YPF oil: EU condemns Repsol state seizure

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LAST UPDATED AT 20 APR 2012, 11:57 GMT

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The European Parliament has passed a resolution condemning a nationalisation that has strained relations between Spain and Argentina.

Argentina has nationalised YPF, wiping out the Spanish firm Repsol's controlling-stake in the oil firm.

The resolution asks the European Commission to consider a "partial suspension" of tariffs that benefit Argentine exports into the EU.

Shares in Repsol has another decline, falling 2.3% on Friday.

Over the week, Repsol stock has lost almost a fifth of its value.

MEPs in the European Parliament said the institution "deplores" the decision taken by Argentina and describes it as an "attack on the exercise of free enterprise".

Decisions such as that taken by the Argentine authorities "can put a strain on the climate of understanding and friendship needed to reach" a trade agreement between a South American bloc and the EU, it said.

The resolution, which is non-binding, received 458 votes in favour, 71 against and 16 abstentions.

'Not valid'

It also emerged that Repsol may be obliged to buy a minority shareholder's YPF stake if it ever lost majority control, which Repsol denied.

Twenty-five percent of YPF is owned by Argentina's Eskenazi family through its firm, Peterson.

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Nationalising YPF

• Spain's Repsol has hitherto owned 57.4% of shares with 25.5% belonging to Argentina's Petersen, 0.02% to the Argentine government and 17% traded on stock exchanges
• The Argentine government proposes to seize 51% of the shares, all of which will be taken from Repsol's stake, leaving the Spanish firm with 6.4%
• The expropriated shares will in turn be divided between the Argentine government and provincial governors
• Following the expropriation, Petersen will retain its 25.5% stake and 17% of the shares will continue to be traded

• 
  

According to regulator filings of a 2008 agreement, Repsol must "maintain directly or indirectly through controlled companies an ownership interest greater than or equal to 50.1%".

If it does not, Repsol is obliged to buy back the loans used to secure the Eskenazis' shares.

But Repsol told the BBC that the expropriation of its stake in YPF had invalidated the agreement.

"The agreement is not valid under Spanish law in these conditions," said Kristian Rix, a Repsol spokesman. "The law is unequivocal, there is no debate."

Trade war brewing?

Spain has threatened retaliation against Argentina over the forced nationalisation of oil firm YPF, raising the prospects of a trade war between the nations.

Spanish Trade Secretary Jaime Garcia Legaz said the European Union would intervene over Argentina's seizure of YPF.

Argentina is taking over 51% of YPF, wiping out Repsol's 57.4% majority stake.

The move has wide support in Argentina but has provoked outrage in Spain.

Spain's Foreign Minister Jose Manuel Garcia-Margallo said US Secretary of State Hillary Clinton had also offered support.

Repsol has said it wants around $10bn (£6.2bn) for its stake in YPF, but Argentina has said it does not accept that valuation.

YPF, Argentina's biggest oil company, was privatised in 1993. Last year it announced huge new finds of shale oil and gas.

Nestle having 'challenging' 2012

The Swiss company said its sales in the first three months of 2012 were 21.4bn Swiss francs ($23.4bn; £14.6bn), up 5.6% from the same period last year.

The world's biggest food group Nestle has reported rising sales but says it is having a "challenging year".

The group behind KitKat and Nespresso said that the trading environment had been subdued in many developed markets.

But it added that in most emerging markets "conditions remain dynamic and rich in growth opportunities".

Nestle struggled in 2011 with the strength of the Swiss franc, which cut its earnings by 13.4% in the full year.

But in the past six months the Swiss central bank has been intervening to weaken its currency and support the country's exporters.

Nestle said an expected "improved raw material environment" in the second half of the year together with rising prices meant it could maintain its forecast of improved earnings and profit margins for the full year.

It did not comment on the deal it is expected to finalise this month to buy Pfizer's infant nutrition business for about $9bn (£5.6bn).

Ford unveils further investment in China

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US carmaker Ford has announced further investment in China, with plans to build a $760m (£474m) factory in Hangzhou.

Ford wants to boost its manufacturing capacity in China 

Car production at the new plant is expected to start in 2015.

Ford already has a big complex in Chongqing, which is its largest global manufacturing location outside south-east Michigan.

Two weeks ago, the company said it would build a third plant there by investing $600m.

Ford has been boosting its manufacturing capacity in China as part of its effort to raise global sales by nearly 50% to about 8 million cars by 2015.

"So far, Ford's investments in China and across Asia represent its largest and most rapid global expansion in 50 years," said Joe Hinrichs, president of Ford Asia Pacific.

