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British business activity sank in July to its lowest level since April 2009, a survey revealed today in the first indication of economic contaction since the shock European Union (EU) exit vote. 
 
The preliminary composite purchasing managers&#39; index (PMI) by the research Markit group sank to 47.7 points in July, down from 52.4 in June. 
 
A reading under 50 indicates contraction in private sector activity. 
 
The survey -- regarded as a key early indicator of economic activity before official statistics are published -- is the first major evidence of economic fallout after Britons voted to leave the EU in a referendum on June 23. 
 
&quot;July saw a dramatic deterioration in the economy, with business activity slumping at the fastest rate since the height of the global financial crisis in early-2009,&quot; said Chris Williamson, chief economist at Markit. 
 
&quot;The downturn, whether manifesting itself in order book cancellations, a lack of new orders or the postponement or halting of projects, was most commonly attributed in one way or another to Brexit,&quot; he added.&nbsp; 
 
Third quarter opens on weak footing in Britain&nbsp; 
 
Markit added that the survey signalled a 0.4-per cent contraction in the British economy in the third quarter, or three months to September. 
 
&quot;Much of course depends on whether we see a further deterioration in August or if July represents a shock-induced nadir,&quot; added Williamson. 
 
&quot;Given the record slump in service sector business expectations, the suggestion is that there is further pain to come in the short-term at least.&quot; 
 
Markit added the survey showed that the economy had &quot;opened the third quarter on a weak footing&quot;. 
 
Output and new orders fell in both the manufacturing and service sectors during July. 
 
&quot;A number of firms linked this to ongoing uncertainty pre- and post-EU referendum, with reports especially prevalent among service providers,&quot; added Markit in a statement. 
 
&quot;The downturn in services was also more marked than that seen in manufacturing. Services activity and new orders both fell at the quickest rates in over seven years.&quot; 
 
The collapse in the British pound following the Brexit vote had meanwhile pushed up manufacturers&#39; costs. 
 
&quot;The downside of the exchange rate was a steep rise in manufacturers` input prices, mainly due to higher import costs,&quot; it said. 
 
&quot;The rate of purchase price inflation hit a five-year record, with the extent of the acceleration among the steepest in the survey history.&quot; 
 
The data was published after the International Monetary Fund slashed its global and British economic growth forecasts for 2016 and 2017 earlier this week -- and blamed uncertainty created by Brexit. Britain`s new finance minister Philip Hammond meanwhile declared this week that it was up to the Bank of England (BoE) to respond to the economic &quot;shock&quot; arising from Brexit. 
 
&#39;PMI data could persuade policymakers to act&#39;&nbsp; 
 
Williamson added today that the new PMI data could persuade policymakers to act. 
 
&quot;With policymakers waiting to see hard data on the state of the economy before considering more stimulus, the slump in the PMI will provide a powerful argument for swift action,&quot; noted Williamson. 
 
The BoE kept its key interest rate at 0.50 percent last week, confounding expectations for a reduction -- but flagged a possible August cut in response to Brexit. 
 
Policymakers also signalled that the exact size and nature of any stimulatory measures would be determined at next month`s monetary policy gathering, due on August 4. 
 
The impact of Brexit on the eurozone was much more muted, however, with Markit&#39;s preliminary composite PMI for the 19 nations that share the euro dipping to 52.9 points, which was however an 18-month low. 
 
Williamson said the eurozone economy &quot;showed surprising resilience in the face of the UK&#39;s vote to leave the EU and another terrorist attack in France.&quot; 
 
(AFP)&nbsp;

The survey is the first major evidence of economic fallout after Britons voted to leave the EU

British business activity sank in July to its lowest level since April 2009, a survey revealed today in the first indication of economic contaction since the shock European Union (EU) exit vote. The preliminary composite purchasing managers' index (PMI) by the research Markit group sank to 47.7 points in July, down from 52.4 in June. A reading under 50 indicates contraction in private sector activity. The survey -- regarded as a key early indicator of economic activity before official statistics are published -- is the first major evidence of economic fallout after Britons voted to leave the EU in a referendum on June 23. "July saw a dramatic deterioration in the economy, with business activity slumping at the fastest rate since the height of the global financial crisis in early-2009," said Chris Williamson, chief economist at Markit. "The downturn, whether manifesting itself in order book cancellations, a lack of new orders or the postponement or halting of projects, was most commonly attributed in one way or another to Brexit," he added. Third quarter opens on weak footing in Britain Markit added that the survey signalled a 0.4-per cent contraction in the British economy in the third quarter, or three months to September. "Much of course depends on whether we see a further deterioration in August or if July represents a shock-induced nadir," added Williamson. "Given the record slump in service sector business expectations, the suggestion is that there is further pain to come in the short-term at least." Markit added the survey showed that the economy had "opened the third quarter on a weak footing". Output and new orders fell in both the manufacturing and service sectors during July. "A number of firms linked this to ongoing uncertainty pre- and post-EU referendum, with reports especially prevalent among service providers," added Markit in a statement. "The downturn in services was also more marked than that seen in manufacturing. Services activity and new orders both fell at the quickest rates in over seven years." The collapse in the British pound following the Brexit vote had meanwhile pushed up manufacturers' costs. "The downside of the exchange rate was a steep rise in manufacturers` input prices, mainly due to higher import costs," it said. "The rate of purchase price inflation hit a five-year record, with the extent of the acceleration among the steepest in the survey history." The data was published after the International Monetary Fund slashed its global and British economic growth forecasts for 2016 and 2017 earlier this week -- and blamed uncertainty created by Brexit. Britain`s new finance minister Philip Hammond meanwhile declared this week that it was up to the Bank of England (BoE) to respond to the economic "shock" arising from Brexit. 'PMI data could persuade policymakers to act' Williamson added today that the new PMI data could persuade policymakers to act. "With policymakers waiting to see hard data on the state of the economy before considering more stimulus, the slump in the PMI will provide a powerful argument for swift action," noted Williamson. The BoE kept its key interest rate at 0.50 percent last week, confounding expectations for a reduction -- but flagged a possible August cut in response to Brexit. Policymakers also signalled that the exact size and nature of any stimulatory measures would be determined at next month`s monetary policy gathering, due on August 4. The impact of Brexit on the eurozone was much more muted, however, with Markit's preliminary composite PMI for the 19 nations that share the euro dipping to 52.9 points, which was however an 18-month low. Williamson said the eurozone economy "showed surprising resilience in the face of the UK's vote to leave the EU and another terrorist attack in France." (AFP)

British business activity sinks after EU divorce, eurozone economy shows resilience: Key survey

&nbsp;Tech giant Samsung Electronics Co Ltd said on Friday it sued Huawei Technologies Co Ltd for patent infringements through multiple courts in China, escalating a legal conflict between the smartphone rivals. 
 
The suits mark the latest salvo in a fight between the world&#39;s Number one and Number three smartphone makers, who compete fiercely across the world in an industry that researcher IHS says is worth $332 billion this year. 
 
The South Korean firm sued Huawei in a Beijing court about two weeks ago for allegedly infringing six of its patents, a spokeswoman said. She did not elaborate on the types of patents or the other Chinese courts involved. 
 
&quot;Despite our best efforts to resolve this matter amicably, it has regrettably become necessary to take legal action in order to defend our intellectual property,&quot; Samsung told Reuters in a statement. 
 
Shenzhen-based Huawei Technologies - also one of the world&#39;s largest telecom equipment manufacturers - said in a statement it had not received a &quot;formal complaint&quot; but would defend itself as necessary. 
 
&quot;In the absence of a negotiated settlement, litigation is often an efficient way to resolve&quot; intellectual property rights disputes, it said. 
 
Huawei sued Samsung in the United States and China in May, accusing its rival of infringement on patents for fourth-generation (4G) cellular communications technology, operating systems and user interface software. 
 
Chinese technology companies have often been on the receiving end of such lawsuits, so Huawei&#39;s US litigation marked something of a reversal of roles, reflecting its growing clout in the global telecommunications and smartphone markets. 
 
CIMB analyst Lee Do-hoon said neither company was likely to be motivated by monetary compensation from the legal battle. 
 
Huawei could be angling to boost its reputation by taking on the top smartphone player, he said, while Samsung&#39;s suit might be a manoeuvre to force Huawei to settle its claims as soon as possible. 
 
&quot;If you look at the patent battle with Apple and Samsung ... it ultimately created a lot of benefits for Samsung in a kind of an advertisement,&quot; he said. 
 
&quot;Huawei might also be trying to create some noise marketing for itself,&quot; he said, adding he expected the two firms to eventually reach a deal such as a cross-licensing agreement. 
 
Huawei became the first Chinese handset vendor to ship more than 100 million smartphones in a year in 2015 when a 44 per cent jump in its shipments defied a market slowdown. 
 
(Reuters)

Huawei, one of the world's largest telecom equipment manufacturers, said it did not receive any formal complaint

Tech giant Samsung Electronics Co Ltd said on Friday it sued Huawei Technologies Co Ltd for patent infringements through multiple courts in China, escalating a legal conflict between the smartphone rivals. The suits mark the latest salvo in a fight between the world's Number one and Number three smartphone makers, who compete fiercely across the world in an industry that researcher IHS says is worth $332 billion this year. The South Korean firm sued Huawei in a Beijing court about two weeks ago for allegedly infringing six of its patents, a spokeswoman said. She did not elaborate on the types of patents or the other Chinese courts involved. "Despite our best efforts to resolve this matter amicably, it has regrettably become necessary to take legal action in order to defend our intellectual property," Samsung told Reuters in a statement. Shenzhen-based Huawei Technologies - also one of the world's largest telecom equipment manufacturers - said in a statement it had not received a "formal complaint" but would defend itself as necessary. "In the absence of a negotiated settlement, litigation is often an efficient way to resolve" intellectual property rights disputes, it said. Huawei sued Samsung in the United States and China in May, accusing its rival of infringement on patents for fourth-generation (4G) cellular communications technology, operating systems and user interface software. Chinese technology companies have often been on the receiving end of such lawsuits, so Huawei's US litigation marked something of a reversal of roles, reflecting its growing clout in the global telecommunications and smartphone markets. CIMB analyst Lee Do-hoon said neither company was likely to be motivated by monetary compensation from the legal battle. Huawei could be angling to boost its reputation by taking on the top smartphone player, he said, while Samsung's suit might be a manoeuvre to force Huawei to settle its claims as soon as possible. "If you look at the patent battle with Apple and Samsung ... it ultimately created a lot of benefits for Samsung in a kind of an advertisement," he said. "Huawei might also be trying to create some noise marketing for itself," he said, adding he expected the two firms to eventually reach a deal such as a cross-licensing agreement. Huawei became the first Chinese handset vendor to ship more than 100 million smartphones in a year in 2015 when a 44 per cent jump in its shipments defied a market slowdown. (Reuters)

Samsung summons China's Huawei for patent infringements

India&#39;s next central bank governor could learn a lot about stubbornly high prices in rural areas by driving down a ramshackle road in Uttar Pradesh state to talk to small farmers like Dharmendra Malik. 
 
After cooling last year due largely to lower oil prices, India&#39;s old nemesis inflation is back on the prowl and is threatening to breach the Reserve Bank of India&#39;s (RBI) target, a harsh welcome for its new chief who is expected to be appointed soon. 
 
Rising prices are also feeding rural perceptions that Prime Minister Narendra Modi increasingly favours the urban middle class, a key voter base. Millions of government employees recently received hefty pay hikes, while more farmers are going bust. 
 
The dusty village of Sisauli puts the dilemma facing India&#39;s policymakers into clear focus.&nbsp;Sisuali is three hours by rough road from New Delhi, making transporting goods difficult and expensive.&nbsp;Layers of middlemen also clog the supply chain and take their cuts. Some farmers say their produce can go through at least four intermediaries before reaching customers. 
 
Malik says he sold rice for 16 Rupees (24 cents) a kilogram to a middle man. In a market 10 minutes away, it retails for three times as much. 
 
&quot;Inflation has come down only on paper; in reality, there is no let up in surging prices,&quot; Sudhir Kumar said in his grocery shop, which also has a small TV set he uses to keep an eye on commodity prices. 
 
Decades of neglect bubbling over 
 
Rural India has long suffered from neglect, but tensions are rising as food prices have surged after two years of drought. 
 
Retail inflation in rural areas has consistently outpaced urban areas in the past 18 months, hitting 6.20 per cent in June, well above 5.26 per cent in cities such as Mumbai.&nbsp;That has pushed overall inflation to a near two-year high of 5.77 per cent in June, near the upper end of the RBI&#39;s 2-6 per cent inflation target. 
 
RBI officials have stressed that many of the causes are structural and beyond the central bank&#39;s control, but the spike in inflation could complicate the next governor&#39;s job. 
 
Though India has become the world&#39;s fastest growing large economy, political pressure on the RBI is growing to cut interest rates more aggressively to spur full employment, at the risk of unleashing even stronger inflationary forces. 
 
Outgoing Governor Raghuram Rajan was lauded by investors for introducing inflation targeting last year, restoring the RBI&#39;s credibility by linking price management to numerical targets. Investors are closely watching to see if his successor will stick to tough targets or water them down. 
 
Economists polled by Reuters see only one more rate cut over the next year, if inflation does not pick-up too sharply. 
 
No easy fixes 
 
Prime Minister Narendra Modi&#39;s Bharatiya Janata Party (BJP) is already facing a tough electoral test in the state next year. Uttar Pradesh will be a crucial test for its re-election bid in 2019. 
 
&quot;You are not ready to pay more to farmers because that is bad economics,&quot; said Malik. &quot;But no one complains when hefty pay increases are given to government employees.&quot; &nbsp; 
 
The government is making some strides. It is spending on infrastructure and is seeking to weed out middlemen by giving farmers an option of selling their goods across India via electronic trading platforms set up at wholesale markets.&nbsp;But progress is slow, and middlemen continue to hold sway as farmers lack the means to ship directly to buyers. 
 
Rate cuts would do little for villagers such as Narpendar Jhinjha, a heavily indebted 52-year-old farmer, who says another bad year will force him to sell his land. 
 
&quot;A farmer is hit on both sides,&quot; Jhinja said, referring to low crop prices and higher prices for goods he needs to buy.&nbsp;&quot;And on top of that we have our loans to pay for. Farmers have been condemned to a life of misery.&quot; 
 
(Reuters)

Rising prices also feed rural perceptions that Prime Minister Narendra Modi increasingly favours the urban middle class, a key voter base

India's next central bank governor could learn a lot about stubbornly high prices in rural areas by driving down a ramshackle road in Uttar Pradesh state to talk to small farmers like Dharmendra Malik. After cooling last year due largely to lower oil prices, India's old nemesis inflation is back on the prowl and is threatening to breach the Reserve Bank of India's (RBI) target, a harsh welcome for its new chief who is expected to be appointed soon. Rising prices are also feeding rural perceptions that Prime Minister Narendra Modi increasingly favours the urban middle class, a key voter base. Millions of government employees recently received hefty pay hikes, while more farmers are going bust. The dusty village of Sisauli puts the dilemma facing India's policymakers into clear focus. Sisuali is three hours by rough road from New Delhi, making transporting goods difficult and expensive. Layers of middlemen also clog the supply chain and take their cuts. Some farmers say their produce can go through at least four intermediaries before reaching customers. Malik says he sold rice for 16 Rupees (24 cents) a kilogram to a middle man. In a market 10 minutes away, it retails for three times as much. "Inflation has come down only on paper; in reality, there is no let up in surging prices," Sudhir Kumar said in his grocery shop, which also has a small TV set he uses to keep an eye on commodity prices. Decades of neglect bubbling over Rural India has long suffered from neglect, but tensions are rising as food prices have surged after two years of drought. Retail inflation in rural areas has consistently outpaced urban areas in the past 18 months, hitting 6.20 per cent in June, well above 5.26 per cent in cities such as Mumbai. That has pushed overall inflation to a near two-year high of 5.77 per cent in June, near the upper end of the RBI's 2-6 per cent inflation target. RBI officials have stressed that many of the causes are structural and beyond the central bank's control, but the spike in inflation could complicate the next governor's job. Though India has become the world's fastest growing large economy, political pressure on the RBI is growing to cut interest rates more aggressively to spur full employment, at the risk of unleashing even stronger inflationary forces. Outgoing Governor Raghuram Rajan was lauded by investors for introducing inflation targeting last year, restoring the RBI's credibility by linking price management to numerical targets. Investors are closely watching to see if his successor will stick to tough targets or water them down. Economists polled by Reuters see only one more rate cut over the next year, if inflation does not pick-up too sharply. No easy fixes Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) is already facing a tough electoral test in the state next year. Uttar Pradesh will be a crucial test for its re-election bid in 2019. "You are not ready to pay more to farmers because that is bad economics," said Malik. "But no one complains when hefty pay increases are given to government employees." The government is making some strides. It is spending on infrastructure and is seeking to weed out middlemen by giving farmers an option of selling their goods across India via electronic trading platforms set up at wholesale markets. But progress is slow, and middlemen continue to hold sway as farmers lack the means to ship directly to buyers. Rate cuts would do little for villagers such as Narpendar Jhinjha, a heavily indebted 52-year-old farmer, who says another bad year will force him to sell his land. "A farmer is hit on both sides," Jhinja said, referring to low crop prices and higher prices for goods he needs to buy. "And on top of that we have our loans to pay for. Farmers have been condemned to a life of misery." (Reuters)

India's next central bank chief will face stubborn old foe: Rural inflation

German carmaker Volkswagen will suspend sales of most of its models in South Korea from July 25 as pressure builds on the company over its falsified emissions tests. 
 
