RTRS - CHINA'S PREMIER LI: NO BASIS FOR CONTINUED YUAN DEPRECIATION
RTRS - CHINA'S PREMIER LI: CHINA HAS NO INTENTION TO RELY ON YUAN DEVALUATION TO BOOST EXPORTS
few deads, no communications on with Company
NOVOB DC -2.4% is the stock the more down...we should have the news later today
Link to Article : http://bit.ly/233VUHI
First study to show link between genetic make-up and perceived national happiness
The citizens of nations which rate themselves happiest display a specific genetic feature: their DNA is more likely to contain a specific allele involved in sensory pleasure and pain reduction, say Michael Minkov of the Varna University of Management (formerly International University College) in Bulgaria, and Michael Bond of the Hong Kong Polytechnic University. They weighed up genetic and various external factors to might contribute to national differences in happiness. The findings are published in Springer's Journal of Happiness Studies.
Minkov and Bond used data from three waves of the nationally representative World Values Survey (2000 -- 2014). They calculated the average national percentages of respondents who unambiguously reported being "very happy." Their calculations also included population genetic data from an allele frequency database maintained by population geneticist Kenneth K. Kidd of Yale University as well as climatic information about the harshness of summers and winters, the historic prevalence of pathogens and World Bank economic data, since national differences in subjective well-being are thought to depend on socioeconomic and climatic factors in addition to genetic factors. The authors found a strong correlation between a nation's happiness and the presence of the A allele in the fatty acid amide hydrolase (FAAH) gene variant rs324420 in its citizens' genetic make-up. This allele helps prevent the chemical degradation of anandamide, a substance that enhances sensory pleasure and helps to reduce pain.
Nations with the highest prevalence of the A allele are quite clearly also those who perceive themselves happiest. These include Ghana and Nigeria in West Africa, and northern Latin American nations, such as Mexico and Colombia, whose citizens are of Amerindian or mixed Euro-American descent. The Arab nations of Iraq and Jordan, and the East Asian nations of Hong Kong, China, Thailand and Taiwan, which had the lowest prevalence of this allele, were also found to be the least likely to rate themselves as "very happy." Genetics also suggests explanations for differences in happiness between European nations. Northern Europeans such as Swedes were found to have a much higher prevalence of the A allele -- and more often rate themselves as being very happy -- than their cousins from Central or Southern Europe.
The authors recognise that genetics is not the only determinant happiness. They argue that the economic and political difficulties continuously experienced by East European nations contribute to the very low happiness scores of Russians and Estonians. This is despite the fairly high prevalence of the A allele in the genes of these Northeast European nations.
Economic wealth, the type of law governing a nation or disease patterns did not significantly influence national differences in happiness. However, politics and economics did cause fluctuations in happiness levels in certain countries during the time this study was conducted. The authors suggest that, for instance, the percentage of very happy people in Rwanda rose dramatically recently because the effect of the 1994 genocide is wearing off. Inversely, it fell among Egyptians, most likely because of the political and economic turmoil in this North African country.
Climatic differences were also found to be significantly associated with national differences in happiness.
"We cannot fail to notice the high occurrence of the A allele in equatorial and tropical environments in the Americas and Africa and the lower occurrence of that allele around the Mediterranean Sea than in Northern Europe," says Minkov. "It seems that some equatorial and tropical environments select for a higher occurrence of the A allele as a counterbalance to environmental stressors."
The results may sound somewhat disturbing for nations that are not endowed with beneficial genes and climatic factors. The researchers reiterate that they studied only national differences in relation to one another and not absolute measures. "In other words, we have not shown that a nation's genetic and climatic heritage doom a particular country to a specific happiness score, but that it can still rise and fall because of situational factors," explains Bond.
ECB policymakers pushed for more stimulus ahead of December vote
Financial markets were not alone in having their hopes dashed by the European Central Bank’s response to the latest setback for the eurozone economic recovery last month. Some of the region’s monetary policymakers had backed more forceful monetary stimulus at their controversial December vote before additional modest measures were announced.
An account of last year’s final policy meeting, published on Thursday, shows that “some” policymakers wanted the bank to act more aggressively — and more in line with investor expectations — by cutting a benchmark interest rate by more than the 10 basis points it delivered.
Some of the 25 members of the governing council had pushed for a 20 basis point cut to its deposit rate, according to the minutes — a move that would have been more in line with market expectations of a bigger stimulus from the ECB in response to a slowdown in emerging markets.
