Investment banking fees fall 8 percent in weakest first quarter since 2012

(GNN) - Global investment banking fees fell 8 percent to $20 billion in the first quarter, the poorest start to the year since 2012, hurt by weak deal activity in Europe, Asia Pacific and Japan.

Fees for deals done fell 28 percent in Japan, 14 percent in Europe and 18 percent in Asia Pacific, according to data compiled by Thomson Reuters and Freeman Consulting.

The North American investment banking market remained stable, with fees little changed at $11.5 billion.

JPMorgan Chase & Co topped the global investment banking league table in the quarter with $1.49 billion in fees. Goldman Sachs Group Inc was second with $1.48 billion.

Morgan Stanley and Citigroup Inc were the biggest gainers among the top 10 banks in fees earned, while Credit Suisse Group AG's fees dropped 23 percent.

Investment banking activity in the financial, healthcare, and energy and power sectors generated 54 percent of the global fee pool during the quarter.

Fees from deal making in the healthcare sector jumped 24 percent, with Goldman commanding 14 percent of all fees booked in the sector.

Equity capital markets underwriting fees fell 2 percent to $5.3 billion, dragged down by a 36 percent drop in fees from initial public offerings.

Fees from debt capital markets underwriting rose 4 percent to $6.3 billion, while mergers and acquisition advisory fees fell slightly to $5.5 billion.

Investment banking fees generated by financial sponsors and their portfolio companies dropped 30 percent to $2.5 billion. Blackstone Group LP's investment banking fees rose 79 percent to $168 million.

(Reuters)(Reporting by Amrutha Gayathri in Bengaluru; Editing by Saumyadeb Chakrabarty)

Australia signals approval of China-based AIIB; Japan divided

(GNN) - Australia said on Friday there was a lot of merit in the China-led Asian Infrastructure Investment Bank (AIIB) while Japan's finance minister signalled cautious approval of the institution that the United States has warned against.

However, other top officials in Tokyo were more sceptical, reflecting a split in the government of Prime Minister Shinzo Abe over

whether joining an institution launched by Japan's main rival would help or hinder its interests.

The Sydney Morning Herald newspaper reported that Canberra could formally decide to sign up to the AIIB when the full cabinet meets on Monday.

Japan, Australia and the South Korea, all major U.S. allies, are the notable regional absentees from the AIIB. The United States, worried about China's growing diplomatic clout, has questioned whether the AIIB will have sufficient standards of governance and environmental and social safeguards.

But the opposition to the AIIB began crumbling after Britain said earlier this month that it would join the institution, maintaining it was in its national interest. France, Germany and Italy swiftly followed suit.

Australia now appears close to joining, although no formal decision has been made, and Beijing said Japan and South Korea were also considering the possibility.

China's Finance Minister Lou Jiwei said the bank would be set up by the end of the year and would complement rather than compete with other institutions, including the World Bank and the Asian Development Bank (ADB), the Manila-based multilateral institution dominated by Japan and the United States.

"All parties will by the middle of this year complete talks and sign the charter for the AIIB, and by year-end will make the charter effective and officially establish the AIIB," Lou said in an interview with state media, adding that Beijing was "maintaining communication" with the United States and Japan.

Asked about Australia, South Korea and Japan joining the bank, China's Foreign Ministry said it was "open" to it.

"They have all already expressed that they are contemplating the issue at hand," ministry spokesman Hong Lei told a daily briefing. "We are open to them making the relevant decision."

Japanese Finance Minister Taro Aso said Tokyo could consider joining the China-led bank if it could guarantee a credible mechanism for providing loans.

"We have been asking to ensure debt sustainability taking into account its impact on environment and society," he told reporters after a cabinet meeting.

"We could (consider to participate) if these issues are guaranteed. There could be a chance that we would go inside and discuss. But so far we have not heard any responses."

Other officials were more leery, reflecting Tokyo's concern over China-led lending practices, its relations with major ally Washington and the AIIB's potential rivalry with the ADB.

"We have a cautious position about participation," said top government spokesman Yoshihide Suga.

But a source familiar with Japan's policy-making said Tokyo should get involved to help ensure best practices and to avoid being left out. "Now it has become awkward as Europe joins but the U.S. and Japan stay out," the source said.

According to one senior official in the ruling coalition, the result of the differences is that Japan's participation "is not going to happen under the Abe administration".

OUR NEIGHBOURHOOD

Australian Treasurer Joe Hockey said no final decision had been made on Australia's involvement but the matter had been under careful consideration.

"More than 30 countries have already signed up. This is going to operate in our region, in our neighbourhood," he told a radio station in Brisbane.

"There is a lot of merit in it, but we want to make sure there are proper governance procedures. That there's transparency, that no one country is able to control the entity."