South Korea is the latest country forcing Volkswagen to take drastic measures to repair its image since the carmaker admitted to cheating US diesel emissions tests and said that up to 11 million vehicles worldwide could be fitted with illegal software. 
 
&quot;We have decided to suspend sales of the affected models to reduce confusion among dealers and customers,&quot; a spokesman for Volkswagen&#39;s South Korean business said. 
 
The move comes ahead of an environment ministry review this month or in early August on whether to revoke certification of the 32 vehicle types offered for sale by Volkswagen and its Audi brand, which would lead to a sales ban. Volkwagen is due to present its case on July 25. 
 
South Korean prosecutors last month issued the first warrant for the arrest of a VW executive in connection with the emissions scandal. 
 
Globally, the company has already set aside about 16.2 billion euros ($17.85 billion) to cover the cost of the scandal and this week said that it had set aside a further 2.2 billion euros. 
 
&quot;The latest costs show that the dieselgate scandal is far from dealt with,&quot; NordLB analyst Frank Schwope said. 
 
Schwope raised his estimate for the cost of the scandal to between 25 billion euros and 35 billion euros, up from a range of 20 billion euros to 30 billion euros. 
 
Volkswagen has been struggling with a sales slump in South Korea, Asia&#39;s second-biggest diesel car market. Sales of VW-branded cars in South Korea slumped 33 per cent to 12,463 vehicles in the first half of this year, industry association data shows. 
 
The group&#39;s top-selling vehicles in Korea last year were the Volkswagen Tiguan 2.0 TDI BlueMotion, with 9,467 vehicles, and the Audi A6 TDI, with 7,049 vehicles, according to the Korea Automobile Importers and Distributors Association. 
 
German car sales in South Korea have soared since a 2011 free-trade deal eliminated duty on vehicles imported from Europe. 
 
(Reuters)&nbsp;

The German carmaker has been struggling with a sales slump in South Korea, Asia's second-biggest diesel car market

German carmaker Volkswagen will suspend sales of most of its models in South Korea from July 25 as pressure builds on the company over its falsified emissions tests. South Korea is the latest country forcing Volkswagen to take drastic measures to repair its image since the carmaker admitted to cheating US diesel emissions tests and said that up to 11 million vehicles worldwide could be fitted with illegal software. "We have decided to suspend sales of the affected models to reduce confusion among dealers and customers," a spokesman for Volkswagen's South Korean business said. The move comes ahead of an environment ministry review this month or in early August on whether to revoke certification of the 32 vehicle types offered for sale by Volkswagen and its Audi brand, which would lead to a sales ban. Volkwagen is due to present its case on July 25. South Korean prosecutors last month issued the first warrant for the arrest of a VW executive in connection with the emissions scandal. Globally, the company has already set aside about 16.2 billion euros ($17.85 billion) to cover the cost of the scandal and this week said that it had set aside a further 2.2 billion euros. "The latest costs show that the dieselgate scandal is far from dealt with," NordLB analyst Frank Schwope said. Schwope raised his estimate for the cost of the scandal to between 25 billion euros and 35 billion euros, up from a range of 20 billion euros to 30 billion euros. Volkswagen has been struggling with a sales slump in South Korea, Asia's second-biggest diesel car market. Sales of VW-branded cars in South Korea slumped 33 per cent to 12,463 vehicles in the first half of this year, industry association data shows. The group's top-selling vehicles in Korea last year were the Volkswagen Tiguan 2.0 TDI BlueMotion, with 9,467 vehicles, and the Audi A6 TDI, with 7,049 vehicles, according to the Korea Automobile Importers and Distributors Association. German car sales in South Korea have soared since a 2011 free-trade deal eliminated duty on vehicles imported from Europe. (Reuters)

Falsified emission tests: Volkswagen halts sales in South Korea ahead of ministry review

Bitcoin exchange Coinbase said on Thursday it is now offering the Ether digital currency to consumers.&nbsp; 
 
Ether is the digital currency for the Ethereum platform, a blockchain, or public database that can be used by consumers or corporations without the need for control by intermediaries. 
 
Ethereum, which uses Ether to execute peer-to-peer contracts automatically, was co-founded and invented by 22-year old Russian-Canadian programmer Vitalik Buterin. 
 
&quot;Ethereum is still in an early and experimental phase and, as it matures, will likely evolve to serve a different purpose than Bitcoin,&quot; said Ankur Nandwani, product manager at Coinbase, in a blog posted on the company&#39;s website.&nbsp; 
 
&quot;In the meantime, Ethereum is pushing the digital currency ecosystem forward and we are excited to support it as part of our mission to create an open financial system for the world.&quot; 
 
The addition of Ether comes given the surge in interest in the digital asset among major financial institutions such as Barclays and other global corporations which are trying to explore the Ethereum network. 
 
Nandwani said consumers in 32 countries can now buy, sell, and store in their Coinbase accounts. 
 
In May, Ether trading was added to its digital currency exchange called GDAX (Global Digital Asset Exchange). That trading platform is 
focussed on institutional investors and professional traders. 
 
According to coinmarketcap.com, Ether was trading at $12.64 late on Thursday, with a market capitalisation of about $1.04 billion, the 
second largest behind bitcoin. Bitcoin currently has a market cap of $10.48 billion and trading at $664.85.&nbsp; 
 
Volume for Ether over the last 24 hours was around $25.7 million, while that for bitcoin was $61.2 million. 
 
At the beginning of the year, Ether traded at just $1 per token and it is one of the fastest-rising digital currencies. 
 
(Reuters)

Ether is a blockchain, or public database that can be used by consumers without intermediary control

Bitcoin exchange Coinbase said on Thursday it is now offering the Ether digital currency to consumers. Ether is the digital currency for the Ethereum platform, a blockchain, or public database that can be used by consumers or corporations without the need for control by intermediaries. Ethereum, which uses Ether to execute peer-to-peer contracts automatically, was co-founded and invented by 22-year old Russian-Canadian programmer Vitalik Buterin. "Ethereum is still in an early and experimental phase and, as it matures, will likely evolve to serve a different purpose than Bitcoin," said Ankur Nandwani, product manager at Coinbase, in a blog posted on the company's website. "In the meantime, Ethereum is pushing the digital currency ecosystem forward and we are excited to support it as part of our mission to create an open financial system for the world." The addition of Ether comes given the surge in interest in the digital asset among major financial institutions such as Barclays and other global corporations which are trying to explore the Ethereum network. Nandwani said consumers in 32 countries can now buy, sell, and store in their Coinbase accounts. In May, Ether trading was added to its digital currency exchange called GDAX (Global Digital Asset Exchange). That trading platform is focussed on institutional investors and professional traders. According to coinmarketcap.com, Ether was trading at $12.64 late on Thursday, with a market capitalisation of about $1.04 billion, the second largest behind bitcoin. Bitcoin currently has a market cap of $10.48 billion and trading at $664.85. Volume for Ether over the last 24 hours was around $25.7 million, while that for bitcoin was $61.2 million. At the beginning of the year, Ether traded at just $1 per token and it is one of the fastest-rising digital currencies. (Reuters)

Coinbase offers digital currency to consumers

Roger Ailes on Thursday resigned as chairman and chief executive of Fox News Channel following allegations of sexual harassment, an abrupt end to his 20-year rein over America&#39;s most lucrative and powerful cable news channel for conservatives.&nbsp; 
 
Rupert Murdoch, 85, the executive chairman of Twenty-First Century Fox Inc, the parent of Fox News, will assume the role of CEO Fox News and Fox Business Network on an interim basis, the company said on Thursday. 
 
Ailes, who will serve as an informal adviser to Rupert Murdoch and no longer have an official role at the company, will receive a severance package of about $40 million, according to a source familiar with the situation, who asked to remain anonymous. 
 
In his resignation letter to Murdoch, Ailes did not indicate he had done anything wrong. 
 
&quot;I take particular pride in the role that I have played advancing the careers of the many women I have promoted to executive and on-air positions,&quot; Ailes wrote in the letter, which his lawyer Susan Estrich provided to Reuters. 
 
However, he added: &quot;I will not allow my presence to become a distraction from the work that must be done every day to ensure that Fox News and Fox Business continue to lead our industry.&quot; 
 
The resignation marks a swift downfall for Ailes, the 76-year-old media executive who advised several US Republican presidents, including George HW Bush, and turned Fox News into the most-watched US cable news channel. 
 
His departure comes on the final and biggest night of the Republican National Convention where Donald Trump will formally accept the Republican presidential nomination.&nbsp; 
 
Trump tweeted on Thursday, &ldquo;Roger Ailes just called. He is a great guy &amp; assures me that &#39;Trump&#39; will be treated fairly on @FoxNews. His word is always good!&rdquo; 
 
Former Fox News anchor Gretchen Carlson sued Ailes earlier this month claiming sexual harassment. Ailes has denied the charges. Fox hired a law firm to conduct an internal investigation.&nbsp; 
 
New York magazine followed up with reports of other women who said they had been harassed by Ailes. On Tuesday, the magazine said that popular Fox News anchor Megyn Kelly had told investigators hired by Fox that Ailes &quot;made unwanted sexual advances toward her&quot; about 10 years ago. 
 
Ailes, who founded the cable channel in 1996, did not sexually harass Kelly, according to a statement attributed to his lawyer in the New York Times on Tuesday.&nbsp; 
 
The resignation comes as Fox News, known for a line-up of politically conservative commentators, including best-selling author Bill O&#39;Reilly, is drawing record viewership. The network is the most-watched channel in all of basic cable television this year with an average of 2.2 million prime-time viewers, according to Nielsen data through June. 
 
Challenges ahead 
 
Whoever replaces Ailes faces the twin challenges of retaining Fox News&#39; established on-air stars such as O&#39;Reilly and Kelly, while making the network attractive to younger viewers, a demographic it has consistently missed. 
 
O&#39;Reilly and Kelly&#39;s contracts are up in 2017, and stars, including Greta Van Susteren and Sean Hannity, all have clauses in their contracts that allow them to leave the network if Ailes departs, according to media reports. 
 
New management will also have to win over the many Ailes loyalists left in the rank. 
 
&quot;Roger Ailes is the best boss I have ever had. I admire him professionally,&quot; Fox News anchor Chris Wallace said in an email. &quot;And I love him personally. I am heartbroken he is gone.&quot; 
 
Murdoch, who built his father&#39;s Australian newspaper business into one of the world&#39;s most powerful news and entertainment conglomerates, has always been fiercely loyal to Ailes, and cut his vacation short in the French Riviera with his wife Jerry Hall to handle the resignation. 
 
While the choice of Murdoch makes sense in terms of &ldquo;creating a holding pattern for programming and talent,&rdquo; Fox would be wise to work quickly to find a new CEO, said Merrill Brown, a former media executive who helped launch MSNBC. &ldquo;It is a good choice if its length is measured in weeks.&quot; 
 
Ailes&#39; long experience as both a television producer and a Republican strategist helped him to formulate a winning strategy: hire charismatic talent to appeal to a conservative audience. 
 
&ldquo;Roger Ailes has made a remarkable contribution to our company and our country,&quot; Murdoch said in a statement. &quot;Roger shared my vision of a great and independent television organisation and executed it brilliantly over 20 great years.&quot; 
 
Critics said Ailes pushed a Republican agenda under the oft-repeated slogan &quot;Fair and Balanced.&quot; His fans said he smartly recognised that conservative TV viewers were not seeing their viewpoints reflected on Time Warner Inc&#39;s CNN or major broadcast networks. Fox News Channel went on the air in 1996, just before Bill Clinton was elected to a second term as president, with Ailes as founding CEO. 
 
While Ailes&#39; departure may not come at an ideal time for Fox News, the momentum of record ratings amid the most sensational US presidential election in decades may give the cable network some breathing room to recover, media buyers and Wall Street analysts have told Reuters. And some of them say this could be an opportunity for Fox News, whose median age of viewers is over 65, to focus on getting younger fans. 
 
(Reuters)

Roger Ailes will serve as an informal adviser to Rupert Murdoch and will receive a severance package of about $40 million

Roger Ailes on Thursday resigned as chairman and chief executive of Fox News Channel following allegations of sexual harassment, an abrupt end to his 20-year rein over America's most lucrative and powerful cable news channel for conservatives. Rupert Murdoch, 85, the executive chairman of Twenty-First Century Fox Inc, the parent of Fox News, will assume the role of CEO Fox News and Fox Business Network on an interim basis, the company said on Thursday. Ailes, who will serve as an informal adviser to Rupert Murdoch and no longer have an official role at the company, will receive a severance package of about $40 million, according to a source familiar with the situation, who asked to remain anonymous. In his resignation letter to Murdoch, Ailes did not indicate he had done anything wrong. "I take particular pride in the role that I have played advancing the careers of the many women I have promoted to executive and on-air positions," Ailes wrote in the letter, which his lawyer Susan Estrich provided to Reuters. However, he added: "I will not allow my presence to become a distraction from the work that must be done every day to ensure that Fox News and Fox Business continue to lead our industry." The resignation marks a swift downfall for Ailes, the 76-year-old media executive who advised several US Republican presidents, including George HW Bush, and turned Fox News into the most-watched US cable news channel. His departure comes on the final and biggest night of the Republican National Convention where Donald Trump will formally accept the Republican presidential nomination. Trump tweeted on Thursday, “Roger Ailes just called. He is a great guy & assures me that 'Trump' will be treated fairly on @FoxNews. His word is always good!” Former Fox News anchor Gretchen Carlson sued Ailes earlier this month claiming sexual harassment. Ailes has denied the charges. Fox hired a law firm to conduct an internal investigation. New York magazine followed up with reports of other women who said they had been harassed by Ailes. On Tuesday, the magazine said that popular Fox News anchor Megyn Kelly had told investigators hired by Fox that Ailes "made unwanted sexual advances toward her" about 10 years ago. Ailes, who founded the cable channel in 1996, did not sexually harass Kelly, according to a statement attributed to his lawyer in the New York Times on Tuesday. The resignation comes as Fox News, known for a line-up of politically conservative commentators, including best-selling author Bill O'Reilly, is drawing record viewership. The network is the most-watched channel in all of basic cable television this year with an average of 2.2 million prime-time viewers, according to Nielsen data through June. Challenges ahead Whoever replaces Ailes faces the twin challenges of retaining Fox News' established on-air stars such as O'Reilly and Kelly, while making the network attractive to younger viewers, a demographic it has consistently missed. O'Reilly and Kelly's contracts are up in 2017, and stars, including Greta Van Susteren and Sean Hannity, all have clauses in their contracts that allow them to leave the network if Ailes departs, according to media reports. New management will also have to win over the many Ailes loyalists left in the rank. "Roger Ailes is the best boss I have ever had. I admire him professionally," Fox News anchor Chris Wallace said in an email. "And I love him personally. I am heartbroken he is gone." Murdoch, who built his father's Australian newspaper business into one of the world's most powerful news and entertainment conglomerates, has always been fiercely loyal to Ailes, and cut his vacation short in the French Riviera with his wife Jerry Hall to handle the resignation. While the choice of Murdoch makes sense in terms of “creating a holding pattern for programming and talent,” Fox would be wise to work quickly to find a new CEO, said Merrill Brown, a former media executive who helped launch MSNBC. “It is a good choice if its length is measured in weeks." Ailes' long experience as both a television producer and a Republican strategist helped him to formulate a winning strategy: hire charismatic talent to appeal to a conservative audience. “Roger Ailes has made a remarkable contribution to our company and our country," Murdoch said in a statement. "Roger shared my vision of a great and independent television organisation and executed it brilliantly over 20 great years." Critics said Ailes pushed a Republican agenda under the oft-repeated slogan "Fair and Balanced." His fans said he smartly recognised that conservative TV viewers were not seeing their viewpoints reflected on Time Warner Inc's CNN or major broadcast networks. Fox News Channel went on the air in 1996, just before Bill Clinton was elected to a second term as president, with Ailes as founding CEO. While Ailes' departure may not come at an ideal time for Fox News, the momentum of record ratings amid the most sensational US presidential election in decades may give the cable network some breathing room to recover, media buyers and Wall Street analysts have told Reuters. And some of them say this could be an opportunity for Fox News, whose median age of viewers is over 65, to focus on getting younger fans. (Reuters)

Fox News chief quits after sexual harassment claims

IMF chief Christine Lagarde was ordered Friday to stand trial in France over a massive state payout to a controversial tycoon when she was French economy minister, dealing a setback to her stellar career. 
 
