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(Reuters) - China will present proposals to revamp its behemoth economic planning agency at an annual session of parliament this week, sources said, but the organisation's role as an antitrust regulator could eventually be enhanced.

Chinese and foreign companies, including U.S. technology firms Qualcomm Inc. and InterDigital Inc., have fallen afoul of the National Development and Reform Commission (NDRC) in recent months as its anti-monopoly arm has become more assertive.

The mammoth agency, which has several thousand employees and has sweeping powers to decide on investment, prices and other issues in the world's second-biggest economy, is striving to retain as much power as possible as it undergoes restructuring. The crackdown on price-fixing and monopolistic practices should become more pronounced as the NDRC has said it is ramping up staffing in its antitrust division.

Academics and senior officials have forecast a streamlining of the NDRC since President Xi Jinping vowed to make the economy more responsive to market forces and shift to consumer-focused investment from a state-led model.

Two sources close to senior leaders said proposals have been readied to restructure the NDRC and these will be discussed at the National People's Congress annual session beginning on Wednesday.

It was not immediately clear if any decisions would be taken.

But the NDRC's role as one of three national antitrust regulators - along with the Commerce Ministry and the State Administration for Industry and Commerce - is set in the country's five-year-old Anti-Monopoly Law that is unlikely to be cut back or revised soon.

"The NDRC is getting ready for a new role. This corresponds with the flurry of antitrust actions," said a Beijing-based foreign diplomat who asked not to be named.

Xu Kunlin, the head of the NDRC's price supervision and anti-monopoly bureau, has hinted at more unified antitrust powers, underlining speculation that the agency is seeking for primacy among the three regulators.

"Having a relatively independent, authoritative or strong and unified antitrust body is a trend. Many antitrust structures around the world are under one roof," Xu said last month.

Xu's comments could be part of the NDRC's attempt to focus on the antitrust role, and stay relevant as its broader powers are slashed, said Yee Wah Chin, a New York-based antitrust expert at law firm Ingram, Yuzek, Gainen, Carroll and Bertolotti.

"The NDRC will continue to expand its AML (anti-monopoly law) enforcement scope by the investigations it conducts, and it is entirely possible that some formal restructuring of AML enforcement will be made after several more years," Chin said.

FINES, INVESTIGATIONS

Last year, the NDRC slapped Chinese and foreign companies with investigations and fines after high-profile pricing probes. In August, the regulator fined six infant formula manufacturers, including Mead Johnson Nutrition Co, Danone and Fonterra, a record $110 million after a probe into price fixing and anti-competitive practices.

The agency confirmed last month it had opened anti-monopoly investigations into Qualcomm and InterDigital, saying it had received complaints that the companies charged discriminatory high prices in China.

Adam Dunnett, secretary general of the European Union Chamber of Commerce in China, said he expects the pricing investigations to maintain their momentum in the medium term.

"The European Chamber has encouraged its members to review their own practices and closely monitor further developments," he said, adding that the anti-monopoly law would play an important role in a more market-oriented China if evenly enforced.

At the moment, the NDRC sets policy for strategic industries, approves big investments and has the authority to influence prices for everything from liquor to gasoline. Its powers are so sweeping that it is often called the mini cabinet.

Beijing has promised to reduce its involvement in matters like the approval of new industrial projects, allowing it instead to focus on improving rules and regulations.

According to one proposal, the agency would be renamed the National Development, Reform and Planning Commission and fold in functions of other departments, including the Development Research Centre, a cabinet think-tank.

"Eventually, the NDRC will just be a think-tank. Its main functions will be to formulate (policies) and conduct research on macro (economic) planning," one source with ties to the leadership said on condition of anonymity.

"The views of various ministries and provincial governments have been solicited," a second source said.

The party announced after a conclave last November that a high-powered committee would be created to oversee the gamut of China's reforms, including coordination between ministries. President Xi heads the group which experts have said could signal changes to the NDRC's discretionary powers.

"I do expect the NDRC's wings to get clipped," said Scott Kennedy, director of the Research Centre for Chinese Politics and Business at Indiana University.

"The creation of the leading group on economic reform is already a big signal that the NDRC's powers will be cut," he said.

The NDRC did not respond to Reuters questions sent by fax.

However, a rapid transition is unlikely within such a huge bureaucracy.

"The government has been cutting red tape but we cannot see any signs of downsizing," an NDRC researcher told Reuters on condition of anonymity, noting that there would be stiff federal-level employees.

