FT : Suppliers feel the squeeze as Paris air show kicks off

Suppliers to the aerospace industry are being told to cut their prices or lose business as big manufacturers seek savings to help push their new aircraft programmes into profit.
Boeing is demanding “significant” savings from 2017, according to one company, after negotiating a 15 per cent reduction over five years from 2012. This was likely to be a process of continuing efficiency rather than a one-off target, another said at the Le Bourget air show in Paris, which starts on Monday. Airbus recently called on GKN, one its main suppliers, for a 10 per cent cut in prices.

Prime suppliers are pushing that pressure down the supply chain, with their own demands for new investment and cost reductions to meet the accelerating pace of aircraft production being demanded by Boeing and Airbus.
The two companies are set to produce some 1,400 aircraft this year, accelerating to 1,800 by 2018, to meet rapidly increasing air travel. By 2035 it is estimated that the number of people flying will more than double from roughly 3bn to 7bn.
David Gitlin, president of aerospace systems at UTC, one of the leading suppliers to aircraft manufacturers with annual sales of $14bn, said he was seeking to cut the number of his own suppliers by a quarter to less than 3,000.
“The demands are very significant,” he said. “Having an effective supply chain is among our most important priorities. Our job is to make sure that we. consolidate that sub-tier into a few suppliers who can support that ramp up.”
The heat is being turned up at Le Bourget on the outskirts of Paris, host to the world’s largest air show, which kicks off on Monday. Held every two years, Paris alternates with Farnborough air show in the UK as a venue for the industry to showcase its newest products. Some 2,200 exhibitors are expected to set out their stalls, and more than 139,000 trade visitors will attend.
Bombardier, the Canadian group, unveiled its long-awaited CSeries jet at a pre-show event on Sunday. The aircraft is pitched at a gap in the market between smaller regional jets and the popular single aisles made by Boeing and Airbus. However it is running several years late and over budget, resulting in a profit warning and management reshuffle earlier this year.
While the group said on Sunday that the aircraft was exceeding expectations, it is struggling to find new customers and this week’s display is aimed at drumming up interest. Meanwhile Pratt & Whitney, the US engine maker that is supplying its new generation geared turbofan engine to the CSeries, said it was confident of reaching 7,000 orders by the end of the air show, up from 6,450.
Airbus has said it will announce “hundreds of new orders” but it will also use the show to try to restore the reputation of its beleaguered A400M military transport carrier. One crashed several weeks ago in a field outside Seville, leaving four crew members dead. The Atlas cargo and troop carrier will take part in the flying display that crowns the air show, performing the same routine that it has been demonstrating at air shows since 2010, Airbus has said. It will be flown by two test pilots, Nacho Lombo and Tony Flynn, every day from Monday to Friday.
Though the show is mainly a civil event, the prospect of a revival in military spending after years of squeezed budgets around the world has turned the spotlight on defence companies. The US industry is expected to turn out in force, having eschewed the event in 2013 when automatic cuts to the defence budget curtailed corporate ambitions. The US presence will be second only to the French with more than 300 trade exhibitors.

NY Post : $141M sculpture may ‘point’ to top

$141M sculpture may ‘point’ to top

This is the art bubble of the millennium.
There are new signs emerging of a massive speculation that could pop in the secretive world of rare paintings, prized sculptures, fine wines and expensive collectibles.
In what some view as another warning of this new frothy top, tongues were wagging on Wall Street with the record $141 million paid at Christie’s on May 11 by hedge-fund tycoon Steven Cohen, the “anonymous buyer” for Alberto Giacometti’s “Man Pointing,” as revealed last week by The Post’s Emily Smith. It’s the world’s most expensive sculpture.
“The high end of the art market in particular has seen significant price increases over the past few years, which in some ways corresponded to the vast increases for the ultra-high net-worth individuals around the world,” Jonathan Yee, an analyst at artnet, an international art data provider.