Frances highest appeals court dismissed Lagarde&#39;s challenge against the decision to try her for negligence in her handling of a dispute between a state-owned bank and businessman Bernard Tapie. 
 
Tapie walked away with a staggering 404 million euros ($445 million) in compensation in 2008 after Lagarde ordered the long-running row over the sale of sports gear giant Adidas to be resolved by arbitration. 
 
Friday&#39;s ruling means the 60-year-old IMF chief will go before a special tribunal that hears cases against government ministers accused of wrongdoing in the discharge of their duties. The ruling is a blow to the IMF boss, who insists she acted in France&#39;s best interests in the case. 
 
Lagarde has denied any wrongdoing or that she acted on orders from then president Nicolas Sarkozy, of whom Tapie was a supporter. In an interview with AFP in Washington earlier this month she insisted she had a &quot;clear conscience&quot;. &quot;Ive always acted in accordance with the law, and I`ve always had in mind the public interest. 
 
&quot;It was not my duty to select the arbitration panel, to investigate their past and history, and I had no reason to doubt their probity and honesty,&quot; she said. 
 
Investigating magistrates however found evidence of &quot;serious negligence on the part of a minister tasked with conducting affairs of state&quot; and in December ordered the case go to trial. 
 
Lagarde appealed the decision, but her challenge was struck out Friday.&nbsp;If tried and convicted, she risks up to a year in prison and a fine of 15,000 euros. 
 
IMF firmly backs Christine Lagarde&nbsp; 
 
The International Monetary Fund expressed firm backing for Lagarde. &quot;The executive board has been briefed on recent developments related to this matter, and continues to express its confidence in the Managing Director&#39;s ability to effectively carry out her duties,&quot; said IMF spokesman Gerry Rice. 
 
The case was well known to the Fund&#39;s executive directors during her first term leading the Washington-based institution, and they have consistently expressed support for and confidence in her. 
 
Rice said in an emailed statement that it would &quot;would not be appropriate&quot; for the IMF to comment on the case itself. 
 
Lagarde was placed under formal investigation in 2014 over her handling of a long-running dispute with Tapie, who claimed he was defrauded by the state-controlled bank Credit Lyonnais in its handling of his sale of Adidas in the 1990s. The case against Lagarde stems from her decision to allow the row be settled by arbitration instead of by the courts, which would likely have resulted in a much smaller bill for the state.&nbsp; 
 
Prosecutors have also questioned her failure to challenge the massive award. A court has since found the arbitration to be fraudulent because one of the arbitrators had links to 73-year-old Tapie. 
 
The ruling comes just days after she began her second term as head of the institution, where she has been hailed as both a tough negotiator and a skilled consensus-builder. 
 
She will be the third successive head of the Washington-based lender to face trial. 
 
Her predecessor, compatriot Dominique Strauss-Kahn, was acquitted of pimping by a French court last year, four years after he resigned his IMF post to fight separate sexual assault allegations. 
 
Spain&#39;s former IMF chief Rodrigo Rato has also been ordered to stand trial for misusing funds when he was head of Spanish lender Bankia.&nbsp; 
 
The former corporate lawyer became the first woman to head the IMF when she replaced Strauss-Kahn in July 2011. 
 
(AFP) 
&nbsp;

Lagarde was ordered to be tried for her role in making a 404 million Euro payout to businessman Bernard Tapie when she was finance minister

IMF chief Christine Lagarde was ordered Friday to stand trial in France over a massive state payout to a controversial tycoon when she was French economy minister, dealing a setback to her stellar career. Frances highest appeals court dismissed Lagarde's challenge against the decision to try her for negligence in her handling of a dispute between a state-owned bank and businessman Bernard Tapie. Tapie walked away with a staggering 404 million euros ($445 million) in compensation in 2008 after Lagarde ordered the long-running row over the sale of sports gear giant Adidas to be resolved by arbitration. Friday's ruling means the 60-year-old IMF chief will go before a special tribunal that hears cases against government ministers accused of wrongdoing in the discharge of their duties. The ruling is a blow to the IMF boss, who insists she acted in France's best interests in the case. Lagarde has denied any wrongdoing or that she acted on orders from then president Nicolas Sarkozy, of whom Tapie was a supporter. In an interview with AFP in Washington earlier this month she insisted she had a "clear conscience". "Ive always acted in accordance with the law, and I`ve always had in mind the public interest. "It was not my duty to select the arbitration panel, to investigate their past and history, and I had no reason to doubt their probity and honesty," she said. Investigating magistrates however found evidence of "serious negligence on the part of a minister tasked with conducting affairs of state" and in December ordered the case go to trial. Lagarde appealed the decision, but her challenge was struck out Friday. If tried and convicted, she risks up to a year in prison and a fine of 15,000 euros. IMF firmly backs Christine Lagarde The International Monetary Fund expressed firm backing for Lagarde. "The executive board has been briefed on recent developments related to this matter, and continues to express its confidence in the Managing Director's ability to effectively carry out her duties," said IMF spokesman Gerry Rice. The case was well known to the Fund's executive directors during her first term leading the Washington-based institution, and they have consistently expressed support for and confidence in her. Rice said in an emailed statement that it would "would not be appropriate" for the IMF to comment on the case itself. Lagarde was placed under formal investigation in 2014 over her handling of a long-running dispute with Tapie, who claimed he was defrauded by the state-controlled bank Credit Lyonnais in its handling of his sale of Adidas in the 1990s. The case against Lagarde stems from her decision to allow the row be settled by arbitration instead of by the courts, which would likely have resulted in a much smaller bill for the state. Prosecutors have also questioned her failure to challenge the massive award. A court has since found the arbitration to be fraudulent because one of the arbitrators had links to 73-year-old Tapie. The ruling comes just days after she began her second term as head of the institution, where she has been hailed as both a tough negotiator and a skilled consensus-builder. She will be the third successive head of the Washington-based lender to face trial. Her predecessor, compatriot Dominique Strauss-Kahn, was acquitted of pimping by a French court last year, four years after he resigned his IMF post to fight separate sexual assault allegations. Spain's former IMF chief Rodrigo Rato has also been ordered to stand trial for misusing funds when he was head of Spanish lender Bankia. The former corporate lawyer became the first woman to head the IMF when she replaced Strauss-Kahn in July 2011. (AFP)

French court orders IMF chief Christine Lagarde to stand trial

The owner of file-sharing website Kickass Torrent (KAT)&nbsp;was indicted in the United States on Wednesday for copyright infringement related to the distribution of more than $1 billion worth of movies, video games, music recordings and other content, US&nbsp;justice officials said. 
 
Artem Vaulin, 30, of Ukraine, was arrested in Poland and US&nbsp;officials want him extradited to face charges that include conspiracy to commit criminal copyright infringement and conspiracy to commit money laundering, according to attorneys for the US&nbsp;District Court for the Northern District of Illinois. 
 
US&nbsp;officials alleged that KAT, which operates in about 28 languages, has a net worth of more than $54 million and illegally made available&nbsp;downloads of&nbsp;movies that were still in theaters such as &quot;Independence Day: Resurgence&quot; and &quot;Finding Dory,&quot; the complaint stated. 
 
The indictment stated that for financial gain the peer-to-peer file-sharing website, also known as Kickass&nbsp;Torrents, distributed since 2008 copyrighted works such as this year&#39;s film &quot;Captain America: Civil War.&quot; 
 
Justice officials and artists&#39; groups have gone after other websites that provided venues for file sharing, such as Napster and Megaupload. The founder of Megaupload, known as Kim Dotcom, is fighting extradition to the United States and has denied allegations that his site has cost film and record companies more than $500 million in revenue. 
 
&quot;Copyright infringement exacts a large toll, a very human one, on the artists and businesses whose livelihood hinges on their creative inventions,&quot; US&nbsp;attorney Zachary Fardon said in a statement. 
 
&quot;Vaulin allegedly used the Internet to cause enormous harm to those artists,&quot; Fardon said, adding that KAT relied on computer servers around the world due to efforts to halt illegal file sharing. 
 
There was no legal representation listed for Vaulin in any court docket, a US&nbsp;Department of Justice spokesman said. The company could not be reached through websites, which were experiencing outages, and there was no immediate response to a request sent to KAT through social media. 
 
One of the domains operated by KAT, Kat.cr, was the 70th most popular website in the world, according to monitoring firm Alexa. 
 
(Reuters)

US?officials allege KAT has a net worth of more than $54 million and illegally made available downloads of movies still running in theatre

The owner of file-sharing website Kickass Torrent (KAT) was indicted in the United States on Wednesday for copyright infringement related to the distribution of more than $1 billion worth of movies, video games, music recordings and other content, US justice officials said. Artem Vaulin, 30, of Ukraine, was arrested in Poland and US officials want him extradited to face charges that include conspiracy to commit criminal copyright infringement and conspiracy to commit money laundering, according to attorneys for the US District Court for the Northern District of Illinois. US officials alleged that KAT, which operates in about 28 languages, has a net worth of more than $54 million and illegally made available downloads of movies that were still in theaters such as "Independence Day: Resurgence" and "Finding Dory," the complaint stated. The indictment stated that for financial gain the peer-to-peer file-sharing website, also known as Kickass Torrents, distributed since 2008 copyrighted works such as this year's film "Captain America: Civil War." Justice officials and artists' groups have gone after other websites that provided venues for file sharing, such as Napster and Megaupload. The founder of Megaupload, known as Kim Dotcom, is fighting extradition to the United States and has denied allegations that his site has cost film and record companies more than $500 million in revenue. "Copyright infringement exacts a large toll, a very human one, on the artists and businesses whose livelihood hinges on their creative inventions," US attorney Zachary Fardon said in a statement. "Vaulin allegedly used the Internet to cause enormous harm to those artists," Fardon said, adding that KAT relied on computer servers around the world due to efforts to halt illegal file sharing. There was no legal representation listed for Vaulin in any court docket, a US Department of Justice spokesman said. The company could not be reached through websites, which were experiencing outages, and there was no immediate response to a request sent to KAT through social media. One of the domains operated by KAT, Kat.cr, was the 70th most popular website in the world, according to monitoring firm Alexa. (Reuters)

Kickass Torrent founder Artem Vaulin arrested in Poland,  US indicts him, wants him extradited

Apple Inc stands to rake in $3 billion in revenue from the Pokemon Go craze in the next one to two years as gamers buy &quot;PokeCoins&quot; from its app store, brokerage Needham &amp; Co said. 
 
Pokemon Go, the augmented reality game from Japan&#39;s Nintendo Co Ltd, can be downloaded for free, but iPhone users can use PokeCoins to buy additional features.&nbsp;A pack of 100 PokeCoins costs 99 cents in Apple&#39;s app store, but the price can go up as much as $99.99 for a pack of 14,500. 
 
&quot;We believe Apple keeps 30 per cent of Pokemon Go&#39;s revenue spent on iOS devices, suggesting upside to earnings,&quot; Needham analyst Laura Martin wrote in a client note on Wednesday. 
 
Up to Tuesday&#39;s close, Apple&#39;s shares had gained 5 per cent in market value, or about $25 billion, since the launch of the game in the United States on June 6 Nintendo&#39;s stock has nearly doubled. 
 
Pokemon Go had 21 million active users in the United States alone as of July 18, less than two weeks after going live.&nbsp;The game, which has been rolled out in 35 countries, is also available on Android devices. 
 
Martin said Pokemon Go&#39;s ratio of paid users to total users was 10 times that of Candy Crush, the hit game from King Digital that generated more than $1 billion of revenue in both 2013 and 2014. 
 
Users in the United States are spending far more time playing the game than they are using Facebook or WhatsApp, according to app analytics firm Sensor Tower. &nbsp;Electronics retailers have also seen a bump in sales of mobile chargers and charging cases since the launch of the game. 
 
(Reuters)

A pack of 100 PokeCoins costs 99 cents in Apple's app store, but the price can go up as much as $99.99 for a pack of 14,500

Apple Inc stands to rake in $3 billion in revenue from the Pokemon Go craze in the next one to two years as gamers buy "PokeCoins" from its app store, brokerage Needham & Co said. Pokemon Go, the augmented reality game from Japan's Nintendo Co Ltd, can be downloaded for free, but iPhone users can use PokeCoins to buy additional features. A pack of 100 PokeCoins costs 99 cents in Apple's app store, but the price can go up as much as $99.99 for a pack of 14,500. "We believe Apple keeps 30 per cent of Pokemon Go's revenue spent on iOS devices, suggesting upside to earnings," Needham analyst Laura Martin wrote in a client note on Wednesday. Up to Tuesday's close, Apple's shares had gained 5 per cent in market value, or about $25 billion, since the launch of the game in the United States on June 6 Nintendo's stock has nearly doubled. Pokemon Go had 21 million active users in the United States alone as of July 18, less than two weeks after going live. The game, which has been rolled out in 35 countries, is also available on Android devices. Martin said Pokemon Go's ratio of paid users to total users was 10 times that of Candy Crush, the hit game from King Digital that generated more than $1 billion of revenue in both 2013 and 2014. Users in the United States are spending far more time playing the game than they are using Facebook or WhatsApp, according to app analytics firm Sensor Tower. Electronics retailers have also seen a bump in sales of mobile chargers and charging cases since the launch of the game. (Reuters)

Apple predicted to make billions off Pokemon Go

Goldman Sachs&#39; work with Malaysian sovereign wealth fund 1MDB is under the spotlight over US government&#39;s allegations that billions of dollars were diverted for the personal use of officials in the south-east Asian country. 
 
The Wall Street bank helped 1Malaysia Development Berhad (1MDB), a development company owned by the government of Malaysia, raise $6.5 billion in three bond sales in 2012 and 2013 to invest in energy projects and real estate to boost the Malaysian economy. 
 
Instead, more than $2.5 billion raised from those bonds was misappropriated by high-level 1MDB officials, their relatives and associates, US department of justice civil lawsuits filed in court on Wednesday said. 
 
