>>> Faroe Petroleum Announces spudding of the Centrica operated Butch East explo

Faroe Petroleum Announces spudding of the Centrica operated Butch East exploration well 8/10-5S (Faroe 15%), the first of two back-to back-wells in Licence PL405/PL405B
- Butch East, which is adjacent to the Company's 2011 Butch discovery, is situated in approximately 65 metres water depth in the Norwegian North Sea, close to significant existing infrastructure with the giant Ula field approximately seven kilometres to the north-west, Tambar approximately 10 kilometres to the south-west and Gyda approximately 20 kilometres to the south.

- The Centrica operated Butch Main discovery (Faroe 15%) was made in late 2011 and contains a significant presence of light crude oil in the Upper Jurassic reservoir of the Ula formation. Since the main Butch discovery was made, licence operator Centrica Energy Norway has acquired new high quality seismic data, which has been applied in the planning of two further exploration wells on the untested eastern and south-western sides of the large central Butch salt structure.

- The operator is currently working on a development plan for the Butch Main discovery, in parallel with drilling the Butch East and Butch South West wells.

>>> What to look at today

US Market ended strong week on Flat note this Friday, Oil & Materials did ok, Tech & Financial were lagging, TWTR Reverse Thu. Move after Mcquarie dwg (-13%) on 60mil shares traded (After +.478% on 82.7mil shres on thu)..VIX @ 12.46 +1.05%...Light volume @ 308mil shares on the Nyse...ECB Pres Draghi interviewed in German press over the weekend, reiterating the absence of evidence of deflation would keep the ECB on the sidelines with no further cuts to is main interest rate...Japanese press speculating Toyota's FY results would top estimates, helped by weaker yen rates than the ¥92-97 range conservatively estimated when the company last offered FY13/14 guidance...FT interview with IMF's Lipton noting Japan GDP would likely be upgraded for the coming year; Lipton saw the first arrow of Abenomics - monetary policy - delivering results in 2013, but also calling for the start of fiscal and structural changes as intended in the remaining "arrows"...Nikkei+0.69%
New tensions between Japan and China over disputed islands, pushed Chinese to make some agressives comments about Japanese aggressive expansionary monetary policy...Shanghai -0.05%...

Eur$ 1.3736 S&P Fut Flat European fut +0.26%

Keep an eye on :
- Italian Banks : Creditor banks have signed the final accord with holding company Carlo Tassara agreeing to restructure €2.0B debt, Tassara will sell all its stakes including 1.7% Intesa, 1.4% of UBI, 1.1% of Monte Paschi, 1.2% of Mediobanca, 2.5% of A2A, and 0.7%of Generali
- AF FP : Barron's Article on Air France, mentioning potential 25% upside potential
- AZA IM : Alitalia Investors to Meet Mid-Jan. on Board, By-Laws, MF Says
- BMPS IM : Paschi Capital Increase Delay May Lead to Alternative Plan: Sole
- BMPS IM : Monte Paschi Capital Increase Can’t Start Before May 12: Profumo
- BMPS IM : Monte Paschi's Profumo, Viola Should Stay, Mansi Tells Corriere
- BMW GY : CFO Eichiner said demand for i3 electric hatchback has been above expectations
- BOOHOO : U.K. Online Fashion Retailer Boohoo Plans GBP500m IPO, Mail Says
- BSS IM : Biesse Seeks Revenue Boost From Overseas Sales: Il Sole 24 Ore
- CAMELOT SS : Camelot CEO Receives 2.1m Pound Payout Through Unit, Times Says
- HEN3 GY : Henkel’s Rorsted Sees Few Acquisition Options, Handelsblatt Says
- HNR1 GY : Hannover Re’s Wallin Sees Falling Rates in 2014, Welt Reports
- LLOY LN : U.K. May Sell Remaining Lloyds Stake in 2014: Telegraph
- ROG VX : Roche CEO Schwan Says Oncology, Immunology Growing in Basel: SZ
- SAN FP : Sanofi Does Not Anticipate Lemtrada to be Approved by End March, Plans to Appeal FDA Decision
- SHBA SS : Handelsbanken May Open 15-20 New Danish Branches, Borsen Reports
- SIE GY : Siemens CEO Aims to Match Industry’s Capital Efficieny, FAS Says
- STL NO : Statoil Resumes Production at Statfjord A Platform: Reuters Link
- STMN SW : Straumann CEO Won’t Rule Out Large Acquisitions: NZZ am Sonntag
- UHR VX : Swatch Group CEO Says Heart of ETA Factory Damaged in Fire: AZ
- UNI IM : Unipol-Fondiaria Merger Deed to Be Signed by Year-End, Sole Says
- VOLVB SS : Volvo Cars to Recall About 31,000 S60 Sedans on Oil Monitoring
- VOW3 GY : Volkswagen Risks Losing EU2.2b Military Truck Deal, Spiegel Says
- VOW3 GY : CEO Winterkorn raised concerns about dispute between Man SE and Scania units - German PressThe official believes that the dispute could put a €2.2B contract at risk between Rheinmetall and Man.
- VPK NA : Announces expansion plan for Horizon Fujairah

