FT : Moët Hennessy turns to China to make new fine wine

Moët Hennessy turns to China to make new fine wine

When Moët Hennessy unveils its latest top-end wine to its leading international clients next month, it will not be inviting guests to Bordeaux or even to Burgundy. Instead, they will arrive at the French embassy in China.

Ao Yun, as the powerful red is called, is grown, produced and bottled in Adong, an area perched 2,600m above sea level on the edge of the Tibetan plateau in one of the remotest places on Earth.
MH, part of French luxury conglomerate LVMH and owner of brands such as Dom Pérignon, Krug and Château d’Yquem, is targeting the international crowd as much as the Chinese market with the wine, priced at €300 a bottle.

“We are starting to see wine collectors around the world wanting to have iconic wines produced in China,” Jean-Guillaume Prats, president of MH’s estates and wines division, told the Financial Times.

Mr Prats said Moët will begin marketing Ao Yun — roughly translated, the name means “sacred cloud” — to connoisseurs and collectors in Europe from next month, and in China from October.

Production at the vineyard, in the south-west province of Yunnan, close to the Tibetan border, is a tiny 24,000 bottles but Mr Prats said the plan was to reach 50,000 within the next five years. The exotic location was picked for its climatic conditions, rare in China, of not being either too wet or too cold.

So far, critics have applauded the Ao Yun 2013, the first vintage — a fact that helps explain the retail price.

As Mr Prats said: “We certainly would never have priced it at that level if we were not confident or if the critics around the world had not said that it was an exceptional wine.”

But the price tag is also a reflection of the challenging logistics, which make Ao Yun the most expensive wine to produce in the estates and wines division’s portfolio.

MH employs 150 Tibetan farmers to tend to the grapes on 320 terraced plots that until recently were more used to yaks, tomatoes and even the odd marijuana plant than to Cabernet Sauvignon and Cabernet Franc.

“They do everything that is farming and we do everything that is winemaking,” Mr Prats said.

Several producers have already started to grow grapes in the area, where Moët has leased 30 hectares of an available 300 hectares considered apt for vines. But the Paris-based producer is the only non-Chinese investor.

It is also the only one that has taken the decision to produce dry red wine on site, which is only accessible via a 4,300m mountain pass — just one part of a four and a half-hour journey over unpaved roads from Shangri-La, the nearest airport.

“The logistics of vinifying on the spot is a real nightmare,” he said with a smile. “It’s an extraordinary venture.”

(Echo.be) Bpost / PostNL: an expected announcement Monday

Bpost / PostNL: an expected announcement Monday
The Belgian and Dutch Post announce their merger on Monday. A statement is expected. Probably before market opening.
Two days after the official marriage between giant FedEx parcel delivery and TNT Express, the Belgian and Dutch markets have learned the probable merger of their incumbent postal operators, bpost and PostNL. Although officially we talk about a merger of equals, concretely is that bpost launch a bid for Dutch rival.
We wait for a statement on Monday, probably before market opening.
In exchange, with a valuation of € 4.8 billion, bpost weighs nearly three times as heavy as PostNL
(1.7 billion). The situation in terms of sales is very different, since PostNL finished fiscal 2015 with a turnover of 3.5 billion euros, against 2.4 billion in bpost. We also know that bpost has a comfortable mattress cash, the redemption being Lagardère Retail Travel Belgium should just start.
Who said mass cash, said offensive. Since March, the Belgian operator would already offers twice on its northern neighbor, meeting every time the opposition of its target. Revised upwards, his third attempt would have been more successful.
Offer cash or as securities?
Will it be a cash offer or combining a mixture of cash and shares? If bpost paid partly in shares, this could explain the statements made Friday morning at RTBF Jean-Pascal Labille, former Minister (PS) of Public Enterprises. He had claimed that the state was about to give ten percent of bpost capital to a European postal operator. The current Minister of tutelage, Alexander De Croo, had immediately responded by denying that the state, the majority shareholder with 51% of bpost, intends to sell its shares. If the supply of bpost on PostNL includes a payment in shares equivalent to ten percent of its capital, neither man will be forfeit.
The new law authorizing the privatization of bpost or Proximus now enables such a payment in shares. Although such a bias by the Belgian government lost its majority in bpost, there nevertheless remain the largest shareholder of the group formed with PostNL. Because although it retained its own shares, the largest shareholder in the Dutch, the US investment fund FMR LLC, owns only a ten percent.
Finally, we could therefore see the emergence of a new transnational actor postal weighing 5.9 billion in revenue and valued at over 6.5 billion ... that would have the Belgian State for first shareholder - or majority shareholder if the payment is made entirely in cash!
It would be quite funny, when we remember that there are a dozen years, it was the Dutch Post Office had planned to buy its Belgian counterpart, then 100% owned by the state. Funny too, so we just vote the privatization law, because that is private?
Unions on the alert
The direction of bpost and staff representatives have a meeting to their calendar to Monday. Friday, rumors and speculations born following the statements of Jean-Pascal Labille have caused some agitation among the bpost unions. Mark Mulder, the Liberal Union, it is "logical" that the postal operators wish to collaborate, "certainly when you know it exists on the market behemoths like TNT / FedEx. It would be crazy not to find partner". He also recalled that bpost had almost redeem the Romanian Post a few months ago before giving up due to risk "European" (the fear that the European Commission will put Posta Romana fined for state aid). The union leader has nevertheless expressed concern about the consequences of such collaboration for bpost staff. "What about differences in workers their current status?" has he asked.
His colleague of the socialist union responded with surprise to the information and regretted that trade unions were not informed in recent months.
About the joint meeting on Monday, Mark Mulder said: "We will decide how to react in a common front." Shares are not excluded, he added. What give grist to observers who believe that by making its release broadcast on RTBF, Jean-Pascal Labille sought to cause social unrest boot. For his part, former minister says he is concerned about the disappearance of the public status of the company. But that is already registered in the privatization law ...

