Goldman suggests shorting gold as fear factor overdone SINGAPORE

Investors should short gold, one of the best performing assets this year, Goldman Sachs said, as it believes a recent rally triggered by concerns over the health of the global economy has been overdone.

Bullion has gained about 13 percent in 2016 as worries over negative interest rates and their impact on the banking sector sent investors scurrying out of equities and into safe-haven gold.

Concerns over the Chinese economy and fears of a U.S. recession also helped gold post one of its biggest rallies in years. Prices hit a one-year high of $1,260.60 an ounce last week.

But Goldman Sachs said prices will roll back.

“Fears around China, oil and negative interest rates have likely been overstated in the gold price and other financial markets,” Goldman Sachs said in a note dated Monday.

“We are recommending shorting gold through a GSCI-style rolling index,” it said, referring to the S&P GSCI commodity index.

Goldman expects prices to fall to $1,100 in three months and $1,000 in 12 months.

Gold has already given back some of its gains, falling below $1,200 early on Tuesday as equities rebounded.

The U.S. Federal Reserve would hike interest rates further, putting pressure on gold, Goldman said, despite recent speculation the Fed might resort to negative interest rates to stimulate the economy.

Bullion was also likely to see little support from top consumer China, with a large amount of physical demand unlikely, Goldman analysts said in the note.

China has already shown its pessimism with the gold rally, selling the metal after returning from a week-long holiday on Monday, while post-Lunar New Year demand is set to falter.

[Source:- Reuters]

India drug monitoring programme struggles to grow fast enough

Within days of being given a diphtheria jab during a school vaccination drive, 5-year-old Meraj Shabbir Khan’s leg became so swollen that he was hospitalised.

In a cramped Mumbai paediatric ward, third-year pharmacology student Nitin Shinde opens the boy’s file and notes the vaccine, his age and the doctor’s diagnosis of a skin infection. That information is later logged into a computer programme linked to a national database, part of India’s fledgling efforts to track, analyse and ultimately warn patients about unknown side effects of drugs on the market.

India’s six-year-old pharmacovigilance programme, which collects and submits suspected adverse drug reactions to a World Health Organisation (WHO) database, is key to improving drug safety in a country where medicine consumption is high, experts say.

But insufficient staff and equipment, and a lack of awareness among medical professionals mean many potentially dangerous drug reactions go unrecorded, hospital personnel across India told Reuters.

Gaps in the system mean the government has less data to determine whether drugs might have harmful side effects. Also, relatively little information flows from one of the world’s largest pharmaceutical markets to the WHO database of over 12 million suspected adverse drug reactions.

“In a country of 1 billion people consuming so much medicine, obviously safety is a concern,” said G. Parthasarathi, dean of the pharmacy school at JSS University in Mysore, adding the pharmacovigilance programme is still gaining traction. “We’ve made a good start,” he said.

Last year, India contributed 2 percent of the 2.1 million suspected reactions added to VigiBase, the WHO’s global database. China, with a comparable population, contributed 8 percent.

Tracking adverse drug reactions is urgent “in public health programs where huge amounts of medicine are being used,” said Sten Olsson, a WHO programme expert at the non-profit Uppsala Monitoring Centre (UMC) in Sweden which maintains VigiBase.

The centre analyses the WHO database for worrying patterns among suspected reactions and, where there are safety concerns, publishes a “signal” that goes out to member countries. It is up to those countries to act on that information or not. “We’re concerned that with some of our new signals nothing has been done with them,” said Olsson.

Indian health officials say the monitoring programme is a “high priority” and a $14.5 million annual budget is sufficient.

“We are going to develop a better pharmacovigilance system in India in due course,” said G.N. Singh, India’s drug controller. “Patient health will be assured.”

DRUG COMPANIES

The programme could improve, experts say, if drugs firms contributed more.

