FILE PHOTO: A Starbucks logo hangs outside of one of the 8,000 Starbucks-owned American stores that will close around 2 p.m. local time on Tuesday as a first step in training 175,000 employees on racial tolerance in the Brooklyn borough of New York, U.S., May 29, 2018. REUTERS/Lucas Jackson
March 20, 2019
(Reuters) – Starbucks Corp is investing $100 million in a newly created fund that will be managed by Tesla Inc investor Valor Equity Partners to promote companies developing new technologies and products for the food and retail industry.
The fund, Valor Siren Ventures Fund, will later seek to raise an additional $300 million, the world’s largest coffee chain said on Wednesday, ahead of its annual shareholder meeting.
“We are inspired by, and want to support the creative, entrepreneurial businesses of tomorrow with whom we may explore commercial relationships down the road,” Starbucks Chief Executive Officer Kevin Johnson said in a statement.
Starbucks is the latest U.S. food company to invest in startups. The largest U.S. meat producer, Tyson Foods, started a fund called “Tyson Ventures” in 2016 to invest in businesses that focus on developing plant-based protein, while a clutch of other food and drink brands including Kraft Heinz and PepsiCo Inc have also set up similar funds.
Starbucks reaffirmed its longer-term revenue and profit targets and said it would buy back $2 billion in shares, as part of a commitment to return $25 billion to shareholders through 2020.
The annual shareholder meeting comes as the coffee chain counters sluggish performance in its U.S. business through a revamp of its stores and introduction of fresher food and cold brews that has driven market-beating same-store sales in the past two quarters.
The company’s shares are up about 11 percent since the beginning of the year, compared with a 13 percent gain in the S&P 500 Index.
Valor Equity is an early stage investor in Tesla and its portfolio includes investments in Chicago-based Roti Modern Mediterranean and Wow Bao.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Sriraj Kalluvila)
FILE PHOTO: Apple AirPods are displayed during a media event in San Francisco, California, U.S. September 7, 2016. REUTERS/Beck Diefenbach/File Photo
March 20, 2019
(Reuters) – Apple Inc on Wednesday launched an updated version of its wireless “AirPods” headphones, ahead of a March 25 event where it is expected to unveil a television and video service.
Earlier this week, Apple also launched a new 10.5-inch iPad Air and updated its iPad Mini as well as iMac PCs.
Apple said its new AirPods will be available on its website and the Apple Store app starting Wednesday, and in Apple Stores from next week.
The new AirPods with a standard charging case are priced at $159, while those with wireless charging case are available for $199, the iPhone maker said in a statement.
(Reporting by Arjun Panchadar in Bengaluru; Editing by Shinjini Ganguli)
FILE PHOTO: Benny Gantz, head of Blue and White party speaks to the media in Kibbutz Nir-Am, Israel March 15, 2019 REUTERS/Amir Cohen/File Photo
March 20, 2019
LONDON (Reuters) – Iran on Wednesday denied an Israeli media report that its intelligence service had hacked the mobile phone of Benny Gantz, the main challenger to Prime Minister Benjamin Netanyahu in next month’s election.
The alleged hack, first reported by an Israeli TV station, was not confirmed or denied by the Israeli national security agency Shin Bet.
The report has been aired repeatedly by Netanyahu’s Likud party in a bid to cast Gantz, former head of the Israeli armed forces, as weak on security and possibly vulnerable to blackmail.
Gantz has confirmed that his phone was hacked but said it carried no sensitive information. He has not blamed Iran.
Answering a question about the report, Iranian foreign ministry spokesman Bahram Qasemi said that “the (Israeli) regime’s officials are long used to spreading lies”, according to the state news agency IRNA.
“They use their propaganda tools to link any event in the world to Iran.”
Qasemi said the allegations were part of an Israeli “psychological war” aimed at stoking hostility.
The two arch-enemies have long been locked in a shadow war. Israel and the United States are widely suspected of deploying the Stuxnet malware, uncovered in 2010, that sabotaged components of Iran’s nuclear program.
Iranian hackers have been behind several cyber attacks and online disinformation campaigns in recent years as Iran tries to strengthen its clout in the Middle East and beyond, a Reuters Special Report published in November found.
The European Union digital security agency said in January that Iran was likely to expand its cyber espionage as its relations with Western powers worsen.
Qasemi also denied reports by Australian media in February that attempts to hack into the Australian parliament’s computer network originated from Iran.
(Reporting by Bozorgmehr Sharafedin in London and Dan Williams in Jerusalem; Editing by Kevin Liffey)
FILE PHOTO: A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005. REUTERS/Raheb Homavandi
March 20, 2019
WASHINGTON (Reuters) – The United States granted Iraq a 90-day waiver from sanctions to buy energy from Iran, a State Department official said on Wednesday, the latest extension allowing Baghdad to keep importing Iranian gas that is critical for Iraqi power production.
“Iraq was granted a 90-day waiver to purchase energy imports from Iran,” the State Department official said on condition of anonymity. The last sanctions waiver for Iraq was granted by Washington on Dec. 21.
(Reporting by Lesley Wroughton; Editing by Franklin Paul)
FILE PHOTO: A logo is pictured on the indoor track at the International Cycling Union (UCI) Federation headquarters in Aigle, Switzerland, September 27, 2017. REUTERS/Denis Balibouse
March 20, 2019
By Julien Pretot
PARIS (Reuters) – After becoming the first sport to ban Tramadol, cycling is looking to use the same “health reasons” justification to prohibit the use of corticosteroids by 2020, International Cycling Union (UCI) president David Lappartient told Reuters.
The UCI banned Tramadol, an opiate painkiller, at the beginning of this month, conducting 43 tests on the Paris-Nice stage race that ended last Sunday.
In 2017, 68 percent of urine samples across 35 Olympic sports containing Tramadol were from cyclists.
While being monitored by the World Anti-Doping Agency (WADA), Tramadol is not on the list of banned substances and having it outlawed could have raised legal challenges.
However, Lappartient insisted that the exclusion was to protect riders’ health and safety rather than any performance enhancing benefits.
“So we banned it on health grounds,” said Lappartient, adding that the Paris-Nice test results were not known yet.
“If you need Tramadol, OK, but when you take this medicine you cannot drive so you do not race your bike.”
The UCI now wishes to take the same approach on corticosteroids, a drug used to treat a wide range of medical conditions, including asthma.
Some, like nasal sprays, are allowed in competition while others – pills, intra-muscular injections — are banned in competition and require a Therapeutic Use Exemption (TUE).
“We are working on this. We named a group of experts to show it is dangerous for your health,” said Lappartient.
“We are hopeful to be ready to ban it for the beginning of 2020. The idea is to not have corticosteroids in our sport in 2020.
“It is not easy though, because with Tramadol, a test is either positive or negative. With corticosteroids, there are thresholds. We are also calling for WADA to ban it.”
Several cycling teams, gathered in the Mouvement Pour un Cyclisme Credible (Movement for credible cycling, MPCC), follow stricter anti-doping rules.
Under those rules, a rider is imposed an eight-day rest after taking corticosteroids.
“Intra-articular corticosteroid injections have to be validated by the team doctor, who will prescribe eight days off-race,” the rules say.
Seven of the 18 World Tour (elite) teams have adhered to the MPCC.
Cycling, a sport long rocked by doping scandals, is again under the microscope after Austrian cyclist Georg Preidler admitted to cheating amid an investigation into blood doping that brought down five skiers at the Nordic skiing world championships.
“He has been provisionally banned,” said Lappartient.
“We are in contact with the national Anti-Doping Agencies and the public authorities, who have not said anything yet.”
Asked if the biological passport, a record of a riders’ doping test results, could be bypassed by cheats as several former professionals implied, Lappartient said: “I don’t know, I don’t have all the elements on this investigation.”
Sponsors, however, remain faithful to the sport, with chemical giant Ineos taking over from Team Sky in May and oil and gas company Total rumored to take over French outfit Direct Energie next season.
“I am pleased that Ineos is taking over the team because it is important that teams find investors. It is healthy that the best team in the world finds a buyer,” said Lappartient.
The Frenchman was wary though of one outfit having too much advantage as Ineos chairman Jim Ratcliffe is expected to increase the team’s budget.
“I understand there can be concerns that the team with the biggest budget can have all the best riders and it affects the uncertainty of sport,” he explained.
“The more uncertainty we have in our sport, the better for the interest of cycling. It boosts its attractiveness.”
(Reporting by Julien Pretot; Editing by Christian Radnedge)
FILE PHOTO: Homes are seen in the Penn Estates development where most of the homeowners are underwater on their mortgages in East Stroudsburg, Pennsylvania, U.S., June 20, 2018. Picture taken June 20, 2018. REUTERS/Mike Segar
March 20, 2019
NEW YORK (Reuters) – U.S. mortgage applications to buy a home and to refinance one climbed to a two-month high last week as home borrowing costs declined to their lowest levels in over a year, data from the Mortgage Bankers Association showed on Wednesday.
The Washington-based industry group’s seasonally adjusted index on mortgage activity edged up 1.6 percent to 390.0 in the week ended March 15. This was the highest reading since 400.6 in the week of Jan. 18.
(GRAPHIC-U.S. mortgages applications link: https://tmsnrt.rs/2RnEpRD).
(Reporting by Richard Leong; Editing by Chizu Nomiyama)
FILE PHOTO: An offshore oil rig is seen in the Caspian Sea near Baku, Azerbaijan, October 5, 2017. REUTERS/Grigory Dukor
March 20, 2019
By Noah Browning
LONDON (Reuters) – Oil prices fell on Wednesday, dragged down by concerns about global economic growth as the U.S.-China trade dispute rumbled on, but receiving some support from tightened supply.
International Brent crude oil futures were at $67.35 a barrel at 1250 GMT, down 26 cents, or 0.38 percent.
U.S. West Texas Intermediate (WTI) crude futures were at $58.43 per barrel, down 60 cents, or 1.02 percent.
An eight-month trade war between China and the United States has worried global markets already concerned by signs of a slowdown in economic growth this year.
But there have been mixed signals that the standoff between the world’s top two economies can soon be resolved.
A Bloomberg report on Tuesday citing concern among U.S. officials that China is pushing back on American demands briefly weakened oil prices before both benchmarks again approached four-month highs.
However, Washington announced that Treasury Secretary Steven Mnuchin plans to travel to China next week for another round of trade talks with senior Chinese officials.
“U.S.-China trade talks continue to present a binary risk for the oil market and other risky assets,” BNP Paribas strategist Harry Tchilinguirian told the Reuters Global Oil Forum.
“A trade agreement is likely to boost oil prices above current forecasts whereas failure can lead to the type of sell-off we saw last December.”
Analysts said an economic slowdown could soon dent fuel consumption, holding back crude.
“Global growth concerns and ongoing oversupply fears (are) creating headwinds for the commodity,” said Lukman Otunuga, analyst at futures brokerage FXTM.
Asian business confidence held near three-year lows in the first quarter as the U.S.-China trade dispute dragged on, pulling down a global economy that is already on a downward path, a Thomson Reuters/INSEAD survey found.
But crude prices have risen almost a third this year, pushed up by supply cuts among the Organization of the Petroleum Exporting Countries and its allies including Russia, as well as U.S. sanctions against oil exporters Iran and Venezuela.
“The shaky supply outlook with regard to Venezuela and Iran, as well as the petro-nations’ output restrictions are top of mind in the oil market,” said Norbert Ruecker, head of economics at Swiss bank Julius Baer.
Further boosting prices, the American Petroleum Institute said on Tuesday that U.S. crude, gasoline and distillate inventories fell in the week to March 15.
The U.S. Energy Information Administration will publish its weekly crude production and storage level report around 1700 GMT.
(Reporting by Noah Browning; Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson and Alexander Smith)
Finance Minister Olaf Scholz addresses a news conference to present the budget plans for 2019 and the upcoming years in Berlin, Germany March 20, 2019. REUTERS/Fabrizio Bensch
March 20, 2019
BERLIN (Reuters) – The German cabinet on Wednesday passed a draft budget for 2020 that calls for a 1.7 percent spending hike and relies on ministries to cut costs to avoid new debt in light of an economic slowdown, a government official said on Wednesday.