Prosecutors said the money was used to buy artwork, including paintings by Vincent Van Gogh and Claude Monet, luxury properties in New York and London and gambling debts in Las Vegas. 
 
Goldman Sachs, which earned close to $600 million to arrange and underwrite the 1MDB bonds, has not been accused of any wrongdoing. 
 
&quot;We helped raise money for a sovereign wealth fund that was designed to invest in Malaysia. We had no visibility into whether some of those funds may have been subsequently diverted to other purposes,&quot; a spokesman for the bank said. 
 
The FBI and other US regulators, including New York&#39;s department of financial services, have been investigating Goldman Sachs&#39; business relationship with 1MDB. 
 
The Wall Street bank had deep ties with 1MDB and Malaysia. In May 2012, it had helped 1MDB raise $1.75 billion in a bond deal it dubbed &quot;Project Magnolia&quot;, and $1.75 billion in a separate bond issue it called &quot;Project Maximus&quot; in October 2012. 
 
The justice department said that the offering circulars for the two bonds contained &quot;material misrepresentations and omissions&quot; over what the proceeds of the bonds would be used for and the nature of the relationship between 1MDB and International Petroleum Investment Company (IPIC), an entity owned by the Abu Dhabi government. 
 
IPIC guaranteed one bond directly and another one indirectly. The US government&#39;s allegations were that no reference to IPIC&#39;s indirect guarantee was included on the second bond offering circular. 
 
After 1MDB received the proceeds of the 2012 bonds, approximately $1.3 billion was misappropriated and fraudulently diverted to bank accounts in Switzerland and Singapore, according to the lawsuits. 
 
In 2013, Goldman helped 1MDB raise $3 billion, in a transaction referred to as &quot;Project Catalyze&quot;. The Department of Justice lawsuit said that more than $1.26 billion in proceeds from that bond was diverted to overseas shell company accounts. 
 
US authorities said that the offer document used to sell the bond failed to disclose that individuals connected to 1MDB would receive hundreds of millions of dollars from the bond proceeds within days of its closing. 
 
&quot;This fact would have been material to the bond transaction, as it would have alerted investors to the possibility of conflicts of interest and related-party transactions,&quot; one of the lawsuits said. 
 
(Reuters)&nbsp;

FBI and other US regulators have been probing Goldman Sachs' business relationship with 1MDB, Malaysian government's development company

Goldman Sachs' work with Malaysian sovereign wealth fund 1MDB is under the spotlight over US government's allegations that billions of dollars were diverted for the personal use of officials in the south-east Asian country. The Wall Street bank helped 1Malaysia Development Berhad (1MDB), a development company owned by the government of Malaysia, raise $6.5 billion in three bond sales in 2012 and 2013 to invest in energy projects and real estate to boost the Malaysian economy. Instead, more than $2.5 billion raised from those bonds was misappropriated by high-level 1MDB officials, their relatives and associates, US department of justice civil lawsuits filed in court on Wednesday said. Prosecutors said the money was used to buy artwork, including paintings by Vincent Van Gogh and Claude Monet, luxury properties in New York and London and gambling debts in Las Vegas. Goldman Sachs, which earned close to $600 million to arrange and underwrite the 1MDB bonds, has not been accused of any wrongdoing. "We helped raise money for a sovereign wealth fund that was designed to invest in Malaysia. We had no visibility into whether some of those funds may have been subsequently diverted to other purposes," a spokesman for the bank said. The FBI and other US regulators, including New York's department of financial services, have been investigating Goldman Sachs' business relationship with 1MDB. The Wall Street bank had deep ties with 1MDB and Malaysia. In May 2012, it had helped 1MDB raise $1.75 billion in a bond deal it dubbed "Project Magnolia", and $1.75 billion in a separate bond issue it called "Project Maximus" in October 2012. The justice department said that the offering circulars for the two bonds contained "material misrepresentations and omissions" over what the proceeds of the bonds would be used for and the nature of the relationship between 1MDB and International Petroleum Investment Company (IPIC), an entity owned by the Abu Dhabi government. IPIC guaranteed one bond directly and another one indirectly. The US government's allegations were that no reference to IPIC's indirect guarantee was included on the second bond offering circular. After 1MDB received the proceeds of the 2012 bonds, approximately $1.3 billion was misappropriated and fraudulently diverted to bank accounts in Switzerland and Singapore, according to the lawsuits. In 2013, Goldman helped 1MDB raise $3 billion, in a transaction referred to as "Project Catalyze". The Department of Justice lawsuit said that more than $1.26 billion in proceeds from that bond was diverted to overseas shell company accounts. US authorities said that the offer document used to sell the bond failed to disclose that individuals connected to 1MDB would receive hundreds of millions of dollars from the bond proceeds within days of its closing. "This fact would have been material to the bond transaction, as it would have alerted investors to the possibility of conflicts of interest and related-party transactions," one of the lawsuits said. (Reuters)

Goldman Sachs under spotlight in Malaysian fund scandal

Anheuser-Busch InBev and SABMiller received approval for their $107 billion merger from US antitrust regulators on Wednesday after the companies agreed to unload beer assets and preserve competition from independent craft brewers. 
 
The department of justice (DOJ) approval comes with a number of stipulations and is notable after the regulatory authority derailed several recent mega-mergers over antitrust concerns. 
 
The Belgian brewer will make concessions beyond its publicly stated offer to sell it stake in MillerCoors, its US joint venture with London-based SAB, as part of the deal. AB InBev will also have to curb its use of incentive programs to limit competition. 
 
Reuters previously reported that the department was investigating AB InBev&#39;s practice of financially rewarding beer distributors for selling more of its own beer than its competitors. Craft beer companies had vocally objected to the practice, which they argued hurt their ability to sell. 
 
&quot;Independent distributors that sell (AB InBev&rsquo;s) beer will have the freedom to sell and promote the variety of beers that many Americans drink,&quot; deputy assistant attorney general Sonia Pfaffenroth of the justice department&#39;s antitrust division said. 
 
The world&#39;s top two brewers hold brands Budweiser, Stella Artois, Miller and Pilsner Urquell. 
 
&quot;While we will make some adjustments to certain aspects of our US sales programs and policies, our fundamental approach and commitment to this market will not change,&quot; said AB InBev chief executive Officer Carlos Brito in a statement. 
 
AB InBev will also be required to secure the DOJ&#39;s approval before acquiring any beer distributors or craft beer brands. 
 
AB InBev has already acquired several regional craft beer companies, looking to benefit from a rapidly growing niche market in the slowing beer industry. Recent deals include Colorado-based Breckenridge Brewing, Oregon-based 10 Barrel Brewing and Virginia-based Devil&rsquo;s Backbone Brewing Company. 
 
&quot;The DOJ&rsquo;s significant requirements... appear to address some of our major apprehensions with the merger. With effective enforcement of these provisions, small brewers can rely on their independent distributor partners to access the market,&quot; Bob Pease, president and chief executive officer of the Brewers Association, said in a statement on Wednesday. 
 
Terms of AB InBev&#39;s agreement with the DOJ expire in 10 years. 
 
AB InBev will also divest the rights to all SABMiller beer brands currently imported or licensed for sale in the United States. 
 
Denver-based Molson Coors Brewing Co will buy SAB&#39;s 58 per cent stake in their US joint venture, MillerCoors. Molson closed up 3 per cent at $100.8 on Wednesday. 
 
The deal changes little within the US market, according to Adam Fleck, equity analyst with Morningstar in Chicago. Still, he added &quot;There&#39;s a chance to increase the profitability for Molson Coors and MillerCoors enterprises that will make MillerCoors more competitive.&quot; 
 
Globally, the deal positions the combined companies to produce almost a third of the world&#39;s beer, dwarfing other major producers like Heineken and Carlsberg. InBev will have more breweries in Latin America and Asia and an entrance to Africa, as major markets such as the United States weaken due to craft beer popularity. 
 
Australia, Europe and South Africa have cleared the deal. The companies are waiting for China to approve it although a proposed sale of SABMiller&#39;s stake in CR Snow was expected to lead to clearance. 
 
AB InBev reaffirmed its plan to close the deal by the end of the year. Shares of the company rose earlier after the DOJ announcement but were down less than 1 per cent at $112.95 in late trade in New York. SABMiller closed up less than 1 per cent in London. 
 
(Reuters)

The companies agreed to unload beer assets and preserve competition from independent craft brewers

Anheuser-Busch InBev and SABMiller received approval for their $107 billion merger from US antitrust regulators on Wednesday after the companies agreed to unload beer assets and preserve competition from independent craft brewers. The department of justice (DOJ) approval comes with a number of stipulations and is notable after the regulatory authority derailed several recent mega-mergers over antitrust concerns. The Belgian brewer will make concessions beyond its publicly stated offer to sell it stake in MillerCoors, its US joint venture with London-based SAB, as part of the deal. AB InBev will also have to curb its use of incentive programs to limit competition. Reuters previously reported that the department was investigating AB InBev's practice of financially rewarding beer distributors for selling more of its own beer than its competitors. Craft beer companies had vocally objected to the practice, which they argued hurt their ability to sell. "Independent distributors that sell (AB InBev’s) beer will have the freedom to sell and promote the variety of beers that many Americans drink," deputy assistant attorney general Sonia Pfaffenroth of the justice department's antitrust division said. The world's top two brewers hold brands Budweiser, Stella Artois, Miller and Pilsner Urquell. "While we will make some adjustments to certain aspects of our US sales programs and policies, our fundamental approach and commitment to this market will not change," said AB InBev chief executive Officer Carlos Brito in a statement. AB InBev will also be required to secure the DOJ's approval before acquiring any beer distributors or craft beer brands. AB InBev has already acquired several regional craft beer companies, looking to benefit from a rapidly growing niche market in the slowing beer industry. Recent deals include Colorado-based Breckenridge Brewing, Oregon-based 10 Barrel Brewing and Virginia-based Devil’s Backbone Brewing Company. "The DOJ’s significant requirements... appear to address some of our major apprehensions with the merger. With effective enforcement of these provisions, small brewers can rely on their independent distributor partners to access the market," Bob Pease, president and chief executive officer of the Brewers Association, said in a statement on Wednesday. Terms of AB InBev's agreement with the DOJ expire in 10 years. AB InBev will also divest the rights to all SABMiller beer brands currently imported or licensed for sale in the United States. Denver-based Molson Coors Brewing Co will buy SAB's 58 per cent stake in their US joint venture, MillerCoors. Molson closed up 3 per cent at $100.8 on Wednesday. The deal changes little within the US market, according to Adam Fleck, equity analyst with Morningstar in Chicago. Still, he added "There's a chance to increase the profitability for Molson Coors and MillerCoors enterprises that will make MillerCoors more competitive." Globally, the deal positions the combined companies to produce almost a third of the world's beer, dwarfing other major producers like Heineken and Carlsberg. InBev will have more breweries in Latin America and Asia and an entrance to Africa, as major markets such as the United States weaken due to craft beer popularity. Australia, Europe and South Africa have cleared the deal. The companies are waiting for China to approve it although a proposed sale of SABMiller's stake in CR Snow was expected to lead to clearance. AB InBev reaffirmed its plan to close the deal by the end of the year. Shares of the company rose earlier after the DOJ announcement but were down less than 1 per cent at $112.95 in late trade in New York. SABMiller closed up less than 1 per cent in London. (Reuters)

AB InBev, SABMiller deal wins US approval, adds craft beer protections

Already hamstrung by the battle to compete with online rivals, Britain&#39;s major clothing retailers now risk a hit to sales and profits from the higher costs and plummeting consumer confidence that have followed the vote to leave the European Union. 
 
A month after that vote, clothing sellers are nursing big share price falls and contemplating the cost of the depreciation in the Pound versus their most important currency, the US Dollar. 
 
At the same time, consumer confidence has recorded one of the biggest drops in over two decades. With consumer spending accounting for three quarters of Britain&#39;s gross domestic product any drop would have huge implications for the economy. 
 
While a few retailers with big overseas earnings could benefit from the currency move, such as luxury brand Burberry, online fashion retailer ASOS and discount chain Primark, those that will struggle are likely to be British-focused and with already tight margins. 
 
&quot;It was already a tough market,&quot; Andy Street, managing director of John Lewis, Britain&#39;s biggest department store chain, said earlier this month, while Steve Rowe, CEO of Marks &amp; Spencer, the nation&#39;s biggest clothing retailer, described confidence as &quot;fragile&quot;. 
 
While steps by clothing retailers to protect themselves from volatility in foreign exchange rates through hedging will provide some breathing space on the currency issue, the hit to confidence is the more immediate threat, as Britons typically curtail clothes shopping in hard times. 
 
Market researcher Nielsen polled shoppers after the Brexit vote and found 41 per cent planned to change their spending habits to save on household expenses, with clothing and expensive grocery brands in their sights. 
 
In common with all British retailers, clothing sellers were already grappling with intense competition from online-only players and the cost inflation implications of the government-mandated minimum pay rate, the national living wage, as well as increased business rates. 
 
Official data today showed UK clothing sales were falling even before the referendum. Sales volumes in the three months to June were 5 per cent lower than a year earlier, the worst performance for any calendar quarter in 25 years, and in sharp contrast to a buoyant picture for most other categories of retail. 
 
Now clothing retailers also have to deal with a sharply depreciated Pound.&nbsp;Sterling has taken the brunt of market concern since the Brexit vote on June 23, falling to a 31-year low and trading below $1.28 on July 6 against $1.50 the day before the referendum. 
 
With the bulk of British clothing retailers&#39; goods sourced from Asian suppliers and paid for in Dollars, a weaker Pound has a major impact on their buying costs. 
 
Britain&#39;s biggest clothing retailers, including M&amp;S, Next and John Lewis, are hedged up to 18 months ahead, meaning that if Sterling stays depressed the main impact will not start to be felt until the second half of their 2017-18 financial year. 
 
Sportswear retailer Sports Direct is the notable exception, being unhedged for Sterling-Dollar for its 2016-17 year. Its share price is down 32 per cent since the vote. 
 
Clothing companies would normally be expected to hedge for the second half of 2017-18 and beyond, now and over the next few months.&nbsp;But with foreign currency markets volatile, the treasury departments of firms are reviewing their hedging policies. 
 
They face a dilemma, explained a senior banker with several major British retailers as clients, because as UK interest rates look set to be cut there is a risk Sterling could fall further.&nbsp;&quot;Now might not be the right time to do it, equally waiting might not be the right thing to do,&quot; he said. 
 
That unease was echoed by a person with knowledge of the situation at a FTSE 100 clothing retailer.&nbsp;&quot;You don&rsquo;t want to be making a decision in July to hedge for 18 months time, because nobody knows what&rsquo;s going to happen. You could put yourself in a worse position,&quot; said the person, adding that only the brave would start hedging now. 
 
Faced with higher sourcing costs one solution could be to pass those costs on to consumers through higher prices.&nbsp;However, in an already weak market shoppers will have little appetite for inflation, and in the case of M&amp;S, raising prices would run counter to Rowe&#39;s stated strategy of bringing them down to cure the firm&#39;s perceived uncompetitiveness. 
 
The average price of clothing has fallen by 15 per cent in the last 10 years, according to official UK data.&nbsp;The key for clothing retailers will be their ability to mitigate the cost increases they face. 
 
&quot;There are a number of things that we can do in terms of the sourcing side of things,&quot; said Helen Weir, M&amp;S&#39; chief finance officer, noting the firm imports 1 billion to 1.5 billion Pounds ($1.31-$1.97 billion) worth of goods each year in Dollars. 
 
Options include changing the mix of sourcing countries and further increasing the proportion of direct sourcing from factories, cutting out middlemen.&nbsp;Also there might be scope to re-negotiate better terms with suppliers as Asian currencies have depreciated against the Dollar. 
 
Bankers say more radical options would require a cultural shift at retailers.&nbsp;They could pursue &quot;dual pricing&quot;, where they negotiate part payment for supplies in different currencies from the Dollar, for example using the Chinese Renminbi. 
 
Retailers could also collaborate more on ordering, shipping and warehousing to seek economy of scale savings.&nbsp;But efficiencies might be more difficult to achieve than in previous years. 
 
