FT : Distilleries make a spirited return as boutique booze flourishes

A taste among trendy younger drinkers for unusual and bespoke sipping spirits has fuelled a rapid rise in the number of distilleries in the UK.
The fashion for small batch crafted gins and heritage vodkas has caused the number of applications for distiller’s licences to more than treble in the past year, according to UHY Hacker Young, the national accountancy group.

Applications for the licences rose from 20 to 65 in the 2014-2015 tax year, UHY Hacker Young found, compared with just five in 2009.
UHY Hacker Young said British boutique spirits are now seen as a luxury item with correspondingly high price tags. Younger drinkers favour independent local producers over mass market drinks produced by large multinational companies, it said.
Joining established boutique distilleries such as Sipsmith and Hendricks are a host of new names with secret recipes such as Rock Rose Gin based in Caithness, Scotland, which uses local berries to flavour the drinks.
London in particular has seen a boom in micro distilleries looking to serve the hipsters of Hoxton, joining the buoyant market for craft beers that has led to a number of fledging breweries opening in recent years. UHY Hacker Young found that 30 breweries for craft beer opened in London alone in 2014.
East London Liquor Company near Bethnal Green creates and serves its spirits on site, while Hackney Wick-based Butler’s Gin makes spirits from a Victorian recipe.
The group behind Butler’s Gin also hosts tasting sessions on a speedboat in the canals of London, bringing together the trend for bespoke drinking with the search by younger drinkers for new experiences.
Other emerging brands include Little Bird, which makes small batch London Dry gin in South London, SW4 London Dry Gin from Clapham and Sacred Spirits of North London.
The growth in boutique drink producers is mirrored by the emergence of new speakeasy bars offering unusual mixed cocktails amid often lavish surroundings.
James Simmonds, partner at UHY Hacker Young, said: “Fashionable young consumers are searching for authenticity in their drinks, and they are not afraid to pay higher prices. A trend that started in the bars of Shoreditch is now becoming a real thriving growth sector across the UK, with formerly boutique brands widely available on supermarket shelves.”

>>> Fast FT : About the 'Fed will hike in September' thing...

About the 'Fed will hike in September' thing...

Lift off? Push back. Those expectations for a September rate rise are crumbling.

Bloomberg data show that the implied probability of a September hike has now dropped to 30 per cent. It was 34 per cent on Friday and 40 per cent this time last month, writes Katie Martin.

Accordingly, US government debt is in demand. The yield on the country's 10-year bonds now stands at under 2 per cent, down by 0.04 percentage points so far today. (Lower yields reflect higher prices.)

Deutsche Bank's Jim Reid notes:

We always thought something would get in the way of the Fed raising rates in September and we're perhaps seeing this now.

This week's Jackson Hole get-together of central bankers could not come at a better time.

Moyeen Islam at Barclays says:

While a full speaker schedule has not been confirmed, keynote speakers and panellists include Fed Vice Chair Fischer. Fischer in particular has always been more mindful of the global backdrop than many Fed speakers and so his comments will be especially closely watched. The market is currently pricing the first full 25bp move from the Fed by January but a dovish stance from Fischer could see that pushed out to March/April. The risk of a delay in the Fed lift-off is increasing.

(BFW) Europe’s Profit Recovery Still Intact Despite China, UBS Says

Europe’s Profit Recovery Still Intact Despite China, UBS Says
2015-08-24 07:25:30.208 GMT


By Blaise Robinson
(Bloomberg) -- UBS strategists see China as the biggest
risk, but so far impact contained to the commodity complex and
specific companies with high direct exposure.

