Boeing ups long-term aircraft market forecast by 8%

June 16th, 2011 - 
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Boeing on Thursday hiked its long-term forecast for the size of the commercial aircraft market by eight percent, estimating it at 33,500 planes worth $4.0 trillion over the next 20 years.

“The long-range forecast for 2011 anticipates delivery of 33,500 new airplanes over the next 20 years, valued at more than $4.0 trillion,” the US company said on its website.

Boeing said its long-range forecasts, which cover both passenger and cargo aircraft, have historically turned out to be conservative.

It said single-aisle aircraft will account for the majority of deliveries over the next 20 years — 70 percent of the airplanes and 48 percent of the value.

“Rapidly expanding air service within China and other emerging economies and the spread of low-cost carrier (LCC) business models throughout the world drive this market segment,” said Boeing.

However the market for efficient long-range twin-aisle aircraft is likely to be the fastest growing segment, accounting for 22 percent of the delivery units and 43 percent of the value.

“High fuel costs are compelling airlines to accelerate replacement of older airplanes,” said the manufacturer.

“In addition, the increased capabilities of the latest long-range, twin-aisle airplanes create opportunities for operators to take advantage of the ongoing liberalisation of air transport markets to open new nonstop routes.”

Boeing forecasts that in the next 20 years the Asia Pacific region will count for one third of sales volume with 11,450 aircraft and 37 percent of market share at $1.5 billion.

Europe and North America will each count for just above 22 percent in sales volume. European sales should reach $880 billion and North America’s $760 billion, Boeing said.

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China’s Hu seeks gas breakthrough in Russia

June 16th, 2011 - 
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Chinese President Hu Jintao met Russian leaders on Thursday in search of a breakthrough in stalled negotiations on a mega-contract for Russia to pump gas to China for the next three decades.

President Dmitry Medvedev and Hu signed a number of agreements after Kremlin talks but the deal between Russian gas giant Gazprom and China National Petroleum Company (CNPC) did not materialise as negotiations were continuing.

Vladimir Putin, Russia’s powerful prime minister considered the country’s paramount leader, will host Hu at Gazprom’s headquarters in southern Moscow where the two will discuss gas supplies, his spokesman Dmitry Peskov said.

“We have significantly moved forward” in the gas talks over the past several days,” Russia’s energy supremo, Deputy Prime Minister Igor Sechin, told reporters. “In principle there is an understanding here.”

Sechin toled AFP that both sides needed to be patient, given the magnitude of the deal.

“We are very serious about this cooperation. Let us work with them a bit,” he said.

Russia and China had hoped to finish the talks with an eye to finalising a firm contract so it could be triumphantly signed during Hu’s visit, which will also see him attend a major investor forum in Saint Petersburg this week.

Gazprom and CNPC signed a framework agreement in 2009 which could eventually see almost 70 billion cubic metres of Russian gas sent to China annually for the next 30 years but talks became mired in differences over pricing.

Russian and Chinese officials said in late May that the two sides still had to find common ground on prices.

Russia has in recent years sought to align itself more closely with China as it seeks to unlock new energy markets in Asia.

It said last year it hoped to clinch the gas deal with China by mid-2011, with first deliveries through Siberian pipelines to start in 2015.

Some analysts believe that Russian and Chinese officials will not sign a firm contract during Hu’s stay in the country, instead opting for a face-saving general agreement.

“I am afraid that all they’ll sign will be a non-binding political agreement,” said Artyom Konchin, an analyst at Unicredit Securities.

Beijing has a stronger negotiating position as it has many potential suppliers and can afford to wring out the lowest possible price during talks with Moscow, he added.

Relations between Moscow and Beijing have a turbulent history.

Once bitter foes during the Cold War, Moscow and Beijing have over the past years ramped up cooperation as both are driven by a desire to counterbalance US global dominance.

Moscow speaks of Beijing as its strategic partner even though it has watched its neighbor’s rapid economic growth with a combination of jealousy and unease.

