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June 17, 2014  

Morrisons to cut 2,600 manager jobs-BBC

UK supermarket chain Morrisons plans to cut 2,600 jobs as a result of changes to its management structure.

The firm will reduce layers of management, it said.

Morrisons has tried out the new structure and says it led to better performance. The supermarket has 126,000 staff.

Dalton Philips, Morrisons chief executive, said: “This is the right time to modernise the way our stores are managed.”

“These changes will improve our focus on customers and lead to simpler, smarter ways of working,” he said.

The roles at risk include department manager and supervisory positions in stores, says the company.

Consultation period
The supermarket will also create 1,000 jobs in Morrisons M local convenience stores and 3,000 in new supermarkets. Morrisons will “look to offer displaced colleagues the opportunity to work in these growing businesses,” it said.

Joanne McGuinness – Usdaw’s national officer representing Morrisons workers said: “The next few weeks will be a worrying time for our members in Morrisons and we will do everything possible to support them. Today marks the start of a 45-day consultation period, where we will look in detail at the company’s business case.

“Our priority will be to safeguard as many jobs as possible, maximise employment within the business and get the best possible outcome for our members affected by this restructuring.’

The changes come amid increasing pressure on Mr Philips after the Bradford-based chain posted an annual loss of £176m in the year to February and recently announced a 7.1% drop in quarterly sales.

sources : Bbc

June 12, 2014  

Siemens, Mitsubishi joins forces to woo Alstom| AFP

The battle for Alstom (Paris: FR0010220475 – news) ‘s energy assets intensified on Wednesday with Germany’s Siemens joining forces with Japan’s Mitsubishi (Dusseldorf: MBI.DU – news) to draw up a bid for the French ‘national jewel’.
The announcement by the German and Japanese giants, however, failed to gain traction with the French group, with a source close to Alstom saying it would effectively mean the company’s break-up.
Siemens had been going head to head against GE for Alstom’s energy assets.
But on Wednesday, the German giant and Mitsubishi Heavy Industries (Other OTC: MHVYF – news) announced that they have “joined forces in evaluating a potential proposal for certain assets of the French multinational conglomerate Alstom in order to strengthen the future position of Alstom, MHI and Siemens.”
They said they would make a decision on whether to submit an offer by June 16.
According to a source close Alstom, Siemens and Mitsubishi are planning to propose to form two entities following the takeover — one comprising of Siemens and part of the Alstom assets and the other made up of Mitsubishi and the remainder of Alstom’s energy assets.
Another source close to the French group, however, said Alstom (TLO: ALSO.TI – news) “is sceptical and shocked” by the planned bid.
“It would be a dismantling” of the group, the source said, adding that it “is not a solution for (Alstom’s) problems”.
The company considers that it does not have the economies of scale in the energy business and is also battling a European slump in energy demand.
Alstom favours GE’s bid, although it has said it would treat any offer by Siemens fairly.
– Political opposition in France –
However, GE’s $17 billion bid has run into political opposition in France.
The French government views Alstom as a firm of national strategic importance and is concerned about safeguarding jobs as it battles record unemployment and declining industrial competitiveness.
Alstom is one of France’s biggest private sector employers with about 18,000 staff nationwide.
Seeking to allay any fears about possible layoffs arising from a deal, GE promised late May to create 1,000 jobs in France.
Alstom’s energy unit, which builds generators, turbines and transmission systems and would complement GE’s own power industry division, accounts for 70 percent of Alstom’s business.
After the sale of the energy unit, which includes nuclear energy activities, Alstom would be left with the railway equipment division that manufactures France’s prized TGV high-speed trains.
The French government will unlikely be enthusiastic about the latest turn despite having encouraged Siemens to look at taking over Alstom and create a European energy giant, said analyst Christopher Dembik at Saxo Banque.
“When you look at the offer in detail you are convinced it will mean the complete dismantlement of Alstom which the government fears,” he said.
“Such an offer has two problems: first the question of control of the nuclear activities and then we are far from the famous Franco-German energy giant…” he added.
French President Francois Hollande will hold a meeting on Thursday morning to review developments on the sale, said Economy Minister Arnaud Montebourg who has been in the forefront of trying to woo Siemens into bidding and get GE to improve its offer.
Alstom told AFP it “still has not received any firm offer” from the German group, while that of GE is on the table until June 23.
A GE spokesman said the company continues “to have constructive discussions about the details of our proposed alliance with Alstom and remain confident in our proposal.”
A source close to the company said GE would unlikely raise its offer whatever Siemens-Mitsubishi decides to bid.
Alstom is a privately owned company, but depends heavily on contracts from the French government which orchestrated a rival offer from Siemens when it learnt that the company seemed close to a deal with the US group.
Alstom faces financial strains and had already put part of its rail activities up for sale.

