European stocks broadly lower ahead of earnings; Dax down 0.32%

Investing.com - European stocks were broadly lower on Tuesday, as markets were jittery ahead of upcoming earnings reports, although upbeat German trade data lent support, as well as comments made by European Central Bank Vice President Benoit Coeure over the weekend.

During European morning trade, the DJ Euro Stoxx 50 fell 0.24%, France’s CAC 40 edged down 0.15%, while Germany’s DAX slid 0.32%.

Official data earlier showed that Germay''s trade surplus widened to €18.8 billion in May, from €17.2 billion in April whose figure was revised down from a previously estimated €17.7 billion. Analysts had expected the trade surplus to narrow to €16.4 billion in May.

European equities found support on Monday after ECB Vice President Benoit Coeure said Sunday that rates will remain on hold for an extended period to ensure monetary stability in the euro zone.

The ECB left all rates on hold at its meeting last Thursday, after cutting rates to record lows in June in a bid to stave off the threat of persistently low inflation in the region.

Financial stocks were broadly lower, as French lenders Societe Generale (PARIS:SOGN) and BNP Paribas (PARIS:BNPP) retreated 0.48% and 0.85%, while Germany''s Deutsche Bank (XETRA:DBKGn) tumbled 1.29%.

Among peripheral lenders, Italy''s Intesa Sanpaolo (MILAN:ISP) and Unicredit (MILAN:CRDI) declined 0.81% and 0.82% respectively, while Spanish banks Banco Santander (MADRID:SAN) and BBVA (MADRID:BBVA) slid 0.31% and 0.81%.

Elsewhere, Air France-KLM (PARIS:AIRF) plunged 5.38% after the airline cut its full-year earnings forecast amid overcapacity on North American and Asian routes, poor demand for freight and the fallout from a dispute with Venezuela.

In London, FTSE 100 slipped 0.22%, weighed by losses in the financial sector.

Shares in Barclays (LONDON:BARC) dipped 0.06% and HSBC Holdings (LONDON:HSBA) edged down 0.18%, while the Royal Bank of Scotland (LONDON:RBS) dropped 0.88% and Lloyds Banking (LONDON:LLOY) lost 1.08%.

Meanwhile, mining stocks were mostly higher as Bhp Billiton (LONDON:BLT) rose 0.28% and Glencore Xstrata (LONDON:GLEN) jumped 1.05%, while Fresnillo (LONDON:FRES) and Rio Tinto (LONDON:RIO) saw shares rally 1.24% and 1.25% respectively.

Marks & Spencer (LONDON:MKS) added to gains, up 0.78%, after the clothing retailer said quarterly revenue at its food unit climbed 1.7%. The company also reported a 12th straight quarterly drop in non-food sales.

In the U.S., equity markets pointed to a steady to lower open. The Dow 30 futures pointed to a 0.07% loss, S&P 500 futuressignaled a 0.13% fall, while the Nasdaq 100 futures indicated a 0.03% dip.

Source:

www.jpost.com

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Cupcake Shop Crumbs Shuttering All Its Stores

rumbs says it is shuttering all its stores, a week after the struggling cupcake shop operator was delisted from the Nasdaq.

The New York City-based company said all employees were notified of the closures Monday. A representative for Crumbs could not immediately say how many workers were affected or how many stores it had remaining on its last day.

"Regrettably Crumbs has been forced to cease operations and is immediately attending to the dislocation of its employees while it evaluates its limited remaining options," the company said in an emailed statement. That will include filing for Chapter 7 bankruptcy liquidation.

A press release from its website in March listed 65 locations in 12 states and Washington, D.C. The website had not been updated with notification of the closures late Monday.

Crumbs was founded in 2003 and went public in 2011, selling giant cupcakes in flavors including Cookie Dough and Girl Scouts Thin Mints. More recently, however, it had been suffering from a steep decline in sales. For the three months ending March 31, Crumbs Bake Shop Inc. reported a loss of $3.8 million, steeper than the loss of $2 million from the same period a year ago.

The company had warned in a filing with the Securities and Exchange Commission this past May that it "may be forced to curtail or cease its activities" if its operations didn't generate enough cash flow.

As of the end of last year, Crumbs listed about 165 full-time employees and about 655 part-time hourly employees working in its stores.

Source:

abcnews.go.com

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Dollar falls against yen, Fed minutes in focus

A money changer holds stacks of US dollar notes in Jakarta, August 29, 2013.

The dollar weakened on Monday against the Japanese yen as investors continued to digest last week’s strong U.S. employment report and speculated about when the Federal Reserve is likely to begin raising U.S. interest rates.

The yen gained as long-dated U.S. Treasuries rallied, stemming a week-long bond selloff heading into Thursday's employment report, which showed nonfarm payrolls increased by 288,000 jobs last month and the unemployment rate fell to 6.1 percent from 6.3 percent in May.

