The Bay is bringing British fashion retailer Topshop and Topman to Canada, the department store confirmed early Wednesday.
The announcement ends months of speculation about the U.K. fashion leader, internationally renowned for collaborating with young designers and also some of history
China faces a 60 percent risk of a banking crisis by mid-2013 in the aftermath of record lending and surging property prices, according to a Fitch Ratings gauge.
Fitch sees the risk of “holes in bank balance sheets” should a property bubble burst, Richard Fox, a London-based senior director, said in a phone interview on March 4. The risk assessment is from a macro-prudential monitor used by the ratings company.
Chinese banks fueled record property-price gains by extending a record 17.5 trillion yuan ($2.7 trillion) of loans over 2009 and 2010 under the stimulus program that propelled the nation through the financial crisis. Regulators’ efforts to contain the risks for lenders have included stress tests for declines in house prices and a crackdown on lending to local- government financing vehicles.
China’s risk of a systemic crisis is based on the nation’s MPI3 classification, the highest of three risk categories, in a Fitch monitor begun in 2005. The indicator signaled crises in Iceland and Ireland and has been tested back to the 1980s, Fox said.
In contrast with Fitch’s concern, the Hang Seng Finance Index (HSF), which includes five Chinese banks traded in Hong Kong, advanced 1.5 percent as of 3:34 p.m. local time.
Depleted Capital
Fitch follows an International Monetary Fund definition of a systemic financial crisis, Fox said. Such crises exhaust “all or most of the aggregate banking system capital,” cause a “large number of defaults” and “financial institutions and corporations face great difficulties repaying contracts on time,” according to a November 2008 IMF working paper.
“We’re talking about systemic crises here, affecting most of the major banks,” Fox said. “A crisis is something which technically de-capitalizes the banking system.”
Sixty percent of emerging-market countries downgraded to MPI3 face banking crises within three years, he said. China entered that classification in June. The indicator’s failures have included not sounding an alarm about the banking system in Spain, he added.
Banking systems in emerging markets are vulnerable to systemic stress when credit growth exceeds 15 percent annually over two years with real property prices rising more than 5 percent, according to Fitch.
Wen’s Pledge
Credit growth in China averaged 18.6 percent annually over 2008 and 2009 as house prices jumped, according to the ratings company. Chinese Premier Wen Jiabao pledged more efforts to cool the property market on March 5, telling lawmakers that “exorbitant” increases in housing prices in some cities are a top public concern.
The fallout from China’s lending spree may be bad loans totaling $400 billion, according to Hong Kong-based advisory firm Asianomics Ltd.
China is seeking to avoid a repeat of its last banking crisis, when the government spent more than $650 billion over a decade to bail out banks after years of state-directed lending.
Fitch’s concern contrasts with gains in banks’ profits and capital adequacy ratios and declines in non-performing loan ratios, according to data released by the China Banking Regulatory Commission payday loan.
The industry’s “capitalization has been noticeably strengthened throughout 2010, with capital ratios of major banks being well supportive of their standalone credit profiles,” Liao Qiang, a director of financial institutions ratings for Standard and Poor’s in Beijing said today.
‘Strong Liquidity’
“With reasonable loan loss reserves at present, good pre- provisioning profitability and strong liquidity, Chinese banks are likely to gradually absorb potential spikes in credit costs caused by looming bad loans, particularly from China’s property sector and local government financing platforms,” Qiang said.
Chinese banks listed in Hong Kong will likely report “strong” 2010 earnings when they report at the end of the month, BNP Paribas SA said in a report today.
In November, Moody’s Investors Service said that it had “concerns over the intrinsic, stand-alone strength of China’s banking system.” At the same time, the largest lenders weren’t materially damaged by the global financial crisis and aren’t likely to pose any significant contingent liability risk to the government balance sheet, the ratings company said.
