Posts tagged ‘Europe’

12/08/2015

ChemChina, Camfin to launch tender offer for rest of Pirelli | Reuters

An investment vehicle controlled by China National Chemical Corp (ChemChina) said it will launch a mandatory tender offer for remaining shares in Pirelli (PECI.MI) after on Tuesday taking control of the Italian tyremaker through a deal struck in March.

A Pirelli's tyre is pictured at the headquater in Milan, March 26, 2015. REUTERS/Giorgio Perottino

ChemChina in March agreed to become the majority owner of the world’s fifth-largest tyre manufacturer as part of a 7.3 billion euro ($8 billion) deal.

On Tuesday, Marco Polo Industrial Holding, a company created to facilitate the Chinese takeover, concluded its acquisition of a stake in Pirelli from Italian holding company Camfin, triggering the mandatory takeover bid.

A Camfin spokeswoman said the tender offer was expected to be launched in September.

State-owned ChemChina holds a 65 percent stake in Marco Polo, with the remainder in the hands of Camfin investors, who include Pirelli boss Marco Tronchetti Provera, Italian banks UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI), and Russia’s Rosneft (ROSN.MM).

The tender offer will be launched at 15 euros per share with the goal to acquire all of Pirelli’s share capital and de-list the tyremaker from Milan’s stock exchange. Marco Polo also decided to launch a voluntary tender offer on Pirelli’s savings shares.

In a separate statement, Tronchetti Provera, who will remain Pirelli’s chief executive, said Camfin would invest more than 1 billion euros in the tender offer and will keep a central role in the tyremaker’s future shareholder structure, along with ChemChina.

He reiterated the Chinese investment would boost the company’s international growth, particularly in the industrial tyre sector.

“In this segment, the integration with ChemChina will allow immediate growth in volumes and market share that Pirelli alone would have taken years to achieve,” he said.

via ChemChina, Camfin to launch tender offer for rest of Pirelli | Reuters.

08/07/2015

China Stock Tumble Scarier Than Greek Debt Crisis – China Real Time Report – WSJ

China’s stock plunge is scarier than Greece, writes Morgan Stanley Investment Management’s Ruchir Sharma:

The continuing crisis is viewed, locally and globally, as a test of China’s control over the economy. The “Beijing put”—a perception that Chinese economy and markets are backstopped by the government—is under threat. That perception has underpinned the widespread belief that Chinese growth won’t fall much below 7%, because that is the government’s desired target and Beijing is omnipotent.

But if Beijing can’t stop the market’s tumble, there could be a sudden shift in the perception of exactly how far economic growth might fall under the weight of too much debt. If that floor crumbles and the Chinese economy spirals downward, it will make the drama surrounding Greece feel like a sideshow. China has been the largest contributor to global growth this decade; Greece’s economy is about the size as that of Bangladesh or Vietnam.

via China Stock Tumble Scarier Than Greek Debt Crisis – China Real Time Report – WSJ.

26/03/2015

Britain launches Europe’s first yuan money-market fund | Reuters

Britain deepened its financial links with China on Wednesday with the launch of Europe’s first yuan-denominated money market fund, which allows investors to get direct exposure to China’s interbank lending market.

100 Yuan notes are seen in this illustration picture in Beijing November 5, 2013. REUTERS/Jason Lee

The exchange-traded fund from China Construction Bank International (601939.SS), China’s second largest bank, is listed on the London Stock Exchange and can be traded in sterling, euros and yuan, Britain’s government said.

London has been keen to attract Chinese banks and encourage offshore trade in the yuan to bolster its position as the world’s main centre for foreign exchange trading.

Last year Britain became the first Western government to issue a yuan-denominated bond. On Tuesday the finance ministry’s chief economist said he viewed the yuan’s possible inclusion in the International Monetary Fund‘s currency basket as a “very live” issue.

“The launch of this (fund) will provide further opportunities for British and other global investors to invest directly into China,” said Andrea Leadsom, a junior British finance minister.

via Britain launches Europe’s first yuan money-market fund | Reuters.

