Tiger Airways in talks with regulators over grounding

Tiger Airways planes have been grounded in Australia by regulators on safety concerns

Tiger Airways will hold crisis talks with Australian regulators to try and counter safety claims and resume its domestic operations.

The Singapore-based low cost carrier's aircraft were grounded in Australia on Saturday by the Civil Aviation Safety Authority (CASA) on safety concerns.

The disruptions come at the start of peak school holiday season, which means less intense price competition.

Shares in Tiger Airways in Singapore plunged almost 20% on Monday.

The airline's domestic Australian flights will be grounded until July 9, but its flights to Singapore are not affected.

Shares of competitors rose sharply as a result, with Virgin Australia jumping 10.5% and Qantas climbing 6.5%.

Chief executive Tony Davis has flown to Australia for talks with the CASA.

The airline said in a statement to the Singapore Stock Exchange that he had been charged with getting its planes back in the air.

Tiger said Mr Davis was going to focus on "assisting Tiger Airways Australia to resume operations as soon as possible."

Tiger operates 10 Airbus A320s domestically in Australia. It moves about 9,000 passengers a day on 60 domestic flights.

It is the first time in Australia's aviation history that an entire fleet has been grounded.

Safety concerns

The grounding of the fleet came after the CASA said its concerns about safety had gone unaddressed by Tiger.

"CASA believes permitting the airline to continue to fly poses a serious and imminent risk to air safety," the regulator said in a statement.

The regulator said it had been closely monitoring the airline and had sent a notice threatening to suspend or cancel its licence over the safety issues.

"The suspension of Tiger Airways Australia follows the issue of a show cause notice to the airline in March 2011."

That notice included instructions for Tiger to improve the proficiency of its pilots, give them more training and to address issues such as fatigue management.

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Sony ranks as Asia's top brand, says Campaign magazine

Despite Asia's much hyped appetite for luxury goods, no designer brands were in the the top 25.

Sony has been ranked top in a survey of Asia's most valuable brands by the marketing magazine Campaign.

The company gained the top spot despite hacking attacks earlier this year that compromised the personal details of 100 million PlayStation users.

Japanese and South Korean consumer electronics brands occupied the top five slots, with Sony trailed by Panasonic, LG, Samsung and Canon.

No Chinese brand names cracked the top 100.

White goods and electronics maker Haier was the highest Chinese brand at 102.

"This year's survey reiterated the challenges Chinese and Indian brands are facing to gain consumer recognition beyond their home markets," the report said.

The highest ranked Indian brand at 89 was Amul, which makes milk products and ice cream.

Source: Campaign

The top five brands were unchanged from last year, reflecting their everyday appeal among Asia's shoppers.

And despite Asia's much hyped appetite for luxury goods, there were no luxury brands in the top 25. Chanel, Rolex and BMW ranked 30th, 42nd and 49th respectively.

Even though Prada listed on the Hong Kong stock exchange this year, it fell almost 100 places from last year's survey to rank 348th.

In China, Taiwan instant noodle brand Master Kong was the most commonly recalled brand after Sony.

The survey was conducted by market research firm TNS, which surveyed 3,322 consumers in Australia, China, India, Japan, Hong Kong, Malaysia, Singapore, Taiwan, South Korea and Thailand.

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Japan finds rare earths in Pacific seabed

The number of seabed mining applications is a growing focus for environmentalists' concern

Japanese researchers say they have discovered vast deposits of rare earth minerals, used in many hi-tech appliances, in the seabed.

The geologists estimate that there are about a 100bn tons of the rare elements in the mud of the Pacific Ocean floor.

At present, China produces 97% of the world's rare earth metals.

Analysts say the Pacific discovery could challenge China's dominance, if recovering the minerals from the seabed proves commercially viable.

The British journal Nature Geoscience reported that a team of scientists led by Yasuhiro Kato, an associate professor of earth science at the University of Tokyo, found the minerals in sea mud at 78 locations.

"The deposits have a heavy concentration of rare earths. Just one square kilometre (0.4 square mile) of deposits will be able to provide one-fifth of the current global annual consumption," said Yasuhiro Kato, an associate professor of earth science at the University of Tokyo.

The minerals were found at depths of 3,500 to 6,000 metres (11,500-20,000 ft) below the ocean surface.

Environmental fears

One-third of the sites yielded rich contents of rare earths and the metal yttrium, Mr Kato said.

The deposits are in international waters east and west of Hawaii, and east of Tahiti in French Polynesia.

Why rare earths are so important to the world's economy

Mr Kato estimated that rare earths contained in the deposits amounted to 80 to 100 billion tonnes.

The US Geological Survey has estimated that global reserves are just 110 million tonnes, found mainly in China, Russia and other former Soviet countries, and the United States.

China's apparent monopoly of rare earth production enabled it to restrain supply last year during a territorial dispute with Japan.

Japan has since sought new sources of the rare earth minerals.

The Malaysian government is considering whether to allow the construction of an Australian-financed project to mine rare earths, in the face of local opposition focused on the fear of radioactive waste.

The number of firms seeking licences to dig through the Pacific Ocean floor is growing rapidly.

The listed mining company Nautilus has the first licence to mine the floor of the Bismarck and Solomon oceans around Papua New Guinea.

It will be recovering what is called seafloor massive sulphide, for its copper and gold content.

The prospect of deep sea mining for precious metals - and the damage that could do to marine ecosystems - is worrying environmentalists.

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Australian retail sales dip, rates to be kept on hold

Analysts were expecting a rise in retail sales

Australian sales of retail goods, such as clothes and shoes, fell unexpectedly in May suffering the biggest drop in seven months.

Retail sales dropped 0.6% compared to the previous month, according to the bureau of statistics. Most analysts had expected a gain of 0.3%.

Other figures out on Monday showed that new home approvals also fell for a second straight month.

The data will strengthen arguments for keeping interest rates on hold.

The Australian dollar weakened slightly after the figures were released.