Catching up

China is already the world's biggest car market and Ford expects sales there to nearly double from 18.5 million last year to about 30 million by 2020.

In order to meet growing demand, Ford aims to double the number of its dealerships and employees there by the end of the decade.

The latest announcement brings the firm's total investment in China to approximately $4.9bn since 2006.

However, Ford was a relative late-comer in the market and has been playing catch-up with the likes of General Motors and Germany's Volkswagen.

While Ford sold 320,658 vehicles in China last year, both GM and VW sold more than 2 million.

Ford makes cars there in a tie-up with Chongqing Changan Automobile and Japan's Mazda Motor.

It also holds 30% of Jiangling Motors which produces light commercial vehicle Ford Transit vans.

Japanese exports rise as car shipments surge in March

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Japan's exports rose in March, boosted by a surge in shipments of cars as the sector continues to recover from last year's natural disasters.

             Car exports are a key contributor to Japanese economic growth 

Car exports rose 33.6% from a year earlier, with overall exports up by 5.9%, latest trade data showed.

Japanese carmakers have also benefited from growing demand from key markets such as the US.

Sales of cars and light trucks in the US rose 13% in March, with Toyota's sales up by 15% and Nissan gaining 13%.

Ryoji Musha of Musha Research told the BBC that the "improvement of exports indicates that the Japanese and the global economy are recovering".

Mr Musha added that the recent weakness of the Japanese yen had also played a part in boosting exports.

The currency fell more than 8% against the US dollar between February and March this year, making Japanese goods more affordable to foreign buyers.

Growing imports

Japanese imports rose by 10.5% in March, resulting in a trade deficit of 82.6bn yen ($1bn; £632m) during the month.

The jump was driven largely by a 21.8% increase in imports of liquefied natural gas (LNG).

Japan has seen imports of LNG and other fuels rise in recent months.

Last year it shut down almost all of its nuclear power stations in the wake of radiation leaks at the Fukushima Daiichi nuclear plant after the earthquake and tsunami.

As a result the country's electricity providers have been relying more heavily on thermal power plants, which require coal, oil and LNG to operate.

Analysts said that growing imports of fuel are likely to affect Japan's trade numbers in the coming months.

"Exports to the United States such as autos are unlikely to keep growing, while the levels of imports will remain high, driven by purchases of natural resources," said Hideo Shimamine, chief economist at Daiichi Life Research Institute.

"It looks like we will be having trade deficits for the time being."

The Largest Marginal Tax Rate Ever?

By CASEY B. MULLIGAN

Casey B. Mulligan is an economics professor at the University of Chicago.

In 2012, the Treasury Department began a new phase of its Home Affordable Modification Program, or HAMP. In doing so, it may have the distinction of putting into place the largest marginal income tax rate ever in a non-Communist country.

TODAY’S ECONOMIST

Perspectives from expert contributors.

For home mortgage borrowers who appear to be headed for foreclosure, mortgage programs typically recommend a revised mortgage payment amount that is lower than the payment specified in the original mortgage contract. The new payment is set in proportion to the borrower’s income at the time of the modification.

The more the borrower is earning at the time of the modification, the more she will be required to pay her lender over several years. Typically, each additional $100 a borrower is earning (on an annual basis) at the time of the modification adds $31 to the annual amount of the mortgage payment recommended by the Treasury’s mortgage modification guidelines. (This modification is not revisited over time; the income is examined one time and payments set.)

The HAMP program, and its predecessor at the Federal Deposit Insurance Corporation, usually modified the mortgage payments by adjusting the loan interest rate over the subsequent five to seven years.

Thus, assuming a five-year modification time frame, each $100 earned at the time of the modification would add $155 to the borrower’s total mortgage payments, or about $130 in present value.

It is done this way with the intention of creating a monthly payment that is “affordable” (defined as 31 percent of income). But there’s a flip side to the argument: the disadvantage of higher earnings in calculating the resulting payment. To an economist looking at it that way, it’s the equivalent of a 130 percent marginal tax rate: a $130 payment differential solely as a consequence of earning an extra $100.

This year the Treasury decided to encourage changes in this procedure. In particular, it will now subsidize lenders for modifying mortgage principal balances rather than interest payments. Because the principal balance determines payments for the life of the loan, in effect Treasury is asking lenders to modify payments for the life of the loan and not just five to seven years.

Take a 30-year mortgage originated in 2006: it has 24 years left. Under the new rules, an extra $100 earned by the borrower at the time of modification costs her $31 a year for 24 years, which amounts to a total of about $390 in present value. That’s a 390 percent marginal tax rate that applies to borrowers who are having, or expect to have, their mortgage modified.

