Business & Financial News

Carrefour said on Thursday opened its first wholesale store in India, New Delhi, as part of its development strategy on key emerging markets.

Earlier in the day, the Indian real estate group Parsvnath Developers had announced that the French retailer opened its first sign "cash-and-carry in one of its shopping centers in the Indian capital.

In India, foreign companies are not allowed today to hold chains with several brands and this activity is limited to wholesale trade.

The ban, which aims to protect small retailers and local channels, forcing large groups to enter into partnerships to penetrate the Indian market.

"The opening of this first shop represents the actual entry of Carrefour into the Indian market and will be followed shortly by the opening of other cash and carry stores," said Lars Olofsson, Executive Director of the number two worldwide distribution , in a statement.

"This first step is essential to enable teams Crossroads fully understand the specifics of the Indian market and to then develop our presence in other formats," he adds.

Located in east Delhi, the store with an area of 5,200 m2 will offer more than 10,000 products to caterers, government and local retailers, Carrefour said in a statement.

Carrefour, which sought to integrate this small market but growing for seven years, joins world number one Wal-Mart and Germany's Metro, already established in India.

In addition to New Delhi, the French retailer has also acquired land in Bangalore, Chennai (Madras) and Hyderabad.

French banking stocks have experienced a difficult year for stock markets in 2010, with fears of tighter financial regulation and two sovereign debt crises in the euro area and the sector should continue recovering in 2011.

Over the year, BNP Paribas, Societe Generale and Credit Agricole posted Tuesday at the close losses of between 12.75% and 21.83%, while Natixis fell by only 0.73%, supported in particular by its entry in September in the CAC 40.

The Franco-Belgian Dexia that figure bad student with a fall of over 39%.

The bank weighed on the benchmark index of the Paris exchange.Constituted 12.3% of bank shares (6.61% just for BNP Paribas), the CAC 40 will decline by nearly 2%.

The cons-performance of the banking sector was in large part by concerns about the financial situation of the peripheral states of the euro area, fueled by the debt crisis of the Greek in March and that of Ireland in November, and Investors are worried about maintaining public finances Portuguese, Spanish and Italian.

"STAY ALERT"

Fears of a tightening of financial regulation have also weighed, and the early 2010 when the Basel Committee published in mid-December the final text of all the new rules "Basel III" on the equity of banks, which will be tripled to allow resist new financial shocks.

The annual results for fiscal 2009 well received by the market in February, as well as the results of resistance testing (stress tests) suffered by European banks and published in July will not have helped offset concerns market on the financial sector.

These elements have contributed to extreme volatility seen this year for bank stocks. The amplitude of the current BNP Paribas was 44% and the price of Dexia has even reached 84% against 22% for the CAC 40.

While noting an improvement for the sector, the managers prefer to be cautious for 2011.

"The financial sector will still remain a number of convalescent months (…) There is a standard in real estate and credit even though it will take time.In contrast, the debt of states is reflected in bank balance sheets, "warns Nicolas Franck, director global allocation at Natixis AM.

"Warning that there is not a new wave of provisioning," he adds, noting that besides the problem of sovereign crisis, the financial sector is undergoing standardization and consolidation of balance sheets, "But even if we remain vigilant."

Caution that found in the valuations of banks with PE (price / earnings) between 4 (Natixis) and 11 (Credit Agricole), according to Thomson Reuters data, while market capitalization is well below their funds own (about half for and Dexia Crédit Agricole).

INSEE fell 0.1 points to 0.3% growth in gross domestic product of France in the third quarter from the previous quarter and 0.1 percentage points than the second at 0.6%.

At the end of September, over for 2010 was 1.4% (+1.5% in the first estimate), as detailed national accounts for the third quarter released Tuesday by INSEE.

The downward revision for the third quarter results "including the revision of indicators of business services and public works (…) and indicators of services to individuals," said INSEE.

Consumer spending of French households have accelerated to +0.5% in the third quarter, after +0.3% in the second (+0.6% in the third previous estimate).

Total investment grew by 0.5% (after +0.9% in the second quarter), with increases of 0.9% for household investment and 0.5% for the non-financial firms.

The government expenditure fell by 0.3% in the third quarter after rising 0.9% in the second.

In total, final domestic demand (excluding inventories) contributed positively to growth (0.5 points after 0.4 in the second quarter).

Changes in inventories also contributed 0.2 points to positive growth in the third quarter as foreign trade contributed negatively to the tune of 0.4 points.

Exports rose 2.6% in the quarter after 2.7% last quarter and imports by 3.9% after +3.8%.

