Frontrunning: March 22
- Beijing on edge amid coup rumours (FT) - as predicted two days ago, do not expect any official media update on this critical matter, until after the outcome, whatever it is
- Goldman scours emails for use of word "muppets" (Reuters)
- Germany to Balance Budget Early (WSJ)
- Osborne Gives and Takes From Rich in U.K. Budget Balancing Act (Bloomberg)
- Big Spending at Fannie, Freddie Should End, Watchdog Says (Bloomberg)
- Volcker Says U.S. Needs Reforms in Finance, Government (Bloomberg)
- Chinese Firms, Regulators in Talks on Yuan-Fund Program (FT)
- Ireland Said to Ready Bank-Debt Proposal for ECB Review (Bloomberg)
- Greece Names New Finance Minister (WSJ)
- Monti faces tough test with labour reforms (FT)
- Bernanke Seeks to Allay Lawmakers' Europe Concerns (WSJ)
Overnight Media Digest via RTRS
* French authorities appeared to be closing in on the suspect in a series of shootings of soldiers, schoolchildren and a teacher, characterizing him as an Islamist radical who had been planning to strike again Wednesday.
* Deutsche Bank changed the legal structure of its huge U.S. subsidiary to shield it from new regulations that would have required the German bank to pump new capital into the U.S. arm.
* Hartford Financial said it would exit its annuity business and weigh a sale of a large portion of its life insurance operation, in a move pushed for by hedge-fund titan John Paulson.
* Springleaf Finance, the subprime lender owned by Fortress Investment Group, has hired restructuring lawyers as it struggles to raise new funds and grapples with billions in debt coming due later this year.
* McDonald's Corp's Chief executive Jim Skinner is retiring, handing the challenge of sustaining one of the restaurant industry's strongest runs to the company's president, Don Thompson.
* The Associated Press said Gary Pruitt, longtime chairman and chief executive of the newspaper publisher McClatchy Co, will become the news cooperative's next president and CEO.
ALASKA CHAMPIONS $40 BILLION PIPELINE PLAN
BP, ExxonMobil and ConocoPhillips are in discussions about a $40 billion project to export liquefied natural gas to Asia from Alaska, potentially opening up large but stranded reserves that currently have no route to market.
MORGAN STANLEY ASKED FOR ITALIAN PAYOUT
Morgan Stanley asked Italy to cancel billions of dollars worth of outstanding derivatives contracts, generating a 2.57 billion euros ($751.83 million) payout from the Italian Treasury to the investment bank.
ECB EYES EXIT FOR CRISIS FUND
The European Central Bank is falling behind on a 40 billion euros asset purchase programme launched at the height of the euro zone crisis, in a sign it could be dropped as a first step towards unwinding huge emergency support for the region's financial system.
CHALLENGE EXPECTED TO O'REILLY GRIP ON IRISH MEDIA GROUP
The O'Reilly family grip on the management of Independent News & Media is coming under fresh pressure with two large shareholders seeking to oust the chief executive of the Irish media group at its June annual meeting.
HARTFORD MULLS DISPOSALS AFTER PAULSON CAMPAIGN
Hartford Financial Services is considering the sale of its life insurance business in response to pressure from billionaire investor John Paulson who has also urged the group to split off its prized property and casualty unit from the rest of its operations.
UK GOVERNMENT PLANS AIR TRAFFIC SALE
The British government is set to announce next week that it will auction part of its stake in the UK's air traffic controller - a sale that would raise about 250 million pounds for the Treasury and underscore British Prime Minister David Cameron's commitment to opening up more infrastructure to private investment.
SONY SHAKES UP LEADERSHIP STRUCTURE
Sony is shaking up the leadership structure of its U.S. entertainment businesses in preparation for Sir Howard Stringer's handover as chairman and chief executive to Kazuo Hirai. The reshuffle will hand more power to Michael Lynton, chairman and chief executive of Sony Pictures Entertainment, and to Nicole Seligman, the Japanese group's general counsel.
