Tag Archives: Policy

Russia criticizes U.S. policy on Syria ahead of Kerry Moscow go to

MOSCOW Russia stepped up its criticism of U.S. policy on Syria on the eve of a check out to Moscow by U.S. Secretary of State John Kerry, saying the United States had not shown it was prepared to cooperate fully in the struggle against Islamic State militants.

Russia would continue to urge Washington to rethink its policy of “dividing terrorists into excellent and bad ones”, Russia’s Foreign Ministry stated in a statement on Monday, ahead of Kerry’s visit to Moscow, which is scheduled for Dec. 15.

(Reporting by Lidia Kelly Writing by Dmitry Solovyov Editing by Andrew Osborn)

Agen Sabung Ayam

Polish management reshuffles heighten policy uncertainty

* Bourse down 24 pct this year, hit lowest considering that mid-2009

* New govt reshuffles state-run companies’ management

* Future of Polish economy uncertain, fund managers say

By Adrian Krajewski and Marcin Goclowski

WARSAW, Dec 14 Poland’s ruling conservatives have ousted a number of leading executives of state-owned businesses since taking energy right after an October election, in what investors be concerned marks the start off of a campaign to seize a lot more manage over the economy.

In a sign of mounting concern amongst fund managers, Warsaw’s blue-chip WIG20 share index hit its lowest level in six years final week, extending losses that followed the shock election of President Andrzej Duda in Might.

That paved the way for his economically left-leaning but nationalist-minded Law and Justice celebration (PiS) to score a landmark election win in October.

Investors are concerned mainly about PiS plans to tax banks and massive retailers to fund social spending, and about signals that PiS wants to rearrange the energy sector to have profitable firms assume the monetary issues of loss-generating coal miners.

PiS has constructed its popularity on a promise of much more economic equality and has stated it wants Polish, not foreign, money to have more control over company.

“When I hear how very good (PiS tells us) Poland is going to be and at the very same time I witness how the economy is obtaining battered, I truly give up. It may be high time to flee the country,” mentioned a Warsaw-based economist at a foreign-owned bank, declining to be quoted by name.

Reuters spoke with ten fund managers, economists and bankers, who have expressed related concerns.

Polish banks, the most most likely targets of PiS policy plans, have shed 28 % of their worth this year, even though power businesses, which with each other with banks make up about half of the WIG20, have lost 35 percent.

In the latest sacking, the supervisory board of Poland’s dominant gas firm PGNiG dismissed the state-run company’s head Mariusz Zawisza on Friday, replacing him with former PiS economy minister Piotr Wozniak as acting CEO.

State-run utilities Enea and Energa also sacked executives final week.

The head of the state-controlled Warsaw bourse has also resigned, as have the head of cargo carrier PKP Cargo and the chief executive of insurer PZU, raising doubts about PZU’s ambitions to build a best five Polish bank.

Polish governments have a tendency to reshuffle top management at state-owned organizations, but PiS has acted much less than a month after taking office.

The country’s biggest lender PKO, Europe’s No.two copper producer KGHM and best refiner PKN are seen subsequent in line for management reshuffles.

“Alterations are some thing that is expected and organic (when government modifications). This industry anxiousness is unfounded,” Poland’s deputy treasury minister Marek Zagorski told Reuters. “The treasury ministry’s function is to calm the scenario and allow the Warsaw bourse’s development.”


There have been few concrete signs the dismissals have affected firm policies, but investors are concerned the new bosses will push the government’s agenda.

“I am afraid they will rock the boat, which will lead to decrease foreign and domestic investments, even though banks will curb lending since of the new tax. In 1 year’s time we will see an financial slowdown,” a bank source stated.

Bankers, fund managers and economists fret about a repeat of Hungary’s scenario, where unpredictable economic policies by Prime Minister Victor Orban’s government, a function model for PiS leaders, are blamed for scaring off investors.

Hungary’s central bank bought a majority stake in the country’s sluggish stock exchange last month, following Europe’s highest bank levies reduce the Budapest bourse’s turnover by 70 % between 2010 and 2014.

“Numerous aspects have appeared simultaneously (in Poland),” a Warsaw-based fund manager mentioned. “Some face management alterations, others element in tax hikes.”

“Positives are difficult to uncover,” the fund manager said. “We can evaluate the effect of the bank asset levy on the lenders’ balance sheets, but the wider influence on the future of Poland’s economy is unpredictable.”

Investors be concerned the government could try to take over some assets of Polish pension funds if it struggles to finance budget spending, successfully eliminating them as relevant market place players.

Poland, Eastern Europe’s greatest economy, has not suffered a recession in 20 years. This and around $ 11-billion worth of privatisations implemented since the 1989 fall of communism have made its bourse central Europe’s biggest.