To make a new drug in India, companies need permission from the national drug controller after submitting safety and efficacy data including from local clinical trials. For four years after an approved drug is on the market, firms must submit safety reports, including those on adverse drug reactions.

After that there is no mandatory requirement for them to report all adverse reactions, and smaller firms, which make up over a third of India’s market, often don’t have robust monitoring resources.

“They feel after four years, every drug is safe,” said a person working in pharmacovigilance at a multinational drugs company in India. “That’s not the case.”

Last year, only about one tenth of the suspected adverse drug reactions India collected came from drugmakers, compared to 95 percent in the United States.

But making reporting mandatory for all companies and all drugs is not realistic, industry advocates say.

“You have up to 80,000 drugs on the market. You think the government is prepared to do pharmacovigilance for all of them?” said T.R. Gopalakrishnan, deputy secretary-general of the Indian Drug Manufacturers Association. “Many manufacturers don’t even know where their drugs are being consumed.”

“WHAT CAN I DO?”

Some of India’s 179 monitoring centres operate smoothly, but other parts of the system aren’t working, programme administrators say. In interviews with staff at more than 20 centres, programme coordinators cited problems ranging from a shortage of personnel, computers and funds to raise awareness among staff to a lack of cooperation from doctors who say they are too busy.

“I call doctors to my office, serve them tea… and push them to report. What else can I do?” said C.B. Choudhary, who coordinates a monitoring centre at Katihar Medical College in Bihar state. “I want the programme to start, but it isn’t happening,” he said.

Not all centres require extra personnel or equipment, and those that do are in the process of getting full staff, said V. Kalaiselvan, principal scientific officer at the Indian Pharmacopoeia Commission which hosts the pharmacovigilance programme’s headquarters in Ghaziabad outside New Delhi.

Regarding doctors’ lack of engagement, “the culture of reporting is improving,” he said.

Reporting numbers have risen, and staff at headquarters used patient data last year to make seven recommendations to the drug regulator to add new warning labels – the first time Indian, not foreign data, was used, said Kalaiselvan.

The body recommended, for instance, that the regulator require an antibiotic combination of piperacillin and tazobactam, sold in India by several major drugmakers, be sold with a warning that it could cause breathing difficulty and potassium deficiency.

($1 = 68.0508 Indian rupees)

[Source:- Reuters]

India’s target to import GMO-free corn: mission impossible

A woman selling grilled corn takes shelter under an umbrella as it rains on a beach in Mumbai in this July 11, 2012 file photo.    REUTERS/Danish Siddiqui/Files

As India prepares to import corn for the first time in 16 years, at least one stipulation in its international tender has become much tougher to meet – that shipments of the crop are completely free of genetically modified organisms (GMOs).

The Asian country of 1.2 billion people does not allow cultivation of any genetically modified food, and has rules that are supposed to ensure that imports contain no trace of GMOs.But an explosion in the use of GM crops worldwide means that purity grade has become harder to attain and, with a growing risk of the supply chain being contaminated, underlines the vulnerabilities faced by countries trying to stay GM free.

Even a shipment containing a handful of genetically altered seeds could cross pollinate with local varieties and mean that in India’s case farmers end up illegally growing GM crops.

“They can buy non-GMO corn, especially out of the Black sea region, but I doubt anybody can offer shipments with zero presence of GMOs,” James Dunsterville, an agricultural commodities analyst at Geneva-based commodities information platform AgFlow.

South Korea’s Daewoo International won the tender to ship 250,000 tonnes of non-GM corn to India from Ukraine, but two international traders in Singapore and an exporter in Kiev said Ukraine could at best guarantee 99.1 percent non-GM corn.

“The biggest risk of accepting anything less than 99, or 100, percent is that the imported GM corn may eventually get mixed with conventional seeds that farmers sow in India,” said an Indian government scientist.

“If, God forbid, any GM seed gets mixed here, it’ll spoil the entire Indian agriculture,” added the scientist, who asked not to be named since he was not authorised to talk to media.