COMEBACK OF THE 'DASH FOR TRASH'
The "dash for trash" that emerged at the nadir of the financial crisis in 2009 has made a comeback this year as investors have piled into the riskiest corporate bonds they can find.
LLOYDS TO SELL BUYOUT LOANS TO BAIN UNIT
Lloyds Banking Group has stepped up efforts to shrink its balance sheet by agreeing to sell a 500 million pound portfolio of mostly UK leveraged loans for private equity buyouts to the debt investment arm of Bain Capital, according to people familiar with the matter.
* In a move to attract multinational advertisers and combat online piracy, "Touch," a new drama from News Corporation , will start almost simultaneously in 100 countries and territories.
* German bonds are losing value as bond yields in Spain and Italy spike, leaving bondholders like big European banks poorer.
* Europe has made good progress in easing its debt crisis, Fed Chairman Ben Bernanke and Treasury Secretary Timothy Geithner told a House committee on Wednesday.
* The Standard & Poor's index of 11 home builder stocks has risen 80 percent since October, the most recent low for the industry.
* In a deal with the Labor Department, FedEx's ground delivery unit resolved allegations involving 21,635 workers in 15 states.
* Jim Skinner, the chief executive who steered a floundering McDonald's to the best financial performance in its history, will retire this summer, the company announced late Wednesday. Skinner, 67, will be succeeded on July 1 by the company's chief operating officer, Don Thompson, 48.
* Gary Pruitt, chairman and chief executive of the newspaper publisher McClatchy Co, becomes the 13th leader of The Associated Press.
* Two Democratic amendments would tighten proposed rules on how companies raise financing online and strengthen other provisions that were approved by the House.
THE GLOBE AND MAIL
- The New Democrats will begin their leadership convention on Friday with a remarkable wind filling their sails. For the first time in 25 years, the polling firm Environics has them in first place, tied with the Conservatives.
- Health Canada is warning hospitals and health-care providers across the country to immediately stop using a painkiller made by Sandoz Canada after a box of the injectable morphine was found to contain another powerful drug that had been mislabeled.
- Canada's ambassador to Libya, Sandra McCardell, has left her post, but will likely emerge in another diplomatic role in another Arabic-speaking country. Foreign Affairs Minister John Baird is standing behind McCardell, still widely viewed as a rising star in Canada's foreign service, despite questions about a potential conflict of interest surrounding the business dealings of her husband.
Reports in the business section:
- Already reeling from the winter that wasn't, many stores in Canada now find themselves struggling to match their inventory to the spring that came too soon.
Tom Johnson, co-owner of Tall Tree Cycles in Ottawa, delayed bringing in new stock at his Ottawa bike store this year because last year's spring was so "horrible."
- Oil producers in Canada and the northern United States stand to be big beneficiaries of U.S. President Barack Obama's effort to insulate himself from political fallout over rising pump prices.
Amid warnings that U.S. pump prices could hit $5 a gallon if the standoff with Iran escalates, Obama is engaged in a campaign swing through the U.S. Midwest to offset Republican attacks on his energy policy.
- The Canadian health-care system has proven to be a black hole for federal tax dollars over the past decade or so, says a new report.
Despite hikes in federal transfers to provinces for health care that were $97.6 billion beyond what was needed to account for inflation and population growth in the past 13 years, there has been little improvement in access to care for Canadians, says the Fraser Institute study released Wednesday.
Reports in the business section:
- After being on the block for about two years, HSBC Bank Canada announced Wednesday it is "winding down" its consumer finance business, which operates as HSBC Financial Corporation Ltd.
- Glencore International Plc has learned from BHP Billiton Ltd's experiences in handling takeovers in Canada.
Glencore, the largest publicly traded commodity supplier, will probably win Canadian approval for its C$6.1 billion ($6.2 billion) agreement to buy Viterra Inc because it brought in partners including Calgary-based Agrium Inc to avoid a repeat of BHP's failed bid for Potash Corp of Saskatchewan Inc.
