Brexit: banks consider whether to start moving business out of UK www.theguardian.com

Brexit could have an impact on the City in the coming months as banks decide whether to implement contingency plans to ensure they retain access to the remaining 27 EU member states by moving business out of the UK.

Theresa May, the prime minister, intends to trigger article 50 – the formal process of exiting the EU – in March and some senior officials in the financial district argue that the rest of Europe could lose out if operations are shifted out of London.

The local authority for the financial district, the City of London Corporation, has urged May to arrange transition arrangements “as soon as possible” to allay concerns of businesses which were delaying investment decisions.

PricewaterhouseCoopers (PwC), which is advising several financial services institutions, said announcements could start in late February, when banks publish their preliminary results.

“A number of big banks are finalising plans for announcements they will make [this] year,” he said.

In the run-up to the 23 June referendum, banks warned about the consequences of a vote to leave the EU. US bank JP Morgan said it could move 4,000 of its 19,000 UK workforce. Its main offices are Canary Wharf, Bournemouth and Glasgow. Britain’s biggest bank, HSBC, said it might need to shift about 1,000 staff to existing operations in Paris.

A report for the lobby group CityUK by PwC, calculated that there could be 100,000 fewer jobs by 2020.

Banks may not be able to delay moving of some of their operations to the remaining EU member states – even if the government were to announce a transition period beyond the two years after triggering article 50 – because of the time it takes to get authorisation from regulators and installing new management teams.

The director of policy and strategy at CityUK, said businesses did not want to move. “There’s a real stickiness. People are here for a reason. It’s a good place to do business,’ Gary Campkin said.

“The important thing is to make sure we focus on ensuring decisions aren’t made too early or too quickly and that’s why stability is crucial.”

The Corporation of London has published data showing that financial and professional services firms employ more than 2.2 million people across the UK, not just in the City.

Campkin said: “The important thing is there is clear recognition from the UK and the EU 27 that transition arrangements, bridging arrangements, or an interim period are an important part of the process”.

This involves two arrangements: the first when article 50 is triggered to the point when the UK leaves the EU; the second covers the period from exit to allow businesses time to adapt to the new arrangements.

“This is a negotiation. It’s not just about what the UK wants. The EU 27 needs to think really carefully what’s at stake for them too … That means, whether EU corporates know it directly or not, that they will be getting benefit from access to London,” he said. New York or Singapore could benefit, he added.

Bank of England officials have warned there could be an impact on the wider EU. Sir Jon Cunliffe, deputy governor, has said economies across the EU could lose out and that operations may move to New York, rather than another financial centre in Europe.

Sam Woods, another deputy governor at the Bank, has said the regulator is being kept informed of contingency arrangements being drawn up by City firms.

Anthony Browne, chief executive of the British Bankers’ Association, said all EU member states had a mutual interest in ensuring the period between concluding the UK’s exit from the trade bloc and any new relationship did not result in disruption to businesses and customers.

“Including transitional arrangements in the UK’s withdrawal agreement under article 50 would avoid a cliff-edge moment and ensure an orderly transition post-Brexit,” he said.

Trump attacks General Motors over Mexico Chevy production www.bbc.com

The US president-elect, Donald Trump, has criticised General Motors for making cars built in Mexico available tax-free in the United States.
"General Motors is sending Mexican made model of Chevy Cruze to US car dealers-tax free across border. Make in U.S.A. or pay big border tax!" said the president-elect in a post on Twitter.
Mr Trump has criticised other US industry titans since his election win.
Shares in Lockheed Martin and Boeing fell after attacks from Mr Trump.
The US share markets will open at 14:30 GMT.

MNT 20 billion was invested in mining industries in 2016 www.gogo.mn

More than 20 mining deposits were put into operation, 800 jobs were created and MNT 20 billion was invested in Mongolian mining sector in 2016, the Ministry of Mining and Heavy Industry reports. 
According to the state budget performance in 2016, 19 tons of gold, 33 million tons of coal, 7.5 million tons of iron ore, 1.1 million tons of oil and 200 thousand tons of fluorite are expected to be exported. 
The Ministry of Mining and Heavy Industry added that 1.4 million tons of copper concentrate, 4700 tons of molybdenum concentrate and 100 thousand tons of zinc concentrate will be produced and exported. 
Ultimately, mining sector accounts for 85 percent of Mongolian exports, 63 percent of industrial products, 18 percent of GDP and one-fourth of national revenue.