The next major focus will be the release on Wednesday of minutes from the Fed’s June meeting, which will be scoured for signs about when central bank members see an interest rate increase as likely.

“The discussion won’t reflect the strong bounce in nonfarm payrolls, but will serve as a reference as to what the internal debate is in the FOMC regarding the first rate hike,” said Martin Schwerdtfeger, a foreign exchange strategist at TD Securities in Toronto.

Goldman Sachs economists on Monday brought forward their expectations of the first rate increase to the third quarter of 2015 from the first quarter of 2016, following similar actions from some other banks last week.

The dollar fell 0.27 percent against the yen to 101.84 yen, down from 102.10 yen late on Friday.

The dollar also slipped 0.01 percent against the euro to $1.3604. It had strengthened to $1.3577 earlier on Monday after data showed German industrial output fell 1.8 percent on the month in May, its biggest drop in more than two years.

The weak German data kept alive expectations the European Central Bank may need to loosen monetary policy further in coming months in the face of disinflationary pressures and subdued economic growth.

The dollar index, which tracks the greenback against a broad basket of currencies, was unchanged at 80.220, down from an earlier high of 80.359, the highest in a week-and-a-half.

Source:

www.reuters.com

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German industrial output posts surprise slump in May

Rolls of wire are seen at the plant of German steel company Arcelor Mittal in Duisburg April 19, 2013.

Germany's industrial output fell 1.8 percent on the month in May, its biggest drop in more than two years, as holiday days ate into working hours, construction slumped and geopolitics weighed, casting a shadow on its role as euro zone motor.

The drop was a surprise and sent the euro weaker - the consensus forecast in a Reuters poll was for industrial output to be unchanged. The economy ministry also slightly downwardly revised April data to -0.3 percent from a previous -0.2 percent.

The disappointing data added to mounting signs of a weaker second quarter in Europe's largest economy, after it enjoyed quarterly growth of 0.8 percent in the first three months of the year, its fastest growth rate in three years.

 

The figures also fanned expectations that the European Central Bank (ECB) may have to loosen monetary policy further in coming months in the face of disinflationary pressures and subdued growth.

"After a strong first quarter, industry output weakened over the last months. Besides the effect of the bridge (holiday) days in May and weakness in construction, which was to be expected after the mild winter, geopolitical factors may also have played a part," the ministry said in a statement.

"However sentiment indicators and general economic conditions suggests that output will rise again in the rest of the year after a weaker second quarter," it said.

The ministry did not specify which geopolitical areas were of concern but economists such as the influential Munich-based Ifo think-tank say business is worried about the Ukraine crisis and the impact on oil prices of the insurgency in Iraq.

"The second quarter is gradually turning into a massive disappointment. So far, May has brought disappointing retail sales, falling industry orders and now a significant fall in production," Dekabank economist Andreas Scheuerle said.

"Even if some of this is down to missing days at work because of the bridge days, and might be recovered later, there was simply not the momentum in the second quarter. That said, the general state of the German economy is not in question. The third quarter should be strong again," he said.

The German government forecasts growth of 1.8 percent for the year as a whole on the back of strong domestic demand and a healthy jobs market. However, expectations of a disappointing second quarter are now widespread.

"It is likely that German growth will at best come in flat in the second quarter, which suggests the other euro countries and the ECB should not pin their hopes on the German engine of growth for the time being," Commerzbank economists wrote in a research note.

Output in the construction sector fell 4.9 percent in May, after an exceptionally mild winter allowed much more building work to take place in the first months of the year. Output in intermediate goods slipped 3.0 percent on the quarter.

Source:

www.reuters.com

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German Industrial Output Falls in Sign of Slower Growth

German industrial output dropped for a third month in May amid signs Europe’s largest economy is taking a breather.

Production, adjusted for seasonal swings, fell 1.8 percent from April, when it declined a revised 0.3 percent, the Economy Ministry in Berlin said today. Economists forecast output to remain unchanged, according to the median of 35 estimates in a Bloomberg News survey. Production rose 1.3 percent in May from the previous year when adjusted for working days.

While Germany’s economic trend points “upward significantly,” growth probably slowed in the three months through June, the Bundesbank has said. Factory orders fell more than economists expected in May, Ifo business confidence dropped to a six-month low in June, and unemployment rose for a second month.

“There was a little dent in the second quarter,” said Jens-Oliver Niklasch, a fixed-income strategist at Landesbank Baden-Wuerttemberg in Stuttgart. “But generally speaking, the German economy is in quite good shape and there’s no reason for concern as growth rates will remain solid.”

Manufacturing fell 1.6 percent, with intermediate-goods production (GRIPIMOM) dropping 3 percent and consumer-goods output down 3.5 percent, today’s report showed. Investment-goods production rose 0.3 percent and energy output was up 1 percent, while construction slumped 4.9 percent.

