Credit Suisse also spied on Greenpeace: newspaper

TINKER, TAILOR, BANKER, SPY
Credit Suisse also spied on Greenpeace: newspaper

ZURICH (Reuters) - Credit Suisse (CSGN.S), which has faced a scandal related to spying on senior executives, also conducted espionage against Greenpeace, Swiss newspaper SonntagsZeitung reported.

Then-Chief Operating Officer Pierre-Oliver Bouee ordered his head of security to infiltrate the environmental group after Greenpeace disrupted the bank’s annual shareholder meeting in 2017, the paper said in an article published on Sunday.

Credit Suisse, which has been criticized by Greenpeace for investing in fossil fuels, gained access to emails, tipping the bank off to demonstrations planned against it, the report said.

A spokesman for Credit Suisse declined to comment on security matters. Greenpeace said it was following up the report and had no comment yet.

Bouee was dismissed in December over the surveillance of former executive board members Iqbal Khan and Peter Goerke. Switzerland’s market supervisor FINMA is investigating the issue.

Credit Suisse has said CEO Tidjane Thiam was unaware of the surveillance, and that Bouee had acted alone.

The affair has triggered a power struggle between Thiam and chairman Urs Rohner, with one expected to leave the bank soon, SonntagsZeitung reported. A board meeting is due to be held this week. The bank has rejected a Bloomberg report that Rohner is drawing up a list of potential successors to Thiam.

Greenpeace gatecrashed Credit Suisse’s AGM in 2017 to protest against its dealings related to the Dakota Access Pipeline in North America. Credit Suisse says it has committed to halting the financing of new coal-fired power plants and reducing the greenhouse gas emissions of ships it finances.

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UP IN SMOKE

Imperial Brands' profit growth evaporates after U.S. vaping crackdown


(Reuters) - Tobacco group Imperial Brands (IMB.L) said it would not see any profit growth this year after tighter regulation in the United States, the world’s biggest vaping market, has sapped demand.

FILE PHOTO: Cigarette packs of Imperial Tobacco, now called Imperial Brands, are pictured at a tobacco store in Madrid, Spain, June 13, 2011. REUTERS/Andrea Comas/File Photo

The news pushed shares in the Winston and Kool cigarette maker down by 7% to 1,817 pence. It was the biggest loser on the broader FTSE .FTSE in early trading. Rival British American Tobacco's shares (BATS.L) were also down 1%.

The profit warning adds to the challenges for new CEO Stefan Bomhard - head of automotive services company Inchcape (INCH.L) - whose appointment was announced on Monday with a start date yet to be disclosed.

Imperial said first-half adjusted earnings per share in constant currency were expected to drop by 10%, as it writes-down inventories following the U.S. government ban on selling certain flavors for pod-based e-cigarettes, which goes into force on Thursday.

In response to slower consumer demand, Imperial forecast net revenue would be flat and adjusted earnings per share would be slightly lower than last year.

Growth of Imperial’s next generation products (NGP) has also been slower than expected.

The vaping market has shrunk in the United States after vaping-related deaths, illnesses and high rates of teen use of e-cigarettes led to increased regulatory scrutiny, including individual state bans.

“Regulatory uncertainty and adverse news flow continues to affect demand in the U.S. and Europe,” Imperial Brands said, adding it would see lower year-on-year NGP revenue and increased provisions for slow-moving stock.

The company said the U.S. ban has led to a write-down of flavored products inventory resulting in a 45 million pound ($58.55 million) impact on its first-half adjusted operating profit.

To mitigate the impact of these issues, Imperial said it would undertake a cost-savings programme, which would have an impact of 40 million pounds on its full-year adjusted profit.

Shareholders will digest the news at an annual general meeting on Wednesday.

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CRIMINAL CAPITALISM 

Malaysia's AirAsia X forms committee to review Airbus bribery allegations

KUALA LUMPUR (Reuters) - Malaysian long-haul budget airline AirAsia X (AIRX.KL) has formed a board committee to review corruption allegations by Britain’s Serious Fraud Office (SFO), a stock exchange filing showed on Wednesday.

