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Paragon Shipping Owes $24 Million on Dry-Bulk Commodity Vessel

Paragon Shipping Inc. (PRGN) , a Marshall Islands-incorporated owner of 16 vessels that haul dry-bulk commodities, owes $24 million on one of its carriers, the Friendly Seas. The amount owed, which is as of Sept. 30, is less than the $36.6 million listed in a company filing with the U.S. Securities and Exchange Commission on Dec. 31, 2010, Robert J. Perri, the company’s Athens-based financial officer, said by e- mail yesterday. Paragon said Jan. 17 the vessel’s charterer asked to change the hire terms of a $33,750-a-day contract scheduled to expire in 27 months. To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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Obama’s Syria Meanderings Border on Incompetence

President Barack Obama risks getting stuck with a rap as toxic as an unpopular war or a troubled economy: incompetence. The president may escape collateral damage if the ambitious deal reached Sept. 14 between the U.S. and Russia holds and Syria relinquishes its chemical weapons. Despite the conventional wisdom, Obama did a pretty good job last week of threading the needle between the imperative to respond to the gassing of civilians by President Bashar al-Assad’s regime and the overwhelming desire of Americans not to get bogged down in another fight. The White House says that what matters is the outcome, not the process. Yet the administration’s overall handing of the Syrian situation, particularly in the last two weeks, has friends and foes shaking their heads. The U.S. government’s response has been anything but measured, coherent and purposeful. It’s hard to argue with Republican Senator John McCain of Arizona that this performance “makes you a little queasy.” This criticism follows earlier complaints, often from Democrats, about the White House’s miscalculations in dealing with irrational Republican demands on debt and deficit issues, and the unwillingness of the president to seek counsel beyond his small comfort zone. Bush’s Missteps Obama’s predecessor was fatally tarred with incompetence in the initial year of his second term. President George W. Bush was politically tone deaf on his top domestic priority of reforming Social Security , insensitive and inept in his handling Hurricane Katrina and floundering from the botched Iraq War and its aftermath. First, in Obama’s defense, his Sept. 10 Syria speech was bifurcated: We’ll be tough against Assad, but not for long. You have to be able to walk and chew gum at the same time. Those two objectives are compatible and rational. Although many details and specifics remain to be worked out, there’s a chance the Russian-led initiative may produce results -- not because President Vladimir Putin is a good guy or wants to help the U.S. -- he’s not and he doesn’t -- but because avoiding military action is in Russia’s self-interest. Susan Eisenhower, the granddaughter of the president and World War II supreme Allied commander (and who herself was once married to a Russian) put it this way: Putin sees an opportunity to elevate his stature on the world stage and wants to ensure that Syria’s chemical-arms stockpiles don’t end up in the hands of Sunni radicals who also pose a threat to Russia. It’s easy to disregard White House spin about how the president shrewdly orchestrated these twists and turns or how he forced Putin to capitulate. Some rank-and-file Obama supporters offer a more compelling defense. “Hamlet-like public messaging by Obama and the White House has confused many,” Louise Dunlap, a longtime Democratic activist, said in an e-mail. “But his determination and capacity to act was not lost on the international community even if people here don’t get it.” To be fair, after a decade of war in Iraq and Afghanistan, the American public is more isolationist than any time since the late 1930s. On public diplomacy, Obama is failing. There is no coherent message, little explanation of the complexities and contradictions created by difficult circumstances. By taking on the role of the agonizingly reluctant warrior on Syria , he has reinforced the country’s skepticism. He announced he was seeking congressional authorization for a military strike on the Saturday afternoon before Labor Day -- not exactly prime time for attracting the nation’s attention. Trusted Advisers Worse, the president reached this decision to turn to Congress after consulting only with his small core of top advisers, none of whom have faced an election. He should have relied on Secretary of State John Kerry , Defense Secretary Chuck Hagel and Vice President Joe Biden , who between them spent 76 years in Congress. Then, there was the confusing display on Sept. 9. Kerry had dismissively raised the possibility that Syria could relinquish its chemical stockpiles if it wanted to avoid a U.S. military response -- a statement that the secretary’s spokesman quickly said was only “rhetorical.” White House aides assailed Kerry’s clumsiness and National Security Adviser Susan Rice warned that the Russians couldn’t be trusted. Only hours later, in interviews with television anchors, the president said he had discussed the proposal with Putin the week before in St. Petersburg and was open to exploring it further. These convolutions didn’t build confidence in the president among politicians, the public, U.S. allies or adversaries. The next several months will be exceedingly difficult for the Obama administration. Syria won’t go away; there will be economy-threatening standoffs over the deficit and the debt ceiling, a hotly debated nomination for the next chairman of the Federal Reserve Board and probably some unanticipated crises. One example: The ongoing investigation of alleged leaks of classified security information from the Obama White House. These days, almost all leak investigations, whether of private citizens or public figures, are a waste of taxpayer dollars. But this one could be embarrassing. When successful presidents reach low ebbs, they reach out. That’s what Franklin Roosevelt did in 1940-41, as did Ronald Reagan after the Iran-contra scandal. On Syria, Obama might have sought guidance from the nation’s foreign-policy graybeards: Jim Baker, George Shultz , Henry Kissinger , Madeleine Albright , Brent Scowcroft, Bill Cohen, Zbigniew Brzezinski and Colin Powell. The optics would have been good; the counsel might have been, too. That, however, isn’t the Obama way. ( Albert R. Hunt is a Bloomberg View columnist.) To contact the writer of this column: Al Hunt in Washington at ahunt1@bloomberg.net. To contact the editor responsible for this column: Max Berley at mberley@bloomberg.net .

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India’s April-June Current Account Gap Widens to $14.1 Billion

India ’s current-account deficit widened to $14.1 billion in the three months ended June 30 from a revised $5.4 billion in the previous quarter, the central bank said in an e-mailed statement today. To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net To contact the editor responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net

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Yahoo’s Ex-Chief Levinsohn Says Turnaround Needs Years

(Corrects references to month in fourth and 11th paragraphs.) Ross Levinsohn , who was interim chief executive officer of Yahoo! Inc. (YHOO) until Marissa Mayer became CEO in July, said his successor will need years and a patient board to turn around the Web portal. “You have to give Marissa and the team that’s there the time to finish the job,” Levinsohn said in an interview with Bloomberg West yesterday, his first since stepping down. “You can’t turn that company or any company of size around in six months or a year.” Levinsohn held the top post at Yahoo less than three months, and had become a candidate to lead the company before the unexpected hiring of Mayer, an executive from Google Inc. (GOOG) tapped to reverse three years of declining revenue at the biggest U.S. Web portal. Mayer, Yahoo’s fifth CEO in three years, is one of several executives attempting to revive the fortunes of a struggling technology icon, including Meg Whitman at Hewlett-Packard Co. (HPQ) and Tim Armstrong at AOL Inc. (AOL) Whitman said in October that a turnaround at HP will be a multiyear effort. “Yahoo is a battleship,” Levinsohn said. “To turn a battleship takes a long time, but once you turn that battleship the right way, it’s a battleship, and it can really inflict some damage on an enemy.” Levinsohn said his departure, announced shortly after Mayer’s appointment, was amicable. “I felt I took a good run at trying to be CEO,” he said. “It was probably the right thing to move on after I didn’t get it.” Growth Challenge Under his brief tenure, Levinsohn resolved a patent dispute with Facebook Inc. (FB) and worked out the final details of a plan for Chinese e-commerce provider Alibaba Group Holding Ltd. to buy back a stake in itself. Among the responsibilities Levinsohn handed off to Mayer is a search advertising pact with Microsoft Corp. (MSFT) , forged in 2009 by another former Yahoo chief, Carol Bartz. Certain terms of the pact are set to expire in April 2013. In the interview, Levinsohn dismissed speculation that Mayer could try to end the partnership in favor of Google, and said he expects Microsoft to be an important ally for Yahoo. “They’ve made improvements in terms of search query, in terms of ad matching, in terms of innovations, in terms of design,” Levinsohn said. “Marissa comes from a real search background. If they can work hand in hand, it should get better.” Yahoo is targeting growth as fast as competitors in online search, display advertising, mobile applications and products such as e-mail, Mayer said on her first call with analysts last month. She may find it challenging to grow e-mail, which does not bring in many new users, Levinsohn said. Signing Up “There is a lot of pressure in the communication space,” he said. “The absolute numbers over the last couple of years for most companies other than Google, who has the advantage of signing up mail users with starts of Android devices, have been relatively flat to down.” Levinsohn, a veteran of social-networking service MySpace and search engine AltaVista, said he’s spending more time at his home in Los Angeles and investing in startups while he decides what he wants to do next. “I’d like to find a place where the people share my interest and passion for changing things.” To contact the reporters on this story: Jonathan Erlichman in New York at jerlichman1@bloomberg.net ; Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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Russian Airline Aeroflot Buys 11 A330-300 Planes From EADS's Airbus Unit

Russian airline Aeroflot bought 11 A330-300 aircraft from Airbus, the planemaker said in an e- mailed statement today.

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Emerging Stocks Rise on Spain Aid Report; Rupee Jumps on Tax Cut

Emerging-market stocks rose, paring the first weekly decline this month, as a report saying European officials will unveil a bailout plan for Spain fueled demand for commodity producers. The MSCI Emerging Markets Index (MXEF) increased 0.8 percent to 1,006.60 by 5:41 p.m. in New York, trimming this week’s loss to 0.7 percent. India’s benchmark gauge jumped to a one-year high and the rupee rallied on tax cuts that added to policy reforms last week. Markets in Chile, Turkey and South Korea also gained. Russia’s ruble snapped a four-day decline as oil pared its biggest weekly drop in three months. Samsung Electronics Co. (005930) gained 1.2 percent in Seoul. Global equity funds lured the largest weekly inflows this year after the Federal Reserve and the European Central Bank announced plans to buy bonds to support growth, Cambridge, Massachusetts-based EPFR said in an e-mail. Spanish Economy Minister Luis de Guindos is in talks with European Commission authorities to facilitate a new bailout program, the Financial Times reported, citing unidentified officials involved in the discussions. “What’s happening with Spain talking to EU introduces a positive sentiment in the market, because if Spain asks for aid, it can potentially unlock ECB action,” Sebastien Barbe , the head of emerging markets research and strategy at Credit Agricole CIB, said by phone from Paris today. “You have quite good opportunities in emerging markets and markets just want to be sure that improvements in Europe are going to be effective.” ETF Gains The iShares MSCI Emerging Markets Index (VXEEM) exchange-traded fund, the ETF (EEM) tracking developing-nation shares, increased the most this week, gaining 0.2 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, slid 5.3 percent. The BSE India Sensitive Index (SENSEX) surged 2.2 percent, its highest close since July 25, 2011. The rupee strengthened 1.7 percent against the dollar. Today’s tax cuts come after Prime Minister Manmohan Singh last week ended a 14-month freeze on diesel prices and opened retailing and aviation industries to foreign investments. ‘Economic Reform’ “This move by the Finance Ministry is welcomed by the market as the government is showing firm commitment in economic reform and rules out uncertainty over potential policy reversal,” Societe Generale SA strategists, including Wee-Khoon Chong in Hong Kong, wrote in an e-mailed note today. Reliance Capital Ltd. (RCAPT) climbed 10 percent to the highest since April 3 in Mumbai. Reliance Infrastructure Ltd. (RELI) jumped 9.7 percent and GMR Infrastructure Ltd. rallied 11 percent. The Bovespa slipped 0.6 percent amid concern stimulus measures in the U.S. and Europe might not be enough to boost a Brazilian recovery, dimming the outlook for the country’s raw- material exports. Petroleo Brasileiro SA, Brazil ’s state- controlled oil company and Vale SA, the world’s biggest iron-ore producer, fell by one percent or more. Stock funds attracted $17 billion in the week ended Sept. 19, while about $3.2 billion was invested in emerging funds, EPFR Global said. Ruble Strengthens The ruble gained 0.7 percent against the dollar and the rand strengthened 0.3 percent. The Standard & Poor’s GSCI gauge of 24 raw materials climbed 0.9 percent. Oil jumped 1.1 percent to $92.89 a barrel on the New York Mercantile Exchange , snapping a four-day decline. Nickel, lead and zinc rose more than 0.5 percent. Russia is the world’s largest energy exporter, while metals and other commodities accounted for 45 percent of South Africa’s exports in 2011, according to government data. MSCI’s developing-nations measure has rallied 6.3 percent this month, beating a 4.6 percent advance by the MSCI World Index of developed-country shares. The emerging-market gauge trades for 11.3 times estimated earnings, compared with the MSCI World’s average multiple of 13.5. The Hang Seng China Enterprises Index added 1 percent in Hong Kong. South Korea ’s Kospi index climbed 0.6 percent. Samsung Electronics, the world’s largest maker of televisions and mobile phones, posted its biggest gain in a week. The stock, the MSCI Emerging Markets Index’s biggest member , fell 2.5 percent for the week, the most this month. China Cosco Holdings Co., the world’s largest operator of dry-bulk ships, gained 3.8 percent. The Baltic Dry Index, a measure of commodity shipping costs, rose 4.6 percent yesterday to its highest close since Aug. 13. To contact the reporters on this story: Ian Sayson in Manila at isayson@bloomberg.net ; Sridhar Natarajan in New York at snatarajan15@bloomberg.net To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net ; Vernon Wessels at vwessels@bloomberg.net

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Minnesota Shutdown, Wisconsin Recalls Show States Mirror Washington Split

Minnesota’s government is in its third week of a shutdown. In Wisconsin, vacations have been interrupted by nine recall elections. California lawmakers approved a budget with only Democratic votes and Montana ’s Democratic governor vetoed 79 bills from the Republican- dominated Legislature. As Congress and the White House are again in showdown mode, deadlocked over a measure to raise the U.S. debt ceiling, state capitols are becoming more confrontational and adopting the partisan traits of political Washington , according to some governors at the National Governors Association conference in Salt Lake City that ended yesterday. The tensions complicated efforts to close combined 2012 deficits estimated by the Washington-based Center on Budget and Policy Priorities at $103 billion as states navigated the fourth consecutive year of budget-cutting. “It’s ironic that governors tend to demonize Washington even as they practice some of the same arts at home,” Larry Jacobs, a political scientist at the University of Minnesota , said in a telephone interview yesterday. While some Democratic and Republican governors at the three-day meeting condemned the debt-limit gridlock in Washington, the effects of political polarization fester in several states. The Minnesota shutdown, which began July 1, was caused by a standoff between Democratic Governor Mark Dayton , who sought a tax increase, and the Republican-controlled Legislature, which opposed it. The impasse halted state construction projects, closed parks and agencies and idled 23,000 employees. Dayton and legislative leaders plan a special session as early as today to approve a deal and end the shutdown, according to the Associated Press. Recall Elections An unprecedented number of recall elections, to remove elected officials from office, are slated in Wisconsin after Republican Governor Scott Walker and the Republican-led Legislature enacted curbs on collective bargaining for most state government employees. The economic downturn has forced almost every state to make deep spending cuts to balance its budget. Some, like Illinois , have raised taxes, although with no Republican votes. Recall efforts have begun in Michigan in protest of education cuts approved by the Republican Legislature and Republican Governor Rick Snyder. ‘The Same Rhetoric’ “I listen to some of the clips today about the rhetoric in Washington and I hear the same rhetoric in North Carolina ,” Democratic Governor Beverly Perdue said at a news conference July 14. “It’s almost a playbook about the next election.” Perdue last month vetoed a $19.7 billion budget approved by the Republican-led Legislature that cut agencies and scaled back environmental controls, while letting a temporary one-cent sales tax expire along with some income taxes on high earners. Lawmakers overrode the veto on party lines. In California , Governor Jerry Brown sought to cover part of a $26 billion deficit by extending expiring taxes and fees. He needed the votes of four Republican lawmakers to put the issue to a statewide vote and began to woo the legislators in January. Talks went into June as Republicans used their power to block his tax plan to jockey for cuts to public pensions and to environmental and business regulations. Ultimately, Brown dropped the revenue effort and the state budget was passed only with the votes of Democrats. Intra-Party Disputes Not all the conflicts are partisan. Arizona Governor Jan Brewer, a Republican, called a special session of the Legislature, which is controlled by members of her own party, to change state law allowing extended unemployment benefits paid by the federal government. Lawmakers refused on philosophical grounds, immediately stopping assistance to 15,000 people and costing the economy almost $3.5 million a week. There’s a time to “stand your ground,” Oklahoma Governor Mary Fallin, a Republican, said in an interview, “but I also think you should find common ground.” “I don’t think it’s helpful when you have standoffs and shutdowns of the government, whether it’s at the state level or the federal level, because we’re dealing with issues that affect the American people,” said Fallin, a former representative in Congress. Determining where and when to take that stand is the challenge. Most states, including New York , approved budgets without disruption. Still, the level of conflict has escalated around the country, said Missouri Governor Jay Nixon, a Democrat. The battles have become fight-to-the-finish struggles. ‘Lack of Civility’ “We’re all concerned with the lack of civility,” Nixon said in an interview. “We all know that our states and our country are more complex than what a donkey or an elephant might say on a particular issue,” he said, referring to the symbols for the major political parties. The current political climate has sharpened partisan divisions on taxes and spending and discouraged bipartisanship, Nixon said. “It’s not a sign of strength to join with others and make incremental gains,” Nixon said. Jacobs, the Minnesota professor, said partisanship at the state level has grown because many moderates in both political parties have been “chased out” and bipartisan consensus is discouraged. “It’s the same story we’re seeing in Washington, and it’s playing out in all these states,” Jacobs said. Wisconsin ’s War Wisconsin is at political war. Both parties and their traditional support groups have pledged to spend millions of dollars on the August recall elections because control of the state Senate is at stake. Walker, whose approval rating dropped to 37 percent in a University of Wisconsin Badger Poll released July 13, faces the prospect of a separate recall next year. “In the end, what calms things down is results,” Walker said in an interview, adding he believes the changes he pushed in Wisconsin will be accepted by taxpayers. Rhode Island Governor Lincoln Chafee, an independent who was previously a Republican U.S. senator, said he expects divisions at the state level “to get worse.” In fact, governors at their national meeting decided not to issue what was to be a bipartisan letter urging Congress and the White House to settle their differences on the debt ceiling. “Everybody agreed, absolutely bipartisan, Republicans and Democrats” that the debt ceiling needs to be raised, said Washington Governor Christine Gregoire, a Democrat who chaired the governors’ meeting. The letter didn’t materialize, she said, because the governors needed time to reach consensus on a larger plan for taxes and spending cuts, and felt their message had already gotten out through the media. “I think the point is every governor that I know of thinks it is important to raise the debt ceiling,” said Mississippi Governor Haley Barbour, former chairman of the Republican National Committee. “But there are very significant differences among governors” on how to get there, he said. To contact the reporters on this story: Timothy Jones in Salt Lake City at tjones58@bloomberg.net ; Amanda J. Crawford in Salt Lake City at acrawford24@bloomberg.net To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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Bunge Boosts Ethanol Ratio at Brazil Mills as Sugar Declines

Bunge Ltd. (BG) , which accounts for about 10 percent of global sugar trading, said its cane mills in Brazil are “maximizing” production of ethanol as the price of the gasoline additive rises. Ethanol currently accounts for close to 65 percent of the mix at its eight mills on average, Alberto Weisser , chairman and chief executive officer of White Plains , New York-based Bunge, said today in a telephone interview. That’s an increase since February, when the ratio was 59 percent ethanol and 41 percent sugar. Ethanol prices are rising as Brazil recently boosted gasoline prices, announced lower taxes on ethanol and increased the blend rate to 25 percent starting in May from 20 percent now. The weekly spot price of ethanol that is blended with gasoline in Brazil gained 25 percent in the six months through April 19 while the most-active raw sugar futures traded in New York dropped 12 percent. Bunge, which bought its first sugar mills in Brazil in 2007, struggled to run its mills at their full capacity of 21 million metric tons last year because of lower cane-sugar yields and ethanol prices. Bunge’s sugar and bio-energy segment, which made up 7.6 percent of sales last year, reported a $23 million profit before interest and taxes in the first quarter compared with a $33 million loss a year earlier, the company said today in a statement. The segment helped Bunge report first-quarter earnings of $1.15 a share, topping the 91-cent average of 10 analysts’ estimates compiled by Bloomberg. Production Ratio Industrywide, mills in Brazil’s Center-South region, the biggest cane producer, got 53 percent of sales from sugar and 44 percent from ethanol during the 2012-2013 crop year, Antonio de Padua Rodrigues, director of trade group Unica, said today. If sugar availability is lower later in the year as the industry shifts production toward ethanol, Bunge will “balance in a way that maximizes profit” and meets client commitments, Weisser said. Bunge has a “single-minded focus” on reducing per-unit costs in the sugar and bio-energy segment by continuing to plant more cane, increasing co-generation, choosing farmers and leasing land closer to mills and boosting yield per hectare, Weisser said. Bunge has been planting cane for the last several years, with 70,000 hectares sown last year and about 60,000 hectares planned this year, Weisser said. Bunge rose 6.8 percent to $72.97 in New York. The shares are little changed this year. Weisser will step down June 1 as CEO and be replaced by Soren Schroder, the head of Bunge’s North American unit, the company said Feb. 7. To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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Banks Find Few Signs of Default Distress in Repo, Credit Markets

U.S. banks searching for hints of credit-market distress ahead of next week’s deadline to raise the debt ceiling are finding few signs of panic so far. Commercial banks and securities firms are tracking how money-market funds adjust holdings and whether participants in repo markets, where financial firms obtain short-term financing, change terms for collateral including Treasuries, according to executives in charge of finance operations at five of the largest U.S. banks. They are also looking for disruptions in commercial paper and swaps markets, said one of the people, who declined to be identified because the deliberations are private. Lenders are making contingency plans in case President Barack Obama and Congress fail to reach agreement before an Aug. 2 deadline. Commercial banks are focused on a potential downgrade to the U.S. debt rating, with a default considered unlikely, said the executives. With less than a week to the deadline, key market indicators have remained stable. “If the debt ceiling was such a problem, there’d be a lot more volatility in the credit markets,” said Leon Wagner, who co-founded GoldenTree Asset Management LP, a New York hedge fund focused on debt markets. “What we’re seeing is really just statistical bouncing around a normal trend line. That’s healthy in credit markets.” The average rate for borrowing and lending Treasuries for one day in the repurchase-agreement market was 9 basis points yesterday, according to index data provided by the Depository Trust & Clearing Corp. The rate was 26.6 basis points on Aug. 2, 2010, the data show. Libor Spread The Libor-OIS spread, a gauge of banks’ reluctance to lend, was 13.4 basis points, up from 12.6 basis points a month ago and down from 28.5 a year ago. A basis point is 0.01 percentage point. The Republican-led House remains on a collision course with the Senate and the White House over competing plans to increase the debt limit. Obama has threatened a veto of House Speaker John Boehner ’s two-step plan to raise the debt ceiling. Standard & Poor’s , which has given the U.S. a top ranking since 1941, reiterated July 21 that the chance of a downgrade is 50 percent in the next three months. The ratings firm said it may cut the nation as soon as August. Vikram Pandit, chief executive officer of Citigroup Inc., said he doesn’t expect a default. ‘All Contingencies’ “Obviously as a bank we look at all contingencies,” Pandit said in an interview. “We’re ready with a lot of liquidity, funding, and understand the impact of a downgrade, not only on us but what could happen to the economy.” A downgrade may roil repo markets, where banks and other companies turn to finance holdings and increase leverage, by causing lenders to advance fewer funds against the same amount of Treasuries, raising the so-called haircut, JPMorgan Chase & Co. (JPM) ’s Terry Belton said July 26 on a conference call hosted by the Securities Industry and Financial Markets Association. About $4 trillion of Treasuries are used as collateral in the market for repos, he said. “The more volatile it is, the higher the haircuts in margin requirements tend to be,” said Belton, global head of fixed-income strategy at JPMorgan. “One of the impacts of that in the repo market is it causes the amount of credit that’s being extended, the collateralized lending, to shrink. You force people to de-lever.” Potential Haircuts In so-called bilateral repos, the investors involved would set their own terms on potential haircuts or exclude certain securities as collateral. In the cleared market, the haircuts would be set by the DTCC, which processes about $3.6 trillion in repos transactions daily. “We continue to monitor market volatility in the Treasury market and are assessing if we will need to make any types of adjustments in our valuations of securities required for collateral in our clearing funds,” DTCC spokeswoman Judy Inosanto said in an e-mailed statement. “At this point, this still remains a precautionary exercise.” In Europe , where the Greek debt crisis has sparked concern other nations may default, LCH.Clearnet Ltd., Europe’s biggest clearing house, increased the extra deposit charge for customers holding long positions in Portuguese and Irish government bonds. LCH said it would scale back the use of Portuguese bonds as collateral after that nation’s credit rating was downgraded. Capital One At least one U.S. bank has moved early to avoid any potential disruption. Capital One Financial Corp. (COF) , the McLean, Virginia-based lender completing the $9 billion purchase of ING Direct USA, moved up the release of its second-quarter earnings and a capital raise by about a week. The lender sold $3 billion in debt July 14 and $2 billion in equity a day earlier. “One of the reasons we chose to do that was to take the financing risk off the table,” Gary Perlin, chief financial officer at Capital One and the former finance chief at the World Bank Group, said in an interview. “Uncertainty is never a good backdrop for raising $5 billion in the market.” Some banks have structured their repo transactions so that nothing needs to be rolled over on Aug. 2 or in the following weeks, one executive said. Pacific Investment Management Co. Chief Executive Officer Mohamed A. El-Erian said the most critical indicators of distress will come from the markets. “That’s the very first thing I do now is I go over to our money market desk and ask them, ‘What you are seeing today? How’s the repo market operating?’” El-Erian said in a radio interview on “Bloomberg Surveillance” with Tom Keene. “Because that is what can really trip an economy. So far it’s functioning OK, but we’re seeing some pressure.” ‘Massive Consequences’ El-Erian said there would be “massive consequences” if the U.S. loses its AAA credit rating. Pimco, the world’s biggest manager of bond funds, expects the debt ceiling to be lifted, he said. Banks have called meetings of their asset-liability committees, which govern the use of the balance sheet and interest-rate risk, and run internal stress tests under default or downgrade scenarios, according to one of the executives. Some lenders haven’t gotten answers to questions for guidance posed to the Treasury Department and Federal Reserve , another executive said. “We have been engaged in operational planning with the Treasury,” Fed spokeswoman Barbara Hagenbaugh said. “We expect to be able to give additional guidance to financial institutions when there is greater clarity from the Congress and when Treasury outlines its specific operational plans.” More Liquidity Money-market funds are also preparing by increasing their liquidity, JPMorgan’s Belton said. Prime money-market funds currently have 40 percent of their assets in securities with less than a week to maturity, up from about 32 percent a month ago, he said. “Over the last month both in government money funds and prime, they are shortening the tenor of the assets they’re holding,” Belton said. Treasury Secretary Timothy F. Geithner has said the U.S., which reached its borrowing limit on May 16, will exhaust measures used since then to avoid breaching its $14.3 trillion debt threshold on Aug. 2. The Treasury Department may have cash to delay that deadline for days or even weeks because of higher tax revenue , according to analysts at UBS AG and Barclays Capital. Unrealized Losses If there’s panic and Treasury prices decline, banks may face unrealized losses in their securities portfolio, where many of the largest U.S. lenders hold Treasuries and debt issued by government-sponsored entities such as Fannie Mae. Commercial banks’ total holdings of Treasuries and agency mortgage-backed securities were $1.67 trillion as of July 13, Fed data show, up from $1.11 trillion at the start of 2008. A U.S. credit-rating cut would likely push up the nation’s borrowing costs by increasing Treasury yields by 60 to 70 basis points over the “medium term,” Belton said. That could increase U.S. borrowing costs by $100 billion a year, he said, estimating that the short-term yield increase would likely be about 5 to 10 basis points. A 25 basis-point rise wouldn’t erode bank capital enough to be a concern, one of the executives said. There have been some signs of investor concern. The Treasury yield curve has steepened this month with the difference between the yield on the 30-year Treasury bond and the 10-year note hitting 1.38 percentage points last week, the largest spread since November. Forced Selling Easing concerns for U.S. banks is that they aren’t likely to be forced sellers of Treasuries on a downgrade since capital and risk-weighting rules aren’t tied to ratings, Citigroup Inc. (C) analysts led by Amitabh Arora wrote in a July 22 research note. The Bank Holding Company Act allows banks to hold Treasuries and agencies without limit, said two of the executives. A downgrade to single-A could push some institutions to sell Treasuries, though that’s “extremely unlikely” unless the U.S. government suffers a technical default, Arora wrote. “Given how the market has reacted, I think you have to conclude that most investors see this debt ceiling situation as an opportunity,” GoldenTree’s Wagner said. To contact the reporters on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net ; Michael J. Moore in New York at mmoore55@bloomberg.net. To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