FT : IMF’s Lipton says Japan on target but needs to show more success

The International Monetary Fund is likely to upgrade its growth forecast for Japan but fiscal and structural reforms must start in 2014, said top IMF official David Lipton in an interview with the Financial Times to mark the first year of “Abenomics”.
Mr Lipton, the powerful number two to IMF managing director Christine Lagarde, said monetary stimulus in the first year of Shinzo Abe’s premiership has already changed Japan’s economic trajectory and suggested that the fund could tolerate even more should it be needed.

“The first year was a year of opportunity for monetary policy and I think they hit the target and showed they were changing the trajectory for the economy,” said Mr Lipton. “The second year they have the opportunity to show that the second and third arrows are potent. It doesn’t mean they have to finish but they really have to start.”
Mr Abe came to power in December 2012 promising to turn Japan’s economy around after almost two decades of low growth by firing “three arrows” of monetary easing, fiscal stimulus and structural reform. Mr Lipton’s remarks suggest international policy makers will not object to the weakening of the yen as long as Japan makes progress on structural changes.
“The international community is supportive of Abenomics and has been very understanding of the fact that the first arrow of Abenomics has weakened the exchange rate substantially,” said Mr Lipton. So far, he said, the net effect of Mr Abe’s policies on the rest of the world is positive because of the boost to Japan’s growth. “We’ve not seen huge spillovers and what spillovers we have seen have been positive ones.”

Mr Lipton said that the Bank of Japan’s huge bond-buying programme, aimed at reaching 2 per cent inflation within about two years, was changing public expectations. “I think they have broken the negativism that people felt, the desperation people felt, the way that deflation or at best very low inflation had become widely expected,” he said.
“We would certainly be open to a strengthening of the policy if the circumstances warranted it, but right now we think they have the right policy from the monetary standpoint.”
They have broken the negativism that people felt, the desperation people felt, the way that deflation or at best very low inflation had become widely expected
He added that Japan should go ahead with an increase in consumption tax to 8 per cent next April and manage the impact via extra spending – which Tokyo is planning. “It is right that when you are carrying out reforms, including substantial tax policy changes, that you go ahead with the steps but you calibrate the impact to make sure you don’t undermine the incipient recovery.”
Falling salaries have raised concerns about the impact of the tax rise on a revival in consumer spending. Data on Friday showed that regular wages halted a 17-month decline in November, one positive sign for Mr Abe that companies may finally be heeding his calls to increase pay, key to creating a “virtuous circle” that spurs consumption and investment. But analysts said the outlook remained uncertain while the impact of the sales tax increase was unknown.