Finance Minister Olaf Scholz’s fiscal room for maneuver is getting tighter because tax revenues are likely to come in lower than expected this year as exporters are hit by weaker foreign demand, trade disputes and Brexit uncertainty.
A government official said that the cabinet approved Scholz’s draft budget plan for 2020 and the mid-term financial planning until 2023.
The draft foresees spending of 362.6 billion euros, but sources have said ministries will have to identify total spending cuts of 625 million euros each year, with program delays and other measures to contribute additional savings.
The draft budget foresees a further increase in military spending in 2020 but does not provide a plan for how to reach the NATO target of spending 2 percent of economic output on defense in the years beyond.
Military spending would rise by 2.1 billion euros over a previous plan for 2020, boosting the share of defense spending to 1.37 percent of gross domestic product from 1.25 percent in 2018 and 1.3 percent this year.
The military budget is slated to rise to 45.1 billion euros in 2020 from planned spending of 43.2 billion this year. But the share of military spending would drop back to 1.25 percent in 2023, with any further spending increases to be negotiated year by year, sources have said.
(Reporting by Michael Nienaber; Editing by Madeline Chambers)
FILE PHOTO: Danske Bank sign is seen at the bank’s Estonian branch in Tallinn, Estonia August 3, 2018. REUTERS/Ints Kalnins
March 20, 2019
By Teis Jensen
COPENHAGEN (Reuters) – Foreign investors sold Danish shares worth almost $14 billion in 2018 following a money laundering scandal at the country’s largest lender Danske Bank, Denmark’s central bank governor said on Wednesday.
Danske Bank is under investigation in the United States, Denmark, Estonia, France and Britain over 200 billion euros ($226 billion) in payments from Russia, ex-Soviet states and elsewhere that were found to have flowed through its Estonian unit between 2007 and 2015.
Non-residents sold Danish equities worth 91 billion crowns ($13.85 billion) last year, including 21 billion crowns’ worth of banking shares, a report from the central bank showed on Wednesday.
The divestment of bank equities may reflect a loss of confidence in the Danish banking sector in the wake of Danske Bank’s money laundering case, it said.
“The trust from international investors has certainly been reduced,” governor Lars Rohde told reporters in Copenhagen.
He said political initiatives to combat money laundering were paramount to restore foreigners’ trust in Danish banks.
He said Danish politicians should consider new rules to force banks to block payments if they are suspected of being related to money laundering, similar to current rules governing payments suspected of being linked to financing terrorism.
Danske Bank’s annual report shows shareholders from the United States and Canada cut their holdings in the bank during 2018 to 17 percent of Danske’s shares by the end of that year from 24 percent by end-2017.
British investors also reduced their holding in Danske Bank over 2018 from 16 percent to 12 percent, while Danes and other Europeans increased their holdings of Danske Bank shares.
(Reporting by Teis Jensen; Editing by Catherine Evans and Jan Harvey)
Maria, 31, holds her baby daughter Ioana, who is less than a week old, at their home in London, Britain, February 3, 2019. REUTERS/Alecsandra Dragoi
March 20, 2019
By Alecsandra Dragoi
LONDON (Reuters) – A few months after Britain voted to leave the European Union, Maria was waiting to see a doctor at a London hospital when an elderly English woman told her to go back to her native Romania.
“You are a foreigner,” Maria, who was heavily pregnant at the time, recalls the woman saying. “Your place is not here.”
Maria was stunned. Until that moment, she had never faced direct abuse over her nationality in her 10 years in the country.
But ever since the 2016 Brexit campaign – when some Leave supporters said they wanted Britain to take more control of immigration – Maria said hostility toward EU nationals such as her has come into the open.
The 31-year-old, who asked to use just her first name, said she was now preparing to leave Britain later this year with her husband and two children, fed up with what she described as xenophobia, as well as the rising cost of living in London.
“After Brexit we could all feel the obvious feeling that we are not wanted here,” Maria said. “I don’t want my kids to grow up in this sort of environment.”
She worries about her children being bullied at school. Last year her Romanian nanny and two-year-old daughter were playing in a park when a woman publicly accused them of being thieves.
Huge uncertainty still hangs over Brexit – with politicians torn between a range of options, including calling the whole thing off. But many Europeans are already voting with their feet and choosing to move.
In the year to the end of June last year, 145,000 EU nationals quit Britain, an 18 percent increase on the previous year, while the number of people arriving has slowed.
Politicians from across the political spectrum regularly say they are proud of Britain’s diverse makeup. And the government has passed legislation to let EU citizens living in the UK apply to stay after the split.
But many EU immigrants, particularly those from the poorer eastern member states such as Poland and Romania, complain they are still made to feel unwelcome.
They say they find themselves accused of stealing jobs from Britons and driving down wages, even though unemployment is at a four-decade low, or of overburdening health services.
Official figures show hate crime in Britain surged to a record level last year, up by almost a fifth, with the Brexit vote cited as a significant factor.Maria came to Britain in 2008 to work in a care home and was hoping she would earn enough buy a car. She initially planned to stay for a year but then met her Romanian husband and decided to stay longer.
On a good month from their work at a removal company, they can save about 500 pounds, enough for them to buy a house back home in Romania. They live frugally in a tiny studio apartment in Hampstead, London, with their two daughters.
They share with their elder daughter a large double bed which takes up most of the flat. There is a small table in the corner of the room where they eat their meals.
“It is very difficult because if one of the children is crying they will wake up the other one,” she said. “You can’t socialize with many people because it is very small.”
Maria said she was initially following all the news about Brexit, but now finds it perplexing.
“I think Brexit is madness,” she said. “I don’t think they needed to come out of the EU. It is very sad that Brexit is destroying the UK.
“We have been affected by this uncertainty. There is so much uncertainty and we just wanted to go home.”
(Writing by Andrew MacAskill; Editing by Stephen Addison and Andrew Heavens)
FILE PHOTO: Poste Italiane headquarters is seen in Rome, Italy, May 30, 2016. REUTERS/Alessandro Bianchi
March 20, 2019
MILAN (Reuters) – Poste Italiane aims to more than double the number of parcels it delivers by 2022, the head of its Mail and Parcel (M&P) unit said, as the former postal services monopoly presses on with its restructuring.
The group, which now comprises insurance and financial divisions and a digital payments unit in addition to M&P, has suffered falling letter volumes since at least 2008.
But Poste recorded its first growth in parcel revenue in 10 years in 2018, compensating for the fall in letters and showing that the restructuring was starting to pay off, it said.
“We aim to deliver 100 million parcels in 2022 compared with 45 million our staff delivered last year,” Massimo Rosini, head of M&P division, told investors in London.
The group wants to increase its market share for e-commerce parcel delivery to 40 percent by 2022 from 33 percent in 2018.
E-commerce is projected to grow rapidly in Italy as the country catches up with other European countries such as Britain where shopping online is much more common.
To compete with e-commerce giant Amazon, which is offering its Prime delivery service in the biggest Italian cities, Poste plans to fully implement a joint delivery system introduced last year and is developing an alternative network of delivery points.
Poste signed an agreement last year with labor unions to extend parcel delivery to the weekends and have staff hand over both parcels and letters to clients, while reducing the frequency of letter deliveries.
Revenue from the M&P division is expected to remain almost stable at around 3.5 billion euros this year, accounting for around one third of Poste’s total revenue of 11 billion euros expected for this year, Rosini said.
Poste CEO said on Tuesday the group was studying the possibility of delivering with drones and driverless vehicles to win more clients.
(Reporting by Francesca Landini; Editing by Edmund Blair)
FILE PHOTO: European Competition Commissioner Margrethe Vestager talks to the media at the European Commission headquarters in Brussels, Belgium March 20, 2019. REUTERS/Yves Herman
March 20, 2019
BRUSSELS (Reuters) – EU Competition Commissioner Margrethe Vestager said on Wednesday she will assess the impact of an EU court ruling on the rescue of Italy’s Tercas bank, but insisted the case should not be linked to other past bank rescues.
“We will have to come back” to the case, Vestager told a news conference, but said no decision was made yet on whether Brussels will appeal the judgment issued on Tuesday by the EU general court.
In a blow to EU antitrust regulators, EU judges had ruled on Tuesday that Italy’s rescue plan for ailing Tercas bank five years ago was legal, prompting calls for compensation for savers who subsequently faced stricter terms because Brussels had rigidly interpreted the bloc’s rules. The ruling overturned an earlier decision made by the Commission.
(Reporting by Francesco Guarascio)
Finance Minister Olaf Scholz addresses a news conference to present the budget plans for 2019 and the upcoming years in Berlin, Germany March 20, 2019. REUTERS/Fabrizio Bensch
March 20, 2019
BERLIN (Reuters) – With solid public finances and a vibrant domestic economy, Germany is well placed to withstand headwinds from a weakening world economy, trade disputes and the risk of a no-deal Brexit, Finance Minister Olaf Scholz said on Wednesday.
“The economic situation in Germany remains good,” Scholz said. “We cannot find funding for everything we want but we can finance a lot,” he said, referring to falling tax revenues as the economy grows at a slower pace.
(Reporting by Madeline Chambers, writing by Joseph Nasr, editing by Michelle Martin)
FILE PHOTO: Workers are seen on scaffolding at a construction site in Nantong, Jiangsu province, China January 1, 2019. REUTERS/Stringer
March 20, 2019
BEIJING (Reuters) – China will strive to achieve its economic development targets for 2019, state television said on Wednesday, quoting the cabinet after a meeting chaired by Premier Li Keqiang.
The government aimed to “maintain steady economic operations and promote high quality development”, Li was quoted as saying.
China will speed up tax and fee cuts and push reforms to help shore up confidence of companies, Li said.
The government would adjust tax rebates for exports of goods and services, he added.
China has promised billions of dollars in tax cuts and infrastructure spending to help businesses and protect jobs, as economic momentum is expected to fall further due to softer domestic demand and a trade war with the United States.
China is targeting economic growth of 6.0-6.5 percent in 2019. The world’s second-largest economy grew 6.6 percent in 2018 – the weakest in 28 years.
(Reporting by Kevin Yao and Beijing Monitoring Desk; Editing by Simon Cameron-Moore)
FILE PHOTO: Hungarian Prime Minister Viktor Orban speaks during Hungary’s National Day celebrations in Budapest, Hungary, March 15, 2019. REUTERS/Lisi Niesner/File Photo
March 20, 2019
By Marton Dunai and Andreas Rinke
BRUSSELS/BERLIN (Reuters) – Germany’s conservatives floated a compromise in a long-running dispute between Hungary’s Prime Minister Viktor Orban and the EU’s center-right grouping that could avert his party’s expulsion over concerns about Budapest’s authoritarian drift.
Orban, a feisty nationalist, was due in Brussels on Wednesday for a meeting to decide the fate of his Fidesz party after 13 sister organizations in the European People’s Party (EPP) urged its expulsion.
Annegret Kramp-Karrenbauer, head of Germany’s Christian Democrats, the largest party in the EPP, said Fidesz should be suspended, but not expelled, for violating the grouping’s values with contested judiciary reforms and anti-immigration campaigns.
“As long as Fidesz does not fully restore trust there cannot be normal full membership,” Kramp-Karrenbauer told Reuters.
A membership “freeze” would be an option, added Kramp-Karrenbauer, who is the frontrunner to eventually replace German Chancellor Angela Merkel.
Austria’s Chancellor Sebastian Kurz and Bavaria’s premier Markus Soeder, both EPP members, supported her position, sources close to Kramp-Karrenbauer said.
But, as Orban’s decision to attend in person what would normally be a routine administrative meeting demonstrates, the stakes are high: EPP membership for Fidesz confers mainstream respectability and influence that other populist parties lack.
The decision poses a particular headache for Manfred Weber, the EPP’s lead candidate in May’s European Parliament elections, whose chances of succeeding Jean-Claude Juncker as head of the executive European Commission would be reduced without the votes of Fidesz’s European lawmakers, of whom there are currently 12.
