FT: David Cameron steps into Tullow Oil’s row with Gabon government



David Cameron steps into Tullow Oil’s row with Gabon government


David Cameron has intervened in an escalating row between UK oil companies and the government of Gabon after the petroleum ministry expropriated assets from the explorer Tullow Oil and threatened Royal Dutch Shell with a fine for non-payment of back taxes.
The prime minister has written to the president of the African country, Ali Bongo Ondimba, after interventions from the Foreign and Commonwealth Office over the past year failed to resolve the dispute.

In a letter promising aid for the Gabonese president’s battle against the poachers decimating the country’s unrivalled population of forest elephants — a campaign supported by Prince William — Mr Cameron stresses the importance of Britain’s relationship with the resource-rich country. The prime minister says he hopes the “companies concerned and the Gabonese government can come to an agreement” soon.
The UK government has encouraged investment in Gabon since President Bongo was elected to succeed his father, Omar Bongo, in 2009. Though his election was disputed and sparked protests, Mr Bongo initially won international praise for promising to eradicate the corruption that had become a way of life under his father; Omar Bongo was one of Africa’s richest men and his hold on power lasted 42 years. Gabon, with just 1.7m people, was ranked the UK’s 94th largest import partner in 2013, up from 143rd in 2012. Foreign direct investment in 2013 was $856m.
But recent actions by the oil ministry have raised concerns in London over the climate for business in Gabon, in particular as the country seeks investment to develop offshore reserves.
Early last year the oil minister, Etienne Ngoubou, locked Tullow Oil out of negotiations on the renewal of a licence on the onshore Onal field, in effect expropriating the UK company’s 7.5 per cent stake. In an attempt to get its stake back, the oil company has twice offered better terms, even reaching an agreement in principle with the oil minister. However, ministers are yet to give their final approval.
“We have been assured by the government that our contract will be honoured,” Tullow told the Financial Times. “However, we are very concerned by the delay. Sanctity of contract is always vital but it is even more important at this critical and difficult time for the oil and gas sector to ensure future investment.”
Aidan Heavey, Tullow’s chief executive, has in the past made donations to the Conservative party. But the company said it had not asked Mr Cameron to write to Mr Bongo.
Mr Ngoubou revealed this month that he was considering levying penalties of tens of millions of dollars against Royal Dutch Shell for back taxes. Shell declined to comment. Gabon’s oil ministry failed to respond to requests for a comment.
The dispute comes as President Bongo faces a difficult election next year, with protests and strikes paralysing the economy in recent months. Revenues from Gabon’s maturing onshore oilfields were declining even before the recent fall in the oil price, and its budget deficit is widening.
An FCO official said the UK would support British businesses and hinted that the oil ministry’s actions could damage the country’s investment potential. “Foreign investment in sectors such as hydrocarbons and the extractive industries can play a vital role in boosting the development of countries such as Gabon, lifting people out of poverty. We seek to encourage governments to improve the ease of doing business, to promote greater transparency and to boost the attractiveness of markets to investment by UK businesses.”

>>> What to look at this week end - 18th & 19th of April 2015

European and Chinese equity markets saw fresh record highs this week, while US equities approached record highs again. However Greek turmoil, the poor US March retail sales report and China's slate of weak March data eventually pulled markets lower. The China Securities Regulatory Commission helped vaporize a large chunck of April's gains by banning certain forms of margin trading. ECB QE and the Greece situation pulled the German 10-year yield down to all-time lows around 0.049% on Friday, while peripheral yields backed up, led by Greece. Oil prices broke out to the highs of the year on speculative bets we may have seen the peak US production figures, while the Dollar gave back some notable ground as traders unwound a portion of the recent relative strength trades tied to a more favorable US economic outlook. For the week, the DJIA lost 1.3%, the S&P500 dropped 1% and the Nasdaq was down 1.3%.