Detailed results of the national accounts also show that the gross household disposable income rose 0.9% in the third quarter, after rising 0.8% during the previous three months.

Rising prices of consumer spending slowing to +0.2% in the quarter (+0.3% against the previous quarter) with energy prices, the purchasing power of households to dramatically accelerate +0, 7% after +0.5%, Insee said.

The savings rate has meanwhile increased to 16.2% from 16.1% at end June

Another indication given by INSEE, the margin of non-financial corporations increased slightly to 29.7% against 29.5% at end June

An Indian consortium formed by five public groups has the financial capacity to launch a competing offer for the Australian mining company Riversdale target of an attack led by Rio Tinto, said Friday the president of one of these groups.

Rio Tinto launched its takeover offer of 3.9 billion dollars (three billion) Riversdale Mining on coal, but the bid increases are likely.

"All the companies are financially strong ICVL.Funding will not be a problem, "said Partha Bhattacharyya Reuters, Chairman of Coal India, one of five companies that comprise the consortium Coal Venture International Ltd (ICVL).

Four of them are listed and had total reserves of 440 billion rupees (7.42 billion euros) in late September and feed all of ambitious plans for expansion or acquisition.

ICVL Thursday asked Citigroup to begin the process of "due diligence" (consultative accounts) and to make its assessment within two weeks.

"The mandate for Citi should enable us to decide whether we should consider making a superior offer to 3.9 billion dollars," said Partha Bhattacharyya.

ALLIANCE WITH TATA STEEL?

ICVL group consists of Indian utilities NTPC, Steel Authority of India, NMDC mining of Coal India and Rashtriya Ispat steelmaker and Nigam.

According to the chairman of Coal India, ICVL has not started formal talks with India's Tata Steel, Riversdale largest shareholder who holds 24%.

But a source familiar with the matter provided in this connection that "everybody talks to everybody," suggesting that discussions had take place.

They revolve around various options, including a joint bid from Tata Steel and ICVL or consortium's offer with the support of the shareholder's number one Riversdale.

Indian groups energy, steel and mining are looking for coal deposits abroad to meet growing demand in their country's third largest economy in Asia.

Rio Tinto, which is where his first big acquisition since that of the Canadian aluminum companies Alcan in 2007, also assumes a growing Asian demand for coal, essential ingredient to the melting of steel.Riversdale also operates coal deposits in Mozambique.

Rio Tinto needs to finalize the support of at least three major shareholders of Riversdale: Indian steelmakers Tata Steel and Brazil's CSN and the fund Passport Capital, who collectively own approximately 50% of capital.

According to a report from the Commonwealth Bank of Australia, the Benga project, operated by a joint venture between Tata Steel and Riversdale, could be further developed and have a yield of six million additional tons of coal per year over the next twenty years.

This would bring the share value Riversdale 20.80 U.S. dollars, the bank said. Rio Tinto's offer represents 16 Australian dollars (20.70 Australian dollars) per share.

Financial institutions reaping billions of euros in revenue per year when the accounts of their customers are in the red. A significant windfall that the government would reduce.

There are no official figures but said Wednesday the Duck chained to two billion euros in annual revenue related to overdrafts on bank accounts. "A low average," according to the newspaper which is based on estimates from experts and the average rate of 14.5% applied for overdraft charge according to the Bank of France. Amount only includes the charges on authorized overdrafts and fees called for intervention, levied when a customer exceeds the authorized amount or goes overdrawn without having been authorized.

The interest rate ranges from 11% to 15% for the overdraft, but oscillates between 15% and 19% for unauthorized overruns.Commission intervention, in addition to bank charges paid on the overdraft, costing between 5 and 10 euros. "For a representative payment, all banks charge a usurious rate therefore [higher than the ceiling set by law, note], and therefore illegal, unauthorized overdraft," argued association UFC-Que Choisir in a study published in June.

8-14% of revenues

By adding all the overdraft fees all weigh between 8% and 14% of revenues of the French settlements on the retail banking business by Eric Delannoy, vice president of consulting firm Weave. On the basis of turnover of the nine major networks, accounts in red have therefore reported to banks about six billion euros in 2009."We will not tell you that this is not a source of GNP [net banking equivalent of sales]," admitted a banker, who requested anonymity.

