By Leonardo Goy and Anna Flavia RochasBRASILIA/SAO PAULO, Oct 18 (Reuters) - Brazil’s state-run
power utility Eletrobras could pare back ambitious
investments in Latin America’s largest economy as the renewal
of electric concessions threatens to pinch cash flow.Brazil is nearing a decision this year on power industry
concessions, with signs pointing to a steep cut in rates for
almost all of Eletrobras’s transmission contracts and about 40
percent of its generation contracts.”No one is taking care of this. Cash flow is going to fall
off steeply at Eletrobras and the government isn’t giving the
issue due attention,” said a lawmaker in the governing
coalition, who asked not to be named.The government is aiming to reduce the sale price of power
by as much as a third, as many generators have long since paid
off their original investments.Electricity rates in Brazil are among the world’s highest,
but this is in large part due to heavy taxes that provide a
steady source of income for the government — crucial for
Brasilia as the government seeks fiscal balance.Eletrobras, the country’s biggest power company, now faces
the possibility of lower revenues just months after it pledged
to double the pace of investments to keep up with Brazil’s
power-hungry economic growth.Major projects include a plan to build the world’s third
largest hydroelectric dam, the 11,200-megawatt Belo Monte
project due to start producing power in 2015.For those investments to go ahead as planned, the
government may have to inject more resources into its state-run
utility, according to energy consulting firm PSR. Eletrobras
could lose 4.5 billion reais ($2.5 billion) in annual revenue
under renewed concessions, PSR said in a recent study, equal to
half of this year’s investments.However, a government source told Reuters on condition of
anonymity that policymakers are not looking at compensation for
Eletrobras. The company declined comment on the issue.”If they lose revenue, then it’s lost. That’s part of it,”
the head of Brazil’s electric regulator, Nelson Hubner, told
Reuters.Hubner argued that an eventual drop in revenues for
Eletrobras will not necessarily slow investments, suggesting
financing for projects could be secured against future revenues
from new installations.Eletrobras is testing market appetite on a road show this
week for a bond issue worth up to $2.5 billion, at a time when
most Brazilian companies are backing away from financial
markets shaken by Europe’s tussles with debt concerns.
All airlines landing in Europe will be forced to comply with
the cap from Jan. 1 and cover any surplus emissions with carbon
credits, and China has criticised the policy as illegal and
unfair.Jos Delbeke, the director general for climate action at the
European Commission, told a news briefing that he had a “very
useful exchange of views” with his Chinese counterparts on the
issue during his visit to Beijing.But he added that Europe was entitled to impose the law
after other countries failed to agree to curb aircraft
emissions.”Multilateral agreements are preferable but our legislators
got impatient because the multilateral agreements did not get
any results,” Delbeke said.”This is a measure the EU is entitled to take according to
international law.”He said the law was an “old story” that was first passed in
2009 and adopted following years of discussions with airlines,
industry associations and other countries, and that opponents in
the United States, China and elsewhere had only started to pay
attention to the issue this year.”It is only just a couple of months before the starting date
that this law seems to provoke quite a bit of anxiety,” he said.He said the impact of the law was likely to be minimal, with
85 percent of emission permits granted free in the first year of
implementation, giving airlines the opportunity to earn revenues
that would allow them to modernise their fleets.He said he was confident that a challenge to the law made by
two U.S. airlines would be rejected, particularly after the EU’s
advocate general ruled that it did not violate either the
Chicago Convention on Civil Aviation or the United Nations
Framework Convention on Climate Change.China continues to urge the EU to exempt its airlines from
the scheme, and has threatened to retaliate by reducing its
aircraft orders from Europe’s Airbus.Delbeke said that the law would encourage countries to
implement their own aviation CO2 emission cap.”It opens up the possibility that if a state takes
equivalent measures we can waive the obligations.”The issue goes to the heart of global climate change
discussions, and to the efforts Europe has been making to
persuade China, the world’s biggest source of climate-changing
greenhouse gases, to make stronger commitments to reduce its
emissions.But China has sought to retain the Kyoto Protocol principle
of “common but differentiated responsibilities” in which the
bulk of the burden for reducing CO2 lies with industrialised
nations.Delbeke said the principle applies only to nations, and not
to individual industrial sectors.He added that discussions on the law would continue.”We are going to continue our negotiations and discussions
and different parties — that’s what we agreed today with
China,” he said.”In case we do not find a solution at the political level,
then airlines may want to go to court and challenge the measure.