'Softness across sectors'

The Reserve Bank of Australia (RBA) meets on Tuesday to decide whether to raise interest rates from the current level of 4.75%.

Analysts say that weak consumer demand translated into the drop in retail sales.

"The softness was across sectors and regions, so there's little sign of the pick-up in economic momentum that the RBA was expecting," said Brian Redican of Macquarie Bank.

"The consumer clearly doesn't need any more encouragement from the RBA to stay on the sidelines. It lessens the need for another hike."

In April, retail sales rose 1.2%, revised up from 1.1%. Analysts were expected a pull back after the big bounce but the drop was much more than expected.

Making matters worse is the data on building approvals which fell 7.9% in May.

"All up it's a pretty weak set of data and not encouraging at all," said Michael Turner of RBC Capital Markets.

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Europe's insurers found to be 'robust'

The French insurance industry owns some 9bn euros in Greek debts

A stress test of Europe's biggest insurers has found them to be "robust" despite exposure to Greek debt.

More than 90% of the 221 firms examined met minimum solvency standards even in the most adverse scenario considered.

However, the exercise identified key vulnerabilities, including exposure to sovereign debts, such as Greece's, and natural catastrophes.

The tests were done by a newly-created regulator, the European Insurance and Occupational Pensions Authority.

None of the insurance companies - which comprise at least 50% of the market in each country - was identified.

'Distraction'

Insurance companies have large exposures to Greek and other troubled European government debt.

Not only have the firms invested in Greek bonds, they are also thought to have written insurance on Greek credit risk in the form of credit derivatives.

French insurers own some 9bn euros (£8bn, $13bn) in Greek government debt.

Meanwhile, German insurers have been asked by their government to participate in a plan to relend Greek debts coming due in the next two years, with Allianz having agreed to provide 300m euros.

German insurer Allianz has offered to contribute 300m euros towards a new bail-out of Greece

Besides sovereign debt exposure, the risks facing the insurance industry included:

• big losses on shares and other investments
• a sharp rise in interest rates
• a sharp rise in inflation, meaning the value of insurance claims outstrips premium payments
• major natural disasters
• a failure of the reinsurance market, which insurers rely on to share losses

It is second such set of stress tests for insurance companies, which shadow a similar exercise being carried out on the big banks by the European Banking Authority.

However, unlike the banks being tested, insurers that fail the test will not yet be formally required to top up the capital they hold to absorb future losses.

The latest tests for insurers come at a time when they are still fleshing out a new set of Europe-wide rules for the industry.

The Association of British Insurers has called the stress tests

"The UK insurance industry is currently under great pressure to implement an enormously complex regulatory framework," said the ABI's Peter Vipond.

"Rather than demand stress tests on the basis of a yet to be agreed framework, it would be better to focus on finalising the proposed rules and helping the industry put the infrastructure in place to make them work by 2013," he said.

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Greece crisis: S&P warns of debt default

There have been violent protests against the austerity measures in Greece

Standard & Poor's has warned that current proposals for restructuring Greece's debt would effectively constitute a default.

The ratings agency said plans for the private sector to roll over debts could trigger a default under its ratings criteria.

Last week, the Greek parliament passed tough austerity measures to secure further financial aid.

However, there is a growing sense that a debt restructuring is inevitable.

German and French banks have already agreed in principle to roll over loans to Greece in order to give the country more time to repay its debts.

This could involve effectively reinvesting the proceeds of maturing Greek debt into newly-issued bonds.

Standard & Poor's said that, depending on the circumstances, it viewed "certain types of debt exchanges and similar restructurings as equivalent to a payment default".

The options laid out so far for restructuring Greek debt would constitute such a default, it said.

Shares in European banks lost ground following the downgrade.

In the UK, Royal Bank of Scotland and Lloyds Banking Group both lost about 2.3%, in France Credit Agricole and Societe Generale fell about 2%, while in Germany Commerzbank slipped 1.7%.

Last month, Standard & Poor's downgraded Greece to CCC from B.

Fresh bail-out

Over the weekend, eurozone finance ministers approved the latest tranche of emergency help for the Greek economy.

They will release 12bn euros (£10.4bn, $17.4bn) in the next two weeks to help Greece meet spending commitments and avoid defaulting on its huge debts.

Last week, the Greek parliament passed tough austerity measures demanded by the European Union (EU) and International Monetary Fund (IMF).

MPs backed the measures despite angry protests on the streets of Athens.

Last May, the EU and IMF provided 110bn euros in emergency loans to Greece, and agreed last month to provide another 120bn euros in loans to try and help the country though its debt crisis.

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Plunge in corn prices may ease food inflation

The price of corn suffered its biggest fall for 15 years on Thursday, prompting speculation that the high cost of food may start to ease.

Corn prices fell 10% after a US Department of Agriculture report said that farmers were sowing unexpectedly large amounts of the grain.

The price of other crops, including soybeans, also fell on speculation that future stock levels will remain high.

Corn prices recently hit a record, helping to fuel inflation worries.

The report said farmers in the vast crop regions of Iowa and Minnesota had been planting substantially more grain.

Corn futures, which were just under an all-time high of $8 (£5) a bushel at the start of June, finished 9.9% down at $6.29 on Thursday. At one point, the price was down almost 12%.

Wheat futures ended 8.8% down, with soybeans 2.1% lower. The falls continued on Friday, with wheat futures down almost 2% in early Asia trading.

The Agriculture Department report, which said that far more grain acreage was being planted than expected, came despite recent bad weather in the US mid-west.

"There are some big surprises in this report," said Karl Setzer, commodity expert at the MaxYield Cooperative in Iowa.

The report said farmers had planted 92.282 million acres with corn this spring, well above an average trade estimate of 90.767 million acres.

The increase in planting comes as Russia is expected soon to lift a year-long ban on grain exports.

Price delay

More expensive grain has led to food price rises, with everything from meat and cereal to soft drinks costing more in the supermarket.