Jonathan Soble, Tokyo bureau chief, investigates the progress of Shinzo Abe’s plan to pull Japan’s economy out of its more than 15-year deflation
But he said it was crucial that Japan now start reforms to boost its potential to grow. “They have a lot more to do and there are risks. If they don’t complete Abenomics we don’t think it will succeed – it really does depend on all three arrows being shot.”
In particular, Mr Lipton called for measures to make it easier for women to participate in the jobs market – thus boosting potential growth and increasing the pool of taxpayers to help lower debt – and for Japan to sign up to the Trans-Pacific Partnership trade deal and the internal reforms that membership will require.
He said it would take years for Japan to tackle its high public debt but there was a path to do so. “What is within their grasp is to have a more dynamic economy with more rapid growth, and to show that by tackling the second and third arrows, sustained higher growth is possible,” said Mr Lipton. “Once that is established the worries about debt will diminish.”

>>> Asia Update

Asian Market Update: Yen at fresh 5-year lows as China, Korea express concern on currency

***Observations/Insights*** - ECB Pres Draghi interviewed in German press over the weekend, reiterating the absence of evidence of deflation would keep the ECB on the sidelines with no further cuts to is main interest rate. - Japanese press speculating Toyota's FY results would top estimates, helped by weaker yen rates than the ¥92-97 range conservatively estimated when the company last offered FY13/14 guidance. - FT interview with IMF's Lipton noting Japan GDP would likely be upgraded for the coming year; Lipton saw the first arrow of Abenomics - monetary policy - delivering results in 2013, but also calling for the start of fiscal and structural changes as intended in the remaining "arrows". - China NDRC joins South Korea amid growing concern that weak Yen unfairly benefits Japanese exporters at the expense of other regional economies. Separately, China naval ships briefly enter Japan's territorial waters around the disputed islands, marking the first reported intrusion since the controversial Yasukuni shrine visit by PM Abe last week. Analysts speculate whether the rising political tensions reverberate through more vocal opposition to Japan's aggressive expansionary monetary policy. - Australia's Port Hedland closes iron loading operations ahead of the arrival of cyclone Christine.

***Economic Data*** - (KR) SOUTH KOREA NOV CURRENT ACCOUNT BALANCE: $6.03B V $9.51B PRIOR; GOODS BALANCE: $6.18B V $7.03B PRIOR - (KR) SOUTH KOREA NOV INDUSTRIAL PRODUCTION M/M: 0.0% V -0.5%E; Y/Y: -1.3% V -0.8%E - (KR) SOUTH KOREA NOV CYCLICAL LEADING INDEX CHANGE Y/Y: 0.2% V 0.4% PRIOR - (UK) UK DEC HOMETRACK HOUSING SURVEY M/M: 0.5% V 0.5% PRIOR; Y/Y: 4.4% V 3.8% PRIOR; 2013 home price gains of 4.4% follows decline of -0.3% in 2012.

***Fixed Income/Commodities/Currencies*** - (JP) BOJ offers to buy ¥250B in 1-3yr JGBs, ¥250B in 3-5yr JGBs, and ¥140B in floating-rate JGBs - (CN) Daily Shibor fixings: O/N: 3.2050% v 3.5130% prior (5th consecutive decline); 1-week: 4.8410% v 5.0670% prior (5th consecutive decline) - USD/CNY: (CN) PBoC sets yuan mid point at 6.1024 v 6.1050 prior setting (record high setting for Yuan) - SLV: iShares Silver Trust ETF daily holdings fall to 9,958 tonnes (lowest since 9,905 on July 1st) from 10,009 tonnes - GLD: SPDR Gold Trust ETF daily holdings fall 3.0 tonnes to 801.2 tonnes (lowest since Jan 2009)

- USD majors tracked in narrow ranges amid thin holiday trade with little deviation from recent trends of relatively weaker JPY and AUD / stronger EUR and USD. USD/JPY hit fresh 5-year highs, reaching as far 105.40, EUR/USD traded up toward 1.3770 on Draghi comments before pulling back to 1.3740, AUD/USD fell over 30pips to session lows below 0.8840, while NZD/USD reversed initial gains above 0.8160 to briefly fall below 0.8120. In yen crosses, EUR/JPY was up about 50pips from Friday close, briefly testing 145 handle. GBP/JPY backed away from 173.80 - also up about 50pips from prior session at its high point.