- The People's Bank of China will encourage more lending to rural areas by the policy bank, Agriculture Bank of China (ABC), and will expand its financial services to more provinces. These local ABC branches will have a lower required reserve ratio (RRR) as compared with other commercial banks.
- Domestic insurers made 6.4 percent more premium income in the first two months of the year totalling 327.88 billion yuan ($51.86 billion).
- China and Mongolia have expanded a currency swap between the two countries to 10 billion yuan from 5 billion yuan.
CHINA DAILY (www.chinadaily.com.cn)
- Domestic consumption will be the main driver of China's economic growth this year and is set to surpass government investment for the first time in a decade, said the Chinese Academy of International Trade and Economic Cooperation, a Ministry of Commerce think tank.
- Taxi drivers nationwide will receive a subsidy of around 300 yuan ($47.45) a month to offset the second hike in fuel prices this year, after the government raised retail prices of mid-grade gasoline by 6 percent and benchmark diesel by 7 percent.
- Premier Wen Jiabao hosted a State Council meeting, which called to speed up the construction of highways and railway lines. The government will also effort to resolve drinking water supply for 298 million rural people in the coming five years.
- The minister of water resources Chen Lei, in an article, called for efficient use of water in farmland irrigation and strict control of water pollution and said the government will speed up construction of irrigation facilities in some rural areas to ensure the country's grain production.
CHINA SECURITIES JOURNAL
- Chinese restaurant chain operator South Beauty Co plans a Hong Kong initial public offering in the second quarter and aims to raise $300-400 million.
CHINA BUSINESS NEWS
- China is expected to release its coal industry development plan for the 12th five-year period on Thursday, aiming to increase the total coal supply to 4.2 billion tonnes by 2015, with net imports reaching 150 million tonnes, the paper reported.
21ST CENTURY BUSINESS HERALD
- China has agreed on a contract price for potash fertiliser imports at $470 per tonne, including freight, for the first half of this year, unchanged from the preceding period.
European Economic Summary:
- Eurozone PMI Composite 48.7 – lower than expected. Consensus 49.6. Previous 49.3.
- Eurozone PMI Manufacturing 47.7 – lower than expected. Consensus 49.5. Previous 49.0.
- Eurozone PMI Services 48.7 – lower than expected. Consensus 49.2. Previous 48.8.
- Eurozone Industrial Orders s.a. -2.3% m/m – lower than expected. Consensus -2.2% m/m. Previous 1.9% m/m. Revised 3.5% m/m.
- Eurozone Industrial New Orders n.s.a. -3.3% y/y – lower than expected. Consensus -3.1% y/y. Previous -1.7% y/y. Revised -0.4% y/y.
- UK Retail Sales ex Auto Fuel -0.8% m/m 1.0% y/y – lower than expected. Consensus -0.5% m/m 2.3% y/y. Previous 1.2% m/m 1.9% y/y. Revised 0.6% m/m 1.1% y/y.
- UK Retail Sales w/Auto Fuel -0.8% m/m 1.0% y/y – lower than expected. Consensus -0.5% m/m 2.4% y/y. Previous 0.9% m/m 2.0% y/y. Revised 0.3% m/m 1.4% y/y.
- Switzerland Trade Balance 2.68B – higher than expected. Consensus 1.80B. Previous 1.55B. Revised 1.50B.
- Switzerland Exports real s.a. 9.2% m/m – higher than expected. Consensus 0.3% m/m. Previous -3.4% m/m. Revised -10.4% m/m.
- Switzerland Imports real s.a. -12.3% m/m. Previous 3.6% m/m. Revised 5.5% m/m.
- Germany PMI Manufacturing 48.1 – lower than expected. Consensus 51.0. Previous 50.2.
- Germany PMI Services 51.8 – lower than expected. Consensus 53.1. Previous 52.8.
- France PMI Manufacturing 47.6 – lower than expected. Consensus 50.2. Previous 50.0.
- France PMI Services 50.0 – lower than expected. Consensus 50.3. Previous 5.0.
- Russia Gold & Forex Reserve USD 505.4B. Previous 507.7B.