18/02/2015

China maps out vision of future prosperity along a New Silk Road | The Times

About half an hour west of Kashgar, China’s westernmost city, a chic estate agent bristling with pamphlets presents a vision of the future. Buy a place here — a short hop from the Uzbek border — and soon the global economy will pivot around you.

Her pitch boasts an artist’s impression of the villa complex a buyer might expect: miniature European palaces nestled between crystal lakes, arcades of high-end boutiques and a pine forest.

It takes (to put it mildly) an imaginative leap to square this idyll with the blistering desert and sheer, barren mountain range just outside the showroom, not to mention stories of ethnic bloodshed in the villages near by.

Yet the large image on the wall is a show-stopper. Kashgar, normally shown on the far left-hand side of Chinese maps, is a red dot at the centre of the world. Around and through it, planned road and rail lines on an epic scale twine and lunge towards Calais and Rotterdam at one end and Guangzhou and Shanghai at the other. Spurs dart off to Karachi, Tashkent, Helsinki, Moscow and Tehran. Australia and Turkey are mentioned as eventual waypoints. This Kashgar villa project, the saleswoman says, will sit at nothing less than the heart of the New Silk Road, a project viewed by some as the most important piece of geo-economic engineering we will see in our lifetimes.

Cheerleaders of the New Silk Road story have plenty to back their optimism, not least the fact that the vision is the unambiguous focus of President Xi. Talk about the Silk Road will ride high on China’s domestic political agenda this year; the global trade implications will start to reverberate soon afterwards. In 2013, when Mr Xi first laid out his ambition of building a Silk Road economic belt and a maritime Silk Road to run in parallel, he did so with the glint of a nation that is getting better and better at turning expansive blueprints into reality.

Mr Xi’s rhetoric doesn’t feel empty. China has buckets of cash to invest and a rising sense that it is deploying those funds at an historically perfect juncture: Europe is light on leadership, Putin’s Russia is not a natural builder of partnership and American domestic politics are a long-term drag on Washington’s capacity to build cohesive global visions. All around it, Beijing sees countries that may be wary of China’s ambition but, at the very least, are underwhelmed by the alternatives.

Yesterday, China’s central bank officially opened its new Silk Road fund, a $40 billion wedge of cash that supposedly will be run like a private equity investor and will drive the construction of the rail and road infrastructure on which all of President Xi’s strategic vision depends.

The blossoming of the Silk Road vision marks an even greater inflection-point in China’s economic advance — the moment when its outward direct investments, as a percentage of global investment flow, outpace inflows. Its investments abroad rose from $45 billion to more than $600 billion between 2004 and 2013. Since 2010, its two largest state-owned development banks have annually lent more to developing countries than the World Bank and China is the predominant funder of the Asia Infrastructure Investment Bank and the Brics Development Bank.

This all needs to be built into the way European leaders see the world, because at the moment, Mr Xi has a vision that could be internationalised or forever belong to China. While the initial stages of the Silk Road expansion will involve dreary-looking handshakes between China’s leaders and their various central Asian counterparts, the moment is fast arriving when the European economies have to work out the extent of their buy-in to Mr Xi’s dream.

via China maps out vision of future prosperity along a New Silk Road | The Times.

12/02/2015

India Passes China to Become World’s Fastest-Growing Economy – China Real Time Report – WSJ

Everyone from the World Bank to Goldman Sachs had predicted it wouldn’t happen for another two years but recent recalculations indicate that India has already dethroned China as the world’s fastest-growing big economy.

Late Monday, India’s statistics ministry surprised economists when it unveiled the new numbers for the growth of India’s gross domestic product. It ratcheted up India’s GDP growth figures using a new methodology that pegs expansion in Asia’s third-largest economy at 7.5% last quarter and 8.2% the quarter before that. Economists and the ministry, using the old methodology, had originally said growth was closer to 5.5% during those quarters.