Absorbing Losses
“Furthermore, we expect that future credit losses — arising from the surge in lending in 2009, from exposures to the property market, from risky loans to local government financing vehicles, and from off-balance sheet operations in the ‘shadow’ banking system — will be mostly absorbed by the banks themselves, either from capital, or from future earnings,” Moody’s said in a statement.
To limit risks for banks, China has increased oversight of lending to the local-government vehicles, which surged during the nation’s two-year stimulus program. In a March 5 speech to lawmakers, Wen pledged a “comprehensive audit” of local- government debt, while the Ministry of Finance said separately that “local governments face debt risks that can’t be overlooked.”
Banks have also been told to assign a higher risk rating to local-government loans.
The country’s “systemically important” lenders may be subject to an overall capital adequacy ratio of as high as 14 percent when their credit growth is judged excessive, a person with knowledge of the matter said on Jan. 28. Other lenders would need to meet a 13 percent threshold, the person said. The minimum ratio, used to gauge banks’ ability to withstand financial stress, is currently 11.5 percent for big banks.
Lenders including China Minsheng Banking Corp. and Agricultural Bank of China Ltd. (1288) have announced plans to sell more than 80 billion yuan ($12 billion) of shares and 70 billion yuan of subordinated bonds this year.
- Kevin Hamlin, with assistance from Zhang Dingmin. Editors: Paul Panckhurst, Lily Nonomiya.
Foreigners fled the turmoil in Libya by the thousands on Wednesday, climbing aboard ships, ferries and planes or fleeing in overloaded vans to the country’s borders with Egypt and Tunisia. Tripoli’s airport was overwhelmed with stranded people seeking a way out.
Two Turkish ships whisked 3,000 citizens from the chaos engulfing the North African nation and a U.S.-chartered ferry arrived to evacuate Americans to the nearby Mediterranean island of Malta, a five-hour journey. Several countries _ including Russia, Germany and Ukraine _ sent more planes in to help their citizens leave the increasingly unstable situation.
“The airport was mobbed, you wouldn’t believe the number of people,” said Kathleen Burnett, of Baltimore, Ohio, as she stepped off an Austrian Airlines flight from Tripoli to Vienna on Tuesday. “It was total chaos.”
Turkey was cranking up the largest evacuation in its history, seeking to protect some 25,000 citizens and more than 200 Turkish companies involved in construction projects in Libya worth more than $15 billion. Some of the construction sites have come under attack by protesters.
Two Turkish commercial ships left the eastern Libyan port of Benghazi on Wednesday escorted by a navy frigate. The first one is expected to reach Turkey’s Mediterranean port of Marmaris around midnight. Authorities began setting up a soup kitchen and a field hospital at Marmaris and arranged buses to transfer the evacuees. Turkey has also sent two more commercial ships to Libya.
Turkey has now evacuated more than 5,000 citizens from Libya over three days, about 2,000 of them by plane, Foreign Minister Ahmet Davutoglu said.
“We are carrying out the largest evacuation operation in our history,” he said, adding that Turkey was also helping other nations. “So far, a total of 21 countries have asked Turkey to evacuate their citizens as well.”
One Turkish citizen has been killed in Tripoli, he said. Davutoglu said Turkey was considering diverting its ships from Libya to Tunisia for quicker evacuation.
“We will then bring them from Tunisia by planes,” he said.
Davutoglu stressed that Turkey was not leaving Libya and would send “food and medicine to Libyan brothers by ships.”
Libya is one of the world’s biggest oil producers _ producing nearly 2 percent of the world’s oil _ and many oil companies were evacuating their expatriate workers and families.
China was also gearing up for a massive evacuation. There are reportedly 30,000 or more Chinese in Libya building railways and other infrastructure and providing oilfield services. Greece is making plans to help evacuate around 13,000 to Crete by ship.
China’s first chartered evacuation flight, staffed with relief officials and stocked with food and medicine, left for Libya on Wednesday.
