>>>Asian Update

Asian Market Update: RBA still concerned with high AUD; China non-manufacturing PMI slows

***Observations/Insights*** - RBA releases nearly identical statement in its last policy decision of 2013; Most notably still concerned about AUD which it continues to view as "still uncomfortably high" despite a 400pip drop since the November decision. - Australia retail sales top estimates and prior month's figure revised higher. - China Nov non-manufacturing PMI slows for the first time in 3 months. - PBoC regular liquidity injection more modest than in recent sessions, even as local think tank notes the 2014 China GDP forecast may be downgraded to 7%. - Yen remaining under pressure amid further speculation the core CPI will not achieve 2% target in 2 years, calling for more BOJ easing down the line; Nikkei outperforms, tracking softer yen.

***Economic Data*** - (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 2.50%; AS EXPECTED - (AU) AUSTRALIA Q3 CURRENT ACCOUNT BALANCE (A$): -12.7B V -11.5BE (3-quarter low); NET EXPORTS OF GDP: 0.7% V 0.4%E - (AU) AUSTRALIA OCT RETAIL SALES M/M: 0.5% V 0.4%E - (CN) CHINA NOV NON-MANUFACTURING PMI: 56.0 V 56.3 PRIOR (frist decline in 3 months) - (NZ) NEW ZEALAND NOV ANZ COMMODITY PRICE M/M: -0.4% V 1.4% PRIOR (1st decline in 5-months) - (JP) JAPAN OCT LABOR CASH EARNINGS Y/Y: +0.1% V -0.2% PRIOR - (JP) JAPAN NOV MONETARY BASE Y/Y: 52.5% V 45.8% PRIOR (multi-year high) - (TH) THAILAND NOV CONSUMER CONFIDENCE: 75.0 V 77.6 PRIOR (22-month low, 8th consecutive monthly decline); CONSUMER CONFIDENCE ECONOMIC: 65.0 V 66.6 PRIOR - (UK) UK NOV BRC SALES LFL Y/Y: 0.6% V 1.1%E (7-month low)

***Fixed Income/Commodities/Currencies*** - (CN) PBoC to inject CNY18B in 7-day reverse repos

- USD/JPY rises above 103.30, highest level since May, amid further speculation over the need for more BOJ easing. GBP/JPY cross rises above 169 handle and EUR/JPY approaching 140 - multi-month highs. Latest CFTC data showing 2nd consecutive week of multi-year highs in yen shorts. AUD/USD rises to 0.9130 after stronger than expected retail sales data before falling below 0.9060 after RBA policy statement reiterating AUD remains uncomfortably high.

***Speakers/Political/In the Papers*** - (CN) China may set 2014 GDP growth target at 7.0% v 7.5% in 2013; may target 2014 CPI growth at 3.5% - Chinese press citing thinktank - (CN) China National Meteorological Center (NMC) issues smog warnings in Central and Eastern China - (JP) Japan Coast Guard said to have spotted two China vessels near the disputed Senkaku Islands (3rd consecutive day) - Kyodo News - (JP) Japan Chief Cabinet Sec Suga: US, Japan on same footing about finding China's air defense identification zone being unacceptable - (JP) Japan Fin Min Aso: Not yet at stage where we can determine size of economic package - financial press - (JP) According to QUICK Corp survey, bond market participants only expect Japan core CPI to reach 1.4% over the next 2 years, well below the 2% target - Nikkei - (AU) Deutsche Bank economist: Australia retail sales clearly showing improvement trend - SMH - (SG) Singapore Central Bank (MAS) in annual Financial Stability Review: Risks for Asia's economic growth tilted to the downside; Sudden increase in interest rates could strain debt-service ability in Asia.

