TheChek News Flow

Yearly Performance

Dow +13.42% S&P +9.54% Nasdaq +7.50% Russell +19.48% Brazil +38.93% Mexico +6.20% EuroStoxx +0.70% FTSE +14.43% CAC +4.86% Dax+6.87% Ibex -2.01% MIB -10.20% SMI -6.78% Nikkei +0.42% Hang Seng +0.39% CSI -11.28% Shanghai -12.30%

Macro :

- China December Manufacturing PMI at 51.4; Est. 51.5

- U.K. Sets New Penalties for Enablers of Offshore Tax Evasion

- ECB to Start a Review of EU Banks’ Internal Models: Messaggero

- France Foiled 17 Attacks This Year, Prime Minister Tells JDD

- Einhorn’s Greenlight Fund Gains 9.4% in 2016

- Spain Wants Good Relations With U.K. to Continue, Rajoy Says

- Spain Bad Bank Sareb Exceeded EU1.5B in 2016 Institutional Sales

Keep an eye :

- AI FP : Air Liquide Completes Aqua Lung Sale to Montagu Private Equity

- AAPL US : Apple to Slice IPhone Production 10%, Calculations Show: Nikkei

- AAPL US : Apple Suppliers Fall After Report on IPhone Production Cut

- BMPS IM : Paschi Plans Bonds for Jan., Feb.; Weighs ‘Bad Bank,’ Sole Says

- BMW GY : BMW to Rely on Combustion Engines for Decade, Krueger Tells BZ

- BP IM : Banco Popolare: Got Interest Expressions on 178,859 Shares

- BPM IM : Banco BPM to Hold First Board Meeting on Sunday: Messaggero

- CON GY : Continental AG CEO Sees Jobs Endangered by E-Car Trend: WamS

- CSGN VX : Tanzania Says Seeking $300m Loan From Credit Suisse: Reuters

- FCC SM : FCC delisting offer to run from 30 December 2016 to 13 February 2017

- ITV LN : ITV Said Preparing for Exit of CEO Crozier, Finance Head: Sky

- LLOY LN : Lloyd’s May Pay Record $50m on Fisher Claim: Insurance Insider

- MC FP : Hengdeli Holdings to sell two business units to its chairman for CNY 3.5bn (MC owns 5.97% of Hngdeli)

- MC FP : LVMH’s Biver Says Smartwatches Still in Their Infancy: Blick

- MMT FP : TF1 Audience Fell to 20.4% in 2016, M6 Rose to 10.2%: Le Figaro

- MKS LN : M&S to Lift Some Prices 15% After Supplier Rebellion: S. Times

- UG FP : French New Car Registrations Rose 5.8% in Dec., 5.1% for 2016

- RNO FP : French New Car Registrations Rose 5.8% in Dec., 5.1% for 2016

- UHR VX : Hengdeli Holdings to sell two business units to its chairman for CNY 3.5bn (UHR owns 9.16% of Hngdeli)

- TSLA US : Elon Musk Says HW2 Autopilot Software Uploaded to 1k Cars Today

- TFI FP : TF1 Audience Fell to 20.4% in 2016, M6 Rose to 10.2%: Le Figaro

- VWS DC : Vestas Gets 67 MW Order and 29 MW Order in U.S.

- VIV FP : Vivendi Said to Seek Mediaset Board Seats Amid Fight for Control

Massive ‘anomaly’ lurks beneath ice in Antarctica

Scientists believe a massive object that could change our understanding of history is hidden beneath the Antarctic ice.

The huge and mysterious “anomaly” is thought to be lurking beneath the frozen wastes of an area called Wilkes Land. The area is 151 miles across and has a minimum depth of about 2,700 feet.

Some researchers believe it is the remains of a truly massive asteroid more than twice the size of the Chicxulub space rock that wiped out the dinosaurs.

If this explanation is true, it could mean this killer asteroid caused the Permian-Triassic extinction event, which killed 96 percent of Earth’s sea creatures and up to 70 percent of the vertebrate organisms living on land.