(Echo.be) Bpost / PostNL: une annonce attendue ce lundi

Bpost / PostNL: une annonce attendue ce lundi

Les Postes belge et néerlandaise annonceraient leur fusion lundi. Un communiqué est attendu. Probablement avant l'ouverture des marchés.
Deux jours après le mariage officiel entre le géant du transport de colis FedEx et TNT Express, les marchés belge et néerlandais ont appris la fusion probable de leurs opérateurs postaux historiques, bpost et PostNL. Même si officiellement on évoque une fusion entre égaux, concrètement c’est bpost qui lancerait une offre sur son concurrent néerlandais.
On attend un communiqué pour ce lundi, probablement avant l'ouverture des marchés.
En Bourse, avec une valorisation de 4,8 milliards d’euros, bpost pèse près de trois fois plus lourd que PostNL
(1,7 milliard). La situation sur le plan des ventes est fort différente, puisque PostNL a terminé l’exercice 2015 avec un chiffre d’affaires de 3,5 milliards d’euros, contre 2,4 milliards à bpost. On sait aussi que bpost dispose d’un confortable matelas de cash, que le rachat en cours de Lagardère Retail Travel Belgium devrait à peine entamer.
Qui dit masse de cash, dit offensive. Depuis le mois de mars, l’opérateur belge aurait déjà fait offre à deux reprises sur son voisin du nord, rencontrant chaque fois l’opposition de sa cible. Revue à la hausse, sa troisième tentative aurait donc eu plus de succès.
Offre en cash ou aussi en titres?
S’agira-t-il d’une offre en cash ou combinant un mélange de cash et d’actions? Si bpost paye en partie en titres, cela pourrait expliquer les déclarations faites vendredi matin à la RTBF par Jean-Pascal Labille, l’ancien ministre (PS) des Entreprises publiques. Celui-ci avait affirmé que l’Etat s’apprêtait à céder une dizaine de pour-cent du capital de bpost à un opérateur postal européen. Le ministre de tutelle actuel, Alexander De Croo, avait aussitôt réagi en démentant que l’Etat, actionnaire majoritaire de bpost avec 51%, ait l’intention de vendre ses parts. Si l’offre de bpost sur PostNL intègre un paiement en actions équivalant à une dizaine de pour-cent de son capital, aucun des deux hommes ne se serait dédit.
La nouvelle loi autorisant la privatisation de bpost ou Proximus permet désormais un tel paiement en actions. Même si par un tel biais l’Etat belge perdait sa majorité en bpost, il n’en demeurerait pas moins le premier actionnaire de l’ensemble formé avec PostNL. Car même s’il conservait ses propres parts, le premier actionnaire du Néerlandais, le fonds d’investissement américain FMR LLC, n’en détient qu’une dizaine de pour-cent.
Au final, on pourrait donc assister à l’émergence d’un nouvel acteur postal transnational pesant 5,9 milliards d’euros de chiffre d’affaires et valorisé à plus de 6,5 milliards… qui aurait l’Etat belge pour premier actionnaire – voire pour actionnaire majoritaire si le paiement se fait entièrement en cash!
Ce serait assez cocasse, quand on se souviendra qu’il y a une douzaine d’années, c’était la Poste néerlandaise qui avait envisagé de racheter son homologue belge, alors détenue à 100% par l’Etat. Cocasse aussi, alors qu’on vient de voter la loi de privatisation, car où est le privé?
Syndicats sur le qui-vive
La direction de bpost et les représentants du personnel ont une réunion à leur agenda pour ce lundi. Vendredi, les rumeurs et spéculations nées suite aux déclarations de Jean-Pascal Labille ont suscité une certaine agitation parmi les syndicats de bpost. Pour Mark De Mulder, du syndicat libéral, il est "logique" que des opérateurs postaux souhaitent collaborer, "certainement lorsque l’on sait qu’il existe sur le marché des mastodontes comme TNT/FedEx. Il serait fou de ne pas trouver de partenaire". Il a d’ailleurs rappelé que bpost avait failli racheter la Poste roumaine voici quelques mois, avant de renoncer pour cause de risque "européen" (la crainte que la Commission européenne ne mette Posta Romana à l’amende pour aide d’Etat). Le responsable syndical s’est néanmoins dit préoccupé par les conséquences d’une telle collaboration pour le personnel de bpost. "Les travailleurs garderont-ils leur statut actuel?" s’est-il demandé.
Son confrère du syndicat socialiste a réagi avec surprise aux informations et regretté que les syndicats n’aient pas été informés ces derniers mois.
À propos de la réunion paritaire de lundi, Mark De Mulder a déclaré: "Nous déciderons en front commun comment réagir". Des actions ne sont pas exclues, a-t-il ajouté. De quoi donner du grain à moudre aux observateurs qui estiment qu’en faisant sa sortie sur les ondes de la RTBF, Jean-Pascal Labille a cherché à provoquer un surcroît d’agitation sociale. De son côté, l’ancien ministre affirme qu’il s’inquiète de la disparition du statut public de l’entreprise. Mais cela, c’est déjà inscrit dans la loi de privatisation…

NY Post : Meet Bill Clinton’s ‘very good friend’ behind ‘Energizer’ rumor

“I don’t understand why this is such a big deal,” Chappaqua resident Joanna Fisher says of the revelation that Bill Clinton’s nonprofit foundation, the Clinton Global Initiative, pledged $2 million to Energy Pioneer Solutions, a company run by her neighbor Julie Tauber McMahon.
“The funniest part of it is, she doesn’t need his $2 million,” Fisher says. “She’s from an extremely wealthy family. We spend that on clothes.”
The big deal, of course, is buzz that McMahon is “Energizer” — the woman so dubbed by Secret Service agents because of her regular visits to Clinton’s home in the Westchester hamlet . . . always when Hillary Clinton isn’t around.