Chinese media reports said a site run by China’s Huafeng Construction Co., Ltd. in eastern Libya was attacked by armed looters over the weekend who stole computers and other equipment and forced nearly 1,000 Chinese workers out of their dormitories.
The International Organization for Migration said several Asian, African and one European government requested its help to evacuate their citizens.
Migrants were pouring into Libya’s land borders with Egypt and Tunisia and the group was trying to help find accommodation for those already at the border, said Jemini Pandya, a spokeswoman for the Geneva-based organization.
Vans piled high with luggage and furniture showed up at the Salloum border crossing with Egypt.
Pandya said it was difficult to estimate how many migrants, many of them undocumented, would flee Libya, but “it will be thousands.”
The first planeload of Russians to be evacuated from Libya landed in Moscow, bringing 118 Russians. Three more planes are expected to arrive later in the day. A ship was also setting sail for Ras Lanuf, the site of Libya’s largest refinery and port, to evacuate up to 1,000 Russians, Turks, Serbs and Montenegrins.
Two French military planes evacuated 335 French people and 56 foreigners to Paris from Libya, and a third plane was en route from France to evacuate French tourists.
A Bulgaria Air plane, carrying 110 Bulgarians and six Romanians from Tripoli _ mostly medical and construction workers _ arrived in Sofia. Some passengers said they heard gunfights.
“I saw horror,” a nurse who gave only her first name, Polly, told reporters upon her arrival in Sofia.
Others fleeing were wary of the political situation. Libyan leader Moammar Gadhafi has urged his supporters to strike back against the Libyan protesters, escalating a crackdown that has led to widespread shooting in the streets. Nearly 300 people have been killed in the nationwide wave of anti-government protests.
“We decided to return because the situation is unstable. When we left Tripoli there was some kind of euphoria, everybody was celebrating some kind of victory,” engineer Natalia Vakova said. “But that’s Libya _ absolutely unpredictable.”
Unease over the safety of U.S. citizens intensified after failed attempts to get some out on Monday and Tuesday. British Airways and Emirates, the Middle East’s largest airline, canceled flights to Tripoli on Tuesday.
Dutch Foreign Ministry spokesman Christoph Prommersberger said a Dutch KDC-10 air force transport plane left Tripoli late Tuesday with 32 Dutch evacuees and 50 other nationalities.
“What we hear from our people is it is chaotic but functioning,” he said of the Tripoli airport.
Britain is redeploying a warship, the HMS Cumberland, off the Libyan coast for a possible sea-borne evacuation of British citizens.
Italians continued to take Alitalia flights from Tripoli home, and a few hundred have already returned to Italy. An Italian air force plane landed in Libya on Wednesday to evacuate more people.
Separately, two Italian naval vessels are headed to eastern Libyan ports to rescue citizens from Benghazi and other cities where airports are damaged. Italian citizens based in Misurata, Libya, said their private company was arranging evacuation by sea because the airfield at that coastal city was damaged by the protests.
About 450 Romanians were in the process of being evacuated but some lived far away from Tripoli and it was not clear how they would get to the Libyan capital. Germany was also trying to evacuate about 150 Germans still in Libya.
U.S. Treasury Secretary Timothy F. Geithner said he’s becoming more confident that the most “acute” part of the financial crisis is over. He spoke at the World Economic Forum’s annual meeting in Davos, Switzerland cash advance.
China’s real estate prices rose for a 19th month in December, raising concerns that the government will expand curbs to limit the risk of asset bubbles in the world’s fastest-growing major economy. Property stocks fell.
Prices in 70 cities rose 6.4 percent in December from a year earlier, the smallest increase in 13 months, according to data from China Information News, the statistics bureau’s newspaper. That’s less than the 7 percent median estimate in a Bloomberg News survey of six economists. Prices gained 0.3 percent from November, the newspaper said today.
Home prices increased even as China suspended mortgages for third-home purchases and pledged to speed up trials of real estate taxes. The People’s Bank of China raised interest rates again on Dec. 25, after increasing them for the first time in three years in October.