&quot;Companies have already materially improved their gross margins through better buying and efficiencies on the supply side,&quot; said Ernesto Bisagno, senior analyst at ratings agency Moody&#39;s. 
 
Ultimately the clothing sellers with the biggest margins will be best able to weather the storm.&nbsp;Here, Next, Britain&#39;s most successful clothing retailer of the last decade, is the stand-out stock, with an operating margin for 2015-16 of 20.8 per cent, according to Reuters data. 
 
That dwarfs M&amp;S on 7.4 per cent, which is diluted by half of its business being in the lower-margin food sector, Debenhams on 5.8 per cent (for 2014-15), Sports Direct on 9.4 per cent and Primark on 11.9 per cent (for its most recent quarter). 
 
Led by Simon Wolfson, who was among the leading business supporters of Brexit, Next should be well prepared. With some foresight, he had warned in March that 2016 could be its toughest year since 2008. 
 
(Reuters)

Clothing retailers fear volatility in foreign exchange rates, and Britons typically buy less clothes in hard times

Already hamstrung by the battle to compete with online rivals, Britain's major clothing retailers now risk a hit to sales and profits from the higher costs and plummeting consumer confidence that have followed the vote to leave the European Union. A month after that vote, clothing sellers are nursing big share price falls and contemplating the cost of the depreciation in the Pound versus their most important currency, the US Dollar. At the same time, consumer confidence has recorded one of the biggest drops in over two decades. With consumer spending accounting for three quarters of Britain's gross domestic product any drop would have huge implications for the economy. While a few retailers with big overseas earnings could benefit from the currency move, such as luxury brand Burberry, online fashion retailer ASOS and discount chain Primark, those that will struggle are likely to be British-focused and with already tight margins. "It was already a tough market," Andy Street, managing director of John Lewis, Britain's biggest department store chain, said earlier this month, while Steve Rowe, CEO of Marks & Spencer, the nation's biggest clothing retailer, described confidence as "fragile". While steps by clothing retailers to protect themselves from volatility in foreign exchange rates through hedging will provide some breathing space on the currency issue, the hit to confidence is the more immediate threat, as Britons typically curtail clothes shopping in hard times. Market researcher Nielsen polled shoppers after the Brexit vote and found 41 per cent planned to change their spending habits to save on household expenses, with clothing and expensive grocery brands in their sights. In common with all British retailers, clothing sellers were already grappling with intense competition from online-only players and the cost inflation implications of the government-mandated minimum pay rate, the national living wage, as well as increased business rates. Official data today showed UK clothing sales were falling even before the referendum. Sales volumes in the three months to June were 5 per cent lower than a year earlier, the worst performance for any calendar quarter in 25 years, and in sharp contrast to a buoyant picture for most other categories of retail. Now clothing retailers also have to deal with a sharply depreciated Pound. Sterling has taken the brunt of market concern since the Brexit vote on June 23, falling to a 31-year low and trading below $1.28 on July 6 against $1.50 the day before the referendum. With the bulk of British clothing retailers' goods sourced from Asian suppliers and paid for in Dollars, a weaker Pound has a major impact on their buying costs. Britain's biggest clothing retailers, including M&S, Next and John Lewis, are hedged up to 18 months ahead, meaning that if Sterling stays depressed the main impact will not start to be felt until the second half of their 2017-18 financial year. Sportswear retailer Sports Direct is the notable exception, being unhedged for Sterling-Dollar for its 2016-17 year. Its share price is down 32 per cent since the vote. Clothing companies would normally be expected to hedge for the second half of 2017-18 and beyond, now and over the next few months. But with foreign currency markets volatile, the treasury departments of firms are reviewing their hedging policies. They face a dilemma, explained a senior banker with several major British retailers as clients, because as UK interest rates look set to be cut there is a risk Sterling could fall further. "Now might not be the right time to do it, equally waiting might not be the right thing to do," he said. That unease was echoed by a person with knowledge of the situation at a FTSE 100 clothing retailer. "You don’t want to be making a decision in July to hedge for 18 months time, because nobody knows what’s going to happen. You could put yourself in a worse position," said the person, adding that only the brave would start hedging now. Faced with higher sourcing costs one solution could be to pass those costs on to consumers through higher prices. However, in an already weak market shoppers will have little appetite for inflation, and in the case of M&S, raising prices would run counter to Rowe's stated strategy of bringing them down to cure the firm's perceived uncompetitiveness. The average price of clothing has fallen by 15 per cent in the last 10 years, according to official UK data. The key for clothing retailers will be their ability to mitigate the cost increases they face. "There are a number of things that we can do in terms of the sourcing side of things," said Helen Weir, M&S' chief finance officer, noting the firm imports 1 billion to 1.5 billion Pounds ($1.31-$1.97 billion) worth of goods each year in Dollars. Options include changing the mix of sourcing countries and further increasing the proportion of direct sourcing from factories, cutting out middlemen. Also there might be scope to re-negotiate better terms with suppliers as Asian currencies have depreciated against the Dollar. Bankers say more radical options would require a cultural shift at retailers. They could pursue "dual pricing", where they negotiate part payment for supplies in different currencies from the Dollar, for example using the Chinese Renminbi. Retailers could also collaborate more on ordering, shipping and warehousing to seek economy of scale savings. But efficiencies might be more difficult to achieve than in previous years. "Companies have already materially improved their gross margins through better buying and efficiencies on the supply side," said Ernesto Bisagno, senior analyst at ratings agency Moody's. Ultimately the clothing sellers with the biggest margins will be best able to weather the storm. Here, Next, Britain's most successful clothing retailer of the last decade, is the stand-out stock, with an operating margin for 2015-16 of 20.8 per cent, according to Reuters data. That dwarfs M&S on 7.4 per cent, which is diluted by half of its business being in the lower-margin food sector, Debenhams on 5.8 per cent (for 2014-15), Sports Direct on 9.4 per cent and Primark on 11.9 per cent (for its most recent quarter). Led by Simon Wolfson, who was among the leading business supporters of Brexit, Next should be well prepared. With some foresight, he had warned in March that 2016 could be its toughest year since 2008. (Reuters)

British clothing retailers face Brexit double whammy

Confidence in Japanese manufacturers is expected to worsen to zero in the next three months, a Reuters poll found, as Britain&#39;s vote to exit the European Union (EU) further clouded the outlook for Japan&#39;s export-reliant economy. 
 
The Reuters Tankan, which tracks the Bank of Japan&#39;s (BOJ) quarterly Tankan survey, also found the service sector&#39;s mood fell in July to levels last seen in April 2013 when the BOJ embarked on massive monetary stimulus to reflate the economy. 
 
The monthly poll of 534 big and mid-sized firms taken July 1-15, of which 266 responded, offered an early glimpse of Japanese business sentiment in the wake of the Brexit vote, which briefly prompted a sharp Yen gain to below 100 Yen versus the Dollar. 
 
The Reuters Tankan sentiment index for manufacturers was unchanged at 3 in July and was seen worsening to zero in October, dragged down by exporters of cars, electronics, steel and chemicals. 
 
The sentiment indexes subtract the percentage of companies saying conditions are poor from those saying conditions are good. A positive number means optimists outnumber pessimists. 
 
The service-sector index fell to 15 from 17 in June, and was seen unchanged in October, reflecting weak domestic demand. 
 
Bleak business sentiment should add to calls for policymakers to do more to revive a flagging economy, with the government eyeing a stimulus package of 10 trillion Yen ($94.62 billion) or more and the Bank of Japan under pressure to ease policy further. 
 
&quot;We cannot see the future, given the effects of a rapid Yen gain due to Britain&#39;s vote to leave EU,&quot; a manager at a chemicals firm said in the survey, which companies answer anonymously. 
 
&quot;Capital expenditures are being put off because of uncertainty over Europe caused by Britain&#39;s exit from the EU, as well as a slowdown in China&#39;s economy, and currency situations,&quot; a machinery-maker said. 
 
While the safe-haven Yen has fallen to about 105 since last week as global risk aversion abated, manufacturers reported concerns over another possible spike in the Yen because of uncertainty over the global economic outlook. 
 
Last week Prime Minister Shinzo Abe ordered compilation of an economic stimulus package by the end of this month to respond to weak private consumption and investment, and external risks. Speculation also lingers that the BOJ may ease again at its July 28-29 policy review. 
 
(Reuters)

Confidence in Japanese manufacturers, which was steady in July, was seen worsening to zero in October, says a Reuters poll

Confidence in Japanese manufacturers is expected to worsen to zero in the next three months, a Reuters poll found, as Britain's vote to exit the European Union (EU) further clouded the outlook for Japan's export-reliant economy. The Reuters Tankan, which tracks the Bank of Japan's (BOJ) quarterly Tankan survey, also found the service sector's mood fell in July to levels last seen in April 2013 when the BOJ embarked on massive monetary stimulus to reflate the economy. The monthly poll of 534 big and mid-sized firms taken July 1-15, of which 266 responded, offered an early glimpse of Japanese business sentiment in the wake of the Brexit vote, which briefly prompted a sharp Yen gain to below 100 Yen versus the Dollar. The Reuters Tankan sentiment index for manufacturers was unchanged at 3 in July and was seen worsening to zero in October, dragged down by exporters of cars, electronics, steel and chemicals. The sentiment indexes subtract the percentage of companies saying conditions are poor from those saying conditions are good. A positive number means optimists outnumber pessimists. The service-sector index fell to 15 from 17 in June, and was seen unchanged in October, reflecting weak domestic demand. Bleak business sentiment should add to calls for policymakers to do more to revive a flagging economy, with the government eyeing a stimulus package of 10 trillion Yen ($94.62 billion) or more and the Bank of Japan under pressure to ease policy further. "We cannot see the future, given the effects of a rapid Yen gain due to Britain's vote to leave EU," a manager at a chemicals firm said in the survey, which companies answer anonymously. "Capital expenditures are being put off because of uncertainty over Europe caused by Britain's exit from the EU, as well as a slowdown in China's economy, and currency situations," a machinery-maker said. While the safe-haven Yen has fallen to about 105 since last week as global risk aversion abated, manufacturers reported concerns over another possible spike in the Yen because of uncertainty over the global economic outlook. Last week Prime Minister Shinzo Abe ordered compilation of an economic stimulus package by the end of this month to respond to weak private consumption and investment, and external risks. Speculation also lingers that the BOJ may ease again at its July 28-29 policy review. (Reuters)

Japan's business mood falls as Brexit clouds economic outlook

Gold held steady on Wednesday as bullion found little impetus from weaker equities as the dollar rose to a four-month high on the back of better-than-expected US housing data. 
 
Asian stocks eased early on Wednesday after a record run on Wall Street showed signs of petering out. 
 
Global risk appetite, which has recovered rapidly from the Brexit shock late in June, received a sobering reminder after the International Monetary Fund cut its global growth forecasts for the next two years on Tuesday, citing uncertainty over Britain&#39;s looming exit from the EU. 
 
Spot gold was up 0.1 per cent at $1,332.81 an ounce at 0334 GMT. It closed at $1,331.73 on Tuesday. 
 
US gold was up 0.1 per cent at $1,333.30 an ounce. 
 
&quot;The probability of a US Federal rate hike has increased as of today. Some expectations of a rate hike have come back,&quot; said OCBC Bank analyst Barnabas Gan. 
 
&quot;There are still some headwinds to growth and this may lift safe-haven demand should the implications of Brexit start to unwind.&quot; 
 
Gold, which has risen 25 per cent this year, is highly sensitive to rising rates, which increase the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. 
 
&quot;Technically, it looks like gold&#39;s recent weakness is slowly coming to a halt with a base being formed around $1,325 - $1335,&quot; MKS analyst James Gardiner said in a note. 
 
Spot gold is biased to fall to $1,313 per ounce after completing its consolidation within a small wedge, as per Reuters technical analyst Wang Tao. 
 
The dollar firmed in early Asian trading on Wednesday, as strong US data and rising expectations that the Bank of Japan will muster additional easing steps sent the dollar index to four-month highs.&nbsp; 
 
US housing starts rose more than expected in June as construction activity increased broadly, but downward revisions to the prior months&#39; data pointed to a sector treading water in the second quarter. 
 
Among other precious metals, spot silver, having ended lower in the four previous sessions, was up 0.1 per cent to $19.91 an ounce. 
 
Spot platinum was down 0.4 per cent at $1,084.50, while palladium, which touched an eight-and-half-month high on Tuesday, was down 0.7 per cent at $651.70. 
 
(Reuters)

Gold is highly sensitive to rising rates as it increases the opportunity cost of holding non-yielding assets such as bullion

Gold held steady on Wednesday as bullion found little impetus from weaker equities as the dollar rose to a four-month high on the back of better-than-expected US housing data. Asian stocks eased early on Wednesday after a record run on Wall Street showed signs of petering out. Global risk appetite, which has recovered rapidly from the Brexit shock late in June, received a sobering reminder after the International Monetary Fund cut its global growth forecasts for the next two years on Tuesday, citing uncertainty over Britain's looming exit from the EU. Spot gold was up 0.1 per cent at $1,332.81 an ounce at 0334 GMT. It closed at $1,331.73 on Tuesday. US gold was up 0.1 per cent at $1,333.30 an ounce. "The probability of a US Federal rate hike has increased as of today. Some expectations of a rate hike have come back," said OCBC Bank analyst Barnabas Gan. "There are still some headwinds to growth and this may lift safe-haven demand should the implications of Brexit start to unwind." Gold, which has risen 25 per cent this year, is highly sensitive to rising rates, which increase the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. "Technically, it looks like gold's recent weakness is slowly coming to a halt with a base being formed around $1,325 - $1335," MKS analyst James Gardiner said in a note. Spot gold is biased to fall to $1,313 per ounce after completing its consolidation within a small wedge, as per Reuters technical analyst Wang Tao. The dollar firmed in early Asian trading on Wednesday, as strong US data and rising expectations that the Bank of Japan will muster additional easing steps sent the dollar index to four-month highs. US housing starts rose more than expected in June as construction activity increased broadly, but downward revisions to the prior months' data pointed to a sector treading water in the second quarter. Among other precious metals, spot silver, having ended lower in the four previous sessions, was up 0.1 per cent to $19.91 an ounce. Spot platinum was down 0.4 per cent at $1,084.50, while palladium, which touched an eight-and-half-month high on Tuesday, was down 0.7 per cent at $651.70. (Reuters)

Gold holds steady as equity rally loses steam

Game maker Niantic has delayed Wednesday&#39;s planned launch of Pokemon Go in Japan after a leak of a McDonald&#39;s Japan internal communication found its way to Internet forums, technology news site TechCrunch reported. 
 
TechCrunch, citing an unnamed source, said there were concerns among the companies that the hype generated would overload the game. It added that it wasn&#39;t immediately clear when the game would be released in Japan.&nbsp; 
 
(Reuters)

TechCrunch says that there were concerns among the companies that the hype generated would overload the game

Game maker Niantic has delayed Wednesday's planned launch of Pokemon Go in Japan after a leak of a McDonald's Japan internal communication found its way to Internet forums, technology news site TechCrunch reported. TechCrunch, citing an unnamed source, said there were concerns among the companies that the hype generated would overload the game. It added that it wasn't immediately clear when the game would be released in Japan. (Reuters)

Gamemaker Niantic delays launch of Pokemon Go in Japan: TechCrunch

Sharp growth in its commercial cloud computing business helped lift Microsoft Corp&#39;s quarterly revenue above Wall Street&#39;s expectations, sending the technology company&#39;s shares up more than 4 per cent in after-hours trading. 
 
The new and growing cloud business - essentially selling computing services and storage in its data centers to corporate customers - is one of the priorities for Chief Executive Satya Nadella, who took the helm of the world&#39;s largest software company in early 2014 
 
Nadella has refocused the company on cloud and mobile in the face of stagnation in its traditional PC-based Windows business. 
 