South Africa Stocks Rise to Record as Rand Rout Boosts Miners

South African stocks rose, sending the benchmark index to a record high, as the world’s worst- performing currency this year boosted shares in mining companies that pay costs in rand and generate sales in dollars. The FTSE/JSE Africa All Share Index (JALSH) advanced 0.1 percent to close at 40,652.96 in Johannesburg. Anglo American Plc (AAL) , the country’s biggest mining investor, climbed 2.2 percent after saying it will write down $4 billion of the value of its Minas- Rio iron-ore project in Brazil, at the low end of market estimates, JPMorgan Chase & Co. said. BHP Billiton Ltd. (BHP) , the world’s biggest mining company, jumped 0.9 percent. The rand has declined 6.2 percent this year after Fitch Ratings downgraded the nation’s credit rating on Jan. 10 amid labor unrest in the mining and agricultural industries. Moody’s Investors Service and Standard & Poor’s cut the country’s rating late last year. The weaker rand boosts the value of shares in companies that earn part of their profit offshore. “All these recent highs are definitely being driven by the weaker rand pushing the rand-hedge stocks up,” Greg Katzenellenbogen, a director of Sanlam Private Investments in Johannesburg, said by phone. “You have also seen a big turnaround in Anglo after the write-off.” Capital expenditure for the Minas-Rio project will increase to $8.8 billion, if a risk contingency of $600 million is used in full, London-based Anglo said in a statement. Anglo Rally The cost increase is “lower than the market feared,” Fraser Jamieson, a London-based analyst at JPMorgan Securities Plc, wrote in a note to clients. “A $4 billion post-tax writedown is also toward the lower end of expectations.” Anglo has advanced 5.2 percent this year after a 12 percent decline in 2012. Positive economic data out of China is boosting resources stocks, Katzenellenbogen said. The Johannesburg bourse may rise a further 15 percent this year if the rand remains weak, making dual-listed shares and other rand-hedge stocks attractive to local investors, he said. The preliminary reading of China’s Purchasing Managers ’ Index was 51.9 this month, according to a Jan. 24 statement from HSBC Holdings Plc and Markit Economics. That compares with a 51.5 final reading for December and the 51.7 median estimate of 17 analysts surveyed by Bloomberg News. To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Spain Plans Competition Probe Into Gasoline, Economista Says

Spain ’s competition regulator is planning to publish a report on gasoline refiners including Repsol YPF SA (REP) and Cia Espanola de Petroleos SA after pump prices rose faster than crude, El Economista reported, citing senior officials at the regulator without naming them. Prices at Spanish gas stations touched a record $1.31 euros per liter this year, exceeding the highs reached during the 2008 crude rally prompting the investigation, the newspaper said. To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Certificate of Deposits Reported: India Money Markets

Following is a table showing certificate of deposits reported by Companies. The data has been provided by the Fixed Incom Money Market & Derivatives Association of India. Contributed via: Bloomberg Publisher WEB Service Provider ID: c9e052d5002546b4af997de52ecbc498

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Apache to Buy Burrup Stake, Plans to Sell Project to Orica

Apache Corp. (APA) , the second-largest independent U.S. oil producer by market value, agreed to buy a 65 percent stake in Burrup Holdings Ltd. and said it’s in talks to sell most of Burrup’s explosives project to Orica Ltd. (ORI) The deal will “secure a long-term economically viable market for our natural gas production in Western Australia ,” G. Steven Farris, Apache’s chairman and chief executive officer, said today in a statement. “We do not plan to operate the facility; we will rely on those with extensive experience in this sector.” Norway’s Yara International, owner of the remaining 35 percent in Burrup Holdings, has a right to match any offers by Jan. 31. Yara is assessing its position, Bernhard Stormyr, a spokesman said Dec. 16, after The Australian newspaper reported a deal with Apache had been struck. The facility, which is located in the Burrup Peninsula region of Western Australia , produces 6 percent of the total world output of tradable ammonia with an annual capacity of 760,000 metric tons, according to the statement from Apache, which has supplied Burrup’s ammonia plant with natural gas. Orica is the world’s biggest maker of industrial explosives. Apache didn’t reveal the terms of the deal. The Australian newspaper reported on Dec. 15 that Apache agreed to pay $560 million for the stake. Australia & New Zealand Banking Group Ltd. in December 2010 appointed receivers PPB Advisory to recover loans to Burrup. To contact the reporters on this story: Soraya Permatasari in Melbourne at soraya@bloomberg.net ; Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net ; Andrew Hobbs at ahobbs4@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

India’s New Plants to Use South Africa Coal, India Coal Says

New power plants in India may opt for high-calorific value South African coal instead of lower grade Indonesian supplies, India Coal Market Watch reported, citing an unidentified official from a South African mining company. Supplies of the fuel in India are inadequate and there are infrastructure issues, the industry newsletter said. The higher energy content of South African coal enables utilities to import less and tackle logistics concerns, it said. India Coal Market Watch is published by Kolkata-based mjunction Services Ltd. , an online trading company. To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Hulu’s Owners Said to Discuss Sale of Stake to Time Warner Cable

Owners of Hulu LLC are continuing talks to sell a stake in the video-streaming service to Time Warner Cable Inc. (TWC) after canceling an auction of the entire business, said three people with knowledge of the situation. A deal could be reached within two weeks, said the people, who sought anonymity because the negotiations are private. Time Warner Cable had previously sought to acquire a 25 percent stake in Hulu, they said. Hulu’s owners, Walt Disney Co., Comcast Corp. and 21st Century Fox Inc., today called off plans to sell the service. Meredith Kendall, a spokeswoman for Los Angeles-based Hulu, declined to comment. Maureen Huff at New York-based Time Warner Cable didn’t immediately respond to requests for comment after normal business hours. Reuters reported the discussions with Time Warner Cable earlier. To contact the reporters on this story: Alex Sherman in New York at asherman6@bloomberg.net ; Andy Fixmer in Los Angeles at afixmer@bloomberg.net To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net ; Nick Turner at nturner7@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Google Says Apple, Microsoft, Oracle Wage ‘Hostile Campaign’

Google Inc. (GOOG) accused Microsoft Corp. (MSFT) and Oracle Corp. (ORCL) of waging a “hostile, organized campaign” against its Android mobile software, a sign of escalating tension in the technology industry’s patent war. The company’s rivals are joining forces to purchase patents to keep them out of Google’s hands and taking other steps to make it more expensive for handset makers to use the Android operating system, David Drummond, chief legal officer at Mountain View , California-based Google, said in a blog posting. “We thought it was important to speak out and make it clear that we’re determined to preserve Android as a competitive choice for consumers, by stopping those who are trying to strangle it,” Drummond wrote. Android’s success has resulted in a “hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.” Apple, Microsoft and Google have ramped up spending on patent portfolios in recent months to gain exclusive rights to a broadening array of technology, much of it used in the emerging area of smartphones. As bidding intensifies, prices for patents are surging, fueling concerns that portfolios are overvalued. Oracle sued Google last year, accusing it of patent infringement over the use of Java technology used in Android. “This patent scramble is a land rush for leverage -- leverage over Google, for starters,” said Patrick Walravens , an analyst at JMP Securities. “The best defense in patent legislation is having a bunch of patents of your own.” ‘Patent Bubble’ A group that includes Apple and Microsoft beat out Google in June with a $4.5 billion bid for patents previously owned by Nortel Networks Corp. Rivals are “banding together” to purchase patents they in turn can use to charge fees that will make Android devices more expensive, Drummond said. “This anti-competitive strategy is also escalating the cost of patents way beyond what they’re really worth,” Drummond wrote. “The law frowns on the accumulation of dubious patents for anti-competitive means -- which means these deals are likely to draw regulatory scrutiny, and this patent bubble will pop.” Drummond also cited Microsoft and Apple working together to acquire Novell Inc. (NOVL) ’s patent portfolio as an example of the campaign against Google. Microsoft General Counsel Brad Smith denied that allegation, saying his company asked Google to participate in the bid. ‘They Said No’ “Google says we bought Novell patents to keep them from Google,” Smith said in a message on Twitter. “Really? We asked them to bid jointly with us. They said no.” The U.S. Justice Department is examining the Nortel deal to see whether it hurts competition in the smartphone industry, a person familiar with the matter has said. If the Justice Department doesn’t challenge the transaction, the winning bidders will control more than 6,000 patents and applications that cover wireless technologies. Steve Dowling, a spokesman for Cupertino, California-based Apple, and Deborah Hellinger , a spokeswoman for Redwood City , California-based Oracle, declined to comment. Tricia Payer, a spokeswoman for Redmond, Washington-based Microsoft, also declined to comment. To contact the reporter on this story: Douglas Macmillan in New York at dmacmillan3@bloomberg.net To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

ISRAEL DAYBOOK: Government to Sell 1.5 Billion Shekels of Debt

The Finance Ministry will auction 1.5 billion shekels ($403 million) of government debt. WHAT TO WATCH: * The Bank of Israel will release the minutes of its Aug. 29 rate-setting meeting. * The Central Bureau of Statistics will release figures on the foreign trade balance for August. * Turkish Prime Minister Recep Tayyip Erdogan is in Egypt on the first leg of a tour of three countries that toppled leaders this year. He has signaled an interest in visiting Gaza while there. EQUITY MOVERS: * Delek Group Ltd. (DLEKG) said it will buy all 353,988 shares, or 7.06 percent, of Delek Energy Systems Ltd. (DLEN) that were tendered into the offer in which it sought to buy 1 million shares, or 20.1 percent. * Xfone Inc. (XFN) began a rights offering to existing shareholders in which it hopes to raise $6.1 million. * Melisron Ltd. (MLSR) Chairman Yuli Ofer died yesterday at the age of 87. MARKETS: * The TA-25 Index fell 3.6 percent to 1,024.93. * The yield on the Mimshal Shiklit government bond due January 2020 was at 5.46 percent. * The shekel lost 0.3 percent to 3.7235 per dollar at 8:59 a.m. in Tel Aviv * Corn for December delivery gained 0.1 percent to $7.37 a bushel. * Crude oil for October delivery fell 2 percent to $85.52 a barrel. * Gold for immediate delivery declined 0.4 percent to $1,848.60 an ounce. MEETINGS: Allot Communications Ltd. (ALLT IT), AudioCodes Ltd. (AUDC) , Magic Software Enterprises Ltd. (MGIC) , Nova Measuring Instruments Ltd. (NVMI) and Mellanox Technologies Ltd. (MLNX) are among companies scheduled to participate in the Rodman & Renshaw Global Investment Conference in New York. To contact the reporters on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net ; Susan Lerner in Jerusalem at slerner2@bloomberg.net To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

South Africa Economy Expands Less Than Forecast at 1.4% as Exports Slump

South Africa ’s economy, the biggest in Africa , expanded at an annualized 1.4 percent in the third quarter, less than economists forecast, as manufacturing and mining output slumped. Gross domestic product accelerated from 1.3 percent in the second quarter, Statistics South Africa said today in Pretoria. The median estimate in a Bloomberg survey of 20 economists was for the economy to expand 1.8 percent. “No one was expecting a quarter-on-quarter contraction of that magnitude for mining,” said Razia Khan , head of Africa economic research at Standard Chartered Plc in London , in a telephone interview. “The limited strength that we have seen elsewhere probably isn’t going to be enough to offset this.” South Africa is struggling to meet employment and economic growth targets as the debt crisis in Europe , which buys about a third of South African manufactured goods, pushes that region close to recession. Finance Minister Pravin Gordhan on Oct. 25 cut his growth forecast for this year to 3.1 percent from 3.4 percent, less than half the 7 percent expansion that the government says is needed to meet its target to create 5 million jobs by 2020. The rand strengthened to 8.2777 against the dollar at 1:20 p.m. in Johannesburg from 8.3695 before the data was released. The yield on the R157 government bond, due 2015, slid 10 basis points, or 0.1 percentage point, to 6.9 percent. Mining Slump Manufacturing , which accounts for 15 percent of the economy, contracted for a second consecutive quarter, declining an annualized 1.9 percent in the three months through September. Mining plunged 17.4 percent last quarter compared with a contraction of 4.2 percent in the previous three months, mainly due to strikes in the industry, the statistics office said. The Reserve Bank has kept the benchmark rate at a 30-year low of 5.5 percent this year to support growth in the face of increasing price pressures. Slower growth and a slump in investors’ risk appetite caused the rand to plunge 20 percent against the dollar this year, the worst-performer of 16 major currencies tracked by Bloomberg. A weaker rand has added to price pressures, with inflation accelerating to the 6 percent upper limit of the central bank’s target range in October. The bank will make its next interest rate decision on Jan. 19. “Our view is that the Reserve Bank will leave the repo rate unchanged until the first half of 2013,” wrote Adenaan Hardien, chief economist of Cadiz African Harvest Asset Management in Cape Town , in a note to clients. “With growth weak and below trend, the Reserve Bank is likely to err on the side of keeping rates loose despite upside inflation risks.” The retail industry was the fastest-growing last quarter, expanding an annualized 6.1 percent, while the financial industry, the economy’s biggest, increased 4.5 percent, signaling that consumer spending may be rebounding. To contact the reporters on this story: Andres R. Martinez in Johannesburg at amartinez28@bloomberg.net ; Mike Cohen in Cape Town at mcohen21@bloomberg.net To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Plotters Sold Weapons, Drugs to Supply Taliban, Hezbollah, U.S. Charges

Three people were charged by federal prosecutors in New York with conspiring to sell heroin and buy weapons for Hezbollah , while a fourth separately was accused of scheming to sell drugs and guns for the Taliban. Siavosh Henareh, 53, of Iran , and Cetin Aksu, whose age and nationality weren’t immediately available, are accused of conspiring to sell heroin to three confidential sources for the U.S. Drug Enforcement Administration , according to an indictment. At least one of the sources was posing as an associate of Hezbollah, a Lebanon-based militant group designated as a terrorist organization by the U.S. in 1997. Aksu and a third person, Bachar Wehbe, 29, of Lebanon, are also accused of conspiring to buy surface-to-air missiles, rifles and handguns for Hezbollah from the confidential sources, according to the indictment, which was made public today. Taza Gul Alizai, 48, of Afghanistan , was accused of selling assault rifles and heroin to a confidential source working for the DEA, prosecutors said in a separate indictment also made public today. The source pretended to be a broker of drugs and weapons and told Gul the profits would go to the Taliban , prosecutors said. “Today’s indictments provide fresh evidence of what many of us have been seeing for some time: the growing nexus between drug trafficking and terrorism, a nexus that threatens to become a clear and present danger to our national security,” Manhattan U.S. Attorney Preet Bharara said in a statement. Drug Lord The office has prosecuted international arms and drugs traffickers in the past, such as Haji Bashir Noorzai, an Afghan drug lord with close ties to the Taliban who was convicted of drug charges in September 2008 and sentenced to life in prison in May 2009. Henareh, also known as “The Doctor,” had a series of meetings and phone calls with the confidential DEA sources starting in June 2010 in countries including Turkey, Romania and Greece , during which he agreed to arrange the shipment of hundreds of kilograms of heroin into the U.S., Bharara’s office said in the statement. The confidential sources received a one-kilogram (2.2- pound) sample of heroin in Bucharest in April 2011 from an unidentified co-conspirator of Henareh’s in anticipation of a larger, multi-kilogram delivery, according to the statement. Assault Rifles The meetings with Henareh led the confidential sources to be introduced to Wehbe and Aksu, who agreed during meetings in Romania, Cyprus, Malaysia and other places starting in February 2011 to buy military-grade weapons for Hezbollah, including Stinger and Igla surface-to-air missiles, AK-47 and M4 assault rifles and ammunition, Bharara’s office said in the statement. Gul is accused of selling about five kilograms of heroin to a DEA confidential source in May 2008 and arranging for the sale of six AK-47 assault rifles and 10 kilograms of heroin about two years later to the source, who was posing as a Taliban representative, Bharara’s office said in the statement. Gul and the confidential source talked about the fact that the heroin was destined for the U.S. and that proceeds from the sale of the drug would go to the Taliban, along with the assault rifles, Bharara’s office said in the statement. Henareh and Aksu were arrested in Bucharest on July 25 in coordination with Romanian authorities, while Wehbe and Gul were detained in the Maldives pursuant to a notice issued by Interpol on July 25, Bharara said in the statement. Life in Prison Henareh, Aksu and Wehbe are charged with conspiracy to distribute heroin, which carries a maximum sentence of life in prison, prosecutors said. Aksu and Wehbe are also charged with conspiracy to provide material support to a foreign terrorist organization and conspiracy to acquire and transfer anti- aircraft missiles, which carries a minimum penalty of 25 years in prison. Gul is charged with conspiracy to engage in narco- terrorism, engaging in narco-terrorism, conspiracy to distribute heroin and distribution of heroin. He faces a maximum sentence of life in prison on each charge if convicted. Henareh and Aksu are still being detained in Romania , while Wehbe and Gul pleaded not guilty today in Manhattan and were held without bail pending court appearances, prosecutors said. An attorney representing Wehbe, Philip L. Weinstein of the Federal Defenders of New York, declined to comment on the charges in an e-mail. Alice Fontier, an attorney for Gul, declined to comment on the charges in a phone interview, saying it’s “extremely early in the case” and she needs more time to speak to her client, who was brought to the U.S. yesterday. The cases are U.S. v. Henareh, 11-93, and U.S. v. Alizai, U.S. District Court, Southern District of New York (Manhattan). To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net. To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Bahraini Inflation Eases to Slowest Pace in More Than Two Years

Bahraini inflation eased to its slowest pace in more than two years as housing and utility costs decreased. The inflation rate fell to 0.9 percent in January from 1 percent in the previous month, according to the Central Informatics Organization’s website. The organization on Feb. 21 had reported that inflation eased to 0.6 percent. Housing and utility costs decreased 1.5 percent while food and beverage costs rose 0.5 percent compared with 3.1 percent the previous month. Tens of thousands of Bahrainis, inspired by protests that have toppled the rulers of Tunisia and Egypt , have been demonstrating since last month, calling for increased democracy and job opportunities. Bahrain’s benchmark index has declined 2.5 percent this year on the unrest. To contact the reporter on this story: Vivian Salama in Abu Dhabi at vsalama@bloomberg.net To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Chile Keeps Benchmark Rate at 5% After Growth Beat Forecasts

Chile kept borrowing costs unchanged for the 19th consecutive month after growth unexpectedly accelerated for the second month in three in June. Policy makers, led by bank President Rodrigo Vergara, held the benchmark rate at 5 percent today, as forecast by 11 of 19 economists surveyed by Bloomberg. Eight analysts expected a quarter-point reduction as consumer spending slows. Economic growth in the world’s biggest copper producer beat estimates in June, after disappointing analysts surveyed by Bloomberg in the previous four months, led by the retail and mining industries. Sustained growth, a drop in unemployment and inflation within the target range are likely to extend the longest period without a rate move in Chile since at least 1995, Rodrigo Fuentes, an economist at the Universidad Catolica in Santiago, said before today’s announcement. “Consumption is still showing great dynamism, the unemployment rate has declined and inflation expectations are well anchored,” Fuentes told reporters yesterday at a news conference held by the Monetary Policy Group, which meets monthly to discuss the outlook for the benchmark interest rate. Traders in the swaps market expected the central bank to remain on hold this month before cutting the rate to 4.5 percent by November and to 4.25 percent by February of next year. Growth Surprise “The economy is slowing down, but the deceleration is moderate,” Finance Minister Felipe Larrain told reporters in Santiago today. Chile’s Imacec index , a proxy for gross domestic product, rose 4.2 percent in June from the year earlier, above the 3.3 percent median forecast of analysts surveyed by Bloomberg, the central bank said Aug. 5. One year swap rates rose to 4.54 percent on the day the Imacec was announced from a 2 1/2-year low of 4.52 percent on the previous trading day as traders pared bets the central bank will cut interest rates today. The swap rate closed at 4.61 percent yesterday. Adding to expectations rates will remain on hold today, the jobless rate fell to 6.2 percent in the three months through June. Strong growth and evidence of an improvement in the global environment, “implies that there aren’t sufficient reasons to recommend a reduction in the current level of the benchmark rate,” the Monetary Policy Group said in a statement yesterday. Subdued Inflation Inflation remains subdued, even after accelerating in the past two months. Consumer prices rose 2.2 percent in July from the year earlier, within the 2 percent to 4 percent target range and up from 1.9 percent in June. “ Consumer spending continues to grow at a robust pace, salaries are rising and moreover, inflation is low,” Larrain said. Still, manufacturing slid 2.7 percent in June from the same month last year, its third year-on-year decline in four months. Signs of slower growth led policy makers to debate a rate cut at each of the last three meetings, according to the minutes of the discussions. Minutes from today’s meeting will be published Aug. 29. Consumer demand is showing signs of easing after driving expansion in the first half of the year. Retail sales growth slowed to 7.7 percent in June from the year earlier, down from a two-year high of 13.2 percent in May. “We don’t see any reasons as to why the central bank should maintain the rate,” said Cesar Guzman, an economist at Banco Security in Santiago, who forecasts a quarter-point cut today. “A while ago they justified their decision on strong consumption, but those numbers have moderated.” Economists expect the central bank to cut the key rate by half a percentage point by December, according to a survey by the central bank released yesterday. Policy makers on July 1 reduced their estimate for economic growth this year to between 4 percent and 5 percent from 4.5 percent to 5.5 percent. “We expected a faster deceleration of Chile’s economic Growth,” said Fuentes. “At the last meeting, we expected as much, but now indicators make it very hard to predict a change” in interest rates. To contact the reporter on this story: Javiera Quiroga in Santiago at jquiroga5@bloomberg.net. To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Mexican Stocks: Aeroportuario Pacifico, Cemex, Grupo Mexico

The following companies had unusual price changes in Mexico trading. Stock symbols are in parentheses and prices are as of 4 p.m. New York time. The IPC index fell 0.4 percent to 35,318.39. Grupo Aeroportuario del Pacifico SAB (GAPB MM), takeover target of Mexico’s largest mining company, Grupo Mexico SAB (GMEXICOB MM), declined 1.5 percent to 48.52 pesos, a day after shares rose 4.1 percent on news of the acquisition offer. Aeroportuario del Pacifico, which operates 12 Mexican airports including Guadalajara, has asked Grupo Mexico to reduce its stake to the 10 percent that’s permitted under bylaws. Grupo Mexico, which fell 1.2 percent to 37.62 pesos, holds a 20 percent stake in the airport operator. Cemex SAB (CEMEXCPO), the largest cement maker in the Americas, declined 1.2 percent to 9.20 pesos on signs the North American economy is slowing. Ford Motor Co. (F) and Owens-Illinois Inc. (OI) lowered profit forecasts, and a Federal Reserve Bank of New York report showed that manufacturing in the New York region unexpectedly shrank in June. To contact the reporter on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Orange Juice Jumps to Seven-Month High on Dry Florida Weather

Orange-juice futures climbed to a seven-month high on speculation that damage to citrus groves from dry weather in Florida , the world’s second-largest grower, will be more extensive than the government forecast. Precipitation in the state will be below normal during the first half of January, Donald Keeney, a senior meteorologist at MDA Information Systems Inc. in Gaithersburg, Maryland , said today in an e-mail. On Dec. 11, the U.S. Department of Agriculture cut its forecast for Florida output by 5.2 percent. Dry weather is causing fruit to spoil as it drops from trees at the highest rate in 43 years, the USDA said, citing data for non-Valencia oranges, which include early, mid-season, and navel varieties. Prices rose 12 percent in seven sessions, the longest rally in three months, signaling higher costs for PepsiCo Inc. (PEP) ’s Tropicana juices and Coca-Cola Co.’s Minute Maid. “The drier outlook over the next two weeks may be enough to hold the market up,” Sterling Smith, a market specialist at Citigroup in Chicago said in a e-mailed report. Orange juice for March delivery rose 1.1 percent to settle at $1.40 a pound at 1:50 p.m. on ICE Futures U.S., after touching $1.41, the highest for a most-active contract since May 1. The rally during the past month has pared this year’s decline to 17 percent. While normally 255 pieces of fruit would fill a 90-pound (41-kilogram) box, it may take as many as 300 this year because the lack of sufficient rainfall yielded smaller oranges, Jerry Neff, a branch manager at Allendale Inc. in Bradenton, Florida, said in a telephone interview. To contact the reporter on this story: Marvin G. Perez in New York at mperez71@bloomberg.net To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Oil Trades Near One-Week High as U.S. Manufacturing Expands

Crude traded near its highest close in a week after a measure of U.S. manufacturing beat estimates and before a report forecast to show shrinking fuel inventories in the world’s biggest oil consumer. Futures were little changed in New York today after advancing for a third day. The Institute for Supply Management ’s U.S. factory index increased to 51.5 in September yesterday, exceeding the median forecast of 49.7 in a Bloomberg News survey. Crude supplies in the U.S. probably gained last week, while gasoline and diesel stockpiles dropped, according to a survey of analysts. Goldman Sachs Group Inc. said that tensions with Iran may push oil prices higher. “Better-than-expected U.S. data has enabled the market to find some support,” said Christopher Bellew , a senior broker at Jefferies Bache Ltd. in London, who predicts prices will remain near current levels this week. “It’s a hard call where the market moves from here, but given events in the Middle East and prospects for positive U.S. economic data, any surprises are likely to be to the upside.” Crude for November delivery was at $92.86 a barrel, up 38 cents, in electronic trading on the New York Mercantile Exchange as of 1:16 p.m. London time. The contract climbed 0.3 percent to $92.48 yesterday, the highest close since Sept. 21. Prices are down 6.1 percent this year. Brent for November settlement was at $112.27 a barrel, up 8 cents, on the London-based ICE Futures Europe exchange. The European benchmark crude’s premium to West Texas Intermediate was $19.50 a barrel, compared with $19.71 yesterday. Upside Risk “As tensions between Iran and the west escalate, the risk to crude prices is becoming increasingly skewed to the upside,” David Greely , a New York-based analyst at Goldman Sachs, wrote in a report dated yesterday. The bank recommended the consumers protect against the risk of higher prices using options. Russia’s oil and condensate output climbed to a post-Soviet record of 10.41 million barrels a day in September, according to the Energy Ministry. Output rose 0.9 percent from a year earlier as OAO Lukoil increased production for the first time in almost three years, preliminary data from the ministry’s CDU-TEK unit show. The nation’s output gained 0.4 percent from revised data for August when levels were at a post-Soviet peak. Crude Stockpiles Oil in New York has technical resistance along its 50-day moving average, at $93.64 a barrel today, according to data compiled by Bloomberg. Futures halted yesterday’s advance near this indicator. Sell orders tend to be clustered near chart- resistance levels. U.S. crude stockpiles probably gained 1.5 million barrels last week, according to a Bloomberg survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate inventory data later today. Gasoline supplies may have dropped by 375,000 barrels last week, according to the median estimate of six analysts in the survey. Distillate stockpiles, a category that includes heating oil and diesel, probably fell 450,000 barrels. The industry-funded API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey. Gasoline at U.S. pumps dropped for the second week, tracking a more than $4-a-barrel slide in oil prices last month and after refiners on the U.S. Gulf Coast restored output following Hurricane Isaac. To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

