Alecia notes

[annettegborn-blog]

CORRECTED-UPDATE 2-IMF tells Belarus fresh credit depends on reform

* IMF wants wage restraint, higher interest rates* Ex-Soviet republic hit by high inflationBy Andrei MakhovskyMINSK, Oct 17 (Reuters) - The International Monetary Fund on Monday stressed the need to restrain wage growth in Belarus and said the leadership of President Alexander Lukashenko would have to show clear commitment to reform if it hoped to secure new IMF credit.The ex-Soviet republic is in the grip of a severe financial crisis which has drained its foreign currency reserves, forced a 65 percent devaluation in the national currency and pushed inflation up to 75 percent in the year to date.Minsk has put out feelers for a possible new stand-by credit programme from the IMF of up to $7 billion, according to financial sources.Chris Jarvis, head of a visiting IMF mission, said that while the Fund applauded the partial floating of the Belarussian rouble as "an important step forward" there was a danger that gains could be wiped out by high inflation.Speaking to journalists, he said Belarus had to raise interest rates more sharply and the authorities should refrain from any further public wage increases.The IMF wants Belarus, which is run for the most part on old Soviet lines, to carry out structural and economic reforms to fully liberalise the economy."The authorities should also continue with and accelerate their work on structural reform, especially enterprise reform, privatization, price liberalization and banking sector reform," Jarvis said in a statement."Deep structural reform is needed for Belarus to achieve strong and lasting growth and to increase living standards in a durable way," he added.FOLLOW-UP ACTION NEEDEDIn a comment angled at Lukashenko, Belarus's authoritarian leader, Jarvis said the country's "highest" authorities had to show a clear commitment to reforms and follow through with action if a fresh programme was to be forthcoming from the Fund."Before programme negotiations could begin, as a first step, the authorities will need to demonstrate a clear commitment, including at the highest level, to stability and reforms and to reflect this commitment in their actions," he said.He implicitly criticised Lukashenko for raising public sector wages shortly before an election last December in which he won a fourth consecutive term in power, which is disputed by the political opposition and in the West."Wage restraint is ... crucial. The role of the November 2010 wage increase in contributing to the crisis ... is now widely recognised," he said.After a previous IMF programme had been completed in 2010 there had been a softening in economic policy especially in credit policy and in the pay sector, he said.Belarus has introduced special free-trade sessions for the rouble, while maintaining a separate official exchange rate tightly controlled by the central bank.While this official rate stood on Monday at 5,692 roubles per dollar, it was down at 8,990 per dollar in the free-float trading session, up slightly from its low point of 9,010 last Friday.The Fund wants the national currency to be able to trade freely across the board and authorities are indicating they may meet the IMF on this point.A senior government official said on Saturday that Belarus would lift administrative caps and reinstate free currency trading."The government along with the National bank made the decision to carry out all currency trading in one session starting Oct. 20 ... with a flexible exchange rate regime," Deputy Prime Minister Sergei Rumas told Belarusian STV channel."The government will not use administrative measures to influence the currency exchange regime," he said.The government curbed free currency trade in March in an effort to rescue the rouble, which nevertheless was subsequently devalued twice, losing 65 percent of its value in all against the dollar.

[annettegborn-blog]

Ex-reporter claims hacking at Trinity Mirror paper-Sky

Trinity Mirror has said the allegation is incorrect. Brown's comments came in a written witness statement prepared for an employment tribunal claim for unfair dismissal against Trinity Mirror, but the statement was never used. Sky is part owned by Murdoch's News Corp media empire. "A number of the methods used to pry into individuals' lives were illegal and I have little doubt that if these people knew they had been spied upon, they would take legal action for breach of their right to privacy," Brown was reported to have written. The people whose phones were hacked by the Sunday newspaper, Sky said, included David Beckham's children's nanny and TV presenter Ulrika Jonsson. Trinity Mirror, which also owns the Mirror newspaper, denied the accusations. "All our journalists work within the criminal law and the PCC (Press Complaints Commission) Code of Conduct and we have seen no evidence to suggest otherwise," it said in a statement. It added that the "unsubstantiated allegations" taken from a draft statement had never been tested under cross examination. Brown declined to comment when contacted by Reuters. He was reported to have written that information had been gleaned by others from Jonsson's mobile phone. "This was done by 'screwing' or tapping Ms Jonsson's phone's message bank," he is said to have written. He said in the statement that Trinity Mirror had quickly paid substantial damages to Beckham after running a front-page story wrongly alleging the soccer star had left angry messages on his nanny's mobile. "It took the company less than a month to pay David Beckham substantial damages because it knew it could not produce the evidence of tapped mobile phones in any litigation," the statement reportedly said. Brown was fired from the Sunday tabloid in April 2006 for gross misconduct, Sky said on its website. The statement, written in 2007, was not used because the company settled out of court with Brown and he signed a confidential settlement agreement, Sky said. When a News of the World reporter was arrested for hacking in August 2006, a senior human resources figure "contacted executives on Trinity's national titles to tell them that if they were asked by other newspapers or trade publications whether they had used information from 'screwed' mobile phones they should deny it," Brown was said to have written. "(The) advice indicates that a major media plc was not only allowing its staff to carry out illegal activity by, at best, turning a blind eye to it, but also taking part in an organised cover-up of that activity." Trinity launched a review of is editorial controls and procedures last August, and had obtained written confirmation from its current senior editorial executives that they had not engaged in phone-hacking since the introduction of an Act of law in 2000. Allegations of hacking at its rival Sunday tabloid the News of the World led to the closure of the 168-year publication. Trinity Mirror soon afterwards said its circulation revenues had risen.