Economists agree that marginal income tax rates of 100 percent or more are destructive to the labor market and strongly encourage corruption. The best we can hope for is that people subject to such confiscatory marginal tax rates are and remain oblivious of the incentives that Treasury is presenting them.

Marginal tax rates in excess of 100 percent are also present in antipoverty programs, especially in what is known as the Medicaid notch, where an additional $1 of income can mean the complete loss of coverage. In a sense, the Medicaid notch is a marginal tax rate in the thousands of percent, because beneficiaries lose benefits valued in thousands of dollars as a consequence of earning an additional $1.

But while a few thousands of dollars are at stake with one family’s Medicaid coverage, tens of thousands, sometimes hundreds of thousands, are at stake in each mortgage modification transaction.

For this reason, I think Treasury officials have earned the award for largest marginal income tax rate ever. Let’s hope they are not in training to yet again break their record.

NAB 2012: Blackmagic Unveils Surprise 2.5K Cinema Camera for Unprecedented $3,000

The postproduction technology developer draws crowds as it enters the camera business.

LAS VEGAS--Attendees expected announcements from camera makers such as ARRI, Canon, Red and Sony this week at the National Association of Broadcasters (NAB) Show -- but fewer expected postproduction equipment maker Blackmagic Design to unveil its first camera, a 2.5K camera for just $3,000.

The manufacturer's exhibition stand was crowded with those wanting to get a look at the new camera, which Blackmagic reported would offer 13 stops of dynamic range; a 2.5K sensor; a built in SSD recorder; support for open file formats including CinemaDNG RAW, ProRes and DNxHD; a built-in Thunderbolt connection; and a built-in touch screen LCD with metadata entry.The Blackmagic Cinema Camera is targeted at uses including feature and TV series production.

The camera -- scheduled for availability in July -- is being developed to support 2.5K and 1080 high definition resolution at frame rates of 24, 25, 29.97 and 30.

Blackmagic -- best known in Hollywood as the company behind the DaVinci Resolve digital color grading software -- has also included a copy of its DaVinci Resolve version 9.0 (which was also introduced Monday at NAB) for color grading and Blackmagic UltraScope software for waveform monitoring.

Canon EF and Zeiss ZF mount lenses can be used with the Blackmagic camera.

"Ever since I was a telecine engineer back in the 1990s I have wished that video cameras would include features that allowed them to perform creatively similar to film," said Grant Petty, CEO of Blackmagic, in a statement. "However current digital cameras are too heavy, way too expensive and need costly accessories to work. We felt there was a need for a camera that delivered these features in a design that's optimized for professional video shoots, as well as being a compact, elegant design that's easily affordable."

Blackmagic’s product lines include video converters, routers, live production switchers, and disk recorders, for production, postproduction and television broadcast industries. The company has offices in the US, UK, Japan, Singapore, and Australia.

Mark Zuckerberg Kept Facebook Board Out of the Loop on Instagram Buy (Report)

The CEO of the social network, which is planning to go public soon, negotiated the $1 billion deal on his own.

When negotiating the deal for Facebook's $1 billion purchase of Instagram, Mark Zuckerberg kept his board of directors out of the action, the Wall Street Journal reported.

Following three days of talks with Instagram CEO Kevin Systrom, the Facebook founder alerted the board of the intended acquisition -- the company's largest-ever -- on the morning of April 8, the day the buy became a done deal.

Negotiations happened at Zuckerberg's $7 million Palo Alto home, according to the Journal, with Systrom initially starting with a price of $2 billion for the sale of his wildly popular photo-sharing company.

Sources familiar with the situation told the newspaper that the board was "told, not consulted," and that Zuckerberg opted for a solo approach out of worry that Systrom might get turned off if approached by lawyers rather than the Facebook CEO.

STORY: Experts Weigh In On Facebook's Instagram Buy

Zuckerberg, in fact, owns 28 percent of Facebook stock and 57 percent of its voting rights, giving him the power to bypass board-related red tape in such deals.

Also kept in the dark, albeit not for long: Facebook's COO, Sheryl Sandberg, who learned of the talks via Zuckerberg the Thursday before the company announced the buy.

San Francisco-based Instagram has experienced tremendous growth since launching in 2010. The company most recently reported about 30 million users, about double from the beginning of the year. A recent launch onto the Android platform had the potential of doubling the number of users again.

PHOTOS: 2012 Digital Power 50

Launched in 2010 by Systrom and Mike Krieger, Instagram instantly took off in the social media universe by allowing users a way of more conveniently sharing photos from their mobile phones.