New York, New Jersey, Pennsylvania to Lose House Seats After U.S. Census

New York, New Jersey and Pennsylvania will lose political influence in Congress over the next decade as job losses in the region contributed to slower population growth, according to government data released today. New York will have 27 seats in the U.S. House of Representatives, down from 29, the Census Bureau said in Washington. The agency’s state-by-state headcounts for 2010 determine reapportionment of the 435 seats in the House, one of the two chambers in Congress. The slowing pace of population growth in the Northeast is a decades-long trend spurred in part by the decline of manufacturing jobs in the region. The faster-growing South and West regions will gain House seats, as companies have been shifting jobs there in response to financial incentives by state and local governments and the lack of strong labor unions. “States are willing to give huge tax benefits to companies that locate there,” said Ross Baker , a political scientist at Rutgers University in New Brunswick, New Jersey. The decline in New York marks the seventh consecutive decade in which it will have lost House seats. With 27 seats for the next decade, the state will have its smallest delegation in 200 years and will dip to 40 percent below its high of 45 seats after the 1930 and 1940 reapportionments. New Jersey New Jersey will lose one representative in the House, bringing its tally to 12, based on today’s 2010 Census data. That will be the lowest total for the state since 1920 and will mark the second time in the past three decades it will have lost seats. Pennsylvania will see its representation fall to 18, compared with 19 this past decade. The state’s House delegation will be reduced for the ninth consecutive reapportionment. It had 36 seats a century ago. New York’s population during the past decade grew 2.1 percent, to 19.4 million, compared with 5.5 percent the previous 10 years, today’s census data showed. In New Jersey, growth slowed to 4.5 percent, from 8.9 percent in the 1990s. Pennsylvania saw its population expand 3.4 percent between 2000 and 2010 -- the same as the previous decade. Payrolls at manufacturers in Pennsylvania declined 35 percent during the last 10 years, according to estimates from Moody’s using data from the U.S. Labor Department. During that same period the unemployment rate climbed 8.6 percent from 4.1 percent, government figures show. Jobless Rate The jobless rate in New Jersey this past decade increased to 9.2 percent, from 3.8 percent. Unemployment in New York in November was 8.3 percent, compared with 4.7 percent in January 2000, according to U.S. Labor Department data. The lack of employment has dealt a blow to state and municipal budgets, resulting in job cuts for government workers. “All three states had employment fall between 2000 and 2010,” said Steven Cochrane , director of regional economics at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The biggest losses were in manufacturing. When you look at where there was growth, it’s almost all in education and health care.” Some companies in the Northeast are still cutting workers. West Pharmaceutical Services Inc. , based in Lionville, Pennsylvania, on Dec. 7 announced plans to close a manufacturing facility in the state, resulting in the loss of about 170 jobs. Closed Plants In May, New York-based Pfizer Inc., the world’s biggest drugmaker, said it would close eight manufacturing plants, including one in Rouses Point, New York and another in Pearl River, New York. Budget shortfalls among municipal and state governments also have spurred job losses. New York City, facing a $3.3 billion deficit in next year’s budget, will cut its workforce by more than 10,000 over the next year-and-a-half, Mayor Michael Bloomberg ’s budget office reported last month. More than 6,200 workers will be fired, and the remaining cuts, from a city that employs 300,000 people, will be accomplished by attrition, the mayor’s office said in a report. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP. Seats Reapportioned Congressional seats are reapportioned every decade after completion of the census, with each district to have roughly the same number of people. After the 2000 Census, each member was supposed to represent about 647,000 people, which will now increase to about 710,000 to reflect the nation’s growth. New Jersey Governor Chris Christie , a Republican who rose to national prominence in a state where his party accounts for just one in five registered voters, said he anticipates a fight as congressional districts are redrawn. Christie’s support helped Republican U.S. Representative- elect Jon Runyan defeat Democratic incumbent John Adler in the November midterm elections. “It’s going to be intensely partisan because someone’s going to have to lose a seat,” Christie said. “Whenever someone’s ox is getting gored it becomes intensely personal.” The reapportionment will also alter electoral vote calculations. A state’s Electoral College vote is the sum of its House seats, plus its two Senate seats. That could provide assistance to Republicans as they prepare to oppose a re- election bid by President Barack Obama. South, West Gained The U.S. population grew to 308,745,538 residents since the last census count in 2000. That’s up 9.7 percent, compared with 13 percent the previous decade, today’s figures showed. The South and West gained at the Northeast’s expense in part because of the proliferation of technological advances such as air-conditioning that have boosted the attractiveness of warm-weather states. “There was a time when people would think twice about moving to a state like Georgia from a state like New Jersey because the summers are so intolerable,” Baker said. “But now with virtually everything air-conditioned, including automobiles, the disincentive to move to a hot-weather state is largely removed.” California surpassed New York to become the nation’s most populous state in the 1960s. Texas overtook New York in the 1990s. Florida, now 577,000 people behind New York, will likely surpass that state later this decade, based on the census data. Data from the 2010 Census will affect the allocation of about $4 trillion in government funds during the next 10 years. The agency will release detailed demographics for individual states starting in February. To contact the reporters on this story: Greg Giroux in Washington at ggiroux@bloomberg.net ; Timothy R. Homan in Washington at thoman1@bloomberg.net To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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Deutsche Boerse, NYSE Chiefs Set to Meet Amid Rising Opposition to Merger

The chief executive officers of Deutsche Boerse AG (DB1) and NYSE Euronext will meet in New York tomorrow to discuss rising opposition to their planned merger, according to two people with direct knowledge of the matter. Reto Francioni and executives of Deutsche Boerse are flying to meet NYSE’s Duncan Niederauer after the companies said today that no official decision has been received from European antitrust regulators on the deal. Shares of the exchange operators rose more than 5 percent after the Financial Times said the European Commission would block it. “Their realistic options are to continue to do what they’re doing, lobby for the deal and give every ounce of effort, and I think that’s what they’re doing,” Richard Repetto , an analyst at Sandler O’Neill & Partners LP in New York, said in a telephone interview. “They never positioned this deal as a layup, or an automatic shoo-in.” Niederauer and Francioni have been working for 11 months to convince competition authorities in Europe that their merger won’t stifle competition in derivatives trading. Scrutiny of the proposed acquisition has been greatest in Europe where it would unite the region’s two biggest derivatives exchanges, NYSE’s Liffe and Deutsche Boerse’s Eurex. The executives will discuss steps that can be taken to persuade regulators to clear the proposal, which would create the world’s biggest exchange company , two people said, requesting anonymity because the plans are private. Topics will include opposition in the EC and among regulators in the German state of Hesse, as well as the integration they have been pursuing since announcing the deal in February, the people said. Falling Short “They could appeal to politicians to secure some pressure on the regulators,” Jamie Selway , head of liquidity management at New York-based Investment Technology Group Inc., said in a phone interview. “They could say that if European politicians are intent on setting back the financial markets in Europe substantially, preventing this deal is a good way to do that.” EC negotiators told the companies at a Dec. 21 meeting in Brussels the concessions they offered to allay competition concerns didn’t go far enough and that they were likely to recommend against the merger, two people familiar with the talks told Bloomberg at the time. People familiar with the situation said Dec. 30 that a draft recommendation reflecting that opinion would probably be released this month. Stocks Gain NYSE shares climbed 5.6 percent to $28.05 as of 2:30 p.m. in New York after the Financial Times said Joaquin Almunia , the EC’s antitrust chief, told the companies he will recommend against the deal. Almunia’s team drafted an official recommendation opposing the plan, the FT said, citing two people involved in the process. Deutsche Boerse advanced 4.9 percent to 42.02 euros. “Deutsche Boerse and NYSE Euronext have not received yet an official decision by the European Commission regarding the requested merger,” Deutsche Boerse spokesman Frank Herkenhoff said in an e-mailed statement. The New York Stock Exchange owner issued a similar statement, citing a media report. “The commission has announced that it will make its final ruling on whether to clear the proposed merger by Feb. 9, 2012,” Herkenhoff said. “As a matter of policy, we cannot comment on speculation.” Deutsche Boerse agreed to acquire NYSE Euronext (NYX) on Feb. 15 for stock worth $9.53 billion. The value of the acquisition has fallen to about $6.6 billion as stocks around the world tumbled. Germany ’s DAX Index is down 16 percent since the merger discussions were first reported Feb. 9. Room to Maneuver Even if Almunia’s team recommends against the transaction, the companies have room to maneuver. Before deciding whether to approve or block a deal, the European Commission must consult competition agencies from the European Union’s member nations. Commissioners from each EU country must vote on a decision and companies can appeal a ban at the EU courts. The takeover would put more than 90 percent of the European exchange-traded derivatives market and about 30 percent of the region’s stock trading in the hands of one company. Deutsche Boerse’s Eurex is the region’s biggest derivatives exchange, while Liffe is the second-largest. Eurex is owner of New York- based International Securities Exchange , which has a 31.5 percent stake in Direct Edge Holdings LLC. Brokers own the rest. OTC Derivatives “The thesis by regulators and politicians is that exchanges are part of the solution for OTC derivatives trading,” Selway said. “They may look to remind politicians of that and let them know a unified derivatives market for Europe will be a counterweight to CME in the U.S. They could argue that not having that would weaken Europe.” In Europe, the companies have offered capping fees on derivatives trading and clearing for three years, selling NYSE’s Liffe single-stock derivatives business, and the licensing of the Eurex trading system to a third party, said the people, who declined to be named because the talks are private. Regulators haven’t drafted a decision yet, they said. The takeover was cleared by the U.S. Justice Department on Dec. 22. U.S. regulators, who in May blocked Nasdaq OMX Group Inc. from pursuing a hostile bid for the New York Stock Exchange owner, agreed to allow the purchase by Frankfurt-based Deutsche Boerse as long as the company sells its 31.5 percent stake in another U.S. equity market, Direct Edge Holdings LLC. To contact the reporters on this story: Nandini Sukumar in London at nsukumar@bloomberg.net ; Aoife White in Brussels at awhite62@bloomberg.net. To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net ; Anthony Aarons at aaarons@bloomberg.net .

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N.J. Democrats Proposing Dueling Middle-Class Tax-Credits

New Jersey Democrats are proposing property-tax credits for residents earning as much as $250,000, countering Republican Governor Chris Christie ’s plan for a 10 percent across-the-board cut in income-tax rates. Senate President Stephen Sweeney today called for giving middle-class families a 10 percent property-tax credit on their income-tax returns, which he said would alleviate a pressing burden. Assembly Democrats today proposed doubling that property-tax credit to 20 percent. Democrats, who control both houses of the Legislature, have said Christie’s plan favors the wealthy and that he should focus on easing residents’ property-tax burden. Christie has said he’s managed to “turn Trenton on its head” by forcing Democrats to debate cuts in a state that raised taxes and fees 115 times in the decade before he took office. “This is a very simple plan -- this is not complex,” Sweeney, 52, told reporters today in Trenton. “We’re taking resources that the governor says are available and putting them on the tax that is the most pressing tax for the people of the state of New Jersey : the property tax; not the income tax.” Sweeney, a Democrat from West Deptford, said his plan would cost about $174 million in the budget year that starts July 1 and would rise to $1.4 billion by the fourth year. Christie’s cut would cost $183 million in the coming budget and $1.1 billion by the fourth year. Tax Cuts Christie, 49, began holding public meetings in January to press his case for hastening what he calls “the Jersey comeback.” The governor, during a radio interview today on 101.5 WKXW-FM said he and Sweeney agree on the need to cut income levies and disagree over how. Speaking during a town-hall meeting held as Sweeney was announcing his proposal, the governor said Sweeney’s plan is “not a bad idea.” “There’s a place for us to begin a conversation,” Christie said. “We agree that taxes should be reduced in New Jersey, and this is such a change.” Under Christie’s plan, someone earning $50,000 would pay $80 less while a person making $1 million would save $7,200, according to calculations from the non-partisan Office of Legislative Services. Tax Credit Sweeney’s plan would give residents with incomes as high as $250,000 a credit of 10 percent of the first $10,000 in property taxes paid. A family earning $50,000 would get an average credit of $600, while a family making $100,000 would see $800, he said. The Assembly Democrats’ plan also applies to income as high as $250,000 and would provide a 20 percent credit. A family earning $100,000 that pays $8,000 in property taxes would get $1,600. That compares with $275 under Christie’s plan, according to Assembly Democrats. New Jersey residents pay the highest property taxes in the U.S. Their bills averaged $7,759 in 2011, up 2.4 percent from 2010, according to the state Department of Community Affairs. Assembly Democrats plan to introduce their measure on March 8, said Majority Leader Louis Greenwald , a Democrat from Cherry Hill. Their proposal also calls for a so-called millionaire’s tax -- a surcharge on income of $1 million or more -- to fund the credits, he said. ‘We’re Pleased’ “We’re pleased to see that the Senate agrees with us that it’s about property taxes, but I don’t think their plan is robust enough,” Greenwald, 44, said in a telephone interview today. “In this economy, the most important thing is to get people that money.” Christie has promised to veto any tax increase, saying it would halt the state’s economic recovery and deter businesses from expanding or moving to New Jersey. The millionaire’s tax would increase the rate to 10.75 percent from 8.97 percent beginning next fiscal year. That surcharge would affect about 16,000 out of 2.6 million filers and raise $800 million, Assembly Democrats said in a statement. “Sixteen-thousand people in this state out of 2.6 million filers have gotten a free ride,” Greenwald said. “It hasn’t worked -- our economy is still in the doldrums.” To contact the reporters on this story: Terrence Dopp in Trenton at tdopp@bloomberg.net ; Elise Young in Trenton at eyoung30@bloomberg.net To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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Swiss Growth to Pick Up in Second Half of 2012, OECD Says

The Swiss economy will gather strength in the second half of the year, paving the way for a normalization in interest rates in 2013, the Organization for Economic Cooperation and Development said. Swiss gross domestic product may rise 0.9 percent this year and 1.9 percent in 2013, the Paris-based OECD said today. Consumer prices are expected to drop 0.5 percent this year before rising 0.1 percent in 2013, while the jobless rate is seen declining for a third straight year in 2013 to 3.7 percent, according to the group. Switzerland ’s economy is showing some signs of recovery after the central bank last year lowered its benchmark interest rate to zero and imposed a franc ceiling of 1.20 versus the euro to help protect exporters and ward of the threat of deflation. Consumer confidence increased in April and the KOF leading economic indicator jumped to a six-month high. “Growth is expected to pick up from the second half of 2012 onward on the back of strengthening activity in Switzerland’s main trading partners, and unemployment is projected to decline slowly,” the OECD said. The Swiss National Bank ’s “policy rate may need to rise gradually in 2013.” Consumer spending may rise 1.2 percent this year and 1.6 percent in 2013, with exports of goods and services seen increasing 1.4 percent and 4.6 percent, respectively, according to the latest OECD estimates. Gross fixed investment will probably increase 2.8 percent in 2012 and 3.8 percent in 2013. To contact the reporter on this story: Simone Meier in Zurich at smeier@bloomberg.net To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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Magna Shareholders End Dual-Class, Founder's Control

Magna International Inc., Canada’s largest auto-parts maker, will eliminate its dual-class structure and end founder Frank Stronach ’s control of the company after shareholders approved a reorganization plan. Shareholders accepted the plan with about 93 percent of the votes cast at a special meeting in Toronto, Magna said today. The Aurora, Ontario-based company said about 75 percent of Class A shares voted were in support. The plan is subject to court approval at a hearing Aug. 12 and 13. The deal gives the Stronach Trust, controlled by Stronach, $970 million in cash and shares based on today closing price on the New York Stock Exchange in return for ceding control of the company he founded in 1969. Stronach, 77, did not attend the meeting. A majority of shareholders voted that this is “a good deal,” Mike Harris , a board member and chairman of the meeting, told reporters as he left the venue. He declined to stay after the meeting and answer questions. Magna rose 79 cents, or 1.1 percent, to $74.45 at 4:04 p.m. in New York Stock Exchange composite trading. The stock has jumped 47 percent this year. While it was opposed by the Canada Pension Plan Investment Board, which said the payout is excessive, Magna Chief Financial Officer Vince Galifi said getting rid of the dual-class system will eliminate the discount at which companies with multiple- share structures trade. Those Opposed The Ontario Teachers’ Pension Plan cast its vote against the deal and said today in a statement it will join other shareholders to oppose it at the Ontario Superior Court of Justice hearing next month. The pension fund holds one Magna share. “The proposed arrangement is excessive, unprecedented and unfair to shareholders,” the fund said in an e-mailed statement. The proposal was developed by a committee of independent directors. It calls for the Stronach Trust to get 9 million new Class A shares, or a 7.4 percent stake, for the Class B stock that now gives it about 66 percent of voting rights. The trust would also receive about $300 million in cash. All Class B shareholders were represented at the meeting and all voted for approval at 300 votes per share. About 80 percent of Class A shareholders were represented. Magna will establish a joint venture with the trust to develop electric vehicles and end a consulting arrangement with Stronach. To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net ; Theo Keith in Southfield, Michigan at tkeith6@bloomberg.net. Enlarge image Frank Stronach Norm Betts/Bloomberg Frank Stronach, founder and chairman of Magna International Inc., is pictured at a shareholders meeting in Toronto. Frank Stronach, founder and chairman of Magna International Inc., is pictured at a shareholders meeting in Toronto. Photographer: Norm Betts/Bloomberg //<![CDATA[ $(document).ready(function () { $(".view_story #story_content .attachments img.small_img").each(function(){ var self = $(this); if (self.width() != 190){ self.width(190); } }); }); //]]>

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CIOs Must Lead Outside of IT

The CIO paradox is a set of contradictions that lies at the heart of IT leadership. Be strategic and operational. Stay secure and boost innovation. Adopt emerging technologies, while weighed down by the past. Many CIOs have buckled under the CIO paradox, while others have managed to be effective despite it. In working with these successful CIOs over the years, I have found that they all share a common set of practices, philosophies and approaches. We are in the midst of a computing renaissance, when all CIOs will need to raise their game and master this same set of practices. Herewith, three items that should have a permanent place on any CIO's "breaking the paradox" checklist. Sell the foundation Most large companies have underinvested in IT for decades. They've spent the bare minimum, and that's been fine, since IT has had to function merely as a "keep the lights on" necessity. As long as the mainframe systems aren't broken, let's not fix them. Today, however, technology innovation is creating a drastic change — across all major industries — in the way customers want to interact with their suppliers. Companies can no longer get away with treating IT as a commodity. These companies face a technical debt, and it's time to pay up. Most CIOs find it relatively easy to convince an executive team to invest in a technology that increases near-term revenue. They find it considerably harder to ask their colleagues to invest in a major infrastructure upgrade that will take 12 months or more before delivering direct business benefit. But all CIOs need to find a way to convince their peers that without these infrastructure investments, they will be mortgaging their company's future. Through visuals, storytelling, and metaphors that resonate with the company's business leaders, CIOs must develop the skill of showing their stakeholders that foundational investments are the table stakes of innovation. If they do not, they will get crushed between the rock and hard-place of legacy technologies and business demand. Grow blended executives The companies that have underinvested in IT have also underinvested in IT talent. IT leaders are a unique breed, and they need to possess a heady brew of business, technology, and interpersonal skills. High-performing IT organizations appoint executives to sit at the intersection of business areas and the IT function, helping business leaders to shape their IT strategies and marshaling a technology team to deliver against that demand. Ideally, these "business relationship executives" would have two heads: one for business and one for technology. Since cloning is still an imperfect science — and these gorgeously blended executives are in short supply in the talent market — companies will need to grow their own. The most effective approach to developing blended executives is to develop a program that rotates IT people into business roles, and business people into IT. But regardless of which approach companies take, they need to start now. We are in the midst of war for IT talent, and companies that always have to go outside for their IT leaders, are at a disadvantage. A far better strategy is to take the people that they have and develop them into blended executives. You know you are on the right track when you walk into a business unit meeting, and from the dialogue taking place, you cannot easily distinguish the IT person from everyone else. Reach beyond IT The IT function is not easy to manage. IT is highly strategic, intensely operational, hard to staff and extremely expensive. CIOs who are successful in running IT tend to develop expertise in important areas including project management, continuous improvement, people development, M&A, and strategic planning. These disciplines are critical to every other department in the company. CIOs who want to be effective in the future will extend their leadership and expertise beyond the IT function. They will set up enterprise project management offices; they will take the reigns as their company's continuous improvement champion; they will absorb HR and legal and procurement, along with IT, into a new Chief Shared Services Officer role. They will step out of their IT boxes because they know it is good for the company. They will not wait to be asked. With cloud, mobility, consumerization, and big data, the CIO paradox is not disappearing; it is growing stronger. The contradictory forces that define IT are getting more acute, and CIOs will work harder than ever to perform. Those who are already struggling under the paradox will continue to struggle. But those who can rise to the occasion, break the paradox, and deliver value in our new technology marketplace will secure themselves a place of leadership in what promises to be an exciting new era.

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Development Projects in Asia, Middle East to Spur Sukuk Sales, CIMB Says

Islamic bond sales will pick up next year as governments in Asia and the Middle East spend more on roads and other infrastructure developments, according to Barclays Capital and CIMB Group Holdings Bhd. Malaysia, the world’s largest sukuk market, last week announced a five-year plan showing annual development spending will rise 23 percent to 142.4 billion ringgit ($44 billion) in 2015, from an estimated 115.5 billion ringgit in 2010. Saudi Arabia, the world’s biggest oil supplier, plans to spend $400 billion in the five years through 2013 on infrastructure projects such as roads, airports and water projects. “There are huge opportunities,” Harris Irfan , head of Islamic products at Barclays Capital said at the annual World Islamic Banking Conference in Singapore on June 14. “By 2011, I hope to see a lot more pickup” in sukuk sales. Saudi Arabia has allocated almost $70 billion to development projects this year, 16 percent more than in 2009. Saudi Arabian Oil, the world’s largest state-owned oil company, and French producer Total SA said in March they plan to raise $8 billion in debt financing that may include Islamic bonds for a joint refinery and petrochemical project. Projects in Malaysia include a mass rapid transit system in Kuala Lumpur that can carry two million passengers per day when completed, the government said in a report last week. “You only need one or two deals to spur issuance in a big way in the Middle East,” Badlisyah Abdul Ghani , head of Islamic banking at Kuala Lumpur-based CIMB Group Holdings said in a phone interview on June 15. “Once the market sees that others will follow and, when that happens, most definitely growth” will accelerate, he said, declining to quantify his forecast. Issuance Slump Gulf issuers raised $2.3 billion from sukuk sales so far this year, about 19 percent less than the amount they borrowed during the same period of 2009, Bloomberg data show. Local- currency sukuk sales in Malaysia have dropped 47 percent to 8.8 billion ringgit as fewer infrastructure projects were started in the first part of the year. Islamic finance transactions are based on the exchange of asset flows rather than interest to comply with the religion’s Shariah principles. The Islamic finance industry’s assets may reach $1.6 trillion by 2012, according to the Kuala Lumpur-based Islamic Financial Services Board , a standards setting body. Global sukuk sales rose 43 percent to $20 billion in 2009, from $14.1 billion the previous year, according to Bloomberg data. Issuance of the notes reached a record $31 billion in 2007. Middle East Demand Middle East demand for infrastructure investments is strengthening after the global financial crisis battered property markets in the region, according to Arif Mohammed Al Alawi, who oversees about $100 million of funds as chief executive officer of Bahrain-based Tharawat Investment House. “Those who were hurt heavily in real estate have started opening doors for investments in low-risk sukuks in infrastructure and in manufacturing,” Alawi, who initiated an Islamic fund to invest in a water project last year, said in a June 14 interview. The scope for issuance to increase to meet that demand is improving. The Qatari government and state-owned companies plan to spend as much as $100 billion in the next four years on projects including roads, sewage treatment, water treatment, ports and airports, Finance Minister Yousef Hussain Kamal said on June 10. The United Arab Emirates, among the four biggest oil producers in the Organization of Petroleum Exporting Countries, is investing in nuclear power and railways to revive economic growth in 2010 and 2011, central bank Governor Sultan Bin Nasser al-Suwaidi said June 14. UAE awarded a 75 billion-dirham ($20.4 billion) contract in December to a group led by Korea Electric Power Corp. to build nuclear power plants. To contact the reporter responsible for this story: Soraya Permatasari at soraya@bloomberg.net ; Khalid Qayum in Singapore kqayum@bloomberg.net .

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Sensex, Bonds Drop as Rupee Strengthens on Bigger-Than-Expected Rate Gain

India’s government bonds tumbled the most in 15 months and stocks had the biggest slide in five weeks after the central bank boosted borrowing costs more than economists estimated to tackle inflation. Yields on 10-year debt surged to an eight-week high after the Reserve Bank of India raised its repurchase rate by 0.5 percentage point to 8 percent in the 11th increase since March 2010, the nation’s fastest credit-tightening on record. ICICI Bank Ltd. (ICICIBC) , the second-biggest lender, lost 3.2 percent, pacing a drop among its peers. Tata Motors Ltd. (TTMT) , the owner of Jaguar Land Rover, slid 3.3 percent. The rupee rose on optimism higher interest rates will attract foreign investors. “It will have serious implications on economic growth, consumer demand and corporate earnings,” Aneesh Srivastava, who oversees $465 million as chief investment officer at IDBI Federal Life Insurance Co., said from Mumbai. “We will hold cash for now.” The yield on the 7.8 percent government bond due April 2021 rose 15 basis points, or 0.15 percentage point, to 8.44 percent in the biggest jump since April 2010. The Bombay Stock Exchange Sensitive Index, or Sensex, lost 1.9 percent to 18,518.22 at 3:30 p.m. in Mumbai, the most since June 20. The rupee rallied 0.5 percent to 44.1875 per dollar, after earlier touching 44.2150, near the strongest level since April 11. The S&P CNX Nifty Index decreased 1.9 percent to 5,574.85. Its July futures closed at 5,577.3. The BSE 200 Index retreated 1.6 percent to 2,301.06. None of the 22 economists surveyed by Bloomberg predicted Reserve Bank Governor Duvvuri Subbarao’s decision today. Twenty estimated a quarter-point addition, while the remainder expected no change. ‘Unpleasant Surprise’ “This was an unpleasant surprise since the market expected 25 basis points,” said J. Moses Harding, a Mumbai-based executive vice president at IndusInd Bank Ltd. “The 8.40 yield seems here to stay as the top of the range.” Ten-year bond yields in India have jumped 48 basis points this year, the most in Asia , and touched a 32-month high of 8.46 percent in May. That widened the rate gap over U.S. Treasuries to 531 basis points from a low of 436 on April 8. Reserve Bank’s Subbarao moved even as counterparts in South Korea , Malaysia and Indonesia refrained from raising rates this month on concern Europe ’s debt crisis and the slowing U.S. recovery will damp global economic growth. India ’s inflation, which quickened to 9.44 percent in June, may remain at an “elevated level for a few more months,” the central bank said today as it raised its forecast for wholesale-price gains to 7 percent by March 31 from 6 percent. ‘Not the End’ “While the 50 basis points hike was an aggressive move, this is not the end of it,” Leif Lybecker Eskesen, Singapore- based chief economist for Indian and ASEAN at HSBC, wrote in a research note published after the Reserve Bank’s rate decision. “The RBI is seriously concerned about anchoring inflation expectations and we expect that the policy rate will reach at least 8.25 percent this year.” ICICI Bank dropped to 1,040.6 rupees and its July futures settled at 1,041.30 rupees. Rival State Bank of India (SBIN) slid 2.7 percent to 2,446.05 rupees. Housing Development Finance Corp. (HDFC) , the biggest mortgage lender, lost 2 percent to 693.95 rupees. The Bombay Stock Exchange Bankex index sank 2.5 percent in the biggest slide since May 23. DLF Ltd. (DLFU) , the biggest developer, slumped 4.1 percent. Valuation Gap The Sensex lost 9.7 percent this year, the worst performer after Brazil among key indexes in the world’s 10 biggest markets, amid rate increases. Companies on the measure are valued at 15 times estimated earnings, compared with a multiple of 11 for the MSCI Emerging Markets Index. Three out of 12 Sensex companies that posted earnings for the June quarter have lagged behind analyst estimates, compared with 33 percent that did so in the previous three months. “Higher rates will hurt growth across sectors,” said Vikas Khemani, president and head of institutional equities at Mumbai-based Edelweiss Securities Ltd. in Mumbai. “We expect a further 3 percent to 4 percent downside for stocks as they price in high interest rates .” Overseas funds bought a net 5.25 billion rupees ($118.8 million) of Indian equities on July 22, raising their total purchases this year to 99.8 billion rupees, according to data on the website of the Securities and Exchange Board of India. To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net ; Jeanette Rodrigues in Mumbai at jrodrigues26@bloomberg.net To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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Argentine Stocks: Grupo Galicia, Mirgor and Petrobras Argentina

The following companies are having unusual price changes in Argentine trading. Stock symbols are in parentheses and share prices are as of 11:11 a.m. New York time. The Merval Index fell 0.4 percent to 3,372.05. Grupo Financiero Galicia SA (GGAL) rose 0.9 percent at 5.75 pesos. Argentina ’s largest consumer lender posted first- quarter net income of 228 million pesos ($55.8 million), up from 51.7 million pesos a year earlier. Mirgor SACIFIA (MIRG AF) fell 4.9 percent to 123.50 pesos, the steepest fall in eight weeks. The Argentine builder of refrigeration systems for automobiles posted a net loss of 800,463 pesos in the first quarter, according to a statement posted on the website of the Buenos Aires stock exchange. “There were expectations in the market that the company would post a profit so the stock is falling on that,” Rafael Aldazabal, president of Buenos Aires brokerage Aldazabal y Cia SA, said in a telephone interview today. Petrobras Argentina SA (PESA) retreated 3 percent to 9.05 pesos, the most in a week. Argentine oil and gas workers started a strike at refineries nationwide today after failing to reach a salary agreement with companies. To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Rupiah Trades Near Lowest Level Since 2009 on Europe; Bonds Fall

Indonesia ’s rupiah traded near the lowest level since 2009 and bonds declined after global investors reduced holdings of the nation’s assets on concern Europe’s debt crisis will worsen. Overseas funds sold $350 million more local stocks than they purchased last week and withdrew 930 billion rupiah ($100 million) from investments in government debt in the four days through May 24, official data show. Standard & Poor’s cut the credit ratings of three Spanish banks to junk on May 25. Greece’s New Democracy party, which supports plans for a European Union-led bailout, placed first in all six opinion polls published on May 26, ahead of a June 17 election. “The market still swings from risk-on to risk-off,” Putu Andi Wijaya, a foreign-exchange dealer at PT Bank Rakyat Indonesia in Jakarta. “ Spain is a worry again and we still can’t hope for much from Europe. Markets may improve a little and then decline even steeper.” The rupiah traded at 9,479 per dollar as of 4:54 p.m. in Jakarta, after closing at 9,474 last week, according to prices from local banks compiled by Bloomberg. The currency reached 9,534 earlier, the weakest level since December 2009. One-month implied volatility, which measures exchange-rate swings used to price options, was unchanged at 16.5 percent, the highest since Oct. 5. “Demand for dollars remains strong and despite Bank Indonesia’s efforts to hold the line, I believe they will struggle,” Patrick Perret-Green, head of foreign-exchange strategy for Asia excluding Japan at Citigroup Inc. in Singapore, wrote in a e-mailed note to clients today. “Further selling will place the rupiah under more strain.” Bank Indonesia Bank Indonesia doesn’t want the rupiah to weaken too fast and continues to intervene in the currency market, deputy governor Hartadi Sarwono said on May 16, adding that it will use its “ammunition” carefully. Benchmark 10-year bonds dropped for a third day, with the yield climbing two basis points, or 0.02 percentage point, to 6.55 percent, according to closing prices from the Inter Dealer Market Association. “We didn’t get a sense of panic dollar buying and notably the bond market was comparatively calm,” Tim Condon , chief Asia economist at ING Financial Markets in Singapore wrote in a report today. “We believe Bank Indonesia will intervene as needed to maintain calm and we don’t expect this will entail macroprudential measures,” such as capital controls , he wrote. To contact the reporter on this story: Yudith Ho in Jakarta at yho35@bloomberg.net. To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Switzerland Close to Resolving Undeclared U.S. Accounts