While economists, investors and executives are still wondering how growth could have been so high during those quarters when other indicators suggested times were tough, the new official numbers mean that India outpaced China, taking the pole position as the fastest-growing major economy in the world.

India has been able to catch up because China’s growth has been slowing. The Middle Kingdom’s GDP expansion was 7.3% in both the third and fourth quarters of 2014. While there are smaller economies which may have had stronger growth, this puts India on top after decades driving in China’s slipstream.

Of course, China’s economy is still four times the size of India’s.

“There’s no comparison between these growth rates because of the size of the economy of China,” said Ashish Kumar, director general of the Central Statistics Office as he announced the new GDP growth numbers.  “If this kind of growth continues and China continues to perform at a lower level, then still it will take 20 to 30 years to catch up.”

Still, if it can keep up this pace at least India will be gaining some ground. More importantly, a return to high growth might mean India is following in China’s footsteps and entering a take-off phase.

The South Asian nation needs to revamp its economy to help create more manufacturing jobs and savings if it wants to become the next China, said Frederic Neumann, an economist at HSBC in a recent report.

“That’s a challenging transformation,” he said. “India may never quite match the rapid ascent of China, but even at a slightly slower speed it will start to make waves.”

via India Passes China to Become World’s Fastest-Growing Economy – China Real Time Report – WSJ.

10/02/2015

Dalian Wanda to buy Swiss sports firm for $1.2 billion amid entertainment push | Reuters

China’s Dalian Wanda Group Co signed a 1.05 billion euros ($1.2 billion/ £787 million) deal to buy Swiss sports marketing firm Infront Sports & Media AG, and said it plans to acquire more overseas companies this year to deepen its push into sports and entertainment.

A man walks in front of an entrance to a Wanda Department Store in Wuhan, Hubei province, in this December 23, 2014 file photo. REUTERS/Stringer/Files

The acquisition will see Wanda Group, China’s largest property developer which also controls the country’s largest cinema chain, take a 68.2 percent stake in Infront, which focuses on distributing media rights for broadcasting sports events including the football World Cup and several Olympic winter sports.

Three unidentified Chinese and global investors will take the remaining minority stake, Wanda executives told Reuters. Infront generated about 800 million euros in revenue last year.

“This purchase allows Wanda to become a global leader in the sports industry in a single bound,” Dalian Wanda Chairman Wang Jianlin told reporters after a deal signing ceremony in Beijing.

“In addition to Infront, Wanda will buy at least two cultural companies this year,” he added, without giving details.

via Dalian Wanda to buy Swiss sports firm for $1.2 billion amid entertainment push | Reuters.

05/02/2015

Why Oil-Hungry China Isn’t Reaping Benefits From Low Prices – China Real Time Report – WSJ

China – which gets 60% of its oil from abroad — is on its way to becoming the world’s largest petroleum importer, and is already there by some measures. So in theory it stands to be a huge beneficiary of plummeting oil prices.

However, as The Wall Street Journal reports, the benefits of cheap oil for several major economies are far less clear, as governments from Europe to Japan battle fears that falling prices—in part a result of cheap energy—will deter spending by consumers and new investment by companies.

In China, cheap oil hasn’t been nearly the boon many may have thought. That is the result of several factors.

The government controls prices, meaning the drops for Chinese businesses and consumers lag those of international oil markets. China’s central government has raised fuel taxes, offsetting prices declines. Both factors add up: The government-maximum price in Beijing for basic-quality gas comes out to roughly $3.50 a gallon, once currency conversions and other factors are weighed. Compare that to the U.S., where that same gallon costs about $2.07.

Then there are the structural issues in China’s economy like overcapacity that low prices can’t fix.

“If you look at the lower oil price, it’s true China is a net importer of oil so in theory it should be beneficial,” said Vincent Chan, a research analyst at Credit Suisse CSGN.VX +0.05%. “But at the same time you have other issues like some of the structural issues that are more important in China.”