* Europe’s corporate profit recovery is intact, driven by:
* Modest pick-up in the top line
* Biggest FX tailwind for nearly 20 years
* High operational leverage
* Base effect in the banks
* NOTE: Stoxx 600 earnings expected to grow by 6.2% in 2015,
11% in 2016, according to data compiled by Bloomberg
* On July 27: Europe’s Luxury, Miners in Spotlight as China
Growth Loses Steam

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

To contact the reporter on this story:
Blaise Robinson in Paris at +33-1-5365-5008 or
brobinson58@bloomberg.net
To contact the editor responsible for this story:
Gaurav Panchal at +44-20-3525-0511 or
gpanchal2@bloomberg.net

FT : Kurds defy Iraq to establish own oil sales



This time last year, a high-stakes dispute over a tanker filled with Iraqi Kurdish oil came to a head in a Texas court. Iraq’s central government and the Kurdistan Regional Government (KRG) wrangled over the semi-autonomous region’s right to sell its own oil and a crude carrier that had made its way to US shores.
The oil was never delivered to Texas after the KRG declined to risk a judgement in court. But fast forward 12 months and the KRG has taken further steps towards establishing a steady stream of independent oil sales.
The world’s biggest oil traders, including Vitol and Trafigura, have handed over billions of dollars to lock in supplies of Kurdish crude, which is now regularly being shipped to refineries in Israel, Italy, France and elsewhere. Both Vitol and Trafigura declined to comment.
The move has accelerated in the past three months after a crude-for-cash deal struck with Baghdad late last year effectively collapsed. The federal government withheld payments to Erbil soon after the deal began due to its own budget crisis, while accusing the Kurds of not transferring the agreed volumes of oil.
Since May, the Kurds have taken matters into their own hands and sold almost 40m barrels of oil to traders via the Turkish port of Ceyhan, all shipped via pipeline, providing Erbil with vital funds as they battle Islamist militants and shelter hundreds of thousands of refugees.
Distracted by rising insecurity, Baghdad’s reaction has so far been muted. Embroiled in its own fight with Islamic State in Iraq and the Levant (Isis), the federal government — unlike last year — has not sued and blacklisted those companies handling Kurdish oil.
Sales from Iraqi Kurdistan and northern Iraq have averaged 450,000 barrels a day since May, according to shipping data. This contributed to record Iraqi output, until flows on the Kurds’ pipeline were disrupted by sabotage earlier this month.
“Baghdad knows exactly what is going on. They are not pleased with the KRG selling its own oil, but they have plenty on their plate right now,” said one adviser to the KRG’s finance ministry. “They will pursue this, but they can’t fight every battle at the same time,” the adviser said.
Kurdistan oil 2
The KRG says it has no choice but to pursue the sales independently of Baghdad. Dwindling state funds have meant the KRG has struggled to pay its Peshmerga forces or the energy companies operating in the region. It has racked up huge debts with domestic banks and business people.
“Revenue from crude oil export through the pipeline to Ceyhan represents the Kurdistan region’s main means of survival,” the KRG’s ministry of natural resources said this week.
Although revenues from oil sales are below Kurdistan’s agreed 17 per cent share of the federal budget, it is still more than the several hundred million dollars a month that Baghdad was transferring over at the start of the year, said industry participants.
The KRG said it has received more than $1.5bn in payments from oil traders in the past two months.
Baghdad said on Thursday the KRG is in “violation of the agreement” the two sides struck late last year. In a statement on the website of the Iraqi embassy in Washington the Iraqi government argued it has transferred funds in proportion to every barrel of crude the Kurds have given to Iraq’s state oil company.
“Dissolving financial links between Baghdad and Erbil weakens national unity at a critical time,” the statement said. “Strengthening co-operation between Baghdad and provincial capitals will help stitch back together seams in society that Daesh (Isis) has been able to exploit.”
The KRG has said it still wants co-operation with Baghdad, though it has long said it defends its right to sell oil independently. Many think its oil push is a precursor to a bigger move for full political independence.
Kurdistan oil 1
“Trust levels are very low,” said Robin Mills at Dubai-based Manaar Energy Consulting. “The longer Baghdad leaves it the more problematic it will be. The Kurds will have established export routes and have a customer base dependent on their oil,” Mr Mills added.
The KRG’s independent oil sales have also come under scrutiny at home by ministers opposing the government’s methods of acquiring additional funds.
The administration has not bargained hard enough with those offering to help fund the KRG, two people familiar with the matter said.
Industry sources said the pre-pay oil sales agreements with international oil traders have included hefty discounts on each barrel compared to benchmark global prices, something the KRG denies.
A mooted attempt to launch a $500m bond will also likely require very high borrowing rates if resurrected, those familiar with the bond issue said, leading some to ask if there are not other ways to raise funds.
Meanwhile financial transparency, revenue retention and the role of middlemen has come into focus.
“Aside from a small coterie of officials close to the president, no one has any idea about how these deals are being done,” said Shwan Zulal, a Kurdish oil industry consultant. “But the KRG has very little choice. They have to raise money fast through whichever means they can.”

