Allianz hedges stake in CPIC through $700 million deal with Goldman

(GNN) - Allianz SE struck a deal with Goldman Sachs to help the German company hedge part of its stake in China Pacific Insurance Group (CPIC) and lock in profits from two rounds of investments that Allianz made in China's third-largest insurer.

Under the deal, Allianz (ALVG.DE) agreed to a future sale of 147.7 million Hong Kong-traded shares of CPIC (2601.HK) at HK$36.77 each to Goldman (GS.N) in a $700 million transaction. That price is equivalent to a 4.2 percent discount to CPIC's closing price on Wednesday.

Allianz said the sale would leave it with a 1 percent stake in CPIC, which it called its "preferred partner in China".

Allianz's stake in CPIC means it can locking in profits from an investment in 2009 and another stake purchase in 2011. CPIC shares are up 31.3 percent from when Allianz made its first investment and up 18 percent from the time of the second deal.

Separately, the deal means Goldman took a long position on CPIC, and to offset that, the New York-based bank sold 147.7 million CPIC shares at HK$36.77 each late on Wednesday, according to a term sheet of the deal seen by Reuters on Thursday.

Goldman declined to comment on the transaction.

The deal is similar to a hedge Goldman entered in 2011 with American Express Inc (AXP.N) under which American Express effectively set up a short position in Industrial and Commercial Bank of China Ltd (1398.HK) to offset part of its long-term investment in the Chinese bank.

Allianz, Europe's largest insurer, first bought into CPIC (601601.SS) in December 2009, when it was a cornerstone investor in the Chinese company's Hong Kong listing with a $150 million purchase.

Allianz increased its stake further in January 2011, buying $855 million worth of shares from private equity firm Carlyle Group (CG.O).

Allianz currently owns 243.2 million CPIC shares, according to Hong Kong stock exchange data.

CPIC's stock is up 51 percent over the past year, but it has undergone wild swings since the beginning of 2015. At one point, CPIC's shares rose more than 17 percent over five days, only to go down 11 percent in the following five days.

CPIC shares closed 2.9 percent down on Thursday. Goldman acted as sole bookrunner for the transaction.

Allianz will continue to own a 22.95 percent stake in a health insurance joint venture with CPIC that was unveiled in December 2014.

(Reuters)(Additional reporting by Fiona Lau of IFR and Denny Thomas in HONG KONG; Editing by Miral Fahmy and Ryan Woo)

China sports brand Li Ning posts third year of losses

(GNN) - Chinese sports brand Li Ning Co Ltd posted a loss for a third year in a row as it invests in a restructuring plan, and said it has appointed executive chairman Li Ning as its interim chief executive.

Li Ning, which is backed by U.S. private equity firm TPG Capital and Singapore sovereign fund GIC, posted a net loss of 781.5 million yuan ($125.4 million) for 2014, compared with a 391.5 million yuan loss a year earlier.

The retailer warned in January that it expected to post a loss for 2014, due in part to the costs of its transformation plans, and the result was in line with analysts' forecasts.

Li Ning said full-year revenue rose 16 percent to 6.73 billion yuan, while its gross profit margin came in at 44.6 percent from 44.5 percent in 2013.

The company, which recently teamed up with Chinese smartphone maker Xiaomi to produce a new generation of "smart" running shoes, operated 5,626 retail stores in China as of end-December, 289 fewer stores than a year earlier.

($1 = 6.2289 Chinese yuan renminbi) (Reuters)(Reporting by Donny Kwok; Additional reporting by Shilpa Murthy; Editing by Richard Pullin)

Hong Kong stocks up 0.30 percent at open

#GNN - HONG KONG: Hong Kong stocks climbed 0.30 percent Thursday morning, an eighth-straight gain, as dealers welcomed data showing the US economy grew much more than expected in the second quarter of the year.

The benchmark Hang Seng Index rose 73.54 points to 24,805.75 at the open.

Airbus set to lose Japanese buyer for A380: sources

#GNN - #European #planemaker #Airbus (AIR.PA) is set to lose its only Japanese customer for the A380 superjumbo as Skymark Airlines (9204.T) prepares to cancel an order for six jets worth more than $2 billion, industry sources said on Monday.

The setback comes after Japan's third largest carrier swung into a loss for its latest financial year and raises new questions over the strength of the backlog for the world's largest airliner, which increasingly depends on one customer, Emirates.

An Airbus spokesman declined to comment on the threat to the Skymark order, which was first reported by Bloomberg News.

The news comes as aerospace sources say several other orders for the huge jetliner are already hanging in the balance, including 10 aircraft earmarked for Hong Kong Airlines.