A huge harvest in August is likely to slow food inflation, which was predicted to rise between 3%-4% this year in the US.

Analysts say it typically takes about six months for changes in commodity prices to feed into retail food prices.

"All of us who perceived tighter [corn] supplies... were proven wrong today," said Jason Ward, an analyst with Northstar Commodity.

However, Mr Ward pointed out that the extra acreage had yet to be harvested and could be damaged by further bad weather.

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Russia rescues Bank of Moscow in record bail-out

The bank's erstwhile head, Andrei Borodin, has fled the country

Russia's fifth largest bank, Bank of Moscow, has been given the biggest bail-out in Russian history.

The $14bn rescue came after another bank, VTB, gained control through a hostile bid, only to uncover bad loans valued at $9bn - a third of the bank's assets.

Bank of Moscow's former head, Andrei Borodin, has fled the country, and a warrant has been issued for his arrest.

The bank was used by ex-Moscow Mayor Yuri Luzhkov to fund property projects.

'Fraudulent lending'

Mr Luzhkov was sacked by Russian President Dmitry Medvedev last year.

In a statement issued in London, Mr Borodin said he was shocked at the size of the bail-out, and claimed that VTB's takeover of the bank was politically motivated.

VTB, for its part, accused Bank of Moscow of committing "fraudulent lending" under Mr Borodin's control, while Russian Finance Minister Alexei Kudrin has called for a criminal investigation.

Under the rescue deal, the Russian central bank will provide a 295bn rouble ($10.6bn) 10-year loan at a negligible interest rate to Bank of Moscow.

Meanwhile, VTB will invest a further 100bn roubles to recapitalise the bank - taking its ownership share from 46% to 75%, enough to qualify for state aid.

VTB, Russia's second-biggest lender, had itself to be rescued by the Russian state to the tune of $6.4bn during the financial crisis.

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Cost of Euro mobile roaming falls

The European Commission wants to make roaming rates the same as domestic rates by 2015

The cost of making and receiving mobile phone calls while travelling in Europe has come down again.

From today, operators cannot charge more than 32p per minute (plus VAT) for outgoing calls, and 10p per minute (plus VAT) for incoming calls.

The new tariffs are the latest in a series of annual price reductions forced on the mobile industry by the European Commission.

Brussels has said it aims to equalise roaming and domestic charges by 2015.

Price regulation was introduced in 2007 by the then commissioner for information society and media, Viviane Reding.

Since then, the maximum call charge has been reduced by approximately 6% per year.

A group of UK mobile operators - O2, Vodafone, Orange and T-Mobile - attempted to challenge the Commission's price-cutting agenda, taking their case to the European Court of Justice.

However, their complaint was dismissed in June 2010.

Along with the lower rates for phone calls, the commission also reduced the wholesale rate of mobile data from 80 euro cents (72p) to 50 euro cents (45p) per megabyte.

Whereas the price cap on voice calls applies directly to the way consumers are billed, the data changes only affect what operators charge each other. There is an expectation, rather than obligation to pass-on the savings.

Operators are compelled to place a 50 euro (£45) cap on users' data consumption, in order to avoid unexpectedly high bills. Customers who wish to continue their data roaming can request to have the limit removed.

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UBS says Axel Weber set to be its next chairman

Mr Weber had been expected to join Deutsche Bank

Swiss bank UBS has said it will nominate former Bundesbank boss Axel Weber to be its next chairman.

The bank said the board would nominate him at the annual meeting in May 2012 and, if elected, he will succeed Kaspar Villiger as chairman in 2013.

Mr Weber headed Germany's central bank from April 2004 to April 2011.

He had been seen as a front runner to succeed Jean-Claude Trichet as chief of the European Central Bank but ruled himself out of the race in February.

The appointment will see a German running Switzerland's biggest bank, while a Swiss, Josef Ackermann, currently heads Germany's biggest bank, Deutsche Bank, although Mr Ackermann is due to stand down in 2013.

The announcement also puts an end to speculation that Mr Weber would succeed Mr Ackermann at Deutsche.

Analysts were surprised by the news but said it was a good move by UBS.

"I think it's positive that they were able to announce it two years in advance. He's a strong candidate who was also in talks to become chairman of the management board at Deutsche Bank, so it's very good news," said Cheuvreux analyst Christian Stark.

"Villiger was always seen as a temporary solution to help UBS get through the crisis and Axel Weber's clearly got more of a connected network into the international banking industry."

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China manufacturing slows as Beijing reins in growth

The manufacturing sector been one of the biggest drivers of growth in the Chinese economy

China's manufacturing sector expanded at its slowest pace in 28 months following government policies to prevent the economy from overheating, according to an official survey.

China's purchasing manager's index (PMI) fell to 50.9 in June from 52 in the previous month.

The PMI is a key an indicator of conditions in the sector, which is a big contributor to China's growth.

China is the world's second-largest economy.

Even though the figure remained above the threshold level of 50, indicating expansion in the sector, the drop from the previous month indicates that growth is slowing.

Beijing has been trying to slow down its credit-fuelled growth in an attempt to prevent asset prices from overheating.

Analysts said the government's policies are starting to hurt the manufacturing sector.

"It think the primary reason is monetary tightening and a reduction of credit," said Sitao Xu of the Economist Intelligence Unit in Beijing.

"Both central bank and the government are taking a hawkish stance to prohibit high credit growth."

'Synchronised slowdown'

Continue reading the main story

“Start Quote

What the government is trying to do is prevent the economy from overheating ”

End Quote Sitao Xu Economist Intelligence Unit

While internal policies are curbing growth in the sector, analysts said that external factors are also playing a key role.

"The other reason is the synchronised slowdown in developed countries," Mr Sitao said.

The recovery in the US has not been as fast as expected, hence demand from the world's biggest economy has been sluggish, he said.

He added that the debt crisis in European countries had also affected demand for Chinese goods from the region.

However, the overall health of the Chinese economy remained robust, despite the slowdown in manufacturing, he said.