Macro :
- Putin To Give Athens €5 Billion For Advance Gas Pipeline Fees - Spiegel {http://bit.ly/1cLXXdu}
- PBOC’s Zhou Says Slower Growth More Sustainable, Xinhua Says
- Dijsselbloem Says Germany Has Need to Invest in Infrastructure
- BOJ Gov Kuroda: Markets may be surprised by higher interest rates if Japan's 2% inflation target is achieved in 2016

Keep an eye on :
- DBK GY : FCA Says Deutsche Bank ‘Uncooperative’ in Libor Review: Spiegel
- DBK GY : Deutsche Bank to spin off Postbank - FT
- FUM1V FH : Boskalis to Appeal Fugro Protection Measure Ruling: ANP
- IHG LN : Intercontinental Hotels rumoured to be eyed by US predator
- ILD FP : Iliad’s Niel Won’t Cut Prices for Orange Switzerland: NZZ
- UG FP : Peugeot to Build Global Small-Car Platform With China’s Dongfeng
- SIK VX : Sika Board Offers to Buy Burkard Family Shares for CHF2.25b: SZ {http://reut.rs/1aIcbut<Go>}
- TSCO LN : Tesco Said Set to Report Annual Loss of Up to GBP5b: FT

- DG FP : Vinci Interested in Nice, Lyon Airports, CEO Tells Investir
- VOW3 GY : VW Says Winterkorn Won’t Travel to Shanghai Show Due to Illness, Porsche Family Doesn’t Seek to Oust Piech From VW Board: Welt

>>> Barron's summary: Cautious on SNDK, CRM, IBM, AMD, SNE; Positive on

Barron's summary 

Cover story: The economy is growing on several fronts, but real estate is showing signs of a slowdown; Strong job growth, falling unemployment, ultralow mortgage rates, and encouraging consumer confidence figures havent been enough to boost monthly sales of existing homes, a sign the housing market may be near its peak.

Special Report: Barrons list of The Top 100 Financial Advisors, led by Greg Vaughan, Brian Pfeifler, and Andy Chase of Morgan Stanley PWM, Mark Curtis of Graystone Consulting, and Jeff Erdmann of Merrill Lynch PGIG.

Tech Trader: Cautious on SNDK: Chip makers recent revenue miss seems less tied to shifting industry paradigms than to company problems, which many analysts say are temporary; Cautious on CRM, N, SAAS, FEYE, LPSN, MKTO, BCOV, AMBR: Many software-as-a-service firms have large valuations, but the sector is likely to face a reckoning at some point this year; Cautious on AMD: Companys transformation from being PC-centric to a maker of custom chips for numerous devices seems to lack momentum.

Trader: Earnings will be weaker than expected this season because of U.S. macroeconomic data, says Tim Ghriskey of Solaris Asset Management; Cautious on IBM: Company is seen as a dinosaur in some quarters, but its cloud business is growing, a new server cycle isnt yet priced into the stock, and its P/E multiple is appealing; Active managers have had a bad time of it, with only one out of five outperforming last year. 

Features: 1) Positive on ADM, ALV, DG, KR, LRCX, PCAR: Six companies have resisted the temptation to spend on dividends and buybacks, and are instead investing in growth, making them solid buy-and-hold picks; Positive on URI: Share price has been hit by investor concern about low oil prices, but company has deep customer relationships outside oil and shares could see a 50% boost; Positive on INT: The collapse of Danish fuel supplier O.W. Bunker prompted concern about Florida-based company, but it is likely to avoid the problems that sank its rival, and shares could gain 15% despite sector volatility. 

Small Caps: Positive on LXU: Company could increase value by splitting its fertilizer, industrial acids, and mine explosive business from its HVAC side, but even without restructuring, shares could rise 10% on better earnings. 

Profile: Larry Auriana, Hans Utsch, Portfolio Managers, Federated Kaufmann Large Cap fund (top ten holdings: INCY, NXPI, TEL, ACT, AIG, AAPL, GILD, PXD, BIIB). 

Follow-Up: Cautious on SNE: Japanese consumer electronics giant is still undergoing a turnaround, with chief Kenichiro Yoshida investing in key profit drivers such as imaging chips, PlayStation, movies, and music; Cautious on NFLX: Investors should be cautious about stock, since its unclear how much longer it can keep boosting spending for original content, for which it doesnt disclose viewership. 

European Trader: Positive on Telecom Italia: Company has had a good run this year, and could be the best-value large-cap telecom play in Europe if it continues to benefit from consolidation and successfully refinances its debt. 

Asian Trader: On a price-to-book basis, Korea is 40% cheaper than Japan, and prospects for Korean firms is brightening. 

Emerging Markets: The elephant in the room for emerging markets is credit risk. Some big companies are overleveraged. As a result, currency volatility could create liquidity and solvency issues.

Commodities: Crude stockpiles will most likely continue to grow in coming weeks, pressuring U.S. oil prices. 