&quot;Only two companies are setting the tone of enterprise computing, Microsoft Azure and Amazon AWS,&quot; said Trip Chowdhry, managing director of Global Equities Research, referring to Amazon.com Inc&#39;s web services unit. 
 
&quot;These are the only two initiators in the whole enterprise space that are going to see growth in excess of 80 per cent year-over-year for at least two or three years.&rdquo; 
 
Microsoft&#39;s revenue in what it calls its &quot;intelligent cloud&quot; businesses, which includes the Azure cloud platform and server software, rose 7 per cent to $6.7 billion. 
 
Revenue for Azure - which customers can use to host their website, apps or data - grew 102 per cent, but Microsoft did not say what the actual revenue figure was. 
 
That makes an annual &quot;run rate&quot; of $12.1 billion for cloud-related revenue, up sharply from over $8 billion a year ago. Microsoft calculates run rate by multiplying revenue in the final month of the quarter for its cloud businesses by 12. 
 
Despite the surge in revenue, Microsoft is still struggling to increase profit in the capital-intensive cloud business. It said operating profit in its intelligent cloud businesses fell 17 per cent to $2.19 billion in the quarter. 
 
Microsoft said the drop was mainly due to higher research, development, sales and marketing costs, as it makes investments and acquisitions to &quot;drive cloud sales capacity and innovation.&quot; 
 
COMING OUT OF DIP 
 
Overall, Microsoft posted revenue for its fiscal fourth quarter ended June 30, adjusted for some one-time items, of $22.6 billion, up 2 per cent from a year ago. That beat Wall Street&#39;s average forecast of $22.1 billion. 
 
It reported net income of $3.1 billion, or 39 cents per share, compared with a loss of $3.2 billion, or 40 cents per share, a year earlier. In the year-ago quarter it took a $7.5 billion charge to write down the value of its purchase of Nokia&#39;s handset business. 
 
Excluding one-time items in the latest quarter, Microsoft reported earnings of 69 cents per share. That was ahead of analysts&#39; average forecast of 58 cents. 
 
Sanford Bernstein analyst Mark Moerdler said Microsoft is finally making headway shifting Microsoft Office software clients onto subscription-based cloud services. Office consumer products and cloud services were up 19 per cent and Office 365 increased subscribers to 23.1 million during the quarter. 
 
&quot;People looked at Office as a product that was going to be in decline,&quot; said Moerdler. &quot;We saw a dip, last quarter we came out of that dip, and now we&#39;re accelerating out of the dip.&quot; 
 
Nadella, who announced the company&#39;s largest-ever deal last month, striking a deal to pay $26.2 billion for LinkedIn Corp, has staked Microsoft&#39;s future on mobile and the cloud. 
 
So far his plan has been well received by investors. Microsoft shares are up 64 per cent since his predecessor as CEO Steve Ballmer announced his plan to retire, in August 2013. The S&amp;P 500 is up 31 per cent in the same time. 
 
Microsoft shares were up 4.35 per cent at $55.40 in extended trading on Tuesday. 
 
(Reuters)

Chief Executive Satya Nadella refocuses the company on cloud and mobile in face of stagnation in its traditional PC-based Windows business

Sharp growth in its commercial cloud computing business helped lift Microsoft Corp's quarterly revenue above Wall Street's expectations, sending the technology company's shares up more than 4 per cent in after-hours trading. The new and growing cloud business - essentially selling computing services and storage in its data centers to corporate customers - is one of the priorities for Chief Executive Satya Nadella, who took the helm of the world's largest software company in early 2014 Nadella has refocused the company on cloud and mobile in the face of stagnation in its traditional PC-based Windows business. "Only two companies are setting the tone of enterprise computing, Microsoft Azure and Amazon AWS," said Trip Chowdhry, managing director of Global Equities Research, referring to Amazon.com Inc's web services unit. "These are the only two initiators in the whole enterprise space that are going to see growth in excess of 80 per cent year-over-year for at least two or three years.” Microsoft's revenue in what it calls its "intelligent cloud" businesses, which includes the Azure cloud platform and server software, rose 7 per cent to $6.7 billion. Revenue for Azure - which customers can use to host their website, apps or data - grew 102 per cent, but Microsoft did not say what the actual revenue figure was. That makes an annual "run rate" of $12.1 billion for cloud-related revenue, up sharply from over $8 billion a year ago. Microsoft calculates run rate by multiplying revenue in the final month of the quarter for its cloud businesses by 12. Despite the surge in revenue, Microsoft is still struggling to increase profit in the capital-intensive cloud business. It said operating profit in its intelligent cloud businesses fell 17 per cent to $2.19 billion in the quarter. Microsoft said the drop was mainly due to higher research, development, sales and marketing costs, as it makes investments and acquisitions to "drive cloud sales capacity and innovation." COMING OUT OF DIP Overall, Microsoft posted revenue for its fiscal fourth quarter ended June 30, adjusted for some one-time items, of $22.6 billion, up 2 per cent from a year ago. That beat Wall Street's average forecast of $22.1 billion. It reported net income of $3.1 billion, or 39 cents per share, compared with a loss of $3.2 billion, or 40 cents per share, a year earlier. In the year-ago quarter it took a $7.5 billion charge to write down the value of its purchase of Nokia's handset business. Excluding one-time items in the latest quarter, Microsoft reported earnings of 69 cents per share. That was ahead of analysts' average forecast of 58 cents. Sanford Bernstein analyst Mark Moerdler said Microsoft is finally making headway shifting Microsoft Office software clients onto subscription-based cloud services. Office consumer products and cloud services were up 19 per cent and Office 365 increased subscribers to 23.1 million during the quarter. "People looked at Office as a product that was going to be in decline," said Moerdler. "We saw a dip, last quarter we came out of that dip, and now we're accelerating out of the dip." Nadella, who announced the company's largest-ever deal last month, striking a deal to pay $26.2 billion for LinkedIn Corp, has staked Microsoft's future on mobile and the cloud. So far his plan has been well received by investors. Microsoft shares are up 64 per cent since his predecessor as CEO Steve Ballmer announced his plan to retire, in August 2013. The S&P 500 is up 31 per cent in the same time. Microsoft shares were up 4.35 per cent at $55.40 in extended trading on Tuesday. (Reuters)

Growth in cloud computing business helps lift Microsoft Corp's quarterly revenue

Nintendo Co&#39;s shares on Wednesday gave up some of their meteoric gains made on the record-breaking success of its Pokemon GO mobile game, hurt in part by a reported delay for the game&#39;s introduction in Japan. 
 
Technology news site TechCrunch said that game developer Niantic Inc had planned to launch Pokemon GO in Japan on Wednesday but had cancelled it, citing a source as saying that the company was worried the hype generated by the game would overload its servers. 
 
TechCrunch said it believed that the launch in Japan, one of the world&#39;s biggest gaming markets, was imminent. 
 
Nintendo&#39;s stock was down 10 per cent in afternoon trade. Even so, it has gained 87 per cent since the July 6 launch of the game in the United States, Australia and New Zealand, adding $17 billion to its market capitalisation. It is now available in 35 countries. 
 
A spokeswoman for Pokemon Company, which created the game along with Nintendo and Google-spinoff Niantic, declined to comment on the report, reiterating that nothing had been decided over the Japan launch date. Nintendo referred any queries regarding Pokemon GO to Pokemon Company. 
 
Pokemon GO, which marries a classic 20-year-old franchise with augmented reality, is on its way to becoming the first mobile game to break the $4 billion-per-year wall, beating Candy Crush Saga and Supercell&#39;s Clash of Clans, according to Macquarie Research. 
 
Shares of Japan&#39;s McDonald&#39;s Holdings Co piggy-backed the Pokemon GO craze, rising 8 per cent after TechCrunch reported on Tuesday the fast-food chain operator would become the game&#39;s first sponsor. 
 
TechCrunch said the sponsorship will see McDonald&#39;s 3,000-plus fast food restaurants across Japan become &quot;gyms&quot;, or battlegrounds, for Pokemon collectors. 
 
McDonald&#39;s Japan shares soared as much as 23 per cent to their highest level since late 2001 on Tuesday, the first day of trade since its stores started giving away Pokemon-themed toys with its Happy Meals last Friday. 
 
McDonald&#39;s Japan declined to comment on the report. 
 
($1 = 106.0200 Yen) 
 
(Reuters)

Nintendo's stock falls 10 per cent in afternoon trade, even though, it has gained 87 per cent since the July 6 launch of Pokemon Go

Nintendo Co's shares on Wednesday gave up some of their meteoric gains made on the record-breaking success of its Pokemon GO mobile game, hurt in part by a reported delay for the game's introduction in Japan. Technology news site TechCrunch said that game developer Niantic Inc had planned to launch Pokemon GO in Japan on Wednesday but had cancelled it, citing a source as saying that the company was worried the hype generated by the game would overload its servers. TechCrunch said it believed that the launch in Japan, one of the world's biggest gaming markets, was imminent. Nintendo's stock was down 10 per cent in afternoon trade. Even so, it has gained 87 per cent since the July 6 launch of the game in the United States, Australia and New Zealand, adding $17 billion to its market capitalisation. It is now available in 35 countries. A spokeswoman for Pokemon Company, which created the game along with Nintendo and Google-spinoff Niantic, declined to comment on the report, reiterating that nothing had been decided over the Japan launch date. Nintendo referred any queries regarding Pokemon GO to Pokemon Company. Pokemon GO, which marries a classic 20-year-old franchise with augmented reality, is on its way to becoming the first mobile game to break the $4 billion-per-year wall, beating Candy Crush Saga and Supercell's Clash of Clans, according to Macquarie Research. Shares of Japan's McDonald's Holdings Co piggy-backed the Pokemon GO craze, rising 8 per cent after TechCrunch reported on Tuesday the fast-food chain operator would become the game's first sponsor. TechCrunch said the sponsorship will see McDonald's 3,000-plus fast food restaurants across Japan become "gyms", or battlegrounds, for Pokemon collectors. McDonald's Japan shares soared as much as 23 per cent to their highest level since late 2001 on Tuesday, the first day of trade since its stores started giving away Pokemon-themed toys with its Happy Meals last Friday. McDonald's Japan declined to comment on the report. ($1 = 106.0200 Yen) (Reuters)

Nintendo stock loses ground on report of delay of launch of Pokemon GO in Japan

An Uber driver told a British tribunal today he had earned less than the minimum wage, despite the firm saying he received nearly three times as much, in a case that could threaten the app&#39;s business model. 
 
Lawyers are representing two drivers at an employment tribunal, arguing that Uber is acting unlawfully by not offering rights such as holiday and sick pay. 
 
Uber, which allows users to book and pay for a taxi by smartphone, says its more than 30,000 London drivers enjoy the flexibility of being able to work when they choose and receive on average much more than the minimum wage. 
 
The case could hit Uber&#39;s reliance on using self-employed drivers. 
 
James Farrar, a driver with the firm since December 2014, said that last August he earned less than the 6.70 Pounds ($8.80) an hour for those aged 21 and older which was then the rate for the minimum wage in Britain. 
 
&quot;They claim that, based on the total number of hours logged into the app, I have been paid 13.77 Pounds on an average hourly basis,&quot; he wrote in a witness statement.&nbsp;&quot;I calculated my net earnings for August 2015 after the expenses I set off and they came to 5.03 Pounds an hour.&quot; 
 
Uber&#39;s lawyer David Reade said that Farrar had picked a month in which he had logged onto the app for the longest period of time, but cancelled or not accepted the most amount of jobs, thereby reducing his hourly pay. 
 
Most employees in Britain are entitled to the minimum wage, but the self-employed are among those who do not qualify.&nbsp;The issue of low pay and a lack of job security has sparked a public outcry in Britain in recent years, with firms such as sports retailer Sports Direct facing a backlash over their use of zero-hour contracts. 
 
Last year Uber, whose investors include Goldman Sachs and Alphabet Inc unit Google, said its drivers received average payments of 16 Pounds an hour in October after the firm&#39;s service fee. 
 
The former start-up has grown rapidly, and is valued at $62.5 billion but has faced protests, bans and restrictions in several cities, including in London where traditional black-cab drivers tried to have the app ruled illegal. 
 
The case is due to last until next Tuesday and a decision on whether Uber is acting unlawfully is unlikely to be given by the judge for several weeks. 
 
(Reuters)

Lawyers representing two drivers argued that Uber is acting unlawfully by not offering rights such as holiday and sick pay

An Uber driver told a British tribunal today he had earned less than the minimum wage, despite the firm saying he received nearly three times as much, in a case that could threaten the app's business model. Lawyers are representing two drivers at an employment tribunal, arguing that Uber is acting unlawfully by not offering rights such as holiday and sick pay. Uber, which allows users to book and pay for a taxi by smartphone, says its more than 30,000 London drivers enjoy the flexibility of being able to work when they choose and receive on average much more than the minimum wage. The case could hit Uber's reliance on using self-employed drivers. James Farrar, a driver with the firm since December 2014, said that last August he earned less than the 6.70 Pounds ($8.80) an hour for those aged 21 and older which was then the rate for the minimum wage in Britain. "They claim that, based on the total number of hours logged into the app, I have been paid 13.77 Pounds on an average hourly basis," he wrote in a witness statement. "I calculated my net earnings for August 2015 after the expenses I set off and they came to 5.03 Pounds an hour." Uber's lawyer David Reade said that Farrar had picked a month in which he had logged onto the app for the longest period of time, but cancelled or not accepted the most amount of jobs, thereby reducing his hourly pay. Most employees in Britain are entitled to the minimum wage, but the self-employed are among those who do not qualify. The issue of low pay and a lack of job security has sparked a public outcry in Britain in recent years, with firms such as sports retailer Sports Direct facing a backlash over their use of zero-hour contracts. Last year Uber, whose investors include Goldman Sachs and Alphabet Inc unit Google, said its drivers received average payments of 16 Pounds an hour in October after the firm's service fee. The former start-up has grown rapidly, and is valued at $62.5 billion but has faced protests, bans and restrictions in several cities, including in London where traditional black-cab drivers tried to have the app ruled illegal. The case is due to last until next Tuesday and a decision on whether Uber is acting unlawfully is unlikely to be given by the judge for several weeks. (Reuters)

Uber driver tells UK tribunal he earned less than minimal wage

The US Justice Department said today it is moving to seize more than $1 billion in assets linked to Malaysia&#39;s 1Malaysia Development Berhad state investment fund. 
 
The assets are &quot;associated with an international conspiracy to launder funds misappropriated&quot; from 1MBD, which was established by Malaysian Prime Minister Najib Razak to support economic investment, the Justice Department said. 
 
US Attorney General Loretta Lynch will reveal details of the seizure effort later today. 
 
The scandal around the embezzlement of billions of dollars from the fund, much of them borrowed, has battered Najib&#39;s government. 
 
Authorities from Singapore to Switzerland and the United States have joined in tracking down missing funds of 1MDB, which is owned by the Malaysian Finance Ministry also headed by Najib. He also chaired the company&#39;s advisory board until it was dissolved in May. 
 
Switzerland and Singapore have frozen millions of dollars worth of assets on suspicion of 1MDB-related embezzlement and money-laundering but so far no major figures have been brought to justice. 
 
In July 2015, The Wall Street Journal revealed that Najib had received payments totaling $681 million in his personal bank accounts in 2013. Subsequent reports said the money originated from 1MDB and may have exceeded $1 billion, which 1MDB denies. 
 
The government later acknowledged the payments, but called them a &quot;personal donation&quot; from the Saudi royal family. 
 