Reuters reported earlier this month the Hong Kong carrier no longer wanted the jets after an associated leasing company struck an expanded deal to buy 70 smaller A320-family aircraft.

Since March the order has no longer been attributed to Hong Kong Airlines, but to an "undisclosed" customer, raising questions over its status, according to a review of Airbus data.

Airbus officials said at the Farnborough Airshow this month that the Hong Kong order remained on its order book.

Skymark was due to take delivery of its first A380 around the end of this year, but the airline said in June the delivery was pushed back by up to six months because of problems in fitting out the interior of the world's largest jetliner.

Industry sources say Skymark, which has reported its first loss in five years, faces a challenge in taking delivery of the A380s, which were worth around $350 million each at list prices when the carrier placed its firm order in 2011.

Airlines pay most of the cost of buying a jet on delivery.

No one at Skymark Airlines was available for comment.

The A380 has so far attracted little interest from low-cost carriers, which operate with fewer of the partnership agreements and loyalty programmes that help traditional network airlines sell tickets and make the 525-seat jet profitable.

The Centre for Aviation (CAPA), an airlines consultancy, has warned that Skymark could encounter "significant losses" if it put the A380 into service without such agreements, and that the airline would need changes in strategy to make it viable.

Adding a new aircraft type adds cost and complexity in training, maintenance and spare parts. Even large airlines can take years and dedicate large teams to preparing for the huge jet.

Skymark, which mainly flies Boeing 737s, has already tested its flexibility by adding two leased wide-bodied A330s.

A380 BACKLOG
The four-engine, double-decker A380 was launched in 2000 as Europe's solution to congested worldwide airports and the success of Boeing Co's (BA.N) 747.

But growth in demand for large twin-engine jets has weighed down sales, which also suffered because of technical problems and the financial crisis, during which many airlines avoided large-scale bets.

The notable exception is Dubai's Emirates, which has invested in 140 of the aircraft, more than five times the number ordered by the next largest customer, Singapore Airlines Ltd (SIAL.SI).

The Dubai airline has said the A380 has unbeatable economics when configured correctly, and has asked Airbus to come up with a more efficient version with new engines from end-decade.

But the remaining backlog of 135 aircraft, of a net total of 324 ordered so far, includes several smaller orders that analysts say look increasingly unlikely to be delivered - at least to the airlines that originally purchased them.

Besides the aircraft originally earmarked for Hong Kong Airlines, these include a remaining eight for cash-strapped Qantas Airways Ltd (QAN.AX), six that Virgin Atlantic has said it may further delay, two for Reunion-based Air Austral, and one originally sold as a flying palace to a Saudi prince.

Despite the setbacks, leasing company Amedeo has ordered 20 superjumbos in the belief there is an untapped market for A380s in a denser and more efficient cabin layout.

While Airbus tries to steady the backlog for its largest jetliner, it faces continued technical headaches from the complex aircraft such as a recent problem with leaking or noisy doors.

Airbus said at this month's UK air show that it was testing a solution after a recent diversion and several incidents involving noise onboard and expected it to be ready this year.

But influential customer Qatar Airways has raised concerns about the doors at the same time as refusing to take the first three aircraft because of what it describes as problems with the cabin, two people familiar with the matter said.

Airbus has said it is confident of reaching its target of 30 A380 deliveries this year, including the aircraft for Qatar.

(Reorders words in paragraph 16 to make plain A380 designed for congested airports worldwide)

(GNN,Reuters,AIP)(Reporting by Tim Hepher; Editing by Greg Mahlich and Andre Grenon)

Related articles

• Airbus clinches first airline customer for revamped jet (gnn-aip.tk)
• Factbox: Orders and deals at Farnborough Airshow (gnn-aip.tk)
• AirAsia to order 50 Airbus A330neo: sources (gnn-aip.tk)
• RPT-China aviation boom brings first aircraft lessor IPO in Asia (gnn-aip.tk)
• Bombardier says firmer economy to boost industry jet deliveries (gnn-aip.tk)
• U.S., #European airlines halt #flights to Israel due to instability (gnn-aip.tk)
• Delta CEO says will continue to bar flights to #Israel: #CNBC (gnn-aip.tk)
• Peace before #economy for #Russia sanctions, German Fin Min tells paper (gnn-aip.tk)
• #Ukraine says pro-Russia rebels shoot down two fighter jets (gnn-aip.tk)
• U.S. Marines air chief wants to curb 'big wish lists' for arms upgrades (gnn-aip.tk)

China brands beat global rivals with tea toothpaste & pickled plums

#GNN - With green-tea flavored toothpaste and pickled plum juice, an army of Chinese retailers is tapping local tastes to whittle away market share from global rivals that are banking their future growth on the world's second-largest consumer market.