“Home prices are still rising, especially for existing homes, and that may lead to concerns that the government will continue its tightening of the property market and more cities will impose a limit on home purchases,” said Cathy Yin, an analyst at Shenyin Wanguo Securities Co. in Shanghai. “Investors are using that as a catalyst to sell property stocks.”
Prices of existing homes climbed 0.5 percent in December, the most in three months, according to the report.
Property Stocks Fall
The gauge tracking property stocks on the benchmark Shanghai Composite Index slumped 5.4 percent at the close, the most among five industry groups on the measure. China Vanke Co., the nation’s biggest listed developer, lost 7 percent to 8.42 yuan, and Poly Real Estate Group Co., the second biggest, dropped 8.7 percent to 13.60 yuan, the most since April 19.
China’s central bank told lenders on Jan. 14 to hold more deposits as reserves for the fourth time in two months, lifting required ratios by half a percentage point. Premier Wen Jiabao said in a National Radio broadcast on Dec. 26 that measures to curb the country’s property market weren’t well implemented. The government also pledged to almost double the number of affordable housing to 10 million units in 2011.
“Continued increases in prices will worry policy makers, given how unaffordable homes have become,” said Dariusz Kowalczyk, economist with Credit Agricole CIB in Hong Kong. The slower price gain in December “is unlikely to be enough to prevent further measures to cool the market,” he said.
Rising Investment
Investment in real-estate development in December rose 12 percent to 557 billion yuan ($84 billion) from a year earlier, according to the report, while full-year investment climbed 33 percent to 4.83 trillion yuan. Property sales increased 22 percent to 1.02 trillion yuan during the month, with 218 million square meters (2.3 billion square feet) of real estate sold, a 12 percent gain from a year earlier, the newspaper said.
“There’s a lot of money in the system, interest rates are close to zero, so it is only natural” that money should be invested in real estate, said Ronnie Chan, chairman of Hang Lung Properties Ltd., Hong Kong’s third-biggest developer by market value which has almost half of its assets in China. “The fact that the government is able to perhaps slow it is a good sign” because it’s “very determined” to contain prices.
Sanya, a resort city on Hainan island in China’s south, posted the biggest price advance in December among the 70 cities monitored, with values rising 43 percent from a year earlier. That’s followed by 36 percent gain in Haikou, the capital city of the island province.
Meeting Targets
Guangzhou, capital of south China’s Guangdong province, and Quanzhou, a city in Fujian province, reported the smallest prices gains among the 70 cities, each rising 0.4 percent in December from a year earlier.
“The growth slowed because developers didn’t dare to raise prices in fear of more government curbs,” said Jinsong Du, head of property research for Credit Suisse Group AG. “Many developers launched more homes in the market last month to meet their annual sales target.”
Today’s numbers came after private data indicated higher sales in December. SouFun Holdings Ltd., the country’s biggest real-estate website owner, said home prices in 100 cities it monitors advanced 0.9 percent in December from November, the biggest gain for at least six months.
China’s land sales climbed to 2.7 trillion yuan in 2010, Land and Resources Minister Xu Shaoshi said on Jan. 7. China needs to push its land reforms because local governments are becoming more reliant on the sale of these sites to generate revenue, leading to social conflicts, he said.
Vanke, Shimao
China Vanke said revenue jumped 71 percent last year to 108 billion yuan, becoming the first developer in China to exceed sales of 100 billion yuan, a target it earlier set for 2014. Shanghai-based Shimao Property Holdings Ltd. said 2010 sales rose 34 percent to 30.5 billion yuan, and set a target of 36 billion yuan for this year.
Shanghai, China’s financial center, will this year prepare for a trial property tax, becoming one of the first cities in the nation to introduce the measure aimed at curbing speculative investment. Mayor Han Zheng announced the move in a speech to the Municipal People’s Congress yesterday, without giving details of how much the tax would be or when it would be implemented.
