*CHINA TO BUILD NEW RAILWAY OF MORE THAN 6,600 KM IN 2014: RADIO

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BN 04/02 11:05 *CHINA DEV. BANK TO SET UP ORGANIZATION TO SELL HOME BOND: RADIO BN 04/02 10:58 *CHINA EXTENDS PREFERENTIAL TAX POLICY TO MORE SMALL COS.: RADIO BN 04/02 10:55 *CHINA TO DEEPEN RAILWAY INVESTMENT, FINANCING REFORM: RADIO

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*CHINA TO BUILD NEW RAILWAY OF MORE THAN 6,600 KM IN 2014: RADIO 2014-04-02 11:08:00.909 GMT

--LI LIU

-0- Apr/02/2014 11:08 GMT

WSJ : Japan Pension Fund Buying Could Boost Tokyo Stocks by 5%

A report that Japan’s giant public pension fund will target high-yielding stocks as it overhauls its investment strategy could give Tokyo stocks a much-needed shot in the arm.

With nearly ¥130 trillion ($1.25 trillion) in assets, the Government Pension Investment Fund will tap Goldman Sachs Asset Management and other companies to handle the investments, the report in the Wednesday edition of the Nikkei said. The brokerages are each expected to invest between ¥200 billion and ¥400 billion, concentrating on companies with high return on equity, the Nikkei said.

Both the GPIF and Goldman Sachs declined to comment on the report.

Several overseas fund managers were pleased by what they read.

“Japan’s large public pension funds have at least a 15% lower weighting to equities and to their home market than their Western equivalents, a position which is entirely incompatible with their ever-increasing obligation to pursue high return,” said Richard Kaye, a fund manager at Paris-based Comgest who advises on the firm’s $2 billion global portfolio, which has a 30% exposure to Japan stocks. The GPIF had 17% of its holding in domestic stocks as of December.

“The reallocation will probably go considerably further especially as key personnel at the GPIF are replaced in coming months,” he added.

The implication is that if the GPIF changes tack other domestic institutional investors may well follow suit, a move that could gradually end a two-decade trend of foreign fund flows driving the Japanese equity market.

Foreign investors currently account for some 60% of stock trading by value in Japan.

“The Japanese market is still the worst performing in the world so clearly more needs to be done,” said Adam Fisher, chief investment officer at Commonwealth Opportunity Capital, a Los Angeles-based hedge fund, referring to the index’s performance so far this year. “The real problem is that everyone in Japan is relatively satisfied with what has already been accomplished. That complacency makes it difficult for investors to gain confidence in the long term path of Japanese risk assets.”

While the Nikkei Stock Average surged 57% in 2013–its best year since 1972–the benchmark is down around 8% for 2014, despite Wednesday’s gains.

Many traders say the GPIF’s oversized investment in Japanese government bonds will end poorly over time if the government’s 2% inflation target comes within reach, making the shift to equities a logical one.

“A confirmed move to buy equities by the GPIF could easily create a short term 3% to 5% move up (in the Nikkei) due to people rushing to buy into the market before the GPIF will,” says Chris McGuire, chief executive and investment officer at Phalanx Capital Management, a hedge fund based in Chicago. “This will add positive sentiment to the market.”

FT : Goldman faces EU fine over subsea cable investment


Goldman Sachs is to be hit with a multimillion euro fine on Wednesday as part of an EU cartel case on subsea power cables that will underline the legal risks faced by buyout groups.
The European Commission is preparing to fine up to a dozen groups including Prysmian, the Italian cablemaker formerly owned by Goldman Sachs Capital Partners, the investment bank’s buyout arm.

While it is common for Europe’s top antitrust authority to fine parent companies when offshoots are embroiled in cartels, it is rare to penalise a primarily financial investor, especially for periods where it held a minority stake.
“The issue of parent company liability has received a lot of attention in the private equity community,” said Jay Modrall, a partner at Norton Rose. “Private equity firms tend to think of their funds and investments as siloed, rather than as part of a single group.”
Goldman’s buyout unit bought Prysmian from Pirelli in 2005 for €1.3bn including debt, floated the cablemaker in 2007 – leaving it with a 43 per cent holding – and by 2010 had fully sold down its stake.
The bank told the commission it was unaware of the effort to rig prices and carve up markets, which started several years before it bought Prysmian.
The commission decision is a warning to buyout groups over legacy legal risks and underscores their responsibility as owners for rooting out and ending any wrongdoing in the business, even when the expertise they bring to the board is primarily financial.
“The implications of the commission’s practice of imposing fines based on group-wide liability goes beyond the financial exposure,” said Mr Modrall. “Private equity firms may want to look at their standard M&A contract language to see how this exposure is addressed.”
Courts have largely backed the commission’s approach to penalising parent companies and have made no significant distinction for private equity buyers. Goldman is the most prominent financial investor to suffer such a fine.