(AFP)

The scandal around the embezzlement of billions of dollars from the fund, much of them borrowed, has battered Najib's government

The US Justice Department said today it is moving to seize more than $1 billion in assets linked to Malaysia's 1Malaysia Development Berhad state investment fund. The assets are "associated with an international conspiracy to launder funds misappropriated" from 1MBD, which was established by Malaysian Prime Minister Najib Razak to support economic investment, the Justice Department said. US Attorney General Loretta Lynch will reveal details of the seizure effort later today. The scandal around the embezzlement of billions of dollars from the fund, much of them borrowed, has battered Najib's government. Authorities from Singapore to Switzerland and the United States have joined in tracking down missing funds of 1MDB, which is owned by the Malaysian Finance Ministry also headed by Najib. He also chaired the company's advisory board until it was dissolved in May. Switzerland and Singapore have frozen millions of dollars worth of assets on suspicion of 1MDB-related embezzlement and money-laundering but so far no major figures have been brought to justice. In July 2015, The Wall Street Journal revealed that Najib had received payments totaling $681 million in his personal bank accounts in 2013. Subsequent reports said the money originated from 1MDB and may have exceeded $1 billion, which 1MDB denies. The government later acknowledged the payments, but called them a "personal donation" from the Saudi royal family. (AFP)

US moves to seize $1 billion in assets of Malaysian 1MDB fund

Netflix shares plunged Monday after its latest quarterly update showed subscriber growth below expectations for the streaming television giant. 
 
Netflix shares tumbled 15 per cent in after-hours trade after the quarterly report. 
 
The company said it ended the second quarter with 83 million subscribers, adding 1.7 million. That was well below Netflix&#39;s own forecast of 2.5 million additions and lower than many analyst forecasts. 
 
Netflix said growth was hurt, especially in the United States, when it raised rates on many long-time subscribers who had been &quot;grandfathered&quot; when it hiked most prices. 
 
&quot;We think some members perceived the news as an impending new price increase rather than the completion of two years of grandfathering,&quot; the company said in a statement. 
 
&quot;Churn of members who were actually ungrandfathered is modest and conforms to our expectations.&quot; 
 
Net profit for the quarter was $41 million, up from $26 million a year earlier. Revenue rose to $2.1 billion from $1.6 billion. 
 
Netflix said its march to becoming a global television provider was making progress, projecting gains of some two million subscribers outside the US in the third quarter. 
 
&quot;Our approach in expanding our global footprint in January was to launch a service targeting early adopters and then to listen, learn and iterate quickly,&quot; it said. 
 
&quot;Now that we are six months in, we will localize Netflix in Poland and Turkey with the addition of local language in the user interface, subtitles and dubbing. Localization in other markets will take place over time as economically prudent.&quot; 
 
The streaming television pioneer in January significantly expanded its global footprint to 190 countries, making its Internet TV service available in 130 new markets, including India -- but not China. 
 
(AFP)

Netflix shares tumbled 15 per cent in after-hours trade following the quarterly report

Netflix shares plunged Monday after its latest quarterly update showed subscriber growth below expectations for the streaming television giant. Netflix shares tumbled 15 per cent in after-hours trade after the quarterly report. The company said it ended the second quarter with 83 million subscribers, adding 1.7 million. That was well below Netflix's own forecast of 2.5 million additions and lower than many analyst forecasts. Netflix said growth was hurt, especially in the United States, when it raised rates on many long-time subscribers who had been "grandfathered" when it hiked most prices. "We think some members perceived the news as an impending new price increase rather than the completion of two years of grandfathering," the company said in a statement. "Churn of members who were actually ungrandfathered is modest and conforms to our expectations." Net profit for the quarter was $41 million, up from $26 million a year earlier. Revenue rose to $2.1 billion from $1.6 billion. Netflix said its march to becoming a global television provider was making progress, projecting gains of some two million subscribers outside the US in the third quarter. "Our approach in expanding our global footprint in January was to launch a service targeting early adopters and then to listen, learn and iterate quickly," it said. "Now that we are six months in, we will localize Netflix in Poland and Turkey with the addition of local language in the user interface, subtitles and dubbing. Localization in other markets will take place over time as economically prudent." The streaming television pioneer in January significantly expanded its global footprint to 190 countries, making its Internet TV service available in 130 new markets, including India -- but not China. (AFP)

Netflix shares plunge after quarterly report reveals cooler growth

Shares of Japan&#39;s Nintendo Co soared another 14 per cent on Tuesday, more than doubling the firm&#39;s market capitalisation to 4.5 trillion Yen ($42.5 billion) in just seven sessions since the mobile game Pokemon GO was launched in the United States.&nbsp; 
 
The phenomenal success of Pokemon GO - now available in 35 countries, the majority in Europe, and most recently in Canada - has triggered massive buying in Nintendo shares, surprising even some seasoned market players. 
 
&quot;I&#39;ve never seen the trend of such a big company&#39;s shares changing so quickly in such a short period of time,&quot; said Takashi Oba, senior strategist at Okasan Securities. 
 
Nintendo shares ended up by 14.4 per cent at 31,770 Yen on Tuesday, bringing its gains to more than 100 per cent since the launch of the game on July 6. 
 
Turnover in Nintendo shares hit 703.6 billion Yen, surpassing the record for trading turnover in individual shares it set on Friday, of 476 billion Yen. 
 
Trading in Nintendo shares roughly accounted for a quarter of the entire trading on the Tokyo Stock Exchange&#39;s main board. 
 
The success of Pokemon GO, unforeseen even by its creators, has boosted hopes that Nintendo could capitalise on a line-up of popular characters ranging from Zelda to Super Mario to strengthen its new foray into augmented reality. 
 
&quot;Virtual reality and augmented reality have been a focus of the market but hardly anyone was expecting Nintendo in this area. Suddenly Nintendo has become an AR-related stock,&quot; said a fund manager at a Japanese asset management firm, who declined to be named as he is not allowed to discuss individual shares. 
 
The fund manager said the big gains were justifiable considering the likely boost to Nintendo&#39;s bottom line. 
 
&quot;Under my rough estimate, the sales from Pokemon GO and upcoming related gadgets will boost net profits by 50 billion Yen. Based on that assumption, Nintendo is traded at 30 times profits, which is not unreasonable,&quot; he said. 
 
The popularity of Pokemon GO is producing an unexpected boom in some shares that have a scant link to the game. 
 
Shares in First Baking Co, a bakery firm with annual sales of 25 billion Yen, saw its shares rise 18 per cent on Tuesday as the firm sells &quot;Pokemon Bread&quot; among other breads wrapped with character-decorated bags. 
 
(Reuters)

Shares ended up by 14.4 per cent on Tuesday, bringing its gains to more than 100 per cent since the launch of the game

Shares of Japan's Nintendo Co soared another 14 per cent on Tuesday, more than doubling the firm's market capitalisation to 4.5 trillion Yen ($42.5 billion) in just seven sessions since the mobile game Pokemon GO was launched in the United States. The phenomenal success of Pokemon GO - now available in 35 countries, the majority in Europe, and most recently in Canada - has triggered massive buying in Nintendo shares, surprising even some seasoned market players. "I've never seen the trend of such a big company's shares changing so quickly in such a short period of time," said Takashi Oba, senior strategist at Okasan Securities. Nintendo shares ended up by 14.4 per cent at 31,770 Yen on Tuesday, bringing its gains to more than 100 per cent since the launch of the game on July 6. Turnover in Nintendo shares hit 703.6 billion Yen, surpassing the record for trading turnover in individual shares it set on Friday, of 476 billion Yen. Trading in Nintendo shares roughly accounted for a quarter of the entire trading on the Tokyo Stock Exchange's main board. The success of Pokemon GO, unforeseen even by its creators, has boosted hopes that Nintendo could capitalise on a line-up of popular characters ranging from Zelda to Super Mario to strengthen its new foray into augmented reality. "Virtual reality and augmented reality have been a focus of the market but hardly anyone was expecting Nintendo in this area. Suddenly Nintendo has become an AR-related stock," said a fund manager at a Japanese asset management firm, who declined to be named as he is not allowed to discuss individual shares. The fund manager said the big gains were justifiable considering the likely boost to Nintendo's bottom line. "Under my rough estimate, the sales from Pokemon GO and upcoming related gadgets will boost net profits by 50 billion Yen. Based on that assumption, Nintendo is traded at 30 times profits, which is not unreasonable," he said. The popularity of Pokemon GO is producing an unexpected boom in some shares that have a scant link to the game. Shares in First Baking Co, a bakery firm with annual sales of 25 billion Yen, saw its shares rise 18 per cent on Tuesday as the firm sells "Pokemon Bread" among other breads wrapped with character-decorated bags. (Reuters)

Nintendo's market capital doubles since Pokemon GO launch

India will inject 229.15 billion Rupees ($3.41 billion) into 13 state-run banks to help shore up the cash-strapped lenders and revive loan growth that has hit a two-decade low. 
 
The capital infusion is part of New Delhi&#39;s plans to invest 700 billion Rupees in state lenders over four years to March 2019. 
 
Finance Minister Arun Jaitley has budgeted 250 billion Rupees for bank recapitalisation this fiscal year, but he has committed to infuse more if required.&nbsp; 
 
Top lender State Bank of India will get 75.75 billion Rupees in capital, the finance ministry said in a statement on Tuesday. Indian Overseas Bank, which has the worst bad-loan ratio, is set to get 31.01 billion Rupees. 
 
A surge in bad loans and the full implementation of global Basel III bank capital rules mean Indian banks need billions of dollars of new capital.&nbsp; 
 
While relatively better balance sheets are expected to make it easier for private lenders tap financial markets, most state-run lenders - struggling with a pile of stressed assets and lower profits - are heavily reliant on the government for funds. 
 
Rating agency Fitch reckons Indian banks would need $90 billion in new capital to meet Basel III requirements, with about two dozen state-run banks accounting for 80 per cent of that figure. 
 
Fourth-biggest state-run lender Punjab National Bank, which reported a record loss in the March quarter, will get 28.16 billion Rupees, the finance ministry said. Bank of India, the third-biggest state-run lender, will get 17.84 billion.&nbsp; 
 
Bank stocks rose after the announcement, with the state-bank index trading 0.4 per cent higher in a Mumbai market that was down 0.1 per cent. 
 
(Reuters)

The capital infusion is part of New Delhi's plans to invest 700 billion Indian Rupees in state lenders over four years

India will inject 229.15 billion Rupees ($3.41 billion) into 13 state-run banks to help shore up the cash-strapped lenders and revive loan growth that has hit a two-decade low. The capital infusion is part of New Delhi's plans to invest 700 billion Rupees in state lenders over four years to March 2019. Finance Minister Arun Jaitley has budgeted 250 billion Rupees for bank recapitalisation this fiscal year, but he has committed to infuse more if required. Top lender State Bank of India will get 75.75 billion Rupees in capital, the finance ministry said in a statement on Tuesday. Indian Overseas Bank, which has the worst bad-loan ratio, is set to get 31.01 billion Rupees. A surge in bad loans and the full implementation of global Basel III bank capital rules mean Indian banks need billions of dollars of new capital. While relatively better balance sheets are expected to make it easier for private lenders tap financial markets, most state-run lenders - struggling with a pile of stressed assets and lower profits - are heavily reliant on the government for funds. Rating agency Fitch reckons Indian banks would need $90 billion in new capital to meet Basel III requirements, with about two dozen state-run banks accounting for 80 per cent of that figure. Fourth-biggest state-run lender Punjab National Bank, which reported a record loss in the March quarter, will get 28.16 billion Rupees, the finance ministry said. Bank of India, the third-biggest state-run lender, will get 17.84 billion. Bank stocks rose after the announcement, with the state-bank index trading 0.4 per cent higher in a Mumbai market that was down 0.1 per cent. (Reuters)

India to push $3.4 billion into economy for credit growth

Traders in the liquefied petroleum gas (LPG) market face a &quot;career-ruining&quot; glut that has led to millions of dollars in losses as Chinese buyers, far from coming to the rescue, are in a stand-off with oil companies to cancel deals. 
 
LPG, a historically niche and dislocated market, has ballooned with the advent of US exports due to the shale boom. The United States went from an importer to the largest single exporter of propane in just a few years, rivalling the West Asia Gulf producers. 
 
&quot;I can&#39;t remember it being this bad. There was massive new production out of the US and people hoped the Chinese market might absorb it,&quot; one LPG trader said. 
 
&quot;There was strong buying in the first four months of the year with low oil prices but that stopped and the market is now a few million tonnes long.&quot; 
 
Traders scrambling to mitigate losses&nbsp; 
 
A glut was expected, but its severity caught most by surprise and will likely serve as a warning to those trading liquefied natural gas, which is increasingly oversupplied. 
 
LPG is the collective term for propane and butane. The United States exports mostly propane used for heating and in the petrochemical industry to make propylene, a base for plastics manufacturing. 
 
Traders have been left scrambling to mitigate losses as China has failed to be the driver of demand. 
 
At least five companies- Vitol, Gunvor, Shell, BP and EDF Trading cancelled July-loading cargoes out of the two major Texas LPG terminals, preferring to pay penalties of up to $1 million per cargo. 
 
Many LPG traders signed up for multi-year contracts but premiums to the US benchmark on a spot basis sunk by about $40 a tonne this year, undercutting the term lifters. 
 
The contracts were also signed when the US benchmark was around a $150 to $200-per-tonne discount to the European benchmark and Saudi Arabia&#39;s official selling price. But spreads shrunk dramatically in 2016, making US exports suddenly unappealing to Asia. 
 
Chinese end-users are now cancelling or renegotiating their term contracts, taking advantage of product overhangs in the Middle East and a cheaper alternative feedstock, naphtha. 
 
Asian demand slowed earlier this year on weak propylene margins, which led to run cuts and delayed new plant start-ups. After hitting a trough, the market is expected to rebalance by the year-end though supply will continue to outpace demand. 
 
&quot;Non-associated gas output means there will be a steady rise in natural gas liquids output despite the oil price doldrums. This trend will continue in the medium term,&quot; Al Troner, head of Asia Pacific Energy Consulting in Houston, said. 
 
Showdown in Court 
 
The disputes have, in some cases, devolved into open altercations and tanker stand-offs. 
 
At an LPG conference earlier this year in China, one trader said he saw &quot;serious arguments between the Chinese and the US suppliers outside the hall at the caf? ... Everyone pretended not to be eavesdropping but stopped chatting and just stood still&quot;. 
 
Targa Resources, operator of an export terminal in Texas, has been stung by contracts with Chinese buyers and is seeking &quot;damages in excess of $1,000,000&quot; from China Soft Packaging Group, documents filed by Targa at a Texas county court showed. 
 
China Soft Packaging declined to comment and Targa did not respond to requests for comment. 
 
&quot;The US suppliers already made fat margins earlier (in 2015) and they should be ready for price negotiations,&quot; a senior source with one of the east China-based LPG buyers said. 
 
Hong Kong-based Oriental Energy International Trading has also had disputes with Targa and Greek LPG trader Naftomar. Targa let Oriental&#39;s Kikyo tanker languish for weeks offshore Texas in June. Naftomar&#39;s Constellation ship is now stuck outside China&#39;s Ningbo port, a senior trader at Naftomar said. 
 
Singapore-based SK Chemical Trading recently cancelled contracts with Naftomar, Petredec and Shell after its end-user Zhejiang Shaoxing Sanyuan Petrochemical Co reneged on its orders. The companies did not respond to requests for comment. 
 
One trader said the price rout was ruining careers and had &quot;gunfight at the O.K. Corral-type implications&quot;, referring to one of the most famous shootouts from the days of the American Wild West. 
 