Juncker, who was the target of a Hungarian government poster campaign depicting him as a proponent of mass immigration into Europe and a puppet manipulated by wealthy Hungarian-American philanthropist George Soros, wants Fidesz expelled.
JUNCKER BACKS EXPULSION
On Wednesday Juncker, who is also from the EPP, repeated his call for Fidesz to be kicked out of the grouping.
“I think that Mr Orban is a long way from basic Christian Democratic values,” he told German radio.
The EPP grouping, the largest in the European Parliament, is also concerned over Orban’s campaign against the private Central European University in Budapest that Soros founded.
Sources close to Weber said Orban had at least partially met the German conservative’s conditions for keeping Fidesz in the EPP, including by apologizing to colleagues in the grouping for labeling them immigration-backing “useful idiots”.
The sources said the EPP committee in Brussels would vote on Wednesday on proposals to deprive Fidesz of the right to vote in meetings of the grouping or to propose candidates for posts. Fidesz would also no longer be present at all meetings.
Weber also proposed that former European Council president and Belgian prime minister Herman van Rompuy could head a monitoring committee to evaluate Fidesz’s cooperation with its sister parties, the sources added.
However, some were not sure Fidesz – which has a big majority in Hungary’s parliament – would accept being suspended.
“I think in reality this means that Fidesz will leave the group,” said Swedish conservative Gunnar Hokmark. “I don’t think they will appreciate being suspended. And anyway they will not be able to live up to the conditions.”
(Additional reporting by Madeline Chambers in Berlin, writing by Thomas Escritt; Editing by Gareth Jones)
FILE PHOTO: Monsanto’s Roundup weedkiller atomizers are displayed for sale at a garden shop near Brussels, Belgium November 27, 2017. REUTERS/Yves Herman/File Photo
March 20, 2019
FRANKFURT (Reuters) – Shares in Germany’s Bayer’s fell more than 12 percent on Wednesday after a second U.S. jury ruled its Roundup weed killer caused cancer.
Tuesday’s unanimous jury decision in San Francisco federal court was not a finding of Bayer’s liability for the cancer of plaintiff Edwin Hardeman. Liability and damages will be decided by the same jury in a second trial phase beginning on Wednesday.
Bayer, which denies allegations that glyphosate or Roundup cause cancer, said it was disappointed with the jury’s initial decision. Bayer acquired Monsanto, the longtime maker of Roundup, for $63 billion last year.
Bayer shares were 12.5 percent lower at 1110 GMT, the biggest intraday loss in 16 years, wiping some 8 billion euros ($9.1 billion) off its valuation.
“This looks like 2-0 plaintiffs, and clearly not helpful for the overall payout calculus and resolution of the litigation,” said Bernstein analyst Gunther Zechmann.
Glyphosate is the world’s most widely used weed killer. Monsanto’s Roundup was the first glyphosate-based weed killer but is no longer patent-protected and many other versions are now available. Bayer does not provide sales figures for the product.
“We are confident the evidence in phase two will show that Monsanto’s conduct has been appropriate and the company should not be liable for Mr. Hardeman’s cancer,” the company said.
The case was only the second of some 11,200 Roundup lawsuits to go to trial in the United States. Another California man was awarded $289 million in August after a state court jury found Roundup caused his cancer. That award was later reduced to $78 million and is on appeal.
Baader Helvea analyst Markus Mayer noted that Bayer management announced ambitious targets in December.
“(It) is now under pressure to deliver and trying to avoid becoming a target for activist or strategic buyers.”
Activist investor Elliott already holds a stake of less than 3 percent in Bayer, Reuters disclosed last year.
Brokerage Warburg lowered its recommendation to “Hold” from “Buy”, arguing that the with the renewed setback upcoming glyphosate court cases would remain a drag on the share price.
Bayer had claimed that jury was overly influenced by plaintiffs’ lawyers allegations of corporate misconduct and did not focus on the science.
U.S. District Judge Vince Chhabria called such evidence “a distraction” from the scientific question of whether glyphosate causes cancer. He split the Hardeman case into two phases: one to decide causation, the other to determine Bayer’s potential liability and damages.
Under Chhabria’s order, the second phase would only take place if the jury found Roundup to be a substantial factor in causing Hardeman’s non-Hodgkin’s lymphoma. The jury found that it was on Tuesday.
Union Investment fund manager Markus Manns cautioned that it was too early to read anything into individual rulings in courts of first instance.
“What will be important for Bayer is the outcome of the appeals hearings,” he told Reuters, adding that Bayer should not yet engage in settlement talks.
Chhabria has scheduled another bellwether trial for May and a third trial is likely to take place this year. All three cases will be split into causation and liability phases.
The U.S. Environmental Protection Agency, the European Chemicals Agency and other regulators have found that glyphosate is not likely carcinogenic to humans. But the World Health Organization’s cancer arm in 2015 reached a different conclusion, classifying glyphosate as “probably carcinogenic to humans.”
(Reporting by Jim Christie in San Francisco; Additional reporting by Tina Bellon in New York, Patricia Gugau in Frankfurt; Writing by Tina Bellon and Arno Schuetze; Editing by Bill Berkrot and Keith Weir)
FILE PHOTO: General Mills breakfast cereal is shown for sale in Carlsbad, California, U.S., June 27, 2017. REUTERS/ Mike Blake
March 20, 2019
(Reuters) – General Mills quarterly profit beat Wall Street estimates and the Cheerios cereal maker raised its full-year forecast, benefiting from its efforts to cut costs and raise prices, sending its shares up 6 percent on Wednesday.
Consumer goods companies like General Mills have been raising product prices to make up for rising commodities and transportation costs.
“Our year-to-date performance and fourth-quarter plans give us confidence that we will meet or exceed all of our key fiscal 2019 targets,” Chief Executive Officer Jeff Harmening said in a statement.
The company’s adjusted gross margin rose 170 basis points to 34.2 percent in the third quarter and beat the analyst average estimate of 32.89 percent.
General Mills, which owns dessert pre-mix brand Betty Crocker and Nature Valley granola bars, said it expects adjusted profit for fiscal 2019 to be between flat and 1 percent from a prior forecast range of flat to down 3 percent.
The company’s net sales rose 8 percent to $4.20 billion in the third quarter, largely in line with expectations of $4.19 billion, according to IBES data from Refinitiv.
Excluding one-time items, the company earned 83 cents per for the quarter ended Feb.24 to beat expectations of 69 cents.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Arun Koyyur)
Ethiopian Red Cross workers carry a body bag with the remains of Ethiopian Airlines Flight ET 302 plane crash victims at the scene of a plane crash, near the town of Bishoftu, southeast of Addis Ababa, Ethiopia March 12, 2019. REUTERS/Baz Ratner
March 20, 2019
By Maggie Fick and Cindy Silviana
ADDIS ABABA/JAKARTA (Reuters) – The world’s biggest planemaker Boeing faced growing obstacles to returning its grounded 737 MAX fleet to the skies on Wednesday, while chilling details emerged of an Indonesian crash with similarities to the Ethiopian disaster.
Experts suspect an automated system, meant to stop stalling by dipping the nose, may be involved in both cases, with pilots unable to override it as their jets plunged downwards.
The March 10 Ethiopian Airlines crash has shaken the global aviation industry and cast a shadow over the flagship Boeing model intended to be a standard for decades to come, given parallels with the Lion Air calamity off Jakarta in October.
The twin crashes killed 346 people.
(GRAPHIC: Ethiopian Airlines crash – https://tmsnrt.rs/2Hn6V4k)
Chicago-headquartered Boeing has promised a swift update of the automatic flight software for the craft but major regulators in Europe and Canada want to be sure themselves, rather than rely on U.S. vetting.
As Ethiopian investigators pored over black box data from their crash, sources with knowledge of the doomed Lion Air cockpit voice recorder revealed how pilots scoured a manual in a losing battle to figure out why they were hurtling down to sea.
Investigators examining the Indonesian crash want to know how a computer ordered the plane to dive in response to data from a faulty sensor and whether pilots had enough training to respond appropriately to the emergency.
Communications showed that in the final moments, the captain tried in vain to find the right procedure in the handbook, while the first officer was unable to control the plane.
“It is like a test where there are 100 questions and when the time is up you have only answered 75,” said one of the sources with knowledge of the cockpit recording that has not been made public. “So you panic. It is a time-out condition.”
At the end, the sources told Reuters, the Indian-born captain, 31, was quiet, while the Indonesian officer, 41, said “Allahu Akbar” (“God is greatest”) – an Arabic phrase to express excitement, shock, praise or distress. The plane then hit water.
U.S. “CREDIBILITY DAMAGED”
Boeing has said there was a documented procedure to handle the situation. A different crew on the same plane the evening before had the same problem but solved it after running through three checklists, though they did not pass on all that information to the doomed crew, the preliminary report by investigators released in November said.
Rowing back from previous reliance on U.S. Federal Aviation Administration (FAA) vetting, Canada and the European Union will now seek their own guarantees over the MAX planes, complicating Boeing’s hopes to get them flying worldwide again.
Regulators want to be absolutely sure of Boeing’s new automated flight control system, known as MCAS (Maneuvering Characteristics Augmentation System), and that pilots are fully trained to handle it.
“Our credibility as leaders in aviation is being damaged,” wrote Chesley Sullenberger, a U.S. pilot famed for landing a jet on the Hudson River saving all 155 people on board a decade ago.
“Boeing and the FAA have been found wanting in this ugly saga that began years ago but has come home to roost with two terrible fatal crashes, with no survivors, in less than five months, on a new airplane type, the Boeing 737 Max 8, something that is unprecedented in modern aviation history,” he added in a scathing article on marketwatch.com.
(GRAPHIC: The grounded 737 Max fleet – https://tmsnrt.rs/2u5sZYI)
Facing such high-profile scrutiny, Boeing, one of the United States’ most prestigious exporters, reshuffled executives in its commercial airplanes unit to focus on the crash fallout.
(GRAPHIC: Boeing 737 Max deliveries in question – https://tmsnrt.rs/2Hv2btC)
The FAA noted in a statement that its “robust processes” and “full collaboration with the aviation community” were key to safety worldwide. The regulator is due to have a new head soon, likely to be former Delta Air Lines executive Steve Dickson.
U.S. President Donald Trump had apparently been considering his longtime personal pilot, John Dunkin, before leaning toward Dickson who had a 27-year career at Delta.
In Ethiopia, which is leading the investigation, experts were poring over the in-flight recording of Captain Yared Getachew and First Officer Ahmednur Mohammed’s voices.
As with the Indonesia flight, they radioed control problems shortly after take-off and sought to turn back, struggling to get their plane on track before it hit a field. However, there is no proven link and experts emphasize that every accident is a unique chain of human and technical factors.
For now, though, more than 300 MAX aircraft are grounded round the world, and deliveries of nearly 5,000 more – worth well over $500 billion – are on hold.
Development of the 737 MAX, which offers cost savings of about 15 percent on fuel, began in 2011 after the successful launch by its main rival of the Airbus A320neo. The 737 MAX entered service in 2017 after six years of preparation.
(Reporting by Maggie Fick and Jason Neely in Addis Ababa, Tim Hepher in Paris, David Shepardson in Washington, David Ljunggren in Ottawa, Jamie Freed in Singapore, Cindy Silviana in Jakarta; Writing by Andrew Cawthorne; Editing by Jon Boyle)
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., March 13, 2019. REUTERS/Brendan McDermid
March 20, 2019
By Medha Singh
(Reuters) – U.S. stock futures were little changed on Wednesday as investors waited for more clarity on the Federal Reserve’s interest rate outlook for the year, while some trade worries still lingered.
The U.S. central bank is expected to keep the fed funds rate unchanged and lower the number of hikes projected for the rest of the year as it wraps up a two-day policy meeting, followed by a statement at 2 p.m. ET and a press conference by Fed Chairman Jerome Powell half an hour later.
The policy statement will also shed light on long-awaited details regarding the Fed’s plans to stop reducing its holdings of Treasury bonds.