"The NDRC will still approve investment plans involving state spending. It will still be responsible for coordinating economic policies," the researcher said.

The government of Dubai is thinking about listing assets including Emirates Airline, The Sunday Telegraph reported. The newspaper quoted the CEO of the Investment Corporation of Dubai, Mohammed al-Shaibani, who said the government could list stakes in state-controlled companies in London.

Shaibani said Emirates, Dubai Airports, Fly Dubai and Dubai’s aluminium smelting business are all candidates for flotations in the future.

The CEO added that Dubai considers the UK to be strategically important for investment in the future, according to the report. Secondary issues, including on the London Stock Exchange, are a possibility, Shaibani said.

The article noted that Emirates has annual revenues of more than USD 21bn (EUR 15.20bn). The airline is Dubai’s most prized asset, and would sell at a substantial premium in a partial listing, the report said.

Shaibani said Dubai cannot list Emirates now as the airline has value yet to be created, and the government does not want to give up that future value.

Ideally, the Dubai government would prefer to list in Dubai, but with a possible secondary listing in London, according to the report.

Source Sunday Telegraph

- This would mark the first deficit in 33 years. - Japan had a current account surplus of ¥1.7T in Apr-Dec last year, although the balance was in deficit for three straight months from Oct. 

- In Jan, the current accont deficit is likely to expand over ¥1T, and could continue to increase through March. 

US fund groups caught out by European bonus rules

EU wins Nobel Peace Prize for advancement of democracy©EPA

A landmark European agreement designed to curb excessive pay in the fund industry has caught US groups offguard by the strict bonus rules.

The restrictions will create a legal and tax headache for fund companies and could deter US nationals in the US and Europe from managing European funds.

Declan O’Sullivan, a Dublin-based partner at Dechert, a law firm, said he had spoken to several US fund companies who are “very upset” about the pay curbs.

Large fund houses including BlackRock, Pimco and Aberdeen could be affected.

The new rules, which are set to enter European law in 2016, mean fund managers will be paid half of their bonuses in units of the funds they manage. They will also have to defer 40 per cent of bonuses for at least three years, or 60 per cent for very high bonuses.

Sean Tuffy, vice-president of investor services at Brown Brothers Harriman, the investment bank, in Dublin, said: “I don’t see how Asian or US managers will be able to escape these rules. This was lobbied pretty intently, but obviously to no avail.”

The requirement for managers to receive half of their bonuses in units of the fund they manage is particularly problematic as US nationals cannot own shares of Ucits funds.

The final rules, which are part of the Ucits V directive, were agreed last week between the European Council and European Parliament following months of political wrangling.

Last-minute amendments to the directive state that the rules should apply to “any third parties to whom functions have been delegated”, including non-EU-based investment advisers to Ucits funds.

Sean Donovan-Smith, a partner at K&L Gates, the law firm, said the rules could deter US fund staff from managing mainstream European funds. “This would mean a smaller pool of US managers willing to work with Ucits,” he said.

US fund groups had hoped that they would be able to pay bonuses in shares of the parent company, but last week’s agreement ruled that out.

Mr O’Sullivan said: “This will be troubling for US managers who are pretty much precluded from investing in Ucits. They could [receive bonuses via] a note or derivative linked to the performance of the fund, but this would be hugely complicated and an annoyance.”

Listed fund groups are also concerned that the rules incentivise staff to focus on fund performance alone rather than growth of the wider business, potentially damaging returns for shareholders, according to Tim Wright, a partner in the rewards practice of PwC, the professional services firm.

The European Securities and Markets Authority will publish guidelines on the scope of the directive in the next six months.

These guidelines could soften the blow for non-European fund managers, but Europe’s parliament and council have stated the guidelines should “prevent circumvention of the provisions on remuneration”.

Deflation fears drive down eurozone borrowing costs

Financial market bets that the European Central Bank will be forced to start buying government bonds to stem the threat of eurozone deflation are driving sovereign borrowing costs lower across the region, according to trading strategists.

Yields on eurozone government bonds, which move inversely with prices, have tumbled recently as investors have sought havens from tensions in Ukraine and other emerging market turmoil. Weak economic growth and inflation data – as well as the easing of the eurozone debt crisis – have also pushed yields lower.