Nonetheless, the valuation of recently privatised firms are likely to come under scrutiny soon after the Supreme Audit Workplace stated final week that the state treasury had sold several companies also cheap, which includes chemical group Ciech.

Retailers also face a new levy next year although the new bank tax bill, currently in parliament, could cost the financial sector up to 7 billion zlotys ($ 1.8 bln) next year.

The strategy mirrors taxes imposed on Hungarian banks in 2010 by Prime Minister Orban. Last month, Hungary proposed capping the tax by far more than half the present level, fearing that weak corporate lending may possibly jeopardise economic recovery.

Poland’s central bank governor Marek Belka warned on Friday that the simultaneous introduction of the bank tax and the government’s plan to force banks to shoulder significantly of the burden of converting Swiss franc-denominated mortgages would result in a “serious crisis” for some banks.

Industry sources said uncertainty relating to the banking sector has delayed ongoing sales of nearby units by Raiffeisen and Basic Electric .

Foreign banks have been retreating from Poland in the past few years due to falling margins, a trend highlighted by Deutsche Bank’s Polish arm last week when it raised mortgage loan prices.

“The decision … was caused by the bank’s approach … as effectively as the necessity to adjust to the challenges facing Deutsche Bank and the entire sector,” Leszek Niemycki, Deutsche Bank Polska’s deputy chief, said. ($ 1 = three.9693 zlotys)

(Editing by Susan Fenton)

ECB asset-purchasing blurs line amongst fiscal and monetary policy: Weidmann

FRANKFURT A proposed European advisory board to assess national budgets is not sturdy adequate and the euro area needs a fiscal authority with higher powers, Bundesbank President Jens Weidmann mentioned on Thursday.

The body proposed by the European Commission would work also gradually to rein in spendthrift governments and would not have adequate power to make sure the Commission respected its suggestions, Weidmann stated in prepared remarks in Lisbon.

“This does not bode effectively for the objective of a far more depoliticized application of the guidelines,” said Weidmann, who also sits on the European Central Bank’s price-setting Governing Council. “For that, a fiscal council needs to be truly independent, and its suggestions need to carry weight.”

The euro zone has struggled considering that its inception to locate approaches to make its member states observe price range rules intended to help them live within the constraints of a shared currency.

The advisory European Fiscal Board was proposed in October with members fully outside the Commission, whose critics say it has bowed to pressure to be a lot more lenient with main nations such as France than with other individuals.

Weidmann stated that a powerful authority is necessary because the euro area’s danger-sharing arrangement reduces the incentive for sound fiscal policy.

A fiscal union with compulsory centralized choice-generating would make the euro zone much less vulnerable but there is not adequate political support for such a move, Weidmann stated.

The ideal viable choice would be to keep economic and fiscal policy decisions at the national level with an independent oversight physique that could take some of the political pressure off the European Commission, Weidmann added.

(Reporting by Balazs Koranyi Editing by Ruth Pitchford)

ECB to drive policy additional into uncharted territory

* Deposit price, asset buys all in play

* Combinational of measures probably

* Inflation outlook could be cut

By Balazs Koranyi and Francesco Canepa

FRANKFURT, Dec 3 Fighting stubbornly low inflation, the European Central Bank is expected to ease policy additional on Thursday, delivering a cocktail of measures that could contain a deposit price reduce and alterations to its asset-getting programme.

Promising to do what it need to to enhance inflation “as speedily as feasible”, the bank has all but committed to action, leaving investors guessing only what measures it would choose from an exceptionally lengthy and often contentious list.

Proposals below discussion variety from mainstream moves like extending quantitative easing, to far more extreme tips, like a two-tier deposit price that would punish banks parking also much money with the central bank alternatively of lending the cash to produce growth and thus inflation.

But most of those proposals will run into some opposition on the consensus-searching for ECB Governing Council, producing it more tough for President Mario Draghi to extend his track record of promising big and delivering even a lot more.

Critics of easing, led by the Governing Council’s two German members, say that Europe’s recovery is gaining strength and the biggest explanation inflation is hovering near zero is the fall in oil costs, which is a boost for development as reduced energy fees leave households with a lot more to commit.

Certainly, business activity in the euro zone picked up at its fastest pace given that mid-2011 last month, third quarter economic growth was running at a respectable 1.6 % and lending is escalating at the quickest price in four years.

The U.S. Federal Reserve’s expected interest price hike also complicates the choice. Although a December move has been broadly telegraphed, an unexpectedly weak manufacturing survey this week raised fresh doubts about the Fed’s price path.

But leading ECB officials, like chief economist Peter Praet, have focused their efforts on inflation, warning that missing the target again risked damaging the ECB’s credibility and producing monetary policy much less powerful.

Even if oil prices account for element of the issue, core figures, which strip out energy prices, are operating at half of the target, an indication that once the one particular-off effect of the crude value fall passes by means of, inflation will not rebound, they argue.