We have the rule of law in Europe and anybody who is
dissatisfied can go to court.”
* Proceeds expected to finance Korea Express takeover
(Adds share prices)SEOUL, Oct 18 (Reuters) - CJ Group member companies sold 4
million shares in Samsung Life via a block sale for
342 billion won ($300 million), the companies said on Tuesday.Shares in Samsung Life tumbled 6 percent, following the
stake disposal at the low end of the offered price range,The stake sale by CJ Cheiljedang and CJ O
Shopping comes as food-to-entertainment conglomerate
CJ looks for ways to finance its takeover of Korea Express
.The two firms sold the shares at 85,500 won per share, a
discount of 5 percent to the stock’s Oct 17 close of 90,000 won,
according to their regulatory filings.Two affiliates of CJ Group had planned to increase their
size of stake on auction to 6.4 million shares if there is
sufficient demand, from the initial offering of 4 million shares
equivalent to a 2 percent stake, according to IFR.CJ Cheiljedang slid 2.1 percent and CJ O Shopping gained
0.8 percent as of 0021 GMT, versus the broader market’s
1.8 percent fall.
“Real Steel” racked up an estimated $39.6 million in global ticket sales over three days, distributor Walt Disney Co said on Sunday. The film earned $16.3 million of that total from U.S. and Canadian theaters.”Footloose,” the story of teenagers who defy their small town’s ban on dancing, was close behind with $16.1 million from U.S. and Canadian theaters.Appeal to families helped “Real Steel” come out on top, said Dave Hollis, Disney’s executive vice president for motion picture sales and distribution. The DreamWorks-produced film stars Hugh Jackman as a father who bonds with his son as they restore a robot to fight for a boxing championship.To date, the movie has earned $51.7 million at North American theaters plus $56.6 million in international markets, for a combined global tally of $108.3 million.The “Footloose” debut performed in line with studio expectations and earned an A rating from audiences polled by survey firm CinemaScore, said Don Harris, president of domestic distribution for Paramount Pictures, which released the film.The remake, which cost about $24 million to make, features Dennis Quaid as a local preacher and lesser-known actors in the lead teenager roles. Kevin Bacon starred in the original 1984 hit.SLOW WEEKEND AT THEATERSIn third place for the weekend, horror flick “The Thing” grabbed a weak $8.7 million. The film, a prequel to a 1982 hit, centers on a team of scientists who travel to Antarctica to investigate an alien creature. The movie’s production cost about $38 million.Nikki Rocco, president of distribution for Universal Pictures, noted other horror films had struggled lately and said the box office “was relatively soft this weekend” overall.Sales for the top 12 movies came in 34 percent lower than the same weekend last year, according to figures from Hollywood.com Box Office.Political drama “The Ides of March,” directed by and co-starring George Clooney, pulled in $7.5 million during its second weekend in theaters to finish in fourth place. Clooney also co-wrote the film about moral choices during a tight primary contest between two politicians running for president.In fifth place was “Dolphin Tale,” a feel-good movie based on the true story of an injured dolphin rehabilitated with a prosthetic tail. The film brought in $6.3 million domestically over the weekend.New comedy “The Big Year” was a flop. The film, starring comedy heavyweights Steve Martin, Owen Wilson and Jack Black as bird-watching buddies, landed in ninth place with just $3.3 million domestically.”It’s a high-quality film with a talented cast. We just missed,” said Bruce Snyder, president of domestic distribution for distributor 20th Century Fox.Paramount Pictures, a unit of Viacom Inc, released ”Footloose.” “Real Steel” was produced by DreamWorks and distributed by Walt Disney Co. Universal Pictures, a unit of Comcast Corp, distributed “The Thing.” Sony Corp unit Columbia Pictures released “The Ides of March.” “The Big Year” was distributed by News Corp unit 20th Century Fox, and “Dolphin Tale” was released by Time Warner Inc unit Warner Bros.