But expectations are also building that the ECB – whose governing council meets on Thursday – could soon launch a large-scale asset purchase programme, or “quantitative easing”, to prevent the eurozone falling into a damaging deflationary slump. That could include buying government bonds.

While bond yields have fallen globally this year, “the recent moves in Europe have been more about discounting potential QE rather than global macro themes,” said Laurence Mutkin, head of global rates strategy at BNP Paribas. “They have been about something euro-centric, rather than a ‘risk-off’ trade or a recalibration of economic growth expectations.”

Mario Draghi, president of the ECB, has signalled this week’s meeting will be crucial to determine monetary policy strategy, with the central bank for the first time publishing an inflation forecast for 2016

While most ECB watchers still believe the central bank is some way from launching QE, “the market is getting ahead of the analysts,” said Huw Worthington, European interest rate strategist at Barclays. “There is the possibility of yields going back higher if the ECB does nothing.”

When the Bank of England and US Federal Reserve launched QE programmes, “a lot of the action came ahead of the announcement – people anticipated it – and a certain amount of that may be going on now,” added Mr Worthington.

Highlighting European markets’ increased sensitivity to news about inflation, eurozone yields on Friday reversed some of their recent falls after official data showed eurozone inflation was higher than expected in February. But at only 0.8 per cent, inflation was still far beneath the ECB’s target of an annual rate “below but close” to 2 per cent.

Whether markets are yet pricing in ECB asset purchases is unclear, however. “The market is at most pricing in a small possibility of QE happening,” said Anton Heese, co-head of European rates strategy at Morgan Stanley.

“The hurdles for the ECB to embark on full scale QE continue to look high to us, and QE is not priced in – if it was, yields would be lower still,” said Peter Goves, European rates strategist at Citigroup.

As well as government debt, the ECB could consider buying private-sector assets, including packages of bank loans to business.

Yields on 10-year German Bunds have recently fallen faster than on equivalent US Treasuries and last week they dipped to 1.55 per cent, the lowest since mid-2013

The differences, or “spreads,” between Spanish, Italian and Portuguese bonds and German equivalents have also narrowed. Spanish 10-year yields last week fell to the lowest since February 2006. Greek 10-year bond yields last week fell to less than 7 per cent for the first time since early 2010.

US stocks are being propelled to fresh highs by investors borrowing a record amount of money in a high stakes gamble that is raising concerns over the potential for a sharp correction in the five-year bull run.

With the S&P 500 registering a fresh closing peak of 1,859.45 last week, margin debt – money borrowed to buy stocks – hit a record level in January, according to data from the New York Stock Exchange.

Peaks in the use of borrowed money have in the past been a precursor to big bear markets and is viewed as a warning sign. Though margin debt has been hitting record high in recent months, it now stands at $451bn on the NYSE, a rise of more than 20 per cent over the past year and above 2007’s peak of $381bn. Five years ago it hit a low of $173bn.

In past market peaks, excessive levels of margin debt exacerbated the subsequent slide in stocks, as investors were forced to quickly sell their holdings as prices fell, sparking a nasty downward spiral.

The rise in margin debt comes as questions are being asked about heady valuations, notably in biotechnology – where the Nasdaq Biotech Index is up 16.4 per cent since the start of the year – and in corners of the technology sector, which has seen Facebook spend $19bn on WhatsApp.

However, investors are not yet alarmed enough to sell out despite the S&P’s 22 per cent rise over the past year.

“We are beginning to see signs of froth; it’s a yellow flag of caution and the market can move higher from here,” said Kate Warne, investment strategist at Edward Jones. “It’s not the time to move to the sidelines, you frequently get good returns in the final stages of a bull run.”

Many investors also expect the US economy will rebound this spring after a harsh winter that has weighed on activity, prompting a sharp snapback in stock prices during February. After stocks slipped during January on soft data and emerging market turmoil, the subsequent rebound has vindicated investors who bought on the dip in prices.

“If we see the economy bounce back and grow near 3 per cent, the S&P can rise further,” said Steven Boyd, principal at Halyard Asset Management. He said the greater use of margin debt was a sign of confidence that the recent soft tone in data is attributable to cold weather and that pent up demand will drive a rebound in the coming months.

Mr Boyd said the record use of margin would be a concern if valuations for the S&P were around a forward earnings multiple of 20 times, rather than the current 17 times.

After the S&P’s 30 per cent rise last year, most analysts and investors remain confident that the market can climb further this year as the Federal Reserve continues to reduce its monthly bond purchases and the economy and corporate profits grow.