“Today’s price action is going to be focused mainly on the Fed chairman’s speech,” Naeem Aslam, chief market analyst at Think Markets UK Ltd in London said in a client note.
“Powell will be grilled on his future plan with respect to the monetary policy and he will have to continue to stress on one keyword, ‘patience’.”
At 6:57 a.m. ET, Dow e-minis were down 0.08 percent. S&P 500 e-minis were down 0.06 percent and Nasdaq 100 e-minis were down 0.02 percent.
Optimism that the Fed will remain patient in raising borrowing costs and hopes that United States and China will resolve their trade spat helped U.S. stocks erase most of their losses from late last year.
Following a 13 percent rally this year, the benchmark S&P 500 now remains 3.5 percent away from its record closing high in September.
Wall Street’s main indexes ended mixed on Tuesday, after a report that U.S. was concerned that China was pushing back against American demands in trade talks. News that the world’s biggest economies will reconvene face-to-face negotiations next week, did little to support the markets.
“It was pretty much given that only a negative surprise was going to have an impact on the markets, when it comes to the trade negotiations saga, because all the positive aspect was already priced in,” Aslam said.
Among stocks, FedEx Corp, seen as a bellwether for the global economy, fell 6.7 percent in premarket trade after the package delivery company cut its 2019 profit forecast for the second time in three months.
General Mills Inc jumped 5.7 percent after the Cheerios cereal maker reported an 8 percent rise in quarterly sales and also raised its full-year profit forecast.
(Reporting by Medha Singh and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)
FILE PHOTO: An attendant walks past EU and China flags ahead of the EU-China High-level Economic Dialogue at Diaoyutai State Guesthouse in Beijing, China June 25, 2018. REUTERS/Jason Lee
March 20, 2019
BRUSSELS (Reuters) – European Union leaders will coordinate their positions on Thursday evening on a number of issues they intend to raise with China at an April 9 summit, including tight cooperation on WTO reform and cyber-security concerns, a senior EU official said.
While there will be no written conclusions of the discussion, the leaders of the 28-nation bloc will also discuss how Europe should position itself in the trade conflict between the United States and China, the official said.
“We are ready to offer China very comprehensive cooperation in many areas,” the official, who is involved in the preparation of the EU leaders’ meeting, said.
He said EU leaders were ready to conclude in 2020 an “ambitious” EU-China investment agreement and that leaders of EU institutions would directly engage in the talks, to speed up the process which has so far been slow.
By mid-year, the EU would like to agree with China on a list of access barriers to priority markets so they can be eliminated and ensure that companies on both sides are not discriminated against.
The official said the EU was also ready to conclude as soon as possible an EU-China agreement on the protection of geographical indications and to work closely with Beijing to deeply reform the World Trade Organisation.
He said the reforms should include new rules on industrial subsidies, on eliminating forced technological transfers and getting to work the WTO appellate body, now paralyzed by the lack of appointed judges.
“We also want to work with China within the G20 framework to tackle the problem of over-capacity in the steel and aluminum sectors and also to prevent the problem of over-capacity in other sectors like in high tech,” the official said.
“We also want to work with China on new, transparent rules for export credit. We are ready to promote, together with China, connectivity between Europe and Asia, but in a way that ensures fiscal, financial and environmental sustainability,” he said.
The EU will also want to discuss with China its concerns linked to cyber security, including cyber theft of intellectual property, the official said.
“I think this discussion will also give a chance for a collective reflection on how the EU should position itself vis-a-vis China and the U.S.,” he added.
(Reporting By Jan Strupczewski; Editing by Catherine Evans)
FILE PHOTO: A Federal Express delivery truck is shown in downtown Los Angeles, California, U.S., October 24, 2018. REUTERS/Mike Blake
March 20, 2019
(Reuters) – Shares of FedEx Corp fell about 7 percent before the bell on Wednesday after the package delivery company cut its 2019 profit forecast for the second time blaming slowing global trade growth and continued weakness in its international Express business.
The profit warning and weak quarterly results have resulted in a slew of price target cuts, with Morgan Stanley cutting to $148 from $156, as the full year forecast cut was much bigger than expected and implied a tough fourth quarter.
In December, FedEx had slashed its forecast, citing a sharp downturn in worldwide trade, and now expects to earn between $15.10 and $15.90 per share this year. Analysts had expected full-year earnings per share of $15.97 for 2019.
J.P. Morgan expects “turbulence” in the near future and has downgraded the stock to “neutral” from “overweight”, cutting its price target to $202 from $227.
FedEx on Tuesday also blamed weak results on the additional cost for launching year-round, six-days-per-week operations at FedEx Ground in the United States, and continued weakness in its international Express business, which includes former Dutch delivery company TNT Express.
“Mix pressures and labor cost inflation are mounting faster than anticipated at Ground… We are increasingly concerned operating margins in percent terms will be pressured even if Ground can lower costs fast enough to grow operating profit in dollars,” J.P. Morgan analyst Brian Ossenbeck said in a note.
Cowen and Company, which cut its price target for the company to $230 from $237, said the uncertainty in the near-term environment may pose challenges in the first half of 2020.
“We also expect Express margins to be pressured in the next six months before improving in second half of 2020.”
Credit Suisse, which raised its price target for the company to $241 from $236, said although FedEx is not out of the woods on Express and TNT, the downside risk is limited.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by James Emmanuel)
FILE PHOTO: Moldovan President Igor Dodon addresses the media as he visits a polling station during a parliamentary election in Chisinau, Moldova February 24, 2019. REUTERS/Vladislav Culiomza
March 20, 2019
FILE PHOTO: An illuminated Google logo is seen inside an office building in Zurich, Switzerland December 5, 2018. REUTERS/Arnd Wiegmann
March 20, 2019
BRUSSELS (Reuters) – EU antitrust regulators handed down a 1.49 billion euro ($1.69 billion) fine to Alphabet unit Google on Wednesday for blocking rival online search advertisers, marking the company’s third penalty in two years.
Last year, the EU competition enforcer imposed a record 4.34 billion euro fine on Google for using its popular Android mobile operating system to block rivals. This followed a 2.42 billion euro fine in 2017 for hindering rivals of shopping comparison websites.
(Reporting by Foo Yun Chee; editing by Philip Blenkinsop)
FILE PHOTO: A Jet Airways Boeing 777-300ER taxis at San Francisco International Airport, San Francisco, California, February 16, 2015. REUTERS/Louis Nastro
March 20, 2019
NEW DELHI (Reuters) – State Bank of India’s head told reporters on Wednesday that putting Jet Airways into bankruptcy is the “last option” for lenders and that they are making every effort to keep the airline flying.
“We believe that it is in everybody’s interest that Jet Airways continues to fly,” the SBI chairman, Rajnish Kumar, told reporters after a meeting with government officials, adding that placing Jet into bankruptcy would mean grounding the airline.
Kumar said that talks with Abu Dhabi-based carrier Etihad, Jet’s largest shareholder, to secure a rescue deal are ongoing.
There is also the possibility of bringing in a new investor, he said. Kumar also said that any decision taken to rescue Jet is a commercial one and is not at the direction of the Indian government.
The 25-year-old airline has defaulted on loans after racking up over $1 billion in debt, and owes money to banks, suppliers, pilots and lessors – some of whom have started terminating their lease deals with the carrier.
The government has asked state-run banks to rescue Jet Airways without pushing it into bankruptcy, two people within the administration have told Reuters.
(Reporting by Manoj Kumar; Edited by Martin Howell)
The U.N. Envoy for Libya, Ghassan Salame, speaks during a news conference in Tripoli, Libya March 20, 2019. REUTERS/Hani Amara
March 20, 2019
TRIPOLI (Reuters) – The United Nations will hold a conference in the Libyan town of Ghadames on April 14-16 to discuss solutions to the country’s conflict, the United Nations’ Libya envoy said on Wednesday.
“We hope it will be a new opening for the country for stability,” Ghassan Salame told reporters.
(Reporting by Ahmed Elumami; Writing by Ulf Laessing; Editing by Catherine Evans)
FILE PHOTO: A Skoda logo is displayed at the 89th Geneva International Motor Show in Geneva, Switzerland March 5, 2019. REUTERS/Pierre Albouy
March 20, 2019
MLADA BOLESLAV, The Czech Republic (Reuters) – Volkswagen’s Czech unit Skoda Auto does not expect to repeat the strong wage growth agreed in 2018 again in the latest round of collective bargaining, a board member said on Wednesday.
“The current situation in the automotive industry as well as the pressure regarding costs and investments are primarily the result of legal changes and regulatory measures,” Bohdan Wojnar, who is responsible for Skoda’s human resources, said at its annual results news conference.
“Against this backdrop it is clear that we cannot allow results similar to that of 2018 in this year’s collective bargaining.”
The average production wage grew 14 percent in 2018 and it is up by 25 percent in the last two years, Skoda said.
(Reporting by Jason Hovet, Writing by Robert Muller)
FILE PHOTO: Jim Ratcliffe, CEO of British petrochemicals company INEOS, poses for a portrait with the Canary Wharf financial district seen behind, ahead of a news conference announcing the launch of a British America’s Cup sailing team in London, Britain, April 26, 2018. REUTERS/Toby Melville
March 20, 2019
By Julien Pretot
PARIS (Reuters) – Team Sky’s takeover by chemical giant Ineos raises questions on financial fair play in cycling as the new outfit is expected to increase its monetary advantage over rival teams.
The British team’s budget of about 40 million euros (about $45.4 million) is likely to be significantly increased when Britain’s richest man Jim Ratcliffe takes over in May, sources told Reuters.
British broadcaster Sky said in December it would end its sponsorship of Dave Brailsford’s cycling team by the end of the 2019 season, throwing the hugely successful team’s future into doubt.
Ratcliffe rode to the rescue of Team Sky when his chemicals multinational Ineos was confirmed as the new owner of the powerhouse cycle team on Tuesday.
“I understand there can be concerns that the team with the biggest budget can have all the best riders and it affects the uncertainty of sport,” International Cycling Union (UCI) president David Lappartient told Reuters.
Team Sky won six of the last seven editions of the Tour de France with three different riders – Bradley Wiggins, Chris Froome and Geraint Thomas – and in 22-year-old Colombian Egan Bernal, the recent winner of Paris-Nice, they have the hottest prospect in stage races.
Most of Sky’s biggest rivals operate on a budget of 15-20 million euros.
Asked if cycling should enforce a budget cap to preserve fairness in the sport, Lappartient said: “That’s something that can be discussed.
“But one of our objectives is to have an economy that is more solid.”
The Frenchman said the UCI was in the process of creating a working group on the attractiveness of the sport.
“The more uncertainty we have in our sport, the better for the interest of cycling. It boosts its attractiveness,” he said, adding the involvement of a new sponsor was ‘healthy’.
Sky/Ineos rivals also welcomed a new sponsor in the sport with oil and gas giant Total rumored to take over French team Direct Energie in 2020, according to local media reports.
“If it’s true that Ineos and Total are making their entry in cycling then this is fantastic news for cycling. Hope that others will follow,” Patrick Lefevere, the manager of Belgian team Deceuninck-Quick Step, said on Tuesday.
Some were also concerned.
“It was already hard to compete, I don’t know how we are going to do now,” a team boss, who declined to be named, told Reuters. “We’re just not in the same league. We’ll have to have more imagination.”
Groupama-FDJ manager Marc Madiot told Reuters: “They will continue to do their thing and we will continue to do out thing.”
In a BBC podcast on Tuesday, EF Education First manager Jonathan Vaughters said: “You’re purchasing the ability to win.
“You’re looking at an almost impenetrable wall of money. You can basically go buy all the best riders. The question for the sport is if they are all on one team, is it fun for spectators to watch?”
(Reporting by Julien Pretot; Editing by Sudipto Ganguly)
FILE PHOTO: British and EU flags flutter outside the Houses of Parliament in London, Britain January 17, 2019. REUTERS/Clodagh Kilcoyne
March 20, 2019
LONDON (Reuters) – Assets worth around a trillion pounds $1.32 trillion) are moving from London to hubs in the European Union ahead of Brexit, with the parallel shift in jobs likely to top 7,000, consultants EY said on Wednesday.