- (US) NY Fed's Potter: Repo plan not a sign of FOMC policy intentions; Repo plan may aid Fed control of money market rates

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 +0.7%, S&P/ASX -0.3%, Kospi -0.8%, Shanghai Composite -0.1%, Hang Seng -0.6%, Dec S&P500 flat at 1,800, Feb gold -0.2% at $1,220, Jan crude oil +0.2% at $96.01/brl

US markets: - TSLA: German transport regulator (Kraftfahrt-Bundesamt) completes review of Model S incidents; review found no manufacturer-related defects; +1.8% afterhours - AAPL: Said to have acquired social analytics startup Topsy Labs for over $200M - financial press; +0.1% afterhours - YUM: Reports Nov China SSS +1% v -5% m/m; affirms FY13 forecast; provides 2014 outlook; -1.8% afterhours - THO: Reports Q1 $0.68 v $0.71e, R$800M v $803Me; -4.4% afterhours - KKD: Reports Q3 $0.16 adj v $0.16e, R$114.2M v $115Me; -13.8% afterhours - OCZ: Reaches agreement with Toshiba to sell solid state drive business; -42.3% afterhours

Notable movers by sector: - Consumer discretionary: Pigeon Corp 7956.JP +2.0% (9M results); Jiangling Motors Corp Ltd 000550.CN +5.1% (Nov vehicle sales); Sands China 1928.HK +1.7%, Wynn Macau Ltd 1128.HK +2.6% (Macau reports Nov casino Rev) - Industrials: Kia Motors 000270.KR -5.5% (Nov sales); Hyundai Motor 005380.KR -4.4% (Nov sales); Zhengzhou Yutong Bus 600066.CN +2.6% (Nov vehicle sales); Shandong Hi-Speed Road & Bridge +10.1% (resumes trading; announces refinancing for road infrastructures); Shuangliang Eco-Energy Systems Co Ltd 600481.CN +2.6% (awarded orders) - Materials: Sekisui Chemical Co Ltd 4204.JP +6.0% (speculation on lithium-ion batteries); Shandong Nanshan Aluminum Co Ltd 600219.CN +5.2% (to invest in new material project); Anhui Conch Cement 914.HK +2.6%, BBMG Corp 601992.CN +1.5%, Henan Tongli Cement 000885.CN +9.6% (China cement price rising for eight consecutive weeks); Rio Tinto RIO.AU -0.8% (lower CAPEX forecasts) - Technology: High Tech Computer Corp 2498.TW +1.0% (Nov sales results); Universal Scientific Industrial Shanghai Co Ltd 601231.CN -2.1% (faces loss due to supplier's financial issues)

FT : Rio to cut capex by $6bn in two years

Rio to cut capex by $6bn in two years

Rio Tinto pledged to cut capital spending by at least 20 per cent in each of the next two years in an attempt to woo back investors dismayed by the miner’s misguided investments during the resources boom. The Anglo-Australian mining group said its capital expenditure would fall from $14bn this year to $11bn next year and to $8bn in 2015. The anticipated reductions come after Rio said last week that one of its biggest investment projects – to raise the output from its iron ore mines in Australia’s Pilbara region by almost a quarter – could be completed much more cheaply than previously predicted. Rio and many of its peers have been out of favour with shareholders after overspending on new projects and acquisitions. Rio’s Sam Walsh is one of many recently installed chief executives at leading miners, following a cull of previous leaders amid shareholder anger at industry underperformance. "We lost our way . . . we are taking decisive action," Mr Walsh said in Australia on Tuesday. "Don’t get me wrong, we do have more to do." Speaking at a seminar for Rio investors in Sydney, Mr Walsh also warned of continued "market fragility and volatility" because of concerns over central bank policies and austerity in some regions. "But it is a mixed story because despite this uncertainty we are also seeing modest economic recovery," he said. China’s government had assuaged some concerns by signalling that economic adjustment would be gradual "which reduced the likelihood of a sudden downturn", Mr Walsh said. Rio’s capital spending soared to more than $17bn last year, part of a splurge of investment in response to a period of strong demand for commodities led by China’s economic growth. The miner needs to cut spending and sell some marginal assets in order to try to maintain its credit rating after net debt rose to more than $19bn last year. It has been unable to sell some businesses, including some aluminium assets and its diamonds business, but has announced or completed $3.3bn of sales this year. Rio said it had cut spending on exploring and evaluating new projects by $800m this year, exceeding a $750m target.