Instagram is the first big purchase by the social media giant, which is expected to go through with its IPO as soon as next month. The IPO will raise about $5 billion for Facebook, though Zuckerberg cautions not to expect many more splashy acquisitions.

Shaw’s launches ‘From Deli to Dugout Sweepstakes’ on Red Sox Radio Network

By Chris Reidy, Globe Staff



Radio station operator Entercom Communications and Shaw’s Supermarkets said they are launching a “From Deli to Dugout Sweepstakes” promotion as part of the ongoing relationship between Shaw’s and Entercom’s WEEI Sports Radio and the Red Sox Radio Network.

The sweepstakes will reward one customer each week for buying specific Dietz & Watsondeli items with their Shaw’s Rewards Card. Shaw’s Rewards Card members who purchase the deli item of the week will receive automatic entry into the “From Deli to Dugout Sweepstakes” with a chance to win such prizes as an opportunity to watch batting practice on-field, Shaw’s said.

The promotion is designed to highlight Shaw’s deli offerings, the West Bridgewater-based chain said.

Given Shaw’s 150-year history, a relationship with WEEI and the Red Sox Radio Network is “a natural fit” for the supermarket chain, Shaw’s president Mike Stigers said in a statement.Chris Reidy can be reached at reidy@globe.com.

New FDI Norms For FIIs

The government ON 10TH march announced new Foreign Direct Investment, FDI norms for Foreign Institutional Investors, FIIs. Under the new norms, FIIs can now invest up to 23 per cent in commodity exchanges without seeking prior approval of the government. However, FDI will continue to require the approval of the Foreign Investment Promotion Board. The Department of Industrial Policy and Promotion's, consolidated FDI policy and the new norms came in force from today. At present both type of foreign investments, 23 per cent through FII route and 26 per cent through FDI route in commodity exchanges require government approval.
This change aligns the FDI policy for foreign investment in commodity exchanges, with that of other infrastructure companies in the securities markets, such as stock exchanges, depositories and clearing corporations.
DIPP has also decided that the consolidated FDI circular will be announced every year instead of six-monthly basis. The revised FDI policy would be announced on 29th March next year.

Centralised Electronic Payment Systems

 In a move to popularise electronic payment system, the Reserve Bank of India (RBI), on 9th April 2012, allowed all licensed banks, including urban co-operative banks, State co-operative banks and district central cooperative banks, to transfer funds through the centralised electronic payment system as sub-members. These banks would participate in the centralised electronic payment systems, Real Time Gross Settlement System (RTGS), and the National Electronic Funds Transfer (NEFT), through their sponsor bank, which is a direct member of this system, the RBI said in a notification to all banks.

“This would be an alternative mechanism to all licensed banks, which have the technological capabilities but are not participating in centralised electronic payment systems on account of either not meeting the access criteria or because of cost considerations,” the RBI said. There is no restriction on the number of sub-members a sponsor bank could sponsor.

“The charges for customer transactions of sub-members cannot exceed the charges applicable to customers of sponsor-banks of the centralised electronic payment system,” the RBI added.

India Qatar Sign Oil And Gas Pact

India and Qatar have signed and initial agreement in for cooperation in oil and gas sector. The co-operation will focus in refining the oil besides gas exploration. The oil and gas agreement was signed after Qatar's Emir Emir Sheikh Hamad bin Khalifa al-Thani met Prime Minister, Dr. Manmohan Singh in New Delhi on 9th April and discussed the issue.

From the Indian side the agreement was signed by Oil and Natural Gas Minister Jaipal Reddy and Energy Minister of Qatar Mohammed Bin Saleh al-Sada.
It envisages cooperation in the areas of upstream and downstream oil and gas activities. It is expected to encourage and promote investment and cooperation between two ministries of oil and gas and through affiliated companies.
Qatar is the largest supplier of LNG to India, which buys 7.5 million tonnes/per year of LNG from it. India wants to have huge additional supply of oil and LNG from Qatar but pricing is an issue.

Pak Notifies Negative List For Trade With India

Posted on : Mar 22,2012
The Pakistan government today issued a notification for switching over to a negative list regime for trade with India, under which the import of only 1,209 Indian products will be barred.

Officials said in Islamabad that the Commerce Ministry issued the Statutory Regulatory Order for trade with India under the negative list regime.

The notification says that a total of 1,209 items have been included in the negative list for trade with India and will not be importable from India.

Of the importable items from India, 137 products can be brought in from India through the Wagah land border crossing.

Till now, Pakistan traded with India under a positive list regime that allowed the import of less than 2,000 items.