Daewoo declined to comment but two sources close to the company said it would be able to meet the requirements and that it was aware of the conditions in last month’s tender issued by Indian state-run firm PEC.

RISKS OF CONTAMINATION

Shrinking arable land, volatile weather and a world population tipped to top 9 billion by 2050 are increasing pressures to plant GM crops to boost yields and protect from pests.

Much of the corn in major producers such as the United States, Brazil and Argentina is GM, helping production hit record levels in recent years and keeping a lid on food prices.

Global corn prices have recovered about 13 percent after hitting a 5-year low in 2014 but are still more than 50 percent below a record price of $8.49 a bushel in 2012.

Indicating the difficulty of keeping GM free, Greenpeace said that Chinese farmers were illegally growing GM corn, despite an official ban on cultivating GM varieties or other staple food crops.

The environmental group said almost all samples taken from cornfields in some parts of the north-east, China’s breadbasket, tested positive for GMO. China has not directly commented on the report, though officials have issued warnings to seed dealers and farmers not to use unapproved GM seeds.

Some farm economists have said India should speed up efforts to embrace GM foods after China took a step towards this with its bid for Swiss transgenic seed developer Syngenta.

But public and political opposition in India remains strong amid fears they could compromise food safety and biodiversity. GM advocates say such fears are not scientifically proven.

“India must reject cargoes from suppliers who promise to provide corn that is only 99.1 percent free of GM organisms,” said Devinder Sharma, an independent food and trade policy analyst based in Chandigarh, highlighting a risk of contamination.

However, Sharma said that it had become standard global practice for GM-free buyers to settle for crops that were up to 99 percent GM free.

A source at trader PEC said India’s condition that the imports were non-GM was sacrosanct.

PEC received 15 bids from global traders including Daewoo, Noble, Cargill and Agro Corp to supply corn mainly to be used as animal feed for India’s poultry industry.

But Singapore-based traders said there could have been more participants in the tender but for the non-GM restriction.

Though Ukraine and growers in Europe, such as France, do produce non-GMO corn, suppliers may not be able to guarantee supplies are completely free of gene-altered grains because of common bulk handling systems, said a trading manager with an international trading company.

“It could be a dirty truck or a dirty conveyor belt. It only takes one seed to get a GMO positive result.”

 

[Source:- Reuters]

SBI looks to woo Japanese business

State Bank of India (SBI) launched an initiative on Tuesday to help strengthen business ties between Asia’s third-largest economy and Japan, where investors eyeing Indian markets need support in navigating the country’s notoriously complex bureaucracy.

SBI dedicated Japan desk offers wholesale and retail banking products like rupee funding for Japanese businesses and banks, as well as guidance on Indian companies and regulations.

“Whereas Japan has the skill and the capital, India has the skill and the market,” SBI Chairman Arundhati Bhattacharya told reporters in New Delhi after launching the initiative. “Japanese companies need special attention to understand the complexities (of markets like India).”

Japan is the fourth largest foreign investor in India, and PM Narendra Modi and his Japanese counterpart Shinzo Abe, who enjoy a close relationship, have made much of the opportunity for both countries as India tries to grow its manufacturing industries.

But Japanese firms investing in India face complex and at times baffling regulatory hurdles. India ranked 130th in the World Bank’s latest ease of “Doing Business” report of 189 countries, behind fellow emerging markets South Africa, China and Brazil.

[Source:- Reuters]

Four oil producers agree to freeze output at January levels: Qatar Energy Minister

DOHA: Top global oil exporters including Russia and Saudi Arabia agreed on Tuesday to freeze output to tackle a global glut but said the deal was contingent on other producers, with Iran absent from the meeting and planning to ramp up shipments.

The Saudi, Russian, Qatari and Venezuelan oil ministers visited Doha for a previously undisclosed meeting – their highest-level discussion in months on joint action to help prices recover from their lowest in more than a decade.
The Saudi minister, Ali al-Naimi, said freezing production at January levels was an adequate measure and new steps to stabilise the market could be considered in the next few months.