In the event, most of the council backed ECB chief economist Peter Praet’s call for a 10 basis point cut, which left the deposit rate charged on banks’ reserves parked at the central bank in the region at 0.3 per cent.
The account revealed the possibility was also raised of expanding the monthly volume of asset purchases under the ECB’s landmark quantitative easing programme from the current level of €60bn, or of front-loading asset purchases. The option of extending QE beyond the date Mr Praet tabled — March 2017 — was also considered. While no one backed taking these measures as soon as December, the ECB raised the prospect of more action in 2016 by saying “a reassessment could be made in the future”.
The account also confirmed that the ECB could cut the deposit rate again, saying those in favour of a 10 basis point cut viewed such a move as having “the advantage of leaving some room for further downward adjustments”.
Investors were left disappointed by what was eventually agreed upon, sparking a sharp sell-off in European bonds and equities. Since the meeting, ECB president Mario Draghi has downplayed concerns that his central bank is out of ammunition or is reluctant to act.
Few expect policymakers to unveil fresh measures in seven days’ time, when their next meeting takes place.
“On the one hand, there was a desire by some to ease more than they did, but on the other, there was quite a lot of opposition to doing more sovereign QE unless it’s a last resort. The implication is ‘let’s wait and see’,” said Justin Knight, a rates strategist at UBS. “Under current conditions, we don’t think there will be further major policy announcements from the ECB.”
But the news that minus 0.3 per cent is not the lower limit for interest rates and that the central bank could increase the volume of monthly purchases under QE are likely to buoy hopes that the ECB will act again, should growth and inflation continue to disappoint. The earliest date for more action looks likely to be March, when the ECB’s staff will present a fresh round of projections for inflation and growth in the 19-member region.
In contrast to those advocating extra monetary stimulus, some ECB members had wanted to do less than what was announced. Five members of the governing council wanted the central bank to stick with QE in the form decided last January, according to people familiar with the matter.
Some of those voting against Mr Praet’s proposal were only prepared to lower the deposit rate, though in certain cases by more than the 10 basis points put forward by the ECB’s chief economist. Other dissenters said the existing measures by the ECB “were working in the right direction and more time should be given for them to unfold their full effect”.
BHP takes $7bn hit on US shale operation
BHP Billiton revealed a huge hit from the sharp fall in the oil price with a $7.2bn writedown on its extensive US shale assets.
The asset impairment, which equates to $4.9bn after tax, is the largest announced by the Anglo-Australian group during a wrenching commodities downturn that is devastating the mining and energy sectors.
BHP, the most valuable miner by market capitalisation, has always been unusual in the sector by virtue of its significant oil business. It vastly expanded its exposure to oil in 2012 when it spent more than $20bn on US shale acquisitions.
The impairments announced on Friday mean BHP has now written off almost $13bn on the deals in which, in addition to the purchase costs, it has committed more than $15bn of capital investment. The group said the value of its onshore US assets now stood at $16bn, after depreciation and amortisation and including $4bn of deferred tax liabilities.
Andrew Mackenzie, chief executive, said oil and gas markets had been significantly weaker than expected. “We responded quickly by dramatically cutting our operating and capital costs . . . while we have made significant progress, the dramatic fall in prices has led to the disappointing writedown announced today,” he said.
“However, we remain confident in the long term outlook and the quality of our acreage. We are well positioned to respond to a recovery.”
BHP said it would significantly reduce output from its US fields, cutting the number of rigs to five from 26 a year ago.
The change highlights how the environment in the US shale sector has soured for BHP, which had previously emphasised its sharply reduced operating costs and the flexibility of its US business compared with its longer-term mining operations.
The sharp downturn in the oil sector increases the likelihood that BHP will make an unprecedented dividend cut, perhaps as soon as next month when the group is due to announce its results for the first half of its financial year.
BHP has not cut its progressive dividend since its merger with Billiton in 2001. But payouts have been slashed across the mining sector as the commodities slump has wreaked havoc with miners’ ability to reward shareholders.
The group had already been hit by the falling price of iron ore — down more than 75 per cent from peaks in 2011 — and copper, which is down more than half from its peak.
BHP’s investments in shale increased significantly under Marius Kloppers, Mr Mackenzie’s predecessor. He left BHP almost three years ago as the incipient commodities downturn forced the mining sector to curb its expansionary plans and slash spending.