Banks, asset managers and insurers in London are opening or expanding hubs in the EU to avoid disruption from Britain’s departure from the European Union.
Britain is legally due to leave next week, but the British government is asking Brussels for a delay.
In its latest Brexit Tracker, EY said that 23 companies have announced the transfer of about a trillion pounds in assets, up from 800 billion pounds in the last quarter.
Dublin remains the most popular destination for relocations, with 28 companies saying they have plans to set up shop there, but Frankfurt, Luxembourg and Paris are catching up, with between 21 and 18 firms.
“As 29 March draws nearer, companies are reconfirming or revising the statements they have made about the extent of staff and operational changes they are making, but we are not seeing many last-minute surprises – firms are executing their plans as expected,” EY said in a statement.
(Reporting by Huw Jones; editing by Emelia Sithole-Matarise)
FILE PHOTO: The logo of Swiss bank UBS is seen in Zurich, Switzerland October 25, 2018. REUTERS/Arnd Wiegmann
March 20, 2019
By Brenna Hughes Neghaiwi
ZURICH (Reuters) – Swiss bank UBS is cutting an extra $300 million from 2019 costs after investment banking revenues plunged and wealth management remained under pressure in the first quarter, its chief executive told a conference in London on Wednesday.
Calling investment banking conditions among the toughest seen in years, especially outside the United States, Sergio Ermotti said investment banking revenues were down about a third compared to the euphoric first quarter that kicked off 2018.
“We’ve seen some improvement lately but it remains patchy, and not enough to offset the challenging start to the year,” he said. The investment bank now expects to achieve mid-single-digit adjusted returns on attributed equity for the first quarter, compared to its 15 percent target over the 2019-2021 period and 12.9 percent achieved in 2018.
“While clearly not in line with our long-term aspirations, I find it to be an acceptable outcome if it is a one-off in one of the worst first-quarter environments in recent history.”
Shares in UBS fell 2.1 percent by 1000 GMT, while shares in rival Credit Suisse fell 2.6 percent, with traders citing the downbeat tone of Ermotti’s comments.
“UBS sent a negative signal that Q1 investment banking revenues will be down across major European banks,” one trader said.
Switzerland’s biggest bank has now slowed hiring as well as its work on a number of IT projects to help the group save an additional $300 million this year, with most of the savings coming through in the second half of the year, Ermotti said.
While its flagship wealth management business looked set to return to targeted inflows after a brutal $7.9 billion in net new money outflows over the final three months of 2018, investor sentiment continued to weigh on revenues.
A continued somber view amongst Asian clients, coupled with U.S. clients sticking more to the sidelines, kept transaction-based income under pressure, Ermotti said, leading to a roughly 9 percent slide in wealth management revenues this quarter.
U.S. clients have boosted their cash holdings to record highs, Ermotti said, with about 24 percent of their balances in cash.
(Reporting by Brenna Hughes Neghaiwi; additional reporting by Danilo Masoni; Editing by Michael Shields)
FILE PHOTO: Supporters of Pheu Thai Party attend an election campaign in Ubon Ratchathani Province, Thailand, Februray 18, 2019. REUTERS/Athit Perawongmetha
March 20, 2019
By Panu Wongcha-um and Panarat Thepgumpanat
BANGKOK (Reuters) – Nearly five years after Thailand’s 2014 military coup, the populist movement that the army has overthrown twice in a decade is contesting an election on Sunday that its leaders say is rigged against it.
Yet, the Pheu Thai party linked to ousted ex-premier Thaksin Shinawatra, is hoping it can beat the system, just as the former telecommunication tycoon’s loyalists have won every general election since 2001.
This time, Pheu Thai has shifted strategy by dividing its forces to capture new votes and to seek a “democratic front” with other parties to overcome junta-written electoral rules that give a huge advantage to the party seeking to retain junta chief Prayuth Chan-ocha as prime minister.
Sunday’s election has 81 parties competing, but the race has shaped up as one between Pheu Thai and “democracy front” allies versus the pro-army Palang Pracharat party that nominated Prayuth as prime minister.
Polls indicate that Pheu Thai will again be the top vote-winner, and it hopes with its allies to make up the largest bloc in the 500-seat House of Representatives.
But that may not matter, because the new constitution written by the junta allows parliament’s upper house, the 250-seat Senate, to vote with the lower house to choose the prime minister – and the Senate is entirely appointment by the junta.
That means pro-junta parties need to win only 126 lower house seats on Sunday to choose the next government, while Pheu Thai and allies, who can’t count on any support in the Senate, need 376 – three-quarters of the total up for grabs.
Despite the disadvantages, Sudarat Keyuraphan, Pheu Thai’s main prime ministerial candidate, said a democratic front could keep the military from controlling the next government.
“I still believe in the heart of the people and we have seen election upsets in many places around the world,” Sudarat told Reuters in an interview.
“Now, they have created a new structure that enables them to hold on to power in a semi-democratic structure,” she said of the military. “So we have to tell people about this and to put an end to this once and for all.”
‘GET RID OF THAKSIN’
However, the complex rules governing the election make it all but impossible for pro-Thaksin parties to form a government on their own as they have in previous elections.
Since he burst onto the political scene in 2001, Thaksin has dominated Thai politics, inspiring devotion among his mostly rural supporters for his pro-poor policies and revulsion from mostly middle-class and establishment opponents who decry him as a corrupt demagogue.
The rivalry has brought intermittent violent protests over almost 15 years. Twice, the military has stepped in, the first time in 2006 to oust Thaksin after he won a second term and again in 2014 to topple a government that had been led by his sister, Yingluck Shinawatra.
Thaksin now lives in self-imposed exile to escape a 2008 corruption sentence. He is officially banned from politics but has been hosting a weekly podcast since January discussing global affairs and politics.
His son, Panthongtae Shinawatra, 38, has made cameo appearances at Pheu Thai rallies, bringing loud cheers in party strongholds in the north and northeast.
Worry that a pro-Thaksin party might yet again win the election was one reason why the post-coup constitution made changes giving the junta a strong say in who will be prime minister, said Titipol Phakdeewanich, dean of the faculty of political science at Ubon Ratchathani University.
“The establishment have had a strong determination to get rid of Thaksin once and for all,” Titipol told Reuters.
While the rewritten electoral rules give junta leader Prayuth’s party an advantage in choosing the next government, they are by no means a guarantee.
In recent weeks, talk of a “democracy front” has gained ground, with speculation different parties in the House of Representatives might muster the 376 votes needed to choose the prime minister.
That strategy took a hit when Thai Raksa Chart, a key pro-Thaksin ally of Pheu Thai, was disqualified from the election this month.
The constitutional court ruled that the party had broken the electoral law by nominating the sister of King Maha Vajiralongkorn, as its prime ministerial candidate, crossing the traditional boundary between monarchy and politics.
Still, Pheu Thai has other allies – including Pheu Chart party and Pheu Tham – while politicians from the dissolved Thai Raksa Chart campaign for the democratic front.
Other parties like the youth-oriented Future Forward Party, while not seen as “pro-Thaksin”, could join forces to keep the military out of politics.
The leader of another main party, the Democrats, has also said he won’t support keeping junta leader Prayuth as prime minister, though it is unclear if the staunchly anti-Thaksin Democrats would join any front with Thaksin loyalists.
Even if they unite, it’s unclear whether anti-junta parties can muster enough votes, but Pheu Thai’s Sudarat said Prayuth’s declaration as a prime ministerial candidate has had a galvanizing effect.
“For 10 years the military has been acting as a referee,” she said.
“But now they have reveal themselves and have become a player so this could lead to a new end game … now it is up to the people.”
(Editing by Kay Johnson, Robert Birsel)
FILE PHOTO: A worker adjusts European Union and U.S. flags at the start of the 2nd round of EU-US trade negotiations for Transatlantic Trade and Investment Partnership at the EU Commission headquarters in Brussels November 11, 2013. REUTERS/Francois Lenoir
March 20, 2019
BRUSSELS (Reuters) – European Union leaders will ask their trade ministers on Friday to quickly approve negotiating mandates for the European Commission to start formal trade talks with the United States, draft conclusions showed.
“The necessary steps should be taken for the rapid implementation of the U.S.-EU Joint Statement of 25 July 2018,” the draft conclusions, seen by Reuters, said.
The EU has been in talks on trade with Washington since July 2018, when U.S. President Donald Trump agreed to hold off new punitive tariffs while the two sides worked on ways to improve economic relations.
(Reporting By Jan Strupczewski; editing by Philip Blenkinsop)
FILE PHOTO : A Toyota logo is displayed at the 89th Geneva International Motor Show in Geneva, Switzerland March 5, 2019. REUTERS/Pierre Albouy
March 20, 2019
NAGOYA (Reuters) – Toyota Motor Corp and Suzuki Motor Corp on Wednesday said they planned to produce electric vehicles (EVs) and compact cars for each other to better compete with fast-changing technologies in the global auto industry.
The agreement builds on a partnership between the two Japanese companies announced in 2017 under which Toyota is helping Suzuki to develop and market electric cars in India, while Suzuki helps Toyota increase its presence in the fast-growing Indian market.
Under the latest agreement, Suzuki will source hybrid systems for cars it sells worldwide from Toyota, which pioneered hybrid vehicles with the Prius more than 20 years ago, the companies said in a joint statement.
Suzuki’s hybrid vehicles for the Indian market will be made using engines and batteries locally produced by Toyota. In addition, Toyota will produce electric vehicles based on its RAV4 SUV crossover and Corolla wagon for Suzuki in the European market.
In return, Suzuki will produce two compact models for Toyota in India based on its Ciaz and Ertiga models, and supply Toyota with gasoline engines for compact vehicle models sold in Europe.
Suzuki will also produce its Baleno, Vitara Brezza, Ciaz, and Ertiga models for Toyota to sell in Africa.
(Reporting by Naomi Tajitsu; Editing by Simon Cameron-Moore)
FILE PHOTO: The Netflix logo is seen on their office in Hollywood, Los Angeles, California, U.S. July 16, 2018. REUTERS/Lucy Nicholson/File Photo
March 20, 2019
By Lisa Richwine
LOS ANGELES (Reuters) – A Netflix Inc experiment that began with viewers picking a movie character’s breakfast cereal may expand to letting the audience choose the best on-screen date or the safest path to escape an ax murderer.
The world’s largest streaming service wants to try out more interactive entertainment following the response to science-fiction movie “Black Mirror: Bandersnatch,” executives told reporters this week.
The company is looking for possibilities across genres such as comedy, horror and romance, said Todd Yellin, Netflix’s vice president of product.
“Why can’t you have a romantic title where you get to choose who she goes out with?” Yellin said. “Or horror titles. Should you walk through that door, or should you dive out that window and get the heck out of there? You can make the choice.”
In “Bandersnatch,” the first decision viewers could make was whether a character would eat Sugar Puffs or Frosties for breakfast.
The idea was to give audiences a simple choice to encourage them to test the technology, which involved clicking via a remote or tapping on the screen to select an option. The movie kept playing even if the viewer did not choose.
The cereal scene became an Internet sensation when “Bandersnatch” was released last December.
“Like many of you, I got addicted to ‘Bandersnatch’ and trying to figure out what’s the significance of the cereal, and not the cereal, all the different options,” Netflix Chief Executive Reed Hastings said.
The film provided feedback about how long people want to engage with interactive programming and how many choices they want to make, Hastings said. After the cereal decision, viewers selected things such as the type of music a character would play or whether they would jump off a building.
When viewers can direct a story, they feel “really with the character,” Yellin said. “You are more viscerally feeling what they are feeling. You just made the choice for them.”
That is why Yellin wants to try the format in other stories where characters face immense consequences. “Horror is life and death situations constantly,” he said. And in romances, “the emotional stakes are high.”
Yellin said the effort is in its early stages, and Hastings suggested he does not see interactive entertainment replacing traditional storytelling.
“I don’t know if I would do it every day,” Hastings said, “but as part of my viewing, it’s pretty exciting.”