"I don't think it's the end of the world, we are not seeing a hard landing or a recession," he said.

"What the government is trying to do is prevent the economy from overheating."

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Eurozone manufacturing growth at 18-month low

The figures showed weakness across the board

Growth in the eurozone's manufacturing sector lost steam in June as both exports and domestic demand slowed, falling to an 18-month low, a key survey has shown.

Markit's Manufacturing Purchasing Managers' Index (PMI) fell to 52.0 last month from 54.6 in May, its lowest reading since December 2009.

Any reading above 50 indicates growth.

"Increasing numbers of countries are showing signs of sliding back into recession," Markit said.

Italy's manufacturing sector shrank for the first time in 20 months, while Spain's contracted for the second month in a row.

Growth in the German and French sectors slowed considerably, while the UK's manufacturing expansion fell to a 21-month low.

Gilles Moec, senior European economist at Deutsche Bank, said the data reflected two main factors: inflation hampering consumer demand and the end of stimulus measures in a number of regions, including the US.

"The weakness is no longer simply in the peripherals, it's now moving to Italy for instance," he told the BBC.

"This is painting a different picture from the one we had a few weeks ago."

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Plunge in corn prices may ease food inflation

The price of corn suffered its biggest fall for 15 years on Thursday, prompting speculation that the high cost of food may start to ease.

Corn prices fell 10% after a US Department of Agriculture report said that farmers were sowing unexpectedly large amounts of the grain.

The price of other crops, including soybeans, also fell on speculation that future stock levels will remain high.

Corn prices recently hit a record, helping to fuel inflation worries.

The report said farmers in the vast crop regions of Iowa and Minnesota had been planting substantially more grain.

Corn futures, which were just under an all-time high of $8 (£5) a bushel at the start of June, finished 9.9% down at $6.29 on Thursday. At one point, the price was down almost 12%.

Wheat futures ended 8.8% down, with soybeans 2.1% lower. The falls continued on Friday, with wheat futures down almost 2% in early Asia trading.

The Agriculture Department report, which said that far more grain acreage was being planted than expected, came despite recent bad weather in the US mid-west.

"There are some big surprises in this report," said Karl Setzer, commodity expert at the MaxYield Cooperative in Iowa.

The report said farmers had planted 92.282 million acres with corn this spring, well above an average trade estimate of 90.767 million acres.

The increase in planting comes as Russia is expected soon to lift a year-long ban on grain exports.

Price delay

Corn futures recently reached a record high of almost $8 a bushel at the start of June

More expensive grain has led to food price rises, with everything from meat and cereal to soft drinks costing more in the supermarket.

A huge harvest in August is likely to slow food inflation, which was predicted to rise between 3%-4% this year in the US.

Analysts say it typically takes about six months for changes in commodity prices to feed into retail food prices.

"All of us who perceived tighter [corn] supplies... were proven wrong today," said Jason Ward, an analyst with Northstar Commodity.

However, Mr Ward pointed out that the extra acreage had yet to be harvested and could be damaged by further bad weather

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Sourcing goods from low cost world markets and selling it locally

• Business Opportunity: There are thousands of products available to source, you may find the best products which you can judge and ensure the quality will be liked by local buyers. For example if the product market price is 100, your cost price is 25 for buying 10000 quantity, so u may sell same at price 40-50, the buyer will sell at 75-95 or even 100 who buys the product from you. Its a simple fact that no retail buyer will buy 10,000 quantity of 1 product to reduce the cost, and the price gap in market will remain open. If we take a product example, mass volume can be of help like buying 10,000 laptops of 1 model.
• Process: You may order a single product, test the quality, use it for a sufficient period of time  Do a research with locals, friends and associates if they like the sample product which you have ordered,  and then once you are satisfied with it then order a large bulk order.
• Ordering: Ensure that the bulk order is done with escrow or bank guarantee so that your money is safeguarded from any fake sellers in the market. The goods can be purchased from manufacturers in asia & countries where the product price available is the best compare to global pricing competition.
• Custom Duties: You need to check locally if there are any custom duties applicable for import of the product in large scale.
• Selling the goods locally: The goods will be easily sold to distributors as the market price comparison will be in favor of your product as well as quality of goods with firm test done from your side in process of purchase. Do a thorough research that the goods available locally with your product make a better stand in the market.
• Financing the goods: Goods for purchase can be financed with 10-20 friends along in a group, or it can be done through bank , most banks where you have a bank account from long time and have a sufficient reputation will surely grant a finance for goods, moreover a 30% of funds finance has to be generated to provide to the seller, and if you get advance payments from your local buyers against the goods it could work really well.
• Foreign Exchange: Check the currency pricing at the time of purchase of goods, buy them at the best timing so that you earn in foreign exchange as well.
• Results: Finally it depends what products you bring in, what price, quality and quantity which will result in profit and key business for you

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Japan's retail sales dip less-than-forecast in May

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Retail sales in Japan fell less-than-forecast in May as the country starts to recover from the 11 March earthquake and tsunami.

Retail sales fell 1.3% in May compared with the same month last year, according to the latest government data.

However, compared with the previous month, retail sales rose by 2.4%.

Analysts said that the numbers were an indicator that the Japanese economy was starting to recover.

"The pace of decline has slowed, reflecting a quick recovery from the damage to supply chains," said Hioshi Miyazaki of Shinkin Asset Management Company.

Natural factor

While improving supply chain conditions have played their part in better output from Japanese factories, analysts said that natural factors such as the weather was also playing a part.

"Summer clothing seems to have sold well due to the hot weather in May," said Junko Nishioka of RBS Securities.

"This trend may continue in June and beyond," she added.

Mari Iwashita of SMBC Nikko Securities added that a change in weather may have a positive affect, not just on retail sales but also on other areas of the economy.

"A hot summer could result in more spending, especially with corporations allowing employees to take longer summer holidays." said Mr Iwashita.

"The picture may not be bad if summer bonuses are spent domestically, such as on travel," he added.