WSJ : China Sends South32 Even Further South

China Sends South32 Even Further South

The mining company’s poor results are mainly because of China’s troubles that have hit commodities

Rule No. 1 when a mining company reports disappointing results: Don’t do it on a day China’s stock market plunges 8%.

South32, carved out of BHP Billiton in May, can hardly be blamed for such unfortunate timing. But the market isn’t in a forgiving mood.

When it spun off from BHP, South32 could boast a somewhat more enticing portfolio of commodities and a sturdier balance sheet. Now, it even offers a cheaper valuation.

But none of that really matters with China in a funk. Back in May, South32’s basket of base metals such as aluminum, nickel and manganese looked relatively immune from the slowdown that afflicted BHP’s core iron-ore and oil assets.

Since then, though, China’s deteriorating stock market and depreciating currency have upended commodities. This sours the outlook for South32. Aluminum and alumina made up 57% of its earnings before interest, tax, depreciation and amortization in the fiscal year ended June.

That is a problem when China is the world’s biggest producer of aluminum. With a slowing economy putting jobs at risk, officials may be tempted to stimulate it by lowering electricity prices and boosting aluminum production. This supply could also be exported easier thanks to a cheaper currency. Paul Adkins at AZ China, a consultancy, already expects a 14% increase in Chinese supply this year, the main reason world supply will be 1% greater than demand.

Lower aluminum prices, down 21% since hitting a year-high in May, may only be starting to be reflected in South32’s reported results. The company also mines manganese, nickel and coal, also hurt by weak Chinese demand.

Meanwhile, South32’s results offered a reminder that it got stuck with the higher-cost assets in its separation from BHP. Though it cut costs in the year ending June, the underlying Ebitda margin it reported was only 26%. By contrast, BHP before the spinoff achieved a 43% margin for the year to December, and Rio Tinto 34% for the 12 months ending June, according to S&P Capital IQ. The cuts South32 plans this year, roughly 5% of all its operating expenses last year, may not keep pace with falling prices.

South32’s Australian shares sank Monday. Its valuation is appropriately low, with its debt-adjusted market value of 3.2 times trailing Ebitda lower than the 7.8 times averaged by six other mining companies, both diversified and those specializing in aluminum or coal.

Optimists will also note that South32’s net debt equal to just 4% of equity gives it firepower to buy other assets or return capital. Yet South32 didn’t announce share buybacks and will only pay out dividends once it reports a full year of profit.

That makes sense: only a reckless commodity company would be paying out a lot of cash right now when it needs as big a cushion as it can muster to ride out this vicious downturn. South32, with its relatively high costs, can only quickly grow profit if Chinese growth recovers and, in turn, pulls up commodity prices.

But right now, all it can do is hunker down, cut costs, and wait for the day when China doesn’t upstage it with a market meltdown.

FT : Khaled al-Asaad, Palmyra’s antiquities custodian, 1932-2015

Khaled al-Asaad, Palmyra’s antiquities custodian, 1932-2015

So highly did Khaled al-Asaad value the site he called home that he protected it above his own life.
Palmyra, the Roman city in the middle of Syria’s Tadmorean desert, was both his birthplace and his unwavering passion. In a 40-year scholarly career as director of antiquities, he oversaw its majestic ruins and the museum that holds many ancient artefacts from the area.