Senior executives at companies such as The Coca-Cola Co (KO.N), Procter & Gamble Co (PG.N) and Colgate-Palmolive Co (CL.N) are being forced to adapt as the challenge posed by local firms intensifies in a slowing economy.

Last year, China's 1.15 billion yuan ($185.31 million) consumer goods market grew at 7.4 percent annually, half the rate of three years ago, according to a report this month from Bain & Company and Kantar World Panel.

In this tougher market, both local and foreign brands are targeting the same customers, and increasingly, the domestic firms are winning: nearly two-thirds of foreign brands surveyed lost market share in China last year, according to the report.

"The good domestic brands are closing the gap really quickly and are able to play off the idea that they know how to develop something that a Chinese person is going to want," said Ben Cavender, a principal at China Market Research Group.

Understanding the needs of Chinese consumers has given local companies an edge. Privately owned Jiaduobao Group (JDB) makes canned herbal tea which it says can put out internal "fires", playing on a concept in traditional Chinese medicine. The firm also sponsors a popular TV talent show, "The China Voice".

"Our campaign around 'fearing internal fire' has helped JDB herbal tea become the highest selling canned drink in China...," said Wang Yuegui, a senior executive at the firm.

JDB accounted for 6.1 percent of the soft drinks market in 2013 by value, up from 4.2 in 2009, according to data from consumer consultancy Euromonitor. Coca-Cola had 13.1 percent, while Pepsi had 3.9 percent.

GREEN TEA TOOTHPASTE
With a population of 1.2 billion and a rapidly expanding middle class, China is the largest consumer goods market after the United States and even with a slowing economy, remains key to the future of global brands.

China's economy is expected to grow at its slowest pace in 24 years this year, but that's still 7.4 percent. The U.S. economy, by comparison, is expected to grow at just 1.7 percent.

Many of the Chinese firms taking on the international conglomerates are little-known abroad, but their local know-how is helping them broaden their appeal at home.

Hawley & Hazel, a joint venture owned by Colgate-Palmolive and its Hong Kong-based founders, makes Darlie toothpaste which leads the domestic market according to Kantar and Bain, playing to Chinese tastes with green tea and jasmine flavours.

Another popular toothpaste brand is made by Yunnan Baiyao Group Co Ltd 000538.SZ, which uses its history as one of the biggest and oldest traditional Chinese medicine makers in the country as a selling point.

Taiwan-based drinks maker Tingyi Cayman Islands Holding Corp (0322.HK), which bottles and distributes PepsiCo Inc (PEP.N) products in China, also says it makes a point of developing traditional Chinese flavours such as snow pear and pickled plum.

"There are a lot of things that Chinese prefer localized," said Bruce Rockowitz, chief executive of Global Brands Group (0787.HK) and former CEO of global sourcing firm Li & Fung. "Foreign brands haven't adapted well enough."

In a bid to fend off competition, market leader Coca-Cola launched small-sized products, which helped boost its China sales. It also offered shoppers discounts, like rival PepsiCo.

Coca-Cola, however, saw its market share drop more than 3 percentage points to 13.1 percent last year, while PepsiCo Inc (PEP.N) fell 1.8 percentage points to 3.9 percent, according to Euromonitor data.

Coca-Cola International president Ahmet Bozer said he was happy with the company's 9 percent sales volume growth in China during the second quarter.

"From a competitive standpoint, we are quite pleased," he said on a conference call with reporters.

Pepsi said in an email to Reuters that its China revenue grew by low double-digits in the second quarter. It also said its relationship with Tingyi and a research and development center in Shanghai helped it develop products geared to the local market.

UNDER SIEGE
Even traditional strongholds for foreign brands are under attack in China, including the market for infant milk formula. That market is one of largest and fastest growing, expected to be worth $25 billion by 2017, according to Euromonitor data.

Global companies including Mead Johnson Nutrition Co (MJN.N), Nestle SA (NESN.VX), Danone SA (DANO.PA) and Abbott Laboratories (ABT.N) have long dominated the premium formula segment but they have increased tie-ups with Chinese partners and boosted domestic supply chains to protect their position.

Chinese milk powder firms including Biostime International Holdings (1112.HK) and Beingmate Baby & Child Food Co Ltd 002570.SZ increased their market share last year, helped by a food scare that hit foreign brands as well as government drives to consolidate the sector.