BHP said it was cutting its medium and long-term gas price assumptions as well as its short and medium-term oil price assumptions. “Our long-term [oil] price assumptions continue to reflect the market’s attractive supply and demand fundamentals,” it said.
■ Action: GLEN has launched refinancing of its $8.5bn revolving credit facility. Typically this is done in Q2 each year but the company has moved early to dispel ongoing funding concerns. We expect the refinancing to be completed before full year results in March and this will provide liquidity and funding out to 2018. Compared to current bond and CDS levels the market is likely to be surprised by the refinancing terms, in our view.
■ Existing revolver: We provide a debt schedule in Fig 1. The existing $15.3bn syndicated revolving credit facility was signed in June 2015 of which $6.6bn has been drawn. Funds drawn under these facilities bear interest at US$ LIBOR plus 40-45 bps pa. This facility is made up of: an $8.5bn 12 month revolver with a 12 month term-out option and a 12 month extension option (out to May 2017) and a $6.8bn (undrawn) 5 year revolving facility with two 12 month extension options.
■ Investment case: We continue to think the sell-off in H215 was over-done given the underpin to cash flows from the trading business. At current prices we expect the company to generate FCF (ex WC or asset sales) of c$2bn in 2016, similar in size to RIO and BHP despite the market cap being less than a third of the size. It remains the cheapest stock by some way on cash flow metrics with a base/spot 2016E FCF yield of 21/14%. Financial leverage is high, making delivery
Truck market outlook increasingly mixed, initiating coverage with a cautious view
* Cautious sector view – prefer Volvo (OP) to CNH (UP): We initiate coverage of European truck OEMs and suppliers with a cautious view. Developed markets are near or past the peak, while the risk for developing markets is still to the downside. Cyclical drivers in Europe are likely to remain supportive near term, but sustainability of the current upcycle is a concern. We like self-help in this environment and initiate on Volvo with an Outperform rating and CNH with an Underperform
* Europe positive near term, sustainability uncertain (2016E +7.6%): Near-term momentum remains solid, though we think growth is unlikely to surprise to the upside in 2016. The current cycle is supported by strong retail goods demand and business confidence. However, the cycle (ex-Euro 6 effects) has been unusually lengthy, and the structural problems of the market increase the downside risk once it ends. We believe it is too early to make a more negative call on Europe
* Key downside risk is the NA market (2016E -22%): A declining market in 2016 is well understood as orders have declined for 10 consecutive months. However, the magnitude could surprise to the downside – cyclical transportation demand indicators deteriorated sharply into year-end, with tonnage and truckload pricing both weakest since 2013, and the business inventory-to-sales ratio at 2009 levels. Carriers have already increased cancellations, and 2016 capex could be hurt by declining freight expenditure
* Self-help key for relative Outperform: Among OEMs, we prefer Volvo (Outperform, TP SEK 100) to CNH (Underperform, €TP 5.4), as we think it is on course to deliver on its SEK 10bn savings target with potential for upside surprise. For Daimler (Neutral, new TP €76 from €78), we see earnings downside risk on overly optimistic truck expectations. Within suppliers, cyclical risks outweigh valuation upside; we are Neutral on both SAF Holland (TP €10.8) and Deutz (TP €3.1). We remain Underperform on VW with a new TP of €85 (from €83).
Gold has started 2016 strongly on safe-haven status
Gold was fairly stable after the Fed raised rates at the December FOMC
meeting, but has outperformed other commodities this year on demand for
safe-haven assets amid market volatility. Our macro team is positive on US
growth: hence we expect gold to moderate to US$1,000/oz by end-2016.
Upgrading ANG (FCF/catalysts) to Buy; ACAA (underperformance)
and GFI (significant FX tailwinds) to Neutral; Poly down to Neutral
We upgrade ANG to Buy from Neutral on strong FCF and scope for valueaccretive
corporate action (dividend reinstatement and/or a potential split).
Acacia is upgraded to Neutral from Sell following underperformance (Buly
performance slippage). With CEO Brad Gordon taking over operations, we
believe operations could surprise to the upside (potentially visible in the
next results). We upgrade Gold Fields (a key FX beneficiary) to Neutral
from Sell and downgrade Polymetal to Neutral (from Buy) given recent
outperformance and a fair valuation.