Geopolitical Tensions

The economy ministry said the decline in output was primarily due to the timing of the May 1 holiday and should only be temporary.

“Sentiment indicators and the overall economic fundamentals suggest the upswing in industrial production will continue in the course of the year after a weaker second quarter,” the ministry said in a statement.

While Germany remains the driving force for the euro-area’s yet-lackluster recovery, recent data suggest that tensions between Russia and Ukraine are weighing on confidence and business prospects. Investor confidence as measured by the ZEW research institute dropped for a sixth month in June to the lowest level since December 2012.

The 18-nation euro-area economy grew just 0.2 percent at the beginning of the year, compared with an expansion of 0.8 percent in Germany, and the European Central Bank has warned that a prolonged period of low inflation could hamper the recovery.

Policy makers left interest rates unchanged last week and unveiled details of a new lending program aimed at boosting credit supply. Last month, they cut the benchmark rate to a record-low 0.15 percent, took the deposit rate below zero and said they’d intensify work on a purchase plan for asset-backed securities.

To contact the reporter on this story: Stefan Riecher in Frankfurt at sriecher@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net Jana Randow, Zoe Schneeweiss

Source:

www.bloomberg.com

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IBM Research Launches Project "Green Horizon" to Help China Deliver on Ambitious Energy and Environmental Goals

Agreement with Beijing government helps transform approaches to air quality management

BEIJING, July 7, 2014 /PRNewswire/ -- IBM (NYSE: IBM) has announced that it is deploying the full force of its researchers in laboratories around the world in a 10-year initiative to support China in transforming its national energy systems and protecting the health of citizens.

Dubbed "Green Horizon", the project sets out to leap beyond current global practices in three areas critical to China's sustainable growth: air quality management, renewable energy forecasting and energy optimization for industry. Led by IBM's China Research laboratory, the initiative will tap into the company's network of 12 global research labs and create an innovation ecosystem of partners from government, academia, industry and private enterprise.

One of the first partners to come on board is the Beijing Municipal Government. Through a collaboration agreement, the two parties have agreed to work together to develop solutions which can help tackle the city's air pollution challenges. The collaboration will leverage some of IBM's most advanced technologies such as cognitive computing, optical sensors and the internet of things all based on a Big Data and analytics platform and drawing on IBM's deep experience in weather prediction and climate modelling.

"China has made great achievements and contributed much to the world's economic growth over the past 30 years. It now has an opportunity to lead the world in sustainable energy and environmental management," said D.C. Chien, Chairman and CEO, IBM Greater China Group. "While other nations waited until their economies were fully developed before taking comprehensive action to address environmental issues, China can leverage IBM's most advanced information technologies to help transform its energy infrastructures in parallel with its growth."

China's economic growth over the past several decades has raised the living standards of hundreds of millions of Chinese citizens and led to China becoming the second largest economy in the world. However, the resulting environmental impact, particularly air pollution, has become a priority for the Chinese government and a matter of global importance.

According to Dr. Lu Qiang, Professor at Tsinghua University and Fellow of the Chinese Academy of Sciences, "the key to tackling environmental problems is not only monitoring emissions but adopting a comprehensive approach to air quality management and addressing the issues at their roots. Initiatives like IBM's Green Horizon can help by fostering joint innovation across the entire energy value chain."

Urban Air Quality Management Global urbanization is creating air quality challenges for all major cities around the world. In China, where cities have been the engines of much of the country's economic growth over the past decade, the government has launched the "Airborne Pollution Prevention and Control Action Plan" as it moves to safeguard the health of approximately 700 million people living in urban areas.

The city of Beijing will invest over $160 billion to improve air quality and deliver on its target of reducing harmful fine Particulate Matter (PM 2.5) particles by 25% by 2017. To support the initiative, IBM is partnering with the Beijing Municipal Government on a system to enable authorities to pinpoint the type, source and level of emissions and predict air quality in the city.

IBM's cognitive computing systems will analyze and learn from streams of real-time data generated by air quality monitoring stations, meteorological satellites and IBM's new-generation optical sensors - all connected by the internet of things. By applying supercomputing processing power, scientists from IBM and the Beijing Government aim to create visual maps showing the source and dispersion of pollutants across Beijing 72 hours in advance with street-scale resolution.

"As a leader in climate modelling, cognitive computing and predictive analytics, IBM Research can provide a lot of value to Beijing and other Chinese cities which are facing significant pressure to better monitor, respond to and address air pollution issues. Science based decision support systems, combined with sophisticated data analysis is exactly what the Chinese government needs to address the country's energy and environmental issues," said Tao Wang, Resident Scholar, Energy and Climate Program, Carnegie-Tsinghua Center for Global Policy.

With accurate, real-time data about Beijing's air quality, the government will be able to take rapid action to address environmental issues by adjusting production at specific factories or alerting citizens about developing air quality issues.