* Election in April/May, polls favour leftBy Brian LovePARIS, Oct 16 (Reuters) - French left-wingers vote on Sunday
to designate the presidential candidate whose mission will be to
unseat Nicolas Sarkozy in an election next year, and the
favourite is Francois Hollande, a moderate Socialist Party
veteran little known beyond France.In a U.S.-style primary, the first of its kind in France,
voters choose between Hollande, who has never held a national
government post, and Martine Aubry, one-time labour minister,
architect of France’s 35-hour week and daughter of the former
European Commission President Jacques Delors.Opinion polls give Hollande a lead of six percentage points
over Aubry in a ballot that decides which of the two will run in
a presidential contest that the Socialists have not won since
Francois Mitterand was re-elected in 1988.The polls suggest French voters are ready to put the left
back in power after five years of conservative Sarkozy, who is
unpopular but widely expected to seek another five-year term.The left’s runaway favourite to become president had been
former International Monetary Fund chief Dominique Strauss-Kahn
but his IMF career and presidential hopes were halted when he
was arrested in New York in May on charges of sexually
assaulting a hotel maid. The charges have since been dropped.The ease with which Hollande and Aubry have filled his shoes
suggests that many voters are simply weary of Sarkozy and his
economic policies.Sunday’s voting at 10,000 polling stations will close at
1700 GMT. Preliminary results are expected a few hours later.CONCILIATORY NOTEHollande and Aubry sparred in the days before the primary
but Aubry seized on France’s World Cup rugby semi-final win over
Wales to sound a conciliatory note ahead of Sunday’s vote.”When it’s time for the post-match session, everyone parties
together,” she told reporters. “That’s how it’ll be on Monday.”She dismissed polls that show Hollande scoring 53 percent of
the vote to her 47 percent, preferring to highlight declarations
of support from several prominent environmentalist politicians.In a primary inspired by the momentum that carried Barack
Obama to the White House, the Socialist Party has organised a
two-round contest where anyone who pays a euro and declares
allegiance to left-wing values can vote.More than 2.6 million people voted in the first-round last
Sunday, when anti-globalisation hardliner Arnaud Montebourg
scored a surprise 17 percent.Hollande, who promised in the ensuing days to crack down on
banks and financial market excess, has consolidated his position
versus Aubry by securing the support of the four contenders
knocked out in round one, including Montebourg.Hollande, seen by many as more centre-left, won 39 percent
of the first-round vote, versus 30 percent for Aubry, often
labelled as a more old-school Socialist. The four candidates
knocked out — including Segolene Royal, Hollande’s former
companion and mother of his four children — got close to 30
percent.But both Hollande and Aubry share the main tenets of a
Socialist Party manifesto that promises to scrap 50 billion
euros of tax breaks that mostly went to the wealthy under
Sarkozy, using half of this money to fund state jobs and promote
growth, with the rest to cut the deficit.Sarkozy, who took power in 2007 after 12 years of Jacques
Chirac, has yet to declare a re-election bid.Opinion polls show him trailing either Hollande or Aubry in
the election which takes place in two rounds on April 22 and May
6, followed weeks later by a parliamentary election.
“I’ve worried about that for a long time and I remain
worried about that because there has been some slowness in the
decisionmaking process in Europe,” Flaherty said.”But I think we’re getting there, I think a sense of
urgency has been developed, with some outside pressure, in
Europe and that the European countries are close to dealing
with … the sovereign debt issues in Greece and the
recapitalization of the banks.”
* U.S. Treasuries rose briefly in early Asia trade after
Spain’s credit rating was cut by Standard & Poor’s to AA-minus
on growth concerns and risks faced by its banks and after a
flurry of downgrades on European banks by Fitch.* Fitch cut the ratings of UBS, Lloyd’s Banking and Royal
Bank of Scotland. It also placed Barclays Bank, BNP Paribas,
Credit Suisse, Deutsche Bank and Societe Generale on watch
negative.* “Hopes are mounting ahead of the EU summit and it’s hard
to be more bullish ahead of that event. It seems though that
many market players are positioning for a positive surprise,”
said a Tokyo-based trader for a European bank adding he sees
yields edging back up towards 2.5 percent levels.* Ten-year notes were unchanged, yielding 2.182 percent
— not far from a six-week high of 2.2710 percent
marked at one point on Wednesday.* Support for 10-year Treasuries lies at roughly 2.3
percent, a level that was unsuccessfully tested several times in
late August to early September. In addition, the 38.2 percent
retracement of a July to September rally in 10-year notes lies
near 2.266 percent.* A G20 preparatory meeting on Friday and Saturday is not
expected to announce market-moving statements.