The bottom line for China: While consumers and some industries have gotten a boost from lower oil prices, the benefits have been pared by the central government’s preference for price stability. Similarly across Asia, governments have used low oil prices to unwind complicated and costly subsidies, which in recent years have kept prices at the pump artificially low for many Asian consumers.

via Why Oil-Hungry China Isn’t Reaping Benefits From Low Prices – China Real Time Report – WSJ.

28/01/2015

BBC News – The village that just got its first fridge

Three-quarters of the world’s homes have a fridge – an appliance that can revolutionise a family’s life. A tailor in one Indian village has just become the first person in his community to own one – something he has dreamed of for 10 years.

Santosh choosing a fridge

Santosh Chowdhury is pacing up and down speaking into his mobile phone.

“How much longer? It’s left past the auto-rickshaw stand, yes that’s right,” he shouts, and then continues his nervous pacing.

It’s a big day for him and indeed for the village of Rameshwarpur, just outside Calcutta in north-east India.

Santosh has bought a new fridge – not just his first but also the first in the entire community of 200 people. “Owning a fridge is quite rare in a village like ours,” he says.

The lack of fridges in Rameshwarpur reflects the situation across the whole of India. Only one in four of the country’s homes has one. That compares to an average of 99% of households in developed countries.

But change can be rapid when linked to an emerging middle class. In 2004, 24% of households in China owned a fridge. Ten years later this had shot up to 88%.

“Ours is the first generation to own a fridge in my family,” says Santosh. “No one in my father’s and grandfather’s time had ever seen one.”

Rameshwarpur has a distinctly rural feel. People bathe in a pond in the middle of the village, children fly kites in the dusty lanes. The homes are little more than simple huts, made of mud and brick. But the village has electricity and many houses have televisions.

Santosh works as a tailor. He lives in a modest, two-room hut which doubles as his home and workplace. “I don’t have a regular job as such,” he says. “Sometimes I also work part-time in a factory. I make about three to four dollars a day.”

Life is quite hard, especially for his wife Sushoma.

She cooks lunch, stirring a pot of rice on a wood fire outside their hut. It’s something she does every day because they have no way of storing leftovers. So Santosh has to go the market early each morning to shop for groceries.

He’s always wanted to make life easier for his wife and has been dreaming of buying a fridge for 10 years. “Owning one will be so convenient,” he says. “You don’t have to buy vegetables every day, you can store food – especially in the summer.”

So he’s been saving hard, putting away a bit of money every month for a purchase that costs more than a month’s salary. “I don’t make that much money, that’s why it’s taken me so long. But now I have enough,” he says, smiling.

At one of Calcutta’s high street stores, about 15km from his home, Santosh had several models to choose from. Peering inside, he ran his fingers along the side of a bright red model.

“It was quite confusing. It was my first time you know. I couldn’t figure out which one to get,” he says shyly. “My wife wanted a red one. I wanted one that will consume the least power. We need to keep our bills down.”

Finally, the deal was struck. Santosh got a discount because it was the final week of the winter sales. The price was 11,000 rupees (£120) – but more importantly, he was able to pay in instalments, having paid just under half the money up front.

“No one pays cash any more like they used to,” says store manager Pintoo Mazumdar. “Everyone can get a loan from the bank or the store – all you need is a bank statement and ID. That’s why so many lower income people can afford to buy a fridge these days.”

 

FRIDGEONOMICS

Fridge ownership around the world

76% Global average

65% Asia Pacific

99% Europe and North America

87% Latin America

63% Middle East and Africa

Source: Euromonitor

 

Santosh’s fridge finally arrives on the back of a cycle rickshaw. He walks along next to it with a broad smile. Many of the villagers come out on to the lane as well, craning their necks to get a better look.

“Careful, careful,” he cries out as a couple of them help carry the fridge into his house.

Then it’s time for a religious ceremony.

His wife applies a dab of vermillion to the fridge, to keep away evil spirits, and then blows on a conch shell to seek divine blessings and welcome the fridge into their home. The fridge has pride of place – next to Santosh’s sewing machine and their tiny television set.