Yee adds this sobering note: “While it is impossible to predict the timing of corrections, it is reasonable to expect that the art market will one day experience a correction again.”
According to an artnet study, higher-end art has appreciated 200 percent since 2006, while stocks indices have risen 150 percent.
Cohen, founder of Point72 Asset Management in Greenwich, Conn., can afford such princely trophies. He’s worth an estimated $11.4 billion. Cohen previously picked up Giacometti’s 1950 sculpture
“The Chariot” for $101 million at a Sotheby’s auction.
While Cohen is described as a sharp-eyed art and financial investor, some analysts also see the sale as trouble, fearing that once the financial marts inevitably retreat, the global art market will come crashing down from lofty heights, too.
The correlations between the art and the markets are eerie, closely tracking each other, often times all the way up — and then right back down as the artnet chart shows (right).
This could be much more than your plain-vanilla 10 percent to 15 percent “correction,” say other prognosticators who spot negative signals in today’s stock market. Prices could conceivably drop as much as 50 percent or more on some items, some analysts think.
“A bubble has been forming in the art market for quite some time,” said art collector Christopher Tsai, who runs his own hedge fund in New York. “And when liquidity dries up in the art market, it’s gone, so it’s a dangerous area in which to speculate over a long period.”
Tsai, son of the late Chinese-American billionaire Gerald Tsai, told The Post he hasn’t bought any pieces for many months despite an average of 10 approaches weekly by willing sellers.
Christopher Tsai’s collection includes 50 pieces by Chinese contemporary artist Ai Weiwei. “They want to sell me works, pricing 25 percent to 50 percent more than I would [typically] pay,” Tsai said. “I just sit back, and wait.”
But there are plenty of wealthy buyers out there. Many are handing over seven- to eight-figure sums for topline artists, according to Gary Castle, who guides the super-rich on art transactions as a principal at New York-based accountancy Anchin, Block & Anchin.
Castle says the real blow from the next financial upheaval in art will weigh most heavily on the less affluent. “The average buyer spending $50,000 to $100,000 on art is much more subject to variations in the economy,” he said. “The number of people who are able to spend that amount of money is going to be reduced.”

NY Post : A tax increase on hedge funds won’t help the poor

A tax increase on hedge funds won’t help the poor

Democratic politicians have become delusional, disingenuous or just flat-out dishonest with their Pinocchio-like tale: That an increase in taxes on hedge funds and private-equity firms would help fight income and social inequality.
First off, let’s set the record straight — since the numbers are all over the place — using President Obama’s own figures from the Congressional Budget Office. The entire tax gain from raising the capital gains rate on hedge funds, which currently ranges from 15 percent to 39.5 percent depending on how long a position is held, might over 10 years raise $20 billion on a Federal budget of $3.34 trillion.
Compare that with the lobbying group the Motion Picture Association of America, which over the last 85 years has been quite successful getting tax credits for films.
Why is no candidate asking for Hollywood to give back tax breaks or millions in salary to fight income and social inequality?
In New York, there is the Empire State Film Production Tax Credit, enacted in 2004, that gives a 30 percent tax break to Hollywood producers, movie studios and stars to a tune of $420 million annually.
In California, the credit is 20 percent, with $330 million annually available.
The MPAA is run by the powerful and well-connected former senator Chris Dodd of Connecticut. Dodd served in Washington for 36 years and gets his constituents fantastic tax breaks.
The hedge fund industry has no such powerful lobbying arm or a heavyweight former senator to lead an aggressive organization. Nor does it get any tax breaks or credits.
Even Mayor de Blasio, who hasn’t announced any intentions to make a run at the White House in 2016, is lecturing people in other states about income inequality throughout America.
The pols lambasting hedge funds don’t seem to know about the hedgie-founded Robin Hood Foundation, a nonpartisan, nonpolitical entity that for the last 25 years has raised $2 billion.
Its mission is “to provide hundreds of the most effective soup kitchens, homeless shelters, schools, job-training programs and other vital services that give New York’s neediest citizens the tools they need to build better lives.” They give full college scholarships, too, repayment not necessary.
These hedge-fund managers all on their own have made a difference in thousands of the lives of underprivileged New Yorkers, while the politicians in charge of New York have failed.

>>> What to look at this Week end - 13th & 14th of June 2015

Weekly Performance
Dow +0.28% S&P+0.06% Nasdaq-0.34% Russell+0.32% EuroStoxx-0.21% Cac -0.40% Dax -0.01% Ibex -0.28% MIB+0.13% FTSE -0.29% Nikkei-0.26% Hang Seng +0.07% shanghai+2.85%
Hopes for a final Greece deal rose and then slid back again this week, talking equities, FX and bonds along for the ride. The feeling that a deal was imminent plus solid advanced retail sales and job openings data in the US generated positive sentiment for most of the week. But hopes for a Greek deal were dashed on Thursday as the two sides couldn't overcome the final political roadblocks and negotiators left Brussels to regroup. Chinese stocks continued to run up, walking the Goldie Locks path between good-enough data and hopes for more stimulus efforts. Central banks in South Korea and New Zealand threw more logs on the fire with fresh rate cuts. Bonds remained volatile all week, with most benchmark government bond yields surging to YTD highs on Wednesday. For the week, the DJIA added 0.3%, the S&P500 edged up 0.1%, and the Nasdaq fell 0.3%.