Since the equity market bottomed in March 2009, the S&P, including the reinvestment of dividends, has risen more than 200 per cent.

Premier Foods is putting the finishing touches to a £750m-plus deal likely to be announced this week that, if successful, would amount to a radical turnround for a company whose debts brought it to the brink of collapse during the recession.

The maker of some of the UK’s best known food brands, including Hovis bread, Oxo stock cubes and Mr Kipling cakes, is expected to announce a rights issue of just over £350m – more than its stock market value of £345m.

It is also preparing a corporate bond issue of about £400m to help tackle its net debt, which stood at £890m at the end of June 2013.

The balance sheet restructuring is aimed at securing an investment grade rating by slashing the group’s high leverage.

Net debt is estimated by analysts to have fallen to £860m at the end of last year, which is about 5 times earnings before interest, tax, depreciation and amortisation. This would need to drop to 3 times for an investment grade rating.

Premier is also expected to announce a deal with pension trustees over its £395m pension deficit. The group, which has pension liabilities of £3.65bn, is close to securing an agreement to reschedule its payments and make reduced contributions over the next few years.

Shares in Premier have risen 57 per cent over the past 12 months on expectation of a turnround and re-rating after the appointment of Gavin Darby as chief executive a year ago.

The former head of Cable & Wireless Worldwide and Coca-Cola executive, pledged to turn Premier into a “normal” company. It was seen as a Great British corporate disaster in the late 2000s when it overstretched itself through a series of highly-leveraged acquisitions.

The restructuring has been made easier by the buoyancy of financial markets and a greater risk appetite by investors. The group’s two biggest shareholders are Warburg Pincus and Paulson, which between them hold a 28 per cent stake. Franklin Resources and Standard Life hold another 13 per cent.

It also follows January’s deal to hive off the Hovis bread business, which struggled to break even, into a joint venture. US private equity outfit Gores Group agreed to take a controlling 51 per cent stake in Hovis for £30m with Premier retaining 49 per cent.

That made it easier to turn to shareholders for new equity on the basis of Premier’s grocery business, which enjoys operating profit margins of 17-18 per cent against 1 per cent for bread.

Premier declined to comment.

Link to google translation : {http://bit.ly/1lt5W0R}

EXCLUSIVE - EDF forecasts estimate that 300 billion over fifty years the cost of the renovation and construction of new plants.

Pursue nuclear will be expensive, very expensive. An internal document EDF, the JDD procured, presents estimates of future costs for maintenance and renewal of the French nuclear fleet. The numbers are dizzy.

Nearly € 300 billion will be invested in the next fifty years if current plants are rebuilt identically. However, a difficult to hold to fulfill the objective of reducing from 75% to 50% the share of nuclear power generation in the French case. For several months, EDF amounts to € 55 billion cost of the work required to extend the life of 58 French reactors from forty to fifty years. Except that "major overhaul" is scheduled for the period between 2015 and 2025. Between 2025 and 2047, EDF will spend about € 35 billion to maintain the plants until they are closed, according to estimates by Greenpeace. A heavy but normal investment. Between 2002 and 2012, "only" 10 billion was spent on maintenance, a level deemed sufficient to ensure safety. A total of 100 billion euros will thus for the renovation of the 19 French plants.

Grist environmentalists

But the most breathtaking yet to come. A mountain of investments stands in case of renewal of the existing fleet. EDF document illustrates more than 200 billion euros needed between 2030 and 2067 to rebuild 58 reactors. Interviewed Thursday by deputies, the number 2 EDF, Hervé Machenaud, acknowledged that the cost could reach € 240 billion by choosing EPR reactors. "This is an image to give an order of magnitude, he explained. This shows the interest to extend the plants to see this investment."

These figures give grist to environmentalists. And EDF knows. "One hundred billion to extend the power of only ten years, the same price it had cost the construction of the entire park," said Denis Baupin, leader of the Greens in the Assembly. The total cost of 300 billion equivalent especially that the output of nuclear replaced by renewables. "The amounts are the same, thereby leaving the myth that nuclear power is free," the Green MP. With or without nuclear, energy costs will be heavy.

Link to Google Translation : {http://bit.ly/NjZScH}

Link to Original article in French : {http://bit.ly/MGjXZP}

UBS and Anheuser-Busch InBev both look good after restructuring and reviving their businesses.