He said he hoped other producers would adopt the proposal, while Venezuela’s Oil Minister Eulogio Del Pino said more talks would take place with Iran and Iraq on Wednesday.

Oil prices rose to $35.55 per barrel but later pared gains to trade below $34 as expectations for an immediate deal faded.

Iran has pledged to raise supply steeply in the month to come as it looks to regain market share lost after years of international sanctions, which were lifted in January.

The Doha meeting came after more than 18 months of declining oil prices, knocking crude below $30 a barrel for the first time in over a decade.

The slump has been longer and deeper than anyone predicted, and the mood may be shifting among producers that have been determined to defend market share rather than prices.
Within the Organization of the Petroleum Exporting Countries is a growing consensus that a decision must be reached on how to prop up prices, Nigerian Oil Minister Emmanuel Ibe Kachikwu told Reuters late last week.

Much has changed since OPEC’s fractious meeting in early December, the last big gathering of key oil ministers, when members “were hardly talking to one another. Everyone was protecting their own positional logic,” Kachikwu said.

While Venezuela has been the hardest Oil Minister Eulogio Del Pino said more talks would take place with Iran and Iraq on Wednesday.

Oil prices rose to $35.55 per barrel but later pared gains to trade below $34 as expectations for an immediate deal faded.

Iran has pledged to raise supply steeply in the month to come as it looks to regainmarket share lost after years of international sanctions, which were lifted in January.

The Doha meeting came after more than 18 months of declining oil prices, knocking crude below $30 a barrel for the first time in over a decade.

The slump has been longer and deeper than anyone predicted, and the mood may be shifting among producers that have been determined to defend market share rather than prices.
Within the Organization of the Petroleum Exporting Countries is a growing consensus that a decision must be reached on how to prop up prices, Nigerian Oil Minister Emmanuel Ibe Kachikwu told Reuters late last week.

Much has changed since OPEC’s fractious meeting in early December, the last big gathering of key oil ministers, when members “were hardly talking to one another. Everyone was protecting  their own positional logic,” Kachikwu said.

While Venezuela has been the hardest-hit major producer, oil below $30 is a fraction of what Russia needs to balance its budget as it heads towards parliamentary elections this year. Saudi finances are also suffering badly, running a $98 billion budget deficit last year, which it seeks to trim this year.

[Source:- Indiatimes]

35 Insanely Awesome Kids’ Bedroom Ideas

We turned our office into a playroom for our three kids. We wanted a fun place for them, but we also didn’t want to spend a lot of money. Here are several fun DIY wall ideas for kid spaces!
  • fun diy wall ideas for kid spaces, chalkboard paint, diy, entertainment rec rooms, painting, wall decor
The first update was to get rid of the white walls, so I added a wallpaper accent wall. (To see this tutorial, go to my blog and search for “wallpaper” in the search box.)
  • fun diy wall ideas for kid spaces, chalkboard paint, diy, entertainment rec rooms, painting, wall decor
I love this wallpaper because it is perfect for displaying photos of the kids and their artwork.
  • fun diy wall ideas for kid spaces, chalkboard paint, diy, entertainment rec rooms, painting, wall decor
Chalkboard walls are another great solution for kid spaces.
  • fun diy wall ideas for kid spaces, chalkboard paint, diy, entertainment rec rooms, painting, wall decor
They’re easy and inexpensive.
  • fun diy wall ideas for kid spaces, chalkboard paint, diy, entertainment rec rooms, painting, wall decor
And DIY wall (art) solution is to make these fun animal heads using paper mache.
  • fun diy wall ideas for kid spaces, chalkboard paint, diy, entertainment rec rooms, painting, wall decor
    [Source :-hometalk]

Make a DIY Hexagon Shelf With Popsicle Sticks

2016-02-02-1454452477-2986178-DIYHexagonShelfPopsicleSticks6.jpg

My favorite craft projects are those that take something mundane, utilitarian or used up and transform it into something beautiful.