His working days were spent in collaborative research programmes with European archaeologists, to aid the understanding and public presentation of the site. Known as “Mr Palmyra”, he continued these endeavours after his formal retirement in 2003.
Singled out by the jihadis from the Islamic State of Iraq and the Levant who have occupied Palmyra since May, after a month of interrogation the 83-year-old academic was beheaded on Tuesday. The Isis killers hung his body in public, his severed head placed at his feet, while an attempt to justify the atrocity was scrawled on a placard tied to his waist. Asaad was a “director of idolatry” who visited Syrian generals and Iran and attended “infidel conferences”, it said.
Those are the conferences at which historians improve the understanding of the course of humankind. Our myriad beliefs are manifested in ancient buildings, applied arts and material culture; Asaad presented papers as a scholar of the inscriptions left by many of the diverse peoples who have shared Palmyra over four millennia.
As a pre-Islamic city, its builders were incapable of having defied a fundamentalist interpretation of a religious text that was yet to be written. But such antiquities hold a financial value and, rather than destroying portable works of art, Isis increasingly prefers to sell them to hunters of illicit trophies — irrespective of whether this itself constitutes idol worship.
According to Samir Abdulac, vice-president of Icomos France, part of the global grouping that seeks to preserve historic sites, “When the troops came to Palmyra, Daesh [another name for Isis] threatened to kill antiquities employees if they did not reveal the location of its hidden ‘treasures’.”
Palmyra is among the greatest surviving sites of Roman civilisation. Peter Frankopan, author of The Silk Roads: A New History of the World calls Palmyra “the Venice of the Sands”, once a hub for the caravans of traders who journeyed between Europe and Asia. The grand desert city was sacked in 1400 by the army of Timur, “Sword of Islam”, who destroyed many of the Roman buildings. A village continued amid the ruins through the Ottoman era.

Its importance was galvanised in 1753 when the fine engravings of views and surveys by Giovanni Battista Borra were published in Robert Wood’s The Ruins of Palmyra . This pioneering volume of “the greatest quantity of ruins we had ever seen” came at the dawn of neoclassicism in Europe, when a closer understanding of ancient architecture informed a more disciplined response to the past.
Wood’s study advanced empathy for varied cultures, and in 1769 he wrote “An Essay on the Original Genius and Writings of Homer”, which argued that true knowledge comes through evaluating one’s own society in relation to others. As Mr Frankopan says of Asaad’s fate in Palmyra at the hands of Isis: “The murder of its benign guardian is a barbaric insult to our common identity as human beings.”
Although Asaad was a member of Syria’s ruling Ba’ath party, this was an affiliation that had been nigh obligatory as a state employee. His own identity was bound up not with the regime in Damascus (which built a notorious prison on Palmyra’s doorstep) but with his home town’s history.
Khaled al-Asaad was born in 1932 during the French mandate that followed the fall of the Ottoman Empire and ran from 1923-46. As the modern city of Tadmur rose alongside, archaeologists began to uncover the historic fabric. He took up his post aged 31.
As Asaad became a father to a daughter and two sons — one of whom, Walid, succeeded him in his job — he oversaw much of the excavation and restoration work that resulted in what can be seen, were it not for the current occupation by Isis, by all who visit the Unesco world heritage site.
Maamoun Abdulkarim, head of Syria’s directorate general of antiquities and museums, adds: “The continued presence of these criminals in this city is a curse and bad omen [on Palmyra] and every column and every archaeological piece in it.”

>>> Europe : Brokers Upgrades & DOwngrades - 24th of August 2015

>>> Up
*FRAPORT RAISED TO OUTPERFORM AT RBC CAPITAL
*GROUP FIVE RAISED TO NEUTRAL AT MACQUARIE
*HENKEL RAISED TO NEUTRAL VS SELL AT GOLDMAN
*NEMETSCHEK RAISED TO BUY VS HOLD AT BERENBERG
*OTE RAISED TO BUY VS NEUTRAL AT GOLDMAN
*SHELL RAISED TO BUY VS HOLD AT JEFFERIES
*SYDBANK RAISED TO BUY AT NORDEA
*VEOLIA ENVIRONNEMENT RAISED TO BUY VS NEUTRAL AT GOLDMAN (note attached) {NSN NTKO5D6JIJUR<Go>}
*WOOD GROUP RAISED TO BUY VS HOLD AT NUMIS