The AirAsia X committee will comprise non-executive members of the board excluding Kamarudin Meranun and Tony Fernandes, who are co-founders of its parent company AirAsia Group (AIRA.KL), the filing with the Bursa Malaysia (BMYS.KL) said.

AirAsia Group said on Monday it had also set up a committee to review the allegations and that CEO Fernandes and Chairman Kamarudin would step aside for at least two months while the airline and authorities investigate the allegations.

Fernandes and Kamarudin have denied any wrongdoing.

Britain’s SFO on Friday alleged that planemaker Airbus (AIR.PA) paid a bribe of $50 million to executives linked to AirAsia and AirAsia X to win plane orders.

The SFO said Airbus sponsored a sports team owned by AirAsia executives while negotiating airplane orders.

“The committee’s main objective will be to review the allegations therein so far as it concerns (AirAsia X), and to take any necessary action ... which includes the appointment of an independent expert,” the airline said.

The committee will manage all matters in relation to the review, AirAsia X said.

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Trump touts stock market's record run, but who benefits

(Reuters) - Donald Trump loves to trumpet the hot U.S. stock market as a key achievement of his presidency, and he was in full self-congratulatory mode on that front during Tuesday night’s State of the Union address.

“All of those millions of people with 401(k)s and pensions are doing far better than they have ever done before with increases of 60, 70, 80, 90 and 100 percent and even more,” Trump said in his address to a joint session of Congress.

While pensions and retirement funds were lifted by the rise in stock markets, the president has avoided talking about one key point about who really benefits when the market rallies: Most of the gains go to the small portion of Americans who are already rich.

That’s because 84% of stocks owned by U.S. households are held by the wealthiest 10% of Americans, according to an analysis of 2016 Federal Reserve data by Edward Wolff, an economics professor at New York University. So when the stock market has a blockbuster year - such as the nearly 30% rise in the S&P 500 benchmark index in 2019 - the payoff primarily goes to people who are already rich.
“For most Americans, a stock price increase is pretty immaterial to their well-being,” said Wolff, who published a paper about wealth inequality in the National Bureau of Economic Research in 2017.

Roughly half of Americans own some stocks through a brokerage account or a pension or retirement fund. But for most people, the exposure is too small for market gains to be life-changing or leave them feeling much better about their finances, Wolff said. “They’ll see a small increase in their wealth, but it’s not going to be anything to write home about,” he said.

Graphic: The stock boom's unequal gains png, here


What’s more, nearly 90% of families who own stock do so through a tax-deferred retirement account, meaning they can’t access the money until they reach retirement age, unless they pay a penalty, Wolff said.

So who owns most of the stock market? The majority of corporate equities and mutual fund shares are held by investors who are white, college educated and above the age of 54, according to an analysis from the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis.

The typical middle-class family gets the bulk of its wealth from the housing market. Households in the middle three quintiles of wealth held 61.9% of their assets in their principal residence in 2016, according to Wolff’s analysis. That compares to households in the top 1%, who held 7.6% of their wealth in their homes.

Because most consumers accumulate the majority of their wealth through their homes, a rise in property values can provide a more substantial boost to household wealth than a stock market rally, said William Emmons, lead economist at the St. Louis Fed’s Center for Household Financial Stability.

Still, the recent revival in the housing market, spurred in part by the Federal Reserve’s interest rate cuts, is not helping all Americans equally. Rising property values benefit homeowners but make it harder for aspiring home buyers to break into the market, said Eugene Steuerle, co-founder of the Tax Policy Center, a joint venture between the Urban Institute and the Brookings Institution.

And some people who bought homes immediately before the recession hit may still be trying to recover their losses, Steuerle said. Their wealth may have been wiped out by foreclosure, meaning they then struggled to qualify for a new mortgage during the recovery, he said.

That’s in sharp contrast to well-off investors, whose overall wealth surged after the crisis thanks to strong returns on stocks, property and other investments. Some 72% of wealth accumulated between the third quarter of 2009 and the third quarter of 2019 went to the richest 10% of households, according to an analysis by Oxford Economics. Over that same time period, the poorest 50% of households reaped only 2% of wealth gains.

“There are a lot of families that have not yet recovered from the financial crisis,” Emmons said.