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Citigroup banker pleads not guilty to $19.2m theft

 

A former Citigroup banker has pleaded not guilty to charges that he stole $19.2m in the "ultimate inside job".

Prosecutors say Gary Foster, a 35-year old former vice president at Citigroup, moved the money from two separate accounts at the bank to his own account at JP Morgan Chase.

The offence is said to have taken place between May 2009 and December 2010.

Mr Foster, who left the bank in January this year, faces 30 years in prison if convicted.

The alleged 18-month fraud went unnoticed until a recent internal audit at the treasury department of the bank.

A Citigroup investigator then alerted the authorities, according to an affidavit from the Federal Bureau of Investigation.

Mr Foster is said to have made eight separate transfers of up to $3.9m (£2.5m) by putting in fake contract and deal account numbers before transferring them to his personal account.

US attorney for the Eastern District of New York, Loretta Lynch, said in a statement: "The defendant allegedly used his knowledge of bank operations to commit the ultimate inside job."

Citigroup said in a statement: "We are co-operating fully to ensure Mr Foster is prosecuted to the full extent of the law."

No date has been set for the next hearing in the case. Mr Foster has been released on $800,000 bail.

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Christine Lagarde named IMF chief

 

France's Christine Lagarde, 55, has been named the first woman to head the International Monetary Fund (IMF).

The announcement of her appointment came soon after she received the backing of the US and Russia.

Ms Lagarde, the French minister of finance since June 2007, was up against Mexico's Agustin Carstens. An IMF statement said that both candidates "were well qualified".

The post became vacant following the resignation of Dominique Strauss-Kahn.

"The results are in: I am honoured and delighted that the board has entrusted me with the position of MD of the IMF!" Ms Lagarde said via Twitter minutes after the announcement.

In a statement, the IMF said: "The executive board of the International Monetary Fund today selected Christine Lagarde to serve as IMF managing director and madame chairman of the executive board for a five-year term starting on July 5, 2011."

Ms Lagarde, it said, was "the first woman named to the top IMF post since the institution's inception in 1944".

The 24-member board called both Ms Lagarde and Mr Carstens, Mexico's central bank governor, "well-qualified candidates" and that it decided on Ms Lagarde "by consensus".

Mr Strauss-Kahn resigned abruptly on 18 May after being arrested in New York for an alleged sexual assault.

'Indispensable institution'

Ms Lagarde toured the world drumming up support for her candidacy.

There were initially reports that many IMF members wanted the next managing director to come from an emerging market economy.

The IMF's David Hawley announces Christine Lagarde's appointment

But in the end Ms Lagarde won over some powerful allies among developing nations, including Brazil and China.

The US, which along with Russia came out in favour of Ms Lagarde just hours before the appointment was announced, said her experience would be invaluable.

US Treasury Secretary Timothy Geithner said in a statement: "Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy."

Her immediate task will be to deal with the efforts of the IMF and European Union to resolve the Greek debt crisis and prevent contagion to other eurozone economies.

Before becoming France's finance minister, she was minister for foreign trade for two years.

Prior to moving into politics, Ms Lagarde was an anti-trust and employment lawyer in the US.

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Greece: Top Italian banker says Europe's banks can help

 

The boss of Italy's biggest bank says Europe's banks can work together with European institutions to help Greece.

"I think there is room for strong collaboration," said Corrado Passera, chief executive of Intesa Sanpaolo.

On Monday, French President Nicolas Sarkozy said French banks had agreed to extend their loans to Greece.

Eurozone officials are trying to find a way for banks to support Greece's bail-out without the country being judged to have defaulted on its debt.

Credit ratings agencies have warned that if banks agree to extend their loans to Greece, even voluntarily, they may judge it to be a debt default, which would cause even more problems for Greece.

President Sarkozy's idea was that when banks are repaid money they are owed by Greece, they should keep 30% of it, re-lend 50% of it to Greece for 30 years and put the remaining 20% into a special fund of high-quality bonds, which would insure them against a future Greek debt default.

French banks have the biggest exposure to Greek debt, while Italy has relatively low exposure.

The deal may be unpopular with Germany, because the new bonds would be insured by eurozone bail-out funds.

The French plan has yet to be agreed either with eurozone leaders or the Greek government.

BBC business editor Robert Peston says the real problem with the proposals is that there has been no attempt to reduce the amount of money that Greece owns, unlike in the Brady bonds for indebted countries such as Mexico, Argentina and Brazil, on which President Sarkozy's plans were based.

Nonetheless, German banks are reported to be very interested in the French model being discussed.

They were discussed by a group of international bankers, who met eurozone officials to discuss the crisis on Monday.

Also, the head of the eurozone's rescue fund, Klaus Regling, is talking to the ratings agencies to explore ways to avoid a second bail-out being considered a default.

European policymakers, notably the European Central Bank, are concerned that the bail-out could force European banks to recognise billions of euros in losses on Greek debts they currently hold, and could also trigger payouts on credit derivative contracts.

Credit derivative contracts are, in this case, bets that Greece will default on its debt. They are used partly as insurance by banks that have bought Greek bonds.

The Greek parliament is discussing a new range of austerity measures, which include introducing income tax on earnings of 8,000 euros (£7,142, $11,600), and is due to vote on the package later in the week.

The ruling party has 155 seats in a 300-seat parliament. Polls suggest the proposals are opposed by three quarters of Greece's 11 million population.

The austerity measures must be agreed before Greece can get its hands on the latest slice of the original 110bn euro support package.