>>> Down
*BIG YELLOW CUT TO HOLD VS BUY AT JEFFERIES
*BREWIN DOLPHIN CUT TO HOLD VS BUY AT LIBERUM
*BRITISH LAND CUT TO UNDERPERFORM AT JEFFERIES
*CAPCO CUT TO UNDERPERFORM AT JEFFERIES
*DERWENT LONDON CUT TO HOLD VS BUY AT JEFFERIES
*GRAINGER CUT TO HOLD VS BUY AT JEFFERIES
*HAMMERSON CUT TO UNDERPERFORM VS HOLD AT JEFFERIES
*INTU CUT TO UNDERPERFORM VS HOLD AT JEFFERIES
*KUONI REISEN CUT TO SELL VS NEUTRAL AT CITI
*LAND SECURITIES CUT TO HOLD VS BUY AT JEFFERIES
*LINDT & SPRUNGLI ORD. CUT TO HOLD VS BUY AT BERENBERG
*LONDONMETRIC CUT TO HOLD VS BUY AT JEFFERIES
*SAFESTORE CUT TO HOLD VS BUY AT JEFFERIES
*SODEXO CUT TO NEUTRAL VS BUY AT GOLDMAN
*UNITE CUT TO UNDERPERFORM AT JEFFERIES
*WORKSPACE CUT TO HOLD VS BUY AT JEFFERIES

>>> PT Change
*BMW TP CUT FROM €94 to €80 AT CREDIT SUISSE (Note Attached)
*FCA TP CUT FROM €19.2 to €18.9 AT CREDIT SUISSE
*DAIMLER TP CUT FROM €85 to €79 AT CREDIT SUISSE
*PEUGEOT TP CUT FROM €20.2 to €15.3 AT CREDIT SUISSE
*RENAULT TP CUT FROM €102 to €92 AT CREDIT SUISSE
*VOLKSWAGEN TP CUT FROM €183 to €169 AT CREDIT SUISSE


>>> Initiation
*BANCA SISTEMA RATED NEW BUY AT JEFFERIES; PT EU5.63
*FLOW TRADERS RATED NEW BUY AT UBS, PT EU45
*LAFARGEHOLCIM REINSTATED OUTPERFORM AT CREDIT SUISSE, PT CHF80 (Note Attached)
*ORDINA RESUMED HOLD AT ING, PT EU1

>>> Call

>>> What to look at today - 24th of August 2015

As a reminder Last Week Performance :
Dow-5.82% S&P-5.77% Nasdaq-6.78% Russell-4.61% EuroStoxx-6.98% FTSE -5.54% CAC-6.57% Dax-7.83% Ibex-5.58% MIB-6.46% SMI-5.86% Nikkei -5.28% Hang Seng-6.59% Shanghai-11.54%

Risk aversion flows have shifted into an even higher gear as worries over Chinese slowdown, FOMC policy uncertainty, and disinflationary macro environment continue to weigh on sentiment. After last week's 11.5% drop in Shanghai Composite, markets were primed for a more aggressive easing response by the PBoC. Instead, regulators announced that China's national pension fund ($548B net assets) would be able to invest in the stock market. Analysts suggest this may be effective in expanding investor participation and perhaps supporting the local stock market in the longer term, but offers little in terms of immediate boost to lending. There was some speculation that the PBOC is planning to cut RRR ratio by 50bps some time soon, releasing CNY678B into system, but those expectations did not materialize in the immediate term. Shanghai Composite is now negative on the year, falling another 8.5% going into the morning break. Risk off flows also boosted US treasuries, JPY, and Euro at the expense of the USD, commodities, commodity FX, and global stocks. USD/JPY was down some 120pips below 120.80, EUR/USD rose 130pips toward 1.15, AUD/USD fell over 100pips to 6-month low of 0.72, and the yield on US 10-year fell to 4-month lows below 2%. Oil was down another 3% around $39/brl, while US equity futures prints were especially worrisome - S&Ps are down 50pts or 2.5%, Dow Industrials down 415pts or 2.5%, and Nasdaq futures down 3.9% below 4,040. Ahead of the upcoming Jackson Hole summit, there is also more uncertainty and noise around the timing of the Fed liftoff as it relates to the latest spike in volatility. Former US Treasury Sec Summers said raising rates in the near term would be a serious error and "threaten all three of the Fed's major objectives - price stability, full employment and financial stability." Separately, Japan PM Abe's remarks in Parliament downplayed recent speculation of his rift with BOJ Gov Kuroda, as he noted he trusts Kuroda on monetary policy.