In diapers, another area traditionally dominated by foreign brands, local firms are becoming more credible rivals, said a spokesman for Japanese diaper maker Kao (4452.T).

"The potential challenge from Chinese domestic manufacturers has grown remarkably," he said.

(GNN,Reuters,AIP)(Additional reporting by Chang-Ran Kim and Ayai Tomisawa in TOKYO, Anjali Athavaley in NEW YORK and James Zhang in HONG KONG; Editing by Miral Fahmy)

Related articles

• Trendy Chipotle burritos show how pricing power belongs to the hip (gnn-aip.tk)
• #China regulator says food supplier forged production dates: #Xinhua (gnn-aip.tk)
• #Audi cuts spare-part prices in #China amid anti-monopoly probe (gnn-aip.tk)
• China sends spy ship off Hawaii during U.S.-led drills (gnn-aip.tk)
• A #Fox-Time Warner deal would give Murdoch new heft in #China (gnn-aip.tk)
• #China shares lead Asia higher, dollar buoyed (gnn-aip.tk)
• #China regulator says scandal-hit food supplier forged production dates- Xinhua (gnn-aip.tk)
• China taps six state-owned firms for reforms (gnn-aip.tk)
• Super typhoon kills fourteen in southern China: Xinhua (gnn-aip.tk)
• Hong Kong's leader says Chinese rules to prevail in 2017 vote (gnn-aip.tk)

Hong Kong's leader says Chinese rules to prevail in 2017 vote

(GNN) - Hong Kong's leader told Beijing on Tuesday that the city's residents wanted a full election in 2017, but said the financial hub would have to abide by the restrictive framework set down by China's Communist authorities.

Chief Executive Leung Chun-ying offered no firm proposal, but said the contest would be run according to the "Basic Law", or mini-constitution, that has governed Hong Kong since Britain returned it to Chinese rule in 1997, rather than international standards.

That document stipulates that candidates for the position of chief executive must be approved in advance by a "broadly representative" special committee. The city's pro-democracy opposition fears it will be shut out of the poll.

Hundreds of thousands marched through Hong Kong on July 1 in support of full democracy.

Leung said the principle of universal suffrage in the 2017 poll "will be an important milestone of the democratic development of Hong Kong's political system, with significant real impact and historic meaning".

"The Hong Kong community is generally eager to see the implementation of universal suffrage for the...election in 2017," he said in his report to the Standing Committee of the National People's Congress (NPCSC), China's parliament.

He later told a news conference that the difficulties in forging a local consensus were not to be underestimated, but said: "Hong Kong people are rational and pragmatic."

"What is important is that if the international standards do not comply with the Basic Law and the decisions of the NPCSC we have to follow the Basic Law and the NPCSC decision," he said.Leung's report immediately sparked minor protests.

Three pro-democracy lawmakers were removed from the Legislative Council's chanber for unruly behavior, including one who shouted "no caged elections".

Outside, a handful of pro-democracy protesters were out-numbered by hundreds of elderly activists from pro-Beijing groups, many waving red Chinese national flags.

CHINA STRESSES SOVEREIGNTY

Hong Kong is governed under the principle of "one country, two systems" allowing it broad autonomy and far more freedom of speech, assembly and religion than exists on the mainland. But China has made it plain that Beijing's sovereignty cannot be questioned.

Both the United States and Britain have intensified calls to implement democratic reforms amid broader concerns about the future of Hong Kong's core freedoms and independent judiciary.

Neither has spelt out precise democratic models, stressing only that the 2017 poll must be publicly credible. Britain made no mention of democracy for Hong Kong until the dying days of 150 years of colonial rule that ended in 1997.

Leung's presentation followed a five-month consultation on democracy in the former British colony that drew nearly 125,000 public submissions.

His report also appeared to reflect a key concern of Beijing's leadership, saying that public opinion supported the notion that Hong Kong's next leader needed to be "a person who loves the country and loves Hong Kong".

The report marked one of the most significant steps yet in Hong Kong's political journey - an experiment with democracy in communist-controlled China.

It comes amid a hot political summer in Hong Kong after the mass march and an unofficial referendum last month on possible election models. Nearly 800,000 took part.

A campaign of choreographed civil disobedience threatens to paralyze Hong Kong's glitzy central financial district unless Beijing allows full democracy.

Leung's report said "mainstream opinion" was that under the Basic Law - Beijing's proposed committee to put forward candidates must retain its powers.

"Such power of nomination must not be undermined or bypassed directly or indirectly," the report said.