CEO Spotlight: AN Chief Executive Mike Jackson has been leveraging positive trends in the auto industry, and he plans to acquire more strategically located dealerships. 

Streetwise: Cautious on VIRT: Investors appear to have put their misgivings about high-frequency trading aside, giving firm a boost following its IPO, but potential regulatory changes should give them pause.

WSJ : Prologis to Buy KTR Capital for $5.9 Billion

Prologis to Buy KTR Capital for $5.9 Billion
Deal would see Prologis assume about $750 million in debt

Prologis agreed late last week to buy closely held KTR, which owns 70 million square feet of real estate concentrated largely in California, New Jersey, Chicago, South Florida and Texas, people familiar with the matter said. As part of the deal, to be announced as early as Sunday, Prologis will assume about $750 million in debt, these people said.

Reuters - Sika wants to buy Burkard stake to thwart French takeo

{http://reut.rs/1aIcbut<Go>}

(Reuters) - Sika's (SIK.VX) board of directors wants to buy out the company's major shareholder to try to stop a takeover of the Swiss chemicals business by France's Saint-Gobain (SGOB.PA), SonntagsZeitung newspaper reported, citing two unnamed sources.

The French group agreed in December to buy from the Burkard-Schenker family a 16.1 percent stake that carries 52.4 percent of Sika's voting rights - enough for control and, at 2.75 billion Swiss francs (£1.9 billion), a far cheaper option than buying the whole company.

However, opposition from the Sika's management and many board members has obstructed the deal, and a lengthy court and regulatory battle for control of the Swiss chemicals firm now looms.

At Sika's annual shareholder meeting on Tuesday, Chairman Paul Haelg said the board had prepared an alternative to the Saint-Gobain deal.

The alternative involves buying all the shares held by Schenker-Winkler Holding (SWH), a vehicle of the Burkard-Schenker family, for 2.25 billion francs, 500 million francs less than Saint-Gobain's offer, SonntagsZeitung reported, citing two "well-informed" sources.

Representatives of Sika were not immediately available outside office hours to comment on or verify the report.

A spokesman for SWH said in an emailed statement that the investment vehicle was not aware of any proposal and that any arrangement in which Saint-Gobain was not part of the solution would be unacceptable for the Burkard family.

(Spiegel) Possible deal between Athens and Moscow: Greece hopes

Possible deal between Athens and Moscow: Greece hopes for Russian pipeline billion {http://bit.ly/1cLXXdu}

Already on Tuesday could Russia and Greece to SPIEGEL ONLINE information sign a pipeline agreement. Athens expects billion revenue. The Kremlin stressed that there was no financial assistance.

Greece relies on money from Russia to gain room for maneuver in debt dispute. The governments in Athens and Moscow are planning an agreement, which involves billions. Contracts for a pipeline project with the name Turkish stream could be signed this coming Tuesday, said a senior SYRIZA man SPIEGEL ONLINE.

Turkish Stream would bring Russian gas to Europe from 2019, lead the line by Greece. Whether the pipeline will be built or can not say. The project would definitely take years to complete, and it should withstand critical scrutiny of the EU.
Whether the plans are ever implemented, is for the Greek government currently but secondary. Athens expects shortly to get three to five billion euros of Russia - as an advance on future profits that could take the country by the transit fees.

Back numbers would not need the money the Greeks before 2019, ie the date on which the pipeline will be put into operation. If the project should be abandoned, the payment from Moscow could be interpreted to be a secret loans. Athens also hopes to further positive effects: The project could arise 20,000 jobs - and falling gas prices in the country.

The Kremlin responded on Saturday afternoon on SPIEGEL ONLINE report. The spokesman of President Vladimir Putin, Dmitry Peskov, said they had not offered any financial help Greece, because it was therefore not asked. But "natural" would have the "energy cooperation" discussed during their meeting in Moscow, Putin and Greek Prime Minister Alexis Tsipras last week. These discussions would now be continued at the employee level.

How close is Greece from bankruptcy?

Greece desperately needs new money, the country facing bankruptcy. If there is no compromise with international donors reached, the government must soon decide: use debt or pay wages and pensions? They officially denied, however, that she ran out of money.

According to information obtained by SPIEGEL ONLINE almost all payments in the public sector are already frozen, which are not absolutely necessary: ​​wages for civil servants to contract payments to suppliers of the Greek army. In this situation, payments from Russia would be a welcome help.