Well, it doesn’t get much more ordinary than popsicle sticks.

Most of us probably haven’t given them much thought since about third grade. But that is going to change today with these DIY hexagon shelves.

2016-02-02-1454452788-1886319-DIYHoneycombShelfPopsicleSticks2.jpg

These shelves add instant dimension and warmth any room. Plus, you can change out what lives inside them throughout the year.

2016-02-02-1454453595-119705-DIYHexagonShelfPopsicleSticks5.jpg

If you’re looking for an inexpensive décor upgrade that will inevitably become a conversation piece, this is it. At less than $10 for the entire set of honeycomb shelves, this is some super affordable DIY decor. And most of all, these shelves just look positively Mad-Men-esque up on the wall.

2016-02-02-1454452908-1515334-DIYHoneycombShelfPopsicleSticks4.jpg

Hexagon Shelf Supplies

• popsicle sticks (You’ll need about 100 per each single hexagon shelf and 200 for the larger honeycomb shelf)
• tacky glue
• honeycomb shelf template (Download it from MakeAndDoCrew.com.)
• wood stain (Minwax Early American was used here.)
• paintbrush
• 1 picture hanger (Optional)

Instructions

1. Download the template. Print it, trim it and tape it together.

2. Position popsicle sticks as pictured, alternating every other hexagon side. I’ve found that adding a drop of glue to both ends of 3-4 sticks at a time and laying them in their appropriate position to be the most efficient strategy.

2016-02-02-1454454840-5626404-DIYHexagonShelfPopsicleSticks7.jpg

3. Add glue to more sticks and use them to make a second layer on top of the first, alternating every other hexagon side.

4. Continue like this until your honeycomb shelf is desired depth. The shelves pictured are about 16 popsicle sticks deep per side.

5. After the glue is dry, use a paintbrush to apply wood stain. Make sure to get stain between each stick. Let the stain dry.

2016-02-02-1454454876-4962602-DIYHexagonShelfPopsicleSticks2.jpg

6. If you’d like, glue a picture hanger on the top side of the hexagon. (Or simply hang two nails for the shelf to rest on.)

2016-02-02-1454453485-6114727-DIYHoneycombShelfPopsicleSticks3.jpg

7. To make a larger honeycomb shelf for your new hexagon twins, check out thisDIY Honeycomb Shelf Tutorial.

8. Fill your new shelves with your favorite miniature possessions. Less is more.

9. Sit back, admire and let your third grade self revel in the lowly popsicle stick’s potential finally actualized.

2016-02-02-1454455029-2225370-DIYHoneycombShelvesPopsicleSticks2.jpg

 

[Source:- huffingtonpost]

Top 5 Interior Design Trends for 2016

What’s in for 2016

SCP X Jasper Morrison side tableENLARGE
SCP X Jasper Morrison side table PHOTO: THE FUTURE PERFECT

BLACK METALS

“There is nothing fussy about iron and blackened steel,” said Mr. Butera. No longer sidelined as the metal for overwrought outdoor furniture or bed frames, the decidedly unflashy material is appearing as simple hardware, bathroom fixtures and even flatware, said British interior designer Martyn Lawrence Bullard. Contemporary designers, such asJasper Morrison blend it with wood and glass, or sometimes create entire pieces of matte black metal. “Welders are the new rock stars,” enthused New York designer Julia Haney-Montanez.


Bethan Gray’s table for LapicidaENLARGE
Bethan Gray’s table for Lapicida

ROUNDED FURNITURE

“It started with the iPhone,” said New York designer Wesley Moon, who’s noting a curvy trickle-down aesthetic in home décor. English designer Rachel Laxer loves the execution of B&B Italia’s Oskar table: “It’s a racetrack shape, almost a rectangle, with the sexiness of curves.” Radial and bullnose edges soften hard materials like marble, said Glenn Lawson of Lawson Fenning in Los Angeles. Meanwhile, Los Angeles designer Timothy Corrigan asked, “Who doesn’t want to rub their hands along a smooth, rounded piece of marble? Touch is essential to design.”