Mukul Roy Announces Partial Rollback In Rail Fare Hike

Posted on : Mar 28,2012
The government on 22nd march announced partial roll back in the passenger fares in the Railways for the benefit of the common man. Rail Minister Mukul Roy announced roll back in third AC, AC Chair Cars, Sleeper classes and sub-urban trains.

There are no changes in the passenger fares for the first and the second AC classes. Replying to the discussion on the Railway Budget 2012-13, Mukul Roy said the roll back is aimed at giving relief to the people. Mr. Mukul Roy said the entire railway system will be revamped. Altogether one lakh people will be recruited in the Railways.

Mukul Roy said new railway tracks will be laid as announced in the Rail Budget besides giving an increased thrust to schemes intended for passenger amenities including safety, cleanliness and catering. He also announced the roll back of the proposal for restructuring the Railway Board.

Later, the House passed the Railway Budget 2012-13. The Rajya Sabha also resumed discussion on the Rail Budget.

CAG Says Coal Scam Media Report Misleading

The CAG has told the Prime Minister that the media reports on alleged coal scam published in a newspaper is exceedingly misleading. Quoting CAG, the daily claimed that the government has lost 10.7 lakh crore rupees by not auctioning coal blocks.

Rejecting the claim, the CAG in a letter to Dr Manmohan Singh, said the details being brought out were observations which are under discussion at a very preliminary stage. These do not even constitute its pre-final draft.

Terming that such leakages causes very deep anguish, the CAG said the leak of the initial draft causes great embarrassment as the Audit Report is still under preparation. In the excerpts of its letter released by PMO to the press, CAG also said it has changed its mind following clarification provided by the Ministry in exit conferences held on 9.02.2012 and 9.03.2012.

In fact it is not even its case that the unintended benefit to the allocatee is an equivalent loss to the exchequer, the CAG said.

Finance Minister Pranab Mukherjee described the CAG's report as only a draft and not yet a CAG report. Speaking to reporters in New Delhi Mukherjee said the normal practice is after the CAG's draft report, ministry's comments come and after the comments there is a regular system through which it will be placed on the table of both Houses of Parliament.

Centre Decides To Open 11 New International Routes Under ASAs Posted on : Mar 31,2012 The Government on 23rd march decided to open 11 new International routes under Bilateral Air Services Agreements (ASAs) to the national carrier Air India as well as to other Indian Scheduled Carriers. A release issued by Ministry of Civil Aviation said, the decision will help expand global networks of such carriers as well as to make air travel more affordable to people. The sectors which have been decided to open include Mumbai-Dar-es-Salaam, Delhi-Guangzhou, Delhi-Yangon, Delhi-Tashkent, Delhi-Hanoi, Delhi-Addis Ababa , Delhi-Melbourne and Delhi-Sydney. The decision to allow all Indian scheduled carriers to use the air traffic rights under the existing ASAs, was taken after Civil Aviation Minister Mr Ajit Singh reviewed their utilisation.With this decision, the international services of Air India and its subsdiary Air India Express will increase from 430 flights per week now to 471 services per week this summer. Similarly,the number of global flights of all private carriers would also go up.The release said, the private airlines would continue to operate on these international sectors till such time they reach the maximum permissible limit under ASAs. In order to safeguard the interests of Air India, the Ministry decided that the national carrier's operational plan would receive due consideration in allocation of the traffic rights and entitlements.

Posted on : Mar 31,2012

The Government on 23rd march decided to open 11 new International routes under Bilateral Air Services Agreements (ASAs) to the national carrier Air India as well as to other Indian Scheduled Carriers.

A release issued by Ministry of Civil Aviation said, the decision will help expand global networks of such carriers as well as to make air travel more affordable to people. The sectors which have been decided to open include Mumbai-Dar-es-Salaam, Delhi-Guangzhou, Delhi-Yangon, Delhi-Tashkent, Delhi-Hanoi, Delhi-Addis Ababa , Delhi-Melbourne and Delhi-Sydney.

The decision to allow all Indian scheduled carriers to use the air traffic rights under the existing ASAs, was taken after Civil Aviation Minister Mr Ajit Singh reviewed their utilisation.With this decision, the international services of Air India and its subsdiary Air India Express will increase from 430 flights per week now to 471 services per week this summer.

Similarly,the number of global flights of all private carriers would also go up.The release said, the private airlines would continue to operate on these international sectors till such time they reach the maximum permissible limit under ASAs.

In order to safeguard the interests of Air India, the Ministry decided that the national carrier's operational plan would receive due consideration in allocation of the traffic rights and entitlements.