The Kremlin said economic ties had successfully weathered the global crisis. Trade turnover grew by 34.5 percent to more than $59 billion last year, with China for the first time becoming Russia’s top economic partner.

The two presidents issued an unusually detailed joint statement on the global situation, warning against outside interference in the crises shaking the Arab world.

“Outside forces should not interfere in internal processes in the countries of the region,” the said, in a clear hint that Moscow and Beijing would not support a UN resolution on Syria.

Mindful of accusations of human rights violations at home, Russia and China traditionally caution the West against interfering in what they say are domestic affairs of sovereign nations.

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HSBC, Citi get nod to underwrite China corporate debt – sources

June 16th, 2011 - 
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HONG KONG/SHANGHAI (Reuters) – The China units of HSBC Holdings <0005.HK> and Citigroup Inc have won initial approval to underwrite corporate debt in China, paving the way for them to be the first foreign banks to win the coveted licences, sources told Reuters on Thursday.

China’s National Association of Financial Market Institutional Investors (NAFMII), an industry association under the central bank that supervises the country’s debt market, has given the two banks the green light to underwrite corporate debt, two sources with direct knowledge of the approvals said.

The two banks will still have to register with the People’s Bank of China, the central bank, before they can start operations, the sources said, adding the banks may obtain the final approval over the next two weeks.

HSBC was not immediately available for comment. A spokesman for Citigroup in China declined to comment.

Analysts said the move marks a significant breakthrough for foreign banks in China.

“The corporate debt market is one of the fastest-growing in China’s financial industry. It offers huge growth potential,” said Sheng Nan, a banking analyst at UOB Kay Hian in Shanghai.

Currently, only domestic banks in China are allowed to underwrite corporate debt such as short-term bills and medium-term notes on the interbank market.

Foreign banks have been hoping to get in on the rapidly growing market for corporate debt, as China encourages companies to raise funds in the bond market rather than relying primarily on bank lending.

China is aiming to make Shanghai into an international money hub, like New York or London, by 2020. One of the biggest hurdles facing this ambitious task is the lack of depth in its corporate debt market.

Regulators had previously allowed some foreign banks to underwrite government bonds as well as those issued by policy lenders, but the corporate debt market is potentially much more lucrative.

However, foreign banks will likely face tough competition from local players such as Industrial and Commercial Bank of China <601398.SS> and Bank of China <601988.SS> at the initial stage given the Chinese banks’ strong local client network, said Sheng.

“Over the longer-term, the foreign banks will definitely be a very strong competitor to the local players. But for now, it’s unlikely they can threaten the market position of the local commercial banks,” he added.

The outstanding issuance of short-term bills and medium-term notes totalled 2.29 trillion yuan (218 billion pounds) as of end-May, official data showed.

(Additional reporting by Soo Ai Peng; Editing by Kazunori Takada)

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Mulberry Defies Slump To Bag 358% Profit Rise

June 16th, 2011 - 
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Luxury fashion brand Mulberry, which numbers the likes of Kate Moss and Cheryl Cole among its fans, has reported a 358% jump in pre-tax profit to £23.3m.

The label, best known for its handbags, including a line named after model and TV presenter Alexa Chung, increased its like-for-like sales by 43% in the year to the end of March.

Its total retail sales were worth £73.5m.

Mulberry ‘s chairman, Godfrey Davis, said the company had delivered a “step change in profitability”.

“Strong demand has continued in all markets has continued into the new financial year and the outlook for the Mulberry brand is positive.”

Its share price has risen by more than 500% in the last year.

Online sales at the company grew by 64% in the last year, and now account for 8% of Mulberry’s sales.

The company said sales at its New York and Paris stores grew by 122% and 151% respectively.

It has doubled the production of women’s handbags as a result of the rapid increase in demand and is expanding capacity at its Somerset factory by 30%, creating some 50 new manufacturing jobs.