Switzerland is moving closer to an agreement with the U.S. to settle a dispute over banks including Credit Suisse Group AG (CSGN) and Julius Baer Group Ltd. (BAER) allegedly helping American clients avoid taxes. The Swiss Bankers Association’s board of directors, which includes executives of the country’s largest lenders, met Aug. 26 to discuss a proposed program to resolve the issue, Sindy Schmiegel Werner, a spokeswoman for the Basel, Switzerland-based group, said by telephone today. “The board stands behind the program even though it’s a painful measure to take,” she said, declining to elaborate. The Swiss government is due to decide today whether to accept the accord, paving the way for a resolution for all Swiss banks that would involve fines and disclosure of U.S. client data, Tages-Anzeiger reported. Acceptance of the proposal would also help about a dozen wealth managers already under investigation in the U.S., including Credit Suisse and Julius Baer, move forward with their individual agreements. Roland Meier, a spokesman for the Swiss Finance Ministry in Bern, declined to comment on the Tages-Anzeiger report. The new proposal comes after the Swiss parliament in June rejected a bill that would have freed the industry to send information to the U.S. The bill, supported by Swiss banks, was aimed at helping firms not yet part of the U.S. probe avoid an indictment like that of Wegelin & Co., which pleaded guilty in January to helping American clients dodge taxes. Paying Fines Banks that aren’t currently under investigation that may have breached U.S. laws with undeclared assets would have to pay fines on accounts exceeding 50,000 francs ($54,407) under the proposal, according to Tages-Anzeiger. The fines will depend on when the account was opened, with 20 percent for those that existed before August 2008, 30 percent for the period between Aug. 1, 2008 and Feb. 28, 2009 and 50 percent thereafter, according to the Swiss newspaper. UBS AG, the country’s biggest bank, agreed in February 2009 to pay $780 million and disclose names of American clients to avoid criminal prosecution for helping customers evade taxes. That deal and the voluntary disclosures by Americans that followed allowed the U.S. to make a case against other Swiss wealth managers. Information on American clients from August 2008 would be made available to the U.S. if requested through existing double-taxation agreements, Tages-Anzeiger said. Banks that didn’t have undeclared American accounts will have to prove that they didn’t break any U.S. laws, it said. To contact the reporter on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

MILDEX OPTICAL April Sales Rise 63.27% (Table) : 4729 TT

MILDEX OPTICAL said unconsolidated sales in April rose 63.27% to NT$111,803,000 from NT$68,477,000, according to a statement filed to the Taiwan Stock Exchange. (Figures are in thousands of New Taiwan dollars) ================================================================= 4/2011 4/2010 Sales 111,803 68,477 YOY% 63.27% -----------------Year-to-date----------------- Sales 379,446 230,557 YOY% 64.58% =================================================================

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Asia, Australia Bond Risk Rise to Nine-Month High, Swaps Show

The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment increased, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rose 3 basis points to 121.5 basis points as of 8:35 a.m. in Singapore, according to Royal Bank of Scotland Group Plc. prices. The Markit iTraxx Australia index also rose 3 basis points to 121.5 as of 10:35 a.m. in Sydney, Westpac Banking Corp. prices show. The risk gauges are on track to reach the highest level since Sept. 24, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. The Markit iTraxx Japan index advanced 3 basis points as well to 130 basis points as of 9:36 a.m. in Tokyo , Deutsche Bank AG prices show. Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite. The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements. A basis point is 0.01 of a percentage point. To contact the reporter on this story: Katrina Nicholas in Singapore at knicholas2@bloomberg.net To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Prisa Is Said to Seek Alternative to Unanimous Creditor Accord

Promotora de Informaciones SA is considering alternative ways to restructure 2.9 billion euros ($3.8 billion) of debt as it struggles to get support from some lenders, according to two people familiar with the matter. Prisa, as the company is known, is looking for a way to avoid having to reach unanimous agreement with its 38 creditors to restructure the debt, the people said, asking not to be identified because the deliberations are private. Some lenders are still not on board with the current restructuring plan, making it very unlikely Prisa could get total accord, they said. British, German and Portuguese creditors are among the ones reluctant to join the refinancing plan, one of the people said. Prisa, Spain’s biggest media company, also told its banks it’s checking with lawyers in the U.S. on a potential Chapter 11 bankruptcy filing there, one of the people said. “It’s very difficult for a company such as Prisa to reach a unanimous debt restructuring agreement with so many lenders, especially if there are any hedge funds” involved, said Cristobal Cotta, a lawyer at Cuatrecasas, Goncalves Pereira in Madrid, who isn’t involved in the reorganization. Spain’s bankruptcy law was amended in 2011 to adopt the British practice known as a “scheme of arrangement.” It allows qualifying companies that have a restructuring agreement with creditors accounting for at least three-quarters of their debt to force dissenters to accept it. Spanish steel producer Celsa Group has recently used this method. Still Trying Last month, Madrid-based Prisa said 72.9 percent of its creditor banks approved a plan to restructure its debt and it was confident it would reach unanimous agreement in weeks. Prisa is seeking more liquidity and to extend syndicated and bilateral debt maturities for more flexibility, it said. Prisa is still trying to reach a deal to restructure its debt, which is a lengthy process given the number of lenders involved, according to a spokeswoman at Prisa, who asked not to be named citing company policy. She declined to comment on any details of the debt negotiations. “This Spanish version of the scheme of arrangement could be a potential solution for many other companies facing a similar situation in order to avoid the bankruptcy,” Cotta said. Prisa shares dropped 11 percent to 19.5 euro cents yesterday in Madrid. The stock has lost 17 percent this year, valuing the publisher of El Pais newspaper at 201 million euros. The Wall Street Journal reported yesterday Prisa has considered filing for Chapter 11 bankruptcy protection in the U.S. To contact the reporters on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net ; Esteban Duarte in Madrid at eduarterubia@bloomberg.net To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net ; James Hertling at jhertling@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Taxpayers May Fund Ex-GSA Official’s Retirement, Lawmaker Says

Taxpayers may get the multimillionaire-dollar “retirement tab” for a former U.S. General Services Administration official who oversaw an $823,000 Las Vegas conference, a U.S. lawmaker said. The GSA announced without elaboration yesterday that Jeff Neely no longer worked at the agency. He will probably retire with government payments of more than $100,000 a year, Representative John Mica , a Republican from Florida , said today in a statement. Mica, chairman of the House Committee on Transportation, planned to investigate the terms of Neely’s departure, according to the statement. The public shouldn’t have to fund multimillion-dollar deals for “government administrators who abuse their positions and snub their noses at Congress and the American people,” it said. GSA spokesman Adam Elkington would not say today whether Neely had retired or if he would receive a government pension. Neely last month refused to testify before Mica’s committee, citing his Fifth Amendment rights against self- incrimination. Mica plans to introduce legislation that would halt salaries for senior administrators who take the Fifth Amendment in such cases. U.S. lawmakers have criticized spending at the 2010 conference, which featured a mind reader, a clown and a $75,000 bicycle-building exercise. The GSA’s inspector general has been investigating other trips and conferences involving agency employees. To contact the reporter on this story: Carol Wolf in Washington at cwolf@bloomberg.net To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

AIG Falls Short of Goldman Standard on Diversity Data

American International Group Inc. (AIG) , the bailed-out insurer, rebuffed a request from New York Comptroller John Liu to release workforce-diversity data that was made public by Goldman Sachs Group Inc. (GS) and MetLife Inc. (MET) AIG hasn’t joined other companies among the city’s largest financial firms in providing access to information on female and minority employment, Michael Garland , Liu’s executive director for corporate governance, said in an interview yesterday. Goldman Sachs and MetLife, the biggest U.S. life insurer, agreed in April to publicly release employment information that is required to be prepared for the federal government. “We try to get to a place where the company recognizes it is in their self interest and the interest of shareholders to take the next step, and that’s why companies agree,” Garland said. “AIG apparently is not there yet.” The insurer “has engaged in discussions with the comptroller’s office,” said Jim Ankner, a company spokesman. “AIG is very committed to diversity.” Matt Anderson , a spokesman for AIG’s majority owner, the U.S. Treasury Department, didn’t respond to messages seeking comment. Liu oversees funds for New York City pensions and had more than $120 billion under management as of March 31. He said investors are entitled to know about the diversity of companies in which they invest. “Many companies say they recognize the business case for a more diverse workforce and highlight their efforts to promote greater diversity,” Liu said in an e-mailed statement today. “But without disclosure of employment data, shareholders cannot be assured companies are practicing what they preach. This is a proposal we will continue to pursue.” JPMorgan, Citigroup Goldman Sachs, the fifth-biggest U.S. bank by assets, said 20 percent of its executives and senior officials in the country were female, compared with 17 percent at MetLife. The figure was 24 percent at JPMorgan Chase & Co. (JPM) and 21 percent at Citigroup Inc ., both of which have made the data available for years. JPMorgan, Citigroup and MetLife all reported that a majority of their U.S. workforce was female, led by JPMorgan, the country’s largest bank by assets, at 57 percent. The figure is 36 percent at Goldman Sachs. JPMorgan said 54 percent of first- and mid-level officials and managers were female and 64 percent of a category labeled “all other.” At Citigroup, almost half of the 49,650 female employees work in administrative support, and about 15 percent are first- or mid-level managers. The disclosure “gives us a picture, you know, to the extent that they have a diverse workforce, how does that play out as you go up the ladder,” Garland said. “We know as an industry, there’s significant underrepresentation” of minorities and women. The New York City pension funds held more than 1.2 million Goldman Sachs shares, 2.3 million MetLife shares, and 1.1 million AIG shares, according to an April 16 statement from Liu. To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net ; To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

China Names Chen Wenhui Vice Chairman of China CIRC

China named Chen Wenhui as vice chairman of China Insurance Regulatory Commission, replacing Wei Yingning, according to a statement on the Chinese government webiste today. To contact the editor responsible for this story: Gregory Turk at gturk2@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Jefferson County Wins Access to JPMorgan Settlement Documents Over Bonds

Jefferson County (3681MF) , Alabama , won permission to review a settlement between JPMorgan Chase & Co. and an investor who sued the bank for fraud related to the county’s defaulted sewer bonds. U.S. Bankruptcy Judge Thomas B. Bennett in Birmingham approved a request by the county to question the investor, James R. Crane, and to review the settlement that ended his lawsuit against JPMorgan, which underwrote the bonds. Bennett ordered Crane to appear at the Houston offices of his law firm to answer questions about the case. The county is seeking information to use in its own lawsuit against New York-based JPMorgan. Now that Crane has settled, the county said it is concerned information he collected as part of his case may be thrown away. “If such information is discarded, destroyed or otherwise lost, the county may be unable to obtain the documents,” the county said in its request. Jefferson County filed for bankruptcy in November after the county, state officials and bondholders failed to implement a tentative agreement to reduce its $3 billion in sewer debt by about $1 billion, raise rates and win financial support from the Alabama state legislature. The case is In re Jefferson County, 11-05736-9, U.S. Bankruptcy Court , Northern District of Alabama (Birmingham). To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net. To contact the editors responsible for this story: John Pickering at jpickering@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

U.S. Companies Reporting Negative EPS Surprises, June 10

The following U.S. companies reported negative earnings surprises today. This list ranks percent surprises of actual earnings to earnings estimates. Earnings estimates provided by Bloomberg. To contact the reporter on this story: Wendy Soong in New York at at csoong@Bloomberg.net. To contact the editor responsible for this story: Alex Tanzi at at atanzi@Bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Ford May Cut Lineup to as Few as 20 Models, CEO Says

Ford Motor Co. Chief Executive Officer Alan Mulally said the second-biggest U.S. carmaker may reduce its product lineup to as few as 20 models. “There will be less than 30, on our way to 20 to 25,” Mulally said in response to questions on the future lineup of “nameplates” or models after addressing the Confederation of British Industry in London today. “Fewer brands means you can put more focus into improving the quality of engineering.” Ford had 97 models on offer when Mulally became CEO of the Dearborn, Michigan-based company in 2006. The lineup has since been reduced by terminating some products and selling luxury brands Volvo, Jaguar, Land Rover and Aston Martin. “It was absolutely clear that we had to simplify Ford dramatically,” said the CEO, who is in Europe prior to visiting the Paris Motor Show later this week. Ford has also simplified component specifications for each product, so that the Fiesta model, which has about 10 variants worldwide, now has about 65 percent of its parts as standard. “It helps all of our distribution, Ford store owners, suppliers, employees and consumers to know exactly what they’re getting,” Mulally said. As part of his push to cut the number of brands and models, Mulally has dismantled the luxury Premier Automotive Group formed by CEO Jacques Nasser in 1999 and embraced by Bill Ford after he took over the top post. Volvo Completion Mulally, who joined Ford from planemaker Boeing Co., completed the sale of Sweden’s Volvo Cars to Zhejiang Geely Holding Group Co. of China for $1.3 billion last month, having sold the Jaguar Land Rover unit to Mumbai-based Tata Motors Ltd. in 2008 and disposed of Aston Martin a year earlier. Ford is also discontinuing the mid-level Mercury line in North America and intends to put more resources into its upscale Lincoln brand. The CEO said Ford’s sales prospects depend largely on economic recovery following the termination of government cash- for-clunkers programs that spurred demand last year. “The key thing now is to keep the economy going,” said Mulally, who turned 65 last month. “All the fundamentals say that we are moving in the right direction.” Prospects for expansion are bolstered by the Asian market, which is “just a phenomenal growth engine right now,” he said. Ford traded down 2 cents, or 0.2 percent, at $12.54 as of 12:18 p.m. in New York, paring this year’s gain to 25 percent. To contact the reporter on this story: Steve Rothwell in London at +44-20-7673-2365 or srothwell@bloomberg.net To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net ;

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Amazon Upgrades Kindle E-Reader, Adds New Services

Amazon.com Inc. (AMZN) updated its Kindle Paperwhite, adding a sharper screen, faster processor and new features for the handheld e-reader used to deliver digital content. The online retailer also introduced a new service giving customers the option to buy discounted Kindle editions of printed books already purchased from Amazon, the Seattle-based company said in a statement today. Chief Executive Officer Jeff Bezos is investing in its line of e-readers even as researchers predict declining sales of the devices in coming years. E-reader shipments are projected to fall to 7.1 million units in 2016, a decline of more than two-thirds from a peak volume in 2011, according to IHS Inc. (IHS) “If you logged onto your CompuServe account during the Clinton administration and bought a book like ‘Men Are from Mars, Women Are from Venus’ from Amazon, Kindle MatchBook now makes it possible for that purchase -- 18 years later -- to be added to your Kindle library at a very low cost,” Russ Grandinetti, vice president of Kindle content, said in the statement. Prices for the digital editions of already purchased books will range from free to $2.99, less than the $9.99 price of many e-books sold via Amazon’s online store, the company said. More than 10,000 books will be available when the program, called Kindle MatchBook, starts in October. For the e-reader, Amazon said the new Kindle model is 25 percent faster, letting users to open books and turn pages more quickly. It features a high-contrast screen that’s indistinguishable from physical books, the company said. The Kindle Paperwhite, which goes on sales later this month, sells for $119 to $189, and was first introduced in September of last year. The device has an 8-week battery life and a front-lit screen, which lets readers scan books in the dark. Amazon is also integrating Goodreads, the reading social network it purchased earlier this year, into Kindle e-reading software. Amazon advanced 2.8 percent to $288.80 at the close in New York , leaving the shares up 15 percent this year. To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Explaining Apple’s Irish Tax Dodge

The outrageous part about Apple (AAPL) Inc.’s audacious tax strategies isn’t whether they are legal. They may well be. More upsetting are the ruses and contrivances that Apple used to pull them off. Consider an Apple subsidiary called Apple Operations International, which was spotlighted at a U.S. Senate hearing this week. Its net income accounted for 30 percent of Apple’s worldwide profit from 2009 to 2011. Apple Operations is incorporated in Ireland. It is managed and controlled in the U.S. Yet Apple says the unit isn’t a resident of either country -- or any country. So it paid no corporate-income taxes. The structure is a farce, regardless of whether there’s a loophole that may have been threaded. The Internal Revenue Service has the authority to label it a sham and attribute the income to the parent company, according to a Senate investigative report released at this week’s hearing. However, the IRS has been hesitant to use its power this way out of concern it would lose in the courts, which have tended not to take action against foreign shell corporations. The tax code isn’t working , and so far authorities haven’t tried to fix it. What Apple did was legitimate, you might say. Apple has a duty to maximize returns for shareholders. Tax planning is part of that. Except, this smacks of abuse. When I watched Apple executives testify on May 21 before the Senate Permanent Subcommittee on Investigations, it was with sadness. Here we had the top people from one of the country’s greatest, most-beloved companies. They didn’t dispute the facts set forth by the panel’s leaders -- Democratic Senator Carl Levin of Michigan and Republican Senator John McCain of Arizona -- only some of their characterizations. Tax Avoidance Apple avoided $9 billion in U.S. taxes in 2012 through one chink in the tax code alone, the panel’s report said. Timothy Cook, Apple’s chief executive officer, explained that the company paid $6 billion in U.S. taxes, which was beside the point. He objected to the senators’ use of the words “gimmicks” and “shifting” (as in shifting profits to tax havens ), but not the panel’s findings, most of which came from information that Apple provided itself. “We pay all the taxes we owe, every single dollar,” Cook said. “We don’t stash money on some Caribbean island.” That’s true, of course. Apple used a different island tax haven -- Ireland. This isn’t how I want to think of Apple’s executives. I don’t want to imagine them as scheming to invent and maintain specious legal fictions to reduce the company’s tax bill while government budget deficits balloon. Yet the tax code begs companies to connive and dissemble to lower their payments. Take another example that the senators pointed to: Apple, as do many other multinational companies, uses a technique called transfer pricing. This lets it move income away from the U.S. to Ireland, where it has negotiated a 2 percent tax rate with the country’s government. When Apple transfers intellectual-property rights to an Irish unit, it uses a so-called cost-sharing agreement. None of the transactions under the agreement is done at arm’s length. All the money going back and forth belongs to Apple. The rules say companies are supposed to be honest about the numbers they assign to these transactions between subsidiaries. But the tax authorities have a hard time challenging them because there are rarely correct answers when it comes to valuing intellectual property or allocating research-and-development costs. So companies can get away with pretty much anything, making it easy to move profits to low-tax countries while recording costs in high-tax jurisdictions. Income Shifting The Senate report said Apple shifted $74 billion in income to Ireland from the U.S. through its cost-sharing agreement from 2009 to 2012. This helps explain why $102 billion of Apple’s $145 billion of cash and marketable securities was assigned to offshore subsidiaries, as of March 30. Even that comes with a twist: Most of the “offshore” funds are kept at U.S. banks. Beyond the questions of tax fairness, or how best to simplify and reduce rates, we should ask ourselves: Is this the kind of culture that our laws should be fostering? The people running Apple -- whose board includes former U.S. Vice President Al Gore -- aren’t being dodgy for tax purposes because they are evil. The law encourages them to behave this way, which leads to other uncomfortable questions. If a company’s managers are willing to devise bizarre structures and stratagems to reduce corporate taxes, would they resort to creative accounting to boost the earnings they show investors on their financial statements? What other sorts of liberties might they be willing to take? Where does it stop? Levin and McCain deserve credit. Rarely does the public get a deep-dive report like the one they just released. They made several concrete recommendations, including strengthening the tax-code section on transfer pricing and using the IRS’s current authority to disqualify sham entities. It’s easy to be jaded, though. The IRS is in constant turmoil, most recently over singling out Tea Party groups for extra scrutiny. It’s doubtful that Congress will respond. Congress is the main reason the tax code is a mess. At least the public is better informed about how corporate taxes work. We should take progress where we can get it. ( Jonathan Weil is a Bloomberg View columnist. The opinions expressed are his own.) To contact the writer of this article: Jonathan Weil in New York at jweil6@bloomberg.net To contact the editor responsible for this article: James Greiff at jgreiff@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Gasoline Falls on Speculation Supplies Adequate to Meet Demand

Gasoline fell on speculation that supplies are adequate to meet demand even as unplanned shutdowns reduce production. Futures declined as much as 1.4 percent after jumping 1.7 percent yesterday after a spate of refinery outages. U.S. gasoline production in the week ended Oct. 18 was the highest season since at least 1982, according to Energy Information Administration data. “The market today is putting into perspective the refining issues we have,” said Phil Flynn , senior market analyst at Price Futures Group in Chicago. Gasoline for November delivery fell 2.4 cents, or 0.9 percent, to $2.6069 a gallon at 9:52 a.m. on the New York Mercantile Exchange. Trading volume was 3.2 percent above the 100-day average. Citgo Petroleum Corp. said yesterday that its Lemont, Illinois, refinery plans to restart the atmospheric section of its crude unit next week at reduced rates. The company said an Oct. 23 fire was limited to the vacuum distillation section of the unit. “If other refiners can make up for the difference in output at Lemont, we might be OK on supply,” Flynn said. The motor fuel’s crack spread versus WTI narrowed 53 cents to $10.42 a barrel. The fuel traded at a 20-cent discount to Brent, from a 2-cent premium yesterday. U.S. retail pump prices , averaged nationwide, fell 0.7 cent to $3.278 a gallon, Heathrow, Florida-based AAA said today on its website. Prices are 26.5 cents below a year ago. Ultra-low-sulfur diesel for November delivery slipped 0.64 cent to $2.958 a gallon on trading volume that was 10 percent below the 100-day average. ULSD’s premium over WTI gained 4 cents to $25.86 a barrel. The spread versus Brent rose 41 cents to $15.30. To contact the reporter on this story: Barbara Powell in Houston at bpowell4@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

The Lust Beneath Japan's Sex Drought 

An occupational hazard for foreign journalists is traipsing into "exotic Japan" and getting lost in a forest of stereotypes, fuzzy data and tarted-up headlines. Such is the case with the media's renewed obsession with reports that the Japanese have given up on sex. This canard emerges every couple of years, but it's snowballing anew thanks to an Oct. 19 Guardian headline screaming: "Why Have Young People in Japan Stopped Having Sex?" The references to dominatrixes-turned-sex counselors, men who get excited by robots, virtual-reality girlfriends and the demise of the Japanese people proved too much for Internet jockeys to resist. Editors, too. The Guardian's piece was followed by the Huffington Post quoting a documentary filmmaker who asserted, dubiously, that "it’s a strange thing that can only happen in Japan." The Japanese are really, really weird, you know, and this celibacy bubble that imperils the future must reflect their peculiar culture. Follow-ups are rolling in from the Washington Post, Slate, Time and all over the Twittersphere. Let me offer my own two yen. The root of Japan's supposed sex drought isn't culture, but economics. This distinction is important because it feeds into Prime Minister Shinzo Abe's efforts to end Japan's 20-year bout with deflation. I, too, have been swayed at times by such data sets. As far back as December 2001, I explored waning sex drives in Japan, citing findings that Japanese are the world's least prolific lovers. Such conclusions are quite paradoxical. How else to explain a country whose cities are teeming with red-light districts; a porn industry that's burgeoning; hard-core manga -- a type of comic book -- that's read openly on the subways; and love hotels that can't turn over rooms fast enough. But I've come to doubt sensationalist surveys suggesting young Japanese don't have sex. The real issue is that many avoid traditional, committed relationships out of doubts about the future that based on economics rather than culture. If low libido were strictly societal, why do the Czech Republic, Poland, Singapore, South Korea, Spain and Taiwan have fertility rates as low as Japan's? I don't see the global media characterizing those countries as sexless freak shows spiraling toward extinction. "This is the typical weird and wacky Japan story that overseas editors seem to gobble up and encourage," says Jeff Kingston, head of Asian studies at the Tokyo campus of Temple University. "Of course Japanese have sex and if the number of love hotels is any barometer it seems like many are getting plenty of it. How do all those places stay in business if nobody is doing it?" To Kingston, the basic premise is flawed. "Japan has a low birthrate and thus it must be a lack of sex," he says. "That's not exactly compelling logic that overlooks all the main factors behind couples' decisions not to have more children." Part of the problem is cherry-picked data. Take the 2011 survey by the National Institute of Population and Social Security Research on which sex-drought stories are often based. Its finding that 61 percent of unmarried men and 49 percent of single women between 18 and 24 of age weren't in any kind of romantic relationship is mentioned up high. Rarely cited is this fact on Page 2 of the report: almost 90 percent of respondents intend to marry someday. And what about international comparisons? A recent Pew study found that 71 percent of unmarried Americans aren't in committed relationships. Also, there can be big cultural and generational differences in the meaning of "single," "dating" and "having sex." Japan's low birthrate (are you listening Mr. Prime Minister?) is a result of exorbitant living costs, elevated stress and diminished confidence. Even after two decades of deflation, prices in Japan for everything from rent to food to entertainment remain among the highest in the world. Economic stagnation and changes in labor laws have restrained wage growth and enabled companies to swap employees into low-paying part-time jobs with few benefits. This means the exclusion of more and more Japanese from the lifetime employment system that's long been the cornerstone of Japan Inc ., forcing many to work additional jobs. If you leave for work at 6 a.m. and get home close to midnight, including weekends, where is there time for dating? Young Japanese, especially men, don't feel financially secure enough to enter into long-term relationships, never mind getting married or starting families. At the same time, little has been done to blunt the institutionalized sexism that exacerbates Japan's low birthrate. Hardships women face in balancing careers and family encourages many to delay marriage and motherhood. If Japanese felt better about the future, they wouldn't be so reluctant to start building their own. Japan's demographics are worthy of study. How it balances a fast-aging population, a gigantic debt burden and a negligible birthrate -- if that's even possible -- will offer insights to officials in China, German and the U.S. in the years ahead. But portraying Japanese as libido-less oddballs and looking for clues in their culture only dehumanizes a nation. It misses Japan's pioneering role in one of the biggest economic challenges of this century as developed nations mature. (William Pesek is a Bloomberg View columnist. Follow him on Twitter.)

