EU Inflation Figures Continue To Display Weakness

Last week, market volatility was slightly lower than usual with investors perhaps bracing themselves for the upcoming week's ECB interest rate decision and US jobs report. However, we did encounter the release of some more vital EU metric data, which seemed to provide further validity to the consensus that the ECB will implement further stimulus, this coming Thursday.

For example, both Italy’s and Spain’s latest inflation data missed expectations. In Italy, it was expected that inflation levels would rise by an annualized 0.6%, however prices increased by only 0.5%. Whereas in Spain, the annual inflation rate increased by 0.2%. A substantial drop compared to last month’s 0.4% gain. There were also concerns regarding EU employment data released in France and Germany. In France, unemployment reached another record high and in Germany, the number of people unemployed surprisingly increased for the first time in six months. The total EU unemployment rate will be released this upcoming Tuesday.

In other news, there are increasing emerging indications from the United States that their economy is progressing. On Tuesday, US Durable Goods dismissed analyst expectations for a 0.6% contraction, increasing by 0.8%. This was followed by US Consumer Confidence advancing towards its second highest reading in nearly six years. Further good news was announced on Thursday when Initial Jobless Claims continued its recent consistent decline, with only 300,000 applications made last week. For the past four weeks, Initial Jobless Claims have decreased to their lowest level since August 2007.

However, there was confirmation that the terrible weather the US faced over the New Year period led to the US economy contracting by 1% during the first quarter of 2014. Initially, the news that the US GDP contracted for the first time in three years created some anxiety, though analysts are now trying to digest the GDP data in a positive manner. After reviewing the GDP release, it was apparent that a significant proportion of the economic contraction was due to a reduction in business investment and construction building. The general feeling is that this will correct itself over the coming months, and contribute towards the 2^nd quarter US GDP surpassing expectations.

In regards to the Japanese economy, there appears to be an air of confusion regarding their highly anticipated CPI release. During the beginning of the week, the JPY strengthened following reports that BoJ policy makers are already discussing the possibility of withdrawing from their QE stimulus, leading to suspicions that Thursday’s Japanese CPI data was going to outperform expectations. This turned out to be the case, with Japanese consumer prices increasing to their fastest pace in 23 years, at an annualized 3.2% growth level.

However, the inflation release appeared to be subdued. On reflection of the data, it was apparent that a sales tax recently implemented in April encouraged additional consumer expenditure. Despite the sales tax encouraging consumers to purchase, household spending actually contracted by an annualized 4.6%. The overall conclusion was that with household spending contracting and a recent sales tax contributing towards the inflation surge, the current CPI levels will not be sustainable. The IMF promptly dismissed the BoJ’s previous assertion that their inflation targets are achievable, proclaiming that the BoJ’s 2% CPI target will not be achieved until at least 2017. Currently, economists are in agreement with the IMF, and predicting further BoJ easing later this year.

In surprising news, the GBPUSD fell towards its lowest valuation in over a month, following a week of mixed economic performances from the United Kingdom economy. The week ended on a positive note, after a survey from the Confederation of British Industry (CBI) announced the strongest level of economic growth in over a decade. However, this survey was released after the GBPUSD record losses, following the news that mortgage approvals declined in April.

Previously, BoE Governor Mark Carney raised eyebrows when he emphasized that the UK housing sector posed one of the biggest risks for the UK economy, hinting towards the consensus that the UK economic revival had been driven by consumer lending. With the BoE set to disappoint the bulls by maintaining interest rates at 0.5% this coming Thursday, further GBPUSD losses could be forthcoming.

Elsewhere, the Reserve Bank of New Zealand previously announced their dissatisfaction with the higher valued Kiwi, indicating that it would lead to worsening fundamentals for their economy. Last week’s economic disappointments provided validity to their assertion. New Zealand’s Trade Balance missed the $636 million expectation, registering in at $534 million. Further data displayed that exports declined by 6.5% last month, with imports rising by 5%. Further economic weakness was displayed when business confidence declined sharply last month. Overall, since the RBNZ made their dovish comments, the NZDUSD has fallen around 250 pips.

What to Watch this Week:

The upcoming week will likely witness a significant increase in market volatility, with a highly anticipated interest rate decision from the ECB, and a US jobs report standing out as the events more likely to have a significant impact on the currency markets. Interest rate decisions are also released in the coming week from Australia, Canada and the United Kingdom.

