppress cryptocurrency (market),” Kim said, adding the government’s immediate task is to regulate exchanges.

Reinforcing Seoul’s intent to tighten the screws on a market widely seen as opaque and risky by global policymakers, the country’s customs earlier on Wednesday announced it had uncovered illegal cryptocurrency foreign exchange trading worth nearly $600 million.

“Customs service has been closely looking at illegal foreign exchange trading using cryptocurrency as part of the government’s task force,” it said.

South Korea has been at the forefront of pushing for broad regulatory oversight of cryptocurrency trading as many locals, including students and housewives, jumped into a frenzied market despite warnings from policy makers around the world of a bubble.

Seoul previously said that it is considering shutting down local cryptocurrency exchanges, which threw the market into turmoil and hammered bitcoin prices. Officials later clarified that an outright ban is only one of the steps being considered, and a final decision was yet to be made.


Customs said about 637.5 billion won ($596.02 million) worth of foreign exchange crimes were detected.

Illegal foreign currency trading of 472.3 billion formed the bulk of the cryptocurrency crimes, it said in a statement, but gave no details on what action authorities were taking against the rule breaches.

In one case, an illegal FX agency collected a total of 1.7 billion won ($1.59 million) from local residents in a form of “electric wallet” coins to transfer it to a partner agent abroad. The partner agent then cashed them out and distributed the settlement to clients based in that country, according to the statement.

In South Korea, only licensed banks and brokers can offer foreign exchange services. Local companies and residents who move more than $3,000 out of the country at a time must submit documents to tax authorities explaining reasons for the transfers. Annual overseas transfers of more than $50,000 must also be reported with similar documents.

Effective from Jan. 30, authorities imposed rules which allow only real-name bank accounts to be used for cryptocurrency trading designed to stop virtual coins from being used for money laundering and other crimes.

Among other breaches, Customs said there were also cases where investors in Japan sent their yen worth 53.7 billion won to their partners in South Korea for illegal currency trade.

It said authorities will continue to monitor for any violations of foreign exchange rules or of money laundering activities.

Bitcoin stood at $10,123.13 as of 0842 GMT on the Luxembourg-based Bitstamp exchange. The heightened regulatory scrutiny around the world, however, has seen bitcoin dive about 27.1 percent so far this month, on track for its biggest monthly decline since January 2015.

Cryptocurrencies got another jolt last week after Tokyo-based exchange Coincheck said hackers stole over $500 million in one of the world’s biggest cyber heists.

Reporting by Dahee Kim, Cynthia Kim and Shin-hyung Lee; Editing by Sam Holmes Shri Navaratnam

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Fujifilm to take over Xerox, combined into joint venture

TOKYO (Reuters) – Japan’s Fujifilm Holdings is set to take over Xerox Corp, and combine the U.S. company into their joint venture Fuji Xerox in an effort to cut costs, the companies said on Wednesday.

Fujifilm will own 50.1 percent of Xerox shares, and combine Xerox with Fuji Xerox, their joint venture in which the Japanese company already holds a 75 percent stake.

Reporting by Naomi Tajitsu; Editing by Jacqueline Wong

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Asia stocks poised for best month in nearly two years, dollar frail before Fed

TOKYO (Reuters) – Asia stocks steadied on Wednesday after stuttering in the wake of rising global bond yields, while the dollar came under renewed pressure, slipping to 2-1/2-year lows versus the yuan, ahead of the Federal Reserve’s policy decision.

In his first State of the Union address since becoming U.S. President, Donald Trump urged Republicans and Democrats to work toward compromises on immigration and infrastructure and implement legislation that generates at least $1.5 trillion for new infrastructure investment.

U.S. stock futures rose 0.15 percent, though overall market reaction to the speech was limited.

“Futures lifted a bit because it was not a negative speech. He was calm. He celebrated America. He avoided his own failures,” said Tim Ghriskey, Chief Investment Officer at Cresset Wealth Advisors in Chicago.

European shares are expected to open higher, with spread-betters looking at gains of 0.2 percent in Germany’s Dax and 0.1 percent each in Britain’s FTSE and France’s Cac.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.3 percent, reversing earlier losses. January has so far seen the index gain 6.5 percent, putting it on course for its best month since March 2016.

Japan’s Nikkei however dropped 0.8 percent, though still capping a monthly gain of 1.5 percent.

Wall Street, which has recently hit a succession of record peaks, has led a global equities rally over the past year thanks to strong world growth fuelling higher corporate earnings and stock valuations.

But the recent surge in U.S. long-term bond yields to near four-year highs has tempered the rally.