[annettegborn-blog]

Analysis: U.S. ducks recession for now, but Europe threatens

After wobbling early in the quarter, the economy regained some footing, with retail sales rising solidly in September and labor market conditions improving. Business spending has held up despite volatility in financial markets and factory activity has kept expanding.Economists now estimate U.S. gross domestic product grew at an annual pace of between 2.3 and 2.7 percent in the July-September period, a sharp step up from the 1.3 percent logged in the first quarter and a far cry from what some feared just a few weeks ago."The economy held up surprisingly well in the third quarter but it's too early to celebrate," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania.Much of the re-acceleration in growth reflects the fading of disruption to motor vehicle production and sales after the big March earthquake in Japan. A surge in auto sales contributed to a solid 1.1 percent rise in retail sales in September.Declining gasoline prices, which stretched household budgets in the second quarter and crimped consumer spending, are also seen supporting third-quarter economic growth.But those factors should prove temporary, and with Europe's economy likely to slow as it battles its debt crisis and the U.S. labor market still weak, economists believe the fourth quarter will prove weaker, with some fearing a contraction in the first half of 2012."The euro zone debt crisis is still playing out. That remains a dark cloud on the horizon that can present a direct hit to the U.S. economic recovery," said Anthony Karydakis chief economist at Commerzbank in New York.Although European leaders sound determined to come to grips with the debt crisis and could announce a bold plan in the next couple of weeks, analysts worry they might once again move too slowly for jittery financial markets.A DAY LATE"A bold plan would require some form of centralized fiscal policy, which means years of voting and changing the treaty and voting in individual parliaments," said Diane Swonk, chief economist at Mesirow Financial in Chicago."It's not clear whether financial markets will have the patience for them to execute on it because you don't have the ability in Europe to move as quickly on it and they have always been a day late in dealing with the crisis."U.S. exports to the euro zone account for only about 2 percent of U.S. gross domestic product, but a worsening of the debt crisis could lead to a financial panic, with ripple effects on American banks and consumers.The euro zone turmoil has already led to tightening in credit availability, weighing on spending and employment.Economists at Goldman Sachs see U.S. growth slowing to a pace between 0.50 percent and 1 percent in the next two quarters, with the risk of a recession at about 40 percent.Others, however, think another recession is far fetched."The economy is not in great shape but it is hardly falling apart," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. "We are in a slow, steady, grinding recovery that is not creating lots of jobs."Naroff, like many other economists, draws solace from the solid rise in retail sales in September reported on Friday and the need for auto manufacturers to replenish inventories after production was disrupted early this year."Some of the momentum in final demand growth could carry into the fourth quarter. Early indications suggest that auto sales, which were an important element in third-quarter growth, are holding up well in October," said Michael Feroli, an economist at JPMorgan in New York."And while energy prices have backed up in recent days it should still be the case that moderation in headline inflation could give some lift to consumer spending power."Much as Europe's shadow looms large over the U.S. economy, belt tightening at home also poses a risk to growth, with a payroll tax cut and an extension of emergency unemployment benefits scheduled to expire in December.While economists expect the payroll tax cut to be extended, many doubt whether the emergency jobless benefits will be renewed, which would undercut already weak household income."If political parties are unable to agree on any of these measures, that could be the straw that breaks the camel's back," said Harm Bandholz, chief U.S. economist at UniCredit Research in New York."The spending cuts would impact growth not only directly via lower disposable incomes, but also indirectly via a massive loss of confidence in the ability of policymakers to steer events in the right direction in these critical times."

[annettegborn-blog]

Deals of the day -- mergers and acquisitions

** The family that runs 99 Cents Only Stores changed buyout partners to take the retailer private at a higher price than an earlier proposal in March, marking the latest private equity backed deal in discount retail.** Broadband technology and software provider ARRIS Group Inc said it is to buy BigBand Networks for $2.24 per share in cash to strengthen its networked video technology capabilities.** Western Wind Energy said it received an unsolicited takeover bid from Algonquin Power and Utilities for at least C$150 million ($145.5 million).** Canada's B2Gold Corp said it agreed to buy Auryx Gold Corp for about C$130 million in a cash-and-stock deal.** Jones Group Inc , a maker of clothing, shoes and accessories, is in talks to sell its stagnating jeanswear division for up to $400 million as it focuses on its more profitable luxury brands.** Sinopec International Petroleum Exploration and Production Corp (SIPC), a wholly-owned unit of state-owned Sinopec Group, has completed the purchase of an 18 percent stake in Chevron Corp's Indonesian deep-water project for $680 million, a Sinopec official told Reuters on Tuesday.** Payment processor Heartland Payment Systems Inc said its unit Heartland School Solutions acquired privately held School-Link Technologies Inc for an undisclosed amount, to expand its market share in the school services payments industry.** Murata Manufacturing Co plans to acquire Finland's sensor maker VTI Technologies for 20 billion yen ($261 million), including debt, as it seeks to expand in the growing market for smaller and low-energy sensors.** Eurasian Natural Resources Corp plans to buy the outstanding 75 percent of Kazakh coal producer Shubarkol Komir for up to $600 million plus assumed debt of about $50 million.** UK-based holding company Chime Communications PLC said it will buy Gulliford Consulting Limited for an initial consideration of 2.5 million pounds ($3.9 million) in a cash and stock deal.