In reference to the ECB, the EURUSD has already depreciated by nearly 500 pips (3%) since Mario Draghi stated during last month’s ECB policy meeting that if inflation levels show no signs of progressing, the ECB are “comfortable” with acting in June. Since Draghi’s threat last month, a continuation of EU metric data has alerted the bears, and 90% of economists are predicting another interest rate cut this coming Thursday. Only 8% of economists are expecting the ECB to introduce asset based purchases (QE). Interestingly, nearly 95% of economists asked by Bloomberg are expecting the ECB to become the first major central bank to introduce negative deposit rates (though that was not specified as expected to happen this month). 

The other major market mover over the next week will be the release of the latest US Non-Farm Payrolls. Last month’s NFP was their strongest in the past 5 years, and within the last month, we have witnessed a consistent decline in Initial Jobless Claims. As mentioned in our previous market report, there are emerging indications that the Federal Reserve is beginning to transition towards offering a more hawkish outlook regarding the US economy. Another impressive NFP will facilitate this process. Currently, economists are estimating that just over 200,000 jobs were created within the US economy last month.

Although the majority of attention over the upcoming week will be focused on the European and American markets, we are also expecting volatility from Australia. This coming Tuesday, the RBA will announce their latest interest rate decision, where they are expected to leave rates unchanged at a record-low 2.5%. However, the key event risk from Australia could in actual fact be Wednesday’s GDP announcement.

During the latest RBA minutes, the Reserve Bank of Australia set alarm bells ringing when they disclosed that the Australian economy is set to welcome a period of weaker than expected economic growth. This has worried onlookers that Wednesday’s GDP release may fail to meet expectations. 

Written by Jameel Ahmad, Chief Market Analyst at FXTM.

 

For more information please visit: Forex Time

13 Accidental Inventions That Changed the World

Necessity isn't always the mother of invention. Lots of the things we rely on to cure our diseases, cook our meals, and sweeten our days weren't deliberately designed. Instead, they were a happy accident.

Read on to see how society-shaping inventions -- from Coca-Cola to penicillin and the microwave oven -- came about by chance.

Alyson Kreuger contributed additional research to this article.

1. Penicillin

Inventor: Sir Alexander Fleming, a scientist.

What he was trying to make: Ironically, Fleming was searching for a "wonder drug" that could cure diseases. However, it wasn't until Fleming threw away his experiments that he found what he was looking for.

How it was created: One day in 1928, Fleming noticed that a contaminated Petri dish he had discarded contained a mold that was dissolving all the bacteria around it. When he grew the mold by itself, he learned that it contained a powerful antibiotic -- penicillin -- used to treat ailments ranging from syphilis to tonsillitis. Thanks to penicillin and other antibiotics, the rate of death due to infectious disease is now one-twentieth of what it was back in 1900.

2. Coca-Cola

Inventor: John Pemberton, pharmacist.

What he was trying to make: Living in Atlanta in the 1880s, Pemberton sold a syrup made of wine and coca extract he called "Pemberton's French Wine Coca," which was touted at a cure for headaches and nervous disorders.

How it was created: In 1885, Atlanta banned the sale of alcohol, so Pemberton created a purely coca-based version of the syrup to be mixed with carbonated water and drank as a soda. The result was a perfect beverage for the temperance era -- a "brain tonic" called Coca Cola.

3. Chocolate-chip cookies

Inventor: Ruth Wakefield, owner of the Toll House Inn.

What she was trying to make: Wakefield just wanted to make some chocolate cookies.

How it was created: While mixing a batch of cookies in 1930, Wakefield discovered she was out of baker's chocolate. As a substitute she broke sweetened chocolate into small pieces and added them to the cookie dough. She expected the chocolate to melt, making chocolate cookies, but the little bits stuck.

4. Potato chips

Inventor: George Crum, a chef at the Carey Moon Lake House in Saratoga Springs, New York.

What he was trying to make: Crum was trying to serve a customer French fries in the summer of 1853.

How it was created: A diner kept sending his French fries back, asking them to be thinner and crispier. Crum lost his temper, sliced the potatoes insanely thin and fried them until they were hard as a rock. To the chef's surprise, the customer loved them.

5. The Pacemaker

Inventor: John Hopps, an electrical engineer.