U.S. stocks fell for a second straight day on Tuesday, with the Dow registering its biggest two-day drop since September 2016, pressured by healthcare stocks and rising bond yields. [.N]

“The key point is the speed of the latest rise in yields, which has been very rapid. Until recently the yield rise helped the financial sector, but the pace of the rise is now too rapid and raising worries about corporate borrowing costs,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

Higher yields are seen hurting equities as they increase borrowing costs for companies and reduce their risk appetite. They also present a fresh alternative to investors, who may choose to allocate some of their money from equities to bonds.

The U.S. Treasury 10-year note yield touched its highest in nearly four years overnight at 2.733 percent, while 30-year bond yield climbed to its highest since May 2017.

Yields rose after the start of the Federal Reserve’s two-day meeting on Tuesday, which could offer more clues on the central bank’s economic and rate hike outlook.

The dollar failed to draw much support from higher Treasury yields as the risk-averse mood favored its peers like the yen.

The dollar was flat at 108.72 yen. It briefly popped up to 109.095 after the Bank of Japan increased its buying of government bonds of three- to five-year maturities at a regular debt-purchasing operation, a move seen as a warning shot against further rises in yields.

The euro nudged up 0.3 percent to $1.2436, adding to modest overnight gains.

The dollar index against a basket of six major currencies was at 88.971, having crawled away from a three-year low of 88.438 set on Friday.

The dollar lost 0.4 percent against the Chinese yuan, falling below 6.3 yuan for the first time since August 2015.

The risk aversion in the broader markets took a toll on recently bullish crude oil. U.S. crude futures stretched overnight losses to slide 0.6 percent to $64.11 per barrel, with data showing a higher-than-expected rise in stocks also weighing.

Underpinned by the dollar’s recent slide, prices had risen to $66.66 per barrel on Thursday, the highest since December 2014.

Brent crude was down 0.5 percent at $68.66 per barrel.

Additional reporting by Noel Randewich in San Francisco and Hideyuki Sano in Tokyo; Editing by Sam Holmes Shri Navaratnam

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Samsung Elec unveils stock split, record profit as chips sizzle

SEOUL (Reuters) – Samsung Electronics Co Ltd announced on Wednesday its first stock split and said it expects demand for semiconductors to remain strong in 2018, as it posted record annual profit driven by a so-called memory chip “super-cycle.”

The tech giant’s stock split is the latest in a series of moves to bolster shareholder returns, including 5.8 trillion won ($5.4 billion) in annual dividends and 9.2 trillion won in share buybacks and cancellations in 2017.

The firm’s largesse has encouraged investors to hold shares despite concerns that the memory business may be peaking. The stock split will open the door to retail investors as well, boosting liquidity and underpinning valuations, analysts said.

“The stock split comes as a surprise to me,” said Kim Sung-soo, a fund manager at LS Asset Management who holds Samsung shares, noting that Samsung previously had shrugged off investors’ calls to split its shares.

“This will not have an impact on the company’s fundamentals, but it will increase supply of the stock and have a positive impact on shares.”

Led by a stellar fourth quarter, the global leader in televisions, memory chips and smartphones brought home an annual operating profit of 53.7 trillion won ($50.2 billion) in 2017, outstripping the previous record of 36.8 trillion won in 2013.

While the profit was expected, the firm’s shares surged more than 8 percent after it unveiled the stock split. They closed up 0.2 percent.

In further good news for shareholders, Samsung eased concerns that the huge expansion in the global semiconductor business may be tapering off, saying the outlook for 2018 remained strong.

Chip makers like Samsung, South Korean rival SK Hynix Inc and Intel Corp have been riding a boom in sales of semiconductors as the world demands ever greater processing capacity to power data centers, high-tech smartphones and the blockchain ledgers behind cryptocurrencies.

“Looking at the mid-to-long term, Samsung expects the components business to see demand expand from new applications,” the company said in a statement.


Samsung’s operating profit for the three months ended December leapt 64 percent on year to 15.15 trillion won ($14.13 billion), in line with its forecasts.

The chip business was Samsung’s top earner last year, posting a record operating profit of 35.2 trillion won and more than doubling its profit on-year in the fourth quarter alone.

Samsung said it expected DRAM and NAND flash chip shipments to grow on-year by about 20 percent and 40 percent respectively in 2018.

The foundry business, which makes chips to order, would jump from 4th place to be a “strong market No. 2” behind Taiwan Semiconductor Manufacturing Co Ltd (TSMC) in 2018, partly due to the cryptocurrency boom.

Cryptocurrencies are digital currencies that use encryption techniques for security and can be traded. The technology needs powerful chips to validate transactions.

Earlier this month TSMC said it expected the cryptocurrency market to drive up demand for high-end chips and help it post record revenue this year, outweighing softening sales to smartphone vendors.

Samsung’s mobile division, which competes with Apple Inc, reported operating profit of 2.4 trillion won in the fourth quarter, down 3 percent from the previous corresponding quarter.