Sources : Yahoo Finance

June 12, 2014  

Oil prices rise on US inventories, Iraq turmoil AFP

Oil prices finished somewhat higher Wednesday following an unexpectedly large decline in US crude supplies and worsening turmoil in Iraq.
US benchmark West Texas Intermediate for July delivery edged higher by five cents to $104.40 a barrel on the New York Mercantile Exchange.
In London, European benchmark Brent oil for July delivery advanced 43 cents to $109.95 a barrel on the Intercontinental Exchange.
The gains followed a weekly oil-inventory report by the US Department of Energy which showed crude stocks fell 2.6 million barrels, more than the 1.7 million forecast by analysts surveyed by Dow Jones Newswire.
The report also showed a 200,000 barrel decline at a widely watched US oil-trading hub in Cushing, Oklahoma.
Analysts kept watch on oil producer Iraq, where militants that had claimed the city of Mosul Monday seized the city of Tikrit Tuesday in a lightning jihadist offensive that swept closer to Baghdad.
The assault by the Islamic State of Iraq and the Levant has driven some 500,000 people from their homes and spurred pledges from both the US and Iran for more aid to Iraq.
The oil market has so far not reacted strongly to the Iraq violence because “traders are probably saying this is far from the oil sector,” said Michael Lynch, president of consultancy Strategic Energy & Economic Research.
But “there is potential for serious political instability in the country,” Lynch added.
As expected, the Organization of Petroleum Exporting Countries, which pumps out about one third of the world’s oil, agreed to maintain its oil production ceiling at 30 million barrels per day.
Saudi Oil Minister Ali al-Naimi said he was “very happy” with the oil market. US oil prices have traded above $100 a barrel for most of the last two months.

Sources : Yahoo finance

June 12, 2014  

Russia delays Ukraine gas deadline to June 16 AFP

Russia’s gas giant Gazprom (MCX: GAZP.ME – news) said on Wednesday it was giving Ukraine an extra five days to start paying for gas ahead of time or risk a cut in its supply as EU-mediated talks dragged on in Brussels.
“The Russian side has taken a step in favour of pursuing negotiations which have been going on quite intensely recently and has decided that the switch to the pre-payment system will be postponed until Monday,” chief executive Alexei Miller said in televised comments following a meeting with EU Energy Commissioner Guenther Oettinger.
Oettinger, the broker for crunch gas talks between Ukraine and Russia, said late Tuesday that an overall agreement to avert a gas supply cut-off could take around ten days to be reached.
Ukraine, Russia and the EU are set to resume trilateral talks Wednesday after marathon negotiations between Moscow’s Energy Minister Aleksandr Novak and his Kiev counterpart Yuriy Prodan broke up early on Tuesday.
A Kremlin (Berlin: KMLK.BE – news) statement released overnight said Russian President Vladimir Putin told German Chancellor Angela Merkel in a telephone conversation that he has ordered the Russian delegation to pursue negotiations from a “constructive position” in order to reach “a mutually acceptable agreement”.
Gazprom had earlier postponed the deadline several times since early June after Kiev made an initial payment of $786 million to cover outstanding debts.
Moscow hiked the amount that Ukraine must pay for its gas to $500 (370 euros) per 1,000 cubic metres, the highest price of any of Gazprom’s clients in Europe, after the ouster in February of Ukraine’s Kremlin-backed president.
Russian gas transiting through Ukraine amounts to around 15 percent of gas consumed by the European Union.