Macro :
- EU Says Greece Talks End With No Deal, ‘Significant Gaps’: AFP
- Gross Suggests China Short; Cohen Likes GM: Barron’s Roundtable
- S&P warns of UK downgrade amid ‘Brexit’ fears - FT http://on.ft.com/1JMieOi
- Eurozone Raises Specter of Default as Pressure Mounts in Greek Bailout Tal - WSJ http://on.wsj.com/1cSIZC2
- Tsipras seeks debt relief as Greeks take offer to Brussels - Reuters http://reut.rs/1L5HkVC
- London Fund Managers May Leave If Britain Exits EU: Times http://thetim.es/1HFpYjl
- Greece Can't Stay in Eurozone at All Costs, Says BDI President http://bit.ly/1TkZ7xu
- Former Greek Rep to IMF Panaritis Says Country ‘Close to a Deal’
- U.K. Watchdog Won’t Propose Break Up of Big Six Energy Cos: Mail

Keep an eye on :
- AFR LN : Afren: Thomas Named COO, Comyn to Resign as Finance Director
- AIR FP : Boeing Said Near Deal to Sell 100 737 Max to AerCap: Reuters
- AIR FP : Airbus Seeks Multi-Million-Pound British Taxpayer Loan: Times
- AAL LN : Anglo American Mulls Leaving London HQ in Bid to Cut Cost: Times
- AVV LN : Aveva Working With Lazard to Evaluate Takeover Options: Times
- AV/ LN : Aviva Starts Sale of GBP2.5 Billion of Property Loans: Times
- CS FP : AXA CEO Sees Risks in Both Asia and Europe, FuW Reports
- BMW GY : BMW Made 2.2 Million Cars Susceptible to Hacking, Spiegel Says
- ACA FP : Credit Agricole Won’t Exit Switzerland, Hocher Tells Le Temps
- DAI GY : Daimler Produced 40,000 Vans That Need New Airbags: NHTSA
- AM FP : Dassault CEO ’Convinced’ 4th Rafale Contract Coming This Yr: FT
- DFT GY : Deutsche Forfait: Up to 6.8m Shrs to Be Issued, Price EU1.30
- FGR FP : Eiffage Employee Group Dissolves, Distributes Shrs to Holders
- ERICB SS : Ericsson CEO does not rule out M&A - Helsingin Sanomat
- FCA IM : Fiat Chrysler Unions Urge Meeting With Co. on M&A Plan
- FM CN / FQM LN : First Quantum Minerals a takeover candidate - Ottawa Citizen
- GKP LN : Ex-U.K. Defense Chief Guthrie to Quit Gulf Keystone Board: Sky
- HEN3 GY : Henkel Doesn’t Need Deals to Meet Growth Goals, CEO Tells Welt
- LHA GY : Lufthansa to Monetize Passenger Data to Boost Valuation: FAS
- MEO GY : Metro Said to Prefer Kaufhof Sale to Hudson’s Bay: Der Spiegel
- NKE US : U.S. Probes Nike Payments Under Brazil Deal - WSJ http://on.wsj.com/1IRxusW
- NOVN VX : Novartis Blood-Cancer Drug Achieves Disease Control in Majority
- REE SM : Red Electrica to Name Lasala CEO; Folgado to Remain Chairman
- SIK VX : Sika’s Haelg Calls Zug Court Ruling ‘Milestone:’ SonntagsZeitung
- SoundClound IPO : SoundCloud Owner German Startups Group Preparing IPO: FAS
- STL NO : Statoil to Start More Cost Cutting Measures in Autumn: Aftenblad
- UBER IPO : Uber Hires Former French Government Advisor, AFP Reports
- UBSN VX : UBS to Invest Hundreds of Millions More in Restructuring: SZ
- UBSN VX : UBS Reports Successful Implementation of UBS Switzerland AG
- VOW3 GY : Volkswagen Group January-May Sales Reach 4.2 Million Units