Dow Jones Global Indexes | Global Stock Markets

The European Union's latest economic forecasts made for grim reading last week, but they left some investors believing that now is a good time to buy stocks laid low by the financial crisis.

EU economists expect the next two years to be characterized by a fragile economic recovery that could easily be overwhelmed by the euro zone's continuing battle with mountainous debt and the threat of deflation.

Thomas Becket, chief investment officer at London's Psigma Investment Management, says that investors shouldn't take the EU's downbeat outlook as a cue to take refuge in defensive stocks. Instead, they ought to be cherry-picking in sectors exposed to the economic upswing, no matter how slight that turns out to be.

Becket reckons that the best investment opportunities are to be found in sectors hit hardest during the past five years, such as financials and what he describes as discretionary consumer stocks—the sort of companies whose clients are likely to halt purchases when consumer confidence takes a dive.

BECKET'S OWN ECONOMIC PROGNOSIS is more optimistic than either the EU or market consensus. He says growth across the euro zone could hit 2% this year, while the EU puts the figure at 1.2%, rising to 1.8% in 2015. He is confident that Europe will execute a broad-based recovery, in which core euro-zone members, such as Germany, will make progress, alongside weaker economies that include so-called peripheral countries, such as Spain.

Some indicators, including Germany's closely watched Ifo survey, suggest that consumer confidence is starting to rebound, Becket says. But he advises caution. "Of course, you can't expect growth to translate automatically into stock market growth," he observes. Last year's gathering optimism that the euro zone had dragged itself out of the worst of the financial crisis prompted a mini bull run, fueled by nothing more fundamental than relief that the region's economy had escaped contagion and collapse.

Becket points out that, in 2013, the European MSCI index, excluding Britain, rose 23%, while corporate earnings were flat. With that in mind, his top picks are major Swiss bank UBS (ticker: UBS) and Belgium's Anheuser-Busch InBev (BUD), the world's biggest brewer, which makes beers such as Budweiser and Stella Artois. UBS and InBev suffered during the financial crisis, but have worked hard to restructure and reposition their businesses.

UBS was hurt on a number of fronts. In 2008, the Swiss government had to pump six billion Swiss francs ($6.74 billion) into the bank, and the Swiss National Bank agreed to buy up to $60 billion of its toxic assets.

Since then, the reputation of UBS has been dented further by several high-profile legal tangles. It was fined $780 million in 2009, following U.S. claims that it helped Americans evade taxes. Then it posted a nearly CHF2 billion loss in 2012's fourth quarter, caused in part by the cost of settling allegations that employees had rigged interest rates.

Becket says that if investors can look past the negative headlines, they will find a bank that has trimmed its balance sheet, bolstered its capital ratios, and refocused on what it does best—wealth management.

IN EARLY FEBRUARY, UBS DELIVERED strong fourth-quarter results, in stark contrast to euro-zone rivals Deutsche Bank (DBK.Germany) and BNP Paribas (BNPQY), which both issued profit warnings. UBS swung to a net profit of CHF917 million from the year-earlier CHF1.9 billion loss.

Analysts praised the results, which they said demonstrated how far UBS had come in shrinking its investment bank and pulling out of capital-intensive businesses. Its wealth-management operation generated nearly half of the bank's operating profit in the quarter.

Barclays analyst Jeremy Sigee says that UBS is delivering healthy operating earnings and capital accretion, underpinning renewed commitment to substantial dividend payouts. It lifted its 2013 dividend by more than two-thirds, to CHF0.25 a share. Barclays has a CHF22 price target on the stock, which closed Friday at CHF18.87.

Becket's consumer-discretionary pick is InBev, which last week posted improving U.S. and Brazilian beer sales. "Despite reporting reduced volumes from the previous year, sales grew over 3% in total, and Ebitda [earnings before interest, taxes, depreciation, and amortization] grew by 8% for the full year, and a more impressive 13% in the fourth quarter," he notes. The full-year dividend rose 21%, to 2.02 euros ($2.79), and the stock rallied nearly 3% the day the results were announced. Full-year profit doubled to $14.4 billion.

Citi analyst Andrea Pistacchi has an €85 price target on the stock, with an expected share-price return of 14.4% and a 3% dividend yield. Of InBev's earnings, he says, "These results show once again that [InBev] has plenty of self-help—including pricing power in its key markets—to deliver even in a challenging environment." InBev ended Friday at €75.95.