***Speakers/Political/In the Papers*** - (CN) China National Development and Reform Commission (NDRC): need to closely monitor effects on China and South Korea exports from weaken Yen - (CN) China Commerce Min (MOFCOM) Gao Hucheng: reiterates 2013 retail sales likely +13% y/y to reach CNY23.8T; Imports and exports may exceed record $4T, +7% y/y - (CN) China Ministry of Industry and Information Technology (MIIT): China has prominent overcapacity problems - Chinese press - (CN) China Premier Li Keqiang: to maintain appropriate liquidity level in 2014 - Chinese press - (CN) China govt to evaluate the performance of SOEs in 2014 and "severely deal" with underperforming companies - Xinhua - (JP) Japan Business Federation (Keidanren) agree to raise wages (1st time in six years) - Japanese press - (JP) Okinawa governor approves relocation of US military base - financial press - (JP) Japan PM Abe: Will consider economic data for Q3 of 2014 before deciding on whether to continue with higher consumption tax - Japan press - (JP) 3 Chinese coast guard ships temporarily entered Japan's territorial waters around the disputed Senkaku islands on Sunday - financial press - (JP) IMF's Lipton: IMF will probably upgrade its growth forecast for Japan - FT interview - (AU) Australia's Pilbara region shutters loading operations on Sunday ahead of the arrival of Cyclone Christine on Monday - financial press - (IN) India Fin Min Chidambaram: Lowers FY14 current-account deficit (CAD) forecast further to below $50B - press - (KR) South Korea Ministry of Knowledge Economy: Nov industrial electricity sales rose 4.2% y/y to 22.3B kwh - Korean press - (KR) South Korea Ministry of Oceans and Fisheries: Container cargo handling at South Korean seaports in Nov rose 1.2% y/y to 113.7M tons - Korean press - (KR) South Korea Trade Min Yoon: Weakness in yen may add to difficulties for South Korea exporters - financial press - (KR) South Korea Dep Fin Min: South Korea concerned about yen's rapid depreciation against won - financial press

**MENA/Europe** - (EU) ECB's Draghi: see no signs of deflation, and no urgent need for further cut in the main interest rate - Spiegel interview - (GR) Greece Fin Min Stournaras: Reiterates view that Greece is preparing return to the bond markets in H2 of 2014 - Greek press - (FR) Top court in France approves a proposal for companies to pay 75% tax on annual salaries above €1M - press - (SY) Syria has yet to remove chemical arms from key sites as deadline approaches - UN joint mission statement - (RU) Suicide bomber struck railway station in Volgograd, Russia; at least 15 fatalities reported - financial press

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 +0.5%, S&P/ASX +0.5%, Kospi +0.1%, Shanghai Composite +0.1%, Hang Seng +0.1%, Mar S&P500 flat at 1,836, Feb gold -0.4% at $1,209, Feb crude oil -0.1% at $100.26/brl

US markets: - CROX: Reaffirms Q4 at lower end of prior guided -$0.23 to -$0.20 v -$0.21e, Rev $220-225M v $222Me on Oct 30th; Confirms $200M investment from Blackstone in convertible preferred shares