U.S. President Donald Trump delivers his State of the Union address to a joint session of the U.S. Congress in the House Chamber of the U.S. Capitol in Washington, U.S. February 4, 2020. REUTERS/Leah Millis/POOL

Some more evidence that the recent stock market boom is not making everyone feel richer: There has been little evidence of the “wealth effect,” which says that people tend to spend more when stock markets are up, said Lydia Boussour, a senior economist for Oxford Economics.

Since the recession, people have mostly continued to increase their savings even as the stock market rose. “Consumers are a lot more cautious,” she said.

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Qatar Foundation rejects U.S. university's reason for scrapping event after anti-gay backlash


DOHA (Reuters) - An American university’s partner in Qatar has rejected the university’s explanation for cancelling an event in Doha that would have featured a prominent Middle East band whose singer is openly gay.


FILE PHOTO: Lebanese band Mashrou' Leila performs in Washington, DC, U.S. June 13, 2016. REUTERS/Yeganeh Torbati/File Photo

Members of Lebanese indie rock band Mashrou’ Leila had been scheduled to take part in a discussion at Northwestern University’s Qatar campus on Tuesday, but the university moved the event to its U.S. campus after hostile online comments against Mashrou’ Leila’s appearance.

Northwestern cited “safety concerns” for the band and its community, among other, unspecified factors.

But Qatar Foundation, a state-linked non-profit body in the conservative Gulf Arab state, challenged the reasons given by Northwestern.

Asked about Northwestern’s comments, a Qatar Foundation spokesman told Reuters: “We place the utmost importance on the safety of our community and currently do not have any safety or security concerns.”

“We also place the very highest value on academic freedom and the open exchange of knowledge, ideas and points of view in the context of Qatari laws as well as the country’s cultural and social customs. This particular event was canceled due to the fact that it patently did not correlate with this context.”

Northwestern has not detailed its safety concerns.

Critics of the event demanded on social media that it be canceled. Some accused Mashrou’ Leila and the university of spreading views that are against Qatari and Islamic values. Others said they opposed same-sex relationships.

Gay sex is punishable by jail in Qatar, as in many Muslim-majority countries.

Mashrou’ Leila has garnered international acclaim with lyrics tackling issues of sectarianism, gender equality and homophobia.

A vocal supporter of equal rights for marginalized groups, the band has also had other events canceled in the Middle East following pressure by conservative groups.

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Finland to offer new fathers as much paid leave as mothers

HELSINKI (Reuters) - Finland’s woman-led centre-left government plans to give new fathers the same amount of paid time off work as new mothers, nearly doubling paternity leave, it announced on Wednesday.


Finland's Minister of Social Affairs and Health Aino-Kaisa Pekonen holds a news conference on the family leave reform in Helsinki, Finland February 5, 2020. Lehtikuva/Vesa Moilanen via REUTERS

Paid paternity leave will be extended to nearly seven months, in line with maternity leave. Around half can be given to the other parent. Pregnant women are also entitled to a month of pregnancy leave before the expected date of birth.

Minister of Health and Social Affairs Aino-Kaisa Pekonen said the aim of the “radical reform” was both to improve gender equality and to boost a declining birth rate.

“This enables better equality between parents and diversity among families,” she said.

The number of newborns in Finland fell by around a fifth between 2010 and 2018, to just 47,577 babies in a country of around 5.5 million people. Pekonen said other countries such as Sweden and Iceland had seen increases in their birth rates after offering more leave for fathers.

Finland’s coalition of five parties, all led by women of whom four are under 35 years old, took office in December and has made gender equality a priority.

Speaking at the 50th annual World Economic Forum meeting in Davos last month, Prime Minister Sanna Marin called for states and companies to do more to ensure women were treated fairly, saying gender equality “doesn’t happen by itself”.

A previous centre-right Finnish government attempted to reform parental leave in 2018 but eventually rejected the idea as too costly.

Pekonen said a more equal distribution of domestic workload between parents has been proven to diminish the risk of divorce.

“Over a longer term, it also improves equality in working life and in wages by directing fathers to use a larger proportion of parental leaves than before,” she said.