Sources : Yahoo Finance

June 12, 2014  

Osborne’s Market Clean-Up: Too Little Too Late? – Sky News

Another year, another probe into the misbehaviour of City bankers.
Thursday’s announcement by George Osborne, the Chancellor, of a review called “Fair and Effective Markets” marks the fourth significant inquiry into the banking sector since the Coalition Government was formed in 2010.
The first three paved the way for profound reforms to the structure of the UK banking industry, and – to a lesser degree – of Royal Bank of Scotland (LSE: RBS.L – news) , the state-backed lender.
Mr Osborne’s latest review has less to do with structure and more to do with standards.
In the wake of the Libor-rigging inquiry, which has seen a handful of banks fined with more to come, the Chancellor believes there is further political capital to be generated from trying to stamp out errant behaviour.
His crosshairs are focused on the foreign exchange and commodity markets, where arcane price-setting mechanisms based on cosy huddles of bankers predominate.
The head of the City watchdog has already said that forex abuse may have been committed on a grander scale than efforts to manipulate Libor.
Under plans to be announced by the Treasury, legislation to regulate Libor will be extended to other financial benchmarks, with criminal sanctions among possible punishments.
The City’s senior managers regime will be extended beyond UK-headquartered lenders to cover all banks with a British presence, while the Chancellor will create another dividing line with Brussels by not opting into EU rules covering criminal sanctions for market abuse.
The Treasury wants the new review to be complete within 12 months.
“The integrity of the City matters to the economy of Britain,” Mr Osborne is expected to say in his annual Mansion House speech.
“Markets here set the interest rates for people’s mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy.
“I am going to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them.”
The Chancellor will, nevertheless, face the charge that he is closing the stable door long after the horse’s departure.
Evidence of misconduct has, after all, been apparent since the financial crisis, with little concerted effort to tackle it until now.
Cathy Jamieson MP, Labour’s Shadow Financial Secretary to the Treasury, said: “This review is too little, too late.
“We pressed Ministers to regulate commodities markets and the full array of financial benchmarks back in 2012, but the Chancellor failed to act.”
Potentially more troubling for the Chancellor is that he will require widespread international backing to impose an effective clampdown on trading practices.
He may find that without it, his latest attempt to regulate the banking sector looks like little more than tinkering around the edges.

Sources: yahoo finance

April 3, 2014  

RBS to close 44 branches across UK : BBC

Taxpayer-backed Royal Bank of Scotland (RBS) has announced it is closing 44 branches across the UK, 14 of which are classed as the “last banks in town”.

That is despite the fact that the bank pledged in 2010 not to close such branches.

A spokeswoman for RBS said “the world had changed since then”, and there had been a 30% fall in branch transactions over the last four years.

But campaigners accused the bank of letting down its customers.

RBS said customers in many Scottish communities affected would now be served by a mobile van.

Others will continue to have access to services through the Post Office, or cash machines.

RBS said those branches classed as “last banks in town” and which are to close, are only open for a few hours a week.

Some of them often see just one or two customers an hour.

It added that in most cases customers would still only be a few miles away from their nearest branch.

However, in its customer charter of 2010, RBS said it would not close any bank which was the last one in the community.

It said then that it had identified 100 such locations, and promised “to stay open for business if we are the last bank in town, and consider a range of options to ensure a local banking service is available”.

Campaigners said they had expected such closures to take place for some time.

“It’s no surprise to see the bank let down its customers once again by upping sticks and leaving town – even where it’s promised not to do so,” said Charlotte Webster of the campaign group Move Your Money.

“Banks of this scale just can’t be trusted to take its customers’ needs into account, even when the only reason it’s still around is because of our support,” she added.

Significant change
A spokesman for RBS said: “Banking has changed significantly over the last few years as more and more of our customers are banking with us where and when it is convenient for them.

“We have to adapt to what our customers want, which is why we’re investing in a range of other ways our customers can bank with us, including online and telephone banking, our mobile app, and in any one of the Post Office’s 11,500 branches across the UK.”

The branch closures come two months after RBS said it planned to slash costs by more than £5bn over four years, after its annual results showed it made a loss of £8.2bn in 2013.

RBS said it had been telling affected customers about the closures over the past two months.