Last summer, in his book “The First Family Detail: Secret Service Agents Reveal the Hidden Lives of Presidents,” author Ronald Kessler quoted an agent as saying, “You don’t stop her, you don’t approach her, you just let her go in.” (Another agent told Kessler that Energizer’s breasts are “very perky and very new and full.”)


McMahon, 56, has been dogged by the affair rumors since 2001 — fueled by sightings of the former president visiting her home without his wife.
So who is this attractive Westchester blonde?
“She’s a very good friend, and an upstanding person. Her family and the Clinton family have been friends for years. They go way back,” Fisher says. “She is the best part of a lot of people’s lives, including the Clintons’.”
McMahon and Bill Clinton reportedly first met in 1998 at the $25 million Aspen, Colo., vacation home of her father, Joel Tauber, a longtime Democratic fund-raiser from Michigan. It was around the time McMahon’s marriage to Goldman Sachs exec Bill McMahon, whom she married in 1990 and had three children with, was unraveling.
“She was from a political family, and he was just a good Joe,” says attorney Ira Garr, who represented Bill McMahon in the divorce.
“He’s a great guy, completely self-made. This is one of the nicest clients I ever had,” Garr says. “He was your American dream — tall, thin, polite, good manners, a delight.
“I don’t believe [Clinton] is a better catch than Billy.”
Julie, then a homemaker, first filed for divorce in 1998. In 1999, Goldman Sachs became a public company via an IPO that netted Bill McMahon some $30 million.
According to papers filed in Manhattan Supreme Court, Julie told him “she intended to make a claim for equitable distribution of these IPO benefits. [He] took the position that because the rights only came into existence after the divorce action had been commenced, she had no such right.”

Julie dropped the divorce action. Her husband fought the move, arguing she withdrew it “to obtain equitable distribution of the IPO in a divorce action that was surely to be subsequently commenced.” The trial court ruled in her favor.
Bill McMahon filed for a divorce later in 1999. It was finalized in 2001. Neither Garr nor Julie’s divorce lawyer, Susan Bender, would disclose details of the settlement. The former couple shared custody of their children — Madeline, Gwen and Andrew.
Things have since calmed. Garr says the whole family — including Bill McMahon’s current wife, hedge funder Jennifer Padovani, whom he married in 2010 — celebrated Gwen’s recent 21st birthday.
“Billy said, ‘Yeah, the kids aren’t thrilled for the publicity, but we do just fine,’ ” Garr says.
“He’s very proud of his kids,” the attorney adds. “[He] jokes, ‘Two went to Yale. One only went to Duke.’ These are high-achieving kids.”
Madeline, a 2014 Yale grad, served as news editor of the Yale Daily News and was a sophomore when she snagged a summer internship with Sen. Sheldon Whitehouse (D-RI).
She’s now a Washington, DC-based reporter covering politics for Bloomberg News. This past week, the 24-year-old co-wrote a story about Hillary Clinton’s e-mail scandal.
The other Yale alum is Andrew, 23, who has mostly stayed under the radar.
Gwen is on the equestrian team at Duke, where she studies psychology and education. Her LinkedIn profile says she’s a marketing associate at the Kraft Group, which owns the New England Patriots.

Julie and Gwen were featured in a 2012 fashion story in Westchester Look magazine enthusing about their mother-daughter outings to restaurants and horse shows.
Asked what she admires most about her mother, Gwen seemed to hint at her mom’s rumored secret identity: “Her energy.”
Bill Clinton and Julie became neighbors a year after they first met. The former first family moved into a $1.7 million Chappaqua mansion less than three miles from Julie’s Colonial Georgian.
‘Gossip about her presidential friendship has fueled Oakland County cocktail parties for well over a decade.’
- The Detroit News
Eyebrows soon started raising in the neighborhood.
“Wherever he went, she went. If he went to the Palm, she went to the Palm. If he went out to the Hamptons, she went to the Hamptons,” a neighbor says.
“I think [their relationship] was an open secret. [People] try to kiss her ass because of her connection to [Clinton].”
“In my world, cheating is very common. It’s not so unusual [in Chappaqua] or anywhere,” the local adds. “The only thing that makes [Julie and Bill Clinton’s alleged affair] interesting is that he was the president.
The chatter has even reached Julie’s hometown of West Bloomfield, Mich., a tony suburb of Detroit.
“Gossip about her presidential friendship has fueled Oakland County cocktail parties for well over a decade,” The Detroit News reported this month.
Julie, who graduated from Columbia with a master’s in education, is the eldest of Joel and Shelley Tauber’s five children. Besides being a major Democratic fund-raiser, Joel is a manufacturing exec, while Shelley is a philanthropist involved in Israel-related charities.
“[Joel’s] been a real pillar of the Detroit Jewish community and beyond,” Rabbi Arnie Sleutelberg, a West Bloomfield-area rabbi, tells The Post. “And a mensch.”
Indeed, Joel has wise words for his scandal-plagued daughter.
“I’m 80 years old. What you learn in those 80 years: This will pass. I taught that to my children their whole lives,” he tells The Post. “Life can be difficult, and life can be wonderful. She’s strong. She’s a fantastic person.”
Like her mother, Julie is involved in philanthropy. She sits on the advisory counsel of Oceana, an international ocean-conservation group based in DC. Its benefits have drawn such celebs as Jeff Goldblum, Melanie Griffith and January Jones. Julie has also been a fixture on New York City’s party circuit for years, vamping at galas for the New York Academy of Art, among others.
Last month, she was at close friend Fisher’s Four Seasons birthday bash, partying with filmmaker Barry Levinson and Vogue editor-at-large Hamish Bowles.
“She’s not hiding,” Fisher says. “Why would she be in hiding? She didn’t kill anyone. Bill Clinton’s not running [for president] — Hillary Clinton is.”
Fisher, who is also on Oceana’s board, uses the charity’s success to dismiss the Energizer suspicions surrounding Julie.
“[Mike] Bloomberg gave us $500 million. Leo DiCaprio gave us $20 million,” Fisher says. “People don’t give money like that to Energizer bunnies. It’s all ridiculous.”
Julie herself has denied the allegations.
In any case, Julie McMahon and Bill Clinton may not be neighbors much longer.
Last September, she put her 7,765-square-foot home on the market for $2.599 million. She has since dropped the price by $100,000, and word among Douglas Elliman brokers, according to one, is “this woman really wants to sell.”