WAGES FOR HOUSEWORK! UNIVERSAL BASIC INCOME! $25 LIVING WAGE!

Cathay Pacific asks employees to take unpaid leave as virus hits demand

JUST SAY NO

SYDNEY (Reuters) - Hong Kong’s Cathay Pacific Airways (0293.HK) asked its 27,000 employees to take three weeks of unpaid leave, saying preserving cash was key for the carrier and that conditions were as grave as during the 2009 financial crisis due to the virus outbreak.

Cathay is also asking suppliers for price reductions, putting in place hiring freezes, postponing major projects and stopping all non-critical spending, Chief Executive Augustus Tang said in a video message to staff seen by Reuters.

On Tuesday, the carrier said it planned to cut about 30% of capacity over the next two months, including about 90% of flights to mainland China.


Cathay had already experienced a sharp fall in demand since the middle of last year due to widespread, sometimes violent anti-government protests in Hong Kong.

The virus, which has led to a death toll of nearly 500, has led to a further drop in visitors and passengers transiting through Hong Kong’s airport.

“This has been one of the most difficult Chinese New Year holidays we have ever had,” Tang said in the video. “We don’t know how long this will last. With such an uncertain outlook preserving our cash is now the key to protecting our business.”

A few hours after the video was released, Hong Kong leader Carrie Lam announced any visitors from mainland China would need to undergo a compulsory quarantine for 14 days.

Cathay said in a statement it was appealing to all employees to participate in the unpaid leave scheme that will run from March 1 until June 30.

Tang said it was the first time the company had offered an unpaid leave scheme since 2009, when demand plummeted due to a global financial crisis.

“We had the overwhelming support of our employees,” he said, about the 2009 scheme. “It made an enormous difference. The situation now is just as grave and I ask for the same commitment to the future from you.”

FILE PHOTO: Hong Kong's Cathay Pacific Airways Airbus A330-300 passenger plane takes off near a Taiwanese national flag at Taoyuan International Airport, Taiwan August 6, 2018. REUTERS/Tyrone Siu/File Photo

The leave scheme, first reported by the South China Morning Post, is not mandatory but employees are encouraged to take it, a spokeswoman said.

Cathay shares closed 2.7% higher on Wednesday following the announcement of capacity cuts which came after the market closed on Tuesday.

In a note to clients, Jefferies analysts estimated the airline would report a loss in the first half of 2020 before returning to a profit in the second half, assuming traffic rebounds as it did with the 2003 SARS epidemic.

Thailand scraps China-led project to blast open Mekong River

ENVIRONMENT FEBRUARY 5, 2020




FILE PHOTO: A fisherman is seen on the Mekong river bank outside Nong Khai, Thailand January 10, 2020. REUTERS/Soe Zeya Tun/

BANGKOK (Reuters) - Thailand has scrapped a Chinese-led project to blast rapids on the Mekong River that had been opposed by local people and environmental groups, a government spokeswoman said on Wednesday.

China initiated a plan to dredge the Mekong River in 2001 to make room for large ships to carry goods from its landlocked southern province of Yunnan to ports in Thailand, Laos, and the rest of Southeast Asia.

The plan had been opposed by conservationists and communities in Thailand living along the Mekong River. They feared it would harm the environment and benefit only China.


The Thai cabinet agreed to scrap the dredging plan during a weekly meeting on Tuesday.

“The communities affected and non-profit groups were against the plan, fearing it would affect the way of life, and China also had no funding for it ... So we ended the project,” said Trisulee Trisaranakul, a deputy government spokeswoman.

“It didn’t take off yet. We were only doing environmental and social impact assessments,” she told Reuters.


The Chinese embassy in Bangkok was not immediately available for comment.

A Thai cabinet document said that China had in any case informed countries on the Mekong River last year that it was not planning to pursue the project, but work had continued on stretches of the river in Laos and Myanmar.

The Mekong flows from China, where it is known as the Lancang river, through five southeast Asian countries.

Argentina's 'little trees' blossom as forex controls fuel black marketBUENOS AIRES (Reuters) - On the streets of Buenos Aires, money changers known as “arbolitos” or “little trees” are taking advantage of Argentina’s capital controls to take a slice of a booming black market trade in U.S. dollars.

