National, World, Business News

China may relax regulations on foreign investment in the private sector, announced Tuesday the central bank governor, less than a week after green light given by the Government in a pilot project of financial reform.

The State Council (government) of China announced last week that it planned to allow direct investment abroad by residents of the coastal city of Wenzhou, st in the country, as part of an experimental project. This was seen as an important step towards liberalization of transactions.

The central bank governor, Zhou Xiaochuan, speaking at the Boao Forum for Asia 2012, on the island of Hainan, said China would encourage capital outflows, which help reduce the imbalances caused by net capital inflows.

"There could be a further de-regulation to give businesses and residents easier for Chinese investment abroad," said Zhou Xiaochuan.

He did not say whether the reforms would be limited to Wenzhou or extended to other areas. Wenzhou, located in Zhejiang Province, is known throughout China as a platform and an entrepreneurial place parallel loans.

Many private Chinese companies are forced to turn to the gray market for loans because they can access loans at official rates, which will first state banks to state enterprises.

On the unofficial market of credit, interest rates can reach 100% annualized. 

The idea of ​​an area of ​​financial reform emerged in late 2011 after newspaper articles on entrepreneurs from Wenzhou who would be gone underground or s' had committed suicide after being found unable to repay loans at high rates contracted outside official channels.

People's Bank of China considered this market to 2400 billion yuan (285 billion euros) in late March 2010, representing 5.6% of total loans market in China.

The price per m2 of existing homes totaled at the end of January 8340 euros on average, 30 euros less than in October 2011. Prices in the Ile-de-France, for the same period were down 0.6%. This trend is not sustainable. Paris real estate. St. Pierre Semard, in the ninth.

Prices of existing homes fell slightly in Paris, in 8340 euros/m2 average for the period between November 2011 and January 2012 instead of 8370 euros/m2 previously announced Thursday night the Chamber of Notaries of Paris-Ile de France. The downward trend in prices began in late last year, is confirmed, indicate notaries in a statement.  

Moreover, the promise of sale entered recently, which presage the final price trends, highlight the value of apartments in the capital between 8100 and 8200 averaged euros/m2 end of May, confirming a trend slightly downward (-2 to -3.2%), after a sharp surge in prices which had led to an annual increase of 21.3% in late August 2011.

For the entire Ile-de-France, house prices in Ile-de-France, for the same period were down 0.6%. The largest decrease is observed in Seine-Saint-Denis (1.4%), while a decline of 0.3% in Paris proper.

The decrease in the number of transactions recorded for several months, was temporarily halted because of the reform leading to higher taxation of capital gains on property that, with effect from 1 February 2012, caused an influx of sales. Thus, from November 2011 to January 2012, 43,000 existing homes were sold, an increase of 6% over the same period 12 months earlier, and even 32% in central Paris.

After the records set last year, the Paris notaries had anticipated the end of February the prospect of a market downturn of the former in 2012 on the entire region, suggesting a decrease of 5 to 10% less a "new rebound of the financial crisis". But this break "will be sustainable only if new construction is accelerating sustainable in Ile-de-France for several years," had they warned. In the provinces, prices are expected to experience the same slope, according to forecasts by the INSEE.

Low-fat diet for households and businesses, slashing the state budget and credit crunch could lead bank for Spain by years of economic stagnation, and force her to ask, such as Greece, an international aid.

Forced by the European Union to reduce the deficit and meet the new budget rules, the Spanish Prime Minister Mariano Rajoy promised that the draft budget presented Friday would be "very, very austere." 

While the Spanish economy is already on the verge of its second recession in three years, that unemployment exceeds 22% and that the costs of bonds go up, Some economists predict the country a "lost decade" like the one Japan experienced in the 1990s and which he never fully recovered.

Others, including the Italian Prime Minister, Mario Monti, consider that Spain could result in the entire euro area a new crisis.