Unionist and legislator Lee Cheuk-yan said the report was an attempt to "close the door" and suggested that activists might have to resort to civil disobedience and "more drastic methods".

The Standing Committee of China's parliament is due to rule on the need for reform in August after which Hong Kong residents will be asked to comment on a range of options.

Hong Kong's legislature must then vote in any changes.

(GNN)(Reuters)(AIP)(Additional reporting by Emily Chung, James Zhang,; Yimou Lee and Nikki Sun; Editing by Nick Macfie and Ron Popeski)

Related articles

• Exclusive: Prosecutors' case against GM focuses on misleading statements
• Screenshot Claims To Show Off The Coming Windows 8.1 Start Menu
• Software Entrepreneurs Must Go Mobile-First Or Die
• Joy, fireworks in Berlin after World Cup thriller
• Hungry business: Grabbing a slice of the growing pizza market

• RPT-China aviation boom brings first aircraft lessor IPO in Asia (gnn-aip.tk)
• Against all odds: Energy projects to be completed by 2017, says CM (gnn-aip.tk)
• Bombardier says firmer economy to boost industry jet deliveries (gnn-aip.tk)
• Modi's farm export curbs may ease India's June inflation (gnn-aip.tk)
• UPDATE 5-Political novice wins power in Slovenia, hints at revisiting economic reform plan (gnn-aip.tk)

Asia shares extend losses after Wall St slip

(GNN) - HONG KONG: Asian markets sank Wednesday, following a negative lead from Wall Street, while China released data showing inflation eased slightly in June after hitting a four-month high in May.

There is also a nervousness that equities could be in line for a correction following a recent rally over the past few weeks.

Tokyo slipped 0.34 percent, Sydney shed 0.90 percent and Seoul was 0.44 percent lower, while Hong Kong lost 1.16 percent and Shanghai eased 0.18 percent.

Jakarta was closed for presidential elections.

US shares retreated on Tuesday for a second straight session after returning from the long, Independence Day weekend. The S&P 500 and Dow closed Thursday at record highs after a better-than-expected report on US jobs creation.

The Dow slipped 0.69 percent, the S&P 500 fell 0.70 percent and the Nasdaq tumbled 1.35 percent.

Some observers have predicted a pullback after the latest surge across global markets. Among them this week Nobel prizewinning economist Joseph Stiglitz said he was "very uncomfortable" with current prices.

There are also concerns that the Federal Reserve could accelerate its plan to raise interest rates next year in light of recent upbeat economic data out of Washington.

In China the National Bureau of Statistics said in a statement that inflation came in at 2.3 percent last month, down from 2.5 percent in May.

It is also slightly below 2.4 percent forecast by economists for Dow Jones Newswires and well short of the 3.5 percent annual target set by Beijing.

Traders will now be keeping a close eye on Thursday´s trade statistics and the release next week of April-June economic growth data, hoping for an improvement on the previous three months.

On currency markets the dollar´s advances against the yen last week have been all but eliminated.

In early Tokyo trade the greenback was quoted at 101.53 yen, against 101.57 yen in New York and well below the 102.11 level touched on Monday in Japan.

The euro bought $1.3615 and 138.26 yen compared with $1.3611 and 138.24Oil prices were mixed. US benchmark West Texas Intermediate for August delivery rose eight cents to $103.48 while Brent crude eased eight cents to $108.86.Gold fetched $1,319.57 an ounce at 0210 GMT compared with $1,322.43 late Tuesday. (GNN)(AFP)(AIP)

Asia shares slip after Wall St losses

(GNN) - HONG KONG: Asia´s markets slipped for a second day Tuesday, after the Dow and S&P 500 in Wall Street retreated from record highs as analysts warned a recent equities rally could come to a sudden halt.

Investors are hoping to get a better handle on the state of the global economy with the release this week of Chinese economic data as well as minutes from the Federal Reserve´s most recent policy meeting.

Tokyo slipped 0.77 percent, Sydney lost 0.23 percent, Shanghai fell 0.14 percent and Seoul was down 0.16 percent, while Hong Kong was flat.

After a long, Independence Day weekend US shares returned on Monday for the first time since Thursday´s better-than-expected jobs report.

However, they ended in the red on profit-taking while there were warnings that global markets could be headed for further losses after enjoying a positive run-up in the past few weeks, which has seen the Dow and S&P 500 touch new records.

Nobel prize-winning economist Joseph Stiglitz said in a television interview that he was "very uncomfortable" with current stock prices, while Raymond James managing director Jeffrey Saut said in a note that stocks are vulnerable to a 10-12 percent decline in the weeks ahead.