Pillow from Anthropologie ENLARGE
Pillow from Anthropologie PHOTO: F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS

OLD-WORLD ORNAMENTATION

“People want the traditional and dressy, with a shot of nostalgia, to feel like everything is going to be OK,” said Tobi Fairley, based in Little Rock, Ark. In 2016, look for brocades, tapestries and Georgian and Empire antiques.Fringe, cording and tassels “soften the austerity of modern upholstery,” noted Kirill Istomin, who has offices in Moscow and New York. Expect, too, dramatic drapes. “Rooms without curtains are like a man in a suit without shoes,” said British designer Kathryn M. Ireland.


Escudero’s Pyramid armoireENLARGE
Escudero’s Pyramid armoire PHOTO: 1STDIBS

MEXICAN MIDCENTURY MODERNISM

Mexican designers who practiced in the 1940s, ’50s and ’60s, such as Arturo Pani, Eugenio Escudero and Pepe Mendoza, “cling to the clean lines of [American and European] midcentury modern,” noted Jonathan Savage,a designer in Nashville, “but many of them also place a high importance on mixing materials—wood, metal and stone.” South American designers, including Jorge Zalszupin, are also coming into vogue for “uniquely shaped pieces in exotic rosewood and jacaranda,” said Perry Walter, a designer based in Decatur, Ga.


A 1962 design by Barbro Nilsson for Märta Måås-FjetterströmENLARGE
A 1962 design by Barbro Nilsson for Märta Måås-Fjetterström PHOTO: BAC

SCANDINAVIAN FLAT WEAVES

“With elegantly balanced geometric compositions, these rugs are a sophisticated answer to the omnipresent neutrals and sisals,” said Los Angeles designer Madeline Stuart, who is fond of early-20th-century designs from the company Märta Måås-Fjetterström. The somewhat folksy carpets adapt to a variety of contexts. “The restraint of Scandinavian design works with both contemporary and traditional interiors,” noted San Francisco designer Heather Hilliard.


What’s Out for 2016

A copper lampENLARGE
A copper lamp PHOTO: MARK LUSCOMBE-WHYTE/THE INTERIOR

ROSY METALLICS

In 2015, copper and rose-gold metals so dominated, they’ll be identified with the year. “You can pretty much date a home based on the metal finishes used,” New York-based interior designer Timothy Brown said. While high-quality pieces may stand the test of time,Barclay Butera, a designer with offices in Los Angeles and Park City, Utah, warned, “The rosy-gold hues can go garish and look cheap in moderately priced pieces.” Others maintain that such shades have no place in décor. Says Los Angeles decorator Lindsay Pennington,“Copper is for pots and pans. Rose gold is for jewelry.”


A facet tableENLARGE
A facet table PHOTO: F. MARTIN RAMIN/THE WALL STREET JOURNAL DESIGN

FACETS

“We’ve grown tired of items that feel sharp, hard and mechanized,” said Los Angeles designer Leslie Shapiro Joyal, sensing a certain facet fatigue. Newport, R.I., designer Ally Coulter observed of the style, which afflicted everything from objets d’art to armoires this past year, “It’s overproduced, unsophisticated and clunky.” Meanwhile, architect Mark Zeff reserved his appreciation of the oversize-gem look for the real deal: “Unless a faceted table is made of real quartz, what’s the point?” he said.