Shanghai and southwestern Chongqing are the two cities that will begin trials of a property tax, according to a Jan. 10 report by Nomura Holdings Inc., which expects China to selectively introduce a tax rate of about 0.8 percent.
–Bonnie Cao, Zheng Lifei, Jiang Jianguo, with assistance from Robyn Meredith in Hong Kong. Editors: Linus Chua, Malcolm Scott.
To contact Bloomberg News staff for this story: Bonnie Cao in Beijing at +86-21-6104-3035 or bcao4@bloomberg.net
American lawmakers are pressing China for action on currency and high-tech trade in talks this week, and a planned Washington visit by President Hu Jintao next month has raised hopes Beijing might offer concessions.
The meeting of the U.S.-China Joint Commission on Commerce and Trade on Tuesday and Wednesday in Washington comes as Beijing faces rising congressional pressure over its swollen trade surplus. The U.S. House of Representatives has approved a measure to allow Washington to punish currency manipulation and the Senate is considering it.
Both sides are likely hoping for a “successful meeting with some deliverables” ahead of Hu’s arrival in Washington in January, said Christian Murck, president of the American Chamber of Commerce in China.
“Because of the timing, expectations are higher,” Murck said.
A group of 32 U.S. senators, both Democrats and Republicans, wrote to the chief Chinese envoy, Vice Premier Wang Qishan, ahead of the meeting to press for action on a list of chronic irritants.
They cited Beijing’s failure to stamp out rampant product piracy and complaints that its currency controls keep its yuan artificially weak, giving China’s exporters an unfair price advantage and wiping out U.S. jobs.
They also appealed for an end to Beijing’s “indigenous innovation” policy, under which the communist government is trying to nurture domestic technology companies by favoring them in official procurement. Business groups complain that could shut foreign suppliers out of fast-growing markets for computers and other goods.
Beijing promised more exchange rate flexibility in June but the yuan has strengthened by only about 3 percent against the dollar since then. Chinese officials have rejected a faster rise, saying that would lead to huge job losses.
Chinese envoys might be looking for ways to placate American critics but concessions are likely to be limited, said Ren Xianfang, senior analyst in Beijing for IHS Global Insight, a consulting firm.
“It has been almost a Chinese tradition for the government to make certain concessions regarding bilateral issues ahead of state visits,” Ren said.
Beijing might promise more currency flexibility, but “actual implementation will certainly be aligned with China’s own economic priorities at this moment, which means it will be gradual and it will remain unpredictable,” she said.
The U.S. trade deficit with China is especially sensitive at a time when Washington faces pressure to cut high unemployment. The gap widened to a monthly record of $28 billion in August and is running 21 percent higher than in 2009.
“We urge China to demonstrate its commitment to adopting a market-determined exchange rate by allowing its currency to appreciate meaningfully in advance of President Hu’s visit,” said the Senate letter. Signers included Max Baucus, chairman of the powerful Senate Finance Committee, and Chuck Grassley, its senior Republican member.
The U.S. delegation to the 21st meeting of the JCCT is led by Commerce Secretary Gary Locke and Trade Representative Ron Kirk. Agriculture Secretary Tom Vilsack also is due to take part.
The JCCT is lower-profile than the U.S.-Chinese Strategic & Economic Dialogue, which covers cooperation on topics from geopolitics to energy and health. But companies closely watch the JCCT because it focuses on business issues and has produced agreements in the past on some disputes.
This year’s meeting comes amid wrangling over access to each other’s markets for steel pipes, beef, movies and other goods.
Beijing has tried to mollify criticism of “indigenous innovation” by promising to treat Chinese units of foreign companies as domestic suppliers. But that leaves out suppliers that have no operations in China, and business groups worry local governments still exclude foreign companies.
The senators warned Wang that Beijing’s innovation policy has a “corrosive effect” on business confidence and support for U.S.-Chinese economic relations.
“It is in our mutual interest for China to suspend these discriminatory policies,” their letter said.