The Dow slipped 0.26 percent after breaking 17,000 for the first time on Thursday, while the S&P 500 eased 0.39 percent while the Nasdaq declined 0.77 percent.

The dollar also dipped in New York, sitting at 101.87 yen late in trade, well down from the 102.11 yen in Tokyo earlier in the day.

On Tuesday morning the greenback bought 101.74 yen. The euro fetched $1.3607 and 138.45 yen in Japan, against $1.3604 and 138.59 yen in US trade.

On Wednesday the Fed is due to release its minutes from the most recent policy meeting.

Rakuten Securities senior market analyst Masayuki Doshida telling Dow Jones Newswires: "Attention is now turning to US corporate earnings, and the US Fed´s stance on monetary policy, especially the pace of stimulus tapering after last week´s strong jobs data."

Also Wednesday China will announce inflation data for June, following that up with trade figures on Thursday. There are hopes for another upbeat set of results following a recent string of good news, including on manufacturing activity.

In Seoul Samsung Electronics was 0.23 percent higher despite warning of a 25 percent plunge in its operating profit in the second quarter of the year as its smartphone business grapples with a strong won and cheap rivals from China.

Analysts said the weak figures had already been priced in, resulting in a more than 10 percent fall since early June.

Oil prices edged down. US benchmark West Texas Intermediate for August delivery eased four cents to $103.49 while Brent crude for August was down 12 cents to $110.12.

Gold fetched $1,317.29 an ounce at 0215 GMT compared with $1,314.03 late Monday. (GNN)(AFP)(AIP)

Asian shares mostly down, focus on Iraq crisis

HONG KONG: Asian markets mostly fell Friday, following another Wall Street sell-off as oil prices shot up to a nine-month high on concerns about the growing crisis in Iraq.

Assets considered safe options in times of uncertainty also benefited, with gold up and the yen holding on to healthy gains seen in US trade.

Investors are also awaiting the release of Chinese indicators and the end of a Bank of Japan policy meeting later in the day.

Tokyo fell 0.78 percent, Sydney tumbled 0.94 percent and Seoul sank 1.00 percent but Hong Kong added 0.14 percent and Shanghai was flat.

New York´s three main indexes took a hit Thursday on news that Iraqi militants were pushing towards Baghdad after capturing a town to the north.

The Dow fell 0.65 percent and the S&P 500 lost 0.71 percent -- both having hit record highs earlier in the week -- and the Nasdaq sank 0.79 percent.

US President Barack Obama raised the prospect of possible air strikes when he said his national security team "is looking at all the options".

Forces from the autonomous Kurdish region took control of disputed northern oil hub of Kirkuk to protect it from attack, officials said.

Adding to the fears over more geopolitical instability is the prospect that supplies from a major oil producer could be cut off. And those worries filtered through to crude markets.

The US benchmark, West Texas Intermediate for delivery in July, jumped 81 cents to $107.34, having surged $2.13 in US trade.

Brent crude, the European benchmark, was up 54 cents at $113.56 after rallying $3.07 on London´s Intercontinental Exchange.

On foreign exchange markets the dollar was at 101.78 yen in early trade, compared with 101.68 yen in New York trade and well off the 102.08 yen in Tokyo earlier Thursday.

The euro was at 137.95 yen from 137.80 yen in New York but also well off the 138.10 yen in Asia Thursday.

The single currency also bought $1.3554 compared with $1.3553."Risk-off sentiment and the threat of renewed US military involvement in Iraq... will keep investors in sell mode -- or sidelined," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

With high oil prices raising the chances of a jump in inflation traders moved into gold, which is a hedge against rising prices. The precious metal was up at $1,273.95 an ounce at 0230 GMT compared with $1,264.20 late Thursday. (AFP)

Melco bets on Japanese culture as casino debate heats up

The new Melco Crown Entertainment gaming resort City of Dreams and the first Hard Rock Hotel in Macau are illuminated during its opening ceremony June 1, 2009 file photo.

Japan/Tokyo/Hong Kong: Casino operator Melco Crown Entertainment Ltd on Wednesday said it had pledged $10 million for cultural projects in Japan, a signal of its commitment to the country as lawmakers take steps to legalize casino gambling.

Melco is one of several global casino operators including Las Vegas Sands lobbying for a position in the Japanese market, seen as the next big Asian gaming opportunity after the spectacular rise of Macau.

The Hong Kong-listed, Macau-based casino operator made no mention of its commercial interest in Japan when it announced its commitment to Tokyo's University of the Arts, although its desire to participate in any liberalization of the Japanese industry is well known.