Gray metal stool ENLARGE
Gray metal stool PHOTO: GETTY IMAGES/ISTOCKPHOTO

THE INDUSTRIAL LOOK

Joe Lucas of Lucas Studio in Los Angeles considers “industrial chic” an oxymoron. “Enough of looking like we are living in the garage,” he declared. The style has become a signifier of millennial-coffeehouse design, said Mr. Brown, who maintains a design practice in New York. “I’m all for reduce and reuse, but I would prefer not to drink out of another Mason jar in a barn in Brooklyn.” New York designer Julia Haney-Montanez takes the oversaturation personally: “I have ended friendships with people asking me for Edison lightbulb resources.”


Midcentury dining room ENLARGE
Midcentury dining room PHOTO: CORBIS

OPPRESSIVE MIDCENTURY MODERNISM

“I love Don Draper as much as the next guy,” said Mr. Butera, referring to the lead character of the 1960s-set AMC series “Mad Men,” “but we have to move on.” Though the occasional womb chair or teak credenza still adds style, said Los Angeles decorator Trip Haenisch, “the quintessential example of not chic is a room done entirely in midcentury or Danish Modern.” And derivations of the classics also threaten to kill a good thing. “Mass-market brands have mimicked the original designs to the point of almost ruining their genius,” New York-based designer Thomas Jayne said.


Sisal samples ENLARGE
Sisal samples PHOTO: GETTY IMAGES

SISAL AND JUTE

Of these two types of fiber rugs, sisals are the tougher but also the rougher. “They don’t feel soft or cushy on bare feet and are not very child- or pet-friendly,” said Mr. Corrigan. And jute lacks durability, said New York designerPhilip Gorrivan. “It wears quickly, stains easily and is virtually un-cleanable.” Its worst offense? Ubiquity. “When you can get a rug for $140 at mainstream stores,” said Birmingham, Mich., designer Corey Damen Jenkins, “the trend has overstayed its welcome.”

[Source:- Wsj]

 

Deutsche Bank shares soar 11% on bond buyback speculation

Deutsche bank branch

Deutsche Bank shares have bounced back, after hitting a 30-year low on Tuesday, on reports that it will instigate an emergency bond buyback plan.

Shares in the bank soared 10% to €14.58 (£11.31) in Frankfurt on the media reports, easing concerns about the strength of Deutsche’s balance sheet.

The bank itself has made no comment.

The recovery in Deutsche Bank’s share price came after two days of dramatic falls.

Shares slumped 13% over the course of Monday and Tuesday, despite assurances from the bank that its balance sheet was “rock solid”.

Overall, shares in Deutsche are still down more than 40% since the start of the year.

A report in the Financial Times stated the bank was expected to focus its emergency buyback plan on some €50bn of senior bonds – debt that is repaid first if a company goes out of business.

But the bank’s move is unlikely to involve so-called contingent convertible bonds.

Convertible bonds force investors to convert bonds into a predetermined number of shares at a given price, known as the strike price.

Contingent convertible bonds, or CoCo bonds for short, usually have a strike price that, as the name implies, is “contingent” on shares in a company remaining at that price for a certain period of time. If that trigger is hit, the bonds convert into shares.


Analysis: Simon Jack, business correspondent

During the financial crisis, when taxpayers around the world saved their banks, they also saved the investors who had lent the banks money. The idea that lenders to banks would suffer big losses was considered a very bad outcome as it would have disastrous knock on effects and undermine banks’ ability to fund themselves in the future.

In the post-crisis world, politicians of every stripe have tried to reassure their voters this would not be permitted to happen again. New rules mean that, when disaster beckons again, some lenders to the banks would see their bonds (IOUs in effect) turn into shares – in other words – they may not get their money back in full or on time. These new IOUs are called Cocos – short for contingent convertible bonds.

In short, Coco investors are not getting the security lenders usually get. The removal of this implied government guarantee has made the value of those IOUs fall and threatens banks’ ability to sell more in the future. That makes banks less stable and hey presto – here we are with some bank shares down 40% since the beginning of the year.