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Cablevision Agrees to Sell Clearview Theaters to Bow Tie Chain

Cablevision Systems Corp. (CVC) , the New York-area cable operator, agreed to sell most of the Clearview theater chain to closely held Bow Tie Cinemas, making Bow Tie the largest exhibitor in the metropolitan New York area. Bow Tie , owner of 22 U.S. theaters with 177 screens, will more than double in size become the eighth-largest chain to 388 screens, the companies said yesterday in a statement. Terms weren’t disclosed. Bow Tie will make “substantial” investments in the Clearview sites, including digital projectors and 3-D gear, so the cinemas can show Hollywood’s biggest releases, according to the statement. Studios are phasing out film prints in favor of satellite-distributed digital copies to save on shipping costs. Cablevision, based in Bethpage, New York , said in May it was considering its options for Clearview. Bow Tie is based in Ridgefield, Connecticut , and is still run by the family that founded the company more than 100 years ago, according to the statement. The agreement calls for Bow Tie to manage the Ziegfeld Theatre in New York, although Cablevision will retain ownership, the companies said. The company plans to make New York’s Chelsea Cinemas its Manhattan flagship. Cablevision rose 1.3 percent to $14.99 yesterday in New York. The shares are little changed this year. The company plans to let the leases expire on the remaining five locations, according to Kelly McAndrew, a spokeswoman. Williams Mullen acted as legal adviser to Bow Tie Cinemas and Anchin, Block & Anchin acted as financial adviser. Citigroup Inc. acted as financial adviser to Cablevision and Hughes Hubbard & Reed LLP provided legal counsel. To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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Treasuries Little Changed Before Europe GDP Report

Treasuries were little changed before data analysts said will show the euro area’s economy contracted in the second quarter, supporting demand for the relative safety of U.S. government securities. While benchmark 10-year yields last week climbed to the highest level since May, they are still within 29 basis points of the record low. Columbia Management Investment Advisers LLC, which oversees $331 billion, said the increase in rates probably won’t lead to sustained weakness in the market. “Treasuries seem a little bit oversold,” said Ali Jalai, who trades U.S. debt in Singapore at Scotiabank, a unit of Bank of Nova Scotia (BNS) , one of the 21 primary dealers authorized to deal with the Federal Reserve. “Over the next day, I expect yields to drop. European growth is going to be weaker.” Ten-year yields held at 1.67 percent as of 7:28 a.m. in London , according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in August 2022 was 99 19/32. The rate was as high as 1.73 percent last week, climbing from the all-time low of 1.38 percent set July 25. The 30-year bond yield added one basis point to 2.76 percent. Japan ’s 10-year rate rose 1/2 basis point to 0.79 percent. Volatility dropped for a third session yesterday. Bank of America Merrill Lynch’s MOVE index, which measures price swings based on options, slid to 67.2 from 2012’s high of 95.4 in June. The average over the past decade is 101.14. Europe Shrinking Gross domestic product in the euro area probably contracted 0.2 percent in the three months through June 30 after being unchanged in the first quarter, according to the median forecast of economists in a Bloomberg News survey. The European Union’s statistics office is scheduled to report the data today. German gross domestic product rose 0.3 percent in the second quarter from the first, the Federal Statistics Office said in Wiesbaden today. Economists predicted a 0.2 percent increase, based on a Bloomberg survey before the report. France ’s gross domestic product was unchanged in the second quarter from the first, the national statistics office in Paris said today in an e-mailed statement. The Fed is scheduled today to buy as much as $5.5 billion in Treasuries with maturities of eight to 10 years, according to the website of the central bank’s New York branch. The purchases are part of the Fed’s effort to support the economy by putting downward pressure on long-term interest rates. ‘Sluggish Pace’ “The main factors behind the lower interest rate environment -- the sluggish pace of the recovery, easing by the Federal Reserve, and the European crisis -- have not meaningfully changed,” Zach Pandl , the Minneapolis-based senior interest-rate strategist at Columbia Management, wrote on the company’s website yesterday. The U.S. central bank has held its target for overnight bank lending in a range of zero to 0.25 percent since 2008 and plans to keep it there at least through late 2014 to stimulate the world’s biggest economy. The Fed also bought $2.3 trillion of mortgage and Treasury debt from 2008 to 2011 in two rounds of so-called quantitative easing. Signs of improvement in the U.S. economy have the potential to send yields higher, said Andy Cossor, a Hong Kong-based market strategist at DZ Bank AG, Germany ’s fourth-largest lender. Retailing, Inflation Sales at U.S. retailers probably increased 0.3 percent last month, according to a Bloomberg survey of economists before today’s Commerce Department data. That would follow a 0.5 percent slide in June. A report today on producer prices and data tomorrow on consumer prices may show costs increased in July, separate surveys showed. The difference between yields on 10-year notes and same- maturity Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, was 2.25 percentage points. The average over the past decade is 2.15 percentage points. “I wouldn’t be surprised to see the recent trend in higher yields in Treasuries being extended if the U.S. data come in little bit better than expected,” Cossor said. The U.S. added 163,000 jobs in July, a government report showed Aug. 3, more than the 100,000 projected by analysts. The data helped send Treasuries to a 0.7 percent loss this month as of yesterday, based on returns compiled by Bank of America Merrill Lynch. The MSCI All-Country World Index (MXWD) of stocks handed investors a 2.2 percent gain in the period, including reinvested dividends, according to data compiled by Bloomberg. Commodities as measured by the S&P GSCI Total Return Index climbed 3 percent. Ten-year yields will be 1.66 percent by Sept. 30, little changed from today’s level, according to a Bloomberg survey of economists, with the most recent projections given the heaviest weightings. To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net ; Wes Goodman in Singapore at wgoodman@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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IMF Says Spain Must Step Up Reform Efforts as Eur Region’s Crisis Worsens

The International Monetary Fund said Spain must step up efforts to overhaul its economy as Europe ’s sovereign-debt crisis threatens to damp growth. “The repair of the economy is incomplete and risks are considerable,” the Washington-based IMF said in its annual appraisal of Spain yesterday. There must be “no let-up in the reform momentum” to bolster the recovery and reduce a 21 percent unemployment rate that is “unacceptably high,” the fund said. Spain’s Socialist government is carrying out the deepest budget cuts in at least three decades while raising the retirement age and reducing firing costs. Prime Minister Jose Luis Rodriguez Zapatero overhauled wage-bargaining rules on June 10 in the latest step aimed at reining in borrowing costs that surged to the highest in a decade last week on mounting expectations of a Greek default. “Financial conditions could deteriorate further, reflecting rising concerns about sovereign risks in the euro area,” the IMF said. “This could put additional pressure on sovereign and bank funding costs for Spain, which in turn could feed back to the real economy.” The IMF called on the government, which has passed two labor overhauls in the past year, to make deeper changes to reduce the highest unemployment rate in Europe. ‘Underlying Problems’ “Some of the underlying problems of the Spanish economy, especially weak productivity growth and the dysfunctional labor market, remain to be fully addressed,” the IMF said. It called for “further enhancing the credibility of fiscal consolidation, completing financial-sector reform” and “boldly strengthening the reforms of the labor market.” Finance Minister Elena Salgado said the IMF report is “extraordinarily positive.” The fund said that authorities “undertook a series of measures targeting the main economic problems facing the country.” “I don’t see here that they are telling us that we have to make changes,” Salgado said in a telephone interview yesterday in Madrid. “The core of the labor reforms is in place already.” Spain’s 10-year bond yield fell to 5.475 percent today, from 5.49 percent yesterday, narrowing the spread over equivalent German securities to 249 basis points from 251 basis points. That gap widened to as much as 282 basis points last week, approaching the euro-era high of 298 reached on Nov. 30. ‘Additional Measures’ The government has pledged to cut the budget deficit to 6 percent of gross domestic product this year and 3 percent in 2013 from 9.2 percent last year, with measures including public- sector wage cuts and a pension freeze. Meeting the medium-term targets “will likely require additional measures,” said the IMF, whose economic projections are less optimistic than the government’s. Economic growth, led by exports, will rise “gradually” to 1.5 percent to 2 percent in the medium-term, the IMF said. The Spanish government forecasts growth of 1.3 percent this year, rising to 2.3 percent next year and 2.4 percent in 2013. Salgado said yesterday she is sticking to those forecasts and first- quarter GDP “doesn’t contradict” the estimates. To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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Heating Oil, Gasoline Futures Slip as Crude Oil Spreads Narrow

Heating oil and gasoline fell as Brent crude oil in London dropped, reducing the cost for refiners on the U.S. East Coast, and as the European benchmark Brent’s premium over West Texas Intermediate oil slipped. Gasoline and heating oil moved in the same direction as Brent for the fourth straight day. Refineries supplying fuel to New York Harbor, the delivery point for heating oil and gasoline futures, use crude oil grades priced relative to the European benchmark. Gasoline and WTI have moved in opposite directions on nine of 13 trading days in February. “WTI and Brent are moving in opposite ways,” said Harry Tchilinguirian , London-based head of commodity markets strategy at BNP Paribas SA. “You’re probably looking at some profit taking by those who shorted the WTI-Brent spread. There does not appear to be any material change to the circumstances that have led to the blowout in the spread to suggest a rapid narrowing.” Heating oil for March delivery dropped 4.24 cents, or 1.5 percent, to settle at $2.7324 a gallon on the Nymex. The WTI-Brent spread, based on April futures traded on Nymex and ICE Futures Europe, dropped $2.19 to $13.75 a barrel. Product futures had followed Brent to 28-month highs as the spread reached a record $15.94 on record-high inventories of oil at Cushing, Oklahoma , the Nymex contract’s delivery point. Changing Positions Traders altered positions on the spreads before the Feb. 22 expiration of the Nymex-traded WTI March contract, which gained $1.37, or 1.6 percent, to settle at $86.36. April-delivery Brent on London’s ICE Futures exchange dropped $1.19, or 1.1 percent, to $102.59 after rising earlier when Middle East protests spread to Libya, Bahrain and Yemen, threatening fuel shipments. “Before Tuesday’s crude expiration on the Nymex, we could see a whole lot more of this in the next few days,” said Tom Knight , vice president of trading and supply at Truman Arnold Cos. in Texarkana, Texas. U.S. markets will be closed on Feb. 21 for the Presidents Day holiday. Heating oil declined as normal temperatures were projected in the U.S. Northeast Feb. 22 through March 2, according to the National Weather Service ’s Climate Prediction Center. The Northeast is the largest user of heating oil. “We’re getting toward the end of the season and warmer weather is on the horizon,” said Fred Rigolini, vice president of Paramount Options Inc. in New York and a trader at the New York Mercantile Exchange. Gasoline Declines Gasoline also fell as two U.S. government reports, showing a rise in the cost of living and more first-time jobless claims, indicated less motor fuel demand. “People are going to be cutting back on buying gas with the not-so-rosy economic picture,” said Dan Flynn , an energy analyst at PFGBest in Chicago in Chicago. “But this market is nervous and just waiting for more headlines out of the Middle East. We’re going to see some choppy trading.” Gasoline for March delivery dropped 1.7 cents, or 0.7 percent, to settle at $2.5277 a gallon after earlier touching $2.5554, the highest intraday price for the front-month contract since Sept. 29, 2008. The consumer-price index increased 0.4 percent for a second month, the Labor Department said in Washington. Applications for jobless benefits rose 25,000 to 410,000 in the week ended Feb. 12, Labor Department figures showed. Regular gasoline at the pump, averaged nationwide, increased 1.2 cents to $3.145 a gallon yesterday, AAA said on its website. To contact the reporter on this story: Barbara J. Powell in Dallas at bpowell4@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net .

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IEA Says EU’s Iran Oil Ban Allows Time for Alternate Supply

The European Union’s decision today to impose sanctions against the purchase of oil from Iran allows customers time to find alternative supply, the International Energy Agency said. “The EU embargo may not impact upon actual physical supplies until around the middle of 2012, which gives existing customers of Iranian oil some time to line up alternative supplies,” the Paris-based agency said in a statement received by e-mail. The IEA “welcomes statements by key Gulf producers that they will continue to meet existing and any incremental demand from their customers,” it said. The IEA requires that its 28 member nations maintain emergency stockpiles in the event of a supply shock. Fatih Birol, the agency’s chief economist, said on Jan. 19 that there is no reason to take any action to release inventories amid concern that tensions over Iran ’s nuclear program and sanctions may disrupt exports of Middle East oil. To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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Gilts Rise as Stock Losses Boost Demand for Safety, Central Bank to Buy

Gilts rose, pushing two-year yields to a record low, as a decline in stocks and speculation economic growth is slowing boosted demand for safer investments. Shorter-maturity notes led gains as the Bank of England said it will buy securities due between three and 10 years at its first debt-purchase operation next year. An industry report today showed U.K. manufacturing shrank in November at the fastest pace since June 2009 and new orders dropped for a fifth month. The pound dropped against the euro and the dollar. “Market sentiment remains fragile as there’s still a lot of uncertainty, and that’s supportive for short-dated gilts,” said Mohit Kumar, head of European fixed-income strategy at Deutsche Bank AG in London. “Price moves were exacerbated somewhat by poor year-end liquidity.” The two-year yield fell nine basis points, or 0.09 percentage point, to 0.375 percent at the 5:33 p.m. in London , after dropping to 0.36 percent, the lowest since Bloomberg began tracking the data in 1992. The 4.5 percent note due in March 2013 gained 0.1, or 1 pound per 1,000 pound ($1,569) face value, to 105.195. Ten-year yields fell five basis points to 2.26 percent after rising as much as 12 basis points. The FTSE 100 Index of stocks fell 0.3 percent and the Standard & Poor’s 500 index slipped 0.2 percent. Gilts rose as a report showed U.K. manufacturing shrank in November at the fastest pace since June 2009. The industry is suffering as the euro-region sovereign debt crisis jeopardizes the outlook for exports to Europe , Britain’s biggest trading partner, and as the global economy cools. Manufacturing Shrinks Markit Economics and the Chartered Institute of Purchasing and Supply said their factory index (UKX) dropped to 47.6 last month from a revised 47.8 in October. Bank of England Governor Mervyn King today urged banks to enhance efforts to bolster their defenses against the euro area’s debt turmoil, which he said now looks like a “systemic crisis.” U.K. government bonds have returned 15 percent this year, while German debt gained 6.5 percent and U.S. Treasuries rose 9 percent, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. The central bank announced today that it will buy gilts with maturities ranging from three-to-10 years at on Jan. 3, its first purchase for 2012 under the quantitative easing program. Gilts fell and the pound rose against the dollar earlier after six central banks led by the Federal Reserve yesterday agreed to cut the cost of providing dollar funding via swaps agreement and to make other currencies available as needed. The pound dropped 0.1 percent to $1.5689 and weakened 0.3 percent to 85.83 pence per euro. “The optimism that helped the pound to perform well is unlikely to prove sustainable in the current wider conditions, as shown by the manufacturing figures today,” said Lee Hardman , a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. To contact the reporters on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net ; To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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Deutsche Post Said to Consider Buying Celesio Drug-Logistics Unit Movianto

Deutsche Post AG (DPW) , Europe’s largest mail carrier, is among companies interested in Celesio AG (CLS1) ’s unit that provides logistics services to drugmakers, according to three people with knowledge of the matter. Celesio (CLS1) , Europe’s largest drug wholesaler based in Stuttgart, Germany , hired Morgan Stanley and Societe Generale SA to run the sale of the business called Movianto, said the people, who declined to be identified because the talks are private. Sales documents will probably be sent to potential buyers this month and the unit could fetch about 150 million euros to 250 million euros ($330 million), people familiar said. Express companies are trawling for acquisitions because growth in pharmaceutical logistics is expected to average 7.6 percent in the coming years, reaching 63 billion euros by 2015, according to research firm Transport Intelligence Ltd. Celesio Chief Executive Officer Markus Pinger is overhauling the company, including selling units that are not part of the main business, after the company cut profit forecasts twice last year on increased regulation and competition in Europe. Celesio’s sale of the Movianto unit comes amid an increase in logistics transactions, with United Parcel Service Inc. (UPS) bidding 4.9 billion euros for Dutch competitor TNT Express NV. Movianto, which operates in 13 European countries with more than 1,700 employees, stores and delivers products for the pharmaceutical and biotech industries and also offers re- packaging and re-labeling. Growth Market “A whole row of express and forwarding companies have identified healthcare logistics as an interesting growth market,” said Hartmut Moers, a Dusseldorf-based analyst at WestLB AG, who has a “buy” rating on Deutsche Post shares. “Theoretically, a business such as Movianto could be of interest for all the major players.” Companies active in these markets include Deutsche Post, its U.S. competitors UPS and FedEx Corp. (FDX) as well as the Swiss freight-forwarding company Kuehne & Nagel International AG and the Danish trucking company DSV A/S. (DSV) Spokesmen for Celesio and Deutsche Post, based in Bonn, Germany, declined to comment. Deutsche Post, UPS, FedEx and other shipping companies have focused on growing their healthcare logistics units to take advantage of surging demand for drugs, aging populations and the higher profit margins that such packages typically bring. Deutsche Post’s DHL express unit has previously cited healthcare as one of the areas driving growth. In 2006, the company won a 10-year contract to supply as much as 3.7 billion pounds ($5.9 billion) a year of goods to the U.K. state-funded National Health Service. To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net ; Jacqueline Simmons at jackiem@bloomberg.net

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Gagfah Chief Is Target of BaFin Investigation, Handelsblatt Says

Germany ’s BaFin financial regulator is investigating Gagfah SA (GFJ) Chief Executive Officer William Brennan on suspicion of insider trading , Handelsblatt reported, citing BaFin. The probe concerns Brennan’s sale of Gagfah shares worth 4.7 million euros ($6.7 million) on Feb. 3, about four weeks before the city of Dresden said it was considering taking legal action against some of Gagfah’s units, the newspaper said in a preview of an article to be published tomorrow. Brennan denies any wrongdoing, Handelsblatt said. The newspaper cited a Gagfah spokeswoman as saying that Brennan had been aware for “a long time” that Dresden was looking into the matter, though he wasn’t aware of any plans for the city to make “hefty demands” on the company. Spokespeople for BaFin and Gagfah didn’t immediately return calls requesting comment after business hours today. A listing for Brennan couldn’t be found in directory assistance or on the Internet. To contact the reporter on this story: Naomi Kresge in Berlin at at nkresge@bloomberg.net. To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net .

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Marchionne Squeezes Mileage for Chrysler With Nine Speeds

Chrysler Group LLC’s biggest U.S. investment in the year following its June 2009 bankruptcy exit is about to show up under more of its hoods: transmissions with additional gears to improve performance and boost fuel economy. Eight-speed transmissions, more common in luxury vehicles made by the likes of Bayerische Motoren Werke AG (BMW) and Volkswagen AG (VOW) ’s Audi, will spread throughout Chrysler’s lineup beginning late this year, said Mircea Gradu, vice president of transmission powertrain and driveline engineering. The company will introduce the industry’s first nine-speed transmissions by the first half of 2013, he said. “I’m convinced that, sooner or later, others will come up with similar solutions,” Gradu said in an interview from his office in Auburn Hills , Michigan, where Chrysler is based. “Hopefully, the time will be as long as possible until they catch up with the technology.” While rivals tout hybrid cars, plug-in hybrids and pure electrics, Chief Executive Officer Sergio Marchionne is betting he can meet regulatory requirements primarily by improving traditional gasoline engines with the better transmissions. The strategy takes less investment than developing a hybrid and has already helped boost sales of cars such as the Chrysler 300. The eight- and nine-speed transmissions will help Chrysler meet stricter standards aimed at curbing emissions and raising efficiency. President Barack Obama has proposed U.S. rules requiring automakers to double their corporate average fuel economy, known as CAFE, to 54.5 miles per gallon by 2025. Alternative Path Most automakers’ game plans are to use some gasoline- electric hybrids, a modest number of electric vehicles and a substantial amount of improvement in traditional internal- combustion engines, Alan Baum, principal of auto-industry forecaster Baum & Associates in West Bloomfield, Michigan, said in a telephone interview. Chrysler hasn’t invested heavily in hybrids, and the only electric vehicle it has announced is an electric Fiat 500 subcompact, primarily to comply with California “zero-emission vehicle” mandates. “Looking at how the various automakers are going to satisfy CAFE, for most of the automakers you can come up with a pretty reasonable path to get there,” Baum said. “And then you look at Chrysler.” For Chrysler to have a chance of staying in compliance through 2025 without dramatically changing their engines, “the answer is the transmissions” for now, Baum said. “They’re getting tremendous differentiation from their old product,” said Baum. Conventional Efficiency Chrysler’s investments related to its transmissions, which the company has said totals $1.3 billion since 2007, show that Marchionne’s approach is to squeeze efficiency out of conventional gas-burning engines rather than make costly bets on hybrid and electric vehicles that account for a small slice of sales in the U.S. and Europe , said Michael Omotoso a powertrain analyst at LMC Automotive. “They’re doing basically the bare minimum to satisfy government regulations,” he said. “Their strategy is to meet the standards with minimum investment.” Marchionne may have little choice: Fiat SpA (F) , Chrysler’s majority owner, has seen sales slump amid the European credit crisis, which has sapped demand in Italy , its home market. Gradu keeps a photograph in his office of Marchionne posing with his team of about 20 engineers after an hour-long meeting about the transmission and its debut in the Charger, which he said is an “illustration of the high-level support that we get in this area.” Gears Help Transmissions link the output of an engine to the wheels, and they have multiple gears to switch among as speed increases or decreases. Like the difference between a 10-speed bicycle and a three-speed, more gears means more points where the powerplant can propel the vehicle most efficiently. The nine-speed transmissions, which Chrysler is developing with Germany ’s ZF Friedrichshafen AG, could boost fuel economy of models such as Dodge Grand Caravan minivans by as much as 16 percent, according to the supplier. The predicted gain is in line with the 15 percent boost in highway fuel economy that was achieved when Chrysler offered eight-speed transmissions in Chrysler 300 and Dodge Charger sedans with the 2011 model year. Adding the eight-speeds to the big, rear-wheel-drive 300 and Charger allowed Chrysler to advertise 31 mpg (50 kpg) per gallon in highway driving, according to the Energy Department’s website. Combined deliveries for the two models are up 68 percent through the first six months of this year. Kokomo Production Chrysler will try to replicate that success by starting production of the eight-speeds at its plants in Kokomo, Indiana , late this year, Gradu said. Chrysler said in June 2010 that it would invest $300 million in the Kokomo plants to accommodate production of the transmissions licensed from ZF. The transmissions will spread to new models, including the Dodge Dart compact car and Ram 1500 pickups, and may be offered in future versions of the Dodge Challenger muscle car and Jeep Grand Cherokee and Wrangler sport-utility vehicles, Gradu said. “Anything that will be rear-wheel-drive based, we will consider this,” he said of the eight-speeds. The nine-speeds are intended for front-wheel-drive models, he said, including minivans. The nine-speed transmission will be exclusive to Chrysler when it goes into production by the first half of 2013. Honda Interest Honda Motor Co. (7267) is interested in being the next automaker to get the technology, said Omotoso, who is based in Troy, Michigan. Bryan Johnson, a spokesman for ZF in Northville, Michigan, declined to comment. Honda has said it plans to offer continuously variable transmissions across its lineup, starting with the redesigned Accord midsize sedan this year. Ed Miller , a Detroit-based Honda spokesman, declined to confirm other future transmissions. LMC Automotive sees Chrysler adding the eight-speed transmission to Grand Cherokee either in the 2013 or 2014 model year, Omotoso said. The researcher also predicts that the eight- speed will be in the Dodge Durango and Maserati Kubang SUVs. The Kubang shares the Grand Cherokee’s underpinnings and is going to be built by Chrysler at a plant in Detroit. Jeep also may introduce a large SUV called the Grand Wagoneer to replace the Jeep Commander in 2014, Omotoso said. If Chrysler moves forward with that plan, LMC sees the model getting the eight-speed automatic. “This is going to help them pull ahead of GM and Ford” in terms of which companies have the best transmission offerings, Omotoso said. LMC expects that Ford and GM will develop their own eight- speeds and have them ready by 2014 for the next generation of Cadillac CTS sedan, Cadillac Escalade SUV, Lincoln MKS sedan and Lincoln MKX crossover. The nine-speed transmission can go in “essentially any” front-wheel drive platform in Chrysler’s lineup, including the minivans, Gradu said. LMC also expects to see the nine-speed in crossovers for the Chrysler and Alfa Romeo brands in 2013 or 2014, according to Omotoso. To contact the reporter on this story: Craig Trudell in Southfield, Michigan , at ctrudell1@bloomberg.net ; To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net .

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Mexican Peso Strengthens as Stimulus Speculation Increases

Mexico ’s peso gained versus all of its major counterparts as crude oil surged on speculation China may increase stimulus measures, boosting the outlook for the Latin American country’s second-biggest export. The peso appreciated 1.3 percent to 13.2904 per dollar at 4 p.m. in Mexico City, the biggest advance among the 16 most- traded currencies tracked by Bloomberg. It touched 13.5231 yesterday, the weakest intraday level since June 29. The peso climbed 0.8 percent this week. Crude oil rallied in New York after China’s economy grew in the second quarter at the slowest pace since the first three months of 2009, boosting the prospect of more steps by the Asian nation’s government to spur expansion. “They’re going to add more stimulus because the economy is slowing more than they want,” Win Thin , global head of emerging-market strategy at Brown Brothers Harriman & Co., said by phone from New York. Mexican crude oil exports accounted for $23.5 billion in revenue in the first five months of this year, according to preliminary data from the national statistics agency. Rafael Camarena , an economist at Banco Santander SA, said the peso extended gains after a gauge of U.S. consumer confidence fell, increasing speculation the Federal Reserve will take further action to boost the world’s biggest economy. Mexico sends 80 percent of its exports to the U.S. The Thomson Reuters/University of Michigan index of consumer sentiment unexpectedly dropped to 72 this month from June’s 73.2 reading. It was the lowest level this year. The gauge was projected to rise to 73.5, according to a median forecast of 69 economists surveyed by Bloomberg News. Additional Steps The Federal Reserve has signaled that a further economic slowdown would increase support among policy makers for additional steps to spur the three-year expansion, according to minutes of the June 19-20 meeting released this week in Washington. “This expectation of more monetary stimulus tends to favor the peso,” Camarena said by phone from Mexico City. The yield on Mexican local-currency bonds due in 2024 fell eight basis points, or 0.08 percentage point, to 5.29 percent, according to data compiled by Bloomberg. The price rose 0.88 centavo to 142.78 centavos per peso. To contact the reporter on this story: Ben Bain in Mexico City at bbain2@bloomberg.net To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

U.S. Companies Reporting Earnings on June 7

The following table lists the 14 U.S. companies that reported quarterly earnings today (end date of the quarter is noted in the last column). Companies are sorted alphabetically by ticker symbol. Earnings estimates provided by Bloomberg. To contact the reporter on this story: Wendy Soong in New York at at csoong@Bloomberg.net. To contact the editor responsible for this story: Alex Tanzi at at atanzi@Bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Cameroon Says Herakles Needs Permits for Oil Palm Project

Herakles Farms needs to obtain the correct permits before it can proceed with its plans to develop an oil palm plantation and processing plant in southwest Cameroon, the government said. The New York-based company needs a Public Utility Declaration Certificate and another certificate showing effective transfer of the plantation land before proceeding with its activity, the Ministry of Forestry and Wildlife said in a statement yesterday. On May 18 Herakles said it suspended work in Cameroon and furloughed its 690 workers there after being ordered to halt operations by the government. A Sept. 17, 2009 agreement between government and Herakles’ subsidiary Sithe Global Sustainable Oils Cameroon for the development of a plantation on 73,086 hectares (180,595 acres) of land doesn’t “exempt” the company from respecting “legal procedure and environmental constraints,” Forestry Minister Ngole Philip Ngwesse said in the statement. The Minister of Forestry and Wildlife authorized the clearing of the forest around the plantation within an area of 2,500 hectares close to the village of Talangaye but following complaints from the local community, the minister was obliged to act, the ministry said in the statement. Herakles has obtained all necessary permissions, it said in its statement. To contact the reporter on this story: Pius Lukong in Yaounde at plukong@bloomberg.net To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Fed’s Plosser Calls for Tapering of QE to Begin in September

Federal Reserve Bank of Philadelphia President Charles Plosser, who has opposed the Fed’s current round of asset purchases, said the central bank should begin tapering its $85 billion in monthly bond buying in September and end the unorthodox stimulus by year-end. “I don’t want to do it all at once, but I think we should begin to taper very soon and hopefully end it by the end of this year,” Plosser said today in an interview in Jackson Hole, Wyoming. “That would be a healthy thing for the economy. We can do it gradually.” Fed Chairman Ben S. Bernanke said last month the Fed is on track to begin reducing its bond buying later this year and halt the program by around mid-2014 if the economy performs in line with central bank forecasts. Plosser, who doesn’t vote on monetary policy this year, has repeatedly spoken out against additional easing by the Fed. “I’d like for us to start in September” to taper the purchases, Plosser said in the Bloomberg Television interview with Michael McKee to air July 15. “We don’t want to create another housing boom,” and “we have to be careful of the unintended consequences of our policies.” The Federal Open Market Committee on June 19 pledged to continue its current purchase pace for mortgage bonds and Treasuries (USGG10YR) , seeking to bolster U.S. growth and reduce unemployment. Many officials wanted to see gains in the labor market before reducing the pace of the monthly purchases, minutes of the June 18-19 gathering showed. Halt Buying At the same time, about half of the 19 participants in the FOMC wanted to halt bond buying by the Fed by year-end, the minutes said. Treasuries fell today, erasing earlier gains. The yield on the 10-year Treasury note increased 1 basis point to 2.58 percent. The Standard & Poor’s 500 Index advanced 0.3 percent to 1,680.19. The risks from the Fed’s so-called quantitative easing are growing with the size of its balance sheet, currently at $3.5 trillion, Plosser said. It will be “difficult” for the Fed to change course on policy, he said. Speaking to reporters after giving a speech today, the Fed district bank chief said he would be “increasingly uncomfortable” if inflation continued to drop. He “would be fine” tapering both Treasuries and mortgage bonds, he said. Financial Markets “The most important thing is to begin to unwind” the asset-purchasing program and “focus” on communicating to financial markets that the Fed will keep rates low, he said. In his speech today, Plosser said recent changes in the way the central bank explains its policy outlook have “likely caused more confusion than illumination.” Fed officials should make a clearer pledge to keep interest rates near zero as long as unemployment is above 6.5 percent and inflation is no more than 2.5 percent, he said in prepared remarks at the Global Interdependence Center’s Rocky Mountain Economic Summit. Instead of emphasizing flexibility, central bankers should treat the guidance as “triggers rather than thresholds,” he said. “Effective forward guidance demands commitment.” Plosser said he foresees the unemployment rate “approaching” 7 percent by year-end and 6.5 percent before the end of 2014. The jobless rate was 7.6 percent in June. The Philadelphia Fed chief in 2011 dissented twice against FOMC decisions to add monetary stimulus. To contact the reporter on this story: Aki Ito in San Francisco at aito16@bloomberg.net To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

States Should Cut Pension Costs, Not Default on Debt, Deutsche's DWS Says

States should cut pension costs through measures such as extending the retirement age rather than defaulting on debt, DWS Investments said in a report. Pension funds are “unsustainable on their current trajectory,” and “represent a significant and growing threat to the long-term financial health of muni bond issuers,” according to the e-mailed report released today by the research unit of Deutsche Bank AG. The average state’s pension is 76 percent funded, according to data compiled for the Bloomberg Cities and Debt Briefing in New York last month. Illinois’ is only 50 percent funded; Kentucky, New Hampshire and Louisiana are funded at 60 percent or lower. The average five-year return of pension assets is about 3 percent, below the 7 percent or 8 percent benchmarks many states use, according to consulting firm Wilshire Associates. The severity of budget problems makes unions more willing to work with legislators to change laws and write new ones, the study said. Some states are prohibiting “spiking,” a practice that allows public workers to take overtime and opt out of vacation time in order to create an inflated benchmark for future benefits. Other measures include changing from defined-benefit programs to defined-contribution programs and reducing the public workforce, said the report. New Jersey Governor Chris Christie proposes legislation raising the retirement age and rescinding the pension increase granted in 2001. Minnesota is attempting to change its cost-of- living formula for retirees, the report said. Defaulting on debt to free up capital would “handicap their access to the capital markets,” according to the report. “After years of watching the unfunded obligation of municipalities, we are finally seeing an environment where reform is possible,” the report said. To contact the reporter responsible for this story: Ashley Lutz in New York at alutz8@bloomberg.net. To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Baht Drops From 16-Year High on Intervention Risk; Bonds Decline