>>> Barrons weekend update: positive on CAG, BF.B, select REITs

Barrons weekend update: positive on CAG, BF.B, select REITs 

Cover story: The current bull market has lasted seven years and pushed the market to new highs, but after faltering last May some bears wonder if the inevitable crash is just ahead; However, because stock valuations aren't too exuberant, the inflation-adjusted house price isn't above its previous peak, the yield curve isn't flat or inverted, and oil prices aren't surging to triple-digit peaks, investors can assume the bull market hasn't finished its run. 

Features: 1) Positive on AVB, EQR, FRT, GGP, PSA: Story says these five REITs are worth a look for investors, noting such investments are less volatile than financials and have a lower correlation to the performance of the broader market; 2) Cautious on Brown Forman (BF.B): Shares have risen steadily and now sell for 27 times forward earnings estimates, but growth in a crowded market will be difficult, and any problems could lead to a drop in share price; 3) Positive on CAG: New chief executive Sean Connolly plans to trim down the company, boost margins, and improve quality, and shares could rise 30% if the efforts are successful; 4) Picks from the speakers at this year's London Value Investor Conference include companies whose attractions aren't apparent in their mostly beaten-down shares (Positive on Ryanair Holdings, easyJet, Elekta, PRGO, RBS, Ocado Group).

Tech Trader: Tiernan Ray says the "unfortunate theme" in the tech world during the past decade has been the massive number of layoffs that resulted from the launch and growth of disruptive industries such as cloud computing. 

Trader: "Investors remain lukewarm on stocks, which still trade at above-average valuations despite weak quarterly earnings"; Positive on AMGN: Biotech's shares have trailed the market, but the company should get a boost if Repatha and AMG 334, now in phase 3 trials, are successful; A vote for the U.K. to remain in the European Union could boost stocks that have strong sales in the bloc, including PAG, PPL, PRAH, IVZ, XRX, F, CPRT, CBG, GWR, EBAY. 

Alternative Investments: Andrew Lo, director of the Laboratory for Financial Engineering at MIT, talks about his work blending economics with behavioral finance and neuroscience and shares insight into the potential pitfalls of liquid alternatives. 

Small Caps: Positive on JLL: The recent share selloff looks like an overreaction and an opportunity for investors, who have given short shrift to the company's less cyclical, annuity-like operations. 

Follow-Up: Cautious on BABA: Barron's "remains wary of the shares of the complicated, opaque company," which could fall further as the SEC's investigation into its operation unfolds; Cautious on CSC: The stock got a boost on news of the HPE deal, but further upside appears unlikely given strong competition in the sector from the likes of AMZN; Cautious on INTC: Chip maker faces a threat from GOOGL's Tensor chip and the company's move into cloud computing, which could put a dent in Intel's lucrative server-chip business. 

European Trader: Positive on BUD, SABMiller: Shares of brewing giants are set to rise now that the European Union has approved their merger, though authorities in the U.S., China, and South Africa remain undecided about the deal. 

Asian Trader: Standard & Poor's is about to launch its index of China's 500 largest stocks; ICBC will partner with CS to offer an S&P China 500 exchange-traded fund, expected to launch in July. 

Emerging Markets: A number of multinationals with operations in Venezuela-including KMB, PEP, MDLZ, Bridgestone Americas, F, PG, HAL, and SLB-are struggling against the country's steep inflation and currency controls. 

Commodities: Cotton, which has been trading in the range of 60-65 cents a pound during most of the past two years, is likely to stay there for the time being. 

Streetwise: The revolving door of chief executives of U.S. companies is more a reflection of market volatility than a struggling economy, and investors shouldn't draw broad conclusions about changes at the top.