Of the 14 “last banks in town”, seven are in Scotland, six in England, and one in Wales.

Those in Scotland are: Castletown, near Thurso; Patthead, Longniddry and East Linton, East Lothian; Greenlaw, Scottish Borders; Bonnybridge, near Falkirk. and Chirnside, Berwickshire.

Those in England are: Bollington, Cheshire; Fair Oak, near Eastleigh; Chelford, Cheshire; Highcliffe on Sea, Dorset; Old Roan, Liverpool; Repton, Derbyshire.

The branch in Wales is Radyr, near Cardiff.

Sources : BBC

 

March 27, 2014  

Bank of England readies tools to rein in risky mortgage lending :Reuters

 

LONDON (Reuters) – The Bank of England urged banks on Thursday to consider the risk of future spikes in interest rates when they approve mortgages, and prepared tools to rein in potentially dangerous lending.

British house prices have risen by around 10 percent over the past year, and the central bank said mortgages were higher as a share of home-buyers’ income than at any point since 2005, although other indicators remained weaker than average.

Some commentators argue that parts of Britain’s housing market are already in a bubble and the BoE’s Financial Policy Committee, which monitors risks to the financial system, said it was keeping a close eye on the sector.

“Given the increasing momentum, the FPC will remain vigilant to emerging vulnerabilities, will continue to monitor conditions closely and will take further proportionate and graduated actions if warranted,” the Bank said.

From next month the body that regulates how British banks lend to consumers, the Financial Conduct Authority, will introduce tougher home loan underwriting standards.

The BoE said in a report of a quarterly meeting of its risk watchdog, the Financial Policy Committee, that from June it hoped to have the power to set the interest rate scenarios that lenders would have to consider when granting loans.

The central bank also said that when it conducts its part of European Union-wide stress tests for banks this year, it would also make them consider the risk of a sharp rise in interest rates and a big fall in house prices.

JPMorgan bank said it expects stricter mortgage stress tests for borrowers and lenders as a minimum step by the FPC.

“But a continued rise in transaction levels together with double-digit house price inflation would probably push the FPC into taking further steps,” JPMorgan said in a research note.

Banks could be forced to hold more capital against mortgages and there was a “high chance” the FPC will recommend scaling back the second phase of a government scheme to help homebuyers, JPMorgan said.

The FPC made no new formal recommendations, but it said that concern about financial markets’ readiness for a rise in interest rates was “now at the heart of the FPC’s risk and vulnerability assessments”.

MISCONDUCT COSTS

The BoE added that British banks’ financial health had improved since its last report in November but that uncertainty about the cost of past misconduct had increased.

Banks like Barclays and Royal Bank of Scotland have been fined millions of pounds for rigging the London Interbank Offered Rate, or Libor, an interest rate benchmark.

Lenders are also paying huge sums in compensation for mis-selling loan insurance and allegations are emerging that banks have manipulated the foreign exchange market.

Separately, the Bank published its terms of reference for an assessment of leverage ratios at banks, which it said would report back in November. However it will not set a numerical value for a leverage ratio until later.

The FPC is likely to get power in future to raise leverage ratios at British banks to above international minimum levels.

Under the global accord known as Basel III, banks across the world must hold capital equivalent to at least 3 percent of their total assets on a non risk-weighted basis from the start of 2018. The aim of this so-called leverage ratio is to serve as a backstop to a bank’s core capital buffer, which is based on risk-weighted assets.

Policymakers in Britain, Switzerland and the United States have put more emphasis on the leverage ratio, saying banks can too easily game risk-weightings in their core buffers and that a higher ratio is required. Analysts expect them to set higher levels than Basel III.

“We expect the UK regulator will eventually settle on a 4-4.5 percent hurdle rate, to be achieved by end-2017. Barclays looks most at risk,” Citi bank said in a research note.

The FPC also said it was minded to require big banks to add up risks on their books using the same standardised model as smaller lenders.

Policymakers have become sceptical about how large lenders use in-house computer models to tot up risks, a calculation which determines how much capital they must hold.

The FPC said banks who use in-house models may have to report figures under the standardised approach as well following a review due in the first half of next year.