The EU Summit will be on Oct. 23/24, ahead of a G20 meeting on
Nov. 3.* On Thursday an auction of $13 billion in U.S. 30-year
bonds attracted strong interest, with a record low yield of
3.120 percent compared with market forecasts of 3.157 percent.
That propelled 30-year bond prices even higher and pushed yields
to session lows.* In Asia, 30-year bond prices were also little
changed from U.S. levels, yielding 3.15 percent, down four basis
points from 3.19 percent at Wednesday’s close.* Foreign central banks’ holdings of U.S. marketable
securities at the Federal Reserve fell sharply in the latest
week, data from the U.S. central bank showed on
Thursday.* The Fed said its holdings of U.S. securities kept for
overseas central banks fell $16.4 billion in the week ended
October 12 to stand at $3.402 trillion. The breakdown of custody
holdings showed overseas central banks’ holdings of Treasury
debt fell by $17.8 billion to stand at $2.679 trillion.
Below are Humala’s key promises and some of his early
accomplishments:SOCIAL POLICY* Double the number of households covered in the “Juntos”
(“Together”) cash transfer program for families in extreme
poverty and single mothers in need.* Raise minimum wage to 750 soles ($275) per month from 600
soles when Humala took office. His government increased the
minimum wage to 675 soles in August and now plans to raise it
further to 750 in January 2012.* Introduce a program for early childhood development,
especially in districts with high poverty rates.* Mandatory government-funded pension of 250 soles ($92)
per month for people over 65 who have no other social safety
net. The program would first be introduced in regions in
extreme poverty and cover the entire country by 2013.MACROECONOMIC POLICY* Maintain current monetary policy model based on inflation
targeting and an autonomous central bank. Humala reappointed
known inflation-slayer Julio Velarde to lead the central bank.* Implement responsible, counter-cyclical fiscal policy.
The government has proposed a modest 5 percent budget increase
for next year, saying this year’s bigger-than-expected fiscal
surplus will guarantee funding for social programs for now.* Promote investment in infrastructure through public and
private investment. The finance ministry, led by Miguel
Castilla, who is well-respected on Wall Street, has launched an
initial stimulus focused on infrastructure investment of
between 0.4 and 0.5 percent of gross domestic product.* Create internal markets for raw materials and
manufactured goods rather than prioritizing exports.TAX POLICY* Congress approved Humala’s proposal to raise taxes and
royalties in the country’s vast mining sector after negotiating
with key mining firms and persuading them they needed to
contribute more to social programs.* Humala wants to increase the tax intake to 18 to 20
percent of GDP — it currently stands at below 15 percent — by
improving tax collection.
($1 = 2.731 soles)
“We have also obtained permission from the Russian
regulators to list up to 25 percent of our ordinary shares
internationally and we expect the same approval for the
preferred shares as well,” he said.The company earlier said it planned to hold the listing by
the year end.Provotorov also said Rostelecom was “closely cooperating”
with its state-controlled shareholder Svyazinvest regarding the
potential acquisition of its mobile phone operator Sky Link and
expected to file documentation for the obtaining of
anti-monopoly approval next week.”We are in the process of obtaining evaluation and we hope
that this deal will be signed by the end of this year. This will
allow us to significantly increase the attractiveness of our
mobile development on the basis of Sky Link’s CDMA, 2G and 3G
frequencies and licenses.”He added Rostelecom could pay higher dividends than
reflected in its dividend policy.”We would like to discuss rennovation of dividend policy
with our board of directors and will ask the board to review
this issue till the end of the year.”
“We have also obtained permission from the Russian
regulators to list up to 25 percent of our ordinary shares
internationally and we expect the same approval for the
preferred shares as well,” he said.The company earlier said it planned to hold the listing by
the year end.Provotorov also said Rostelecom was “closely cooperating”
with its state-controlled shareholder Svyazinvest regarding the
potential acquisition of its mobile phone operator Sky Link and
expected to file documentation for the obtaining of
anti-monopoly approval next week.”We are in the process of obtaining evaluation and we hope
that this deal will be signed by the end of this year. This will
allow us to significantly increase the attractiveness of our
mobile development on the basis of Sky Link’s CDMA, 2G and 3G
frequencies and licenses.”He added Rostelecom could pay higher dividends than
reflected in its dividend policy.”We would like to discuss rennovation of dividend policy
with our board of directors and will ask the board to review
this issue till the end of the year.”