‘Rock solid’

On Tuesday, Deutsche Bank’s co-chief executive, John Cryan, sent a message to all staff in which he assured them the bank was in a strong financial position, despite global growth fears, low oil and other commodity prices, and the fact that the bank would be booking write-downs in its fourth quarter.

He said that while the stock markets had “expressed some concern about the adequacy of our legal provisions”, he did not “share that concern”.

Mr Cryan added: “Volatility in the fourth quarter impacted the earnings of most major banks, especially those in Europe, and clients may ask you about how the market-wide volatility is impacting Deutsche Bank.”

He said staff at the bank could tell customers concerned about investing with the bank that “Deutsche Bank remains absolutely rock-solid, given our strong capital and risk position”.

Takeover speculation

The email to Deutsche Bank staff, made publicly available via the bank’s official Twitter account, is an unusual step.

The bank has also been the subject of takeover speculation in German media, given the low value of its share price. Deutsche Bank has had negative press for years now amid a series of scandals and litigation. It chalked up a record loss of €6.8bn last year.

Meanwhile, Credit Suisse chief executive Tidjane Thiam has told the Financial Times that he believes the Swiss bank’s capital position is healthy and that they have “no liquidity issues.”

He added that the bank’s current common equity tier 1 capital ratio of 11.4% was the strongest Credit Suisse has ever had.

Tier 1 capital is the measure of a bank’s financial strength based on the sum of its equity capital and disclosed reserves.

Last week Credit Suisse reported its first full-year loss since 2008, sending its shares tumbling.

 

[Source:-BBC]

 

 

EDF cuts dividend, says Hinkley Point decision soon

French EDF (EDF.PA) saw 2015 net profit plunge 68 percent on asset impairments and provisions and cut its dividend, but the power utility reaffirmed it was committed to its planned UK nuclear investment on which it will decide soon.

EDF CEO Jean-Bernard Levy told an earnings call that the investment decision on EDF’s 18 billion pound project to build two nuclear reactors in Hinkley Point, Britain was “coming closer”.

He said EDF was negotiating final details with its Chinese partner and was looking at how best to finance the operation in light of very low electricity wholesale market prices.

EDF surprised markets by cutting its dividend to 1.10 euros per share after paying 1.25 euros for three years in a row and against median consensus for an unchanged dividend.

Asset impairments and provisions pushed EDF’s 2015 net income down to 1.19 billion euros from 3.70 billion last year.

EDF said it had non-recurring items totalling minus 3.64 billion euros in 2015, compared to minus 1.15 billion last year.

These items mainly concern impairments on thermal assets, particularly in the United Kingdom, Italy, Poland and Belgium, and impairments on Italian unit Edison’s exploration and production activities.

The items also include provisions for network renewal and nuclear waste storage.

Levy also said the French state – which owns 85 percent of the company – would take its entire 2015 dividend in shares, which would leave 1.8 billion euros worth of cash with the company.

He declined to comment on press reports about a possible 5 billion euro capital increase.

“The share dividend is a de facto capital increase,” he said.

Levy also said that he hoped that the planned opening of the capital of its grid unit RTE can happen quickly. The government has said that state-owned bank CDC might take a stake in RTE.

The company confirmed its outlook for a positive cash flow after dividend payment by 2018.

EDF said 2015 core earnings before interest, tax, depreciation and amortisation (EBITDA) rose 1.9 percent to 17.6 billion euros and turnover rose 2.2 percent to 75.01 billion euros.

Reuters consensus estimates were for a median net profit of 1.36 billion euros (range 1.03-1.68), EBITDA of 17.41 billion (range 17.29-17.79), sales of 73.92 billion euros (range 72.40-76.33) and unchanged 1.25 euros dividend (range 0.80 to 1.34). EDF paid 1.25 euros on 2014, 2013 and 2012 earnings.

Nuclear power production totalled 416.8 terawatt/hour, compared to 415.9 TWh in 2014 and EDF’s own 2015 target of 410-415 TWh.

 

 

[Source:- Reauters]