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Free Business Start Up Ideas: Junk Removal

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Italy bank shares dive on credit rating alert

Unicredit was one of the banks whose shares fell sharply in the wake of the Moody's warning
Shares in leading Italian banks fell sharply after the credit ratings agency Moody's said it may downgrade their status.
Moody's report, published late on Thursday, put 16 Italian banks and two government institutions on review for a possible mark-down.
Shares in the country's biggest bank, Unicredit, lost 5.5%.
Intesa Sanpaolo, Italy's second-largest bank, and Monte Paschi also dropped. Trading was suspended in some banks.
Other factors weighing on bank shares included fears that Italian banks could be forced to raise more capital as a result of imminent stress tests.
Credit ratings help investors to determine the strength of an institution or company.
They affect the rate of interest a borrowing organisation must pay. The weaker the credit rating, the higher the cost of borrowing.
Moody's put Italy's public debt on review for possible downgrade amid concerns about low growth and high public debt, which at 120% of gross domestic product (GDP) is one of the highest in Europe.
Greece's debt is 150% of GDP.

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US consumer spending fails to rise in May

Falling car sales were partly blamed for the unchanged consumer spending

US consumer spending was unchanged in May, the first time there has been no growth since September 2009.

Adjusted for inflation, spending contracted by 0.1% compared with the month before, according to the Commerce Department.

Consumer spending accounts for about 70% of US economic activity.

Incomes grew by 0.3% in the month, which was 0.1% above the rate of inflation, reversing a 0.1% inflation-adjusted decline in April.

"While there are no major surprises, there is little good news in this report," said David Sloan at IFR Economics.

"The data does show that core inflationary pressures have gained some momentum."

Falling car sales were partly blamed for unchanged consumer spending, which may be partly connected to production shortfalls following the disruption to car parts producers caused by Japan's earthquake and tsunami.

Also, petrol prices peaked at more than $4 a gallon in May, but have since fallen back, which economists say may increase consumer spending in the following months.

"It was a little bit of a blow to consumers from the higher energy prices and the supply chain issues," said Stephen Stanley at Pierpont Securities in Stamford, Connecticut.

"We'll see a nice rebound in third-quarter GDP on the back of full production in the auto industry."

April's figure was also downgraded to show a 0.3% growth in spending, which equates to a 0.1% decline after inflation is taken into account

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Greece: French banks ready to roll over loans, Sarkozy

Nicolas Sarkozy is trying to forge a plan for French banks to give Greece longer to repay

French President Nicolas Sarkozy says his country's banks would help Greece by giving it 30 years to repay.

France's Figaro newspaper said banks are ready to relend - or roll over - 70% of loans they hold.

The plan is being worked out by the French government and bankers.

Greece, which has not yet exhausted all its first 110bn-euro (£98bn, $158bn) bail-out, is already standing by for further rescue loans expected to be up to 120bn euros.

Losses

However, the German government and others have been pressing for banks and other private-sector lenders to Greece to be involved this time round.

German banks are reported to be very interested in the French model being discussed.

A group of international bankers are currently meeting eurozone officials in Rome to discuss the crisis.

The matter is fraught because credit rating agencies, who determine the credit-worthiness of borrowers, have already said they will view any roll-over of loans by banks as a technical default, something that is tantamount to bankruptcy.

The head of the eurozone's rescue fund, Klaus Regling, is talking to the ratings agencies to explore ways to avoid a default rating.

European policymakers - notably the European Central Bank - are also concerned that the move could force Europan banks to recognise billions of euros in losses on Greek debts they currently hold, and could also trigger payouts on credit derivative contracts.

'Restart the system'

Meanwhile, in earlier comments, Axel Weber, the former president of Germany's central bank, said the piecemeal approach to Greece's debt problems would not work.

Mr Weber said EU governments should accept that at some point they would need to "restart the system".

The ex-Bundesbank chief said the current options for Greece were either a default with debt writedowns, or for Europe to guarantee all Greece's debts.

He said that repeatedly offering aid would only work for a limited time.

Mr Weber - who was once seen as a likely candidate to run the European Central Bank - said: "There are, unfortunately, only very limited options: Either a default or partial haircuts or a guarantee for the outstanding amount of Greek debt."

He added that "the current piecemeal approach of repeated aid programmes inevitably leads to the latter solution. At some point you've got to cut your losses and restart the system."

Opposition

This week is another crucial one for the indebted country.

The Greek parliament will discuss a new range of austerity measures, which include introducing income tax on earnings of 8,000 euros (£7,142, $11,600).

The ruling party has 155 seats in a 300-seat parliament and polls suggest the proposals are opposed by three quarters of Greece's 11 million population.

On Sunday, Greece's deputy prime minister said some of the key cuts and fundraising measures may not be passed.

They must be agreed before the country can get its hands on the latest slice of the 110bn euro support package.

The country cannot stay financially afloat without that.

Protestors were again out on the streets on Monday and a two-day national strike is planned for Tuesday.

Previous demonstrations have culminated in riots.

Contamination

Meanwhile, two major investors have warned of the gravity of the situation facing Europe.

The joint head of the world's biggest bond fund manager, Pimco, has said Greece's sovereign debt restructuring is inevitable.

And leading investor George Soros, who reportedly made £1bn when the pound crashed out of the euro's forerunner, the ERM, said the world was on the brink of another disaster.

"Let's face it: we are on the verge of an economic collapse which starts, let's say, in Greece but could easily spread," he said.

Mr Soros said it was almost inevitable that one or more eurozone country would exit the single currency.

Britain's "big four" banks - Lloyds , Barclays, Royal Bank of Scotland and HSBC - have a relatively small exposure to Greece.

They have a larger exposure to other struggling eurozone economies, particularly Ireland and Spain.

France's banks hold around 15bn euros in Greek government debt.

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Enterprise Investors tips IT, retail, manufacturing, finance

Cristian Nacu, president of South Eastern Europe’s Private Equity Association (SEEPEA) and partner in Polish investment fund Enterprise Investors provides some insight into the activity of both organizations, their plans for the future and the hot investment domains for private equity funds on the local market.

Otilia Haraga

Give me an example of when SEEPEA has lobbied the Romanian authorities during your term?

Recently, the EU introduced a law for the regulation of the private equity and hedge funds market. This must be implemented by all member states in their national legislation. We will try to contribute to the creation of this legislation, which should be done in conformity with the EU law but also adapted to the Romanian context. However, the main directions have not yet been defined.