>>> Week Ahead May 30 - June 4 - Busy Week

Monday, May 30
-Memorial Day holiday in the U.S. and markets are closed; U.K. markets are closed for the Spring bank holiday.
-German Finance Minister Wolfgang Schaeuble delivers remarks on sustainable public finances at a conference in Berlin at 11:00 local time (05:00 EDT). Guests include Clemens Fuest, president of the Ifo Institute.
-Polish Deputy Prime Minister Mateusz Morawiecki and Iranian Foreign MinisterJavad Zarif to attend an economic forum in Warsaw. Event starts at 10:00 local time (04:00 EDT).
-Israel’s expanded coalition government set to be sworn in. Yisrael Beiteinu party adds five parliamentary seats to the government’s one-seat majority but has strengthened the hardline image of Benjamin Netanyahu’s coalition toward the Palestinians and peacemaking. No time set.
-U.S. Federal Reserve Bank of St. Louis President James Bullard is the keynote speaker at the Bank of Korea International Conference 2016. 09:35 in Seoul (20:35 EDT).
-Pittsburgh Penguins host the San Jose Sharks in game 1 of the National Hockey League Stanley Cup final. 20:00 at Consol Energy Center.
-U.S. government bond auctions, Fed debt purchases. Click here for the schedule.
-U.S. initial public stock offerings. Click here for the schedule.
-CENTRAL BANKS: Greece deposit data (April).
-ECONOMY: Euro-area economic confidence (May), German CPI (May), Brazil IGP-M inflation (May), South Korea BSI business confidence survey (June),Japan retail trade (April), Portugal consumer, business confidence (May), Portugal retail sales (April), Portugal industrial production (April), Spain CPI(May), Greece GDP (1Q).
-EARNINGS: OPAP SA.
Tuesday, May 31
-Personal spending in the U.S. probably increased in April at the fastest pace in almost a year, rebounding from early-year weakness as incomes continued to grow, economists project the Commerce Department to report. 08:30 EDT in Washington.
-United Arab Emirates Ambassador to the U.S., Yousef Al Otaiba, is among the panel speakers on the Iran nuclear deal at The Brookings Institution. 09:30 EDT in Washington.
-Deutsche Bank hosts its annual Global Financial Services Investor Conference in New York City. Goldman Sachs Group Inc. President Gary Cohn, Wells Fargo & Co.’s Chief Financial Officer John Shrewsberry and JPMorgan Chase Bank Investment Bank CEO Daniel Pinto are among this year’s presenters. Through June 1.
-Russian Economy Minister Alexei Ulyukayev visits Munich and Stuttgart, Germany. Agenda to be determined. Through June 1.
-Russia’s Gazprom Pao Deputy CEO Alexander Medvedev and Gazprom Export CEO Elena Burmistrova will discuss European gas-export strategy at a news conference in Moscow. 10:00 local time (03:00 EDT).
-Russian anti-monopoly authorities may discuss imposing fines on Google. Event starts at noon, local time in Moscow (05:00 EDT).
-European Central Bank Governing Council member Ignazio Visco speaks at the annual meeting of Banca d’Italia. 10:30 in Rome (04:30 EDT).
-Tesla Motors Inc. holds its annual shareholder meeting in Mountain View, California to elect board members and adopt new voting requirements. Earlier this month, Chief Executive Officer Elon Musk unveiled an ambitious production plan to build 500,000 electric cars a year by 2018. Click here for livestream. 14:00 local time (17:00 EDT).
-Deadline for Total Gas and Power, a unit of Paris-based Total SA, to respond to a Federal Energy Regulatory Commission proposal that would issue civil penalties of $213.6 million, and claim $9.18 million in unjust profits, over allegations that it manipulated prices at locations in the southwest U.S. between June 2009 and June 2012.
-CENTRAL BANKS: Brazil Central Bank publishes primary budget report, Turkey’s central bank releases minutes of May 24 rates decision, Bulgaria base interestrate decision.
-ECONOMY: U.S. S&P/Case-Shiller 20-city home-price index (March), U.S.Chicago PMI (May), U.S. consumer confidence (May), U.S. Dallas Fedmanufacturing (May), Canada GDP (March), Euro-area flash CPI (May), euro-area unemployment (April), German unemployment (May), Brazilunemployment (April), Brazil primary budget balance (April), Hong Kong retail sales (April), India GDP (1Q), South Korea industrial output (April), Japan jobless (April), Japan industrial output (April), Portugal GDP (1Q), Turkey trade balance (April), Poland GDP (1Q), CPI (May), Lithuania GDP (1Q), Croatia GDP(1Q), Latvia GDP (1Q Final), Serbia GDP (1Q Final), South Africa M3 and private credit (April), South Africa trade balance (April), South Africa budget balance(April), Kenya consumer inflation (May), Greece retail sales (March).
-EARNINGS: Volkswagen AG, Medtronic Plc., Workday Inc., Bank of Nova Scotia,Laurentian Bank of Canada, Alrosa PAO, Alpha Bank AE.
-ENERGY/COMMODITIES: U.S. Energy Information Administration Petroleum Supply (March), U.S. Department of Agriculture releases crops/livestock reports (weekly).
Wednesday, June 1
-U.S. manufacturing probably barely expanded in May as lackluster overseas demand and limited business investment continue to hobble the industry, economists forecast an index from the Institute for Supply Management to show. 10:00 EDT in Washington.
-Brazil GDP (first quarter). Latin America’s largest economy shrank by the most in a quarter century in 2015. Economists surveyed by the central bank expect more of the same in 2016 as consumer demand and investment have dried up. 08:00 local time in Rio de Janeiro (07:00 EDT).
-Organisation for Economic Co-operation and Development (OECD) presents itseconomic outlook. 11:00 local time in Paris (05:00 EDT).
-Estonian President Toomas Hendrik Ilves, Czech Defense Minister Martin Stropnicky and NATO deputy Supreme Allied Commander Manfred Nielson to speak at a cyber defense forum. Event starts at 08:00 local time in Tallinn (01:00 EDT).
-Bank of America Merrill Lynch 2016 Global Technology Conference is held in San Francisco. Cisco Systems Inc., Intuit Inc. and HP Inc. are among the presenters. Through June 2.
-Sanford C. Bernstein’s Strategic Decisions Conference is held in New York, featuring speakers from all industry groups including technology, financial services, energy, retail and heath. Click here for the agenda. Through June 3.
-The U.S. hosts the Seventh Clean Energy Ministerial (CEM7) in San Francisco, drawing energy ministers from 20 countries. This is a follow-up to the climate change talks last December in Paris. Ernest Moniz, U.S. energy secretary, will attend. Through June 2.
-Sotheby’s Paris hosts an auction of modern and impressionist art including works by Marc Chagall, Pierre Bonnard and Edgar Degas. Christie’s New York will hold an Imperial Sale of “Important Chinese Ceramics and Works of Art.”
-CENTRAL BANKS: Chile Central Bank meeting minutes.