"We signed a suicide pact, Europe, accepting that everyone could save," said Luis Garicano, an economist at the London School of Economics and a researcher in the circle reflection Spanish FEDEA. "Europe must admit that this creates a downward spiral that does a disservice to anyone."

The Spanish economy, characterized by a debt of nearly 70% of gross domestic product (GDP) and private debt among the highest in the euro area , represents more than twice those of Ireland, Portugal and Greece combined, which excludes its partners leaves the sink.

DRYING OF CREDIT

In financial markets, the financing costs of the Spanish debt have certainly receded after last year reached their highest levels for 14 years, but the recent renewed concern weeks resulted in a rise in yield spreads between Spanish and German bonds. 

"There is a risk that Spain forced eventually to seek financial assistance in order to borrow at reasonable interest rates," said Ben May at Capital Economics.

The draft government budget Rajoy will include at least 35 billion euros in savings and new revenues, including an increase in certain taxes and wage cuts and staffing in the Public .

And Budget 2013 promises to be just as rigorous.

Problem: Spanish domestic demand, a key driver of growth in the boom years before the crisis, is now more to go.

The country's GDP expected to contract 1.7% this year. In turn, property prices fell 11.2% in the fourth quarter of last year and some are predicting 30% price decline further. The construction sector, flourishing during the housing boom, collapsed after 2008, which resulted in several million additional unemployed.

The unemployment rate in Spain is thus twice the average for all EU and approach 50% among youth. The kingdom also displays the rate of development of the highest poverty in Europe.

POLICY DANGEROUS TURN

The situation of enterprises is not much better and even the most promising sectors are cutting their workforces, like tourism (11% of GDP), where the group Sol Melia had sell assets in late 2011 to reduce its debt, despite the increased number of visitors favored by the Arab spring.

"At this stage, in the absence of significant changes in reservations in view of the first book, we prefer to adopt a wait, and especially if we take into account the weak position of the Spanish market, "said the group managing director, Gabriel Escarrer.

Bank credit, it is virtually at a standstill. The financial sector, captured by a vast movement of consolidation and mergers, has instructed the government to strengthen its financial strength by injecting 50 billion euros in its balance sheets.

"I do not expect any credit growth this year: it will not accelerate as the economy slows," said a senior industry.

This drying up of lending in Spain affects both large, established companies that families bold enough to ask for a mortgage.

"We are one of the strongest Spanish companies but banks simply will not lend," says an executive from a leading company, who requested anonymity. 

His group nevertheless manages to borrow in the bond markets, which are obviously inaccessible to smaller businesses.

Some economists believe the situation in Spain is unfortunately similar to that of Japan in the 1990s. At the time, the shift to austerity operated by Tokyo in 1997 while the private sector was working to pay off debt had resulted in five quarters of contraction Japanese GDP and a soaring budget deficit.

"The recession will last much longer if the government continues to insist on fiscal consolidation at a time when the Spanish private sector debt reduction," said Richard Koo, Nomura Research Economist Institute in Tokyo.

"It took ten years in Japan to recover from this error policy. I would hate to see Spain follow the same path."

Consumer confidence signs outright acceleration in March after remaining flat in February, announced Tuesday INSEE.

The synthetic indicator of confidence was up by five points to 87 against 82 in February. It still remains well below its long-term average, keyed to 100.

All 20 economists polled by Reuters had expected an index to 82 on average.

In March, consumer confidence about their personal financial situation rose rose three points to -28, INSEE said in a statement.

That their future personal finances back seven points to -18.

Their opinion on the advisability of making major purchases is unchanged from February (24).

Households also feel that the time is somewhat less favorable than in February to save (2 points to 22).

Poweo released Friday a net loss of 64.3 million euros for 2011 – divided by more than two compared to 2010 – due to poor performance of its generation assets sold in early 2011.

The alternative supplier of gas and electricity French, being merged with Direct Energy, has recorded sales of 503 million euros (-28%) and a gross margin of 47, 6 million (-30.1%).