Notable movers by sector: - Consumer discretionary: Fujian Furi Electronics 600203.CN +0.7% (denies speculation on wearable product); Maruha Nichiro Holdings 1334.JP -2.7% (product recall); Changfeng Axle China Co 1039.HK +10.6% (acquires stake in JV) - Industrials: Daewoo Shipbuilding & Marine 042660.KR -0.6% (rig sinks by accident); Toyota Motor Corp 7203.JP +0.5% (speculation on FY13/14 results); Hyundai Motor Co 005380.KR +2.4% (to increase overseas production); Tengda Construction Group 600512.CN +1.3% (awarded contract); Xiamen International Airport 600897.CN +6.8%, Xiamen ITG Group 600755.CN +9.7%, Xiamen Port Development +7.8% (Xiamen submits FTZ application); Austal Ltd ASB.AU +1.7% (awarded contract); Mazda Motor Corp 7261.JP -0.2% (cuts target for China unit) - Financials: Central China Real Estate Ltd 832.HK +1.2% (rating action) - Materials: Forge Group FGE.AU +57.1% (awarded contract) - Healthcare: Sichuan Kelun Pharmaceutical 002422.CN +2.5% (receives approval from GMP) - Technology: Shenzhen Coship Electronics 002052.CN +3.3% (internet TV project); Samsung Electronics 005930.KR -2.1% (speculation on Q4 results); Sony Corp 6758.JP +2.3% (reverses decision to sell battery unit)

WSJ : Beware the Tech Bubble—But Stay Calm

Beware the Tech Bubble—But Stay Calm
How to Reap the Best of the Sector While Staving Off Irrational Exuberance

I spend a lot of time worrying about the next tech bubble. It's my job to worry, of course, and this year, worrying became a full-time occupation.

Ever since Facebook's FB -3.97% stock price rebounded this year to the level of its initial public offering, tech startups have seen an incredible run-up in valuations. Boxrecently raised financing that valued the data-storage company for businesses at $2 billion, almost double its value when it raised funds in the summer of last year. The value of Palantir, whose software analyzes data for law-enforcement agencies, shot up to $9 billion from $6 billion in just three months. Even more suspicious are the dollars being thrown at companies that barely make money: Pinterest's investors value it at nearly $4 billion, for instance, and Facebook was willing to pay around $3 billion for Snapchat.

Then there are other, less tangible signs that the tech sector is becoming unmoored. The industry's towering ambitions, its capacity to skew local economies and its swaggering, tin-eared way of dealing with the rest of the world (witness Silicon Valley's secession movement) all came into sharp relief this year.

Doesn't this feel like a bubble? And, if it is, shouldn't we do something about it?

We should. I'm not convinced that we're in a bubble now, that the tech sector is too hot or that we're somehow spinning out of control, however. At the same time, it's not unreasonable to fear that we might get there soon, perhaps next year.

With that in mind, I've come up with a simple, two-step guide for reaping the best from tech while staving off the next bout of irrational exuberance. Think of it as my year-end gift to you, a clip-and-save guide for preventing a new tech bubble.

Step 1: Worry. If you're an investor, employee, founder, tech journalist or in some other way connected to the tech business, worrying about the bubble is your best defense against the bubble. Worrying keeps you sharp. Worrying keeps magical thinking at bay. As in the 1990s, the tech industry is pushing grand, society-transforming novelties on the rest of the world. If you're not worried that some of these claims are crazy, you're not paying attention.

Step 2: Don't panic. Don't let your anxiety become all-consuming. If you study the last dot-com boom, you'll see profound differences between what happened then and what's happening now. Unlike in the 1990s, today's public markets have yet to fully buy in to the boom; it's difficult to take a tech company public, and a newly public company can expect to be judged harshly by the press and investors if it shows any sign of weakness. This factor—the stock market's demand for results—is an enormous difference from the last boom. And it is reason enough to hold off on any panic.

Now, I know that my plan—worry, but don't panic—sounds like a glib, easy way to deal with tech's rise. As a columnist, I strive for firmer, less squishy opinions. I want to say, "Hey, keep partying, there's no bubble!" or "Everyone hide, doom awaits, the end is nigh!"

But unfortunately, the truth is more nuanced and complicated. People with an interest in tech should be on guard against the bubble at the same time they are open to the transformative powers of tech. Maintaining the right balance between skepticism and optimism isn't simple. But looking at the overall market, it does look like we've got the worst impulses in check, at least for now.