-ECONOMY: U.S. MBA mortgage applications (weekly), U.S. Markit manufacturingPMI (May final), U.S. construction spending (April), U.S. Fed Beige Book, U.S. motor vehicle sales (May), China manufacturing PMI (April), Caixin China manufacturing PMI (April), Nikkei Taiwan manufacturing PMI (May), Euro-areamanufacturing PMI (May, final), U.K. mortgage approvals (April), U.K. manufacturing PMI (May), Switzerland GDP (1Q), Australia GDP (1Q), Indonesia CPI (May), Thailand CPI (May), South Korea current account (April), South Korea CPI (May), South Korea trade (May), South Korea Manufacturing PMI(May), Turkey manufacturing PMI (May), Russia PMI (May), Russia CPI(weekly), Poland PMI (May), Czech PMI (May), Czech budget (May), HungaryPMI (May), Slovak budget (May), South Africa manufacturing PMI (May), GreecePMI (May).
-EARNINGS: National Bank of Canada, Elkta AB, Michael Kors Holdings Ltd.,Koninklijke Ahold NV.
-ENERGY/COMMODITIES: Bloomberg survey of analysts’ expectations on natural gas volume (weekly).
Thursday, June 2
-U.S. Federal Reserve Bank Governor Jerome Powell gives the keynote address on the role of regulation in today’s banking system at the Prudential Regulation Conference, hosted by Sifma. Former Comptroller of the CurrencyJohn Dugan will also speak. 08:35 EDT in Washington.
-Organization of Petroleum Exporting Countries (OPEC), which contributes about 40 percent of the world’s oil supply, meets in Vienna. Begins at 10:00 local time (04:00 EDT). (Follow the TOPLive blog for real-time coverage here.)
-The European Central Bank’s Governing Council meets to review interest rates and stimulus programs. Rate decision at 13:45 in Vienna (07:45 EDT), followed by ECB President Mario Draghi’s press conference at 14:30 (08:30 EDT). (Follow Draghi’s remarks with TOPLive blog real-time coverage here.)
-Germany’s lower house, the Bundestag, votes on a resolution backed by Chancellor Angela Merkel’s government to designate the Ottoman Empire’s 1915-16 campaign against Armenians as genocide, risking diplomatic conflict with Turkey. Vote about 11:00 local time in Berlin (05:00 EDT).
-Amos Hochstein, the U.S. State Department’s special envoy for energy, and Ali Moshiri, Chevron Corp.’s Exploration and Production President for Latin America & Africa, will speak at a CSIS event on energy security. 10:45 EDT in Washington.
-NATO Deputy Secretary General Alexander Vershbow, Polish Foreign MinisterWitold Waszczykowski, outgoing Polish Central Bank President Marek Belka and Lithuanian Foreign Minister Linas Linkevicius to speak at Wroclaw Global Forumin Poland. Event starts at 10:00 local time in Wroclaw. (04:00 EDT). Through June 3.
-U.K. Prime Minister David Cameron discusses Britain and the European Union, answering questions from journalists and the public in an hour-long Sky News television program on the June 23 referendum. 20:00 London time (15:00 EDT).
-Kazakh President Nursultan Nazarbayev to attend business forum in Zagreb, Croatia. Agenda to be announced.
-Five-time major champion Phil Mickelson commits to play in the Jack NicklausMemorial Golf Tournament at Muirfield Village Golf Club in Dublin, Ohio. Jordan Spieth and Rory McIlroy will also compete for the $8,500,000 purse. Through June 5.
-ECONOMY: U.S. Challenger job-cut announcements (May), U.S. ADP private employment (May), U.S. jobless claims (weekly), U.S. Bloomberg consumer comfort (weekly), U.S. ISM New York manufacturing (May), U.K. construction PMI (May), Brazil industrial production (April), South Korea GDP final release(2Q), South Korea FX reserves (May), Kazakh CPI (May), Spain unemployment(May).
-EARNINGS: Cooper Companies, Inc., Saputo Inc., Canadian Western Bank.
-ENERGY/COMMODITIES: Bloomberg survey of analysts’ expectations on U.S. natural gas prices (weekly), U.S. Energy Information Administration natural gas inventory report (weekly), United National Food and Agriculture Organizationfood-price index (weekly), U.S. Energy Information petroleum inventory report(weekly).
Friday, June 3
-Employers in the U.S. probably added around 160,000 jobs in May after a similar gain a month earlier, economists project. Even after adjusting the data to account for 36,000 striking Verizon Communications workers, the pace of hiring may be starting to cool. Unemployment is forecast to ease to 4.9 percent from 5 percent, while worker pay probably increased. The Labor Department will issue the figures at 08:30 EDT in Washington. (Follow the TOPLive blog for real-time coverage here.)
-U.S. Federal Reserve Bank of Chicago President Charles Evans will discuss the monetary policy divergence between the Fed and the European Central Bank and the future of positive rates at the Global Interdependence Center’s Central Banking Series event. In London at 08:45 local time (03:45 EDT).
-U.S. Federal Reserve Bank of Cleveland president Loretta Mester speaks on macro and financial stability at the Sveriges Riksbank Conference: “Rethinking the Central Bank’s Mandate.” Sweden Central Bank Governor Stefan Ingvesdelivers the opening remarks. Click here for agenda. Through June 4 in Stockholm.
-The American Society of Clinical Oncology (ASCO) brings 30,000 oncology professionals to Chicago to discuss new therapies and ongoing controversies in the field. Merck & Co., Bristol-Myers Squibb Co. and others will present data from clinical trials. Through June 7.
-Foreign ministers from 20 nations including U.S. Secretary of State John Kerry will attend a Paris conference to discuss the Palestinian-Israeli peace process. Timing not determined.
-U.K. Justice Secretary Michael Gove, a leader in the Leave-EU campaign, makes the case for Britain to leave the European Union and takes questions from journalists and the public on Sky television. 20:00 London time (15:00 EDT).
-German Chancellor Angela Merkel addresses a regional convention of her Christian Democratic Union party in the eastern state of Brandenburg at 17:30 local time (11:30 EDT). Possible topics include economic policy and the EU’s refugee deal with Turkey.
-Russian Energy Minister Alexander Novak and his Qatari counterpartMohammed bin Saleh al-Sada meet to discuss economic cooperation in Moscow. 10:30 local time in Moscow (03:30 EDT).
-The 15th Shangri-La Dialogue begins with a keynote speech by Thailand’s Prime Minister Prayruth Chan-Ocha. The meeting gathers global military leaders to discuss security and defense policy. Talks may be dominated by discussions on the South China Sea dispute ahead of an arbitration ruling on China’s claims to the waters, expected mid-year. 18:00 in Singapore (6:00 EDT).
-ECONOMY: U.S. trade balance (April), U.S. Markit services PMI (May final), U.S.factory orders (April), U.S. ISM non-manufacturing (May), Euro-area services PMI (May final), U.K. services PMI (May), Colombia GDP (1Q), Caixin China services PMI (May), Nikkei Hong Kong PMI (May), Turkey consumer inflation(May), Romania retail sales (April), Russia services PMI (May), Hungary retail sales (April), Czech GDP (1Q); Georgia CPI (May), South Africa whole economyPMI (May).
-ENERGY: Baker Hughes U.S. oil-and-gas rig count (weekly), U.S. Commodity Futures Trading Commission futures and options positions for oil & Commitments of Traders
reports (weekly).
-SOVEREIGN RATING UPDATES: Bulgaria (Fitch, Moody’s & S&P), Cyprus (DBRS),ESM (Moody’s), Finland (Moody’s), Ireland (S&P), San Marino (Fitch), South Africa (S&P), Sweden (DBRS).