However Poweo reported net earnings of 6.3 million euros in its new scope, which includes its core activities in the supply and optimizing energy and a gross operating income of 12.8 million and a turnover of 405 million. 

With the implementation of the Law on the reorganization of the electricity market, which gives it access to nuclear EDF, Poweo also stresses that its gross margin s is improved but without covering all of its operating costs.

Due to lack of capabilities to compete with the public electrician, had to sell Poweo early 2011 its means of power generation to its former shareholder of re Verbund conference to provide the resources necessary for the continuity of its operations. 

The group then announced in July the purchase by Direct Energy of the 46% stake held by Verbund, prior to the merger of two French operators, whose boards of directors come from approve in principle which will create a new group of more than one million residential and business customers.

List of values ​​to follow on Wednesday at the Paris Bourse, where the CAC 40 is 0.7% to 3574.70 points at 12:55, at its highest since meeting on March 2, in a market supported by the improving economic outlook in the United States and an overall positive result of stress tests undergone by U.S. banks.

* PSA earns 5.4% more increase in the CAC 40, on purchases cheaply and redemptions of short positions. The total European car takes 2.2% and 2.8% RENAULT.

According to La Lettre VN Auto K7, orders for new cars in France fell by only 7% in February.

* The FINANCIAL are again the first to enjoy the return of risk appetite. AXA gained 4.3%, 3.6% BNP Paribas, Crédit Agricole and Societe Generale 3.4% 2.7%. Outside CAC 40, Natixis is 5.5%, the second largest increase in PSA after SBF 120, and CNP ASSURANCES earns 3.5%.

* BIOMÉRIEUX however lost 5.5%, largest drop in the SBF 120, severely punished after revising down its organic growth target in 2012 and abandoned ambitions to provide long term.

* ARKEMA down 4.8%, while Groupe Bruxelles Lambert has sold 6.2 million shares of the chemicals group, is 10.01% stake. GBL sold its share at a price of 69.90 euros / share, it was learned on the market.

* EURO DISNEY (+6.4%) expects to exceed this year's attendance record in 2011 (15.7 million tourists) despite the difficult economic environment in Europe, de clare its CEO Philippe Gas in an interview with Le Figaro.

U.S. stocks open slightly higher Friday after the announcement of more new jobs than expected last month in the United States.

In early trade, the Dow Jones gained 0.16% or 20.17 points, to 12,928.76 points. The Standard & Poor's, wider, takes 0.25% or 3.49 points to 1369.38 points while the Nasdaq composite wins 0.3% (8.71 points) to 2,979.12 points.

The U.S. economy created 227,000 non-farm jobs last month, according to statistics from the Labor Department, and the unemployment rate remained at its lowest level in three years to 8.3%.

On the values ​​front, Monster Worldwide, the agency offers online job, gaining nearly 2%. Manpower is 0.2%.

The market is also supported by the announcement of a high acceptance rate of return for Greek debt.

Three years ago exactly, in a financial crisis, the S & P 500 posted its lowest closing level in 12 years, to 676.53 points. Since then, the index has more than doubled.

Side decreases, Texas Instruments lost 1% after launching a warning on its first quarter results.

Hedge funds refused to make the Greek debt they hold to the exchange transaction, threatening to ask the courts if the offer does not improve liorée.

These funds seek to meet a minority sufficient to block the process, the risk of derailing the debt swap and cornered Greece to bankruptcy.

Greek debt holders should tender their shares before Thursday at 20:00 GMT. In the opinion of Greek officials, the operation is moving in the right direction, even though banks and as well as European politicians have expressed their uncertainties.

"I was warned that many investors think carefully about the options available to them, including that of the judicial path," said Steven Friel Brown Rudnick, a firm which advises investors on possible legal strategies in Greece.

Hedge funds prefer debt securities that are not of Greek law, harder eligible for restricted devices developed by Athens.

McClutchen Bingham, another law firm, said Monday that he advised the holders of 650 million Swiss francs of Greek debt. Investors holding significant amounts of Greek debt came together to find "all the answers to their concerns and protect the rights of holders," according to the firm.