"The Chinese government is taking bold steps to transform the country's energy and environmental structures. IBM is here to help and through Green Horizon we are committed to deploying our most advanced technologies and best talent from around the world," said Dr. Xiaowei Shen, Director, IBM Research – China.

Renewable Energy Forecasting The Chinese government recently announced increased investment in solar, wind, hydro and biomass energy in a bid to decrease its dependency on fossil fuels. To support the objective, IBM has developed a renewable energy forecasting system to help energy grids harness and manage alternative energy sources.

The solution combines weather prediction and Big Data analytics to accurately forecast the availability of renewable energy which is renowned for its variability. It enables utility companies to forecast the amount of energy which will be available to be redirected into the grid or stored - helping to ensure that as little as possible is wasted. It increases the viability of renewable energy, helping the Chinese government to realize its objective of getting 13% of consumed energy from non-fossil fuels by 2017 and enabling the construction of the world's biggest renewable grids.

Based on IBM's "Hybrid Renewable Energy Forecasting" (HyRef) technology, the solution uses weather modeling capabilities, advanced cloud imaging technology and sky-facing cameras to track cloud movements, while sensors monitor wind speed, temperature and direction. It can predict the performance of individual renewable energy farms and estimate the amount of energy several days ahead.

The system has already been rolled out to 30 wind, solar and hydro power sources. The biggest deployment is at China's largest renewable energy initiative - the Zhangbei Demonstration Project managed by State Grid Jibei Electricity Power Company Limited (SG-JBEPC) in the Northern province of Hebei. Using the system, SG-JBEPC is able to integrate 10% more alternative energy (enough for 14,000 homes) into the national grid. With a prediction accuracy of 90% proven on Zhangbei's wind turbines, it is one of the most accurate energy forecasting systems in the world.

"Applying analytics and harnessing big data will allow utilities to tackle the intermittent nature of renewable energy and forecast power production from solar and wind, in a way that has never been done before," said Brad Gammons, General Manager IBM's Global Energy and Utilities Industry. "We have developed an intelligent system that combines weather and power forecasting to increase system availability and optimize power grid performance."

Energy Optimization for Industry China's economic growth over the past 10 years has led it to becoming the biggest energy consumer in the world. As part of the transformation of Chinese industry, the government has committed to reducing the country's "carbon intensity" by 40-45% by the year 2020, compared with 2005 levels (equivalent to 130 million tons of coal per year).

To support these goals, IBM is developing a new system to help monitor, manage and optimize the energy consumption of industrial enterprises – representing over 70% of China's total energy consumption.

Using a Big Data and analytics platform deployed over the cloud, it will analyze vast amounts of data generated by energy monitoring devices and identify opportunities for conservation. It could be used to analyze data from industrial enterprises in different cities and identify which sites and equipment waste the most energy. The system will be valuable for guiding decisions about optimization and investment in China's most power hungry industries such as steel, cement, chemical and non-ferrous metal. 

The new energy optimization system for industry leverages IBM's expertise in regional energy management in China. IBM is already engaged with China Southern Grid to manage the energy consumption of HengQin Island in Guangdong province helping the island to decrease energy consumption, costs and CO2 emissions.

About IBM in China IBM has been a partner to China's modernization program since the 1970s, providing computing systems and services to government, industry and scientific research. Today China is home to a number of world-class IBM laboratories and development centers including one of its twelve global research labs.

IBM Research - China was established in 1995 and today has labs in Beijing and Shanghai. IBM Research - China pursues a broad research agenda including cloud, big data analytics, cognitive computing and Internet-of-Things. IBM Research – China collaborates with partners from government, academia and industry to address key challenges across multiple sectors including energy and environment, logistics and supply chain, healthcare and financial services.

Source:

www.marketwatch.com

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American Apparel: Ousted CEO Dov Charney gears up for a power grab

Ousted American Apparel Chief Executive Dov Charney is firing up the machinery to retake control of the company that booted him nearly two weeks ago.

Charney plans to solicit the written consent from other stockholders to expand the number of board members to 15 from seven, elect new directors and amend company bylaws at a special shareholder meeting, according to a Tuesday filing with the Securities and Exchange Commission.

This is Charney's first indication that he intends to wage a "proxy fight," as it's known in corporate circles, by soliciting the right to vote other stockholders' shares in support of his position.

On Monday, Charney revealed that he had significantly upped his stake in the Los Angeles retailer to 43% from 27%. He spent $19.6 million to buy an additional 27.4 million shares last week, according to security filings.

Both American Apparel and Charney have engaged in a series of moves and countermoves since the board voted him out June 18. 

Charney's buying spree apparently came before American Apparel announced a shareholder rights plan on Saturday. The one-year poison pill plan is designed to keep Charney from regaining control of the retailer after he announced plans last week to buy more shares in the company. 

It is unclear whether Charney, the company's biggest shareholder, can call a special meeting of shareholders.