Thailand ’s baht fell from a 16-year high on concern the central bank will intervene to slow gains that may hurt exports. The government’s 10-year bonds fell for the first time in eight days. Bank of Thailand Governor Prasarn Trairatvorakul said yesterday the baht gains were “excessive,” though added that special measures to stem fund inflows weren’t necessary as yet. The dollar’s 14-day relative strength index against the baht stayed below the 30 threshold for a third day, a sign that the greenback is oversold. The baht has strengthened 1.1 percent this week, the biggest advance among 25 emerging-market currencies tracked by Bloomberg. “Even though the central bank seems to be quite tolerant with the baht’s gains, it doesn’t mean it won’t step in, especially since the baht has risen so much in such a short time,” said Hideki Hayashi , a researcher at the Japan Center for Economic Research in Tokyo. “In the short term, we may see some technical correction too. But the basic trend of fund inflows and currency gains will continue.” The baht slid 0.4 percent to 29.22 per dollar as of 9:26 a.m. in Bangkok, according to data compiled by Bloomberg. It touched 29.08 yesterday, the strongest level since July 1997. Global funds purchased $2.5 billion more sovereign debt than they sold this month after putting in a net $2.7 billion in February and $3.7 billion in January, Thai Bond Market Association data show. Interest Rates Finance Minister Kittiratt Na-Ranong said yesterday that Thailand’s relatively attractive interest rates were encouraging inflows. The nation’s policy rate of 2.75 percent compares with a maximum of 0.25 percent in the U.S. and 0.1 percent in Japan. It is still lower than Indonesia ’s 5.75 percent, the Philippines ’ 3.5 percent and Malaysia ’s 3 percent. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, slumped 17 basis points, or 0.17 percentage point, to 4.91 percent. The yield on Thailand’s 3.625 percent bonds due June 2023 rose one basis point to 3.59 percent, data compiled by Bloomberg show. The rate dropped for seven days through yesterday, the longest streak since Feb. 8. It touched 3.58 percent yesterday, the lowest level since Feb. 11. To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Brokers Beat Banks as China Revamps Economy: Chart of the Day

Investors are betting China ’s brokerages will gain more than commercial banks and other companies from a plan unveiled this month to make market forces the “decisive factor” in the world’s second-largest economy. The CHART OF THE DAY shows the average price-to-book ratio for the three Chinese brokerages whose shares are traded in Hong Kong -- China Galaxy Securities Co., Citic Securities Co. and Haitong Securities Co. -- compared with a similar measure for the five largest banks and the Hang Seng China Enterprises Index, which tracks 40 mainland companies. Since the Communist Party announced a package of 60 reforms on Nov. 15, the brokers’ ratio surged to 1.76, while banks lagged behind at 1.08. “Brokerages will benefit more from China’s reform because the nation is pledging to develop a multilayer capital-markets system, meaning more new listings, bond issuance and other market activities,” said Edmond Law, an analyst at UOB Kay Hian Holdings Ltd. in Hong Kong. “The opening of the banking market, interest-rate liberalization and the introduction of competition will hurt banks’ profitability.” Brokers’ earnings have been held back by a government freeze on initial share sales that’s in its 14th month. Authorities are drawing up new rules for share sales, under which regulators will be responsible only for ensuring companies’ disclosures meet requirements, rather than approving the sale itself, regulator Xiao Gang said last week. Banks may face a squeeze on margins as the government’s pledge to ease restrictions on interest rates paid on deposits leads to tougher competition. Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Agricultural Bank of China Ltd., Bank of China Ltd. and Bank of Communications Co. have boosted earnings since 2008 as policy makers allowed unprecedented amounts of new credit to boost economic growth, while deposit-rate caps protected margins. Net income at ICBC, the world’s most profitable bank, was about double that of PetroChina Co. last year. In the U.S. and Europe , the ratio between the biggest banks and energy companies was the reverse. To contact the reporter on this story: Stephanie Tong in Hong Kong at stong17@bloomberg.net To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

To Rebuild Haiti, Restoring Democracy is a Must

After a devastating earthquake, hurricanes and an imported cholera epidemic, impoverished Haiti seems an unlikely candidate for tough love. But that may be the best way to resolve a political impasse blocking the country’s recovery. At a recent meeting of the United Nations Security Council, important givers, including Canada , the U.K. and the U.S., expressed dismay over the political paralysis that is feeding an increase in civil unrest and major crime. On the same day, major donors declined Haiti’s invitation to discuss more aid, saying the government first needed a plan for restoring democracy. They’re right. For more than a year, Haiti has been governed outside its constitution. Elected officials’ terms have expired, and with no electoral commission to organize new balloting, President Michel Martelly has handpicked 129 of 140 mayors. A third of the Senate is empty. If there are no elections this year, and terms expire for another third, the Senate will cease to function. The drift is toward authoritarianism, of which Haiti has already suffered plenty. Only in 2011, with Martelly’s ascension, has power ever passed democratically between opposing political factions. Organizing the overdue elections, unfortunately, has not proved simple. After a long, inconclusive fight over forming a permanent electoral council, the executive, judicial and legislative branches agreed on Christmas Eve to create a temporary one to organize local and Senate elections. In mid- March, Parliament finally named its three representatives, but the executive and the judiciary have yet to announce theirs. Martelly may prefer to let the Senate collapse and to leave local government in the hands of his appointees. Yet ruling in this way won’t resolve the qualms of foreign donors who are essential to Haiti’s recovery. To resettle the remaining 347,000 Haitians left homeless by the January 2010 earthquake, and to create decent housing for those in transitional accommodations, Martelly has to keep foreign aid flowing. Moreover, Haiti needs the UN’s help in fighting a cholera epidemic that has killed 8,000 people and is link ed to a sanitation lapse at a U.N. Stabilization Mission camp. Although the U.N. refuses to accept responsibility, it is seeking donors for a 10-year, $2.2 billion cholera eradication program based on vaccinations and improved water and sanitation systems. Those benefactors will insist on a restoration of democracy because they know the country’s long-term future depends less on their money than on investors who can create work for the two- thirds of the population who have no formal job. Entrepreneurs won’t put serious money into Haiti without faith that the government is legitimate, the rule of law is paramount, and Parliament is capable of passing laws to improve the business climate. Elections alone won’t save Haiti. But the failure to hold them may doom the country to a backward slide. To contact the Bloomberg View editorial board: view@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Rand Gains 1st Day in 5 After Failing to Breach Resistance Level

The rand gained for the first time in five days as the currency’s biggest weekly slump since October failed to push it through a key resistance level. Bond yields also dropped for the first time this week. The currency advanced 0.7 percent to 8.8652 per dollar by 3:36 p.m. in Johannesburg. The rand has weakened 1.7 percent this week, the worst performance of major emerging-market currencies monitored by Bloomberg and the most since the week ended Oct. 5. Yields on benchmark 10.5 percent bonds due December 2026 fell 11 basis points to 7.65 percent after reaching the highest in more than two weeks yesterday. South Africa ’s currency appreciated after failing yesterday to break through 9 per dollar, seen as an important resistance level to further weakness. The stochastics oscillator for the rand versus the dollar was 29.8 today, according to data compiled by Bloomberg, below the 30 threshold that signals the currency may have declined too fast and is poised to strengthen. “We’re seeing a technical pullback after yesterday’s move,” Ian Martin , a senior currency trader at Rand Merchant Bank in Johannesburg, said by phone. “We’re stuck in a range but I still think the risk is” for further weakness, he said. Stochastics measure the price of a security relative to its highs and lows during a particular period. The rand’s decline this week came as violent wage protests in the Western Cape province damped investor sentiment and Standard & Poor’s downgraded Gold Fields Ltd. (GFI) , the country’s second-biggest gold miner, to junk. Junk Rating Police fired rubber bullets at farmworkers protesting low wages and poor service delivery, who burned down liquor stores and looted other stores in Swellendam, 124 miles east of Cape Town , eNCA Channel reported. Gold Fields, Africa ’s second- largest producer of the metal, had its ratings cut to BB+ from BBB- as the risk of operating in South Africa increased, S&P said in a statement yesterday. “In mentioning Gold Fields’ exposure to South Africa as one of the principle reasons behind the downgrade, it is yet another vote of no-confidence in South Africa’s leadership and the country’s investment prospect,” ETM analysts including Johannesburg-based George Glynos wrote in e-mailed comments. “It is yet another reminder to government of the desperate need to improve on South Africa’s industrial policies so as to raise the overall level of investment attraction.” Bonds gained as yields at the highest in two weeks lured investors and as some traders bought the securities after selling bonds they didn’t own, betting the prices would fall. “Yields are at the top of recent ranges, and providing a good entry level for some of the speculative portfolios,” Alvin Chawasema, a bond trader at Renaissance BJM Securities in Johannesburg, said by phone. “There was also some short- covering.” To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

MTS Premium Shrinking as Moscow Remakes Market: Russia Overnight

The premium investors demand to hold OAO Mobile TeleSystems’ New York-traded shares rather than the stock in Moscow is narrowing to the smallest in almost a year on Russian plans to improve local settlement rules. The mobile company has climbed 0.3 percent on Moscow’s Micex Index this month to 229.70 rubles, or $7.30, while its American depositary receipts fell 2.9 percent, shrinking the gap to $1.89 this week, the least since Nov. 20. The premium was as high as $4.17 on Sept. 13. The Bloomberg Russia-US Equity Index (RUS14BN) of the most-traded Russian stocks in the U.S. added 0.2 percent yesterday, and RTS Index futures climbed, as crude rose for the first time in six days. Russia is combining its two securities depositaries into one central body in order to bring settlement procedures in line with international norms and help lure foreign investments. The average value of shares traded in Russia’s biggest companies is 30 percent higher in London than in Moscow, data compiled by Bloomberg show. “When a single central depositary starts operating, the attractiveness of the Russian market will increase,” Alexander Vengranovich, a telecommunications analyst at Otkritie Financial Corp. in Moscow, said by phone yesterday. “Some investors are buying shares ahead of the implementation.” Futures expiring in December on the dollar-denominated RTS gauge increased 0.2 percent to 145,350 in New York yesterday. The Market Vectors Russia ETF (RSX) , the biggest U.S.-traded exchange- traded fund that holds Russian shares, gained 0.5 percent to $28.41, rising for the first time in two days. The RTS Volatility Index, which measures expected swings in the gauge futures, advanced 1.2 percent to 25.38 points. Widest Premium ADRs of Moscow-based MTS added 0.4 percent in New York yesterday to $17.01 after Russia’s largest mobile services operator said it offered to buy 25 percent of MTS-Bank from parent company AFK Sistema for 5.09 billion rubles ($162 million). MTS’ Moscow-traded shares slipped 0.8 percent today as the Micex dropped to a seven-week low. The ADRs, which account for two underlying shares, traded at a premium of $2.21 yesterday, the widest among the 11 biggest dually traded companies. The central depositary is on track to be established by next month, Dmitry Pankin , the head of the market regulator, told reporters in Moscow on Oct. 24. Russia currently has two competing depositaries which leads to the share ownership structures of companies traded in Moscow being “not fully transparent,” Otkritie’s Vengranovich said. Depositaries, or clearing agencies, ensure money is paid or debited and securities ownership is transferred after a trade occurs. ‘Marginal Benefit’ As part of its reforms, the Micex-RTS is also transitioning by next year to a system where traders are allowed a number of days to complete deals, instead of the current procedure of immediate settlement. All U.S. exchanges offer settlement the third day after the trade occurs. “People don’t like pre-funding for the Micex (INDEXCF) or having to keep their stock there, it’s a major deterrent to most funds,” Julian Rimmer, a trader at CF Global in London who focuses on Russian and Turkish equities, said by e-mail yesterday. The introduction of a central depositary is “a marginal benefit, but the aggregation of marginal benefits is what it takes to eliminate Russia’s discount versus other emerging markets .” Boost Volumes The Micex has gained 2.1 percent in 2012 and trades for 5.6 times analysts’ earnings estimates for member companies. That compares with a 1.2 percent advance for Brazil ’s Bovespa Index (IBOV) , which is valued at 15 times estimated earnings, according to data compiled by Bloomberg. The Bovespa, which also allows settlement on the third day, had four times more volume than the Micex yesterday, data compiled by Bloomberg show. The move to so-called T+3 settlement will boost volumes on Russia’s stock market by as much as 25 percent, Oleg Achkasov, head of equity trading at VTB Capital, the investment banking arm of Russia’s second-largest lender, said in an interview in Moscow on Oct. 3. The Federal Financial Markets Service may also lift restrictions on converting local shares into depositary receipts, the Interfax newswire reported on Oct. 19, citing Pankin. Under current regulations, depositary receipts can only account for 25 percent of a company’s total shares and 50 percent of its listed shares, according to the Interfax report. Russia’s reforms “should help eliminate all depositary receipt premia over time,” CF Global’s Rimmer said. MegaFon Spurs Yandex Yandex NV (YNDX) , Russia’s most-used Internet search engine, jumped 3.5 percent in New York yesterday to $22.74, the biggest one-day advance since Sept. 12. The delay in an initial public offering set for Oct. 22 of OAO MegaFon, a Russian wireless carrier, has bolstered The Hague, Netherlands-based Yandex as investors are looking to put money allocated for the IPO into “solid companies,” Simon Mandel, director of emerging Europe equity sales at Auerbach Grayson & Co. in New York, said by phone yesterday. Crude for December delivery added 0.4 percent to $86.05 a barrel on the New York Mercantile Exchange yesterday, while Brent oil gained 0.6 percent to $108.49 a barrel. Speculation the Bank of Japan will add to its asset-purchase program and that U.S. data will signal a recovery in the world’s biggest economy bolstered energy prices. Urals crude, Russia’s chief export blend, climbed for the first time in eight days, rising 0.8 percent to $107.39. Futures due in December on the ruble were little changed at 31.586 per dollar in New York yesterday. The currency slipped 0.3 percent to 31.4649 per dollar in Moscow, the weakest level since Sept. 12. Moscow-based United Co. Rusal, the world’s largest aluminum producer, dropped 2.4 percent to HK$4.40, or 57 U.S. cents, in Hong Kong today. The MSCI Asia Pacific Index tumbled 1.1 percent, the steepest one-day drop since Sept. 26. To contact the reporter on this story: Maria Levitov in London at mlevitov@bloomberg.net To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Lebanon’s Banks’ Outlook Lowered to ‘Negative’ at Moody’s

The outlook for Lebanon’s banking system was cut to “negative” from “stable” at Moody’s Investors Service on slower economic growth and political instability, particularly in Syria. Lebanese banks have assets and loans linked to countries in the region experiencing political unrest as well as slowing growth, such as Egypt and Jordan, it said. The Arab nation’s economy has also slowed after a “sharp” deceleration in gross domestic product in the first half, it said. The International Monetary Fund forecasts 1.5 percent growth in Lebanon this year, the slowest since 2006. The country’s public debt reached about $52.6 billion last year, the equivalent of 137 percent of GDP. The uprising in Syria against the rule of President Bashar al-Assad, which began more than six months ago, is hurting tourism in Lebanon. The credit risk of Lebanese banks, which are closely linked to Lebanon’s sovereign debt, will continue to be tied to the Lebanese government which is rated as “stable,” Moody’s said. The banks’ profitability is also undermined because “subdued business activity” will probably cause a slowdown in credit growth and fee-generating income, it said. Some of the risks will be mitigated by the banks’ “resilient depositor base”, Moody’s said. “The sector retains a relatively stable funding structure driven by customer deposits, which account for approximately 90 percent of total liabilities,” it said. Deposits mainly come from Lebanese expatriates who accounted for 22 percent of GDP at the end of last year, it said. The stability of Lebanon’s pound, pegged at about 1,500 to the dollar since 1993, coupled with interest rates that were as high as 8 percent in 2008, have attracted a steady flow of funds into the country, Central Bank Governor Riad Salameh said in an interview on Oct. 5. Bank deposits grew 10 percent last year to $110 billion, he said. To contact the reporters on this story: Inal Ersan in Dubai at iersan@bloomberg.net ; Nayla Razzouk in Dubai at Nrazzouk2@bloomberg.net ; To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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Ukraine Grain Exports Rose 31% This Month to 389,000 Metric Tons

Ukraine’s grain exports rose 31 percent this month through yesterday to 389,000 metric tons, researcher UkrAgroConsult said. That’s up from 297,400 tons of grain exported in the same period a year earlier, UkrAgroConsult analyst Liza Malyshko said by phone today. Shipments also rose from 80,800 tons exported in the same period in July, according to an e-mailed statement from the company today. Shipments included 162,800 tons of wheat, 131,500 tons of barley and 88,300 tons of corn. Wheat was shipped to Tunisia, Kenya and Egypt , corn to the European Union and barley to Saudi Arabia and Egypt, the Kiev-based researcher said. To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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Dankner Gets More Time to Settle Debt as Court Delays Creditors

IDB Holding Corp. (IDBH) , which has about 2 billion shekels ($556 million) of debt outstanding, has until October to come up with a repayment plan after it met a court demand for a deposit of 500 million shekels. A Tel Aviv court gave controlling shareholder Nochi Dankner until Oct. 20 to submit a debt plan and set the next hearing for Nov. 25, according to an e-mailed court statement today. The court also approved the sale of a 32 percent stake in Clal Insurance Enterprise Holdings Ltd. (CLIS) for 1.47 billion shekels. Dankner has been trying to sell assets and find investors for his holding company, which owns stakes in Israel ’s biggest supermarket chain, Shufersal Ltd. (SAE) , and its largest mobile operator, Cellcom Israel Ltd. (CEL) York Capital Management LP was among bondholders of IDB Holding and unit IDB Development Corp. Ltd. that joined hands in May to force a debt-to-equity swap increasing the possibility that Dankner may lose control of the companies. Emblaze Ltd. (BLZ) , based in Hertzliya Pituach, Israel, and Tel Aviv-based Netz Group Ltd. (NETZ) on Aug. 15 offered 826 million shekels for a 80 percent stake in debt-strapped IDB Holding. That values the company at 1.03 billion shekels, more than three times its market value. Argentine businessman Eduardo Elsztain, who was also present at the court hearing yesterday, has been in talks with bondholders’ trustees for an investment of 770 million shekels in exchange for a 51 percent stake in the IDB Development Corp. unit. The combination of unprofitable investments and regulations to boost competition, cut IDB Holding’s market value to 330 million shekels from 5.06 billion shekels at the end of 2010, according to data compiled by Bloomberg. To contact the reporter on this story: Sharon Wrobel in Tel Aviv at swrobel4@bloomberg.net To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Cadillac’s $70,000 Monster Wagon Leaves Mad Max, Mel in Dust

There’s something about the desert that always makes you feel like you’re crawling along, even in a 556-horsepower monster like the CTS-V Wagon. Even with the accelerator sunk to the floor, Joshua trees swing slowly by, supplicating arms outstretched to the gray, turbulent sky. I’m in the Mojave, outside of Los Angeles , the two-lane highway bereft of traffic and the weather threatening lightning storms. My ride is a Cadillac. It’s the car I want to be in, a monster of the asphalt, perfectly suited for chomping through endless miles, a machine to beat the solitude. In the history of weird, automotive mash-ups, the CTS-V wagon is a doozey. Take the old-school family station wagon, evil it up with a glossy black paint job, man-eating grill and wicked knifelike taillights, and then stick a supercharged Corvette engine inside. The result is a family vehicle with a heavy-metal attitude. The Mad Max movies are scheduled for a reboot, and I hereby nominate this $64,500 vehicle to have a starring role, replacing the Ford Falcon Interceptor from the original 1979 film. A better Road Warrior (preferably without Mel Gibson inside), I’ve never seen. Let the post-apocalyptic motorcycle gangs come: I can outrun them. And since the rear hatch gulps 58 cubic feet, I could stuff enough water, food and survival equipment to last a long time in a dystopian future. Dry Lakebed I’ve come to a massive dry lakebed in the hopes of executing car-commercial stunts like dusty drifts and figure 8s. Sadly, it’s closed to the public due to recent rain which has turned the clay to mud. Instead I just wander, letting the miles hypnotize me as the 6.2-liter supercharged V-8 rattles in the hood. That stupidly big engine churns 551 foot-pounds of torque, enough to help reach 60 mph in 4.3 seconds. The quarter mile comes in about 12.6. Not exactly your dad’s wood-paneled station wagon. The kids at school will not make fun of you for showing up in this. The downside is that its thirst would probably leave you like the doomed, nameless characters in Cormac McCarthy’s “The Road” -- pushing a shopping cart rather than driving. With an 18 gallon tank and gas mileage of 14 in the city, 19 on the highway, you’d soon be bone dry, waiting for the vultures to alight. (Maybe the next Mad Max movie will feature a Prius instead.) I motor down a road to a small airport that I find on the map, and am turned away by a security guard who says it’s a private government facility. When I ask what kind he frowns at me. I turn around, scanning the sky for Predator drones, and park outside a graveyard of rusting aircraft. Russian Helicopter The dead machines include an old Russian helicopter, painted in dull camouflage and missing its rotors, and two former Pan Am planes, each cut in half, with the company’s distinctive pale blue stripe running down the side. Cadillac could easily have gone the way of that famous brand. It was certainly sliding that way until a design resurgence pulled it back. The product behind the reinvention was largely the CTS, which comes in sedan, coupe and wagon forms. Each is available in a supercharged “V” model, with prices from mid-$30,000s to high $70,000s, spanning many needs and desires. General Motors Co. (GM) will not sell a lot of the CTS-V wagons, but you’ve got to love the radical idea of mating a family vehicle with a powerful sports car. Especially if you’ve got a kid or two and hate minivans. Midlife Crisis The Cadillac wagon can put off a full-blown midlife crisis for decades, and you’ll never be late to soccer practice. Or you could opt for the less-mental CTS wagon. Available in either rear- or all-wheel-drive, it has a V-6 with 270 hp (enough power for most of us) or 304 hp. It retains the radical styling, so it’s still an anti-minivan, but gets up to 27 mpg highway. Pricing starts at just over $39,000. On my lonely road, I perform a solitary burnout, the smoke drifting into the sky. I can see how one might get drunk with power in this zany station wagon. Mad Max -- and Mel -- have nothing on me, baby. The 2011 Cadillac CTS-V Wagon at a Glance Engine: 6.2-liter supercharged V-8 with 556 horsepower and 551 pound-feet of torque. Transmission: Six-speed manual or six-speed automatic. Speed: 0 to 60 mph in 4.3 seconds. Gas mileage per gallon: 14 city, 19 highway (manual); 12, 18 (automatic). Price as tested: $70,790. Best features: Lots of space, lots of attitude, lots of power. Worst feature: Lots and lots of gas. Target buyer: The family man who hates minivans. (Jason H. Harper writes about autos for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.) To contact the writer of this column: Jason H. Harper at Jason@JasonHharper.com or follow on Twitter @JasonHarperSpin. To contact the editor responsible for this column: Manuela Hoelterhoff in New York at mhoelterhoff@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

U.S. Targets Hezbollah Supporters for Operations in West Africa

The U.S. Treasury Department said it sanctioned four Lebanese supporters of Hezbollah to limit the organization’s efforts to raise funds and recruit members in West Africa. “As Hezbollah continues to use its global network of operatives and supporters to extend its malign influence beyond the borders of Lebanon, we will continue to use all tools at our disposal take action to disrupt these efforts,” Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen said today in a statement. “These actions are increasingly important as the funding from Hezbollah’s traditional patron, Iran , is squeezed by international sanctions.” The designations that Treasury put on Ali Ibrahim al-Watfa, Abbas Loutfe Fawaz, Ali Ahmad Chehade and Hicham Nmer Khanafer limit their ability to do business with U.S. citizens and their assets under U.S. jurisdiction are frozen. According to the statement, they are responsible for Hezbollah fundraising and recruitment activities in Sierra Leone, Senegal , Ivory Coast and Gambia. To contact the reporter on this story: Kasia Klimasinska in Washington at kklimasinska@bloomberg.net To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Cotton Futures Extend Rally to Record as China Demand Raises Shortage Risk

Cotton futures in New York rose to a record for the fourth straight day as concerns mounted that global demand led by China, the world’s biggest user, will outstrip supplies and reduce inventories. After a cold spell damaged crops in China last month, the nation may be forced to import more from global stockpiles that already are forecast to drop to a 14-year low. U.S. exports have climbed, and adverse weather may damage crops in India. Cotton prices have more than doubled in the past year. “The export-sales report of last week shows, yes, there still is demand” after prices surged, said John Flanagan , the president of Flanagan Trading Corp. in Fuquay-Varina, North Carolina. Cotton for December delivery rose 1.78 cents, or 1.3 percent, to settle at $1.4223 a pound at 3 p.m. on ICE Futures U.S. in New York. Earlier, the fiber reached $1.446, the highest level since the fiber started trading 140 years ago. The price was up for the sixth straight session, the longest rally since mid-February. The fiber gained 14 percent this week, the biggest such rally since November 2008. In China, cotton futures for May delivery on the Zhengzhou Commodity Exchange gained as much as the daily limit of 5 percent to a record 31,235 yuan a metric ton. The U.S., the biggest exporter, shipped 560,798 bales of upland cotton in the week ended Oct. 28, up 20 percent from the average of the previous four weeks, the U.S. Department of Agriculture said yesterday. China purchased 59 percent. A bale weighs 480 pounds, or 218 kilograms. “Export sales, feeding the seemingly inexhaustible Chinese appetite for cotton, continue abnormally strong,” O.A. Cleveland , an analyst at cottonexperts.com in Starkville, Mississippi, said in a note e-mailed today. USDA Forecast Global production is forecast to lag behind demand for a fifth straight year, draining stockpiles, the USDA said on Oct. 8. China will have a production deficit of 18.5 million bales this year, according to the USDA. The agency will update its crop forecast on Nov. 9. China’s crop may be 2 million bales smaller than the USDA estimated in October, Flanagan said. China is the world’s biggest grower, followed by India. The latest USDA forecast was released before a hailstorm hit Texas, the largest U.S. growing state, on Oct. 21. The China Meteorological Center said on Oct. 25 that a cold front moving across the nation might hamper the cotton harvest and reduce fiber quality. Tropical Cyclone 5B strengthened over the Bay of Bengal and was heading toward India’s east coast. The storm was projected to reach hurricane strength and reach land on Nov. 7. It may bring up to 8 inches (20 centimeters) of rain and winds of 80 miles per hour, damaging crops in Andhra Pradesh, said MDA Information Systems Inc., a weather forecaster. “It’s going to be a big deal for both sugar and cotton,” Donald Keeney , an MDA meteorologist, said today in a telephone interview from Rockville, Maryland. “Cotton has open bolls, so it’s not going to be good at all.” To contact the reporters on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net ; Jae Hur in Tokyo at jhur1@bloomberg.net. To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Bloomberg Launches Trading Platform for Derivatives Compliance

Press Release Institutional investors prepare for pending SEF regulations NEW YORK -- Institutional investors facing upcoming Dodd-Frank Act regulations on over-the-counter (OTC) derivatives can get another step closer to compliance with new technology from Bloomberg’s Fixed Income Trading , executives announced today. Bloomberg FIT has launched the first commingled trading platform for OTC swap trading, ALLQ Derivatives, which allows buy-side investors to review indicative prices and execute directly with dealers on the Bloomberg Professional Service. The new technology is the foundation for Bloomberg’s development of a swaps execution facility (SEF) offering. The platform will be adapted upon finalization of the SEF rules by regulators. The Dodd-Frank Wall Street Reform & Consumer Protection Act requires companies to trade credit-default swaps (CDS) and other derivatives products through SEFs. The Bloomberg AllQ platform is the first to provide a full view of dealer liquidity available in the market and to provide multi-currency details on interest rate swaps (IRS) and CDS. In the IRS market, investors can review executable prices in four currencies in maturities ranging from one year to 30 years. A wide range of dealers are participating on AllQ IRS including: Bank of America Merrill Lynch, Barclays Capital , BNP Paribas, Citigroup, COMMERZBANK, Credit Suisse, Danske Bank, The Royal Bank of Scotland plc, Société Générale and UBS. For CDS Indices, customers can execute on prices in both the CDX© and ITRAXX© index suites. Participating dealers in the CDS Index markets are: Bank of America Merrill Lynch, Barclays Capital, BNP Paribas, Citigroup, Credit Suisse, Goldman Sachs, Nomura, The Royal Bank of Scotland plc and UBS. “Bloomberg is the largest independent trading platform for OTC derivatives and we have been actively working with regulators to develop the mandatory clearing and post-trading reporting requirements,” said Ben Macdonald, Global head of Bloomberg’s Fixed-Income business. “The challenge now is to get the market ready, when we don’t know exactly what the regulations will entail. The development of the ALLQ Derivatives platform is a crucial step toward SEF-style trading and the support we are getting in the marketplace is strong.” The AllQ Derivatives platform capitalizes on Bloomberg’s voice technology (VCON), the leading post-trade processing system for cash and derivative securities. For more information on AllQ Derivatives, in the U.S. contact Jeff Missimer at +212-617-2236 or jmissimer@bloomberg.net , in the EMEA, contact Richard Warrick at +20 7330 7604 or rwarrick@bloomberg.net For more information on Bloomberg’s Fixed Income products and services go to http://www.bloomberg.com/professional/fixed_income/ About Bloomberg Bloomberg L.P. is the world’s most trusted source of data, news and technology for businesses and financial professionals. Headquartered in New York , the company employs more than 13,000 people in 185 locations around the world. Bloomberg Fixed Income Trading (FIT) is the world’s largest and most widely used fixed income trading platform. FIT provides liquidity, trading functionality, and straight-through-processing across all fixed income asset classes including cash bonds, repo, money markets, interest-rate and credit derivatives , mortgages, money markets, and municipal bonds. FIT is the only fixed income platform which is fully integrated with the Bloomberg Professional service. Media Contacts: * Pam Snook, Bloomberg LP, pamsnook@bloomberg.net , +212-617-7652 * Sophie Fischman, Bloomberg@cognitomedia.com , +1 646 395 6300 * Stuart Macaulay, BloombergEMEA@cognitomedia.com , +44 20 7438 1100 * Stella Xu, Bloomberg LP, sxu43@bloomberg.net , +86-10-6649-7551 * Anne Karumo, APAC, BloombergAsia@cognitomedia.com , +65 8112 64 09 #<761373.6922700.2.1.95.14779.2660>#