However, the wilder minds of the internet have come up with their own theories, with some conspiracy theorists claiming it could be a massive UFO base or a portal to a mysterious underworld called the Hollow Earth.

This “Wilkes Land gravity anomaly” was first uncovered in 2006, when NASA satellites spotted gravitational changes which indicated the presence of a huge object sitting in the middle of a 300-mile-wide impact crater.

Now the internet has lit up with discussions of the mysterious observations after the UFO-hunting crew Secure Team 10 posted a YouTube video about the anomaly.

“To this day, scientists have no idea or way to discover exactly what is buried deep under this thick ice shelf,” the video narrator said.

“This continent has been shrouded in a mystery of its own for years now.”

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Ice floats near the coast of West Antarctica.Getty Images

Secure Team 10 suggested the Nazis built secret bases in Antarctica during World War II, which were designed to be used by flying saucers.

The UFO hunters added: “There is some evidence of this coming to light in recent years, with images purporting to show various entrances built into the side of mountains, with a saucer shape and at a very high altitude.”

“This begs the question: how would you enter these entrances without something that could fly and was the same shape as the hole itself?”

Secure Team also suggested the US Navy led a mission to investigate the mysterious continent.

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A mountain rises out of the West Antarctic Ice Sheet.Getty Images

This expedition was called Operation High Jump, which conspiracy theorists believe was an attempt to find the entrance to a secret world hidden underneath Earth.

However, the scientist who first spotted the anomaly believes it is actually evidence of a massive impact crater.

“This Wilkes Land impact is much bigger than the impact that killed the dinosaurs, and probably would have caused catastrophic damage at the time,” said Ralph von Frese, who was a professor of geological sciences at Ohio State University when he discovered the “killer crater” on 2006.

“All the environmental changes that would have resulted from the impact would have created a highly caustic environment that was really hard to endure. So it makes sense that a lot of life went extinct at that time.”

Carrie Fisher’s death could be a windfall for Disney.

The entertainment company, the distributor of “Star Wars: The Force Awakens” and the next two films in the franchise, could receive $50 million thanks to an insurance policy the company took out in the event Fisher was unable to fulfill her three-film contract.

It’s set to be the largest single personal accident insurance claim payout ever, according to Insurance Insider.

Fisher reprised her career-making role of Princess Leia from the original 1977 “Star Wars” flick for the new trilogy. “The Force Awakens,” released in December 2015, made $2.068 billion at the box office worldwide.

Filming on “Episode VIII” was already complete at the time of Fisher’s death on Dec. 27 at the age of 60, after she suffered a heart attack aboard a flight from London to Los Angeles.

Fisher was due to appear in “Episode IX,” forcing the film’s creators to either rewrite the plot or possibly use visual effects to insert her in the film. The latter was implemented for “Rogue One,” in which the late Peter Cushing reprised his role as Grand Moff Tarkin.

It’s unclear if a similar insurance policy was taken out on Fisher’s co-star, Mark Hamill.

An autopsy Friday determined Fisher’s cause of death was “not obvious” and that further testing will be required, TMZ reported.

Fisher’s mother, Debbie Reynolds, passed away the day after her daughter’s death. She was 84 years old.

Hamill gave his first extended interview after the mother-daughter pair’s passing, calling the two “mothering types, both opinionated and determined.”

“I can’t think of [Fisher] in the past tense. I think of her in the present tense, in the future tense,” Hamill told Entertainment Weekly. “I’m angry and so sad.”

China’s Factory Activity Remains in Expansionary Territory, Despite December Slide

Index has stayed above mark that separates expansion from contraction for five straight months

A Downbeat Year for Many Indexes, but Not All Sectors

Europe was beset by woes in 2016, but basic materials, energy shares, and the FTSE 100 shined

European equity markets had two years in one in 2016, and neither was pleasant.