"Melco really wants to do something to help contribute to cultural development in Japan. There is no defined set period for the commitment," company spokeswoman Maggie Ma said.

Japan is widely considered one of Asia's largest untapped markets after Macau, the world's biggest gambling hub. Industry analysts predict Japan could rake in $15 billion in annual gaming revenues, making it the second-biggest market globally.

Melco, controlled by Ho and Australian billionaire James Packer, said in a press release that it would contribute 1 billion yen, or roughly $10 million, on projects in coordination with the university.

The projects include research on urban development and a "Kimono Culture" event early next year.

In a written response to questions from Reuters, the university said the donation was unrelated to the ongoing debate about legalizing casino gaming.

Melco Crown is the fourth biggest casino operator by market capitalization in Macau, which overtook Las Vegas as the global gaming capital in 2006. The southern Chinese territory is on course to generate over $43 billion in gaming revenue this year.

A group of lawmakers earlier this month submitted a bill towards legalizing casino gambling in Japan. They hope to pass the bill in the first half of next year, and enact concrete regulations by 2015.

The bill is backed by Prime Minister Shinzo Abe and is thought to have a decent chance of passing. Lawmakers hope the first casino resort could open in time for the Tokyo Olympics in 2020.

Other global operators eyeing the Japanese market include MGM Resorts International and Wynn Resorts Ltd.

Casino operators often make donations to universities and community projects to build goodwill for an industry that can be politically controversial.

A $135 million donation by Wynn to a foundation affiliated with a university in Macau drew scrutiny from U.S. authorities, although the company was cleared of any wrongdoing.(S-W)(Reuters)(GNN)

(Additional reporting by Emi Emoto in Tokyo; Editing by Stephen Coates)

Asian shares slip, Fed outlook fuels taper rumours

HONG KONG: Asian markets slipped Thursday after the US Federal Reserve kept its stimulus programme unchanged but gave a rosier than expected summary of the economy which fuelled expectations it will start winding it down soon. While the central bank's decision to keep the $85 billion-a-month scheme in place was widely expected, the upbeat outlook provided strong support for the dollar. Tokyo shed 1.20 percent, or 174.41 points, to end at 14,327.94, Sydney eased 0.10 percent, or 5.4 points, to 5,425.5 and Seoul tumbled 1.43 percent, or 29.49 points, to 2,030.09.

In afternoon trade Hong Kong was up 0.55 percent while Shanghai was 0.67 percent off.

After a closely watched two-day policy meeting, the Fed said Wednesday it would hold steady on its bond-buying programme as it awaits further signs the US economy is strong enough to stand on its own feet.

Policymakers made no reference to the potential impact of October's government shutdown and did not hint at future plans for the stimulus.

However, analysts noted the bank did not downgrade its outlook from earlier statements, and some suggested it could begin to reel in the scheme as early as December.

"While maintaining that the economy continued to expand at a moderate pace and that housing may have slowed slightly, overall the Fed noted that downside risks have diminished," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

The commentary was "slightly more optimistic than expected" and "not as doveish as many had expected", Esiner added.

Investors have been keeping a close eye on the Fed's plans for the stimulus since May, when it indicated it might begin cutting down its bond purchases, sending global markets tumbling.

Tapering had been expected by the end of this year but a weak set of data -- including soft jobs growth -- and October's two-week government shutdown had made that highly unlikely.

However, the latest comments have sparked talk of such a move before January.

The dollar advanced in New York on expectations there will be less cash washing around the financial system, although it retreated slightly in early Asian trade.

The greenback bought 98.33 yen Thursday, compared with 98.52 yen in New York but well up from 98.14 yen earlier Wednesday in Tokyo.

The yen gained a measure of support from the Bank of Japan's decision to delay expanding its own stimulus programme.

The euro bought $1.3695 and 134.66 yen Thursday, against $1.3738 and 135.35 yen.

On Wall Street the three main indexes retreated on the Fed news, with the Dow and S&P also hit by profit-taking after hitting record highs in the previous session.

The Dow fell 0.39 percent and the S&P 500 declined 0.49 percent, while the Nasdaq lost 0.55 percent.

In oil trade New York's main contract, West Texas Intermediate for December delivery, slipped 30 cents to $96.47 in afternoon Asian trade. Brent North Sea crude for December dropped 33 cents to $109.53.

Gold rose to $1,336.40 at 0610 GMT compared with $1,350.42 on Wednesday.