In his filing Tuesday, Charney states that the law in Delaware, where American Apparel is incorporated, allows him to take action to expand the board and install his own directors in the new positions without a special shareholders meeting if he is able to acquire the written consent of enough shareholders. Charney said he intends to seek such consent.

Over the weekend, a special committee of the board changed American Apparel's bylaws. The amended bylaws now prohibit executives or shareholders from calling special meetings, roughly doubles the time required to nominate directors and submit stockholder proposals at annual meetings and emphasized that board directors can be removed only "for cause." American Apparel said Monday that it had rejected Charney's request last week for a stockholder meeting. 

Regardless of the bylaws, analysts said that Charney's huge block of shares may force the board to sit down with him. Charney now has the power to block any big moves that the company may try to make, including a sale to an interested buyer. 

Charney bought his new shares on Friday after reaching a deal with New York investment firm Standard General. The cooperative buying arrangement stipulates that Standard General would buy American Apparel stock and then lend Charney the money to buy the stock from the firm at an annual interest rate of 10%, a security filing said. 

Late Monday, Standard General reported to the SEC that last week it had bought 27.4 million shares, which it sold to Charney on Friday. It bought an additional 1.5 million shares on Monday. 

The board voted to replace Charney as chairman and terminate him as CEO pending an investigation "into alleged misconduct." The vote resulted in Charney's immediate suspension, but under his employment contract, termination requires a 30-day delay.

The company has been working hard to counter attempts by Charney to get back his job. His lawyer, Patricia Glaser, filed an arbitration petition last week alleging wrongful termination, breach of contract and retaliation, among other issues.

Aside from its difficulties with Charney, American Apparel is struggling to overcome many hurdles.

The retailer has lost nearly $270 million in the last four years and is more than $200 million in debt. The company has warned that firing Charney could trigger defaults on nearly $40 million in loans and force it into bankruptcy.

One lender, Lion Capital, which owns 12% of American Apparel's stock, has demanded repayment on a $10-million loan this week, according to the New York Post. That could trigger another default on a $30-million loan with Capital One.

Allan Mayer, the retailer's co-chairman, said that the company had sufficient capital to pay off the loan if Lion asks to be repaid right away.

Source:

www.latimes.com

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Markets face mixed week; oil slides

Added to the picture, revised data revealed that the US economy shrank a steep 2.9 per cent in the first three months of 2014, sharply worse than the previous estimate of a 1pc decline.

Oil: The oil market fell as weak data stoked fresh demand fears in top consumer the United States, while Iraqi crude supplies appeared unaffected by ongoing violence, analysts said.

Consumer spending, which accounts for more than two-thirds of US economic growth, rose a mere 0.2pc in May after flattening in April, official data showed.

In addition, initial US jobless claims, a sign of the pace of layoffs, totaled 312,000 in the week ending June 21, a decrease of just 2,000 from the previous week.

And American oil inventories unexpectedly rose by 1.7 million barrels in the week ending June 20. That dashed analysts’ forecasts for a 1.2m-barrel decline, indicating weakening demand.

“As a result of the weaker data and the build in crude stocks ... investors are all of a sudden refocusing their attention on the demand side of things,” said analyst Fawad Razaqzada at trading site Forex.com.

“They are realising that demand is simply not strong enough to justify oil prices at these elevated levels.” New York oil prices had been lifted on Wednesday by a report suggesting that Washington will ease a decades-old ban on crude exports.

Late last week, meanwhile, oil prices had hit nine-month peaks on the back of Iraqi unrest.

“Both crude benchmarks slipped over the past week, correcting lower in small-scale profit-taking,” added VTB Capital analyst Andrey Kryuchenkov. “Importantly, despite ongoing violence in Iraq, supplies remain largely unaffected by the militant advance.”

Iraq’s Prime Minister Nuri al-Maliki conceded Thursday that political measures are needed alongside military action to repel a Sunni insurgent offensive that is threatening to tear the country apart.

Despite ongoing supply fears over violence in Iraq — the second biggest Opec producer after Saudi Arabia — the nation’s oil output has yet to be impacted.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in August fell to $113.18 a barrel compared with $114.66 one week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for August sank to $105.55 a barrel compared with $107.13 a week earlier.

Gold climbs on Iraq

Precious metals: Haven investment gold continued to climb on stubborn geopolitical worries in Iraq and Ukraine, hitting a two-month peak of $1,325.92 an ounce on Tuesday.

“With geopolitical tensions in places like Ukraine, Syria and Iraq unlikely to end soon, demand for a safe haven asset could stay well supported for a considerable period of time,” said Capital Spreads dealer Jonathan Sudaria.

Sister metal silver also pushed higher to strike a three-month high at $21.20 an ounce.

By Friday on the London Bullion Market, the price of gold rose to $1,317.50 an ounce from $1,312.50 a week earlier.