Nikkei -4.63% Hang Seng -4.92% Shanghai Comp : -7.80%

Eur$ 1.1447 JPY 121.05 CNY 6.3963 GBP 1.5671 RUB $70.5468 EURCHF 1.0795 WTI $39.33 (-2.77%)

S&P -2.5% EuroStoxx-3.25% Dax -3.2% SMI -3.25%

Macro :
- China’s Central Bank Seen Cutting Lenders’ Reserve Ratios: WSJ
- WTI Crude Plunges Below $40 1st Time Since 2009 Amid Supply Glut
- German Pension Subsidies to Reach Almost EU100b in 2019: Bild
- De Guindos Says Spanish Economy to Grow About 1% in 3Q: EFE
- Donald Kohn Says Fed Will Be Cautious in Rate Decision: El Pais

Keep an eye on :
- AV/ LN : Aviva Could Grow 20% After Long Makeover - Barron's
- BOL FP : Bollore Signs EU1B Rail Contract With Niger, Benin, Echos Says
- BPTY LN : GVC prepared to abandon Bwin takeover attempt
- BT/ LN : Verizon, AT&T Dominance Hurts Competition, BT Says: FT (Earlier)
- CLSO GY : Claas Sees Stable 2015 Sales, Bucking Slower Market: HB
- CON GY : Bosch, Continental Mull Here Mapping Stake: Automobilwoche
- DCEL US : Digicel expected to raise USD 1.5bn in NYSE listing
- ENEL IM : Enel Starts Exclusive Talks With EPH for Slovenske Elektrarne
- FNC IM : Finmeccanica CEO Targets Profit From Ordinary Activities, Focus on Aerospace, Defense, Security
- GKN LN : GKN considers sale of Land Systems unit -Sunday Times
- IFX GY : Infineon May Consider a ‘Fantastic’ Takeover Offer: Handelsblatt
- IFX GY : Infineon could make bolt-on buys - Handelsblatt
- NOK1V FH : Bosch, Continental Mull Here Mapping Stake: Automobilwoche
- NOVN VX : GSK sells ofatumumab for auto-immune indications to Novartis for up to $1bn plus royalties, $300m payable at closing, $200m payable subject to the start of a phase III study in relapsing remitting multiple sclerosis by Novartis; further contingent payments of up to $534m payable on the achievement of certain other development milestones, 12% Royalties.
- ROG VX : Barrons article on Cancer, mentioning Roche as one of the leader on new cancer treatment.
- RDSA NA : Iran Says Shell to Pay $2.3B Oil Debt When Sanctions End: Shana
- RWE GY : German Utilities to Shut 9 More Power Plants Than Planned: Bild
- SUN SW : Sulzer board refrains from issuing recommendation on mandatory offer by Renova
- TSCO LN : Tesco sale value could suffer from weakened Korean won
- TSCO LN : Goldman Drops Bid for Tesco’s Korea Unit: the Bell, 3 Investor Groups to Bid for Tesco’s Korea Unit: Chosun
- WOS LN : Wolseley Chief Ian Meakins Plans to Retire in 2016: Times
- ZURN VX : Zurich Insurance Seeks More Time for GBP5b RSA Offer: FT (Yday)