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Bus Drivers May Face New Rest Rules Following Truckers, Pilots

U.S. bus operators may face new limits on drivers’ work hours, after the Department of Transportation last week released revised rules for truckers and airline pilots. The agency is seeking public comment and data on driving time and its association with safety as it considers new rules, according to a notice set for publication tomorrow in the Federal Register. Bus companies operate differently from trucking companies, requiring the Federal Motor Carrier Safety Administration to gather separate data, the notice said. Rules for driving and on-duty time for bus drivers haven’t been updated in “several decades,” the notice said. It is looking into possible changes at a time the bus has become the fastest-growing mode of U.S. transportation, with daily departures up 7.1 percent this year, according to a DePaul University study released Dec. 21. Twenty-eight people have died in eight U.S. bus crashes this year. The National Transportation Safety Board warned in an Oct. 31 study that curbside operators, which account for most of the industry’s growth, are seven times more likely to be involved in a fatal wreck than intercity lines with more conventional business models. The agency will hear comments on Jan. 9 in Grapevine, Texas. To contact the reporter on this story: Carol Wolf in Washington at cwolf@bloomberg.net To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Occidental Reduces CEO Compensation After Criticism Over Pay

Occidental Petroleum Corp. (OXY) , the fourth-largest U.S. oil company, reduced new Chief Executive Officer Stephen I. Chazen’s compensation package after facing criticism for former CEO Ray R. Irani’s salary in 2010. Chazen, who became CEO in May, received $31.7 million in 2011 compared with $38.1 million the year before when he was president, according to a filing today with the U.S. Securities & Exchange Commission. Chazen’s compensation included $1.27 million in salary, a $1.34 million bonus and $28.6 million in cash and stock awards. Irani received $49.8 million in cash, stock and other benefits versus $76.1 million in 2010, when his compensation nearly doubled, making him the highest-paid CEO in the energy industry. Irani retired as CEO and became executive chairman. Occidental announced revisions to the compensation plan in October 2010 after the hedge fund Relational Investors criticized his pay and called for changes on the Los Angeles- based company’s board, according to a statement released at the time. The previous pay formula included incentives based on the company’s returns, established in 2007. Irani’s 2011 pay included $1.3 million in salary, a $1.25 million bonus and $45.5 million in cash and stock awards. Occidental fell 3.5 percent to $97.96 at the close in New York. The shares have risen 4.6 percent this year. To contact the reporter on this story: Bradley Olson in Houston at bradleyolson@bloomberg.net To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Hungary’s Municipal Debt Increases 22% in 2010, Napi Reports

Hungarian municipalities’ debt increased 22 percent to 1.25 trillion forint ($6 billion) by the end of 2010, Napi Gazdasag reported, citing a government official. Half of the overall debt is denominated in Swiss francs, the newspaper reported, citing Abel Berczik, an Economy Ministry official. The number of municipalities that were forced to enter debt-settlement procedures is currently 17, Napi cited Berczik as saying. To contact the reporter on this story: Edith Balazs in Budapest at ebalazs1@bloomberg.net To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Autonomy Founder Mike Lynch Said to Plan Technology Fund

Mike Lynch, the founder of U.K. data-analysis company Autonomy Corp., is planning to set up a technology investment fund that will back young firms, according to people with knowledge of his plans. Lynch, who left Hewlett-Packard Co. (HPQ) this year after the U.S. company agreed to acquire Autonomy for $10.3 billion last August, will tap the expertise of other former Autonomy executives for the fund, the people said, asking not to be identified as the plans are private. The fund will be based in London and invest globally, with the aim of using the experience of Lynch and other executives to assist the companies in its portfolio, they said. Hewlett-Packard said in May that Lynch, 47, would leave the company following a decline in license revenue at the Autonomy unit, which specializes in helping corporate clients sift through and analyze large volumes of data. He owned about 8 percent of Autonomy’s shares at the time of HP’s offer, according to data compiled by Bloomberg. That stake was then valued at 505 million pounds, or $834 million. Hewlett-Packard, based in Palo Alto , California , ousted its then-chief executive officer Leo Apotheker in September of last year after investors criticized the Autonomy deal, along with reduced sales forecasts and a short-lived plan to spin off the company’s personal computer unit. Whitman Era Current CEO Meg Whitman , who quickly canceled the proposed spinoff, is nonetheless directing spending toward products for cloud computing, data security, and information management that could reduce HP’s dependence on lower-margin hardware businesses. In May, Whitman appointed Chief Operating Officer Bill Veghte to lead the Autonomy unit. Lynch will have plenty of company in his new role. London is becoming an increasingly important center for technology investment as U.S. venture-capital firms look for hidden gems and cheaper valuations far from the Silicon Valley spotlight. The U.K. government is encouraging startups to move to “Tech City,” a four-mile-long stretch of former industrial zones in the east of the British capital, where Google Inc. (GOOG) announced plans last year to open a seven-floor hub for young companies that will complement its existing London offices. Autonomy traces its origins to a very different part of the British tech landscape. Founded as a spinout from the University of Cambridge in 1996, the company was one of the largest in a cluster of enterprise-focused tech businesses that includes semiconductor designer ARM Holdings Plc. (ARM) This year, Lynch participated in an investment round for Featurespace , a Cambridge-based company that provides predictive software for marketing and the detection of fraud. The University of Cambridge graduate focused his early research on the mathematical theories of the 18th-century theologian and mathematician Rev. Thomas Bayes , who sought to refine the study of probability. To contact the reporters on this story: Matthew Campbell in London at mcampbell39@bloomberg.net ; Jacqueline Simmons in Paris at jackiem@bloomberg.net To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net ; Jacqueline Simmons at jackiem@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

U.S. Companies Reporting Earnings on Oct. 7

The following table lists the six U.S. companies that reported quarterly earnings today (end date of the quarter is noted in the last column). Companies are sorted alphabetically by ticker symbol. Earnings estimates provided by Bloomberg. To contact the reporter on this story: Wendy Soong in New York at at csoong@Bloomberg.net. To contact the editor responsible for this story: Alex Tanzi at at atanzi@Bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Asian Stocks Outside Japan Drop, Led by Emerging Markets

Asian stocks outside Japan fell for a third day as a retreat in emerging markets dragged the regional equities gauge to its lowest level in a week. Japan’s Topix index gained amid low trading volume. Tokyo Electric Power Co. dropped 3.6 percent after saying two workers were exposed to dangerous radiation at its crippled Fukushima Dai-Ichi nuclear reactor. BlueScope Steel Ltd. (BSL) sank 14 percent as sales missed analyst estimates and Australia’s No. 1 steel producer forecast a weaker first half of the financial year. JX Holdings Inc. (5020) gained 4 percent after Mitsubishi UFJ Morgan Stanley Securities Co. advised buying the Japanese refiner’s shares. The MSCI Asia Pacific excluding Japan Index fell 0.9 percent to 442.97 as of 7:25 p.m. in Tokyo, with all 10 industry groups on the gauge dropping. The measure has lagged an increase in U.S. stocks this year as growth slows in China and speculation that the Federal Reserve will curb bond buying spurred investors to sell risk assets across Asia and emerging markets. The Federal Open Market Committe’s July meeting minutes are scheduled to be released on Aug. 21. “The market’s going to be watching the FOMC minutes this week to see if there’s any more indication in regards to potential of tapering in September, which is what we’re currently predicting,” Martin Lakos, a Sydney-based director at Macquarie Private Wealth, told Bloomberg TV. “There are still some concerns that a big move in QE will be disruptive.” The MSCI Asia Pacific excluding Japan Index has dropped 5 percent this year, lagging a 16 percent surge in the Standard & Poor’s 500 Index. Relative Value The MSCI Asia Pacific Index, the benchmark regional gauge that includes Japan , slid 0.4 percent today. It traded at 13 times estimated earnings through Aug. 16, compared with 15 for the Standard & Poor’s 500 index and 13.9 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. Japan’s Topix index rose 0.6 percent, reversing a decline of 0.4 percent, with trading volume 43 percent below its 30-day average. Japanese exports increased 12.2 percent in July from a year earlier, data showed today, less than the 12.8 percent estimated by economists. Imports jumped 19.6 percent. The Topix gained 34 percent this year, the world’s best-performing developed equity market, amid optimism Prime Minister Shinzo Abe will push through reforms while the central bank provides record stimulus to spur an economic recovery. Daily trading volume on the gauge fell to the lowest this year on Aug. 12 and remained near that level throughout last week as investors took summer vacations. Regional Gauges Australia ’s S&P/ASX 200 Index was little changed. New Zealand’s NZX 50 Index fell 0.2 percent and South Korea’s Kospi index lost 0.1 percent. Singapore ’s Straits Times Index slipped 0.8 percent and Taiwan ’s Taiex Index slid 0.3 percent. Thailand ’s SET Index slid 3.3 percent and Indonesia ’s Jakarta Stock Exchange Composite Index plunged 5.6 percent. India ’s S&P BSE Sensex Index retreated 1.6 percent. Hong Kong’s Hang Seng Index fell 0.2 percent as property developers retreated. China’s Shanghai Composite gained 0.8 percent. Chinese stocks were roiled Aug. 16 by a trading error at Everbright Securities Co. that spurred a 53 percent surge in volume and a swing of more than 6 percent in the Shanghai Composite Index. Erroneous buy orders from Everbright’s proprietary trading group sparked the early rally, the securities regulator said. China Property China ’s new home prices rose in July for a third month in all but one city, led by gains in the biggest metropolitan centers on anticipation the government will focus on a longer-term housing plan rather than immediate curbs. Country Garden Holdings Co. dropped 2.6 percent to HK$4.91 in Hong Kong, pacing losses among Chinese developers. “If prices rise too quickly, it does encourage the mainland authorities to come back with some policy measures to try to cool the market,” Andrew Lawrence, a Hong Kong-based analyst at CIMB Group Holdings Bhd., told Bloomberg TV. “This rise in prices will concern investors with regards to policy responses.” Huaneng Power International Co. (902) , the unit of the mainland’s largest electricity producer, tumbled 9.4 percent to HK$7.70, leading utilities lower in Hong Kong. Chongqing Times reported China may cut electricity prices as soon as this October, citing unidentified people close to National Development & Reform Commission. Futures on the S&P 500 were little changed today. The U.S. gauge capped its biggest weekly drop in almost two months on Aug. 16 as investors weighed data showing housing starts climbed in July while a gauge of consumer confidence fell. Tepco Radiation Tokyo Electric Power retreated 3.6 percent to 622 yen. Two workers at the Fukushima Dai-Ichi nuclear plant were exposed to radiation today near a quake-resistant building, after the radioactivity alarm of a dust monitor went off, according to an e-mailed statement from the utility. Bluescope tumbled 14 percent to A$4.70 after forecasting profit this half won’t beat the preceding six months. JX Holdings advanced 4 percent to 547 yen in Tokyo. Mitsubishi UFJ Morgan Stanley upgraded the shares to outperform from neutral. To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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Floods Delay U.S., China-Built Dam in Power-Starved Pakistan's Northwest

Pakistan’s Gomal Zam dam, needed by the government to ease power and water shortages, will be completed six months late because of delayed funding and damage from recent floods, its project manager said. The barrage, being built by China’s state-owned Sinohydro Corp. , “will begin operating in April 2011” instead of this month, said Colonel Muhammad Zaheer, who oversees the work for the army’s Frontier Works Organization. “The construction is 92 percent complete,” Zaheer said in an interview Sept. 28 at the dam site. The dam, in the impoverished district of South Waziristan, is a key part of Pakistan’s economic development plan to undercut the Taliban guerrilla movement. Militants had their main base in the district until the army seized it last year, and 1,500 troops protect the construction site, Zaheer said. The first of two planned turbines will add 17.4 megawatts of electricity to the national power grid, against Pakistan’s supply shortfalls this year of 5,000 megawatts or more. Canals built by Istanbul-based Tekser Construction will irrigate 66,000 hectares (163,000 acres) of farmland in South Waziristan and adjoining districts, Zaheer said. Work on the dam began from 2002 until 2004, when it halted after Taliban fighters kidnapped two Chinese engineers, one of whom was killed in a Pakistani army rescue operation. The original Chinese contractors withdrew from the project, and the army’s construction branch resumed work in 2007, subcontracting to Sinohydro and Tekser. Worst Floods This year’s monsoon floods, Pakistan’s worst ever, submerged the site’s rock-crushing plant and caused mudslides that buried access roads, causing $800 million rupees ($9.3 million) in damage, Zaheer said. He declined to provide details on the delays in construction funding. The U.S. Embassy in Islamabad said by e-mail in July that President Barack Obama’s administration would step in to pay $108 million of the $136 million projected cost for the dam and irrigation project. The aid is part of U.S. efforts to improve power supplies and agriculture as a way of stabilizing a country it sees as crucial to its fight against Islamic militant groups in South and Central Asia. Sinohydro , which helped build China’s Three Gorges Dam, is also working on the Khan Khawar Dam in Shangla, a northwestern valley that has suffered attacks by the Taliban. General news about Pakistan: {NI PAKISTAN BN} News about Taliban: {NSE TALIBAN BN} To contact the reporter on this story: Anwar Shakir in Peshawar, Pakistan at Ashakir1@bloomberg.net To contact the editor responsible for this story: Bill Austin at billaustin@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Baum's View on Money

Good morning, all. Here are some stories on the U.S. economy that I'm reading to start my day. Federal Reserve to markets: We'll get back to you on tapering. In a nutshell, that's what the minutes from the Fed's July 30-31 meeting revealed. Almost all members of the policy committee were on board with the idea of starting to taper monthly asset purchases later this year. Almost all of them thought July was too soon. That was a month ago. What's changed since then? The minutes shed no new light on when the Fed will act. Whatever you thought about the timing of tapering before the minutes were released is exactly what you will think after reading them. Big news from a big employer. UPS, one of the biggest employers in the U.S., said it plans to drop health-care coverage for 15,000 working spouses. "Since the Affordable Care Act requires employers to provide affordable coverage, we believe your spouse should be covered by their own employer -- just as UPS has a responsibility to offer coverage to you, our employee," UPS said in a memo to employees. "Limiting plan eligibility is one way to manage ongoing health care costs." Rationing care is another. The young and the restless. U.S. median income has been rising since it hit a trough in August 2011, but remains below its level at the end of the recession in June 2009, according to a new study based on Census Department data. The boomers (ages 55-64) and those under 25 suffered the biggest hits to income. Those in the 65-74 year old age bracket were the only demographic to see real incomes rise by a statistically significant amount. Age does have its advantages, sometimes. Ersatz jobs. "It’s as if someone were out there making up pointless jobs just for the sake of keeping us all working," writes British anthropologist David Graeber, referring to "administrative sector" jobs. Corporate downsizing seems to have inflated the number of meaningless jobs, including paper-pushers to support a host of new services industries. John Maynard Keynes' 1930 prediction that technology would usher in the 15-hour workweek by the end of the last century hasn't panned out. Nor have some of his other general theories. The debt time bomb, Part 119. Just in case you've been reading too much Paul "What-Me-Worry" Krugman, David Walker, who was comptroller general of the Government Accountability Office for a decade, warns us against a false sense of security. The debt clock is ticking. We're all living longer. The ratio of workers to retirees is going in the wrong direction. The unfunded promises to future Social Security recipients are on the order of $73 trillion. And interest on the debt? You may have noticed that the Treasury can no longer borrow for 10 years at sub-2 percent. Under current law, the annual interest on the debt will top $800 billion in a decade, almost four times the current cost, according to the Congressional Budget Office. Yes, we should worry. (Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Japan Gas Binge Ties Third-Biggest Economy to One Fuel

Japanese companies are buying natural gas assets and fields around the world, setting the nation on course to be the first of the 10 largest energy users to bet its future on a less-polluting fuel than oil or coal. Mitsubishi Corp. (8058) led purchases this year as trading and energy explorers bought gas properties in four countries and pledged at least $30 billion to develop deposits. They’re capturing supplies to generate power after authorities idled the nation’s 54 nuclear reactors since the Fukushima disaster. The spending plans and closures, which doubled gas’s share of the Japanese power mix to about 50 percent, tie the country to a single fuel more than any other major energy-consumer. While that leaves Japan vulnerable to rising prices in the years ahead, the world’s third-biggest economy is gaining an advantage trading the fastest-growing fossil fuel for electricity. “The big Japanese players are moving to lock in this supply,” said Ken Courtis, founding chairman of Next Capital Partners LP based in Tokyo. “They have the ability to take on these large projects today like few others in the world,” backed by domestic banks insulated from Europe ’s credit woes. Japan’s six major trading companies, which together with Mitsubishi are Mitsui & Co. (8031) , Itochu Corp. (8001) , Sumitomo Corp (8053) , Marubeni Corp. (8002) and Sojitz Corp. (2768) , had $62 billion in cash as of March 31. Mitsubishi’s cash pile is the highest since 1995, while Mitsui’s is close to the most in at least 20 years. While the U.S. has used hydraulic fracturing to become the world’s largest producer of gas and is becoming an exporter, Japan is solidifying its position as the biggest liquefied natural gas importer. Age of Gas “When we look back in a decade, we will understand that the U.S. has moved from the age of oil to the age of gas,” Courtis said. “Japanese companies see the strategic opportunity and have the means to capitalize on it.” Japanese companies announced 652 billion yen ($8.2 billion) in gas and oil acquisitions in the first four months of this year, close to the total for all of 2011, which set a record for at least a decade, Tokyo-based researcher Recof said. The spending indicates Japan , due to publish a new energy policy this summer, is charting its future largely on gas after idling its last nuclear reactor this month, completing the removal of a third of its pre-Fukushima electricity supply. Japanese utilities plan to build an extra 24,000 megawatts of gas-fired capacity, 40 percent more than now, within a decade, according to government reports. Japan will also add 10 LNG import terminals to an existing 28 in the same period, thus increasing storage capacity by 23 percent, the data show. Risky Dependence “Raising dependence on LNG above 50 percent will probably be thought of as risky” because of the fuel’s high price, said Shigeki Sakamoto, a researcher with Japan Oil, Gas and Metals National Corp. in Tokyo. Japan should add coal and other fuels to the mix to avoid being “ripped off” on LNG, he said. Higher fossil fuel imports may bring Japan into current account deficit sooner than expected, which will make the yen more sensitive to events abroad and tie its rate movements more closely to that of the oil price, Barclays Capital analysts Aroop Chatterjee and Amrita Sen said yesterday in a report. Gas-fired generation has risen to about 50 percent of the total since three reactor cores melted at Tokyo Electric Power Co.’s Fukushima Dai-Ichi power station following the earthquake and tsunami that struck Japan last year, according to CLSA Asia- Pacific Markets. “It’s very tough to sustain that level for a long time, but you may have to if nuclear doesn’t come back online,” Penn Bowers, a Tokyo-based utilities and trading companies analyst with CLSA, said by phone. Gas Reliant Of the 34 countries in the Organization for Economic Cooperation and Development, five rely on gas for more than 50 percent of their electricity, with Luxembourg the most dependent, followed by the Netherlands, Ireland, Mexico and Italy, according to International Energy Agency website. Japan would become the most gas-reliant in the top 10 energy consumer countries, IEA data show. Japan’s government has yet to win public support to restart any of the country’s idled reactors. Prime Minister Yoshihiko Noda has said some nuclear generation will be needed to ease the strain on the economy. Even on the premise that Japan cuts half to two-thirds of its nuclear capacity and energy efficiency improves, the country will need to replace more than 20 percent of its base load power, Courtis said. Lock In Supply Inpex Corp. (1605) , Japan’s biggest energy explorer, bought 17.5 percent of Royal Dutch Shell Plc (RDSA) ’s Prelude LNG venture in Australia in March, in a deal Macquarie Group Ltd. (MQG) valued at $700 million. Inpex also committed this year to spending $24.7 billion on developing its Ichthys LNG project in west Australia. Mitsubishi and Mitsui, Japan’s top two traders, this month agreed to buy a $2 billion stake in the Browse LNG project in Australia, operated by Woodside Petroleum Ltd. (WPL) Last month the two joined Sempra Energy (SRE) of the U.S. to fund a $6 billion LNG export facility in Louisiana. The traders are also partners in Russia’s Sakhalin II LNG project, which OAO Gazprom (GAZP) said in January may be expanded for as much as $8 billion. Australia has a further $5 billion of LNG assets up for sale, Adrian Wood , a Sydney-based analyst at Macquarie, wrote in a May 2 report. Among those may be stakes in Chevron Corp. (CVX) ’s A$29 billion Wheatstone LNG venture and BG Group Plc (BG/) ’s $20.4 billion LNG project in Queensland, he said. “Australia is a preferred supply source, but they are also starting to look beyond Australia,” said Neil Beveridge, a Hong Kong-based analyst with Sanford C. Bernstein & Co. Demand Shortfall Japan will probably need to obtain a further 20 million tons of LNG annually by 2018 to meet demand, Noel Tomnay, head of global gas research at Wood Mackenzie Ltd. in Edinburgh, said in a phone interview. Replacing all 49,000 megawatts of nuclear capacity with the same of gas-fired generation would require buying an extra 49 million metric tons of LNG, according to calculations by Osamu Fujisawa, an independent energy economist in Tokyo. Japan imported a record 83 million tons in the year ended March 31. Japan’s investment activity in energy has always been high and the nuclear shutdown is only part of the reason for the recent up-tick, said Michael Joyce, a partner at Norton Rose (Asia) LLP in Tokyo, who advises Japanese companies on foreign asset purchases. The companies are enjoying the situation in which the yen has gained 53 percent against the dollar in the past five years while the rivals of the Japanese companies struggle to raise finances, Joyce said. Mitsubishi Confidence Ken Kobayashi, the chief executive officer of Mitsubishi, Japan’s biggest LNG importer, said he sees investing in gas as having little downside. Global LNG use is likely to grow 50 percent by 2020 from 2011 and Mitsubishi could market its foreign gas both domestically in the production country and in Japan and the rest of Asia. Mitsubishi has increased its own LNG capacity to 705,000 metric tons last year, up 42 percent from 2007. The company accounted for 41 percent of all Japan’s LNG imports in 2010, which includes production and trading volumes. Mitsubishi also wants to diversify LNG sourcing geographically and make take on operating roles in new development, Kobayashi said. “On a 10-15 year horizon, LNG is going to continue to be Japan’s core energy source,” Kobayashi said in a meeting with analysts May 11 in Tokyo. Ballooning Costs Whether Japanese companies buy more assets or not, they are already committed to “ballooning development costs” at their current assets, Jogmec’s Sakamoto said. Japanese companies may need to speed up gas investment because traditional suppliers such as Indonesia are lowering the volumes as their fields become exhausted and more of the fuel is needed domestically, CLSA’s Bowers said. Many of the new investments are aimed at the U.S. and Canada on the premise that both countries will gradually lift restrictions on exporting the fuel since vast quantities of gas have been found in shale rock formations. The gap between U.S. gas, which is mostly priced at Henry Hub, and Asia’s oil-linked rates has widened to a record $13 per British thermal unit, heightening interest in LNG exports from North America to the world’s most populous region, Barclays Capital analysts Shiyang Wang and Michael Zenker said in a May 15 note. Were U.S. gas to trade at the Asian price the sellers would earn an extra $1 billion a day, Wang and Zenker said. Gas Glut Marketed U.S. gas production may climb 4.4 percent this year from a record 66.22 billion in 2011, the Energy Department said May 8 in its Short-Term Energy Outlook. Sumitomo and Tokyo Gas Co (9531) in April agreed to buy 2.3 million tons of LNG a year from Dominion Resources Inc. (D) in the U.S. with the price linked to Henry Hub. The arbitrage with Asian gas prices would allow the companies to sell the fuel in Japan for under $10 per Btu, Kunio Nohata, a senior general manager at Tokyo Gas, said April 27. That’s more than 40 percent less than what Japan currently pays. The sales contract is also dependent on the U.S. approving Dominion Resource’s Cove Point facility for export activity. “People talk about Henry Hub and what it can do for Japan, but there’s absolutely price risk to that over the long-term,” CLSA’s Bowers said. “It could be good, it could be bad.” With the north American gas market at a fledgling stage and the premise vast, buying gas assets today is the equivalent of acquiring oil reserves about a decade ago when crude traded at $10 a barrel, Courtis said. Oil futures in New York are trading around $91 a barrel today. To contact the reporters on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net ; Yuji Okada in Tokyo at yokada6@bloomberg.net To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net

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BRE, Emperia, Hydrobudowa, PKO May Move: Central European Equity Preview

The following is a list of companies whose shares may have unusual price changes in central European markets. Stock symbols are in parentheses after company names. Share prices are from the last close. Poland’s WIG20 Index fell 0.3 percent, the Czech PX Index declined 1.1 percent and Hungary’s BUX Index rose 0.2 percent. BRE Bank SA (BRE PW): The Polish unit of Commerzbank AG was rated “neutral” in new coverage at Credit Suisse Group AG, which set its share-price estimate at 289.6 zloty. BRE shares declined 0.4 percent to 261 zloty. Emperia Holding SA (EMP PW): Poland’s second-largest food and household-products distributor plans a stock buyback and may also sell new shares after rejecting a takeover bid from bigger domestic competitor Eurocash SA (EUR PW). Emperia advanced 1.8 percent to 99.5 zloty. Eurocash rose 1.9 percent to 23.69 zloty. Hydrobudowa Polska SA (HBP PW): Obrascon Huarte Lain SA of Spain plans to buy a 51 percent stake in the Polish engineering company from PBG SA (PBG PW) for 431 million zloty ($142 million), Parkiet reported, citing people it didn’t identify. PBG will post a pretax profit of 300 million zloty on the stake sale, the newspaper said. Hydrobudowa lost 2.7 percent to 3.55 zloty and PBG shares declined 2.9 percent to 236.7 zloty. PKO Bank Polski SA (PKO PW): Poland’s biggest bank was upgraded to “outperform” from “neutral” at Credit Suisse. Bank Pekao SA (PEO PW), majority-owned by UniCredit SpA, had its recommendation increased to “outperform” from “underperform” at the Swiss bank. PKO shares climbed 2 percent to 41.49 zloty and Pekao added 0.1 percent to 161 zloty. Polskie Gornictwo Naftowe i Gazownictwo SA (PGN PW): Poland’s dominant gas company may limit supplies to customers in the fourth quarter, Dziennik Gazeta Prawna reported, citing company documents. The shares rose 2.6 percent to 3.61 zloty. To contact the reporters on this story: Pawel Kozlowski in Warsaw pkozlowski@bloomberg.net

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McDonald’s Sales Drop in Asia Signals Fast-Food Slowdown