Russia wants Ukraine to deal with Turkish Music from 2019 as a transit country for its gas. President Putin had presented the plan during a visit to Ankara in 2014. The planned pipeline would reach Greece from Turkey and about 450 km run through the country, before it leads to Macedonia.

Some analysts think the project is unrealistic. It could also fail as previously planned by Russia South Stream pipeline . This should lead gas from Russia through the bottom of the Black Sea to Bulgaria. The project was abandoned in late 2014 after disputes between Russia and the EU. ( Click here for important questions and answers about South Stream .)

Brussels is also the new project skeptical about the feasibility and fears that Russia would disagreement between the EU countries stoke.

SYRIZA wants energy policy "without prejudice"

The Greek Energy Minister Panagiotis Lafazanis, leader of the left wing SYRIZA, argues that Russia is central to Europe's energy supply. Last week he said at a meeting in Lithuania that Greece pursues an independent and open energy policy, "to build without prejudice and without walls that isolate certain countries".
In a radio interview Lafazanis criticized the attitude of Germany. It wanted by the expansion of the Baltic pipeline establish a monopoly on gas transmission in Europe. He can understand the reaction of the Western European countries, but Greece should not continue to behave like a banana republic.
During his visit to Moscow Putin and Greek Prime Minister had Alexis Tsipras talked about the Turkish Stream project, the Athens preferably referred to as "Greek pipeline". The cooperation between the two countries on energy issues could also be extended to the oil sector. Athens hopes that Russian companies apply for drilling projects in the Ionian Sea, off the southeast coast of Crete.

On April 7, Foreign Minister of Greece Nikos Kotzias had also discussed in Budapest with his counterparts from Hungary, Serbia, Macedonia and Turkey's pipeline plans. The Ministers therefore supported the establishment of an economically viable alternative for the forwarding of natural gas by their states in the Central and Eastern European countries.

In sum, Russia and Greece could in the coming days to sign an agreement that provides for the construction of a new pipeline - the project's Turkish stream, because the lines will lead via Turkey to Greece. The deal could bring three to five billion euros Athens. However, some analysts think the project is unrealistic.

(ZeroHedge) This Technical Signaled The Last Two Market Crashes And It Just Happened



This Technical Signaled The Last Two Market Crashes And It Just Happened


So the fundamental case for a 20 year bull run as BMO is calling for and  certainly many other banks seem to be onboard with that is not looking great YTD.  In fact, most perma bulls have shy’d away from even mentioning fundamentals other than to say that generally they aren’t looking great but don’t worry the Fed is still engaged.   And so I feel its a worthwhile exercise to have a look at the technicals.  Thing about the technicals is that you can cherry pick any baseline point to really make any case, good or bad.  But if we take a look at a time period that encompasses several cycles we negate our ability to cherry pick the baseline and we can be much more confident in our overall analysis.
So what I’ve done is taken a two decade period of S&P pricing which encompasses several cycles.  Mid 1990′s was a market mid cycle having recovered from the short recession of the early 1990′s but before things really began heating up in the late 1990′s.  If we just have a gentle look at the chart we see we’ve had a couple large cycles with fairly extreme booms and subsequent busts.  Currently we are in the midst of the third boom which has taken us to new all time highs.  Now even a 5 year old can look at the chart and say at some point this thing has a large down turn, same as it always does.  That’s easy to see and not many will argue it.  But as so many bulls remind us we could have said the same thing about this chart a year ago and we’d have missed out on significant returns.  Very true.  So the key is then figuring out where the down turn begins.  I know I know that’s the kind of stuff you have to go to biz school for eh.  Ok so let’s first have a look at the easy chart.
Screen Shot 2015-04-17 at 3.20.32 PM
So pretty simple.  Two full cycles and into the third which doesn’t tell us much.  Let’s add some markers to see if we can’t pick up on some technical cues.
Screen Shot 2015-04-17 at 2.39.28 PM
So what we’ve done is run a 2.5 standard deviation Bollinger Band (BB) using a 100 period moving average looking at monthly returns because we are interested long cycle technical cues.  We’ve also run Relative Strength Indicator (RSI) using 20 periods.  What we find is actually quite notable.  During the tech bubble cycle we saw the S&P rise to the upper BB where it tracked the upper band for some time.   During that same period we saw the RSI move above 70.  Now as the market peaked we saw the S&P move below the upper BB and we also saw a decline in RSI.  What is very interesting is that the point where RSI dropped below 70 is the point the tech bubble burst and sent S&P into a free fall.  The market continued to sell until the RSI dropped below 30 at which point the market stabilized and reversed higher.
This took us into the start of the credit bubble cycle.  Here the RSI move up very quickly and plateaued just below 70 for several years during which time the S&P moved up but never quite made it to the upper BB.  Then in 2007 the RSI moved above 70 but then quickly reversed back down below the upper band.  Interestingly again the RSI dropping below the upper band seemed to trigger the bursting of the credit bubble as we saw S&P again move into free fall.  Then here too we saw the market stabilize as the RSI moved through the bottom band.
And again this brought us into the latest Fed bubble.  Now during this latest cycle the RSI moved up but bounced off the upper band a few times without actually breaking through 70.  At the same time the S&P moved higher but with quite heavy volatility.  Eventually we saw the RSI move up and break through the upper limit.  It was about the same time that the S&P traded higher to the upper BB where it tracked for some time.  However, at the end of November 2014 the S&P started to dislocate and moving down below the upper BB.  And then ominously January of this year we saw the RSI also move below the upper RSI band.
Remember this technical signaled the popping of the past two bubble cycles.  Now February saw the RSI move back above the upper band but March moved back down below.  I would watch this very carefully now.  I would venture to say if April remains below the upper RSI band we could very well have moved into the latest and perhaps greatest period of wealth destruction. It is time to protect those assets.