Silver increased to $21.04 an ounce from $20.62.

On the London Platinum and Palladium Market, platinum climbed to $1,479 an ounce from $1,456.

Palladium advanced to $839 an ounce from $829.

Base metals: Most prices rose, with zinc striking another 16-month peak at $2,198 a tonne, after upbeat data in China — which needs vast supplies of commodities to power its growth.

HSBC said its purchasing managers index (PMI) of Chinese manufacturing came in at 50.8 this month, up from a final reading of 49.4 in May. Anything above 50 points to growth and anything below suggests contraction.

“A stronger-than-expected Chinese HSBC Flash Manufacturing PMI has given the base metals complex a boost and underscored the effect of the government’s mini-stimulus measures to help stabilise China’s flagging economy,” said Standard Bank analyst Leon Westgate.

The latest figure is the first time the reading has come in above 50 since December’s 50.5, and will raise hopes that a slowdown in the world’s second biggest economy has bottomed out.

By Friday on the London Metal Exchange, copper for delivery in three months climbed to $6,956 a tonne from $6,779.75 a week earlier.

Three-month aluminium eased to $1,886 tonne from $1,894. Three-month lead grew to $2,166 a tonne from $2,146. Three-month tin slipped to $22,315 a tonne from $22,650. Three-month nickel advanced to $18,825 a tonne from $18,523. Three-month zinc increased to $2,187 a tonne from $2,172.25.

Cocoa loses steam

Cocoa: Prices slipped from three-year highs struck the previous week, as traders eyed favourable weather conditions in key producing nations.

“The growing weather has been very good for the mid-crop and this allow for a large harvest and should create further pressure on the futures market,” said Citi analyst Sterling Smith.

By Friday on LIFFE, London’s futures exchange, cocoa for delivery in September eased to £1,924 a tonne from £1,928 a week earlier.

On the ICE Futures US exchange, cocoa for September slid to $3,108 a tonne from $3,116 a week earlier.

Coffee: Prices advanced amid ongoing supply concerns. “Arabica moved higher on the day as worries about the state of the crop is providing support to the market,” said Citi analyst Sterling Smith.

On ICE Futures US, Arabica for delivery in September rose to 181.30 US cents a pound from 170.50 cents a week earlier.

On LIFFE, Robusta for September climbed to $2,036 a tonne from $1,978 a week earlier.

Sugar: The market weakened despite supply worries in key producer Brazil.

“Despite some rainfall, many areas of Brazil are still too dry, which is expected to further reduce crop yields in the harvest that is currently underway,” said Commerzbank analysts.

By Friday on LIFFE, the price of a tonne of white sugar for delivery in August receded to $483.10 from $488.50 a week earlier.

On ICE Futures US, the price of unrefined sugar for October declined to 18.55 US cents a pound from 18.63 US cents a week earlier.

Rubber: Prices in Kuala Lumpur strengthened further, supported by expansion in China’s factory activities.

The Malaysian Rubber Board’s benchmark SMR20 rose to 178.65 US cents a kilo from 173.60 cents a week earlier.

Source:

www.dawn.com

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HP to settle $11bn litigation

NEW YORK: Hewlett-Packard and attorneys representing shareholders have agreed to settle litigation over its troubled $11.1 billion acquisition of British software company Autonomy Corporation.

Under the terms of the settlement, involving three lawsuits, the attorneys for the shareholders have agreed to drop all claims against HP's current and former executives, including chief executive Meg Whitman, board members and advisers to the company.

The exception to that will be former officials at Autonomy. As part of the agreement, the shareholders' attorneys will assist HP in pursuing claims against Autonomy's co-founder and former CEO Michael Lynch, its former chief financial officer Sushovan Hussain, and potentially others related to Autonomy. The precise nature of such claims and when HP might file them could not be learned.

The settlement, which followed mediation, is expected to be announced as soon tomorrow.

HP took an $8.8bn impairment charge in November 2012 for its purchase of Autonomy only just over a year earlier, with more than $5bn of that linked to what HP said at the time were "serious accounting improprieties, misrepresentation and disclosure failures."

In particular, sources close to an HP investigation into the matter say that the technology giant believes that Autonomy's results and prospects were made to look much better than they were.

Lynch has consistently denied HP's allegations, saying HP is blaming him for its own failure to manage Autonomy after the acquisition.

A spokesman for Lynch said that "we continue to reject HP's allegations." He said it appears that Whitman will be using a large sum of HP's money to avoid explaining in court why she made the November 2012 allegations regarding Autonomy.

HP responded by saying that it has evidence showing how Autonomy "created the illusion" that it was a high-growth company. "This had the effect of misleading investors and HP", it said in a statement.

Hussain has not responded to calls and emails.