An EU charge sheet sent to the US investment bank covers from 2005 to 2009, including a period of more than a year where Goldman’s stake in Prysmian was under 50 per cent.
The commission argues that the buyout unit is liable to pay a share of Prysmian’s fine because it exercised a decisive influence on Prysmian that went beyond a pure financial investment, including through nominating individuals to the board.
Mario Mariniello of Bruegel, a think-tank in Brussels, said the case tests the point where investors carry direct legal risks from antitrust infringements.
“Investment with no control cannot entail direct legal liability. It would make little economic sense: regardless of what an investor knows, its investment already carries extra risk as ultimately shareholders pay cartel fines,” he said.
“Investment with control should directly be punished. The likelihood of a fine affects your incentives to ensure profits are legally made and to stop infringements. The notion of control is key here – it might be possible to have a decisive influence without direct control.”
A successful legal challenge to the grounds for the commission inspections mounted by Prysmian and Nexans has limited the scope of the case to high-voltage cables.
In a 2012 ruling, the EU General Court found the commission raids mounted in 2009 had no reasonable grounds for extending its search to information relating to all cables and electrical products.

(BFW) Prada FY Net EU627.8m Trails Est.; Miu Miu Ebitda Falls

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MORE: Prada FY Net EU627.8m Trails Est.; Miu Miu Ebitda Falls 2014-04-02 08:52:01.759 GMT

By Billy Chan and Moxy Ying April 2 (Bloomberg) -- 4Q same-store sales growth at 6%; full-yr same-store sales growth 7%: statement to H.K. stock exchange. * FY Ebitda of Prada brand +11.1% y/y to 1.05b euro * FY Ebitda of Miu Miu -10.9% y/y to 89.3m euro * Miu Miu Ebitda margin decreased to 17.1% from 19.5% because of increase in oper. expenses on expansion of directly operated store network * Total 540 stores owned by co. vs 461 yr ago * 330 Prada brand stores as at end-Jan. vs 283 stores yr ago; 24 franchises vs 19 yr ago * 150 Miu Miu brand stores as at end-Jan. vs 126 stores yr ago; 8 franchises vs 6 yr ago * 52 Church’s brand stores as at end-Jan. vs 45 stores yr ago * Final div/shr 0.11 euro * Earlier: Prada FY Net Income EU627.8m; Est. EU656.3m

For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>

To contact the reporters on this story: Billy Chan in Hong Kong at +852-2977-6114 or bchan101@bloomberg.net; Moxy Ying in Hong Kong at +852-2977-4736 or yying13@bloomberg.net To contact the editors responsible for this story: Jan Dahinten at +65-6212-1164 or jdahinten@bloomberg.net Shiyin Chen

>>> Quiksilver +6.9% on the last 2 days - K.Slater stopped 23y partnership with

K.Slater stopped his partnership with Quiksilver to launch his own brand backed by Kering, Should see some pressure on the stock.


WWD : Kering Partners With Kelly Slater

PARIS — American professional surfer Kelly Slater is separating from sponsor Quiksilver after 23 years and launching his own brand as part of a new partnership with Kering.

Kering confirmed the partnership with Slater, adding that it would be “a multilayered relationship” with Kering “supporting Slater in the launch and the development of his own apparel brand, acting as an operational partner providing assistance where possible in areas like sourcing, logistics, e-commerce, etc.”

Slater would become an ambassador for Kering and take part in initiatives across some of the group’s brands, namely in relation to sustainability, it added. A spokeswoman for the group declined to say whether Kering would take a stake in Slater’s brand.

Slater, 42, earlier took to his Facebook page to reveal the news. He paid tribute to Quiksilver, which signed him to a 100 percent sponsorship deal in 1990.

“There aren’t enough pages or words to express my heartfelt thanks and appreciation for the experiences that have come from this relationship we’ve shared together. So it is with a heavy heart and a lifetime of positive memories that I move in a new chapter of my life,” he wrote.

“For years I’ve dreamt of developing a brand that combines my love of clean living, responsibility and style. The inspiration for this brand comes from the people and cultures I encounter in my constant global travels, and this is my opportunity to build something the way I have always wanted to,” he added.

Slater did not provide any additional details about the partnership with Kering. “They share my values and have the ability to support me in all of my endeavors. I look forward to exploring all of the new opportunities this partnership will provide,” he said.