The Sydney Morning Herald said Canberra could invest as much as A$3 billion ($2.3 billion) in the bank and that the National Security Committee has cleared the way for the investment.

South Korean government officials denied a newspaper report that Seoul had decided to join in exchange for a five percent stake in the AIIB and the position of deputy chief.

The finance ministry said in a statement South Korea will make a decision on whether to join the bank "through close consultation with major countries and after considering various factors such as economic advantages and disadvantages".

Hockey said joining the AIIB would not affect Australia's close relationship with the United States and also referred to the gains that Australian companies could reap.

"The United States understands that this is a bank that's going to be operating in our region. It's going to be using contractors in our region. We want Australian contractors involved, we want work for Australians out of this bank," he said.

"And because it's operating in our region, in our neighbourhood, it is important that Australia fully understand and look at participating in this Bank."

($1 = 1.3067 Australian dollars)

(Reuters)(Additional reporting by Leika Kihara, Yuko Yoshikawa and Kaori Kaneko in TOKYO and Megha Rajagopalan and Michael Martina in BEIJING, Editing by Raju Gopalakrishnan)

Japan split on joining AIIB bank, caught between US, China

(GNN) - Japan is split over joining a China-led development bank, concerned about missing out on the rapidly coalescing global movement for the institution while also worried about alienating ally United States and helping bolster rival China, officials said.

Finance Minister Taro Aso signaled for the first time on Friday that Tokyo could be part of the Asian Infrastructure Investment Bank (AIIB) if it can guarantee a credible mechanism for providing loans.

But other top officials took a more skeptical stance, reflecting a split in the government of Prime Minister Shinzo Abe over whether the AIIB would help or hinder Japan's interests.

"We have a cautious position about participation," said top government spokesman Yoshihide Suga.

Around 30 countries, including Britain and Germany, have decided to participate in Beijing's flagship economic outreach project, but Washington, Japan's main ally, has urged countries to think twice before joining, citing worries about governance and environmental safeguards.

"Views are split within the Japanese government on whether to join the AIIB," said a person with close knowledge of Japan's financial policy-making.

The result of the standoff within the government, said a senior official in the ruling coalition, is that Japan's participation "is not going to happen under the Abe administration."

Japan is hesitant to join out of concern over China-led lending practices, over its relations with Washington and over the AIIB's potential rivalry with the Asian Development Bank (ADB), the Manila-based multilateral institution dominated by Japan and the United States, officials said.

By custom, the ADB is headed by a former senior official from the Bank of Japan or the country's finance ministry.

But the source familiar with Japan's policy-making said Tokyo should get involved to help ensure best practices and to avoid being left out. "Now it has become awkward as Europe joins but the U.S. and Japan stay out."

Finance Minister Aso told a news conference that the AIIB needs to have its board of directors screen and approve individual cases in deciding provision of loans.

"We have been asking to ensure debt sustainability, taking into account its impact on environment and society," he said after a cabinet meeting.

"We could (consider joining) if these issues are guaranteed. We'll give it careful consideration from diplomatic and economics viewpoints."

If the bank can address debt sustainability, environmental and societal concerns, "there could be a chance that we would go inside and discuss," he said. "But so far we have not heard any responses."

Suga, the chief cabinet secretary, interpreted Aso's comments to mean that "unless such issues are resolved, participation would be impossible."

(Reuters)(Additional reporting by Yuko Yoshikawa and Kaori Kaneko; Editing by William Mallard and Raju Gopalakrishnan)

China, Japan agree to keep momentum alive for better ties

(GNN) - China and Japan held their first security talks in four years on Thursday and agreed to keep alive and foster a nascent recovery in bilateral ties plagued by the legacy of Japan's wartime aggression and a territorial dispute.

The world's second- and third-largest economies, however, failed to set a timetable for the implementation of a scheme designed to ensure real-time communication between their armed forces.

Sino-Japanese relations have chilled over what China views as Japan's reluctance to properly atone for its wartime past as well as a dispute over a group of tiny East China Sea islets.

Patrol ships and fighter jets from both countries have shadowed each other regularly near the uninhabited islands that are controlled by Japan but also claimed by China, prompting fears that an accidental collision could spark conflict.

Japanese Prime Minister Shinzo Abe's moves to ease the constraints of Japan's pacifist constitution on its military have unnerved China. Japan says China's defence policy lacks transparency.

Abe held formal talks with Chinese President Xi Jinping last November. In the meeting, hailed by Xi as the first step toward improved ties, the two agreed to work for the implementation of a bilateral crisis management mechanism.

"Both sides agreed that the tide is beginning to turn for the better regarding relations between Japan and China following the summit meeting," a Japanese Foreign Ministry official told a media briefing after the one-day meeting.