Source:

www.gulf-daily-news.com

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Ruling Risks New Argentine Default as Monday Deadline Approaches

Bank of New York Mellon Corp. must return a $539 million deposit from Argentina intended for restructured bondholders, a U.S. judge ruled, calling the transfer an “explosive action” that disrupted potential settlement talks with holders of defaulted debt.

U.S. District Judge Thomas Griesa in New York has ruled that Argentina can’t pay holders of its restructured debt without also paying more than $1.5 billion to a group of defaulted bondholders, raising the possibility of a new default as the South American nation approaches a June 30 payment deadline.

Robert Cohen, a lawyer for hedge funds holding the defaulted debt, told Griesa that Argentina “defiantly and contemptuously” violated his court orders. The U.S. Supreme Court this month declined to disturb the judge’s rulings that both groups of debtholders be paid, setting off the latest fight. Griesa urged Argentina to negotiate with the bondholders.

“This payment is illegal and will not be made,” Griesa said today at a hearing in Manhattan federal court. He warned that any attempt to pay restructured bondholders would be in contempt of court.

Argentina, which defaulted on a record $95 billion in debt in 2001, has said it would face a second default if forced to pay both classes of bondholders. In a statement today, the country said Griesa’s ruling on the payment to BNY Mellon was an abuse of authority.

Argentina’s Economy Ministry said in an e-mailed statement that the decision was outside his jurisdiction because restructured bonds aren't part of court case, and that the judge is impeding Argentina from completing its debt obligations.

Scolded

During the hearing, Griesa scolded the nation’s lawyers for failing to file a proper application to stay the ruling, calling a letter sent to his chambers seeking a delay an improper application.

Billionaire Paul Singer’s NML Capital Ltd. said it is willing to agree to a delay that would permit Argentina to make the its bond payment by July 30, the end of a 30-day grace period, if sufficient progress is made in negotiations. The bonds will be in default if payment isn’t made by July 30.

“What was necessary, if anybody wanted to negotiate, was to figure out a way to maintain a status quo so there would not be a default,” said Griesa. “It doesn’t take a rocket scientist to figure out how to do that.”

Griesa expressed frustration several times at Argentina’s failure to engage in negotiations with NML as the payment deadline gets closer.

“Why haven’t settlement negotiations gone forward?” Griesa asked. “Why aren’t they going forward today instead of having us sit in court?”

Griesa on June 23 appointed a special master to aid settlement talks.

Complied

Argentine Economy Minister Axel Kicillof said the nation complied with its foreign debt obligations yesterday when it deposited the funds with BNY Mellon, the trustee under the bond agreements. An interest payment comes due June 30. In a statement to investors, the nation said it was now the bank’s responsibility to pay them.

Eric Shaffer, a lawyer for the bank, told Griesa the bank remains in compliance with his orders as it hasn’t passed Argentina’s money along to clearinghouses for payment to restructured bondholders.

“Your bank didn’t do anything wrong,” Griesa told Shaffer.

The defaulted bondholders, led by NML, rejected Argentina’s offers of new bonds, worth about 30 percent of the defaulted bonds, in debt restructurings in 2005 and 2010. NML, which is seeking to recover the full value of the bonds, asked Griesa to hold Argentina in contempt of court for disobeying his orders and transferring the money to BNY Mellon.

Negotiated Settlement

Carmine Boccuzzi, a lawyer for Argentina, told Griesa at the hearing that the country still hoped for a negotiated settlement. Jay Newman, a money manager at NML, said “we are hoping to have the opportunity to negotiate with Argentina.”

The price on Argentine bonds due 2033, whose coupon payments are being blocked, fell 1.55 cents to 83.69 cents on the dollar at 4:32 p.m. in New York, according to prices compiled by Bloomberg.

The extra yield investors demand to hold Argentine debt over U.S. Treasuries widened 0.04 percentage point to 7.62 percentage points, according to JPMorgan Chase & Co.’s EMBIG diversified index.

Holdout Battle

The dispute between Argentina and holders of its defaulted debt has reached a climax now after the U.S. Supreme Court on June 16 left intact Griesa’s ruling requiring the nation to treat defaulted bondholders equally with holders of its performing debt.

“Conventional wisdom is that this gets resolved before July 30,” said Marco Santamaria, a New York-based money manager at AllianceBernstein, which oversees $25 billion of emerging-market debt. “This may be the opportunity for Argentina to finally put to bed its issues with all external creditors.”

Last year, BNY Mellon had said Griesa’s order would force it to violate contractual obligations to investors.

Argentina deposited $539 million in its BNY Mellon account at Argentina’s central bank designated for payment of the international bonds. In total, including peso payments, more than $1 billion was set aside to pay the debt.

Ron Gruendl, a spokesman for BNY Mellon, declined to comment on Griesa’s ruling today.

Local Bonds

A payment of about $300 million is to be made to Citigroup Inc. for payment of local law bonds. Griesa said that disbursement may go forward if Argentina makes an expected payment to the New York-based bank. In a statement today, Citigroup said it was “an important decision” that allows the bank to fulfill its obligations to the bondholders while complying with Griesa’s rulings.