One of the arbolitos, Martin, 47, spends his days shouting “cambio” to passersby, offering dollars outside the formal banking channels that currently limit purchases of the U.S. currency to $200 per month.

The black market trade has flourished since Argentina introduced the controls in September to stem a decline in dollar reserves and stabilize the peso amid an economic downturn and debt crisis.

Argentina’s boom-and-bust economy has suffered from high levels of inflation and a weakening peso for years, which has spurred savers to snap up dollars.

But the increase in the black market trade risks fuelling inflation which is already running at more than 50%, while the peso has lost close to 70% of its value against the dollar over the last two years.

“This whole business is growing more and more,” said Martin, who has been a arbolito for 10 months and pockets around 500 pesos ($8.35) a day. Like others traders Reuters spoke to he did not want to give his full name as the trade is technically illegal.

Argentina’s currency is being held artificially stable by the capital controls, which were introduced following a market crash that pushed up the cost of the country’s debt.

The new Peronist government, which took over in December, is racing to restructure around $100 billion in debt payments to avoid a damaging sovereign default.

“The danger is that you get multiple dollar prices, or a parallel dollar,” Ariel Coremberg, an economist at the University of Buenos Aires, said, referring to the black market trade. He said demand for dollars at higher rates risked fuelling inflation.

“This black market dollar can have a rapid knock-on effect on the price of all goods and services.”

Martin said the number of money changers had increased to meet demand that was around one-fifth higher than last year under the free-market government of conservative Mauricio Macri, who was defeated in the October election by center-left Alberto Fernandez.

“It’s better for us now. We earn 10% more than before,” said Martin, adding clients were a mix of Argentines and tourists.

Under Macri’s government, the official and black market price of dollars had been largely in step. But since the controls came in the two rates have diverged, with the black market rate now around 30% higher - a gap not seen since the end of the last Peronist government in 2015.

A second often-cited rate, a legal workaround to access dollars known as a blue-chip swap, is even more expensive.

Macri had scrapped currency controls when he came to power in late 2015, but was forced to re-impose them in September last year after his shock defeat in a primary election caused currency market turmoil.

The primary result - and the market crash that followed - helped to push the country further towards an economic crisis and made Macri the underdog in an election that most had thought would be close.

But the controls have managed to hold the peso-dollar ARS=RASL rate stable, even as other unofficial channels have flourished.

MONEY TABLES

The arbolitos, who say they receive between 0.5%-2% commission, take their clients to informal “money tables” where the currency transactions take place.

Aniuska, a 33-year-old Venezuelan working in the trade in the city, said she had seen around 70% more people buying dollars “due to the restrictions by the government.”

“Having these restrictions, people have no choice but to come and buy,” she said. Her group of arbolitos had grown from 3 people to 10.

“The truth is that if there are lots of us it does not suit me because there are fewer opportunities to get customers.”

The rise in demand echoes the situation under the previous Peronist government of Cristina Fernandez de Kirchner, who imposed capital controls during her 2007-2015 administration, creating a wide gap between official and black market rates.

Fernandez de Kirchner is now Vice President.

“Now it will be like it was with Cristina and that is better for us because there will be many more people who will want dollars. It suits us,” said one 26-year-old arbolito, who said she had worked in the trade for nine years.

The arbolitos said the work was not easy and meant long hours, but with the economy facing recession and employment down there were few alternatives.

“I earn on commission, but it’s practically cents,” said one arbolito who gave his nickname as “El Pitufo” - the dwarf - who said he had previously worked in a leather clothing factory.

“But in the face of unemployment, doing this is the only thing left.”


IMF sees 'important moment' for Argentine debt restructuring

VATICAN CITY (Reuters) - International Monetary Fund Managing Director Kristalina Georgieva said on Wednesday that now was a “very important moment for Argentina” to enact policies for successful debt restructuring.

Speaking at a Vatican conference on economic solidarity, she told Reuters that the policies must stabilize the Argentine economy and ensure that the most vulnerable in society are not left out.

Georgieva and Argentine Economy Minister Martin Guzman, who is also at the conference, held what both said were constructive talks on the Latin American country’s debt crisis on Tuesday night.