Although significant decrease since the financial crisis, the rates remain high. "Banks tarifient everything they do to levels they can not justify regrets Reine-Claude Mader, president of the association consumption, housing and living environment (CLCV).People do not really know what they pay. "The association called for the abolition of the term" commission "intervention," customers do not understand. "

To lower costs

Eric Delannoy, the law on consumer credit, initiated by the Minister of Economy Christine Lagarde should melt those revenues by changing the setting of wear rate, the maximum rate applicable to credit: beginning of May 2011 This rate will be determined by the nature of credit, but depending on its size, which should help to bring it down. Direct consequence, "the banks anticipate a decline in revenues to the overdraft of between 30% and 50%."

In the wake of a report commissioned by Bercy and published in July, banks have also pledged to halve their commission on intervention for the most vulnerable customers.The number of committees will also capped a day or a month "to avoid excessive cumulative effects," the French Banking Federation (FBF).

France will issue less debt in the medium and long terms in 2011, due to reducing its budget deficit and the early retirement of debt maturing next year in order to reduce reimbursements.

The Agence France Trésor (AFT), which manages the state debt, announced Tuesday that France would issue 184 billion euros of debt in the medium and long terms (net of redemptions) in 2011, 4.0 billion less than in 2010.

The debt issuance program in the medium and long term in France is lower than Germany's program for 2011 announced last week to $ 185 billion which added approximately ten billion emission of securities indexed to inflation.

During a telephone press briefing, Philip Mills, Director General of the AFT, said that the stock of short-term debt would be reduced by 1.1 billion euros in 2011, which should reduce it to 187 billion euros at end 2011.

End of 2010, the BTF outstanding will be reduced from 26 billion to be reduced to 188 billion euros, he added.Earlier this year, total deposits amounted to 214 billion euros and the initial goal was simply to stabilize it.

AFT has repurchased debt securities throughout the year 2010 for a total of 22.7 billion euros, a record for such operations.

These redemptions have reduced by 18.2 billion total debt repayments of medium and long term maturing in 2011 to bring them back to 94.8 billion euros.AFT has also acquired this year 4.5 billion euros of debt maturing in 2012.

Redemptions since September have reduced the $ 2.0 billion debt issuance program of medium and long term of 2011 was announced at the presentation in September of the budget proposal of France for $ 186 billion euros.

RISING RATES LONG AWAITED

The draft budget law for 2011 foresees a reduction in fiscal deficit to 91.6 billion euros against 149.7 billion in 2010.

The crisis of sovereign debt in the euro area has generally little effect on financial conditions in France which have improved this year.

Philip Mills has indicated that the average rate paid by France to finance medium and long terms in 2010 stood at 2.53% against 2.95% in 2009.

Asked about changes in long rates, he said that the trend was upward.

"It's normal to see an increase in financing costs because they were very low. They reflected the expectations of investors that relied on low levels of growth and inflation," he said.

"Over the last two or three months, the market has entered a process of normalization.That makes sense, "he said adding that the U.S. debt markets, German and French gradually incorporating the fact that growth would probably be stronger.

France has used in 2010 to reduce its short-term debt, which has lengthened the average duration of its entire debt to seven years and 50 days.

The share of short-term debt was lowered this year to 15.3% of total marketable debt of France (more than 1,200 billion euros) against a record 18.6% in 2009.

Reducing the stock of short-term debt was made possible by repurchases of medium term (BTAN) maturing in January 2011 and bonus harvested at monthly auctions of BTAN and OAT (Tracks long term), by issuing old high-coupon securities.

Greater centralization of surplus cash and reducing government, announced on November 17, 2010 budget deficit (152 billion euro 149.7 billion) also played.

Gross bond issuance in the medium and long terms has reached 210.7 billion euros in 2010, including 102.4 billion of fixed rate bond, 20.4 billion euros OAT indexed on the French inflation (OATi) and inflation in the euro area (OATei) and 87.9 billion BTANs.

The flow of capital to China's lessened somewhat in November, compared to the previous month's near record, something that does not advocate an immediate hardening of the Chinese monetary policy.

Figures released Monday by the People's Bank of China show that it and financial institutions in China spent 319.6 billion yuan (36.5 billion euros) to absorb the flow of foreign exchange to the country last month.

This figure is significantly down compared with 519 billion in October, the third highest amount since these statistics are, or since the late 90s.

It remains well above the 290 billion yuan and 243 billion in September from August, according to Reuters calculations based on latest data released by China's central bank during the weekend.

This slowdown reflects a decline of 5.3% of the stock market in November, after rising 12.2% in October, and efforts by Beijing to oversee the property prices.

The lackluster performance of the index of Shanghai Stock Exchange this month (+2.6%) and stability of the yuan suggest that capital flows could remain stable in December compared to November.