In the early months of the year, the Continent’s stocks were pummeled by weak oil prices and worries about slowing economic growth in China. As those pressures eased, they were replaced by potentially more damaging local issues, including Britain’s surprise decision to leave the European Union, terror attacks in France, Belgium, and Germany, and growing popular support for Europe’s anti-establishment, anti-EU political parties.

That the Stoxx Europe 600 index dropped 1.4% for the year probably is good news; the loss could have been much worse. In the days following the U.K.’s so-called Brexit vote in June, the index hit its nadir, down almost 16% on the year. Since then, it has rebounded, adding nearly 17%.

Britain’s FTSE 100 was a standout performer among European indexes, gaining 13% last year and confounding grim forecasts about a Brexit fallout. Britain won’t launch the formal two-year process to leave the EU for at least another few months, however, so the full economic impact remains unknown.

The FTSE’s performance is attributed mainly to the benefits of the pound’s decline since the referendum. It plunged immediately after the vote and has slipped further since. It currently stands at around $1.22, its lowest level in more than 30 years. On the plus side, about 80% of FTSE 100 companies are exporters, whose income has been boosted by sterling’s weakness.

EURO-ZONE STOCK MARKETS appear to have suffered more from Brexit than the U.K. on concerns that other members might follow suit, potentially destroying the EU and taking the euro currency with it.

Among the largest economies, Germany’s DAX rose 6.7% in 2016 while France’s CAC-40 was up 4.5%. Investors in Spain and Italy—countries at the center of Europe’s sovereign debt crisis five years ago—haven’t fared so well. Spain’s Ibex is down nearly 2% and Italy’s FTSE MIB has lost almost 10%.

The Italian government suffered a bruising loss in a referendum on proposed constitutional changes at the beginning of December, and several of the country’s largest banks need beefing up with fresh capital. Banca Monte dei Paschi di Siena (ticker: BMPS.Italy), Italy’s third-biggest lender, was supposed to plug an 8.8 billion euro ($9.19 billion) capital shortfall by the end of the year.

Readers of this column were encouraged to avoid Italian banks in the early part of 2016. The same could have been said for most of the European banking sector, where several of the biggest players were battling costly litigation and struggling to persuade investors they were financially sound.

European banking stocks have fallen by more than 7% in the past year, but outperformed most other sectors in the second half of 2016, rising 44% as government bond yields picked up. Germany’s Deutsche Bank ’s (DB) shares have jumped a whopping 65% in the latest quarter, and Switzerland’s Credit Suisse Group (CS) is up 22%. Both banks reached multibillion-dollar settlements with U.S. authorities in recent weeks, resolving claims against them for alleged wrongdoing, and eliminating uncertainty about fines.

Tim Gregory, a fund manager with London-based Vermeer Investment Management, says low interest rates and the banking sector’s financial pressures have kept investors away for years, a situation that began to change around the time of the Brexit vote.

“Since then, [government bond] yield curves have steepened a little and the banking sector has responded strongly, a move that has been exacerbated by the scale to which investors were underweight the sector,” he says. “U.S. yields have steepened significantly since the November election, and this has accelerated the rally.”

European government bond yields were crushed in the immediate aftermath of the U.K. referendum, pushing some into negative territory. As the Brexit panic subsided, they climbed anew, helped by an outlook for greater inflation.

THE INSURANCE SECTOR enjoyed a late surge under the same impetus, with European insurance stocks up more than 16% in the past three months despite slipping nearly 6% for the full year. Two stocks recommended here were ahead of the pack, with France’s AXA (CS.France) adding 29% in the final quarter and Dutch insurer NN Group (NN.Netherlands) up 22%.

Among European stock sectors, the steadiest and strongest gains came from basic resources, up 54% for the year. Oil and gas stocks rose 20%. Investors in both sectors have benefited from steadily recovering commodity prices. Oil has climbed from a 14-year low of around $28 a barrel in January to $58 now.