What are the criteria for a company to become a member of SEEPEA?

It must be an investment fund which operates in the territory of eight countries that are part of SEEPEA: Romania, Bulgaria, countries from the former Yugoslavia. They can also be suppliers of services, consultancy firms, law firms or audit firms. More recently, we have been trying to attract banks as members.

What domains would be hot for a private equity firm in Romania?

Private equity firms generally focus on sectors in the consumer industry. They either offer financial services for the end user, are manufacturers or retailers. Generally, our firms are linked in one way or another to the end user. This is also because Romania is a relatively large market compared to the neighboring countries, which makes it more attractive, but also because these firms are generally more dynamic.

What is EI’s investment budget for 2011?

There is no allotted budget at the level of each country. Traditionally, let’s say we manage to invest up to EUR 150-200 million a year. From this sum, there are sometimes some investment projects in Romania. So far, over the last six years, we have invested around EUR 200 million in Romania, which is a ratio of probably 20 percent of the funds invested in the entire region.

We invest from two funds: one is a buyout fund which buys major stakes in large companies, which total EUR 20-25 million. From this fund, there is around EUR 60-70 million left to invest in the region.

The other is a venture capital fund where there is EUR 50-60 million left to invest. This fund generally targets minor stakes in small companies. Investments made from this fund are between EUR 1 million and EUR 5 million. In total there are ten target countries. Romania is the largest investment portfolio after Poland by proportion of the total funds that have been invested so far.

When EI decided not to invest in certain projects anymore, what were the reasons?

There are many reasons. Most of the time, we did not agree on the price. Other times, the business did not perform. Usually, it takes more than six months from the moment you start a transaction until it is concluded. Sometimes, the business did not perform as expected in that time span and ceased being attractive to us. The financial crisis was another reason.

What projects has EI invested in over the past year or two? What now?

In the past year we have only invested EUR 3 million in Smartree, which we bought in 2010. A year earlier, we bought the Profi store chain. These were the transactions we have made over the last 12-14 months. Our investment rate is probably two companies a year. We are looking at firms in retail, IT, manufacturing and financial services. But our policy is to announce it after we have carried out the transaction.

What would be interesting for an investment fund on the IT market in Romania?

There are many areas. The difference that the growth of the internet and the appearance of iTunes, iPhone and iPad have made is that it allowed any smart programmer with entrepreneurial spirit to become an international player overnight. Everyone is just a click away from the world market. There are tens of thousands of applications on iTunes, and some of them are Romanian applications. There are also opportunities in e-commerce, and other types of services such as financial services.

How quickly does EI make an exit from a firm?

The average rate of keeping an investment for us is four to four and a half years. Recently, this has been even longer because the crisis delayed some exits, so we may keep firms even for five or six years. We only want to sell when the business can turn in its deserved value and this can depend on the circumstances. In theory, it’s four to five years, but in practice it can go up to seven years. Of course, Romania was more affected by the crisis than elsewhere, but the difficult times were everywhere. 2009-2010 were poor years all over Europe and many exits were delayed even there, so the situation in Romania is not different.

What profits does EI make from an investment?

There are companies which we sold at a profit that was eight times the invested sum, others that we sold for a much lower profit. On average, we get back two and a half to three times the money we invest after this period of four or five years.

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Developer Oasis launches commercial property management division in Romania

Retail developer Oasis has launched its Shopping Center Services division, which will provide commercial management and technical administration services for the retail sector. The new division will be headed by Brigitte Schmitt (pictured), the former head of the property management division of DTZ Romania. The new division already administers a portfolio of 25,000 sqm of retail space in the projects developed by Oasis Development.

Oasis Shopping Center Services provides technical and commercial management services for retail developments, as well as analysis for tenants mix reconfiguration. The new division plans to have over 100,000 sqm of retail space in administration by the end of the year.

 “Once the Romanian retail market evolves and competition increases, there will be details making the difference in how shopping centers are managed and the tenants mix is chosen. For instance, administration costs of Romanian shopping centers are high, with situations when they are comparable with a second rent. In other European markets, these costs do not exceed 25 percent of the net rent. At the same time, commercial centers should carefully configure their tenants mix so that it is sustainable on the long term,” said Brigitte Schmitt, partner with Oasis Shopping Center Services.

The property and facility management market, which is concentrated mainly around Bucharest, was estimated at approximately EUR 200 million last year, up 10 percent since 2009.

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Bucharest Stock Exchange included in Dow Jones Global Exchanges Index

The Bucharest Stock Exchange BSE was included in the Dow Jones Global Exchanges index, which measures the performance of shares issued by stock exchanges and trading platforms across the world. BSE was effectively included in the index after the end of the June 17 2011 trading session.

The Dow Jones Global Exchanges index is revised quarterly and is calculated based on the price and total yield. On June 8^th of this year the BSE free-float capitalization was of USD 107.4 million.

There are 23 other stock exchanges included in the Dow Jones Global Exchanges Index: ASX Limited (Australia), BM&F Bovespa S.A. Bolsa de Valores Mercadorias e Futuros (Brazilia), Bolsa de Valores de Colombia (Columbia), Bolsa de Valores de Lima (Peru), Bolsa Mexicana de Valores (Mexic), Bolsas y Mercados Espanoles (Spain), Bursa Malaysia (Malaezia), CBOE Holdings (US), CME Group (US), Deutsche Boerse (Germany), Dubai Financial Market PJSC (Arab Emirates), Hellenic Exchanges Holdings (Greece), Hong Kong Exchanges & Clearing (Hong Kong),  Intercontinental Exchange (US), JSE Limited (South Africa), London Stock Exchange Group (UK), NASDAQ OMX Group (US), NYSE EURONEXT (US), NZX Limited (New Zeeland), Osaka Securities Exchange (Japan), Philippine Stock Exchange (the Philippines), Singapore Exchange Limited (Singapore), TMX Group (Canada).