What he was trying to make: Hopps was conducting research on hypothermia and was trying to use radio frequency heating to restore body temperature.

How it was created: During his experiment he realized if a heart stopped beating due to cooling, it could be started again by artificial stimulation. This realization led to the pacemaker in 1951.

6. Silly Putty

Inventor: James Wright, an engineer at General Electric.

What he was trying to make: During World War II, the United States government needed rubber for airplane tires, boots for soldiers, and the like. Wright was trying to make a rubber substitute out of silicon, since it was a widely available material.

How it was created: During a test on silicon oil in 1943, Wright added boric acid to the substance. The result was a gooey, bouncy mess. While he couldn't find a practical application, the impracticality of Silly Putty is what makes it awesome.

7. Microwave ovens

Inventor: Percy Spencer, an engineer with the Raytheon Corporation.

What he was trying to make: In 1946, Spencer was conducting a radar-related research project with a new vacuum tube.

How it was created: While experimenting with the tube, a candy bar in Spencer's pocket started to melt. Already a holder of 120 patents, Spencer grabbed some unpopped popcorn kernels and held them by the device.

Sure enough, they started to pop. Spencer knew he had a revolutionary device -- and an enabler to lazy cooks everywhere.

8. LSD as a drug

Inventor: Albert Hofmann, a chemist.

What he was trying to make: He was researching lysergic acid derivatives in a laboratory in Basel, Switzerland in 1938.

How it was created: Hofmann unintentionally swallowed a small amount of LSD while researching its properties. He subsequently had the first acid trip in history, marking the entry of a drug that would become a theme of undercurrent culture, most signified the Beatles' "Lucy in the Sky with Diamonds."

The psychedelic has had its mark on tech, too: Steve Jobs said that taking LSD was "one of the two or three most important things" he had done in his life.

9. Saccharin

Inventor: Constantine Fahlberg, a researcher at Johns Hopkins University.

What he was trying to make: Fahlberg was trying to find a new use for coal tar back in 1879.

How it was created: Home from a long day at the lab, Fahlberg noticed that his wife's biscuits were way sweeter than usual.

The secret ingredient: The chemical that would eventually be known as saccharine had been on his hands after the lab work. The researcher immediately requested a patent and mass produced his product.

10. Post-it notes

Inventor: Spencer Silver and Art Fry, researchers in 3M Laboratories.

What he was trying to make: In 1968,Silver made a "low-tack" adhesive at 3M, but he couldn't find a use for it.

How it was created: Silver's adhesive was remarkable for the fact that you could stick something light to it -- like a piece of paper -- and pull it off without damaging either surface. What's more, the adhesive could be used again and again. He tried to find a marketable use for the product for 3M for years, to seemingly no avail.

Years later, his colleague Fry found himself frustrated when he couldn't find a way to stick papers into his book of hymns at the church choir. And like that, the idea for the Post-it was born -- though it wasn't until 1980 that it was launched nationwide.

11. Scotchgard

Inventor: Patsy Sherman, a chemist for 3M.

What she was trying to make: In 1953,Sherman was assigned to work on a project to develop a rubber material that would not deteriorate from exposure to jet aircraft fuels.

How it was created: An assistant accidentally dropped the mixture Sherman was experimenting with on her shoe. While the rest of her shoe became dirty and stained, one spot remained bright and clean. She retraced her steps and identified the stain resistant compound, known today as Scotchguard.

12. Corn Flakes

Inventor: John and Will Kellogg, brothers and breakfast entrepreneurs.

What they were trying to make: The brothers were trying to boil grain to make granola.

How it was created: In 1898,the brothers accidentally left a pot of boiled grain on the stove for several days. The mixture turned moldy but the product that emerged was dry and thick. After a few experiments, they got rid of the mold -- and created Corn Flakes.

13. The Slinky

Inventor: Richard Jones, a naval engineer.

What he was trying to make: In 1943, Jones was trying to design a meter to monitor power on battleships.

How it was created: Jones was working with tension springs when one of them fell to the ground. The spring kept bouncing from place to place after it hit the floor -- the Slinky was born. 

Culled from www.entrepreneur.com

3 Free Website to Organically Grow Your Presence Online

Sharing valuable content can grow your expertise and influence online. Lots of up-and-coming entrepreneurs want to create organic and cost-effective buzz about their products and services but aren’t sure how to get started without hiring a PR agency. Whether you have a PR staff or not, there are still several influential online outlets for sharing high-quality content and valuable information that will help you spread your influence.