Netflix already has produced a handful of interactive shows for kids, who were immediately receptive to the idea, Yellin said.
“Kids don’t have established rules,” he said. “They assume that’s the way the world should be and they’ll try it.”
(Reporting by Lisa Richwine; Editing by Darren Schuettler)
2020 Democratic presidential candidates are seen in a combination of file photos (L-R top row): U.S. Senators Kirsten Gillibrand, Amy Klobuchar, Elizabeth Warren, Bernie Sanders, (L-R bottom row): U.S.Senator Kamala Harris, Former Texas congressman Beto O’Rourke, U.S. Senator Cory Booker and Democratic presidential candidate Andrew Yang. REUTERS/Files
March 20, 2019
By Ginger Gibson
HEMINGWAY, S.C. (Reuters) – In the most polarized political environment in decades, Democratic voters want to know how their eventual nominee will match up against President Donald Trump in the November 2020 general election.
Senator Kirsten Gillibrand of New York appears willing to go the furthest yet, at least symbolically, in trying to prove she is ready to go toe-to-toe with the president.
On Sunday, she will deliver her campaign launch speech at a rally in view of one of Trump’s hotels in New York City, taking her “vision of restoring America’s moral integrity straight to President Trump’s doorstep,” her campaign said.
The backdrop for her speech underscores a defining theme of the Democratic nominating contest. Trump is present at every campaign stop – not physically, but as a constant topic of discussion, even if his name is not uttered by those seeking to defeat him.
Candidates are trying to convince voters in early primary states that they would provide the best Trump opposition. And in a large field with few variations on policy so far, each contender is using different tactics to make their case.
“Voters need to believe that a candidate can stand on stage, take a rhetoric punch from Trump and still look strong and viable,” said Joel Payne, a Democratic strategist who worked for Hillary Clinton in the 2016 White House race.
Potential and declared candidates including former Vice President Joe Biden and Senators Elizabeth Warren and Bernie Sanders “have likely already passed that litmus test with voters,” Payne added. “Others who are less known to the public probably still have some proving to do.”
A February poll by Emerson College found every Democratic hopeful out-performed Trump in a hypothetical general election matchup, except when a third-party candidacy was added to the equation.
At campaign events in rural South Carolina this month, Senator Kamala Harris used a simple refrain to begin answers about complicated policy questions: “We need a new president.”
Harris, a former prosecutor, is seeking to convince voters that her courtroom experience prepared her to be able to successfully “prosecute” Trump on the debate stage, a campaign aide said.
But Harris does not plan to make her case using any demeaning nicknames for Trump, something the president did during the 2016 campaign to deride his opponents.
“They don’t want someone who is going to mimic his tactics,” the aide said of Democratic voters. “Democrats want someone who can confront from him.”
VOTERS FOCUSED ON ELECTABILITY
A February poll by Monmouth University found that 56 percent of Democrats would prefer a nominee who has a good shot at defeating Trump even if they do not agree on policy positions.
The poll found women voters – who turned out in droves during the 2018 midterm elections to help send a historic number of women to Congress – were even more inclined to prioritize electability over ideology with 61 percent putting their positions aside in favor of a candidate who can defeat the president, compared to 45 percent of men.
The high level of Democrats citing electability over “kitchen table” issues like jobs and the economy was surprising to Tim Hagle, a political science professor at the University of Iowa.
But Hagle thinks it could be a product of the large field of Democrats, with voters looking for ways to whittle it down. Once the field narrows, policy issues such as immigration and jobs could again emerge as top concerns, he said.
“What is different this time is the intensity about wanting to defeat Trump,” Hagle said.
Even candidates who are inclined not to tussle with Trump directly still talk about him a lot.
In Mount Vernon, Iowa on Friday, Beto O’Rourke largely spoke of Trump in the context of using his campaign to try and bring people together. He criticized Trump – not using his name – for how the president talks about immigrants and Muslims.
“We’ve never been as divided as we are right now. And we’ve never seen the kind of rhetoric employed by this president in our history,” said O’Rourke, a former Texas congressman. “This is absolutely wrong. And there’s a consequence to this rhetoric and the policies employed by the president.”
Senator Cory Booker of New Jersey, a Democratic hopeful, insists Trump can be defeated by a candidate who offers a calmer tone instead of attacks.
“I know there’s some ‘fight fire with fire’ people out there, and God bless ’em, if they become the nominee, I’m behind them,” Booker told a group of voters at a New Hampshire pub last week. “But I’m willing to die on this hill, because I believe that when we as Americans extend grace to one another, we’re not weaker, but stronger.
“My mom taught Sunday school, and she taught me to love my enemies,” Booker said. “I’m not going to let anybody drag me so low as to contort my soul and make me hate them.”
(Reporting by Ginger Gibson; Additional reporting by Joseph Ax in New Hampshire and James Oliphant in Iowa; Editing by Alistair Bell)
FILE PHOTO: Idemitsu Kosan Co. Chief Executive Officer Takashi Tsukioka attends a news conference with Showa Shell Sekiyu Chief Executive Officer Tsuyoshi Kameoka (not in picture) in Tokyo, Japan, October 13, 2016. REUTERS/Toru Hanai
March 20, 2019
TOKYO (Reuters) – Japanese refiners will unlikely continue to import oil from Iran from April unless Japan gets a sanctions waivers extension from the U.S. government, Takashi Tsukioka, president of the Petroleum Association of Japan (PAJ), said on Wednesday.
The PAJ head said he believes the government is negotiating with the United States to get such a waiver and that PAJ would support this effort.
Japanese refiners have been asking the government to seek an extension of the U.S. sanctions waivers after the initial 180-day exemption period is over in early May. [nL3N1ZO2R2]
Japanese officials and their U.S. counterparts met last week in Washington to discuss the U.S. sanctions on Iran, according to a statement from Japan’s foreign ministry.
“Japan has told the U.S. that the sanctions should not negatively affect Japan’s stable supply of energy and Japanese companies’ operations,” an official at Japan’s industry ministry said, although declining to comment on the result of the talks.
Asked if Japan will extend sovereign ship insurance to import Iranian oil to the financial year that starts on April 1, PAJ’s Tsukioka said: “We understand the insurance is due to roll-over. We are just waiting for an announcement.”
Tsukioka had said in November, shortly after the U.S. sanctions waivers had been granted, that it was unclear whether the government would extend sovereign ship insurance into the new financial year.
(Reporting by Yuka Obayashi; Editing by Tom Hogue)
FILE PHOTO: Visitors walk outside the tombs at the Madain Saleh antiquities site, al-Ula, Saudi Arabia February 10, 2019. Picture taken February 10, 2019. REUTERS/Stephen Kalin
March 20, 2019
By Stephen Kalin
RIYADH (Reuters) – Saudi Arabia is targeting up to $20 billion of investments through 2035 for a planned landmark tourism destination and will hold a global investor roadshow before the end of the year, the head of the project told Reuters.
Al-Ula, the site of an ancient civilization in a remote northwestern corner of the country, is part of plans by the world’s top crude exporter to diversify its economy away from oil and open up after decades of reclusion.
Amr Madani, chief executive of the Royal Commission for al-Ula, said in an interview this week he expects targeted investments to eventually generate 35,000 jobs and contribute a combined 120 billion riyals ($32 billion) to gross domestic product over the next 17 years.
“The bulk of that in the beginning will be construction-led but at steady state it will be tourism-led,” he said. This would be alongside secondary industries like sustainable agriculture, heritage preservation and film production.
The government, along with a French cultural partnership, has already begun financing infrastructure at al-Ula, which features majestic rock-hewn tombs and 2,000-year-old stone carvings by the Nabateans, the pre-Islamic Arab people that also built Petra in neighboring Jordan.
“We’d rather inject zero from public money, but the reality is we need to kickstart the investment. So we don’t know what that number is but we’re committed to keep investing until we get to the right conditions where funds jump in,” Madani said.
Various investment vehicles will be considered, including joint ventures and long leases, he added.
Al-Ula’s development is part of a push to preserve pre-Islamic heritage sites in order to attract non-Muslim tourists, strengthen national identity and temper the austere strain of Sunni Islam that has dominated Saudi Arabia for decades.
It is also part of Crown Prince Mohammed bin Sultan’s efforts to make the country an entertainment destination, with the kingdom looking to attract dozens of Western acts, including a planned Michael Jackson-inspired “Thriller” theatrical show.
The authorities eventually want to attract up to 2 million visitors annually to al-Ula, but they are starting with about 1,000 hotel rooms plus desert camps and a three month visitor season called Winter at Tantoura that just concluded its first iteration.
“We were overwhelmed, not only by those who came, but by people who saw the pictures and wanted to come,” said Madani. “There is a lot of excitement around the world.”
Plans to admit tourists to Saudi Arabia have been discussed for years but have not come to fruition due to sluggish bureaucracy and concern over conservative sentiment.
International outcry over the murder of journalist Jamal Khashoggi by Saudi agents last October may give some potential visitors pause, but calls for Western performers to boycott the kingdom have not caught on.
Alongside “seasonal” visas issued for Tantoura, the government has approved plans to issue electronic visas for foreign visitors to attend sporting events and concerts, but it is unclear when those will be available.
(Reporting By Stephen Kalin; editing by Emelia Sithole-Matarise)
People stand as they look at damaged houses after a flash flood in Sentani, Papua, Indonesia, March 17, 2019 in this photo taken by Antara Foto. Antara Foto/Gusti Tanati/ via REUTERS
March 20, 2019
JAKARTA (Reuters) – Indonesia’s easternmost province of Papua is planning to hold mass burials for the victims of flash floods, as the death toll from the disaster rose to 104 on Wednesday with nearly 10,000 people displaced, the disaster mitigation agency said.
The floods and landslides injured 160 people, 85 of them seriously, while 79 people were missing, said Sutopo Purwo Nugroho, a spokesman for the agency.
After consulting families and churches, a mass funeral for the victims would be held on Thursday, he said.
The floods and landslide struck at the weekend near the provincial capital of Jayapura after torrential rain fell across the Cyclops mountain range, much of which has been stripped of trees by villagers chopping fire wood and farmers cultivating plantations.
Disaster authorities had warned provincial officials of the danger of flash floods due to deforestation.
Fourteen excavators had been deployed to help clear blocked roads, while temporary bridges were also being built in some areas after access had been cut.
The nearly 10,000 displaced people were scattered across 18 relief shelters and they would be moved to six camps to help streamline aid distribution, the spokesman said.
(Reporting by Ed Davies; Editing by Robert Birsel)
FILE PHOTO: A Nirav Modi showroom is pictured in New Delhi, India, February 15, 2018. REUTERS/Adnan Abidi
March 20, 2019
LONDON (Reuters) – Fugitive billionaire jeweler Nirav Modi had been arrested in London on behalf of the Indian authorities, British police said on Wednesday.
India had asked Britain in August to extradite Modi, one of the main suspects charged in the $2 billion loan fraud at state-run Punjab National Bank (PNB), India’s biggest banking fraud.
Police said Modi, 48, had been arrested in the Holborn area of central London on Tuesday and was due to appear at London’s Westminster Magistrates Court on Wednesday.
(Reporting by Michael Holden; editing by Guy Faulconbridge)
FILE PHOTO: A vendor sells drinking water to motorists in traffic along the Sudirman business district in Jakarta, Indonesia, June 13, 2017. REUTERS/Beawiharta
March 20, 2019
JAKARTA (Reuters) – Indonesia’s capital plans to invest 571 trillion rupiah ($40.27 billion) to upgrade its transportation and other infrastructure in the next 10 years, its governor was reported by media as saying on Wednesday.
Jakarta Governor Anies Baswedan said he has submitted a list of proposals to President Joko Widodo including plans to expand the city’s new mass rapid transit (MRT) system and build a 120 km-long light transit railway.
Other projects include investments in a clean water pipeline and waste management projects.
“We will extend the MRT. It’s now 16 km (9.9 miles), but later 231 km more will be built,” he said, as reported by media.
The projects will be funded mostly through debt, Baswedan said.