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new 1st Annual Business Event Summit

About the First Annual Business Event Summit

Events are simply things that happen. In day-to-day business activity, Business Events happen everywhere, all the time. Many are orderly and highly repetitive, but others can be difficult to detect or predict, or rare. How can you manage and exploit all these Business Events more effectively? How can you respond to Business Events instantaneously and selectively in a manner that scales and supports your business processes? What do you need to know about Business Events to do your job better?

Technology to manage Business Events, called complex event processing (CEP), is entering the IT mainstream, opening exciting new opportunities for building better business capabilities. Early adopters have already demonstrated impressive ROI in terms of productivity, early discovery, customer response, consistency, security, and more.

Hear what leading practitioners and engineers are saying about what is possible. Learn how others have achieved Business Event Management and talk with the leading vendors in the space. Participate in shaping breakthrough business innovation and refining the analysis techniques needed to exploit Business Events to their fullest. Join us at the Business Event Summit, the first-ever conference of its kind.

• The business benefits of managed Business Events
• How Business Events support Business Rules and Decisions
• What Business Events can do for Business Analysts
• Business Processes – complementary or mutually exclusive?
• Trends and forecasts for complex event processing (CEP)

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Republicans bail on budget talks, blame Democrats

WASHINGTON – Republicans pulled out of debt-reduction talks led by Vice President Joe Biden with a flourish on Thursday, blaming Democrats for demanding tax increases as part of a deal rather than accepting more than $1 trillion in cuts to Medicare and other government programs.
"Let me be clear: Tax hikes are off the table," said House Speaker John Boehner, R-Ohio.
Boehner spoke shortly after the House GOP second-in-command, Majority Leader Eric Cantor, announced he would not attend a planned negotiating session and said it is "time for President Obama to speak clearly and resolve the tax issue."
White House spokesman Jay Carney quickly obliged, while announcing that the talks were "in abeyance." He said Obama supports a "balanced approach" to debt reduction.
"I would point that the president supports a balanced approach," Carney said. "He does not support an approach that provides for a $200,000 tax cut for millionaires and billionaires paid for by a $6,000 a year hike in expenses and costs for seniors."
Numerous officials have said in recent days that Obama and Boehner would soon take a more public role in the negotiations, as time grows short for confronting politically vexing questions over taxes and Medicare and other benefit programs.
As a result, it appeared that the day's events marked an eruption of political maneuvering rather than a blow-up that would jeopardize the success of negotiations.
In general, the negotiations are aimed at producing legislation to cut future deficits while simultaneously lifting the $14.3 trillion limit on Treasury borrowing.
Treasury Secretary Tim Geithner has said that without an increase in the debt limit by Aug. 2, the United States faces a first-ever default, with potentially catastrophic consequences for the economy.
Carney told reporters that Boehner had met unannounced with Obama at the White House Wednesday evening. The meeting was at the president's initiative, and the first known encounter between the two men since their widely publicized round of golf last weekend.
Nor was it likely Democrats were taken by surprise by the day's events, since Cantor informed Biden of his plans before making any public announcement.
Adding to the intrigue, one GOP leadership aide said Cantor did not inform Boehner of his plan to withdraw from the talks until shortly before he did so. Nor was Cantor aware of Boehner's trip to the White House the evening before, this aide said.
For his part, Cantor said the secretive Biden-led talks had "established a blueprint" for agreement on significant cuts in spending, but had reached an impasse because of the Democratic demand for taxes.
Sen. Jon Kyl of Arizona, the other Republican participant, also said he would not attend the scheduled session, and Senate Republican leader Mitch McConnell spoke in unusually biting terms of Democratic demands for new government spending as part of a debt-reduction deal.
"What planet are they on?" McConnell wondered aloud.
While accepting a need to raise the debt limit, Boehner has said that deficit cuts must exceed the size of any increase in borrowing authority — a position that neither Obama nor any other Democrat has challenged.
The president and Biden were meeting with House Democratic leaders at the White House when Cantor made his announcement.
One of the Democratic negotiators, Rep. Chris Van Hollen of Maryland, said at a news conference that Republicans "are playing with fire and really putting the very fragile economy at greater threat by playing the games that we've been seeing."
In several weeks of talks, Biden and congressional negotiators had largely completed a review of the federal budget, focusing at first on areas where the two sides were amenable to cuts.
They quickly identified higher pension contributions for federal employees as one area of savings, and cuts in farm programs and student loan subsidies as others. Additional items include a federal auction of parts of the spectrum and the sale of surplus federal property. Discretionary programs, which bore the brunt of an earlier agreement to cut spending by $38 billion, would be ticketed for additional cuts.
Other steps had been discussed to rein in future government spending automatically if deficit targets were not reached.
But in recent days, officials said, the two sides were increasingly at an impasse, with Democrats demanding higher taxes to accompany spending cuts, while Republicans ruled out tax hikes and pushed for deeper cuts in benefit programs.
The conflicts long predate the current negotiations.
Republicans long ago branded themselves as the party of lower taxes, while Democrats, looking to the 2012 elections, are already campaigning hard against a new Republican plan to turn Medicare into a system of private insurance coverage beginning with anyone currently under 55 years of age.
Privately, Republicans bristle at the suggestion that taxes be traded off for Medicare. They argue that official reports make it clear that without significant changes, the Medicare program is financially unsustainable.
Yet polls show that while there is general support for spending cuts, there is opposition to benefit cuts in Medicare.
The imperative to cut spending has gained impetus since Republicans won control of the House last fall, benefiting hugely from tea party activists demanding a smaller and less intrusive government.
In addition, sputtering recovery from the worst recession in decades and stubbornly high unemployment have helped form a bipartisan agreement that long-avoided steps are needed to reduce federal red ink.
The Congressional Budget Office warned on Wednesday that unless steps are taken to rein in deficits, the country risks a "sudden fiscal crisis," with investors losing faith in the U.S. government's ability to manage its fiscal affairs.

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