Here are three great sites you can write for that will help you expand your influence -- and they’re all free.

1. Medium: Started in 2012 by Twitter co-founders Evan Williams and Biz Stone, Medium is a collaborative writing space to share your writing. The user interface is simple and easy to navigate and you can call on other writers for help with editing, ideas and more. It’s a highly social place such as Tumblr or Blogger (another of Williams’ projects) that’s designed to cater to writers and readers the way Tumblr caters to socially sharing images. The site even tells you in the article how long it should take you to read. You can create a free profile and join this prolific, highly social and inviting community to meet cool people and write great content.

2. Slideshare: Slideshare is a great resource for information as well as to create original content to share. The content on slideshare tends to focus on presentations, giving you the maximum information in the most condensed format. As the site has grown, the content has evolved. You can now find incredible infographics, common documents and videos. The site is free and increases your likelihood of having your content go viral as this voracious community is constantly sharing and promoting.

3. Quora: This question-and-answer-based platform has grown exponentially over the years and seeks to be the information hub of the internet. Think of it like a social Wikipedia. Ask any question you can imagine and get answers from any manner of experts and casual bystanders. The most popular questions rank highest on the site for the best exposure, so make sure your query is a broad-reaching topic you’re truly interested in. Better yet, build your own expertise and qualifications by answering open questions. Responses are voted on by other Quora members and the better your answer, the higher it will rank. It’s a simple concept that can be a fascinating experience as both the asker and answerer.

Culled from www.entrepreneur.com

CBN extends mortgage banks' recapitalisation by six months

FRESH facts emerged last week that the Central Bank of Nigeria (CBN) may have shifted by six months the deadline for the recapitalization of Primary Mortgage Institutions (PMIs) in the country.

 The apex bank had initially granted the mortgage firms a 12-month deadline from November 1, 2011, which would have terminated by December 12, 2012, but extended to 18 months, by April 30, 2013. Another circular was issued in March 20, 2013 to extend the date to December 2013, which according to CBN will afford all affected PMBs sufficient time to exercise any of the options for capital raising, business combination and downscaling.

It was revealed that CBN gave six months moratorium to some mortgage banks that have a national spread, that already made payment of N2.5 billion for state license to close their  branches or upgrade to N5 billion national license. In the circular, the firms are expected to close their branches nationwide, if they could not comply with the new directive by the end of June.

  The new extension will also enable CBN officials to verify PMBs submissions and allow sufficient time for capital verification and necessary regulatory approvals.    Sources disclosed some of the affected mortgage banks, including a federal institution are seeking further injection of funds to retain their national spread.

   Under the fresh guidelines, mortgage firms have been categorized into National and State mortgage firms, while the National PMIs are allowed to operate in any or all parts of the federation after the payment of a new N5 billion minimum paid up capital, the State PMIs are restricted to only one state at the payment of N2.5 billion.

  Sources further disclosed that the mortgage firms led by its national body –Mortgage Banking Association of Nigeria (MBAN) have lobbied the CBN’s Other Financial Institutions Department (OFID) to soft pedal on the announcement of the about 38 PMIs that have been adjudged to be financial sound and undergone recapitalization to limit crisis of confidence rocking the sector.

   It was further gathered that series of talks have taken place between some of the recapitalized and non-recapitalized banks in move to ensure soft landing for most mortgage firms through mergers and acquisitions.  This was confirmed by one of the affected mortgage institution, who disclosed that a deal was recently brokered to shift customers’ liability to the new firm

.

 Recently, CBN explained that its rationale for the State PMIs is to promote the spread of mortgage firms across the six geo-political zones to further embed the objective of financial inclusion and national PMBs will provide options for operators to remain in business at different authorisation levels, and similar to other banking segments.

  It is a known fact that the sector is facing a harsh economic down turn, notwithstanding the global economic crisis as the scarcity of long-term funds are hitting the operators hard. The short-term funds are mostly sourced from the money market, where commercial banks also complete for funds

.

   Their cash flow is also hampered by their inability to tap into the National Housing Fund (NHF), and becoming a window for the collection of the fund, which has prompted MBAN to liaise with the Federal authorities, local financial institutions and international development agencies to float a Mortgage Refinancing Company.