(BI) It may be the end of hedge funds as we know it

It may be the end of hedge funds as we know it

There's a colloquialism that hedge fund managers are "masters of the universe."

These investors take big risks betting on the market, but the reward has usually been pretty significant.

Let's not forget, five hedge fund managers made over $1 billion in 2015.

Based on recent outlooks, however, the reign of these "masters" may be coming to an end.

Everywhere you look, it appears that doom and gloom is surrounding the industry. From competitors to analysts and even to the managers of hedge funds themselves, everyone is acknowledging that these funds are going through a rough patch.

It's all over

Let's get the obvious out of the way: hedge fund performance is abysmal. Funds are underperforming their benchmarks and many are losing investors money. For an industry that is founded on the idea that it can produce alpha, or better returns than the broad market, even being in-line is a disappointment.

Hedge funds typically charge high fees to deliver the alpha to their investors. When they're not performing, more attention is paid to these fees. That focus has coincided with the growth of lower cost alternatives, such as liquid alternatives, which provide hedge fund-like investments with lower fees.

Add that up and you've got some problems. Tony James, president of private equity giant Blackstone, told Bloomberg this week that he expects a quarter of all current assets in hedge funds to be yanked out in the next year.

"It’s kind of a day of reckoning that we face here,” James told Bloomberg TV. “There will be a shrinkage in the industry and it will be painful. That’s going to be pretty painful for an awful lot of places.”

A 25% drop in assets might sound pretty dramatic, but there are those who think it may be even worse. K.C. Nelson at alternative investor Driehaus Capital Management, expects a brutal reduction in the number of funds over the next few years.

"I believe there will be a culling of hedge funds like we've never seen before," he said in a letter to investors. "I'd estimate the number of funds gets cut in half over the next couple of years."

Even Dan Loeb, manager of the hedge fund Third Point, said that it has been "one of the most catastrophic periods of hedge fund performance" and that many funds won't survive.

"There is no doubt that we are in the first innings of a washout in hedge funds and certain strategies," he said in a letter to investors in April.

Now questions are being asked about the entire hedge fund business model. According to Brian Balter, CEO of Balter Capital Management, the model has broken down, and there is nothing to do to repair it.

"The mechanism to grow a hedge fund broke, the hedge fund capital raising mechanism broke," he told Business Insider.

Balter, whose firm runs a fund of funds and liquid alts strategy, said that hedge funds start by getting seed money from a high-net worth family office. Then the fund-of-fund community would help build the fund from there, until the hedge fund became institutionally viable and larger pension plans would invest to grow it even further.

Now, according to Balter, there is such a proliferation of hedge funds that many family offices are skeptical of investing because they aren't seeing the growth. The middle ground made up of fund-of-funds is also struggling, or in Balter's words "D-E-A-D, dead" and receiving redemptions.

Finally, pension funds from California to New York are starting to pull their money out of hedge funds.