Griesa denied a request by holders of euro-denominated exchange bonds, who argued that his orders shouldn’t apply to those securities as their payments are made entirely outside of the U.S. The judge replied that his orders apply to payments made by Argentina, which agreed to U.S. jurisdiction when it issued the original bonds.

Griesa today also declined to sign orders requiring payment to five holders of defaulted bonds not involved in the NML case but with similar claims, saying he wanted to avoid further complicating possible settlement talks.

“Their rights aren’t going to go away,” Griesa said.

Carlos Abadi, chief executive officer of New York-based investment bank ACGM Inc., said in an e-mail that Argentina knew BNY Mellon was barred from distributing the $539 million to bondholders before it made the deposit.

“It’s not clear why they would put up such a show and waste precious time,” Abadi said. “It’s going to be incredibly complex to reach a comprehensive deal by July 30th and this sideshow makes the goal even harder.”

The case is NML Capital Ltd. v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

Source:

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American Apparel Adopts Rights Plan to Thwart Ousted CEO

Dov Charney, former chief executive officer of American Apparel Inc. The company investigated Charney’s actions this year and found a history of misconduct, a person familiar with the matter said. Charney is contesting the firing. Photographer: Keith Bedford/Bloomberg

American Apparel Inc. (APP:US), the retailer whose shares have dropped 52 percent in the past year, adopted a one-year shareholder rights plan to keep ousted Chief Executive Officer Dov Charney from taking control of the company.

A special committee of the board made the decision after a filing to the U.S. Securities and Exchange Commission by Charney, “in which he expressed an intent to acquire control or influence over the company” and “reports of rapid accumulations of the company’s outstanding common stock,” American Apparel said in a statement today.

Charney, who already owned 27.2 percent of the troubled retailer, yesterday entered into a loan agreement with Standard General LP to help increase his stake as he contests his firing. American Apparel said last week it replaced Charney after it investigated his actions. The Los Angeles-based company found a history of misconduct that ranged from sexual harassment and retaliation to misallocation of corporate funds, a person familiar with the matter has said.

VIDEO: American Apparel CEO Fights Back Against Ousting

“This plan is an important tool to ensure that all American Apparel stockholders are treated fairly,” the company said today. “It is intended to provide the board of directors and stockholders with time to make informed judgments.”

The rights will be “attached to all shares of common stock,” and each right entitles the holder to purchase one ten-thousandth of a share of preferred stock at an exercise price of $2.75, according to the statement.

15 Percent

The rights may separate “upon the occurrence of certain events,” the company said. The plan allows investors to accumulate as much as 15 percent of common stock and has no impact on a takeover proposal that is acceptable to a majority of investors, American Apparel said.

VIDEO: He's Not Leaving: American Apparel CEO Fights Back

If a person or group already beneficially owns 15 percent or more of the common stock, the person won’t be deemed a so-called acquiring person unless an additional 1 percent of the company’s shares is purchased, American Apparel said.

Under the plan, Charney doesn’t beneficially own any of the American Apparel stock owned by Standard General “solely by reason of the letter agreement dated June 25,” the company said.

Standard General will loan Charney funds to buy at least 10 percent of outstanding shares, according to the SEC filing yesterday. The loan carries a five-year term and will use Charney’s stock as collateral.

STORY: American Apparel Has Finally Had Enough of CEO Dov Charney

“The rights plan is designed to limit the ability of any person or group, including Dov Charney, to seize control of the company without appropriately compensating all American Apparel stockholders,” the company said.

Net Losses

The retail chain, which started out selling U.S.-made T-shirts and became a byword for hip fashion, has racked up about $270 million in net losses since the beginning of 2010. The company avoided a cash crunch this year by selling stock.

Lion Capital LLP, a creditor to the chain, won’t grant a waiver request from the retailer to keep its $10 million loan from going into default and is demanding full repayment, according to two people familiar with the matter.

STORY: American Apparel Founder Dov Charney Finally Gets Fired

That decision threatens to trigger a default on a $50 million credit line with Capital One Financial Corp., under which $30 million is drawn, because of cross-default provisions in the agreements. A default also means American Apparel would lose access to $20 million available under that pact.

Capital One is holding its own talks with the company’s management and working to get Lion back on board with granting a waiver, according to one of the people.

American Apparel shares jumped 30 percent to 97 cents at the close in New York yesterday, giving the retailer a market value of about $169.3 million, and slid 7.2 percent to 90 cents in extended trading.

STORY: American Apparel: Charney's Bad Behavior Was Very, Very Expensive

To contact the reporters on this story: Gabi Thesing in London at gthesing@bloomberg.net; Ben Livesey in San Francisco at blivesey@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Kristen Hallam, Jennifer Joan Lee

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