Sourc: Guardian Newspaper

Apple buys Dr Dre's Beats for $3bn as company returns to music industry

 Apple on Wednesday confirmed its long-awaited deal to buy headphone-maker Beats Electronics for $3bn. With the purchase, the largest acquisition in its history, Apple is also bringing on a hip-hop artist and entrepreneur who recently bragged about the riches he hoped to score in the deal.

Two Beats co-founders – artist-entrepreneur Dr Dre, who called himself "the first billionaire in hip-hop", and record industry executive Jimmy Iovine – will join Apple as part of the agreement.

For three weeks, since the Financial Times first reported that the two companies were in talks, speculation has raged among the tech intelligentsia over the two strange bedfellows: Apple, with its diverse platform of products, and Beats, which is currently known mainly for its headphones and speakers.

Curiosity about the strategy sent Wall Street analysts into the realm of gossip in trying to explain the deal. Five days ago, Nomura research analysts quoted a rival maker of audio-visual equipment, AV Concepts, speculating that the real value of Beats was only $1bn when investment firm Carlyle Group bought a stake in it a year ago. AV suggested to Nomura that "Apple’s objective of this deal should be Beats’ new music streaming service, which competes with Spotify and Pandora," according to a Nomura note to clients dated 23 May.

Apple's iTunes, once the dominant force in paid music downloads, has become more of a window-shopping venue. RBC Capital Markets analyst Amit Daryanani pointed recently to Billboard statistics estimating that only "1-2% of consumers hit ‘download/buy’" when listening to iTunes Radio.

Subscription-based music is dominating among consumers, Daryanani told clients on 9 May, pointing to statistics from music-industry group IFPI that showed subscription-based music revenues were $1.1bn in 2013 – up 50% – while downloads fell 2% to $3.9bn, their first decline in history.

The size and scale of the deal may reflect Apple's determination to make a splash. The company has struggled to show investors and the public that it can innovate without Steve Jobs, with no significant new products announced since the iPad several years ago.

The company has seen its stock price fall and attracted unwanted attention from activist shareholders including David Einhorn and Carl Icahn, who’ve none-too-gently suggested that Apple should make better use of its approximately $150bn hoard of cash.

While Apple has responded to the investor complaints by returning cash to its shareholders and splitting its stock, the company has struggled to prove it can continue to innovate and, in the words of Steve Jobs, tell the consumer what he wants.

The Beats acquisition addresses the issue of innovation, to some extent, as Apple is, in addition to the company itself, buying two executives who know the music industry as well as anyone. As RBC's Daryanani wrote earlier this month, "another potential from a deal could be that Jimmy Lovine could help run AAPL's iTunes/ music strategy, which has been challenged in the recent quarters. He was one of the first industry executives to anticipate the download business’s decline and advocate for subscription and streaming services as music’s future."

In an interview Wednesday with Re/Code, Cook called Iovine and his team “creative souls, kindred spirits”.

In a statement about the purchase, Apple, perhaps trying to remind investors and consumers of its once-magical touch, made reference to the birth of iTunes, which transformed the company when it launched.

"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," .company CEO Tim Cook said in a statement.

Source:TheGuardian(UK.)

China's Global search for Energy

Whether by diplomacy, investment or in extreme cases, force, China is going to great lengths to satisfy its growing hunger for energy to fuel its expanding car fleet and electrify its swelling cities.

The Chinese government showed that desire on Wednesday when it reached a 30-year natural gas deal with Russia, even as China was locked in a tense standoff with Vietnam over a Chinese oil rig drilling in the contested South China Sea.

The two events involve different political dynamics. The agreement with Russia reflects closer economic ties between the two nations, while the other underscores the growing tension of two on-again, off-again Cold War allies.

But both developments demonstrate China’s expansive approach to energy, a political and economic strategy with significant implications for the rest of the world. As its economy has rapidly expanded over the last decade, China’s energy efforts have come to dominate the global markets. Its mushrooming consumption helped prompt the spike in global oil prices in the mid-2000's.

China’s demand has also provided life support to coal producers suffering from declining use in the United States and other industrialized countries. Among the fastest-growing importers of natural gas, China has had to cement its ties to Russia to diversify its supplies, as well as to invest in exploration in the United States and liquefied natural gas terminals in Australia. China now has operations, investments or projects across the globe in Africa, the Middle East, South America and North America.

