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Deutsche Bank has prohibited its foreign exchange and fixed income staff from using online chatrooms, joining a growing band of lenders who have halted the use of such forums over concerns of mounting scrutiny from regulators. Chat rooms have been a focus for regulators investigating manipulation of benchmark interest rates and possible rigging in the $5.3 trillion-a-day foreign exchange market. "We have banned the use of multi-party chatrooms in FX (foreign exchange) trading already in the first quarter, and we have extended this ban to other parts of our fixed income business", a Deutsche Bank spokesman said on Wednesday.
World shares fell for a third day on Wednesday and gold was at a five-month low, with focus back on the risks of the U.S. Federal Reserve starting to trim its bond-buying economic stimulus as soon as this or next month. The to-and-fro of when the Fed will begin to halt the flow of cheap dollars has dominated trading worldwide for months and a run of data ending in the main U.S. jobs indicator - non-farm payrolls - on Friday may yet tip the balance again. Polls of analysts and traders still point firmly to the U.S. central bank holding fire until next March but some stronger data has reheated speculation it could move earlier. "The whole market has been focused on when tapering will start, but what I would ask (incoming Fed chief) Janet Yellen is when does she perceive it ending."
Standard Chartered (STAN.L) warned that 10 years of record earnings are likely to end this year, with profit set to fall because of losses in Korea, a slowdown in its key Asian markets and tougher regulations. Standard Chartered said on Wednesday that operating profit in its consumer bank will be down by at least 10 percent from a year ago because of problems in Korea and profit from wholesale banking is expected to be flat, leaving overall profit down. "We've seen significant softening in this fourth quarter, particularly in financial markets," Group Finance Director Richard Meddings said.
SHANGHAI/HONG KONG (Reuters) - China plans to roll out financial sector reforms in the Shanghai special economic zone in the next three months and most will be implemented in a year, suggesting authorities are accelerating the pace of dismantling capital account controls. A People's Bank of China (PBOC) statement on Wednesday for the first time gave a timeline for launching deep reforms in the zone, adding they could then be duplicated in other similar zones around the country. The statement came after the PBOC provided additional detail for its plans for financial liberalization in the Shanghai free trade zone (FTZ) in a separate document published on Monday. "Financial reform in the pilot zone is not in the past tense, nor the future tense, but the present tense," PBOC Shanghai chief Zhang Xin said in a statement posted on the bank's Shanghai branch website.
The interim chief executive recently appointed to revamp mobile phone maker BlackBerry is in it "for the long haul", the company's largest shareholder Prem Watsa told Reuters. Watsa earlier this year sought partners in a $4.7 billion bid to take BlackBerry private. But his company, Fairfax Financial, then opted for a lead role in a $1 billion note offering to provide the Canadian company with money to fund a turnaround. John Chen, a turnaround specialist with Sybase in the late 1990s, was brought in as interim CEO.
Bets on debt-ravaged Greece or ailing phone maker BlackBerry would make many investors flee, but for Prem Watsa both are part of a "cautious" strategy he employs to manage Fairfax Financial's $23.3 billion portfolio. His 2011 investment in Bank of Ireland (BIR.IR) - the only domestic Irish bank not forced into state ownership after a financial crisis - has almost trebled in value to 845 million euros ($1.15 billion). Investments in Greece and a $4.7 billion bid for BlackBerry, which has faded almost to irrelevance in a competitive smartphone market, fit the pattern of contrarian investments, but it's too early to say if they will succeed.
A territorial dispute and rising labor costs have dulled the appeal of China as a production base for Japanese manufacturers, with Indonesia, India and Thailand more attractive, an annual survey by the Japan Bank of International Cooperation showed Wednesday. China dropped to fourth place in a survey it has topped since it began in 1992, with the proportion of companies naming it the most promising region over the next three years falling to 37.5 percent from 62.1 percent last year. State-owned JBIC, which provides loans to help Japanese companies expand overseas, in July-September surveyed 625 firms which have three or more overseas affiliates, including at least one production base outside of Japan. Sino-Japanese relations have worsened since the survey after China established an air defense zone in the East China Sea covering islands controlled by Japan but claimed by China.
NEW YORK/SHANGHAI (Reuters) - Yum Brands Inc's (YUM) KFC website in China trumpets the slogan "Trust in every bite". That message is part of the company's new "I Commit" campaign intended to reassure customers in its largest market, who have cut back on visits since Chinese media reports a year ago about excessive antibiotic use by a few KFC suppliers. A survey conducted in November found nearly 40 percent of respondents were still very concerned about antibiotic use in KFC chickens. It is China's largest Western restaurant operator with roughly 4,500 KFC outlets and the company reaps more than half of its overall operating profit there.
Bank of Japan board member Takehiro Sato said he saw no need to expand monetary stimulus pre-emptively to counter the pain to the economy from next year's sales tax hike, seeking to dispel speculation of a near-term expansion of its ultra-easy policy. Even if the BOJ had tools remaining to expand stimulus, doing so could be counter-productive after having deployed all possible steps in a single blow in April, said Sato, who is among those in the board who are more pessimistic about prospects for achieving the central bank's inflation target. "The BOJ has broken away from the incremental approach (on monetary policy)," Sato told business leaders in Hakodate, northern Japan, on Wednesday. Prime Minister Shinzo Abe is readying a $182 billion package this week in his latest bid to pull the economy out of deflation and bolster it ahead of the tax hike next April.