(Reuters)

A glut was expected but its severity caught most by surprise and will likely serve as a warning to those trading liquefied natural gas

Traders in the liquefied petroleum gas (LPG) market face a "career-ruining" glut that has led to millions of dollars in losses as Chinese buyers, far from coming to the rescue, are in a stand-off with oil companies to cancel deals. LPG, a historically niche and dislocated market, has ballooned with the advent of US exports due to the shale boom. The United States went from an importer to the largest single exporter of propane in just a few years, rivalling the West Asia Gulf producers. "I can't remember it being this bad. There was massive new production out of the US and people hoped the Chinese market might absorb it," one LPG trader said. "There was strong buying in the first four months of the year with low oil prices but that stopped and the market is now a few million tonnes long." Traders scrambling to mitigate losses A glut was expected, but its severity caught most by surprise and will likely serve as a warning to those trading liquefied natural gas, which is increasingly oversupplied. LPG is the collective term for propane and butane. The United States exports mostly propane used for heating and in the petrochemical industry to make propylene, a base for plastics manufacturing. Traders have been left scrambling to mitigate losses as China has failed to be the driver of demand. At least five companies- Vitol, Gunvor, Shell, BP and EDF Trading cancelled July-loading cargoes out of the two major Texas LPG terminals, preferring to pay penalties of up to $1 million per cargo. Many LPG traders signed up for multi-year contracts but premiums to the US benchmark on a spot basis sunk by about $40 a tonne this year, undercutting the term lifters. The contracts were also signed when the US benchmark was around a $150 to $200-per-tonne discount to the European benchmark and Saudi Arabia's official selling price. But spreads shrunk dramatically in 2016, making US exports suddenly unappealing to Asia. Chinese end-users are now cancelling or renegotiating their term contracts, taking advantage of product overhangs in the Middle East and a cheaper alternative feedstock, naphtha. Asian demand slowed earlier this year on weak propylene margins, which led to run cuts and delayed new plant start-ups. After hitting a trough, the market is expected to rebalance by the year-end though supply will continue to outpace demand. "Non-associated gas output means there will be a steady rise in natural gas liquids output despite the oil price doldrums. This trend will continue in the medium term," Al Troner, head of Asia Pacific Energy Consulting in Houston, said. Showdown in Court The disputes have, in some cases, devolved into open altercations and tanker stand-offs. At an LPG conference earlier this year in China, one trader said he saw "serious arguments between the Chinese and the US suppliers outside the hall at the caf? ... Everyone pretended not to be eavesdropping but stopped chatting and just stood still". Targa Resources, operator of an export terminal in Texas, has been stung by contracts with Chinese buyers and is seeking "damages in excess of $1,000,000" from China Soft Packaging Group, documents filed by Targa at a Texas county court showed. China Soft Packaging declined to comment and Targa did not respond to requests for comment. "The US suppliers already made fat margins earlier (in 2015) and they should be ready for price negotiations," a senior source with one of the east China-based LPG buyers said. Hong Kong-based Oriental Energy International Trading has also had disputes with Targa and Greek LPG trader Naftomar. Targa let Oriental's Kikyo tanker languish for weeks offshore Texas in June. Naftomar's Constellation ship is now stuck outside China's Ningbo port, a senior trader at Naftomar said. Singapore-based SK Chemical Trading recently cancelled contracts with Naftomar, Petredec and Shell after its end-user Zhejiang Shaoxing Sanyuan Petrochemical Co reneged on its orders. The companies did not respond to requests for comment. One trader said the price rout was ruining careers and had "gunfight at the O.K. Corral-type implications", referring to one of the most famous shootouts from the days of the American Wild West. (Reuters)

Oil traders lose millions as LPG glut shocks market

The World Bank on Monday confirmed New York University economics professor Paul Romer as its next chief economist, bringing in a prominent voice advocating investment in human capital and innovation. 
 
Romer, 60, will replace Kaushik Basu, a former Indian government economics adviser who is retiring. Romer will take up the position in September and is tasked with keeping the World Bank Group at the forefront of international development knowledge. 
 
Romer is a proponent of &quot;endogenous growth theory&quot;, which holds that investments in human capital, innovation and knowledge are significant contributors to economic growth. 
 
The theory, which Romer helped develop in the 1980s and 1990s, also holds that the spillover effects of a knowledge-based economy will lead to economic development and that the long-run growth rate of an economy can be increased with measures such as subsidies for research and development, and education. 
 
&quot;We&#39;re most excited about his deep commitment to tackling poverty and inequality and finding innovative solutions that we can take to scale,&quot; World Bank President Jim Yong Kim said of Romer in a statement. 
 
Romer&#39;s appointment comes at a time when the World Bank, the International Monetary Fund and officials from the world&#39;s largest economies are increasingly worried by a slowdown in global growth and trade. 
 
The IMF said last week that the United States&#39; future growth potential could be even lower than previously thought as aging baby boomers leave the workforce and productivity stagnates. 
 
Romer, also a student of urbanisation, said in a blog posting last year that economic growth sprang from continual innovation, even things as minor as new paper coffee cup designs in which small and large cups use a single-sized plastic top, reducing costs. 
 
Using a cooking metaphor, he said: &quot;Economic growth springs from better recipes, not just from more cooking. New recipes produce fewer unpleasant side effects and generate more economic value per unit of raw material.&quot; 
 
For the developing countries served by World Bank loans and support, he said the priority was to adapt tested strategies that richer countries had used to build higher living standards. 
 
Dense urban environments where market forces can flourish foster innovation, he said, citing China&#39;s urban growth as an example. 
 
&quot;Together, the city and the market let large groups of people cooperate by discovering new ideas, sharing them, and learning from each other,&quot; Romer wrote. 
 
(Reuters)

He believes in 'endogenous growth theory' which says investment in human capital & innovation are significant drivers of growth

The World Bank on Monday confirmed New York University economics professor Paul Romer as its next chief economist, bringing in a prominent voice advocating investment in human capital and innovation. Romer, 60, will replace Kaushik Basu, a former Indian government economics adviser who is retiring. Romer will take up the position in September and is tasked with keeping the World Bank Group at the forefront of international development knowledge. Romer is a proponent of "endogenous growth theory", which holds that investments in human capital, innovation and knowledge are significant contributors to economic growth. The theory, which Romer helped develop in the 1980s and 1990s, also holds that the spillover effects of a knowledge-based economy will lead to economic development and that the long-run growth rate of an economy can be increased with measures such as subsidies for research and development, and education. "We're most excited about his deep commitment to tackling poverty and inequality and finding innovative solutions that we can take to scale," World Bank President Jim Yong Kim said of Romer in a statement. Romer's appointment comes at a time when the World Bank, the International Monetary Fund and officials from the world's largest economies are increasingly worried by a slowdown in global growth and trade. The IMF said last week that the United States' future growth potential could be even lower than previously thought as aging baby boomers leave the workforce and productivity stagnates. Romer, also a student of urbanisation, said in a blog posting last year that economic growth sprang from continual innovation, even things as minor as new paper coffee cup designs in which small and large cups use a single-sized plastic top, reducing costs. Using a cooking metaphor, he said: "Economic growth springs from better recipes, not just from more cooking. New recipes produce fewer unpleasant side effects and generate more economic value per unit of raw material." For the developing countries served by World Bank loans and support, he said the priority was to adapt tested strategies that richer countries had used to build higher living standards. Dense urban environments where market forces can flourish foster innovation, he said, citing China's urban growth as an example. "Together, the city and the market let large groups of people cooperate by discovering new ideas, sharing them, and learning from each other," Romer wrote. (Reuters)

NYU economics Professor Paul Romer to be next World Bank chief economist

Audi will boost spending on digital technologies and electric cars over the next decade, sources at the German carmaker said, as it follows parent Volkswagen in reshaping its business in the wake of the diesel emissions scandal. 
 
Volkswagen&#39;s (VW) main profit contributor plans to invest about a third of its R&amp;D budget which totalled 4.24 billion euros ($4.69 billion) in 2015, in digital services, electric cars and autonomous driving by 2025, two sources at Audi told Reuters late on Monday on condition they not be identified because the plans are still confidential. 
 
Audi will offer on-demand mobility services for premium customers and increase the share of electric vehicles of its overall sales to about a fourth by 2025, the sources said. The Ingolstadt-based brand sold a record 1.8 million cars last year. 
 
Chief Executive Rupert Stadler plans to outline details of Audi&#39;s new business roadmap to more than 2,000 managers on Wednesday at a closed-door conference in Munich, the sources said. 
 
A spokesman at Audi declined comment. German business daily Handelsblatt reported late on Monday about Audi&#39;s transformation plans. 
 
To free up funds for the new strategy, Audi plans retrenchments in its conventional car programme including steps to reduce country-specific engine and transmission variants, the sources said, without being more specific.&nbsp; 
 
The changes come as three US states plan to unveil new lawsuits against Volkswagen on Tuesday tied to the automaker&#39;s sale of diesel vehicles with emissions-cheating software, even after they announced settlements with the German automaker in June. 
 
VW last month announced plans to spend billions of euros on electric cars, ride-hailing and automated driving to become a world leader in green transport by 2025. 
 
(Reuters)&nbsp; 
 
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The German carmaker plans to invest a third of its R&D budget in digital services, electric cars & autonomous driving by 2025

Audi will boost spending on digital technologies and electric cars over the next decade, sources at the German carmaker said, as it follows parent Volkswagen in reshaping its business in the wake of the diesel emissions scandal. Volkswagen's (VW) main profit contributor plans to invest about a third of its R&D budget which totalled 4.24 billion euros ($4.69 billion) in 2015, in digital services, electric cars and autonomous driving by 2025, two sources at Audi told Reuters late on Monday on condition they not be identified because the plans are still confidential. Audi will offer on-demand mobility services for premium customers and increase the share of electric vehicles of its overall sales to about a fourth by 2025, the sources said. The Ingolstadt-based brand sold a record 1.8 million cars last year. Chief Executive Rupert Stadler plans to outline details of Audi's new business roadmap to more than 2,000 managers on Wednesday at a closed-door conference in Munich, the sources said. A spokesman at Audi declined comment. German business daily Handelsblatt reported late on Monday about Audi's transformation plans. To free up funds for the new strategy, Audi plans retrenchments in its conventional car programme including steps to reduce country-specific engine and transmission variants, the sources said, without being more specific. The changes come as three US states plan to unveil new lawsuits against Volkswagen on Tuesday tied to the automaker's sale of diesel vehicles with emissions-cheating software, even after they announced settlements with the German automaker in June. VW last month announced plans to spend billions of euros on electric cars, ride-hailing and automated driving to become a world leader in green transport by 2025. (Reuters)

Audi reshapes business strategy after emissions scandal

Yahoo Inc&#39;s quarterly earnings fell short of Wall Street expectations on Monday in what may be the company&#39;s last financial report before it sells its core business. 
 
Yahoo reported adjusted earnings of 9 cents per share, short of the 10 cents that analysts expected. It also announced a $482 million write-down on the value of Tumblr, the social media service that it acquired in 2013 for $1.1 billion. 
 
Yahoo is in the process of auctioning off its search and advertising business, and is expected to choose a winner this week. The company said its board has made &quot;great progress on strategic alternatives&quot; but did not comment further on the auction process. 
 
Verizon Communications Inc and AT&amp;T Inc are said to be in the running to acquire the core business, along with private equity firm TPG Capital and a consortium led by Quicken Loans founder Dan Gilbert and backed by billionaire Warren Buffett. 
 
Yahoo also owns large stakes in Chinese ecommerce giant Alibaba and Yahoo Japan, which are worth far more than the company&#39;s internet business. 
 
Monday&#39;s earnings report showed the continued slide in Yahoo&#39;s business during the protracted sale process. After the Tumblr write-down, the company posted a net loss of $439.9 million, or 46 cents per share, compared with a loss of $21.6 million, or 2 cents per share, a year earlier. 
 
Although total revenue rose to $1.31 billion from $1.24 billion a year earlier, the seeming improvement was the result of a change in the way the cost of acquiring traffic is counted. After deducting fees paid to partner websites for traffic, revenue fell to $841.2 million from $1.04 billion. 
 
Estimating that Tumblr is worth &quot;nothing&quot; at this point, Ross Gerber, cofounder and CEO of Gerber Kawasaki Wealth and Investment Management, said potential buyers were likely bidding lower than Yahoo believes it is worth. 
 
&quot;I can&#39;t imagine why the sale process is taking so long, the only thing I can think of is it&#39;s being overpriced. This report doesn&#39;t further create an impression that paying up for these assets has any value,&quot; Gerber said. 
 
Revenue in the company&#39;s emerging businesses, which Chief Executive Officer Marissa Mayer calls Mavens- mobile, video, native and social advertising , showed some life, rising 25.7 per cent to $504 million in the second quarter ended June 30. 
 
But the improvement in Mavens was offset by decreases in gross search revenue that is only expected to get worse, said B. Riley &amp; Co analyst Sameet Sinha. Gross search revenue for the quarter was $765 million, down 17 percent from the same period last year. 
 
&quot;This is supposed to be the growth engine of the company, and at best it was up slightly year over year. That shows that even in high-growth categories like mobile and native they&#39;re losing their search impact,&quot; he said. 
 
JMP Securities analyst Ronald Josey said search revenues are a significant portion of Yahoo&#39;s overall revenues and their continued decline could definitely be a factor in the sale negotiations. 
 
&quot;If search continues to decline as much as it has, that&#39;s something that&#39;s going to be called into question,&quot; he said. 
 
In a conference call, Yahoo Chief Financial Officer Ken Goldman touted the company&#39;s cost-cutting efforts. 
 
&ldquo;Through excellent expenditure management of cost and capital, we achieved above the high-end of our guidance on adjusted EBITDA and significantly increased cash flow,&rdquo; he said, referring to earnings before interest, taxes, depreciation and amortisation. 
 
Yahoo&#39;s shares were little changed at $37.92 in trading after the bell. 
 
(Reuters) 
 
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Yahoo announced a $482 million write-down on the value of Tumblr, the social media service that it acquired in 2013 for $1.1 billion

Yahoo Inc's quarterly earnings fell short of Wall Street expectations on Monday in what may be the company's last financial report before it sells its core business. Yahoo reported adjusted earnings of 9 cents per share, short of the 10 cents that analysts expected. It also announced a $482 million write-down on the value of Tumblr, the social media service that it acquired in 2013 for $1.1 billion. Yahoo is in the process of auctioning off its search and advertising business, and is expected to choose a winner this week. The company said its board has made "great progress on strategic alternatives" but did not comment further on the auction process. Verizon Communications Inc and AT&T Inc are said to be in the running to acquire the core business, along with private equity firm TPG Capital and a consortium led by Quicken Loans founder Dan Gilbert and backed by billionaire Warren Buffett. Yahoo also owns large stakes in Chinese ecommerce giant Alibaba and Yahoo Japan, which are worth far more than the company's internet business. Monday's earnings report showed the continued slide in Yahoo's business during the protracted sale process. After the Tumblr write-down, the company posted a net loss of $439.9 million, or 46 cents per share, compared with a loss of $21.6 million, or 2 cents per share, a year earlier. Although total revenue rose to $1.31 billion from $1.24 billion a year earlier, the seeming improvement was the result of a change in the way the cost of acquiring traffic is counted. After deducting fees paid to partner websites for traffic, revenue fell to $841.2 million from $1.04 billion. Estimating that Tumblr is worth "nothing" at this point, Ross Gerber, cofounder and CEO of Gerber Kawasaki Wealth and Investment Management, said potential buyers were likely bidding lower than Yahoo believes it is worth. "I can't imagine why the sale process is taking so long, the only thing I can think of is it's being overpriced. This report doesn't further create an impression that paying up for these assets has any value," Gerber said. Revenue in the company's emerging businesses, which Chief Executive Officer Marissa Mayer calls Mavens- mobile, video, native and social advertising , showed some life, rising 25.7 per cent to $504 million in the second quarter ended June 30. But the improvement in Mavens was offset by decreases in gross search revenue that is only expected to get worse, said B. Riley & Co analyst Sameet Sinha. Gross search revenue for the quarter was $765 million, down 17 percent from the same period last year. "This is supposed to be the growth engine of the company, and at best it was up slightly year over year. That shows that even in high-growth categories like mobile and native they're losing their search impact," he said. JMP Securities analyst Ronald Josey said search revenues are a significant portion of Yahoo's overall revenues and their continued decline could definitely be a factor in the sale negotiations. "If search continues to decline as much as it has, that's something that's going to be called into question," he said. In a conference call, Yahoo Chief Financial Officer Ken Goldman touted the company's cost-cutting efforts. “Through excellent expenditure management of cost and capital, we achieved above the high-end of our guidance on adjusted EBITDA and significantly increased cash flow,” he said, referring to earnings before interest, taxes, depreciation and amortisation. Yahoo's shares were little changed at $37.92 in trading after the bell. (Reuters)

Yahoo reports lacklustre results as sale looms