“The dynamic growth of China’s economy and energy growth is reshaping global energy markets, and both the economic and strategic implications are still being developed,” said Mark J. Finley, BP’s general manager for global energy markets and United States economics.

The shift has been swift. China used only half as much energy as the United States in 2000. Nine years later, it surpassed the United States as the world’s biggest energy user and last year it leapfrogged the United States as the No. 1 oil importer.

China now burns as much coal as the rest of the world combined. The country’s emissions of greenhouse gases, linked by scientists to global warming, surged past the United States’ emissions a decade ago and have risen ever higher since then.

China has little choice but to look beyond its borders for its energy needs. While it consumed 10.1 million barrels of oil a day last year — one-ninth of the world’s total — the country produced only 4.2 million barrels a day, according to a recent OPEC report. China has had mixed results drilling offshore, and it has been slow to develop what many energy experts believe to be vast shale gas resources on land, though Chinese energy executives express optimism.

“The China market feels that the revolution in shale gas will be coming very soon,” Zhang Mi, chairman and president of Honghua Group, an exporter of drilling rigs, said in an interview while at a Houston energy technology conference this month. He added that 100 shale gas land rigs would be put in operation by the end of the year.

Most energy experts think it will take another five to 10 years, though, before substantial amounts of gas can be produced — and even then the quantities may be small compared to China’s enormous needs. The two main shale gas areas are in the west, far from major energy users in the east, and pipelines are few.

More important, shale gas in China mainly lies significantly deeper underground than in the United States and is in poorly understood, geologically complex formations. The domestic oil industry is already struggling with safety and environmental concerns, and faces a challenge in drilling extremely deep wells in western Chinese terrain with pockets of compressed natural gas and toxic gases.

China’s hunt for natural gas reserves at home has taken it into some of the poorest, most remote mountain valleys of western China, where terraced fields of mustard greens and corn cascade down hillsides from mud-brick farmhouses. While some of the country’s energy giants, like Sinopec, are using modern drilling rigs, smaller Chinese companies are also trying to jump into the industry, although many have minimal experience or technical expertise.

China’s reliance on imports poses the same kind of foreign policy challenges that the United States has faced in recent decades. That is, the country must look to unstable areas of the world to meet its needs.

China imports much of its oil from the Persian Gulf region and through the Strait of Hormuz, where security is dependent on the United States Navy. China relies on roughly a half-million barrels a day from Iran.

But American sanctions on Iran have made that country a less reliable source of oil. At the same time, China has been receiving fewer crude shipments from Libya, Sudan and South Sudan. The Energy Department recently reported that China has nimbly replaced those declining sources with imports from Oman, the United Arab Emirates, Angola, Venezuela, Russia and Iraq.

China’s relations with energy-rich countries differs widely. The situation in Vietnam seems extreme, with ships from both countries ramming each other, and the Chinese naval forces using water cannons against the Vietnamese. China’s moves to exert claims to contested Asian waters have drawn protests from its neighbors as well as from the Obama administration.

But in Iraq, where China is the biggest oil customer and Chinese oil companies are major investors in some of the biggest oil fields, the Chinese have been scrupulous about staying out of Iraq’s strained sectarian affairs. And they do not seem eager to challenge the United States’ influence in the region.

China has also become a major player in an area traditionally dominated by the United States, Latin America. But China is largely forging ties with oil-financed governments that promote a socialist ideology and seek to distance themselves from the United States, namely Ecuador and Venezuela.

In Ecuador, China has become effectively the government’s banker, providing roughly 60 percent of Ecuadorean borrowing needs in return for oil shipments. Chinese companies sell the Ecuadorean oil around the world, including to the United States. Venezuela’s state-owned oil company is repaying China for $40 billion in loans procured over the last six years with a large share of its 600,000 barrels a day in oil shipments.

Africa has proved a more difficult place to invest, showing the limits of Chinese influence. Chad last year indefinitely suspended the activities of the state-owned China National Petroleum because of oil spills south of the capital, N’Djamena. Chadian officials claimed that the Chinese forced local workers to clean up the mess without adequate protection.

A subsidiary of another Chinese oil company, Sinopec, was forced to pay Gabon $400 million in January to settle what the government said was a breach of contract at an onshore oil field. Premier Li Keqiang this month highlighted China’s enduring interest in Africa by visiting four countries, including oil-rich Angola and Nigeria.