“It is very important moment for Argentina to put in place policies that are going to stabilize the economy, lead to successful debt restructuring and respond to the expectations of people that those who are the most vulnerable not be left out,” she said.

Guzman told Reuters that his talks with Georgieva were “very good and constructive”, while she told reporters that it was a “very constructive meeting”.

Argentina needs to restructure $100 billion in sovereign debt with creditors, including the IMF, amid a steep recession with inflation above 50%

The Vatican conference at the Pontifical Academy of Social Sciences brought together more than 25 government officials, religious authorities, and economists, including Joseph Stiglitz, the 2001 Nobel economics laureate.

“We are going to discuss how the world economy can be more oriented toward the needs of everyone, how it can serve the aspirations of all people and it (the Vatican) is a good place to have that discussion,” said Georgieva, who is Bulgarian.

Last Friday, Argentine President Alberto Fernandez met Pope Francis and said the pontiff, who is also Argentine and lived through a previous debt crisis when he was archbishop of Buenos Aires, had promised him to do everything he could to help with the current one.

Fernandez has promised to bridge social divisions and roll out a massive credit system with low rates to bolster domestic demand, and to boost spending to address hunger and poverty.

Stiglitz told the conference that the current Argentine debt crisis gave the world an opportunity “to show that there is an alternative approach to the one that has failed persistently in the past”.

He called for “a framework that simultaneously should appeal to notions of economic rationality and to our sense of social solidarity, a common humanity, which at this point in history seems so under attack”.

GREEN WASHING

Budget carrier Ryanair ordered to drop low-emissions ad claims

LONDON/PARIS (Reuters) - Budget carrier Ryanair was ordered on Wednesday to withdraw publicity describing it as a “low-CO2 emissions airline”, as Britain’s main advertising watchdog labelled the claim misleading.

Ryanair Holdings Plc’s print and broadcast adverts last September made environmental claims that were poorly substantiated and “must not appear again in their current forms”, the Advertising Standards Authority (ASA) ruled.

Under Chief Executive Michael O’Leary, the carrier has tangled repeatedly with advertising authorities, often over discount terms and conditions, and on Wednesday struck an unabashed tone.

“Ryanair is delighted with its latest environmental advertising campaign, which communicates a hugely important message for our customers,” spokeswoman Alejandra Ruiz said.

Under pressure from policymakers and “flight-shaming” campaigners, airlines are scrambling to convince consumers they are taking action to mitigate environmental impacts, even as their traffic grows.

Low-cost carriers tend to emit less carbon dioxide per passenger than legacy airlines because they operate younger aircraft on point-to-point routes with fewer empty seats. But they also account for a bigger share of total emissions growth.

Ryanair, which carried 152 million passengers in 2019 and is targeting 200 million by mid-decade, based its green message on emissions per passenger, per kilometre. Its 69 grammes of CO2 per passenger-km come in 23% below the average of Lufthansa, British Airways parent IAG, Air France-KLM and easyJet, its website says.

In absolute terms, Ryanair’s 9.9 million tonnes of CO2 output placed it among Europe’s top 10 emitters in 2018, a group dominated by coal-fired power stations, according to EU data.

In radio and television adverts, the company “did not give any information on the metric used” to underpin its self-description as a “low-CO2 emissions airline”, the ASA found.
The print version did outline the calculation but failed to acknowledge Ryanair’s higher seating density as a contributor or substantiate a claim to be Europe’s “lowest-emissions airline”, the watchdog ruled, upholding complaints against all three ads.

“We told Ryanair to ensure that when making environmental claims, they held adequate evidence to substantiate them and ... that the basis of those claims were made clear,” it said.

Transport & Environment, a European campaign group, said the decision offered “a reminder that the aviation sector’s climate impact is soaring because of a decades-long tax holiday and almost zero regulation of their pollution.”

A spokeswoman for the environmental organisation added: “Ryanair should stop greenwashing and start doing something to tackle its sky-high emissions.”

Ryanair said the same advertising message had been used in 10 European countries. “The message was approved in other markets and we provided all the supporting data they required,” Ruiz said.

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