Gateway Commercial, Cushman & Wakefield Alliance represented:
Maple Leaf Foods Inc. (TSX: MFI) says it has decided to sell its Ontario pork processing business for $20 million.
The Toronto-based food processing company said that Sun Capital Partners Inc. bought the operations in a transaction that???s expected to close ???within the next few days.???
Maple Leaf had announced in May that it was putting the pork processing business up for sale again after a failed attempt to unload the facility at the height of the credit crunch in 2008.
The Burlington, Ont.-based pork operation is one of the largest pork processing facilities in Canada.
The plant currently employs 1,000 people and processes about 1.6 million hogs a year.
SureWest Communications is launching on Saturday a one-hour radio show on the region’s high school football programs.
SureWest (NASDAQ: SURW) said Thursday that SureWest Sports Radio Show will debut Saturday from 9 to 10 a.m. on ESPN 1320 AM.
An extension of the SureWest Sports TV program, the radio show will air every Saturday, a news release said.
“The response to the SureWest Sports TV Show, which launched over a year ago, has been overwhelming,” Mike Finnerty, SureWest Sports Show’s host who will also host the new radio program. “I talk to kids, coaches and families everyday, and they always want more coverage. The weekly one-hour radio show with ESPN 1320 is a great extension of our TV program and allows us to dig deeper into the Sacramento’s high school sports scene to whet the appetites of our die-hard high school sports fans.”
The radio show will feature regular weekly contributions from knowledgeable local sports sources, including head coaches and sports writers in the region. Contributors will include Sacramento Bee writer Joe Davidson, Jon Gudel of the Elk Grove Citizen and Bill Hicks of the Grapevine Independent.
SureWest Sports Radio Show will recap the previous night’s games and preview the next week’s contests, the release said. Each week Finnerty also will rank his top 15 local football teams.
“Utilizing our relationship with the SureWest Sports Show and Mike Finnerty allows ESPN 1320 to now provide even more in-depth high school football coverage on the area’s most popular sports radio station,” Brian Lopez, ESPN 1320’s program director, said in the release. “Mike and his guests on the show bring a unique and unparalleled amount of knowledge and passion for high school sports in Sacramento and we are excited to have them on ESPN 1320.”
Four Ohio pension funds have joined the New York state retirement fund in filing a class-action suit against BP for allowing its stock to plunge in value, New York State Comptroller Thomas DiNapoli said on Wednesday.
The four Ohio funds — the Ohio Public Employees Retirement System, the State Teachers Retirement system of Ohio, the School Employees Retirement System of Ohio and the Ohio Police & Fire Pension Fund — have a combined value of $150 billion.
These funds joined the New York State Common Retirement Fund, worth $132 billion, in filing suit against BP (BP), which has lost about 45% of its market value since the company’s oil well blew up an offshore rig in the Gulf of Mexico in April, killing 11 workers and unleashing a massive spill.
"BP misled investors with false and misleading statements about the safety of its drilling operations and its ability to fix events like the oil spill," DiNapoli said in an announcement that he released with Ohio Attorney General Richard Cordray, who represents the legal interests of the Ohio funds.
"By forming a partnership between New York and Ohio, we aim to compensate investors for what we believe was securities fraud and effect real change in the way BP and other companies do business," DiNapoli added payday loans.
BP did not immediately respond to calls seeking comment.
The New York fund, the country’s third-largest, originally filed suit against BP in June. The fund held 19 million BP shares at the time of the explosion.
Robert Whalen, spokesman for the New York comptrollers, said the New York fund is filing as a co-lead plaintiff with the Ohio funds. He said there are also four pending actions filed through U.S. district courts in Louisiana and California, but they will eventually be consolidated into one.
BP has agreed to set aside $20 billion in an escrow account for spill-related costs. The company also decided to suspend its dividend for the rest of the year.
On Wednesday, the Times of London reported that Tony Hayward is getting ready to step down from his job as chief executive officer, but BP denied the report.