Two Barron’s stock picks have done well as a result, with France’s Total (TOT) up 14% on the year and 18% in the latest quarter, and Royal Dutch Shell (RDS.A) adding 42% during 2016 and 23% in the past three months.

More Pain Than Gain for Asian Markets in 2016

Most market were hurt by global and local issues, but Pakistan and Thailand rewarded investors nicely.

For investors in Asia, 2016 was a year to forget. Equity returns were paltry, currencies were a drag, and for much of the year, more money was yanked from than put to work in the markets. Asian markets were hurt by global events such as Brexit, or Britain’s vote to leave the European Union, the election of trade-pact critic Donald J. Trump as U.S. president, and the Federal Reserve’s fourth-quarter interest-rate hike, with promises of more to come.

Softer global trade and the collapse of the Trans-Pacific Partnership trade agreement are expected to hurt the world’s most trade-reliant region. Markets also moved down on the death of Thailand’s long-serving monarch, the botched demonetization of the Indian rupee, a controversial tax amnesty in Indonesia, the impeachment of South Korea’s president, and the 1MDB sovereign-wealth-fund corruption scandal in Malaysia, involving Prime Minister Najib Razak.

Yet the more things changed, the more they remained the same. The Bank of Japan hardly made an impact with such ostensibly bold moves as the introduction of a negative-interest-rate policy; attempts to stimulate the economy by doubling purchases of exchange-traded funds; capping 10-year bond yields, and vowing to overshoot its 2% inflation target. The yen strengthened nearly 19% in the first eight months of last year, and then eased, closing up just 3% for the year at 117 to a dollar. Japan’s benchmark Nikkei 225 was barely in positive territory, gaining 0.5% for the year.

China’s fiscal and monetary stimulus likewise underwhelmed. Instead, investors focused on China’s burgeoning credit bubble and troubled bank loans.

Across the region, stocks were weighed down by falling earnings expectations. Markets fared better in countries like Thailand, where earnings met expectations. Hong Kong’s Hang Seng Index ended down 2% in 2016 after a 7.5% fall in the last quarter. Normally more resilient, the China Enterprise Index of top mainland China H-shares listed in Hong Kong fared worse, skidding 3.7%. The Shanghai Composite was down 13% and the Shenzen Component Index was off 20%. India BSE’s Sensex ended flat for the year as investors struggled to make sense of the government’s demonetization program, designed to remove larger bills from circulation.

Among Asia’s few bright spots, the tech-heavy Taiwan market rose 10% for the year. A rebound in commodities lifted Australia, up 7% for the year. Mining giant BHP Billiton (ticker: BHP. Australia) rallied 73% from its February lows. Korea’s KOSPI eked out a 3% gain as its largest listing, Samsung Electronics (05930.Korea), plunged on the Galaxy Note 7 recall, but then rebounded, to close up 42% for the year. Vietnam was flat, as was Singapore, due to falling property prices and turmoil in its offshore energy sector. But Thailand rose 19%, and Indonesia, 15%, as economic recovery got underway.

Asia’s best performer, Pakistan, rose 43% in 2016 in dollar terms. Stocks had begun the year trading at only eight times forward earnings, and yielding 5%. Pakistan will return to emerging-market status in 2017, after eight years as a frontier market. It is benefiting from political stability, low oil prices, record-low interest rates, and $46 billion in infrastructure investments by China.

Nomura’s Asia strategist Mixo Das sees more pain ahead for Asian markets, but is betting that India is poised to break out of the pack, with strong gains.

Professional advisers face fines of up to £3,000 for helping their clients to evade tax

New penalties for professional advisers who help their clients to evade tax come into force today, as part of a bid by the government to tackle abuses of the excise system.

Accountants, bankers, lawyers and other advisers can be fined by up to the value of the tax they helped their client evade, up to a maximum of £3,000. HMRC will also name and shame company involved.

The measure was first announced by then-chancellor George Osborne in 2015 and a consultation on the plan was launched in August, just weeks after Theresa May pledged during her leadership campaign to pursue companies over tax avoidance.