Hedge funds hold more than a quarter of Greece's debt denominated in Swiss francs and 450 million euros of bonds maturing and it might be enough to prevent the Greek government to impose on private creditors to agree to take their losses.

They hope that the government prefers to reach a settlement before May instead of defaulting despite warnings from the Greek politicians who warned that n ' there would be no new offer. 

Failing agreement, the funds could go on the judicial front, even then appeal to the European Court of Human Rights, alleging violations of property law.

This option could however be lengthy and costly for investors.

PSA Peugeot Citroëna unveiled Tuesday the terms of the capital increase of about 1.0 billion euros related to its alliance with General Motors, an operation marked by a substantial discount to the American group that will take 7.0% stake.

This capital increase, announced last week at the presentation of the alliance between the two automakers, will open on Thursday and until 21 March inclusive.

The operation with maintenance of preferential subscription rights will be on the basis of 16 new shares for 31 existing shares, said in a statement PSA. 

The subscription price is set at 8.27 euros, showing a discount of approximately 42% over the closing price on Monday (14.2050 euros), and 32.4% compared to the theoretical subscription right off (12.23 euros).

Discount as the French group finance director, Jean-Baptiste de Chatillon, a relativized in a teleconference with reporters.

"What must be considered as haircuts, the calculation is compared to the theoretical price after issuance of one billion, ie about 32%, and this de ; rating is quite usual in the market, "he said. "What matters now is the time and size of the capital increase."

The action PSA yielded 2.56% in pre-market transactions in Frankfurt after the announcements.

For analysts at CM-CIC Securities, "this discount is explained by the fact that the success of the capital increase would condition the entry of GM capital of PSA and thus the birth of the alliance ".

PRIORITY INVESTMENT

The Peugeot family, the largest shareholder group, 45.4% exercise of his rights for $ 140 million and sell its remaining rights to General Motors. The latter will invest a total of 304 million euros in the operation, including the purchase of these rights and the acquisition of treasury stock (4,400,000 shares).

Following the capital increase, the Peugeot will own 25.2% stake in GM and PSA 7.0%.

"This round of money for PSA Peugeot Citroën will fully intended to fund our strategic projects with General Motors," said Jean-Baptiste de Chatillon.

"These investments will enable us to accelerate our globalization strategy and go upmarket, and (…) access to technologies and projects much faster and mania re wider ", he added.

Priorities for which he also argued for the decision of PSA do not pay a dividend this year. 

"We need our cash to fund these investments," he summarized.

Last month, SAP announced a major plan asset sales totaling 1.5 billion euros after the publication of annual results marked with an operating margin born NEGATIVE activities in the automotive industry, a "free cash flow" negative EUR 1.6 billion and a doubling of the debt in six months.

BASF being undermined expectations of contraction this year by announcing Friday that its results and its turnover increase this year in favor of a rebound second half.

"We believe the global economy will accelerate in the course of 2012 after a modest start," said Kurt Bock said in a statement, chief executive of the world's leading chemicals with the number business.

There is a risk of the uncertainty surrounding the issue of debt in the U.S. and Europe, while "the positive momentum of the chemical industry will once again mainly in emerging markets" .

The action gained 2% in pre-market.

Analysts anticipate a decline in turnover and operating profit this year. The C.A. was 73.5 billion euros and operating profit of 8.4 billion euros in 2011.

Operating income for the fourth quarter, adjusted for exceptional items, fell 14% to 1.51 billion euros, according to Reuters.

The quarterly revenue it has increased 10% to 18.1 billion euros.

Operating income will be down in the first half but it will be up the next semester, said BASF.

Sign of the optimism of the chemical group, the annual dividend is raised to 2.50 euros per share against 2.20 euros last year and EUR 2.39 predicted by analysts.

"The positive outlook for the global economy and BASF is amazing," said Peter Spengler, an analyst at DZ Bank.