TheChek News Flow

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(Reuters) - Iran is lobbying to get HSBC to process humanitarian trade transactions that Europe's biggest bank has frozen because of concerns about potential breaches of international sanctions, sources familiar with the trades told Reuters.

Banks such as HSBC are responding to tougher scrutiny over financial dealings with some countries including Iran, even as the Islamic Republic has won relief from some sanctions since its interim deal with world powers last November under which it has scaled back some aspects of its disputed nuclear program.

French bank BNP Paribas is facing a fine of as much as $9 billion and other penalties over allegations of U.S. sanctions breaches involving Iran and other states between 2002 and 2009.

Iran was never barred from buying food or other humanitarian goods under sanctions first imposed in 2006 over its nuclear activity. But measures by the European Union and the United States have made trade generally more difficult over the past two years, hindering payments and shipping.

"HSBC, like other banks, is increasingly worried about falling foul of any sanctions oversights. It is just not worth the risks, especially in this climate," a banking source, who declined to be named due to the sensitivity of the issue, said.

European and U.S. trade sources, who also declined to be named due to sensitivities over business with Iran, said HSBC had in recent weeks frozen some transactions for approved goods.

"My direct experience is that they have blocked payments going into and out of Iran," a European trade source said.

HSBC said it continued to consider humanitarian payments involving sanctioned countries "on a case-by-case basis" to ensure they are in accordance with applicable regulatory requirements, and otherwise consistent with the bank's policy.

"This review process can be particularly challenging and therefore can take time to conclude. Our policy only requires the freezing of these payments where required under applicable laws and regulations," HSBC said in a statement issued in response to Reuters questions. HSBC declined to comment on whether it had received any overtures from Iran.

A U.S.-based trade source said that payments with Iran via HSBC had not gone through in recent weeks.

"HSBC seems to have stopped processing financial transactions for allowable humanitarian trade," the source said, adding that this could have wider implications.

"The (financial) ecosystem with Iran is so fragile that the loss of even one entity, (like HSBC), can have an existential consequence."

Three Iranian government officials said HSBC had stopped processing payments, and that Tehran was trying to resolve the issue. "We are in talks to solve the problem,” one said.

A second Iranian government official said the West was "trying to pressure Iran" to accept their conditions in continuing negotiations with the six world powers on a long-term settlement under which Tehran would cede any means of diverting its nuclear energy program to atomic bomb-making in exchange for a removal of all sanctions against it. Iran has long insisted it seeks only peaceful nuclear energy, not bombs.

"These sanctions will be lifted sooner or later and we will prefer to work with those banks that helped us under sanctions," the second official said.

Iran’s Central Bank Governor Valiollah Seif told Reuters: "We never had any such (humanitarian/food commodities finance) interaction with HSBC."

In recent days, the suggestion that the United States and Iran may have common interests on Iraq has raised hope of overcoming stumbling blocks to a final nuclear agreement between Tehran and the world powers.

The United States said it might launch air strikes and act jointly with Iran to shore up the Iraqi government, after a territorial rampage by Sunni Islamist insurgents that has scrambled alliances in the Middle East.

Britain said separately that it would reopen its embassy in Iran “within months” after a hiatus of more than 2 1/2 years.

TRANSPARENCY FEARS

A Western intelligence source said HSBC's trade finance was "completely consistent with our understanding and assessment".

"It appears that HSBC is very concerned by the apparent lack of transparency in Iranian activity," the source said.

"Large European banks are to a large extent making it a matter of policy to manage risk and operate more cautiously than is actually required by regulations in order to avoid prohibited activity."

In March, trade sources and government officials told Reuters that Tehran was pressing world powers to speed up trade finance arrangements on humanitarian deals involving both Western and Iranian banks.

"Parties no doubt shy away from engaging in food or humanitarian transactions with Iran from concern about compliance with restrictions that are not always clear," said Doug Maag, U.S.-based senior counsel with law firm Clyde & Co.

"Banks are also reluctant to become involved in such transactions, because if they process payments on non-compliant transactions the banks themselves can be subject to sanctions."

In December 2012, HSBC was fined $1.92 billion by U.S. regulators for various violations including doing business with Iran and money laundering in Mexico. The bank has ramped up internal compliance and in 2012 appointed Stuart Levey, former U.S. Treasury undersecretary for terrorism and financial intelligence, as the bank's chief legal officer.

A former U.S. Treasury official now working in the private sector, including commercial deals with Iran, said banks were increasingly concerned over transparency issues.

"On the policy side, Treasury wants the transactions processed but the bank regulators want to make sure there is no money laundering going on. It sounds like the banks are stuck between sanctions regulations and anti-money laundering controls," the former official said.

"The potential BNP fine is certainly eye-opening and the concern is what may be considered common banking practice now may be determined illicit five years from now. That is adding banks' considerations especially with regards to Iran."

COMMERCIAL DECISIONS

William Arnall-Culliford, team leader of the Iran department at Britain's Foreign Office, said the intention of sanctions was not to harm ordinary Iranians or humanitarian transactions, but the government did not offer an "interpretation service on the legal rules in the EU".

"What we won’t do is tell people whether their proposed activities are in line with sanctions," he told an Iran business seminar in London earlier this month.

"(Where there are no legal obstacles), issues dealing with banks are commercial issues. It is not the policy of government to intervene in commercial decisions."

Arnall-Culliford said that where an activity was not prohibited under sanctions, "we would not expect the U.S. to issue letters of comfort" to EU companies.

"The government’s policy is not to encourage trade with Iran. There is no support in trade disputes," he said.

A U.S. Treasury spokeswoman said Washington had worked hard with international partners "to support and facilitate humanitarian trade with Iran".