“It doesn’t matter to me whether you’re Amazon, Google or Starbucks: you have a duty to put something back, you have a debt to fellow citizens and you have a responsibility to pay your taxes,” she said at the time.

Accounting bodies warned during the consultation that the government needed to ensure the move did not prevent investors receiving impartial professional advice.

Jane Ellison, the financial secretary to the Treasury, said: “Tax evasion is a crime and as a government we have led reform of the international tax system to root it out. Closer to home we are creating a tax system where taxes are fair, competitive and paid.

“The raft of measures we have introduced to tackle avoidance and evasion will create a level playing field for the vast majority of people and businesses who play fair and pay what is due.”

This year will also see the creation of a new criminal offence for companies which fail to prevent the facilitation of tax evasion. The government is currently legislating for the measure, under which a company will be held liable if one of its employees or contractors facilitates tax evasion.

This strengthens the current rules in which prosecutors must prove that the company’s board of directors was aware of and involved in the facilitation.

Additionally the government is introducing a new requirement to declare historic tax evasion. Anyone who has not owned up to past evasion by 30 September 2018 could face new penalties.

The Treasury is also consulting on whether to introduce a new requirement on businesses and individuals with complex offshore financial arrangements to notify HMRC of them.

Since 2010 HMRC has brought in £130bn in its crackdown on tax evasion, tax avoidance and non-compliance.

Last year Mr Osborne unveiled plans to shut down disguised remuneration schemes such as employee benefit trusts and contractor loans, in a move the Treasury forecast at the time would raise £2.5bn over five years.

HMRC has also won a series of court victories against film investment schemes that attracted high-profile investors and were deemed to inflate their losses to maximise tax relief.

Authorities complain of ‘leaks’ in the system and demand reporting of large deals

China has tightened checks on citizens exchanging foreign currency in anticipation of renewed downward pressure on the renminbi in the new year.

Banks have been asked to improve standards for verifying customers’ identities and to report “large or questionable transactions”, the State Administration of Foreign Exchange (Safe) said in a public statement at the weekend.

“There have been leaks in China’s system of personal foreign exchange purchases,” the statement said, giving as an example the way individuals and companies avoid capital controls on overseas investments by disguising their transactions as goods purchases.

China’s policymakers have clamped down on capital flows leaving the country in recent weeks, imposing fresh restrictions on outbound corporate acquisitions and investments. European companies have reported difficulties in remitting dividends to stockholders abroad. The restrictions are partly an attempt to keep the renminbi from steep falls in the future after it depreciated almost 6 per cent against the dollar in 2016.

China’s capital controls limit individuals to buying no more than $50,000 each year in foreign currency, a quota which resets on Sunday, January 1. The renminbi may come under fresh pressure to weaken when individuals use their fresh quotas after banks reopen on Tuesday.

“The first day of the new year can be crazy — it’s always a big test for the renminbi,” said Jonas Short, head of research at NSBO China, an investment bank. “People who are anticipating further renminbi depreciation will take out their quota early in the year, and some will want to take out the full amount as soon as they can.”

The central bank is trying to ensure the renminbi’s value stays above the red line of Rmb7 per dollar, a symbolic number for the country’s policymakers. The renminbi was trading at Rmb6.94 to the dollar at the weekend.

On Thursday night the central bank, the People’s Bank of China, scolded media outlets for being irresponsible in reporting the exchange rate crossing Rmb7 to the dollar, after a momentary glitch in the Bloomberg currency quote system showed the renminbi weakening beyond that point during overnight trading.

China’s foreign reserves fell by almost $200bn last year after the central bank sold dollar reserves in order to prop up the value of the renminbi against the dollar.

At the same time as guarding the Rmb7: $1 line, central bankers are also trying to keep foreign exchange reserves falling below the $3tn mark. Domestic economists say the two goals are hard to achieve simultaneously without the help of capital controls.