Next week, the traffic-clogged city will open to public its $3 billion MRT system, running from south to central Jakarta along its main thoroughfares.
The project, funded by a loan from the Japanese government, is a centre-piece of an infrastructure boom under Widodo.
Widodo is vying for re-election on April 17 against opposition candidate, retired general Prabowo Subianto.
Delayed for more than 20 years, the MRT was finally launched in 2013, with the first line originally scheduled to open in 2018.
The national government will explore creative financing options to fund the newly proposed projects alongside the Jakarta administration, Luky Alfirman, director general of budget financing at the finance ministry, said.
(Reporting by Maikel Jefriando; Writing by Gayatri Suroyo; Editing by Kim Coghill)
FILE PHOTO: Former Nissan Motor Chairman Carlos Ghosn sits inside the car as he leaves his lawyer’s office after being released on bail from Tokyo Detention House, in Tokyo, Japan, March 6, 2019. REUTERS/Issei Kato/File Photo
March 20, 2019
By Norihiko Shirouzu
YOKOHAMA, Japan (Reuters) – In September 2007, despite weighty responsibilities at the helm of Nissan Motor Co and alliance partner Renault SA, Carlos Ghosn found time to get involved in a seemingly straightforward business decision.
Two days before Nissan’s executive committee was due to formalize the choice of a company called TVS as a partner for sales and marketing in India, Ghosn threw his weight behind a different firm: Hover Automotive India Pvt Ltd, four company sources with knowledge of the matter said.
Hover had been a candidate but was knocked out of the running because it had been deemed insufficiently experienced in automotive distribution and marketing, they said. However, its founder and chairman, Moez Mangalji, was a close family friend of Ghosn’s, the sources added.
A Nissan executive wrote to the team preparing for the committee meeting saying it was Ghosn’s wish that Hover be recommended over TVS, two of the sources said, adding that this was enough to ensure Hover got the job.
The incident is part of Nissan’s wide-ranging probe into what it calls years of serious misconduct by Ghosn. There is no evidence of Ghosn benefiting from the decision but it is an example of conduct investigators believe helped his friends at Nissan’s expense, the two sources added.
A spokesman for Ghosn said the former Nissan chairman did not intervene on behalf of Hover, that Hover met key criteria to launch the distribution business, and all partnership decisions were made by Nissan’s executive committee.
“The baseless accusations against Mr. Ghosn and steady stream of leaks from certain Nissan executives are a transparent and dishonorable attempt to smear Mr. Ghosn’s reputation, destabilize and reset the balance of power in the Alliance, and distract from Nissan’s alarming performance,” the statement from Ghosn’s spokesman said.
The spokesman declined repeated requests by Reuters to be identified, citing the “sensitive nature of the topics.”
A representative for Mangalji said Hover employed experts with substantial experience and “that at no point was Hover aware of any special treatment on its behalf by Mr Ghosn or anyone else.”
Ghosn would continue to back Hover even after Nissan dealers in India began protesting in 2012 to executives about a collapse in sales, according to the sources, who declined to be identified, citing the sensitivity of the subject.
Those protests grew in 2013, with some groups representing Nissan’s India dealers sending letters to senior executives, imploring them to step in, and Nissan ultimately dropped Hover as a partner the next year.
An internal Nissan document that summarizes some of the decision-making around the choice of Hover and which one source said was created in 2014, was also reviewed by Reuters.
Company insiders say the Hover episode was a defining moment for some managers inside Nissan, leading them to question the agenda of a man who had been universally lauded for bringing Nissan back from the brink of bankruptcy.
At the same time, the sources acknowledge there was little resistance among the executive committee and other management to Ghosn’s support for Hover and one other dealership decision in the Middle East that had raised eyebrows within Nissan.
“In so many ways it was assumed that what he said would not need to be questioned. That applies to just about every decision he made,” one of the sources said.
TOO MUCH POWER
Looking back at Ghosn’s reign, it is clear that too much power was concentrated in one man, and that management did not do enough, Nissan Chief Executive Hiroto Saikawa told employees in a town hall meeting one week after Ghosn’s Nov. 19 arrest.
“For 19 years, management, myself included, we allowed his high-handedness, allowed wrongdoings, and regret for that is what I think we all feel,” he said, according to a copy of his speech reviewed by Reuters.
“Our biggest and most urgent task….is to undo the negative legacy that resulted from years of Ghosn’s leadership and corporate governance,” he added.
Last week, Nissan and major shareholder Renault said they would break up the all-powerful chairmanship position held by Ghosn, with the chairman of Renault serving as head of the alliance but not as chairman of Nissan.
An external committee is due to make recommendations this month on changing Nissan’s corporate governance including procedures for executive appointments and compensation.
The re-evaluation of Ghosn’s legacy is also driving a broader shift in Nissan’s strategy, particularly Ghosn’s practice of setting ambitious objectives for sales and profitability called ‘commitments’, where managers were held to account if they were not delivered.
“If you couldn’t meet them then you’d be in trouble, those numerical targets came to feel like threats,” Saikawa told the town hall meeting. “Now, we have to change this, work out something that is healthier.”
PLETHORA OF ACCUSATIONS
Not until 2017 did a lone internal auditor, Hidetoshi Imazu, discreetly start making checks into dealings that Nissan now says were orchestrated by Ghosn.
Imazu had been aware of queries by Nissan’s external auditor Ernst & Young ShinNihon LLC about the purpose of a Dutch unit Zi-A Capital, according to one source. Payments for Nissan-owned luxury apartments used by Ghosn were made through Zi-A Capital and its units, sources have previously said.
Imazu’s concerns also followed a June 2017 Reuters report https://www.reuters.com/article/us-renault-nissan-bonuses/exclusive-renault-nissan-considers-hidden-bonus-plan-documents-idUSKBN1941FU that Renault-Nissan alliance bankers had drawn up plans to pay millions of dollars in undisclosed bonuses to Ghosn and other managers through a separate Dutch unit, the source said.
Saikawa would only learn of the probe around October last year after Imazu and Hari Nada, head of Nissan’s CEO office and an ally Imazu later teamed up with, had turned their findings over to prosecutors, two sources said.
Nissan declined to make Imazu, Nada and Saikawa available for comment on this article.
Tokyo prosecutors have accused Ghosn of under-reporting $82 million in compensation for 2010-2018 – pay he had arranged to receive after his retirement.
He has also been charged with temporarily shifting personal losses to Nissan after a foreign exchange contract went sour and improperly steering $14.7 million in Nissan funds to a firm owned by Saudi businessman Khaled Al-Juffali.
Ghosn has said he is innocent and believed the compensation arrangements had been vetted by experts. Both Ghosn and the Khaled Juffali Company have asserted the $14.7 million in payments were for legitimate business purposes.
“Mr. Ghosn is innocent of the charges brought against him and he will be vindicated,” the statement from Ghosn’s spokesman said.
Nissan investigators continue to pursue a number of other leads with the probe expanding as whistleblowers come forward, one source said.
The alleged schemes took so long to come to light, sources with knowledge of the probe said, due to Ghosn’s practice of conveying his wishes verbally to trusted lieutenants rather than in writing. Many payments were made via the ‘CEO Reserve’, a budget for unplanned expenses, and were made through unconsolidated units which did not require vetting by the CFO or external auditors, they said.
In addition to the case involving Juffali, one key focus of the automaker’s probe is a sum of more than $30 million in Nissan funds Ghosn arranged to have transferred via the CEO Reserve to a Nissan distributor in Oman owned by businessman Suhail Bahwan and whether the money was used to repay personal debt, the sources said.
Ghosn’s spokesman said payments of $32 million made over nine years were rewards for the Bahwan firm being a top Nissan dealer. Such dealer incentives were not directed by the CEO and the funds were not used to pay any personal debt for Ghosn, the spokesman added.
One of the Nissan sources countered that dealer rewards were a planned event each year and were not paid via the CEO Reserve.
A spokesman for Bahwan did not respond to requests for comment.
The probe is also looking at the amount of money spent on Nissan-owned residences in Paris, Beirut and Rio de Janeiro and how the payments were made through units.
Ghosn’s spokesman said officials at Nissan, including Saikawa and Nada, had been aware of and had approved of the provision of the residences.
Investigators are also examining payments to Ghosn’s sister, Claudine Bichara de Oliveira, for what two sources describe as a fictitious job advising on global donation activities.
Those payments date back to 2003 and total nearly $700,000 through 2016, documents seen by Reuters show.
An internal Nissan letter dated March 27, 2003 shows Ghosn asked Oliveira if she would work for Nissan’s global donation advisory council and that she signed the agreement. A source said, however, there was no evidence that the council existed.
The spokesman, who also represents Ghosn’s sister, said appropriate officials had approved the contract with the sister, and that Nissan officials opposed to Ghosn were attacking his family with false accusations.
(Reporting by Norihiko Shirouzu; Additional reporting by Gary McWilliams in Houston, Tuqa Khalid in Dubai and Tim Kelly in Tokyo; Editing by Joe White and Edwina Gibbs)
U.S. Secretary of State Mike Pompeo shakes hands with Kuwait’s Foreign Minister Sheikh Sabah Al-Khalid Al-Sabah in Kuwait, March 20, 2019. REUTERS/Jim Young/Pool
March 20, 2019
KUWAIT (Reuters) – Kuwait’s foreign minister said on Wednesday that a long-awaited U.S. peace proposal for the Middle East should factor in regional considerations and all stakeholders.
“We hope the plan will take into account the situation in the region and all the relevant parties,” Sheikh Sabah Khaled al-Sabah told a joint press conference with U.S. Secretary of State Mike Pompeo, who is on a regional tour that will also take him to Israel and Lebanon.
(Reporting by Sylvia Westall and Ghaida Ghantous; Editing by Catherine Evans)
Houses are seen in London, Britain January 19, 2017. REUTERS/Stefan Wermuth
March 20, 2019
LONDON, (Reuters) – Britain’s main inflation rate ticked up last month but stayed close to January’s two-year low, helping consumers maintain their spending power even as Brexit remained uncertain.
Wednesday’s official data also showed house prices rose at the weakest annual pace seen in five-and-a-half years, dragged by London prices falling by the most since September 2009 — just after the low point of the global financial crisis.
Consumer prices rose at an annual rate of 1.9 percent in February after a 1.8 percent increase in January, the Office for National Statistics said. A Reuters poll of economists had pointed to a rate of 1.8 percent.
But core inflation, which strips out volatile food and energy prices, edged down, leaving the overall picture of domestic price pressures in Britain muted ahead of Brexit.
The weakening of inflation, combined with the lowest unemployment rate in 44 years and rising wages, has taken the edge off the uncertainty about Brexit for many households whose spending drives Britain’s economy.
Data due for release on Thursday are expected to show retail sales grew by an annual 3.3 percent last month, weaker than immediately before the Brexit referendum in 2016 but above its average for much of the last decade.
Britain’s modest inflation rate is also helping the Bank of England as it holds off on fresh interest rate hikes while it waits for the outcome of Britain’s Brexit impasse.
A group of officials at the central bank have said over the past couple of weeks that they want to see firm evidence of domestic inflation pressure building before they vote to raise rates.
“The rate of inflation is stable, with a modest rise in food as well as alcohol and tobacco offset by clothing and footwear prices rising by less than they did a year ago,” ONS statistician Mike Hardie said.
The ONS said house prices in January rose by an annual 1.7 percent across the United Kingdom as a whole, the smallest increase since June 2013, when Britain was still struggling to shake off the effects of the global financial crisis.
Prices in London alone fell by 1.6 percent, marking 11 months where prices have not risen. The ONS said prices in the capital were down 3.3 percent from their recent peúak in June 2017.
(Reporting by Andy Bruce and William Schomberg)
Students use their mobile phones during a protest calling on President Abdelaziz Bouteflika to quit, in Algiers, Algeria March 19, 2019. REUTERS/Zohra Bensemra
March 20, 2019
By Lamine Chikhi and Hamid Ould Ahmed
ALGIERS (Reuters) – An influential Algerian party that was a long-time supporter of Abdelaziz Bouteflika has criticized the ailing president for seeking to stay in power, another setback for the ruling elite in the face of mass demonstrations.