They simply cannot stop smiling.

“We’ve dreamt of this moment for so long,” says his wife Sushoma. “Some of our neighbours have already asked us if they, too, can store some food in our fridge. “And I can’t wait to drink cold water in the summer.”

As Santosh shows off his fridge everyone crowds around, excited. “Imagine, they won’t have to shop for fresh vegetables every day,” says one woman. “I’m thinking of getting one too,” another man says.

It’s a special moment for the Chowdhurys. This acquisition could potentially transform their lives. “I can focus on finding more work and not worry about buying food for the family,” Santosh says. “My wife will get more free time and perhaps she can give me a hand as well.”

With those words, he opens his fridge and places the first contents inside – tomatoes, an aubergine, eggs and some milk.

via BBC News – The village that just got its first fridge.

20/12/2014

Chinese warm to Russia in the winter – China – Chinadaily.com.cn

Chinese travelers have been flocking to Russia in recent days to cash in on the weak rouble.

Chinese warm to Russia in the winter

Bitter weather means that winter is usually the offseason for Russian tourism, and some Chinese travel agencies even stop selling tours to the country from October to June.

But this winter, the ailing rouble has stoked Chinese traveler’s enthusiasm for heading north.

Online travel agency Tongcheng Network Technology Share Co, in Suzhou, Jiangsu province, recently launched winter tour services to Russia for the first time. The agency said it has received 113 percent more bookings in December than in November.

“The number of bookings and inquiries increased sharply as the rouble depreciated significantly,” said Liu Qing, chief executive officer of Tongcheng’s Outbound Tourism Department.

Ctrip.com International, the largest online travel agency in China, said inquiries about Russian tours rose by 100 percent month-on-month in December.

Dai Yu, marketing director of Ctrip’s Tourism Department, said winter tours to Russia are about 60 percent cheaper than summer ones and the cost has fallen further due to the weak rouble.

Group tours to Russia usually last for six to eight days, with recent prices quoted at between 5,000 and 8,000 yuan ($815 to $1,300), much lower than tours to Western Europe.

Zhang Jing, 32, from Beijing, said she plans to book a low-priced tour to Russia for her parents. “It is a good deal to go now,” Zhang said, adding that her parents will choose between leaving at New Year‘s or Spring Festival in February.

Travel industry insiders said Russia will be a popular choice for Chinese visitors during the seven-day Spring Festival holiday.

Some agencies have already sold Spring Festival tours, although most travelers will only make their plans in the next month.

Liu said, “We can’t estimate how many travelers will book tours for Spring Festival, but we have already seen a dramatic rise in bookings.”

China is the main source of tourists to Russia, with their numbers increasing by 10 percent year-on-year in the first nine months of 2014, according to the Russian tourism authority. The number of tourists from Russia, the third-largest source of inbound tourists to China, continues to fall and will worsen due to the weakening rouble.

via Chinese warm to Russia in the winter – China – Chinadaily.com.cn.

18/12/2014

Birla Said to Plan $1 Billion Aluminum Exports: Corporate India – Businessweek

Hindalco Industries Ltd. (HNDL), owned by Indian billionaire Kumar Mangalam Birla, is targeting a record $1 billion of aluminum exports by March 31 buoyed by rising U.S. and European demand, people with knowledge of the matter said.

Overseas shipments may triple to as much as 400,000 metric tons in the 12 months ending March 31 from the previous year, said two people, who asked not to be identified because they aren’t authorized to speak to the media. The Mumbai-based company had exported less than half the target as of the middle of last month, the people said.

Stricter emission norms in the U.S. and Europe are prompting vehicle makers to choose the lighter alloy over steel, helping the owner of the world’s largest supplier of aluminum sheets to carmakers boost overseas sales and counter a domestic slowdown. The additional demand will aid Hindalco revive profit growth after five straight quarters of decline and find a market for its new capacity.

via Birla Said to Plan $1 Billion Aluminum Exports: Corporate India – Businessweek.

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