FT : US online sales boost beats stores

US online sales boost beats stores

US consumers spent slightly more at the shops than last year as holiday shopping got under way early on Thanksgiving last week, but the biggest rises in spending came online. Sales at stores rose by a modest 2.3 per cent from last year on Thanksgiving and Black Friday as shoppers spent $12.3bn, according to estimates from ShopperTrak, a research group. The figures – lower than some had predicted – were consistent with ShopperTrak’s forecast of a 2.4 per cent rise in sales in November and December as a whole. That would be the slimmest gain since 2009, when holiday sales were down from the previous year. Ecommerce continued to boom as more consumers opted to avoid the crowds and shop online, where many retailers offered the same "door buster" discounts they had in stores. On Thanksgiving, online sales climbed 18 per cent year-on-year to just over $1bn and on Black Friday they jumped 39 per cent to $1.9bn, according to analysis by Adobe Systems. Ecommerce extends beyond online-only businesses such as Amazon and eBay. Traditional retailers are taking more traffic away from their stores with their own websites. For example Target, a style-oriented discount chain, said it experienced twice as many online orders as on Thanksgiving last year. Despite improvements in labour and housing markets, retailers and economists say US consumers continue to be inhibited by economic uncertainty, rising living costs, confusion over healthcare and political gridlock in Washington. At malls and big box retail parks, shopper numbers on Black Friday itself were down 11.4 per cent from last year, ShopperTrak said, as consumers were lured by retailers that opened earlier than ever on Thanksgiving at 6pm or 8pm. Bill Martin, ShopperTrak’s founder, said it was expensive for retailers to open on Thanksgiving because they had to offer holiday pay and other incentives to employees and that would put their profitability in the spotlight. "You’ve got extra expenses and deep discounts, so the question is: did anyone make any money?" he said. Retailers typically begin the holiday season with a few loss-leading discounts, but they are carefully planned. Profitability often takes the biggest hit later in the season when they are forced to offer big unplanned discounts to offload products that have flopped. NPD, a research group, said the top selling items on Thursday, Friday and Saturday were clothing, which accounted for 28 per cent of purchases, followed by toys at 11 per cent. The long Thanksgiving weekend accounts for about 10 per cent of retail sales in November and December, according to analysts at Cowen & Co. The holiday season can account for between 20 and 40 per cent of retailers’ annual revenues, said the National Retail Federation, a lobby group.

>>>US After Hours

After Hours Summary: ENVI +4.2%, ASNA +4.2%, KKD -13.3%, GMAN -10.0%, THO -5.1%, YUM -2.8% following earnings/guidance After Hours Gainers: Companies trading higher in after hours in reaction to earnings: ENVI +4.2%, ASNA +4.2%

Companies trading higher in after hours in reaction to news: CNAT +35.2% (confirmed U.S. Orphan Drug Designation for emricasan for treatment of liver transplant recipients with reestablished fibrosis), UNIS +22.9% (announced clinical supply agreement with Novartis (NVS) for delivery of a novel drug), RNDY +6.0% (signed agreement to acquire 11 Dominick's stores from Safeway (SWY) a $36 mln cash and lease assumption transaction), IVR +2.1% (announced 20 mln share increase in share repurchase program), TSLA +2.1% (announced that the German Federal Motor Transport Authority found no manufacturer related defects), GY +1.7% (co's subsidiary Aerojet Rocketdyne was awarded a medium class Stage III demonstration contract)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: KKD -13.3%, GMAN -10.0%, THO -5.1%, YUM -2.8%

Companies trading lower in after hours in reaction to news: OCZ -38.5% (signed an asset purchase agreement with Toshiba Corporation to acquire substantially all of OCZ's assets in a chapter 11 bankruptcy proceeding for $35 mln), TAXI -7.0% (announced commencement of 2.9 mln share offering of common stock), GTAT -4.4% (to offer $125 mln convertible senior notes and 12 mln shares of common stock), ST -4.0% (announced offering of 15.5 mln ordinary shares by selling shareholders and 4.5 mln share repurchase), WES -3.6% (announced 4.5 mln common unit offering), OSIR -3.5% (announced C. Randl Mills will be stepping down as President and CEO for personal reasons), SDLP -3.4% (announced public offering of 12.9 mln common units), ECTE -2.0% (filed for ~3.226 mln unit offering, with each unit consisting of one share of common stock and one warrant to purchase one share of common stock), RM -1.2% (announced secondary offering of ~2.04 mln shares of common stock), NDLS -1.2% (commenced proposed 4.5 mln share common stock offering)

>>> US Close Dow-0,48% S&P-0,27% Nasdaq-0,36%

Closing Market Summary: December Begins on Cautious Note

Equity indices finished the first December session on a lower note as the S&P 500 shed 0.3%. Small caps endured steady selling throughout the session as the Russell 2000 fell 1.2%.