(BFW) EU Commission Says Greek Brussels Talks End Without Success

BFW 06/14 17:11 *EU: GREECE PROPOSALS REMAIN `INCOMPLETE'
BFW 06/14 17:11 *EU: GAP BETWEEN PARTIES IS ABOUT 2B EUROS ON ANNUAL BASIS
BFW 06/14 17:11 *EU: GAP BETWEEN PARTIES `IN THE ORDER' OF 0.5%-1% OF GDP
BFW 06/14 17:10 *EU: `THERE REMAINS A SIGNIFICANT GAP' BETWEEN PARTIES
BFW 06/14 17:08 *JUNCKER'S `LAST ATTEMPT' TO SEEK ACCORD MADE `SOME PROGRESS'
BFW 06/14 17:08 *EU: FURTHER GREECE DISCUSSION WILL NOW MOVE TO EUROGROUP
BFW 06/14 17:07 *EU: BRUSSELS TALKS BETWEEN GREECE, CREDITORS DID NOT SUCCEED
BFW 06/14 17:07 *EUROPEAN COMMISSION GIVES DETAILS IN TEXT MESSAGE
EU Commission Says Greek Brussels Talks End Without Success
2015-06-14 17:15:23.415 GMT


By Jonathan Stearns
(Bloomberg) -- “President Juncker made a last attempt this
weekend to find, via personal representatives and in close
liaison with commission, ECB and IMF experts, a solution with
Prime Minister Tsipras that would allow for a positive
assessment in time for the Eurogroup on Thursday, June 18,” EU
Commission says in text message.

* “While some progress was made, the talks did not succeed as
there remains a significant gap between the plans of the
Greek authorities and the joint requirements of commission,
ECB and IMF in the order of 0.5-1 percentage of GDP, or the
equivalent of up to EU2b of permanent fiscal measures on an
annual basis”
* “In addition, the Greek proposals remain incomplete. On
this basis, further discussion will now have to take place
in the Eurogroup”



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(BFW) EU Says Greece Talks End With No Deal, ‘Significant Gaps’: AFP

BFW 06/14 17:05 *EU SAYS GREECE TALKS END WITH NO DEAL, `SIGNIFICANT GAPS': AFP
EU Says Greece Talks End With No Deal, ‘Significant Gaps’: AFP
2015-06-14 17:08:15.702 GMT


By Erin Zlomek
(Bloomberg) --


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>>> Aveva engages Lazard to explore options

Aveva engages Lazard to explore options 

Aveva, the London-listed engineering-software company, has appointed Lazard bankers to explore strategic options for the business, The Sunday Times reported. An insider cited in the report said Lazard started working with the company on potential takeover options four months ago.

Connecticut-based General Electric, Emerson of Missouri and the French group Schneider Electric are considering bidding for Aveva, and Massachusetts-based Aspen Technology is believed also to be looking at making an offer, the report said. According to insiders cited in the piece, a number of Aveva investors have discussed a potential merger with Aspen.

Aspen is considering a tax-inversion transaction which would involve relocating the company’s headquarters to the UK to minimise tax charges, according to City sources cited in the report.

Sources said Aveva boss Richard London is aware of Aspen and Schneider’s interest, although he has stated that no formal approach has been received, the item reported. The same sources said the chief executive is not expected to instigate a formal auction and is not seeking a takeover by the highest bidder but is more likely to opt for a strategic deal with a competitor.

Neither Lazard nor Aveva wished to comment, the report said.

Aveva has a market capitalisation of GBP 1.2bn (USD 1.9bn) on the London Stock Exchange.

Sunday Times

(BFW) U.K. Watchdog Won’t Propose Break Up of Big Six Energy Cos: Mail

BN 06/14 06:37 *U.K.'S CMA WON'T SEEK BREAKUP OF BIG SIX ENERGY FIRMS: MAIL
U.K. Watchdog Won’t Propose Break Up of Big Six Energy Cos: Mail
2015-06-14 08:47:39.477 GMT


By Suzi Ring
(Bloomberg) -- Competition and Markets Authority won’t
propose a break up of the “big six” energy firms in a
provisional report to be published this month, the Mail on
Sunday reports, citing unidentified people.

* CMA will stick to original findings that smaller firms
aren’t disadvantaged by big firms
* CMA will call for action to limit pricing differences
between variable and fixed-price tariffs; agency found
variable tariffs much more expensive
* CMA expected to recommend more flexibility on “four
tariffs” program, which restricts companies to offering no
more than four tariffs for each type of fuel
* NOTE: The so-called Big Six utilities in the U.K. are
Centrica, SSE, local units of Electricite de France, RWE,
Iberdrola, E.ON


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aaarons@bloomberg.net
Adveith Nair, Shaji Mathew

>>> First Quantum Minerals a takeover candidate

First Quantum Minerals a takeover candidate
First Quantum Minerals (TSE:FM), a Vancouver, British Columbia-based metals and mining company, could find itself on the receiving end of takeover attention, reported The Ottawa Citizen on 13 June.