As my colleagues have pointed out, the major difference between today's investing climate and that of the last boom concerns IPOs. In the 1990s, companies went public soon after they were founded, with far less revenue than today's IPOs have and with far more enthusiasm from investors and the media.

Today the game is different. Again and again over the last couple of years, we've seen market skepticism swoop in to pop an emerging bubble. Look what happened to Facebook when it struggled to generate mobile-ad revenue after its IPO. Look at how investors punished Groupon GRPN -2.34% and Zynga ZNGA -2.95% as soon as their revenue and user growth began to slide. Recall how flash-storage company Violin Memory VMEM -2.28% turned into one of the year's most disastrous IPOs, after it delivered terrible financial results.

Note, too, that while today's tech startups offer a dizzying array of new technologies, most aren't peddling brand-new business models. For the most part, today's tech darlings make money from ads, e-commerce or corporate sales. These are all well-functioning, mature businesses, sectors where markets have developed expertise about how to tell a titan from a turkey. And when they notice anything that gobbles like a turkey (see Groupon's fishy metrics), they attack.

But what about those towering valuations for pre-IPO startups? What about the outsize expectations for risky-looking businesses like Snapchat and Pinterest?

Here's a thought experiment: If these valuations turn out to be wrong, who gets hurt? The answer: private investors and employees, not the public at large.

"In some ways, what's happened is that we've transferred risk from the public market to the private market," says Danielle Morrill, the chief executive of Mattermark, which collects data on the growth of startups. "Snapchat got this huge valuation, but it isn't in the public market, so there's a limit to how many people they can screw over if they're wrong."

That, I think, is a key detail.

Is the tech sector overheated? Maybe. Maybe not. I don't know. But at least the nation's retirement funds aren't riding on it anymore.

And as long as that's true, I may worry about the bubble, but I won't panic.

WSJ : 2014 Should be Brighter for Euro Zone

2014 Should be Brighter for Euro Zone

Knock on wood while saying it, but the euro zone did more than just survive the past year.

At the start of 2013, worry persisted about whether the currency bloc had done enough to prevent a fresh descent into crisis. Now, there are good reasons to believe relative calm may persist for 12 more months.

Europe isn't free of problems. But the channels by which issues in one country could swiftly engulf the wider bloc have been broken. In 2013, various flashpoints—from Italy's elections to Portugal's political strife to Cyprus' bailout—caused little more than localized market ripples.

Economically, 2014 should be brighter. The euro zone might grow 1% in 2014, according to Deutsche Bank, DBK.XE +0.73% after a contraction of 0.4% in 2013. Indicators such as Markit's purchasing managers indexes and the European Commission's economic-sentiment indicator have all continued to rise.

Less-austere 2014 government budgets mean that the drag on the economy should fall to 0.3% of gross domestic product from almost 1%, Berenberg Bank notes. The European Central Bank delivered a rate cut in November; it may well provide further support.

Progress has been made on strengthening Europe's institution. The ECB's intervention proved decisive,And now European politicians have hammered out at least the underpinnings of a banking union. That is an important step forward.

Not that it is all smooth sailing from here. While Ireland has graduated from its bailout, Portugal is likely to require fresh Europeanassistance to regain market access. Greece still needs debt relief. Unemployment stands at 12.1% in the euro area, and is more than 20% in Spain and Greece.

Meantime, France and Italy both need reform to unlock their growth potential. The challenge for French President François Hollande, in particular, is mounting.

Elsewhere, the German Constitutional Court will rule on the ECB's program for "outright monetary transactions," the bond-purchase program that has proved vital in quelling the crisis. And the ECB's stress tests of banks' balance sheets may yet cause jitters.

Given the experience of 2013, though, and the fact that bond-market stresses have been alleviated by the ECB, these risks look manageable. At worst, they are mostly slow-burn problems.

With growth picking up elsewhere, too, the euro zone may finally have some reason to celebrate.