Despite its record profits, Mulberry has remained cautious about future sales while it continues to expand its international operations.

The figures for the current financial year, to June 4, show like-for-like sales were up 42% on the same period last year.

Established in 1971, Mulberry has 86 stores worldwide, including 44 in the UK.

In addition to Chung, Moss and Cole, the brand has a number of high-profile followers, including Kate Bosworth and Gemma Arterton.

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Beware: ‘Phishing Scams’ Hit UK Taxman

June 16th, 2011 - 
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The taxman has alerted consumers to a scam in which fraudulent emails demand bank details to return tax refunds.

HM Revenue & Customs (HMRC) says the so-called ‘phishing’ scam aims to trick people into disclosing their account information in the run-up to the deadline for renewing tax credits, by telling them they are in line for a rebate.

It asks them to click on a link which takes them through to a cloned replica of HMRC’s website, where they are asked to enter their credit or debit card details.

The fraudsters use the information to empty bank accounts, before selling on the personal information to other criminals.

Since the beginning of April, when the first tax credit renewal forms were sent out, more than 46,000 people have reported receiving one of the phishing emails.

HMRC says it has been involved in shutting down more than 150 scam websites.

Joan Wood, director of HMRC online and digital, said: “We currently only ever contact customers who are due a tax refund in writing by post.”

Anyone who receives an email which claims to be from HMRC is asked to send it to phishing@hmrc.gsi.gov.uk before permanently deleting it.

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Eurozone inflation eases to 2.7% in May

June 16th, 2011 - 
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Eurozone 12-month inflation eased slightly in May to 2.7 percent after hitting a 30-month peak of 2.8 percent in April, European Union data showed on Thursday.

Annual inflation in the EU 27 also eased to 3.2 percent in May, down from 3.3 percent in April, according to Eurostat, the EU’s data agency.

While it was the sixth month running in which inflation was well above the two-percent target set by the European Central Bank, it remains below the pre-crisis October 2008 level of 3.2 percent.

Fuelled by a spike in energy costs as well as for raw materials, inflation was highest in Romania with a 7.5 percent increase, followed by Greece with 4.8 percent and Estonia 4.5 percent.

The lowest 12-month change in consumer prices was registered in Ireland with a 0.2 percent drop, followed Sweden with a 1.5 percent gain.

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Ashtead full-year profit up on U.S. rental growth

June 16th, 2011 - 
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LONDON (Reuters) – Industrial equipment hire company Ashtead said a continued shift to rentals from ownership left it well placed for 2012, after posting full-year pretax profit in line with expectations.

The FTSE 250 company, which hires out equipment from diggers to small tools, on Thursday said the trend of contractors renting rather than buying equipment had continued in the face of limited financing and a slow construction recovery.

Pre-tax profit for the year to the end-April was 31 million pounds against 5 million in 2010 — a year blighted by weak construction markets.

Results for 2011, bolstered by a 10 percent revenue rise in its largest market — U.S. Sunbelt operations — compared with a consensus of 29.47 million pounds, according to a Thomson Reuters I/B/E/S poll of 11 analysts.

Shares in the company, which hit a 52-week high of 209.2 pence in April, were down 4.33 percent to 170.2 pence at 0742 GMT in London on Thursday.

“Although continued challenging end-market conditions are likely to constrain upgrades, we expect consensus FY12 pretax profit to move to the high 50 million pounds. We remain a buyer on the basis of the strong long-term structural growth story in the U.S.,” Investec analysts said in a note.

Sunbelt, which generates more than 80 percent of Ashtead’s revenue, benefitted from a well-timed increase in fleet and prices, as well as a first-time contribution from Empire Scaffold, acquired in January.

In its UK market, full-year revenue grew 1 percent and Ashtead said it could benefit from an improving outlook for UK housebuilders, which have reported better consumer confidence since January.