Sanford C. Bernstein & Co. analyst Paul Gait said in a report from the newspaper's Financial Post section that majors such as UK- and Australia-listed BHP Billiton and UK- and Australia-listed Rio Tinto could look to acquire First Quantum.

According to the analyst, the two potential buyers could pursue growth via acquisitions rather than by "building projects" from the ground up.

First Quantum's market cap is CAD 10.49bn (USD 8.514bn).

Ottawa Citizen

FT : Greece locked in ‘last try’ talks with bailout negotiators

Greece locked in ‘last try’ talks with bailout negotiators

Talks between Athens and its international bailout creditors were expected to resume late on Sunday after Greek government officials were told to submit a final list of economic reforms in order to secure €7.2bn in desperately needed rescue aid.
The request came in a meeting in Brussels on Saturday between Nikos Pappas, aide-de-camp to Alexis Tsipras, Greek prime minister, and Martin Selmayr, chief of staff to Jean-Claude Juncker, the European Commission president who has played a central role in trying to broker an 11th-hour deal.

A spokesman for Mr Juncker would only say that talks would continue on Sunday. But others briefed on the talks said the meeting had been “difficult” and that senior eurozone officials were concerned whether a deal could be reached in time for Greece to access the aid before its bailout expires at the end of the month.
“Positions are still far apart,” said one EU diplomat. “It’s not certain there will be an outcome.”
Another senior eurozone official said the Greek team returned to Brussels on Saturday without new proposals and that Sunday’s evening session would be a “last try.”
“Greek movement [is] not discernible,” said the official. “I think they do not want a solution.”
Mr Pappas, the Greek minister of state and a longtime political ally of Mr Tsipras’, took to Twitter to push for politicians to become engaged in the negotiations rather than technocrats who normally hammer out such agreements. “A political solution is needed to permanently exit from the crisis,” Mr Pappas wrote.
Eurozone officials are pressing for a deal on a full list of economic reforms to be reached early this week so that it can be presented to a meeting of eurozone finance ministers at their regularly scheduled monthly gathering on Thursday.

Without approval of the eurogroup at that meeting, officials believe there will not be enough time for national parliaments to approve the bailout aid before the programme expires on June 30.
“A credible proposal needs to be tabled by the Greeks in the next 24 or so hours,” said Mujtaba Rahman, head of European analysis at the Eurasia Group risk consultancy. “Otherwise it’s looking like game over for Athens.”
Already, officials believe any deal will have to be accompanied by an extension of the current programme, since there is no longer enough time for Greece to legislate and implement the agreed reforms before the end of the EU bailout. Under an extension, subtranches would likely be paid out over the course of July in order for Athens to meet a €3.5bn bond redemption due on July 20.

In a sign Athens is aware it will not get additional funding before the end of the month, the government last week ordered all local and municipal governments to deposit surplus funds to the Greek central bank. Greece owes €1.5bn to the International Monetary Fund on June 30 and it remains unclear whether Athens has the funds to make the payment.
Before sending his negotiating team back to Brussels, Mr Tsipras told his close advisers on Friday that he needed a deal that could be accepted by comfortable majority in parliament with the backing of the Greek people.

“If we get a viable agreement, no matter how tough the compromise, we will put up with it since our only aim is to get out of the crisis and the humiliating [bailout],” Mr Tsipras was quoted as saying. “But if Europe wants a split and the humiliation to continue, we’ll take the decision to say no, a big no, and we’ll fight for the dignity of our people and our national sovereignty.”
For nearly two weeks, creditors have been asking Athens to come back with a counterproposal that would fit within a broad programme outline that sets a gradually increasing series of budget surpluses.
Under the creditors’ plan, Athens would need to find measures to hit a primary budget surplus — revenues less expenses when interest on sovereign debt is not counted — of 1 per cent of gross domestic product this year, rising to 2 per cent next year and 3 per cent in 2017. By 2018, the primary surplus would need to hit 3.5 per cent.
Athens has objected to pension cuts and energy tax increases to hit those targets, and has countered with a slower path to the 3.5 per cent target in 2018: with 0.75 per cent this year, 1.75 per cent next year, and 2.5 per cent in 2017.
“1.2 per cent was utterly feasible in late March,” Yanis Varoufakis, the Greek finance minister, wrote on Twitter over the weekend of this year’s target. “1 per cent infeasible after three more months of induced asphyxiation.”