The National Rally for Democracy (RND), a member of the ruling coalition, has joined ruling party officials, unions and business tycoons who have abandoned Bouteflika in recent days, after nearly a month of street demonstrations protests.
“The candidacy of president Abdelaziz Bouteflika for a new term was a big mistake,” RND spokesman Seddik Chihab told El Bilad TV.
“Extra constitutional forces have seized power in the past few years and ruled state affairs outside a legal framework.”
Bouteflika, who has ruled for 20 years, bowed to the protesters last week by reversing plans to stand for a fifth term. But he stopped short of stepping down and said he would stay in office until a new constitution is adopted, effectively extending his present term.
His moves have done nothing to halt demonstrations, which peaked on Friday with hundreds of thousands of protesters on the streets of Algiers and have continued into this week.
RND leader Ahmed Ouyahia, a former prime minister who had close ties to intelligence agencies, has also switched sides. “The people’s demands should be met as soon as possible,” he told followers in a letter on Sunday.
Leaders have emerged from the protest movement, offering an alternative to Bouteflika’s political roadmap to what he says will be a new Algeria. But they have not built up enough momentum to force the president to quit or make more concessions.
The military, which wields enormous power from behind the scenes, has remained on the sidelines.
Another powerful figure, Bouteflika’s younger brother Said, has kept a low profile. The president has rarely been seen in public since suffering a stroke five years ago, and the protesters say a shadowy circle of aides, including Said, have been ruling the country in his name.
The protests continued on Tuesday, with students, university professors and health workers rallying in Algiers calling for Bouteflika to quit.
A new group headed by activists and opposition figures told the army not to interfere.
In the first direct public message to the generals from leaders emerging from the protests, the National Coordination for Change said the military should “play its constitutional role without interfering in the people’s choice”.
(Writing by Michael Georgy; Editing by Peter Graff)
FILE PHOTO: Former Nissan Motor Chairman Carlos Ghosn leaves from his residence in Tokyo, Japan, March 8, 2019, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS
March 20, 2019
TOKYO (Reuters) – The trial of former Nissan Motor Co boss Carlos Ghosn on charges of under-reporting his salary is expected to start in September, public broadcaster NHK said on Wednesday.
Ghosn was released on $9 million bail earlier in March after spending more than 100 days in a Tokyo detention center. He faces charges of under-reporting his salary at Nissan by about $82 million over nearly a decade.
Ghosn has said the charges are “meritless”.
He was stripped of the role of Nissan chairman but remains a board member.
(Reporting by Stanley White; Editing by David Dolan)
Police officers and workers in protective suits are seen at a checkpoint on a road leading to a farm owned by Hebei Dawu Group where African swine fever was detected, in Xushui district of Baoding, Hebei province, China February 26, 2019. Picture taken February 26, 2019. REUTERS/Hallie Gu
March 20, 2019
By Dominique Patton
BAODING, China (Reuters) – When pigs on the Xinda Husbandry Co. Ltd breeding farm in northern China began dying in growing numbers in early January, it looked increasingly likely that the farm had been struck by the much feared African swine fever, an incurable disease that has spread rapidly across the country since last year.
But after taking samples from some pigs, local officials in the Xushui district of Baoding city, about an hour’s drive from Beijing, said their tests came back negative, said Sun Dawu, chairman of Hebei Dawu Agriculture Group, the farm owner.
As hundreds of pigs began dying daily on the 20,000-head farm, the company obtained a test kit that showed some positive results for the virus. But after further lobbying by Xinda, officials just offered the company subsidies for farm buildings and other investments, said Sun.
Sun’s account of events and pictures taken by farm staff of dead pigs lying in rows and a pile outside the farm could not be independently verified.
Xushui district said in a faxed response to Reuters on Tuesday that it was opening an investigation into the case, adding that it had found some “discrepancies” with the reported version of events.
“If there is illegal behavior, relevant departments will handle it according to the law,” added the statement from the local government’s investigative committee.
Farmers and other industry insiders told Reuters that China’s African swine fever epidemic is far more extensive than official reports suggest, making the disease harder to contain, potentially causing pork shortages and increasing the likelihood that it will spread beyond China’s borders.
“Our full expectation is that the number of cases is under-reported,” said Paul Sundberg, executive director at the Swine Health Information Center in Ames, Iowa, which is funded by American pork producers.
“And if there’s so much of that virus in the environment in China, then we are at increased risk of importing it.”
China does not permit the commercial sale of African swine fever test kits, though many are now available. Official confirmation must come from a state-approved laboratory.
“Public confirmation of disease is the government’s job,” Sun told Reuters at his company headquarters in Xushui in late February.
Frustrated by the lack of action and mounting losses from the disease, Sun eventually published details of the suspected outbreak on China’s Twitter-like platform Weibo on Feb. 22.
Two days later, it became the first African swine fever case in Hebei province, one of the north’s top pig producing regions, to be reported by China’s Ministry of Agriculture and Rural Affairs, about seven weeks after the company says it had alerted local authorities.
By then, more than 15,000 pigs on the Xinda farm had already died, said Sun, and the company even sold on thousands of pigs – potentially spreading the disease further.
Sun said officials did not explain why their first test had been negative, though he suggested it may have been because they took samples from live pigs on the farm and did not test the dead ones.
China’s Ministry of Agriculture and Rural Affairs did not reply to a faxed request for comment on the case.
The agriculture ministry has warned against covering up outbreaks of the disease, and in January highlighted two large farms that had tried to conceal outbreaks.
Detailed accounts of unconfirmed outbreaks shared with Reuters by two other farm company managers suggest Sun’s experience is not unique.
In one case in northern China last year, local officials declined to even carry out a test. In another case in Shandong province, official test results came back negative, despite clinical symptoms that strongly pointed to African swine fever and a positive test result obtained by the company itself.
Neither manager was willing to be named because of the sensitivity of the issue.
Once an outbreak of African swine fever (ASF) is confirmed, all pigs on the farm, as well as any within a 3-km (1.8-mile) radius, must be culled and disposed of, according to Chinese law, and farmers should be paid 1,200 yuan ($180) per pig culled.
For some cash-strapped county governments, avoiding compensation payments could be an incentive not to report disease, said a senior official with a major pig producer.
When the disease hit one of the company’s 6,000-head sow farms in the northeast in November, local authorities did nothing, the official said.
“It was never tested by the government. We couldn’t do the test because we didn’t have the capability. But there’s no question it was ASF, based on the symptoms and lesions,” he told Reuters, declining to be identified because of company policy.
A county official in northeastern Liaoning province told Reuters in January that the local government had poured so much money and resources into preventing and controlling African swine fever that it risked bankrupting the county.
But wealthy Shandong province, northern China’s biggest producer of hogs, has only confirmed one case of the disease, on Feb. 20.
Insiders at one company said four of its farms in the province had suffered swine fever infections, however, suggesting more unconfirmed outbreaks may have occurred.
After the company’s first outbreak in early January the local government tested and the results came back negative, said an executive, who declined to be identified because of the sensitivity of the issue.
Shandong province’s animal husbandry bureau did not respond to a fax seeking comment on unreported cases.
There is no cure or vaccine for African swine fever and it kills about 90 percent of infected pigs.
Analysts forecast pig production in China, which eats about half of the world’s pork, will fall more than during the 2006 ‘blue ear’ epidemic, one of the worst disease outbreaks in recent years, with some expecting a decline of around 30 percent in 2019.
That would send meat prices soaring and trigger huge demand for imports.
The agriculture ministry said last week the pig herd in February had dropped 16.6 percent year-on-year, and sow stocks were down more than 19 percent.
China also has a patchy record of reporting disease. Details of the blue ear outbreak, which infected more than 2 million hogs, did not emerge until months after the damage had already been done, and the number of pigs that died is still disputed.
Like blue ear, African swine fever does not harm people. But it is classified a reportable disease by the Paris-based World Organization for Animal Health (OIE), a global body that promotes transparency, and member country China is obliged to report each outbreak.
“You need to move faster than the virus, it’s a very simple equation of how to control disease,” said Trevor Drew, director of the Australian Animal Health Laboratory at the national research agency, the Commonwealth Scientific and Industrial Research Organization. “If you don’t know where the virus is, you can’t stop it.”
Since August 2018, Beijing has reported 112 outbreaks in 28 provinces and regions. The increase has slowed considerably in 2019 and the agriculture ministry said earlier this month the situation was “gradually improving”.
But some suspect the disease is worse than the official data suggest.
“I am very much hoping that I am wrong, but if I consider the epidemiological characteristics of this virus disease, I would have to be extremely skeptical,” said Dirk Pfeiffer, a professor of veterinary epidemiology at the City University of Hong Kong.
He pointed to the “spatial randomness” of the reported outbreaks, unusual for an infectious disease, which normally develops in clusters.
The high rate of detection of the virus in food products carried from China to Japan, South Korea, Taiwan and Australia, as well as domestically, also indicated a much higher presence of the virus in Chinese pigs than reported, said Pfeiffer and others.
LARGE FARMS, LARGE LOSSES
With extremely high density of pigs, raised largely on low-biosecurity farms, tackling disease is widely recognized as a major challenge for China.
But the disease has hit both small farms and large producers, say industry insiders, despite better hygiene and training at factory farms.
“The large producers have not been spared,” said a manager with a company that supplies several of China’s top pig producers. “Everyone is trying really hard on biosecurity, but they’re still getting outbreaks, and they’re frustrated and losing hope.”
He said he knew of eight large breeding farms that had experienced outbreaks, including two on very large, 10,000-head sow farms. None were officially reported.
He declined to be named or to reveal the names of the producers because of client confidentiality.
Beijing has not officially reported any swine fever on the farms of large listed producers, whose shares are trading at record levels as investors bet the big producers will benefit from tighter supplies.
Qin Yinglin, chairman of China’s No.2 producer, Muyuan Foods Co Ltd, which raised 11 million pigs for slaughter last year, said most large companies were likely to be infected.
“If you checked carefully, testing one-by-one, then for sure everyone has it,” he told Reuters in an interview. “This is a high probability event.”
He said it was “not yet known” if his firm had been hit.
(For a graphic on ‘African swine fever in China’ click https://tmsnrt.rs/2QMhmzL)
(Reporting by Dominique Patton and Beijing Newsroom; Editing by Tony Munroe and Alex Richardson)
FILE PHOTO – U.S. President Donald Trump and North Korean leader Kim Jong Un sit down for a dinner during the second U.S.-North Korea summit at the Metropole Hotel in Hanoi, Vietnam February 27, 2019. REUTERS/Leah Millis/File Photo
March 20, 2019
TOKYO (Reuters) – Japan will extend unilateral sanctions against North Korea by two years, public broadcaster NHK said on Wednesday.
Japan will extend a trade embargo on North Korea and a ban on North Korean ships entering Japanese ports by two years, according to the report.
The government is expected to approve the extension at a cabinet meeting early next month, NHK said.
The decision would come after a second meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un last month collapsed over differences on U.S. demands for Pyongyang’s denuclearisation and North Korea’s demand for sanctions relief.
(Reporting by Kaori Kaneko; Editing by Chang-Ran Kim)
FILE PHOTO: The BMW logo is seen on the wheel of a vehicle presented at the Auto China 2016 auto show in Beijing, China, April 29, 2016. REUTERS/Damir Sagolj/File Photo
March 20, 2019
MUNICH (Reuters) – BMW <BMWG.DE> on Wednesday said it expected group pretax profit to fall by more than 10 percent in 2019 and announced a sweeping 12 billion euros ($13.6 bln) cost savings and efficiency plan to help offset higher technology investment and currency costs.
Last week BMW said it would step up cost cutting in anticipation of a difficult year, as it reported a 7.9 percent fall in 2018 operating profit.
BMW said it would expand group-wide efforts to increase efficiency and lower costs. “By the end of 2022, it expects to leverage potential efficiencies totaling more than 12 billion euros,” BMW said in a statement.
(Reporting by Edward Taylor; Editing by Tassilo Hummel)