To ease the flow of capital entering the country and control inflation, the People's Bank of China raised rates on Oct. 19 and then conducted three increases in the required reserve ratio, which had to freeze over 1,000 billion yuan.

The central bank suggests, through its operations in the money market, it will probably require more than the minimum reserves by the rates to tighten policy in the weeks and months ahead.

The possibility of a further rise in interest rates would end up delayed and perhaps after the Chinese New Year in early February, market sources suggested.

The central bank left unchanged the rate of return on its bill auctions during the last five weeks and will likely continue to try and dispel any expectations of a future rate hikes.

U.S. stocks finished higher Thursday after the publication of a series of economic statistics considered encouraging.

The Dow Jones gained 0.36% to 11,499.25 points while the Standard & Poor's 500 took 0.62% to 1242.87 points and the Nasdaq Composite advanced 0.77% in 2637, 31 points.

The agency announced Wednesday it was considering lowering the rating of the new country. Despite the austerity measures implemented by the government, the agency expressed concern about its ability to refinance in 2011. However, she rejected the need for a bailout.

Moody's said Wednesday it was considering lowering the rating again "Aa1" from Spain, worrying about its ability to obtain financing in a climate of distrust of markets, a sign that the Socialist government, despite the measures taken , still can not convince.

This declaration, which would lower the Madrid stock market by 1.48% to 09.30 am (0830 GMT), comes after several days of warnings from analysts and representatives of institutions such as Jean-Claude Trichet, president of the European Central Bank (ECB), who called on Spain to be more transparent and to accelerate its reforms, labor, pensions and banking system.Moody's itself had decided Monday to maintain a negative outlook on Spanish banks, concerned about their ability to finance themselves and for their losses.

In late September, it had withdrawn its maximum rating "Aaa" to Spain, due to "considerable deterioration of the financial soundness of government." In the spring, Standard and Poor's and Fitch had also removed the maximum score for Spain, which is still well marked.

This time, it is "high refinancing needs in 2011" concerns of the rating agency.Even if "the solvency of Spain" is not "threatened", which avoids the need for a bailout, "the great need for funding of the Spanish government, not only the state but also regions and banks, make the country likely to see new episodes of tension to finance on the markets, "explains the analyst Kathrin Muehlbronner.

Banks are central concerns of Moody's, who fears "a rising ratio of public debt if the cost of recapitalizing banks should be higher than expected." It therefore plans to lower the rating "Aa1" Frob's debt, the government fund to support banks.She "will review his notes on the Spanish banks in the coming days," she announces.

Finally, she noted that the Spanish government, despite the austerity measures he has put in place, "control" limited "on regional finances, in a highly decentralized country. Yet the government has multiplied in recent weeks the reassuring words, and announced new anti-crisis measures, including the partial privatization of its airports and its lottery, which should bring him 14 billion euros, to try to calm the markets. These doubts about the strength of Spain after the Irish rescue plan. "I am confident and I am absolutely sure of the strength of the Spanish financial system," he repeated Monday that Economy Minister Elena Salgado.

Moody's "continues to see Spain as a country much stronger than other countries in the euro area" sources also worries markets (Portugal, Ireland …), recalls Ms. Muehlbronner, so "the examination of Moody's most likely to enter into a maintenance of the note in Spain in the Aa category + + ".

During the next three months, duration of the review period, Moody's will focus on "the government's commitment to address the key structural changes in the Spanish economy," including its "reforms of pensions and collective bargaining."

The agency will also monitor the finances of the 17 Spanish regions, which collapse under an accumulated debt of 105 billion euros, and the actual cost of recapitalizing the banking sector.

In this tense context, the Spanish Treasury will attempt Thursday to lift 2-3000000000 Bond 10 and 15 years.Tuesday, it issued $ 2.513 billion for good at 12 and 18 months, but at rates well above the previous emissions.

The Economy Minister Christine Lagarde has expressed hope Monday that French growth would be about a "big 1.6%" of GDP in 2010.

The government had built the 2010 budget on a growth forecast of 1.4% of the French economy, a figure that was increased to 1.6% in September.

"I am hopeful we will make a big 1.6", Christine Lagarde said on RMC radio and BFM TV

Asked about the possibility of reaching 1.7% of GDP, it said there was still "too many uncertainties" to be able to vote."It would be a very nice surprise year-end, wait a bit," she argues.

Saturday, Francois Fillon said that the growth of the French economy in 2010 would be "clearly superior" to estimates made initially and reiterated that the 2% target adopted for 2011 was "clearly within our reach."