The new gas deal with Moscow should strengthen Russia and China, both economically and politically. It will help China ease some of its dependence on insecure transit routes and unstable countries. It will also guarantee an energy market for Russia if Europe seeks to replace Russian energy with imports from other countries.

Russia could supply 38 billion cubic meters of natural gas annually — or more than 15 percent of current demand — to China beginning in 2018. Perhaps most important, the deal should enable China to replace some of its dependence on coal for electricity generation with natural gas.

“The Chinese public will appreciate being able to industrialize without billows of toxic smog,” said Jim Krane, an energy expert at Rice University. “And the world will appreciate the reduced carbon emissions if cleaner gas can thwart some of the coal consumption in China’s power grid.”

Source:The 

New York Times

25 foreign, local investors jostle for Mainstreet Bank

Twenty five foreign and local banks are jostling to buy Mainstreet Bank Limited barely two weeks after the nationalised bank was officially put up for sale by the Asset Management Corporation of Nigeria.

AMCON, the bad debt manager created after the banking sector crisis of 2009, on Wednesday disclosed that 25 financial institutions and investment groups had submitted Expression of Interest to buy the bank.

Mainstreet and Enterprise banks, two of the three bridge banks owned by AMCON, would be sold on or before September 15 this year, the Managing Director, AMCON, Mr. Mustafa Chike-Obi, had stated last week.

He added that Keystone Bank Limited, the third bridge bank, would be sold some time next year.

Afribank Plc, Bank PHB Plc and Spring Bank Plc were taken over by AMCON after the banking crisis and renamed Mainstreet Bank, Keystone Bank and Enterprise Bank, respectively.

AMCON had said the Federal Government’s plan was to sell the banks to private investors.

A statement on Wednesday by the Head, Corporate Communications, AMCON, Mr. Kayode Lambo, said that the 25 banks, which had submitted EOIs to buy Mainstreet Bank, would be required to submit some documents after which they would be allowed to examine the bank.

The statement read in part, “The Asset Management Corporation of Nigeria hereby announces the successful completion of the submission of Expressions of Interest phase of the divestment of its shareholding in Mainstreet Bank.

“In confirmation of the earlier comment made by the corporation that the time frame given was adequate for serious interested parties to submit all requested documents, a total of 25 EOIs were received.

“These spanned a diverse group of interest, which included local and foreign banks, and local and foreign investment groups. It is worthy of note that the number of requests received for this advertisement exceeded expectations and the corporation is impressed with the profiles of the entities.”

However, Lambo noted that the bidding process for the bank had yet to begin, adding that bidding would start after the prospective investors had performed due diligence on Mainstreet.

He said, “Please note that the bidding process has not yet begun. All successful EOI applicants will now be required to submit further information in order to enable the advisers to perform a due diligence on them.

“At the completion of that exercise, the successful applicants will proceed to the next stage, which will be the due diligence phase. That phase is expected to take four to six weeks after which they will be required to submit their bids.

“This process has included a thorough search for reputable advisers who have been engaged. AMCON remains committed to fairness and transparency in the entire process as it looks forward to the next steps in the divestment of its shareholding in Mainstreet Bank.”

Some industry stakeholders had on Tuesday threatened to place a caveat on the bridge banks if AMCON failed to extend the nine-day timeline given to prospective investors to submit their EOIs, arguing that they needed more time to submit their bids.

AMCON, however, stressed that the bidding process had yet to start, noting that prospective investors were only being asked to identify themselves.

The Central Bank of Nigeria had on August 5, 2011, revoked the operating licences of Afribank, Spring Bank, and Bank PHB, which it said did not show enough capacity and ability for recapitalisation.

In their place, the CBN, through the Nigeria Deposit Insurance Corporation, established bridge banks and transferred the assets and liabilities of the three affected banks to the bridge banks.

Under the arrangement, MainStreet Bank took over the assets and liabilities of Afribank; Keystone Bank assumed the assets and liabilities of Bank PHB, while Enterprise Bank took over those of Spring Bank.

Consequently, AMCON acquired from the NDIC the three bridge banks and injected N679bn into them to meet the minimum capital base of N25bn and the minimum capital adequacy ratio of 15 per cent.

MainStreet Bank received N285bn; Keystone Bank, N283bn; and Enterprise Bank, N111bn.

Source: Punch Newspaper.