The benchmark index spent some time on each side of its flat line, but ultimately ended near its lows. The index attempted to build on the relative strength of financials (-0.2%) and materials (-0.2%), but the underperformance of technology (-0.3%), industrials (-0.5%) and discretionary shares (-0.5%) short-circuited the rally. The discretionary sector was pressured by homebuilders and retailers. The iShares Dow Jones US Home Construction ETF (ITB 22.69, -0.45) lost 1.9% as Treasury yields climbed throughout the session. The benchmark 10-yr yield added five basis points to 2.80%. Meanwhile, retailers slumped after the National Retail Federation said Thanksgiving weekend sales were down 3.0% year-over-year. The SPDR S&P Retail ETF (XRT 87.87, -0.59) lost 0.7%. However, eBay (EBAY 51.35, +0.83) outperformed its brick-and-mortar peers amid indications holiday online sales have gotten off to a strong start. Elsewhere, Dow component 3M (MMM 127.68, -5.83) pressured the industrial sector, falling 4.4% after Morgan Stanley downgraded the stock to ‘Underweight.' Transports withstood the bulk of the selling as the Dow Jones Transportation Average added 0.3%. The Nasdaq also contributed to the afternoon weakness as top-weighted components and momentum names lagged. Apple (AAPL 551.23, -4.84), Google (GOOG 1054.48, -5.11), and Intel (INTC 23.70, -0.14) lost between 0.5% and 0.9% while LinkedIn (LNKD 220.39, -3.64) and Tesla (TSLA 124.17, -3.11) fell 1.6% and 2.4%, respectively. A pocket of strength could be found inside the tech-heavy index as biotechnology outperformed. The iShares Nasdaq Biotechnology ETF (IBB 224.73, +0.57) added 0.3%, which helped the health care sector finish with a slim gain of 0.1%. The remaining countercyclical groups lagged across the board as consumer staples, telecom services and utilities lost between 0.4% and 0.9%.

Today's participation was well below average as 667 million shares changed hands on the floor of the New York Stock Exchange. Investors received just two economic data points today. After increasing a downwardly revised 0.1% (from 0.6%) in August, construction spending fell 0.3% in September before rebounding and increasing a solid 0.8% in October. The consensus expected construction spending to increase 0.4% and 0.3% in September and October, respectively. The big gain in October spending came entirely from the government sector. Spending rose 3.9% in October, namely from an 8.5% gain in educational and a 5.9% gain in transportation. Private construction spending fell 0.5% in October after increasing 0.4% in September. Separately, the November ISM Manufacturing Index increased to 57.3 from 56.4.That was the highest reading since the index reached 59.4 in April 2011. The consensus expected the index to fall to 55.5. For the past several months, regional manufacturing surveys have hinted at a slowdown in manufacturing activities, but the national ISM has shrugged those off and continued its trek higher. There is no notable economic data on tomorrow's schedule.

o Nasdaq +34.0% YTD o Russell 2000 +32.9% YTD o S&P 500 +26.3% YTD o DJIA +22.2% YTD

ThyssenKrupp Decides to Increase Capital Stock by 10 Percent

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ThyssenKrupp Decides to Increase Capital Stock by 10 Percent 2013-12-02 18:41:31.58 GMT

By Jana Randow Dec. 2 (Bloomberg) -- ThyssenKrupp said it will increase its capital stock by EU131.7m, or 10%. * Co. says it will issue 51m new stocks * Co. says emission starts today via accelerated book-building procedure * Co. mandated Commerzbank, JP Morgan Securities * Co. says move intended to strengthen equity, reduce net financial debt * Co. says it’s “convinced that a capital increase on this scale represents an appropriate balance between the interests of shareholders and the requirements of other strategic stakeholders” * NOTE: ThyssenKrupp shares are being offered at EU17.05 to market price, according to a term sheet obtained by Bloomberg News.

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--Editor: Jana Randow

To contact the reporter on this story: Jana Randow in Frankfurt at +49-69-92041-206 or jrandow@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at +44-20-7673-2841 or cstirling1@bloomberg.net