“We would hope to benefit from a supply constraint rather than a demand recovery. Yes, there are tentative signs of a recovery in residential, but that’s going to have to compensate for a hell of a big decline in UK public sector work,” Chief Executive Geoff Drabble told Reuters.

In current trading, the firm reported an 11 percent rise in UK rental revenue for May, with revenue in the U.S. for the same month up 21 percent.

Ashtead said it remained cautious in the short term on its outlook for end-construction markets, particularly in the UK, but a structural shift in the U.S. rental market left it well placed.

The company, which in March raised full-year expectations after a narrower loss in its third quarter, proposed a final dividend of 2.07 pence, making 3 pence for the year.

(Editing by Kate Holton and David Hulmes)

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Euro hits three-week dollar low on Greek crisis

June 16th, 2011 - 
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The European single currency struck a three-week low against the dollar on Thursday, rattled once again by the fast-moving Greek debt crisis.

In early morning trade, the euro dived as low as $1.4090, hitting a level which was last seen on May 26. It later stood at $1.4118, down from $1.4182 late in New York on Wednesday.

Against the Japanese unit, the dollar eased to 80.65 yen from 80.92 yen on Wednesday.

“There has been a mini-rout in euro/dollar this morning as investors digest the true extent of the crisis in Greece,” said Forex.com research director Kathleen Brooks.

“Everyone knew that things were bad, but as next week’s deadline for the European Union to approve new funds to Greece approaches it appears the crisis is reaching a climax.

“This has spooked forex investors, who are traditionally a more short-term bunch than investors in other asset classes.

The shared eurozone unit had already dived on Wednesday after eurozone finance ministers failed to agree on a second bailout package aimed at averting a Greek debt default, against a backdrop of violent anti-government protests in Athens.

Euro sentiment also took a hit after ratings agency Moody’s warned it may downgrade major French banks Credit Agricole, BNP Paribas and Societe Generale because of their exposure to Greek debt, dealers said.

“Moody’s announcement was a blow to the euro, as vague worries in the market about the Greek debt problem may materialise in the form of a credit crunch hitting European financial institutions,” added Dai Sato, dealer at Mizuho Corporate Bank.

“The euro showed slight resilience against the dollar in early trade but its underlying weakness remains unchanged,” Sato said.

Greek Prime Minister George Papandreou Wednesday said he would reshuffle his government after sweeping anti-austerity protests in Athens ahead of a key vote on new belt-tightening reforms.

Brooks added: “The euro’s resilience in the face of peripheral debt problems amazed some in the markets; however foreign exchange traders are nervous that something bad is lurking right around the corner.”

In London on Thursday, the euro changed hands at $1.4118 against $1.4182 late in New York on Wednesday, at 113.87 yen (114.77), £0.8756 (0.8756) and 1.2026 Swiss francs (1.2088).

The dollar stood at 80.65 yen (80.92) and 0.8517 Swiss francs (0.8523).

The pound was at $1.6120 (1.6196).

On the London Bullion Market, gold prices slid to $1,525.70 an ounce from $1,529.75 late on Wednesday.

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Global Ports aims for up to $572 million London IPO

June 16th, 2011 - 
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MOSCOW (Reuters) – Russian group Global Ports said it planned to raise up to $572 million (355 million pounds) from an initial public offering in London, hoping for investor interest in the fast-growing Russia container market.

Global Ports, a unit of transport and infrastructure holding group N-Trans, set a $14.70-$16.10 price range for an IPO expected to comprise 35.5 million shares, it said on Thursday.

N-Trans will sell existing shares, while the business itself is eying proceeds of around $100 million from new shares to fund investment in Russian ports.

A source close to the deal said earlier this month Global Ports was seeking $750 million from the IPO, although that figure was based on the most optimistic analyst valuation of the company.

Russian private issuers have been queuing up to access London capital markets this year, receiving a lukewarm reception from investors reluctant to pay valuations sought by owners.