Chinese consumers may be losing their appetite for American fast food. On June 8, McDonald’s Corp. (MCD) reported that same-store sales fell 1.7 percent in Asia Pacific, the Middle East and Africa in May, the biggest decline since at least 2004. The pullback at the world’s largest restaurant chain coincides with a slowing Chinese economy. That has forced McDonald’s and Yum! Brands Inc. (YUM) , which runs the KFC and Pizza Hut chains, to fight back with less-expensive menu items, said Steve West, an analyst at ITG Investment Research in St. Louis. “We’ve seen a lot of deep discounting by McDonald’s and Yum,” he said. “McDonald’s has been talking about keeping that up in the face of pretty high inflation.” McDonald’s, based in Oak Brook, Illinois, rose 0.3 percent to $87.97 and Yum fell 0.2 percent to $64.48 at 9:58 a.m. in New York , while the Standard & Poor’s 500 Index gained 0.1 percent. China’s manufacturing expanded at the slowest pace since December, a government report showed on June 1, adding to signs the nation’s slowdown is worsening. A separate purchasing managers’ index from HSBC Holdings Plc (5) and Markit Economics pointed to a seventh straight contraction, the longest stretch since the global financial crisis. China responded to the slowdown on June 7 by cutting interest rates for the first time since 2008. Sales Decline The 1.7 percent same-store sales decline at McDonald’s Asia, Middle East and Africa division last month compared with analysts’ projections for a gain of 3.2 percent, the average of estimates compiled by Consensus Metrix. Globally, sales rose 3.3 percent, trailing an estimate for a 5.2 percent increase. The chain’s division that includes Asia is “seeing challenging economic conditions, with slow growth in China,” Don Thompson , who will become chief executive officer in July, said during a first-quarter earnings conference call in April. Company-operated margin at restaurants in that region narrowed to 16.9 percent in the first quarter from 17.5 percent a year earlier. McDonald’s has tried to lure customers to its 1,500 stores in China with value lunch items and a new chicken burger. The company will start selling a value-priced dinner in China “in the coming months,” Thompson said in April. A slowing Chinese economy comes at a time when Yum is betting on the growing middle class to help it expand. The Louisville, Kentucky-based company, which generated 44 percent of its revenue in China last year and already has more than 4,600 restaurants there, plans to open another 600 locations this year. Earnings Growth McDonald’s is scheduled to report second-quarter earnings on July 23. Net income excluding some items is projected to increase less than 1 percent, according to the average of analysts’ estimates compiled by Bloomberg. That would be the weakest quarterly earnings growth in three years. Profit growth at Yum, scheduled to release second-quarter results on July 13, is also slipping. Net income excluding certain items may rise 4.2 percent, which would be the slowest growth since 2008, according to analysts’ estimates compiled by Bloomberg. While “China is slowing to some degree,” it’s still a profitable market for fast-food chains, said Larry Miller, an analyst at RBC Capital Markets in Atlanta, who rates McDonald’s and Yum the equivalent of buy. “I don’t think these guys are making a bad bet.” To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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EMERGING DISPLAY August Sales Fall 29.30% (Table) : 3038 TT

EMERGING DISPLAY said unconsolidated sales in August fell 29.30% to NT$270,354,000 from NT$382,382,000, according to a statement filed to the Taiwan Stock Exchange. (Figures are in thousands of New Taiwan dollars) ================================================================= 8/2011 8/2010 Sales 270,354 382,382 YOY% -29.30% -----------------Year-to-date----------------- Sales 2,774,836 2,479,657 YOY% 11.90% =================================================================

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U.S. Gulf Crude Premiums Slump as Brent to WTI Spread Narrows

U.S. Gulf crude premiums slumped as the benchmark West Texas Intermediate’s discount to its European counterpart narrowed for the fifth consecutive day to the smallest spread since January. The gap between April-delivery WTI futures and Brent, the basis for European and West African crudes, narrowed $1.41 to $8.19 at 2:10 p.m. in New York. The differential reached a record $15.94 on Feb. 16 and last settled this low on Jan. 20 at $6.99. When Brent falls versus WTI, it weakens the value of low- sulfur U.S. grades that compete with West African oil priced against Brent. Light Louisiana Sweet’s premium narrowed $3.25 to $10.75 a barrel at 2:02 p.m., according to data compiled by Bloomberg. Heavy Louisiana Sweet’s premium to WTI weakened $3.10 to $10.50. Among Gulf Coast sour, or high-sulfur, grades, Mars Blend’s premium to WTI narrowed $4.75 to $3.75 a barrel, while Poseidon weakened $4.40 to $3.60 over the benchmark. Southern Green Canyon’s premium shed $2.25 to $3.75 a barrel. Thunder Horse weakened $4.90 to $8 a barrel over WTI. West Texas Sour’s discount was slipped 5 cents to $3.65 a barrel. WTS is delivered in Midland, Texas, so its price is less influenced by imports. Syncrude’s premium slumped $3.25 to $8.75 a barrel. Syncrude is a light, low-sulfur synthetic oil derived from the tar sands in Alberta. The discount for Western Canada Select widened 20 cents to $20.10 a barrel. To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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Kenya Will Borrow $453 Million From World Bank for Health, Energy Projects

Kenya signed an agreement to borrow $453 million from the World Bank to fund health and energy projects, Finance Minister Uhuru Kenyatta told reporters in the capital, Nairobi, today. To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net

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England Reaches 43-1 at Lunch in Opening Cricket Test With India

England reached 43-1 in the opening cricket Test against India at Lord’s in London. Alastair Cook scored 12 before being caught leg before wicket by Zaheer Khan after England was put into bat after losing the toss. Captain Andrew Strauss is 20 not out and Jonathan Trott has scored 9. The match is the 2,000th in the 134 years of elite Test cricket. England can overtake India as the top team in the International Cricket Council rankings if it wins the four-match series by two Tests or more. To contact the editor responsible for this story: Bob Bensch at bbensch@bloomberg.net

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Italy Meets Target as Borrowing Costs Decline at 12 Billion Euro Bill Sale

Italy sold 12 billion euros ($15.9 billion) of Treasury bills today, meeting its target for the auction, and borrowing costs fell to the lowest since June from the previous sale. The Rome-based Treasury sold 8.5 billion euros of 365-day bills at 2.230 percent, the lowest since June 10 and down from 2.735 percent at the last auction of similar-maturity securities on Jan. 12. Investors bid for 1.09 times the amount offered, down from 1.47 times last month. The Treasury also sold 3.5 billion euros of 127-day bills at a rate of 1.546 percent, down from 1.644 percent last time. While “in pricing terms, Italy has turned a corner,” the country “is starting to become a victim of its own success,” Nicholas Spiro, managing of Spiro Sovereign Strategy in London , said in an e-mail. “The dramatic fall in yields over the past several weeks has driven down borrowing costs to levels where demand is ebbing. Today’s auction is an illustration of this.” The Bank of Italy said a technical problem delayed its reception of purchase requests and may have affected the bid-to- cover ratio on the 1-year bill sale, “which wasn’t particularly brilliant,” according to an e-mailed statement from the Rome- based central bank. ECB Assistance Italy, which needs to sell about 450 billion euros of debt this year, has benefited from the European Central Bank ’s efforts to fight the sovereign debt crisis by shoring up banks and propping up demand for government bonds. The Frankfurt-based institute loaned euro-region banks a record 489 billion euros for three years on Dec. 21 to avert a credit crunch and has been purchasing Italian bonds since August. The auction comes after Greek lawmakers approved spending cuts demanded by European finance chiefs, giving the indebted nation the chance of a financial lifeline and reducing investor demand for the safest assets. Italian 10-year bonds advanced, with the yield at 5.53 percent at 11:54 a.m. Rome time, which is seven basis points lower than on Feb. 10 and compares with a euro-era high of 7.55 percent on Nov. 29. Mario Monti , the unelected premier who took over after Silvio Berlusconi’s resignation in November, pushed through 20 billion euros in spending cuts and tax increases in December while reducing red tape that he blames for Italy’s stagnant economy. Italian gross domestic product expanded at an annual average of 0.4 percent in the decade through 2010, compared with 1.2 percent in the euro area. Weakening Economy Italy’s government projects GDP to fall 0.5 percent this year while the International Monetary Fund forecasts a contraction of 2.2 percent. Bank of Italy Director General Fabrizio Saccomanni told reporters in Rome last week that he expects the economy to shrink as much as 1.5 percent in 2012. “As yields find a floor after several weeks of sharp declines, more attention will be paid to Italy’s economic fundamentals which are deteriorating markedly,” Spiro said. “Right now, the market is unsure about the fair value of Italian sovereign risk.” To contact the reporter on this story: Chiara Vasarri in Rome at cvasarri@bloomberg.net. To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net

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Dubai Shares Drop, End 2-Day Gain, on Speculation Rally May Be Overdone

Dubai shares declined for the first time this week, led by Emaar Properties PJSC and Aramex PJSC, on investor speculation gains this month may have outpaced prospects for profit growth. Emaar, the company with the biggest weighting in the emirate’s benchmark index, lost 1 percent. Aramex, the Middle East’s biggest courier company, dropped to the lowest in a month. The DFM General Index slid 0.5 percent to 1,744.63, trimming the gain for the month to 3.6 percent, at the 2 p.m. close in the emirate. “We are seeing profit taking,” said Kifah Maharmeh , general manager at Al Dar Shares & Bonds Brokerage in Abu Dhabi. “Volumes are low” and investors are “waiting for results.” Gains of 19 percent in the second half of the year have left the 32 members of Dubai’s index valued at an average price to earnings ratio of 14.3. That compares with 12.3 times in Abu Dhabi and 11.8 times for shares in Qatar’s gauge. About 87 million shares traded in Dubai today compared with a three-month daily average of 109 million. Emaar may say tomorrow third-quarter profit rose 6.6 percent to 698 million dirhams ($190 million), according to the median estimate of four analysts compiled by Bloomberg. The shares declined to 3.84 dirhams today, paring the gain since June 30 to 25 percent. Aramex lost 2.3 percent to 2.12 dirhams, the lowest close since Sept. 21. Abu Dhabi’s measure slid 0.2 percent and the Kuwait SE Price Index dropped 0.1 percent. Bahrain’s measure fell 0.2 percent, while Qatar’s QE Index and Oman’s MSM 30 Index rose 0.4 percent. The Bloomberg GCC 200 Index rose 0.2 percent and Saudi Arabia’s Tadawul All Share Index advanced less than 0.1 percent. To contact the reporter on this story: Zahraa Alkhalisi in Abu Dhabi at zalkhalisi@bloomberg.net To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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Videotron Says Spectrum Auction Needs Limits on Incumbents

Videotron Ltee, one of Canada ’s new wireless carriers, called on the government to establish rules for the country’s next wireless auction that would offer new entrants twice as much spectrum as the incumbents. Carriers such as BCE Inc. (BCE) , Telus Corp. (T) and Rogers Communications Inc. (RCI/B) that already own 800-megahertz frequency spectrum should be limited in bidding for a single 700-megahertz block, with new carriers eligible to own two 700-megahertz blocks, Videotron Chief Executive Officer Robert Depatie said in a speech at the Canadian Telecom Summit in Toronto today. Spectrum are the government-licensed radio frequencies used in wireless communications. Canada’s Industry Minister Christian Paradis yesterday said he’ll consider all options in forming rules for next year’s auction. Wireless carriers want more spectrum to meet surging data demand as smartphone growth explodes and Rogers’ wireless chief Rob Bruce yesterday said limits on the ability of his company to bid for the 700-megahertz spectrum would be a "slap in the face" of its customers. Videotron, based in Montreal , spent C$555 million in the latest auction in 2008 ($555 million at the time) to buy sufficient spectrum to introduce wireless service in Quebec , to tap its base at that time of more than 2.5 million Internet and cable customers across Canada’s mainly French-speaking province. Costly Spectrum Videotron hopes to pay less for new spectrum in 2012, Depatie said in an interview after his speech. “I’ve never seen, based on the history of auctions in the U.S., an auction going lower than the previous one, but we hope it will because C$555 million for 40 megahertz in Quebec and 10 in Ontario, that’s a lot of money.” Carriers’ interest in the 700-megahertz frequency is high because it is effective in transmitting calls and data through buildings and densely inhabited settlements. The Canadian government should only establish limits on spectrum purchases if it thinks a company is hoarding the airwaves it doesn’t plan to use, Ken Engelhart, Toronto-based Rogers’ head of regulatory affairs, said at a panel discussion on the topic. “If a company has a legitimate need for spectrum, then you have an auction,” said Engelhart. “An auction says you put your money where your mouth is.” Telus is open to compromise on the rules of an auction but there has been too much distortion in how much spectrum it controls, said Michael Hennessy, senior vice president, of regulatory affairs at the Vancouver-based company. Edward Antecol, head of regulatory affairs at Globalive Communications, whose Wind Mobile service began operating in late 2009, said government-mandated set asides are a legitimate option to further stimulate competition. Bell, Telus and Rogers’s dominance is a “cosy little oligopoly” which “sucks for consumers,” said Antecol. Caps and limits "are perfectly reasonable options for consumers." To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net ; To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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Asian Stocks Fall Amid Earnings, China Slowdown Concerns

Asian stocks fell, with the regional benchmark index heading for a third straight decline, after companies from Daewoo Engineering & Construction Co. to Tokyo Steel Manufacturing Co. posted weaker earnings and a report China ’s manufacturing may shrink for a sixth month. Daewoo Engineering dropped 4.4 percent in Seoul after the construction company posted a 38 percent drop in first-quarter operating profit. Tokyo Steel slumped 7.6 percent as the steelmaker’s full-year loss widened. China Mobile Ltd. (941) , the world’s biggest carrier by subscribers, fell 3 percent in Hong Kong after posting first-quarter net income that missed analysts’ estimates. “Investors are taking a wait-and-see attitude as some earnings disappoint,” said Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management Asia Ltd., which oversees about $165 billion. “Even if more earnings were to come in at below expectations, we are still staring at very cheap equity valuations. There’s still scope for the market to move up.” The MSCI Asia Pacific Index dropped 0.5 percent to 123.61 as of 5:08 p.m. in Tokyo, erasing gains of as much as 0.3 percent. More than two shares fell for each that rose in the measure. The gauge posted its fourth weekly retreat this year last week as the Group of 20 nations warned Europe ’s debt crisis still threatens global growth and as reports showed economic expansion is slowing in the U.S. and China. China Manufacturing Japan’s Nikkei 225 Stock Average (NKY) dropped 0.2 percent, erasing gains of as much as 0.9 percent. South Korea’s Kospi Index lost 0.1 percent and Australia ’s S&P/ASX 200 Index declined 0.3 percent. Hong Kong’s Hang Seng Index sank 1.8 percent. China’s Shanghai Composite Index slid 0.8 percent as a survey showed the nation’s manufacturing may contract for a sixth month in April. The 49.1 preliminary reading of the Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics today compares with a final figure of 48.3 in March. A number below 50 points to a contraction. The MSCI Asia Pacific Index (MXAP) gained 9.1 percent this year through last week, compared with a 9.6 percent advance by the S&P 500 and a 5.4 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 12.7 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 10.8 times for the Stoxx 600. Of the 50 companies on the regional benchmark index that reported quarterly net income since April 10, 31 exceeded analysts’ estimates, while 15 missed expectations, according to data compiled by Bloomberg News. Earnings Performance Daewoo Engineering dropped 4.4 percent 9,800 won in Seoul. Operating profit fell to 51.2 billion won ($45 million) in the three months that ended March 31 from 82.3 billion won a year earlier, Daewoo said on April 20. Tokyo Steel (5423) sank 7.6 percent to 642 yen after saying losses widened to 14.3 billion yen ($176 million) in the year ended March 31 from 10.4 billion yen 12 months earlier on higher production costs. Nippon Yusen K.K., Japan’s largest shipping line by sales, slid 1.7 percent to 237 yen after reporting a preliminary full- year loss of 73 billion yen, wider than its forecast of a 26 billion yen loss, due to a slowdown in its logistics business and the reversal of deferred taxes assets. China Mobile slid 3 percent to HK$84.80 in Hong Kong after reporting first-quarter profit rose 3.5 percent from a year earlier to 27.8 billion yuan ($4.4 billion). That compared with the 28.2 billion yuan median estimate of four analysts surveyed by Bloomberg News. U.S. Futures Futures on the Standard & Poor’s 500 Index declined 1 percent today. The index gained 0.1 percent in New York on April 20 as profits from companies including Microsoft Corp. and General Electric Co. beat estimates and a report showed German business confidence improved. Asian stocks initially advanced today after the International Monetary Fund received more than $430 billion in pledges at the G-20 meeting in Washington over the weekend, nearly-doubling the IMF’s firepower in addressing Europe’s debt crisis. The group said in a statement that downside risks remain in the world economy and that volatility is high in part because of pressures in Europe. Among stocks that advanced, Yakult Honsha Co. jumped 12 percent to 3,075 yen, its highest close since October 2008, after the Nikkei newspaper reported Danone may increase its stake in Japan ’s largest non-alcoholic beverages maker. Paris- based Danone owns about 20 percent of Yakult, according to data compiled by Bloomberg. To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net

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Thailand Stocks: PTT, PTT Exploration, Jasmine International

Shares of the following companies had unusual moves in Thailand trading. Stock symbols are in parentheses and prices are as of the 4:30 p.m. close in Bangkok. The SET Index fell 11.70, or 1.1 percent, to 1,046.16, the lowest close since March 29. Oil companies : PTT Pcl (PTT) , Thailand’s biggest oil company, declined 1.2 percent to 343 baht, the lowest close since March 22. PTT Exploration & Production Pcl (PTTEP) , the nation’s only publicly traded oil explorer, declined for a third day, losing 1.1 percent to 174 baht, a one-week low. Crude oil dropped for a second day in New York , extending last week’s 0.4 percent decline, on signs of a slowdown in demand as OPEC ministers arrived in Vienna to discuss production quotas. Jasmine International Pcl (JAS) , an Internet service provider, gained 5.5 percent to 3.06 baht, the highest close since May 9, after the company said in a regulatory filing that it will write off 155.2 million shares that it bought back from investors. To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net. To contact the editor responsible for this story: Reinie Booysen at rbooysen@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Hungary GDP Growth Slowed in Second Quarter, Survey Shows

Hungary’s economy probably lost steam in the second quarter after exiting a 2012 recession, raising pressure on Prime Minister Viktor Orban before parliamentary elections next year. Gross domestic product advanced 0.3 percent from the previous three months after rising 0.7 percent in the first quarter, according to the median estimate of five economists in a Bloomberg survey. It grew 0.6 percent from a year earlier, a separate poll of eight economists showed. The statistics office will report preliminary data at 9 a.m. tomorrow in Budapest. Economic growth may exceed the government’s 0.7 percent forecast for this year, Orban said June 14, with the cabinet estimating accelerating expansion in the second half. Its prospects may be helped by euro area demand, with the currency bloc’s growth projected to snap six quarters of contraction in the three months ended June, according to a Bloomberg News survey. Euro-area GDP data will be published tomorrow. “The favorable data from the euro area and Germany appear to underpin the hypothesis that the recovery will start in” Hungary’s “main export markets in the second half of the year,” Mariann Trippon, a Budapest-based economist at Intesa Sanpaolo SpA, said in an e-mailed report. “Monthly data all point in the direction of Hungary having exited the recession.” Hungary’s forint has lost 1.9 percent against the euro this year, the sixth-best performer among emerging-market currencies tracked by Bloomberg. It had weakened 0.3 percent to 297.14 against the common currency late yesterday in Budapest. Budget Focus Orban sacrificed growth in his first two years in office to keep the budget deficit within the European Union’s 3 percent of GDP limit and remove the threat of cuts in funding from the trading bloc. Measures included Europe’s highest bank tax and extraordinary corporate levies on industries such as energy, damaging lending, industrial production and investment. Industrial production, Hungary’s economic engine, expanded a workday-adjusted 1.7 percent from a year earlier in June as car company production rose. Daimler AG (DAI) ’s Mercedes-Benz, Volkswagen AG (VOW) ’s Audi AG (NSU) , Suzuki Motor Corp (7269) and General Motors Co. (GM) ’s Opel unit are among car manufacturers in Hungary. The central bank in June began a 750 billion forint ($3.4 billion) Funding for Growth program, giving free funding to commercial banks that boost lending to small and medium-sized companies. The funding plan complements 12 consecutive quarter-point cuts in the benchmark interest rate to a record-low 4 percent. The central bank has said it plans to reduce the rate further, by as much as 1 percentage point. To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Canada Stocks Little Changed as BlackBerry Gains, Materials Fall

Canadian stocks were little changed after closing at a one-week high, as BlackBerry (BB) Ltd. climbed a third day and commodities producers slumped amid falling oil and gold prices. BlackBerry rose 3.4 percent today, after announcing yesterday it had formed a special committee to consider strategic options. Iamgold added 3.6 percent after lowering its cost forecasts for the year. Pengrowth Energy Corp. and TransGlobe Energy Corp. fell at least 1.2 percent as crude slid 0.4 percent. The Standard & Poor’s/TSX Composite Index (SPTSX) rose 13.32 points, or 0.1 percent, to 12,607.59 at 10:13 a.m. in Toronto. The index has gained 1.4 percent this year. To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Russia Equity Movers: United Co. Rusal, Nomos Bank Are Active

The 30-stock Micex Index slipped 0.4 percent to 1,558.45 as of 4:55 p.m. in Moscow. The dollar- denominated RTS dropped by the same to 1,706.26. The following are among the most active equities in the Russian market today. Stock symbols are in parentheses. Nomos Bank (NMOS) (NMOS RX) jumped the most in almost two weeks after posting a 35 percent net income gain last year as fees and commissions rose. The shares added 2.8 percent to 820 rubles, their biggest gain since March 14. United Co. Rusal (RUALR) (RUALR RX) slid for a fourth day in Moscow, retreating 0.7 percent to 216.05 rubles. Otkritie Financial Corp. lowered its recommendation on the stock to hold from buy. The Hong Kong-traded shares closed up 1.4 percent at HK$5.79 earlier. To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@bloomberg.net To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Looming Port Strike Deadline Pressures Obama to Intervene

President Barack Obama is facing pressure to block a strike that would gridlock eastern U.S. ports and risk damaging industries from retail to manufacturing. Federal mediators have been pushing for a deal between dockworkers and their employers before a Dec. 29 deadline. Talks between the International Longshoremen’s Association and the U.S. Maritime Alliance broke down last week amid a dispute over container royalty fees, levies that supplement wages. A walkout would be the first at East Coast and Gulf Coast ports since 1977, and would halt shipments of containerized cargo, including clothing, frozen foods and car parts. Obama would be left to choose between forsaking a pro-labor stance by invoking the 1947 Taft-Hartley Act and allowing a union action that could compound the effects of the fiscal cliff. “To throw that kind of a strike on top of the economy right away in January, I’m sure is something the administration would rather not see,” Mike Asensio, a labor lawyer at Baker Hostetler LLP in Columbus, Ohio , said in a telephone interview. “Would it create that much of a nightmare for him that they would be willing to do something that would anger part of their constituency in organized labor? That’s the $64,000 question.” Matt Lehrich, a White House spokesman, declined to comment beyond a statement last week that the administration was monitoring the situation and urging the parties “to continue their work at the negotiating table to get a deal done as quickly as possible.” Salvaging Talks The Federal Mediation and Conciliation Service, which has guided talks since September, organized a meeting between the two sides this week in an 11th-hour effort to salvage negotiations. All three parties declined to provide further details on the new talks. “I believe in my president, and I will follow him down whatever road he leads us,” Carl Chiofolo Jr., a union member and clerical worker at New Jersey’s Port Elizabeth, said in a phone interview. “Solidarity is the No. 1 thing here. We have to keep together on this. It literally is a fight for our lives.” If federal mediation fails, the only remaining tool in the government’s arsenal is Taft-Hartley, which empowers the president to intervene in strikes that are deemed national emergencies, said Phillip Wilson, president and general counsel at the Labor Relations Institute in Broken Arrow, Oklahoma. The act was last invoked by President George W. Bush in 2002 after a lockout closed West Coast ports for 10 days. The most recent successful use prior to that was in 1971 under President Richard Nixon. Retail Pressure The National Retail Federation and Florida Governor Rick Scott have urged Obama to use the law to avoid an eastern port shutdown that they say would cripple an already weak economy. “The threat to national health and safety that would result from mass closure of the ports cannot be overstated,” Scott, a Republican, wrote in a Dec. 20 letter to Obama. “The Taft-Hartley Act provides your administration with tools that can help avoid this threat.” On a conference call with port directors today, Scott said he hasn’t yet received a response from Obama and reiterated his call for an intervention. About 550,000 people depend on Florida ports directly and indirectly for their jobs, he said. The Port Authority of New York and New Jersey said a strike would cost the region an estimated $136 million a week in personal income and $110 million in economic output. “Any disruption to port activity will negatively affect tens of thousands of local jobs as well as both the regional and the national economies,” Steve Coleman, an authority spokesman, wrote in an e-mail. “We urge the parties to resolve their differences as soon as possible.” Labor Support Even as pressure for action mounts, Obama may hesitate to undermine the union’s bargaining power, Bradford Livingston, a partner at Seyfarth Shaw LLP, said in an interview from Chicago. Labor unions “continue to be one of the bigger donors of the Democratic Party,” Livingston said in a phone interview. “As the top Democrat, even though he may not be re-elected, he’s going to want to be a friend to organized labor for the next four years.” The Longshoremen’s political action committee gave 96 percent of its $549,050 in 2012 election donations to Democratic candidates and committees, according to the Washington-based Center for Responsive Politics. Obama didn’t accept PAC contributions for his re-election campaign. West Coast Calls from the Retail Federation for presidential intervention during an eight-day strike last month at the Port of Los Angeles and adjacent Port of Long Beach went unheeded. A strike at East Coast and Gulf Coast ports would need to last at least as long or longer before Obama steps in, according to the Labor Relations Institute’s Wilson. “The president intervening is a big deal,” he said in a phone interview. “At the end of the day, the way these situations are supposed to work out is the parties inflict whatever pain they can on each other and then they reach a deal.” Still, with the fiscal cliff of more than $600 billion in spending cuts and tax increases looming at the end of the year, the president won’t be able to linger on the sidelines, said Jock O’Connell , international trade adviser at Los Angeles-based consultant Beacon Economics LLC. “There’s always the possibility that the mediators will lead the respective parties to come to a solution before the strike,” O’Connell said in a phone interview. “After that, then the clock starts ticking. The precedent in this case is about a 10-day clock before pressure on the White House to invoke Taft-Hartley starts becoming irresistible.” To contact the reporter on this story: Brooke Sutherland in New York at bsutherland7@bloomberg.net To contact the editor responsible for this story: James Langford at jlangford2@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Germany's Benchmark DAX Index Rises to Highest Level Since September 2008

Germany’s benchmark DAX Index climbed to the highest level in more than two years after minutes from the Federal Reserve showed U.S. policy makers are prepared to buy more government debt. The DAX advanced 0.8 percent to 6,356.52 at 9:40 a.m. in Frankfurt, on course for the highest close since Sept. 3, 2008. To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.

Guineans to Vote in an Election That Threatens to Stoke Ethnic Tensions

Guinea holds a delayed presidential runoff on Nov. 7 that threatens to stoke ethnic tensions in the world’s biggest bauxite-exporting nation. Former Prime Minister Cellou Dalein Diallo , who received 43.7 percent of votes in the June 27 first round, will compete against opposition leader Alpha Conde , who garnered 18.2 percent. The vote will pave the way for the transition from military to civilian rule in the West African nation. “These elections seem to have divided the country,” said Rolake Akinola, London-based West Africa analyst with Eurasia Group. “The civilian class has to present a united front” to stave off future military interventions, she said yesterday in a phone interview. The election is being held almost two years after the army seized power following the December 2008 death of President Lansana Conte , who ruled the country for 28 years. Guinea hasn’t had a democratic transfer of power since it gained independence from France in 1958. General Sekouba Konate took control in December after an aide shot the coup leader Moussa Dadis Camara , in the head. Diallo, 58, may emerge the winner by drawing support from his ethnic Peul that forms a majority in the country, Akinola said. Conde, 60, courts the Malinke and other, smaller ethnic groups. Mining Agreements Both candidates have pledged to continue a review of mining agreements. The review has already led to a dispute with London- based Rio Tinto Group over ownership of the Simandou iron-ore project. Other companies operating in the country include Russia’s United Co. Rusal , the world’s largest aluminum producer, AngloGold Ashanti Ltd. , Africa’s biggest gold miner, and Brazil’s Vale SA , the No. 1 iron-ore producer. Guinea holds as much as half of the world’s reserves of bauxite, an ore used to make aluminum, more than 4 billion metric tons of “high-grade” iron ore and “significant” deposits of diamonds and gold, according to the U.S. State Department. Aluminum Corp. of China Ltd. also operates in the country. The ballots will be collected from polling stations until Nov. 10, with the preliminary results released on Nov. 12, said Lounceny Camara, vice president of the Conakry-based electoral commission. The body is “ready for organization of the presidential runoff,” he said in a phone interview today. Polls were delayed in September and October when the commission said it wasn’t prepared. Future for Guinea “A well-organized, transparent and credible runoff election, with results accepted by all parties, will be a major step toward a promising future for the people of Guinea,” Yakubu Gowon , a former Nigerian head of state and leader of the Atlanta-based Carter Center’s observation team in the country, said in a statement published on the group’s website Nov. 2. Guinea is one of three West African countries that have held votes this month in an attempt to overcome political turmoil and revive economic growth. Ivory Coast went to the polls on Oct. 31 for an election that aims to reunite a country divided between a rebel-held north and a government-controlled south. Young-jin Choi, the United Nations mission chief in Ivory Coast, said the country showed “political maturity and determination to put an end to the crisis.” ‘International Goodwill’ Guinea’s leaders should “be taking note” of the praise given to Ivory Coast, the world’s top cocoa grower, Akinola said. “Guinea needs that sort of international goodwill.” Niger, the world’s sixth-biggest uranium producer, voted 90.2 percent in favor of a new constitution on Oct. 31, a step toward the return of civilian rule after the army ousted President Mamadou Tandja in February. A presidential election is planned for Jan. 31. Political instability in West Africa has curbed investment and economic growth over the past 15 years, according to the International Monetary Fund. Guinea’s per capita income is less than half the sub-Saharan African average of $861, according to the World Bank, and the country ranks 170th out of 182 countries on the UN’s Human Development Index. To contact the reporter on this story: Emily Bowers in Accra at ebowers1@bloomberg.net ; Ougna Camara in Conakry via Accra at ebowers1@bloomberg.net. To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net .

Generate a suitable headline for the given input of a financial news article. Only output the headline, not the instruction and input article.