Certainly, analysts polled by Reuters count on the ECB to cut its 2017 inflation forecasts to 1.six percent from 1.7 percent, below its target of close to but below two percent, indicating that the inflation could be beneath target for over four years.

The ECB will announce its interest rate choice at 1245 GMT and Draghi will unveil new economic forecasts along with measures not involving rates at a 1330 GMT news conference.


Whilst the ECB does not target the exchange rate, it could need to act to preserve the euro’s recent weakness against the dollar and the pound after current falls lifted extended term inflation expectations to their best level since mid-year.

“The major purpose why the ECB sees a want to signal a lot more easing, even although it is not even halfway by way of its ongoing quantitative easing programme, is that it wishes to stop euro appreciation,” SEB stated in a note.

“A weak currency has been 1 critical driving force behind the recovery, and with a hesitant Bank of England postponing its rate hikes ever further into the future, a euro rebound is a threat,” it added.

Studying from its previous mistake of providing overly particular forward guidance, the bank could extend its asset purchases indefinitely, only dropping the finish date without having delivering a new one particular, and could reduce the deposit price, once more with out offering an estimate for exactly where the bottom is for rates.

German banks would be the most affected by a cut in the deposit rate as they have almost 160 billion euros of excess money parked at ECB or the Bundesbank, according to Barclays Study estimates.

The French and Dutch banking sectors every sit on a lot more than 100 billion euros of excess money, compared to much less than 20 billion euros each and every for their peers in Ireland, Spain and Italy, the estimates show.

The enhanced financial outlook indicates the ECB can also afford to save some firepower for later, especially following promising data, such as lending growth at a four year high.

“In our view, the ECB should preserve some of its tricks up its sleeves and stick to a small 10 basis point reduce in December, and hold (schemes such as a two-tier deposit rate) in case of a further deterioration of the inflation outlook,” Credit Agricole said.

“If the ECB desires to exceed marketplace expectations, it could just swing to a clear QE-infinity, and drop any time reference,” it added.

Fitch: New FDI Policy a Extended Term Optimistic for India True Estate


(The following statement was released by the rating agency) MUMBAI/SINGAPORE, November 30 (Fitch) Fitch Ratings believes that the easing of investment norms beneath Foreign Direct Investment (FDI) policy for the real estate sector is far more of a extended term story, and is unlikely to outcome in any instant enhance in FDI in the near term. The policy, which became powerful on 24 November 2015, removes the earlier circumstances on minimum investments (of USD 5m earlier), minimum location and also eases exit alternatives for the FDI investor. The Indian genuine estate sector has been challenged by frequent delays in project completion and a long/ complicated approval procedure. The weak demand in current times has added to the challenges. With these problems continuing to effect the sector, we think that investment flows will stay slow and restricted to a handful of selective projects in the next 12 months. Investment flows in to the actual estate sector have slowed down over the final 18 months. FDI in so referred to as construction-development projects fell by more than 38% throughout the year ending March 2015 (FY15) to USD 758m (FY14: USD1,226m). The FDI flow has remained weak this year with just USD34m of investments in 1QFY16. We anticipate the investments to choose up over the next two to 3 years along with the expected improvement in demand in the genuine estate sector. In addition, the less complicated exit options allowing FDI investors to money out right after a lock-in period of three years without linking them to any execution delays and capacity to invest in completed projects could enhance the appetite of investors. Fitch expects FDI investments to attain about USD1.5bn annually more than the next two to 3 years. The increase in FDI is likely to bring far more transparency in the Indian real estate sector, whilst also resulting in much more timely completion of projects and improved construction top quality with access to much better technologies. The affordable housing segment has so far witnessed a weak response from developers and fewer completed projects, notwithstanding the government concentrate and the potential for the sector to benefit from the easing of FDI policy. We do not count on meaningful foreign investment flows into this segment till investors are better capable to assess the risks unique to this segment, and this will need a significant enhance in the number of completed projects. Speak to: Muralidharan R Director +91 22 4000 1732 Wockhardt Towers, 4th Floor, West Wing Bandra Kurla Complicated, Bandra East Mumbai – 400 051 Hasira De Silva Director +65 6796 7240 Vicky Melbourne Senior Director +61 two 8256 0325 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, E mail: bindu.menon@fitchratings.com. Extra info is offered on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE Subject TO Specific LIMITATIONS AND DISCLAIMERS. PLEASE Study THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS Hyperlink: right here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE Accessible ON THE AGENCY’S PUBLIC Web site ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE Accessible FROM THIS Site AT ALL Times. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO Offered FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS Site. FITCH May HAVE Supplied One more PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS Associated THIRD PARTIES. Details OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS Based IN AN EU-REGISTERED ENTITY CAN BE Located ON THE ENTITY SUMMARY Web page FOR THIS ISSUER ON THE FITCH Web site.