"They also agreed that it is important to keep on taking positive steps in various areas and at various levels to firmly establish this trend."

In a sign of a thaw in Sino-Japanese ties, foreign ministers of Japan, China and South Korea are set to meet on Saturday in Seoul for the first time in nearly three years.

Xi and Abe, in their talks last year, agreed to aim for implementation of a plan for hot lines between defence officials as well as communication between vessels and aircraft to convey each other's intentions and avoid clashes.

Although both sides at the Thursday meeting agreed to work to implement the scheme at an early date, no agreement was reached on a concrete schedule toward that goal, the official said.

(Reuters)(Reporting by Kiyoshi Takenaka; Editing by Robert Birsel)

Japan confirms one citizen killed, three wounded in Tunisia attack

(GNN) - Japanese Foreign Minister Fumio Kishida said on Thursday one Japanese citizen was killed and three were wounded in an attack on Tunisia's national museum.

"We cannot forgive this despicable act of terrorism for whatever the reasons. We strongly condemn it," Kishida told reporters.

Tunisian Prime Minister Habib Essid said earlier five Japanese were among 17 people killed when gunmen wearing military uniforms stormed Tunisia's national museum on Wednesday.

Kishida did not refer to that but said there was information other Japanese people had been wounded and the Japanese government was checking.

The attack in Tunisia was one of the worst militant attacks in a country that had largely escaped the region's "Arab Spring" turmoil.

Kishida said Japan would continue to fight terrorism in cooperation with the international community.

(Reuters)(Reporting by Kaori Kaneko; Editing by Robert Birsel)

New global disaster plan sets targets to curb risk, losses

SENDAI, Japan (Thomson Reuters Foundation) - Governments set targets to substantially reduce deaths and economic losses from disasters at a U.N. conference in Japan on Wednesday, but critics were disappointed by the lack of a firm goal to ramp up financial support for poor countries.

The non-binding agreement adopted after a marathon negotiating session, includes seven targets to measure progress on protecting people and assets that experts described as a leap forward.

The Sendai Framework for Disaster Risk Reduction, a 15-year plan, replaces the current 10-year blueprint.

In the decade covered by the expiring Hyogo Framework for Action, more than 700,000 people lost their lives, and over 1.5 billion people were affected by disasters. Total economic losses topped $1.3 trillion.

"This new framework... opens a major new chapter in sustainable development as it outlines clear targets and priorities for action which will lead to a substantial reduction of disaster risk and losses in lives, livelihoods and health," said Margareta Wahlström, head of the U.N. Office for Disaster Risk Reduction (UNISDR).

Implementing the plan "will be vital to the achievement of future agreements on sustainable development goals and climate later this year", she added.

Some were disappointed that earlier proposals for percentage goals were rejected.

Instead the draft text includes aims to lower the global mortality rate from disasters between 2020 and 2030, compared to 2005 to 2015, and reduce the proportion of people affected.

Another target is to reduce economic losses in relation to global GDP by 2030.

The new agreement also includes targets to reduce damage to infrastructure and disruption to basic services, including health and education facilities, and to widen access to early warning systems and disaster risk information for the public.

But some disaster experts said a lack of a clear goal in the agreement to increase international aid for risk reduction would undermine developing countries' efforts to make progress on the goals.

Only Japan put money on the table in Sendai, promising to provide $4 billion in support over the next four years.

"Rich nations have pushed making financial commitments to reduce disaster risk to a separate round of financing negotiations later in the year," said Farah Kabir, country director of ActionAid Bangladesh, referring to a conference in Ethiopia in July.

Without larger pledges, "the results for vulnerable communities in poor countries will be catastrophic," he added.

Wahlström told reporters disaster risk reduction had received very little international funding so far, but she was convinced donors would make it a policy priority in coming decades for their development assistance.

Japan's Minister of State for Disaster Management Eriko Yamatani said that for her government, it was "not really a cost but an investment for the future".

HELP FOR MOST VULNERABLE

The devastation caused by Cyclone Pam in the South Pacific island nation of Vanuatu at the start of the conference last week highlighted the need for greater efforts to protect those most at risk from extreme weather and other hazards.

"Disasters, many of which are exacerbated by climate change and (are) increasing in frequency and intensity, significantly impede progress toward sustainable development," the Sendai framework said.

"It is urgent and critical to anticipate, plan for and reduce disaster risk in order to more effectively protect persons, communities and countries... and thus strengthen their resilience," it added.

Maggie Ibrahim of World Vision UK said the Sendai conference had put issues affecting the disabled, women and children in disasters under the spotlight.