“On a standardized basis we estimate Lloyds would see the greatest risk-weighted assets inflation,” Citi bank said.

Finally, the watchdog said it will set out “concrete and specific action plans” for banks this year to improve their resilience to cyber attacks.

Sources : Yahoo Finance

March 27, 2014  

H&M plans Asia, online expansion as profits rise AFP

Swedish fashion giant H&M announced strong profits Thursday amid plans for a large-scale expansion of outlets in Asia and online but shares dropped sharply as the figures missed expectations.

The group reported a 7.7-percent annualised growth in profits to $409 million (297 million euros) for the first quarter of 2014 — running from December to February — slightly below analysts’ forecasts.

“Sales have got off to a good start … in a fashion retail market that in many places is still characterised by a challenging macroeconomic situation, and we have continued to gain market share,” chief executive Karl-Johan Persson said in a statement.

“We have a strong customer offering with many great collections and we are constantly working to further develop and broaden our product range.”

The fashion retailer said that sales grew by 12 percent to $5.8 billion in the three months as the group expanded online.

The online expansion is expected to continue for the rest of 2014, with the company opening a new website in France in March and confirming plans for more sites for Spain, Italy and China by the end of the year.

In 2013 the group passed the 3,000 mark in terms of stores around the world and plans a further 375 in 2014, including outlets in new markets such as India, the Philippines and Australia.

On Thursday the group also announced on Twitter (NYSE: TWTR – news) that it had opened a new store in Hawaii.

In early afternoon trading on the Stockholm Stock Exchange, the group’s share price was down 4.14 percent in an overall market down 0.85 percent.

Sources : Yahoo Finance

March 27, 2014  

Stronger consumer spending lifts Q4 US economic growth AFP

The US economy grew at an annual rate of 2.6 percent in the fourth quarter of last year, expanding more strongly than previously thought as consumers spent more.

The Commerce Department on Thursday revised higher its prior 2.4 percent estimate of gross domestic product growth for the period, matching analyst expectations.

“The general picture of economic growth remains largely the same,” the department said in its third and final GDP estimate.

The fourth quarter marked a slowdown from the 4.1 percent pace in the third quarter. The economy grew 1.9 percent for all of 2013, decelerating from 2.8 percent in 2012.

The revision for the October-December quarter reflected new data showing stronger consumer spending, which accounts for about 70 percent of activity in the world’s largest economy.

That was partly offset by downward revisions to private investment in inventories and in intellectual property products.

Personal (Other OTC: PRBDF – news) consumption expenditures in the key year-end holiday shopping season rose 3.3 percent, the strongest increase since late 2010. The prior estimate was 2.6 percent.

The fourth quarter included the negative effects of the 16-day government shutdown in October and ended with disappointing holiday retail sales in December amid the start of unusually severe winter weather.

“The data suggest that the economy had slightly more momentum than previously thought before it was hit by extreme weather at the start of 2014,” said Chris Williamson, chief economist at Markit.

The economy has been pummeled by winter storms that have gripped large areas of the United States. Data has shown slowdowns in consumer spending, a weakening of the housing market recovery and weak auto sales.

– Pick-up expected –

But many economists see growth picking up in the coming quarters. Expectations were raised after the economy added 175,000 jobs in February, accelerating the pace of job growth despite the bad weather.

“A sturdy February jobs report provides the clearest evidence that the slowdown will be short-lived,” said Scott Hoyt of Moody’s Analytics.

“The economy’s fundamentals are strong. Businesses are profitable and competitive. Household debt loads are low and credit conditions are strengthening. Banks are well-capitalized and liquid. The fiscal health of government at all levels is much improved,” he said.

Hoyt predicted GDP growth would pick up to about 3.0 percent this year and 4.0 percent in 2015.

The Federal Reserve expects the economy will continue to improve at a sufficient pace to support the continued taper of its massive monetary stimulus.

Last week the Fed cut its asset-purchase program by $10 billion for the third month in a row, paring the stimulus to $55 billion a month.

“More importantly for the course of policymaking… will be how much momentum the economy has retained after the weather impact falls out of the numbers, and that of course includes the need to discount strong rebound numbers,” said Markit’s Williamson.

Sources : yahoo finance

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