"Through our private sector outreach and in discussions with other governments, we make clear that transactions related to humanitarian trade with Iran are permissible," she said.

"In addition, as part of our commitment to implementing the Joint Plan of Action, we helped establish financial channels to facilitate humanitarian trade with Iran and those channels have been actively working."

Syngenta news today can give ideas to US players inthe sector...(IFF, Dupont Dow, Ashland...)

Exane comment on note from the 6th of June :

Croda: the stock has recently de-rated on short-term concerns, whilst peers have

re-rated; many cash-rich global majors want speciality/consumer businesses, including

Dow, DuPont and Ashland. A tax inversion scheme with the latter cannot be excluded

(too small for the others). IFF has also explained they are looking at 'adjacent' markets.

Croda could thus be a potential target (inversion scheme could also be an option given

their relative size). However, IFF would need a partner to buy the cyclical pieces

(Performance Technologies and Industrial Chemicals).

--> Could make sens to start looking at it regarding the Performance vs Peers.

{CRDA LN Equity BAS GY Equity GRT D}

>>> Affordable again

* EBIT could grow by 8% in 2014 on forex, then by more than 15%

* Current price fails to reflect strong outperformance

* Upgrade from Hold to Buy, TP raised from EUR225 to EUR300

* At least 10% organic growth a year expected

Guidance calls for 10% organic growth a year. The group posted 14.7% in

Q1, and we expect 12% in 2014-16. Our estimates assume SSSG of 9% a

year, including 6% from price increases in 2014, and then 4% from 2015

onwards. According to our estimates, the opening of a Maison in Shanghai

could have more than a 1% impact on organic sales growth in 2015.

* EBIT could grow by 8% in 2014 on forex, then by more than 15%

We expect EBIT growth to be 8% in 2014, including the negative impact of

less favourable hedging on the yen than in 2014. The EBIT margin could

then be down by 50bps, but we expect it to rebound and increase by more

than 100bps annually from 2015, thanks to ongoing strong organic growth

and operating leverage.

* Current price fails to reflect strong outperformance

The stock’s performance has been nil over the past 12 months. We think

that the market could again focus on the stock’s strong operating

performance. Based on our estimates, the stock’s fair value is EUR300.

* Upgrade from Hold to Buy, TP raised from EUR225 to EUR300

We upgrade the stock to Buy, seeing c. 15% upside. This estimate does not

include any speculative scenarios: our core scenario is that LVMH’s stake

(currently 23.3%) will not change materially in the near future. The H51

family holding owns 50.31% of Hermès’s capital and has pre-emption

rights on a further 12.65% stake.

ThromboGenics NV Decides to continue as a stand-alone company; CFO Chris Buyse to Resign

Following an assessment of various strategic options including a sale of the entire company, the Board of Directors of ThromboGenics has decided to continue as a stand-alone company, and to pursue discussions for a potential partnership for the commercialization of JETREA in the US. The Company will provide a further update at the time of its 2014 half year reporting on August 28. 

Separately, Chris Buyse, Chief Financial Officer and Board Member of ThromboGenics, will resign effective June 30, 2014. Chris was appointed CFO of ThromboGenics following its 2006 IPO and has played an important role in building ThromboGenics. 

As of July 1, Luc Philips, former CFO of KBC group and Board Member of ThromboGenics since its IPO, will take on the role of interim-CFO until the Company completes an international search for a new permanent CFO.

End of school year requires, it is time to publish the transcripts and assessments that go with it. In telecoms, is that ARCEP supported. The regulator announced on Monday the results of its survey on the quality of voice and data over mobile networks . In total, 90,000 2G and 3G measurements were performed with a wide variety of situations (indoor, outdoor, car, train ...) and services (telephony, SMS, mobile Internet). The differences are quite significant between the four operators.

Orange still leads

In this little game is to Orange again wins the prize for best service. The operator obtains notes above average in 83% of cases. Compared to the previous survey, Bouygues Telecom progresses and delights SFR second place with 29% of indicators above average against 15%. Free up the rear with only 2 notes above average; in 59% of cases it gets below average results.

Given the anticipation and the density of its network, the dominance of the incumbent is not a surprise. 3G, it is he who shows the best performance in terms of median flow, either in the downlink (download) or uplink (sending files). "We constantly optimize our network, it is a criterion strategic differentiation, "says Delphine Ernotte, Director of Orange France. On flows, Bouygues Telecom has increased significantly compared to last year. The operator benefits from recent investments in its network. When the subsidiary of Bouygues carried out the conversion of its 2G frequencies (1,800 MHz) for 4G, he also took the opportunity to strengthen its 3G equipment. The group should build on these achievements to illustrate the redesign of its strategic model.

Surprising results

The poor performance of SFR are more surprising. On 3G speeds, the number two market is neck-and-neck with Free. "Despite 20 years of deployment, performance is very flattering," mocks a competitor. Work on its network could partly explain this performance-cons. Since mid-2013, along with the addition of 4G, SFR has undertaken a complete renovation of its network to be completed end of 2014. "We undertook heavy work. But the first results in some major cities show that the quality is now higher than that obtained previously, "says Will we in the operator.

On the measurement of 3G speeds, Free, whose network is being deployed and leases a portion of Orange infrastructures, is like a bad student. As measured by ARCEP, the download (downstream) fails in 31% of cases in the fourth operator, against 12-13% for its competitors. "Free is still running-in period, says an industry expert. But these poor results also show that the roaming agreement with Orange does not solve the problem of quality of services. This is a strong incentive to invest. " In general, the results of four 3G operators are not completely satisfactory, even if the mean flow rate increases by 30%. "There are too many failures, recognize one of them. This reflects some gridlock. We must continue to invest in 3G, parallel with the deployment of 4G. "