The launch of the Galaxy S9 flagship smartphone next month should minimize any off-season weakness in demand during the first quarter, the company said.

However, the outlook for Samsung’s smartphones was uncertain amid competition from Chinese rivals in markets like Europe and Asia, said Tom Kang, research director at data provider Counterpoint.

Samsung’s display business, which supplies Apple with OLED screens, reported a 1.4 trillion won profit in the fourth quarter, up 5 percent from the same period last year.

KwonYoung Choi, the vice president of Samsung’s display unit, brushed off reports that Apple will cut iPhone X production for the first three months of the year amid soft sales, saying the screen business was not dependent on any one client.

Samsung spent a record 43.4 trillion won in capital expenditure last year to boost production of memory chips and organic light-emitting diode (OLED) screens. As a result, capital expenditure would fall in 2018, it said.

Reporting by Joyce Lee and Ju-min Park; Additional reporting by Hyunjoo Jin; Editing by Stephen Coates

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Allegiant up on TSX-V debut

The spin-out was approved by Columbus shareholders in November and is led by industry veteran Andy Wallace.

Allegiant has more than a dozen gold projects in the US with the bulk in Nevada.

The gold price was almost US$10 an ounce higher than this time yesterday in the wake of US president Donald Trump’s state of the union address, where he called for unity, spruiked economic achievements and called on Congress to produce a bill that generated “at least US$1.5 trillion” for new infrastructure investment.

Ironbark set to open a new zinc basin for hungry smelters

Ironbark set to open a new zinc basin for hungry smelters…

Doe Run Peru's Productive Units are on the Public Auction Block

Doe Run Peru’s Productive Units are on the Public Auction…

The pure play cobalt vehicle

The pure play cobalt vehicle

A new Dynasty

A new Dynasty

Australian gold stocks had a better day than yesterday.

Pilbara conglomerate gold co-trendsetter Artemis Resources (AU:ARV) was one of the key gainers, rising 7.5% on a newsy day.

The company announced it had received bought deal commitments to raise an additional A$2 million to the $4.5 million capital raising announced yesterday.

The funds will take its cash reserves to more than $20 million (US$16 million) as it prepares to recommence production at its Radio Hill plant and fund bulk sampling at its conglomerate plays.

It also announced a resource increase for its Carlow Castle project, also in the Pilbara, saying it had the potential to be a significant new cobalt province in Australia.

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Media reports say Nevada regulators open misconduct inquiry into casino mogul Steve Wynn

(Reuters) – Nevada state regulators have opened an investigation into sexual misconduct accusations leveled against Las Vegas casino magnate Steve Wynn by former and current employees in a Wall Street Journal article last week, media reports said on Tuesday.

The billionaire founder, chairman and chief executive officer of Wynn Resorts Ltd has denied the allegations as “preposterous” and accused his ex-wife of instigating them for her own gain in litigation against him and his company.

The regulatory inquiry was revealed on Tuesday in a statement that CNBC and several other news outlets attributed to Nevada Gaming Control Board Chair Becky Harris, whose agency oversees enforcement of casino and gambling operations and licensing in the state.

“After completing our review, the Nevada Gaming Control Board is conducting an investigation with regard to the allegations of sexual misconduct involving Steve Wynn. The Nevada Gaming Control Board will conduct its investigation in a thorough and judicious manner,” Harris was quoted as saying.

A spokesman for Wynn Resorts, Michael Weaver, said the company “will fully cooperate with any review by regulators.”

Reuters was unable to independently obtain a copy of the statement, but one source with knowledge of the situation confirmed that media reports citing the statement were accurate.

Wynn, 76, resigned as finance chairman of the Republican National Committee on Saturday, a day after the Wall Street Journal reported he had routinely subjected women who worked for him to unwanted sexual advances for decades..

His former spouse, Elaine Wynn, whom he accused of fomenting false allegations against him, has denied through her lawyer that she did any such thing.

The company’s stock dropped more than 10 percent on Friday after publication of the Journal’s article, closing the day at $180.29 per share on the Nasdaq exchange.

Hours later, the Wynn Resorts board said it had formed a special committee to conduct its own inquiry into the accusations. That panel is chaired by Patricia Mulroy, who sits on the board’s corporate governance and compliance committees and is a former member of the Nevada Gaming Commission.

The Journal report marked the latest in a wave of sexual abuse and harassment allegations against powerful men in the United State during the past year, especially in the media and entertainment industries and politics.

The Journal said its report was based on interviews with dozens of people who had worked for Wynn and that none of the 150 individuals contacted for its story had reached out to the newspaper.

Reporting by Steve Gorman in Los Angeles; Editing by Paul Tait and Neil Fullick

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