But the agreement would not equip them and other vulnerable people with the resources and tools to build skills so they can better prepare for disasters and avert crises, she said.

(Reporting by Megan Rowling; Editing by Katie Nguyen)

Exclusive: U.S. asks Vietnam to stop helping Russian bomber flights

(GNN) - The United States has asked Vietnam to stop letting Russia use a former U.S. base to refuel nuclear-capable bombers engaged in shows of strength over the Asia-Pacific region, exposing strains in Washington's steadily warming relations with Hanoi.

The request, described to Reuters by a State Department official, comes as U.S. officials say Russian bombers have stepped up flights in a region already rife with tensions between China, U.S.-ally Japan and Southeast Asian nations.

General Vincent Brooks, commander of the U.S. Army in the

Pacific, told Reuters the planes had conducted "provocative" flights, including around the U.S. Pacific Ocean territory of Guam, home to a major American air base.

It is the first time that U.S. officials have confirmed the role of Cam Ranh Bay, a natural deep-water harbor, in Russian bomber plane activity that has increased globally.

Brooks said the planes that circled Guam were refueled by Russian tankers flying from the strategic bay, which was transformed by the Americans during the Vietnam War into a massive air and naval base.

Vietnam's willingness to allow Russia to use Cam Ranh Bay reflects Hanoi's complex position in a geopolitical tug-of-war that frequently pits China and Russia on one side and the United States, Japan and much of Southeast Asia on the other.

   Washington is keen to secure greater access itself to Cam Ranh Bay as part of its strategic "pivot" to Asia to counter China's growing strength in the region. U.S. ships have visited for repairs in recent years.

Vietnam, in turn, has sought closer U.S. ties as a hedge against what it sees as China's aggression, but remains close to Russia in both defense and energy cooperation.

Cam Ranh Bay is now host to three submarines bought by Vietnam's navy from Russia to counter Chinese expansion in the South China Sea, with two more expected by early next year.

Brooks said in an interview the flights indicated that Vietnam's Cold War-era ally Russia was acting as "a spoiler to our interests and the interests of others."

RAISING TENSIONS

Asked about the Russian flights in the region, the State Department official, who spoke on condition of anonymity, said Washington respected Hanoi's right to enter agreements with other countries.

But the official added: "We have urged Vietnamese officials to ensure that Russia is not able to use its access to Cam Ranh Bay to conduct activities that could raise tensions in the region."

The Vietnamese government did not immediately respond to a request for comment on the U.S. request.

Brooks declined to say when the flights he referred to took place. He did not say how many had been conducted and how many aircraft were involved. But he confirmed they had occurred since Russia's annexation of Crimea last March, which sparked a broader conflict with Ukraine and a surge in tensions between Russia and the United States.

The head of U.S. air forces in the Pacific said last May that Russia's intervention in Ukraine had been accompanied by a significant increase in Russian air activity in the Asia-Pacific region in a show of strength and to gather intelligence.

Russia's Defense Ministry said on Jan. 4 that Russian Il-78 tanker aircraft had used Cam Ranh Bay in 2014, enabling the refueling of nuclear-capable TU-95 "Bear" strategic bombers, a statement also reported in Vietnam's state-controlled media.

In that time, Russia has conducted increasingly aggressive air and sea patrols close to the borders of the U.S.-led NATO alliance, including by Bear bombers over the English Channel.

    Last year, NATO conducted more than 100 intercepts of Russian aircraft, about three times as many as in 2013.

RUSSIAN BOMBER FLIGHTS

Russian bomber patrol flights, a Cold War-era practice, were cut back after the fall of the Soviet Union but President Vladimir Putin revived them in 2007.

Russia said in November it planned to send long-range bombers on patrols over North American waters but the Pentagon played this down at the time as routine training in international airspace.

In its effort to boost ties with Vietnam, the United States has been pouring in aid and assistance in health, education, landmines clearance, scholarships and nuclear energy.

Defense cooperation had been limited by an embargo on lethal arms. But Washington started to ease this in October, enabling humanitarian exercises between both militaries late last year and more are taking place this month.

Last year saw a flurry of high-level U.S. visits to Vietnam that coincided with a maritime territorial row between Hanoi and Beijing. On Friday, the U.S ambassador in Vietnam announced that the Vietnamese Communist Party chief would later this year become the first party leader to visit Washington.

U.S. Ambassador to Vietnam Ted Osius said on Friday it was understandable Hanoi would look to "historic partners" when it came to security, but the United States had "much to offer... to enhance Vietnam's security in the short, medium and long term."

(Reuters)(Reporting by David Brunnstrom; Additional reporting by Martin Petty and Ho Binh Minh in Hanoi and Jason Szep in Washington; Editing by David Storey and Stuart Grudgings)

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