Investors have been particularly reluctant to back individual owners using IPOs as a cash-in, preferring companies using proceeds for expansion.

Russian IPOs have raised $3.4 billion in the year to date, including the $1.4 billion New York IPO of search engine Yandex, while issues hoping to raise a combined $7 billion have been shelved.

If successful, Global Ports would be the third successful IPO launched by N-Trans after freight company Globaltrans and road and bridge builder Mostotrest .

The Russian container traffic market was expected to grow over18 percent annually until at least 2013, Global Ports said, citing a forecast by independent maritime consultancy Drewry, supported by Russian economic development and growing volumes of imports and exports.

The price range implied a pre-money equity value for Global Ports — the leading container terminal operator serving Russian cargo flows — of $2.2-$2.4 billion.

Deutsche Bank, Goldman Sachs International, Morgan Stanley and Troika Dialog are joint global coordinators and joint bookrunners of the global offer.

(Reporting by Maria Kiselyova and John Bowker; Editing by Erica Billingham and Dan Lalor)

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Samsonite shares down on Hong Kong trading debut

June 16th, 2011 - 
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Luggage maker Samsonite posted a poor start on its Hong Kong trading debut Thursday with its shares slumping amid uncertainty in global markets.

The stock ended the day at HK$13.38 ($1.72), about 7.7 percent lower than its IPO price of HK$14.50, although the firm’s newly minted shares started the day even lower at HK$13.

Samsonite’s weak start, as the broader Hang Seng index lost 1.75 percent, came after the luggage maker raised a lower-than-expected $1.25 billion to help boost its presence in fast-growing Asian markets, particularly China.

At a time of unease in markets around the world some firms have decided to delay or cancel their listings in the Asian financial hub, which has become the number-one IPO market.

Earlier this month, Australian miner Resourcehouse shelved an IPO originally slated to raise as much as $3.6 billion, citing weak market conditions.

Samsonite, which makes suitcases, casual bags and travel products, sold 671 million shares — 48 percent of the company — in the share sale. It had earlier estimated an IPO price range of HK$13.50-HK$17.50 per share, with the top-end price translating into a $1.5 billion initial public offering.

Despite the weak start Samsonite chief executive Tim Parker told reporters in Hong Kong: “I’m very optimistic about Samsonite’s prospects in Hong Kong.

“We’re extremely pleased to be listing (our) shares here… People in China are travelling more and more and when they travel they need more suitcases.”

Before the shares began trading, Parker said “we expect over the next few years to be developing our company extensively in Asia and particularly our biggest markets in China and India.”

China and India are the firm’s second and third biggest markets respectively, after the United States, he said, adding that the firm also has “a major foothold” in South Korea and Japan.

“Even though Samsonite priced the IPO at a reasonable valuation, the weak market sentiment negatively affected investors who buy in IPOs looking for a short-term gain,” Ben Kwong, chief operating officer at KGI Asia, told Dow Jones Newswires.

A restructuring has boosted Samsonite’s profit margins while it hikes spending on advertising, especially in Asia, where business grew 45 percent last year, Parker said earlier this month.

European private equity firm CVC bought Samsonite in 2007 in a $2 billion deal, following several earlier restructurings by the company, which almost went bankrupt in 2003.

Samsonite’s sales in 2010 recovered to $1.21 billion from $1.03 billion in 2009, when the global financial meltdown pounded the travel market.

Thursday’s listing comes as several luxury goods makers prepare to list in Hong Kong in a bid to tap the region’s growing wealth.

Prada will make its trading debut later this month with its IPO expected to raise as much as $3 billion, while US handbag maker Coach, already listed in New York, announced in May that its shares may start trading by the end of the year.

Britain’s Burberry is also reportedly eyeing a listing in the city.

Firms raised more than $50 billion in Hong Kong IPOs last year, including two monster sales by Asian insurer AIA and Agricultural Bank of China, making it the world’s biggest market for new listings.

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