Tesco (TSCO.L), the world's third-biggest retailer, fell back to an underlying sales decline in its main British market in its third quarter, raising new questions over its recovery strategy. The firm, which trails France's Carrefour (CA.PA) and United States number one Wal-Mart (WMT) in annual sales, also reported on Wednesday underlying sales declines in all of its overseas markets. "Continuing pressures on UK household finances have made the grocery market more challenging for everyone since the summer and our third quarter performance reflects this," Chief Executive Philip Clarke said. Tesco, which makes about two thirds of its revenue in Britain, is 20 months into a turnaround plan for its main UK business that has pumped over 1 billion pounds ($1.64 billion) into store revamps, more staff, new product ranges and pricing initiatives.
Just a few years ago, Morgan Stanley (MS) lacked the expertise, infrastructure or desire to do a lot of lending, but today it is making a big push into loans to bridge a profit gap with rivals. Morgan Stanley's brokerage business historically focused on helping clients invest in stocks and bonds, leaving lending to competitors like Citigroup (NYS:C) with bigger retail banking operations. Interest rates are near zero, which weighs on the returns that brokerages can earn from investing client deposits in securities. By making more loans instead, Morgan Stanley could generate an extra $300 million of annual profit by one analyst's estimate.
Wal-Mart Stores Inc (WMT) is paying for lawyers to represent more than 30 of its executives involved in a foreign corruption investigation, according to people familiar with the matter, an unusually high number that shows the depth of the federal probe. The U.S. Department of Justice is investigating whether Wal-Mart paid bribes in Mexico to obtain permits to open new stores there, and whether executives covered up an internal inquiry into the payments. In recent months, the U.S. government has brought in a number of senior Wal-Mart executives for questioning, including officials from corporate headquarters in Bentonville, Arkansas, the sources said. The sources declined to name the executives who have submitted to interviews.
It isn't just Americans who need to go on a diet after Thanksgiving. Chains including Abercrombie & Fitch Co., Chico's FAS Inc., Gap Inc. and Victoria's Secret came into the fourth quarter with heavy inventory loads. The concern now is the retail industry's weak showing over Thanksgiving weekend will force them to take bigger markdowns that could hurt their fourth-quarter profits. Simeon Siegel, an analyst with Nomura Equity Research, looked at the inventory carried by those and other specialty-apparel retailers at the end of the third quarter and compared it with his projections for the chains' fourth quarter sales.
China's services industry grew at a steady pace in November, a private survey showed on Wednesday, a further indication of strength in the world's second-largest economy as the government embarks on a sweeping restructuring drive. The HSBC/Markit services PMI stood at 52.5 in November, little changed from October's 52.6 and above the 50 line that separates expansion from contraction. On Tuesday a government PMI survey of the services industry showed growth holding near a one-year high. "Service sectors maintained a steady pace of growth in November, translating into the third consecutive month of employment expansion," said Hongbin Qu, chief economist for China at HSBC.
U.S. auto regulators have asked Tesla Motors Inc (TSLA) for records of consumer complaints, property damage claims and other details as part of a federal probe into two Tesla electric cars that caught fire on U.S. roads since October. The U.S. National Highway Traffic Safety Administration also requested information about any design modifications to the Model S electric sedan as well as engineering drawings. Tesla has until January 14 to provide the additional details. The request for more information is routine in such safety defect probes, but signals how NHTSA is approaching the Model S investigation that was launched last month.
Japan's securities market watchdog will recommend that a Tokyo-based unit of Deutsche Bank (DBK.DE) be sanctioned for excessive entertainment of pension fund executives considered public employees under the law, sources with knowledge of the matter said on Wednesday. The Securities Exchange and Surveillance Commission (SESC) had been investigating entertainment by Deutsche Securities because the clients involved managed part of the Japanese national pension scheme, making them public employees in the eyes of the law and subject to anti-bribery statutes, Reuters reported in September. The Financial Services Agency, which carries out the recommendations of the SESC, will likely issue an order to Deutsche Securities to improve its business practices, the sources told Reuters on condition of anonymity because no official decision on a sanction has been announced.
Japanese Prime Minister Shinzo Abe is readying a $182 billion economic package this week in his latest bid to pull the economy out of deflation, but the new measures will not require the government to sell more debt. The headline figure usually announced by the Japanese government on economic measures often includes spending that has already been committed, and tends to far exceed the amount of actual new government spending.
A new video is circulating on the Internet that pokes fun at Lockheed Martin Corp's (LMT) F-35 fighter jet while lauding the F/A-18 built by rival Boeing Co (BA), the latest salvo in an increasingly pitched battle over Canadian fighter orders. Tyler Brand, vice president of business development for Canadian defense contractor RaceRocks 3D, said his company made the video on its own to showcase its skills and boost Boeing's marketing efforts while it was bidding for work from AeroInfo, a Boeing unit in Canada. Boeing is trying to round up additional orders for its F/A-18 fighter and the EA-18G electronic attack plane which is based on the same airframe to extend the plane's production past 2016, when it is currently slated to end. Boeing executives say they see good prospects for F/A-18 orders from the U.S. Navy, Canada, Australia, Denmark and several other countries.
The star witness in the government's case against SAC Capital Advisors portfolio manager Michael Steinberg faced aggressive questioning on Tuesday from Steinberg's lawyer, who sought to discredit his earlier testimony. Jon Horvath, a former analyst at Steven A. Cohen's SAC hedge fund, was on his fourth day on the witness stand in Steinberg's high-profile insider trading trial in a federal court in New York. Barry Berke, Steinberg's lawyer, questioned Horvath about statements he made last week that Steinberg had pushed him to obtain "edgy" information, at times eliciting seemingly contradictory answers from Horvath.