"It's over for hedge funds," said Balter. "Yes, there will be hedge fund-like structures, but this is not a cyclical thing, it's a secular thing that has been been building up for a long time."

This too shall pass

To some in the industry, however, all is not lost. Many hedge fund managers have said this is simply a cyclical event and a case of too much attention being lavished on hedge fund performance.

"Today's reports of hedge fund redemptions totaling $15 billion in Q1 2016 might sound like a big shift in favor from the sector, but it is important to note that this represents only around half of one per cent of total AUM invested," wrote Jack Inglis, CEO of the hedge fund industry trade group Alternative Investment Management Association in a recent blog post.

"Outflows from equity and bond mutual funds over the same period have been much more."

Inglis also noted that hedge funds have outperformed most other investment strategies over the past 25 years, so to take the short-term view would be unwise.

This may actually be a good thing

The thing is, the closure of many hedge funds may end up being a good thing for managers in the long run. Not for all managers, obviously, but for those that can make it through the tough times.

Currently there are a large number of hedge funds. In a June 2015, a report showed that there were a record 10,149 registered hedge funds. The staggering number of funds has "polluted" the returns of hedge funds, said Balter, as all of these big-time firms chase the same ideas.

Steve Cohen of Point72 Asset Management has decried the crowding of trades by hedge funds, making it impossible to anyone to generate returns.

So whether you call it a "culling" or a "washout", decreasing the number of funds investing could allow the survivors a little more elbow room to operate.

Only time will tell.

FT : Matteo Renzi’s early pensions proposal draws mixed reactions

Matteo Renzi’s early pensions proposal draws mixed reactions

A proposal by Mario Renzi, Italy’s prime minister, to allow workers to claim their state pensions early is likely to please tens of thousands of Italians who have seen their retirement age drift higher. But some in Rome fear it will provoke the ire of Brussels amid concern over Italy’s public finances.
Mr Renzi’s plan, which would allow pensions to be paid up to three years early, is aimed at increasing generational turnover in Italy’s labour market and tackling stubbornly high youth unemployment.

The prime minister floated the idea during a live Twitter discussion earlier this month and said he would aim to include the measure in next year’s budget, which is due to be presented in October.
The plan — whose details have yet to be finalised — will be welcomed by Italian businesses eager to replace older, disenchanted staff with younger, keener employees.
“This accommodates people’s preferences without having any big impact on our public finances. And companies may benefit as well — it could help generational turnover and boost productivity,” said Tommaso Nannicini, a senior economic adviser to Mr Renzi.
But for pensioners, the proposal — which would allow retirement at 63.7 years instead of 66.7 years — comes with a catch. To avoid weighing on Italy’s public coffers, a penalty of between 1 and 4 per cent would be imposed on early retirement cheques, say Italian officials.
This would either be paid by individuals, or in certain circumstances such as in cases of disability, by the government, or by companies whose employees took early retirement because of a restructuring.
The prospect of a penalty has drawn opposition from Italian trade unions. “These are very low pensions already, so a penalty would hurt a lot, it would be a punishment,” said Massimo Gibelli, a spokesman for the CGIL, Italy’s largest trade union. “People don’t retire because it’s a privilege, but because they can’t handle work any more.”
The scheme could also spark concern in Brussels. Although the penalty is expected to make it budget-neutral in the long run, it would involve higher short term outlays — of as much as €1.6bn in the first year up to more than €6bn in 2021, according to figures from INPS, the national pensions administrator — to cover the cost of workers drawing pensions earlier than originally planned.
But some in Rome fear the EU might see this as an unwinding of reforms passed by Mario Monti’s technocratic government at the height of the eurozone crisis in 2011, when Rome was under pressure to rein in public spending. Mr Monti’s changes to pensions, which lifted the retirement age, were widely welcomed by international institutions as putting Italy’s welfare system on a sounder footing.

But observers suggest the overriding goal for Mr Renzi, who took office in early 2014 with a mission to revitalise the country after years of economic stagnation and recession, is to find a way of tackling youth unemployment, which fell to 36.7 per cent in March but remains well above the EU average of 21.2 per cent.
Tito Boeri, an economist who heads INPS, supports the plan. “It relies on incentives instead of rigid constraints and introduces freedom of choice,” he said. “If you force employers to keep people who are less and less productive, are not motivated, have already planned to leave and are just waiting to retire, that is a cost for the firm, making it less profitable and less likely to hire young workers.”
Stefano Scarpetta, director for employment, labour and social affairs at the OECD in Paris, said that across advanced economies there was “no evidence” that early retirement generated more jobs for young people in the long term.
But the issue was “absolutely relevant” for Italy in the short term because of the impact of the Monti reforms, he said, adding: “Some employers might replace early retirees with younger people.”
Meanwhile, Mr Renzi’s team is considering creative ways of financing the plan to eliminate any impact on Italy’s budget and allay Brussels’ concerns. One emerging idea is doing so through bank loans so the government would avoid putting money up front. But that has drawn scepticism from trade unions and some opposition politicians.
“It’s fine to have pensions flexibility but at what price for workers? With banks loans and other policies, the only ones to gain are banks and insurers,” Gabriella Giammanco, a lawmaker with the centre-right Forza Italia party, tweeted recently.
On the streets of central Rome, however, the idea of flexible retirement was generally supported.
“Personally I would retire, I can't wait . . . Even if I’d probably lose money,” said Sabrina, a 55-year-old high school teacher who declined to give her surname.
Claudio, a 53-year-old taxi driver, was not so sure: “I have to know how much money I’m going to lose. If it’s too much I’ll work three extra years — otherwise what am I going to eat afterwards?”