In other markets:

Taipei fell 0.18 percent, or 15.00 points, to 8,450.06.

Chunghwa Telecom rose 0.21 percent to Tw$94.6 while Hon Hai fell 0.67 percent to Tw$74.5.

Wellington rose 0.86 percent, or 41.75 points, to 4,909.73. (GNN) (AFP) (Yoogle)

Asian shares rally ahead of Fed policy decision

HONG KONG: Asian markets rose on Wednesday and the dollar held up against the yen after another record finish on Wall Street, but trade was cautious ahead of a Federal Reserve policy decision. With few trading cues to drive business, investors took a recent batch of weak US data as enough evidence to suggest the central bank will keep its stimulus programme in place until the new year.

Tokyo rose 1.22 percent by the break, Hong Kong added 0.53 percent, Sydney was 0.37 percent higher, Seoul was flat and Shanghai gained 0.12 percent.

The rise in Japanese stocks also came after numbers showing factory output in the country saw a healthy rise in September from August, adding to evidence of a pick-up in the world's number-two economy.

Markets expect the Fed wrapping up a two-day meeting on Wednesday to keep its $85 billion a month stimulus in place but will be poring over its announcement for clues as to when it will start winding down.

The bank had been expected to begin tapering by the end of this year but a weak set of data including on jobs growth and this month's two-week government shutdown has made that highly unlikely. (GNN) (AFP) (Yoogle)

World Bank: Singapore, Hong Kong best for business

WASHINGTON: Singapore and Hong Kong rank the world's best places to run a business, while mainland China remains far down the list, according to the World Bank's annual competitiveness survey on Tuesday. The Southeast Asian entrepots and finance centers topped the survey for the eighth straight year, with New Zealand, the United States and Denmark rounding out the top five, as a year ago.

The lower ranks of the 189-country list was populated with African countries like Chad, the Central African Republic and Libya holding.

But a rising African country, Rwanda, took honors as the most improved since 2005, praised for its efforts to boost property registration and for simplifying trading and tax procedures.

China, which was furious to receive a ranking of 91 last year and has pressured the World Bank to drop the 11-year-old study, fell five notches this year to 96th place and was leapfrogged by Russia.

Among the BRICS economies — Brazil, the Russian Federation, India, China, and South Africa - Russia made the most progress.

The "Doing Business 2014" report said many countries are making it easier for people to start and run a local business, with low-income economies moving more quickly than larger ones to improve.

"Regulation is a reality from the beginning of a firm's life to the end," the report says. "Navigating it can be complex and costly."

But in many areas, it added, "there has been remarkable progress in removing some of the biggest bureaucratic obstacles to private sector activity."

The rankings focus on what a small or medium-sized business faces in its home country, as opposed to how a multinational giant would fare in the same environment.

The data was based on surveys of more than 10,000 professionals, mostly people who routinely help administer or give advice on legal and regulatory issues in a country.

The countries are scored on a range of issues, from how many days and procedures does it take to start a business, to the length of time to get a power hookup, to the ease of credit and the cost of exporting or importing a container.

Countries credited with progressing the most in the past five years include Rwanda (ranked 32), Russia (92), Ukraine (112) and the Philippines (108).

Russia and Rwanda both jumped 20 places from last year, Ukraine gained 25 and the Philippines 30 places.

China is likely to remain unhappy with its rating. It scored particularly poorly on the challenges of starting a business, dealing with construction permits, making tax payments and protecting investors.

Even in trade, the mainstay of the world's second largest economy, it ranked only 74 on the list.

In 2012 China pressed the new World Bank President Jim Yong Kim to scrap the survey.

Bin Han, China's alternate director at the bank, said then that the report "used wrong methodologies, failed to reflect facts (and) misled readers."

But Kim tied the issues the report raises to the Bank's campaign to end poverty.

"It is indisputable that 'Doing Business' has been an important catalyst in driving reforms around the world," he argued.

Augusto Lopez-Claros, Director of Global Indicators and Analysis at the Bank, called support for the study "overwhelming".

"The reason why the World Bank has decided to keep the aggregate ranking is, most importantly, that they still give you a sense of the best practices in the world.

But others criticized the study's methodology, pointing out hard-to-justify conclusions.

For instance, in how hard it is for a company to get an electricity hookup, Haiti, one of the poorest countries in the world, ranks 67, while energy-rich Canada ranks 145.

And under "protection for investors," underdeveloped Sierra Leone ranks 22, while Switzerland is at 170.

"It is an extremely low-quality report," one World Bank source told AFP. "They rank things that have nothing to do with each other. It's no longer economics."