FT : Deutsche Bank to spin off Postbank


Deutsche Bank is preparing to divest its Postbank retail operation in the latest strategy overhaul by a big global bank in response to sluggish markets and a welter of tough new regulations since the financial crisis.
After months of reviewing its business, Deutsche’s management board has whittled down its strategic options for boosting returns to two, both of which involve parting ways with Postbank, according to people familar with the matter.

The divestment of Postbank, which has 1,100 branches and was bought for €6bn in stages from 2008, would be biggest strategic step yet for Deutsche under co-chief executives Anshu Jain and Jürgen Fitschen.
Under the first scenario being considered by the management board, Deutsche would sell shares in Postbank, 6 per cent of which remains listed, within the next 18 months and refocus its remaining own-brand retail business on more affluent clients.
At the same time, it would cut assets at its investment bank by €160bn – or roughly a fifth. The most likely areas of Deutsche’s dominant investment bank to be reduced are the rates trading business and prime brokerage operation, which are both hit particularly hard by new Basel III capital rules.
Under the second more radical scenario being considered, Deutsche would split itself in to two separate legal entities. One would contain its investment banking, asset and wealth management and global transaction banking divisions. The second would contain all its retail businesses, which would be fully merged and then listed at some point over the next two and a half years.
Retail banking in Germany is less profitable than in many other European countries because of fierce competition from the country’s large number of local savings banks and Germans’ traditional aversion to higher margin products, such as credit cards.
Deutsche’s eight-man management board met last Wednesday, but has yet to decide formally in favour of either of the proposals, and various members have changed their positions over the course of the strategic review.
The bank’s supervisory board is due to discuss the plans on Friday, but it is not yet clear whether the management board will be in a position to recommend one of the two options by then.
Unanswered questions remain over both. Spinning off the entire retail business would potentially provide Deutsche with a large enough slug of capital to avoid making deep cuts in its investment banking arm.
But it remains unclear whether Deutsche would still be able to meet tough regulatory requirements on funding in times of stress once it had been shorn of its retail deposit base.
Spinning off just Postbank is a lower risk option. But under this scenario, which would also include de-emphasising the rest of Deutsche’s balance-sheet-intensive mortgage business, Deutsche would have to make deep cuts to its remaining domestic retail network of about 750 branches in order to keep its cost base in line with its lower retail revenues.
Deutsche said: “Strategy 2015+, our three-year plan launched in 2012 comes to its natural conclusion this year. We have been transparent that the bank is reviewing and updating its strategy, and that we will communicate further in the second quarter after decisions are made.”
A number of large investors have previously told the FT that they are keen for Deutsche to retain a strong investment bank. But many of them support the idea of it disposing of Postbank because it generates relatively low returns from its €144bn of mostly mortgage assets that weigh heavily on the group’s capital under the recent leverage ratio rules.