State Commission launches inspection at new airport www.gogo.mn

Construction of The New Ulaanbaatar International Airport (NUBIA) is currently underway in Khushig Valley, Tuv Aimag, a location 52 km south of the capital city. Starting from the first working day of new year 2017, January 2, a 57-member State Commission launched its inspection at the airport to complete the Mongolian Government’s acceptance of the construction works.
On December 21-28, technical inspection of the project was conducted by a designated technical committee of 104 personnel. As a result of the technical inspection, some 23 objects and facilities constructed by Japanese side were handed over to the Mongolian side.

Wall St stays bullish on Alibaba www.chinadaily.com

Wall Street remains bullish about China's internet giant Alibaba Group Holding Ltd amid a spate of stock selling by its principal stakeholders in the past six months.

Among the latest moves was the share sale plan adopted by Joe Tsai, which allows the firm's executive vice-chairman to sell up to 6.5 million shares of the company's stock through October.

The shares represent approximately 8 percent of Tsai's holdings, the company said in a filing to the United States Securities and Exchange Commission last month.

Tsai's affiliated entities, including the Joe and Clara Tsai Foundation, Parufam Ltd and MFG II Ltd, have adopted the prearranged sale plan in accordance with Rule 10b5-1 of the SEC Act of 1934, the statement said.

Based on Alibaba's annual report in March, Tsai holds a 3.2 percent stake in the company.

Alibaba Chairman Jack Ma unlocked 5 percent of shares under his beneficiary ownership through a similar plan in September, allowing for the sale of up to 9.9 million shares over a 12-month period commencing in September 2016.

These plans have been put in place to meet philanthropic commitments and for ordinary wealth planning purposes, the company told China Daily on Monday.

In 2014, the duo established a charitable trust that is designed to be funded by share options they own, representing around 2 percent of the shares in the company, Alibaba said.

"Rule 10b5-1 allows major holders to sell a predetermined number of shares at a predetermined time, as long as the sale isn't set to bring about major effects to the company. Many corporate executives use such plan to avoid accusations of insider trading," said Ling Xiao, partner of Hui Ye Law Firm specializing in overseas investment and financing.

The e-commerce giant's largest shareholder Softbank Group Corp said it would sell $7.9 billion of its shares in June, marking the first such sale since the Japanese company began investing in Alibaba in 2000. Its holding in Alibaba were reduced to around 28 percent, from 32.4 percent as of June 2016.

But a potential snowball effect shorting Alibaba is unlikely to occur. In November, rating agency Fitch Ratings Inc affirmed Alibaba at A+ with a stable outlook, and Morgan Stanley gave a "Buy" rating last month and a $130 price target, more than 40 percent up from its current price.

"We believe that Alibaba is in the early stages of unlocking the value from what we view as its most valuable asset－a rich database that continues to accumulate from its well-controlled and extensive closed-loop ecosystem, through advances in data technology," Morgan Stanley's Grace Chen and her team said in a report in December.

Selloffs don't necessarily reflect a shift in confidence among major investors, according to an analyst tracking Alibaba stocks at an investment bank who wished to remain anonymous. The institution also maintains a buy rating and had raised its target price to more than $130.

"In the case of Softbank Group Corp, the selloff is targeted at trimming debts and saving up to acquire the semiconductor and software design company ARM Holdings Plc," said the analyst.

Investor optimism, global economic reality may clash in 2017 www.rt.com

The economic outlook for this year looks similar to 2016 - uneven and unspectacular, according to economists worldwide polled by Reuters in December. The result is despite investor optimism about a breakout for the world economy.

Famed Swiss banking secrecy replaced by financial data exchange www.rt.com

Copper to be best performing commodity of 2017 — analysts www.mining.com

Copper, until recently one of the worst performing commodities of the past two years, experienced a sudden spike at the end of 2016, posing several questions as to the direction of the market as we move into 2017.

The rally, which began on the heels of Donald Trump winning in the US presidential election, has been partly based on speculation regarding the impact of the President-elect’s $500 billion infrastructure plans on demand for the metal.

It has also been fuelled by a pick-up in Chinese imports, responsible for almost 50% of global copper demand, which is seen a good omen for the industry’s health.

Even Goldman Sachs — usually the most pessimistic when it comes to forecasting what’s in stake for copper in the short term — has changed its tone to a more positive one.

The investment bank now believes that increased demand from China will leave the market tighter than previously expected, which will support a more "bullish" environment for the metal at least to mid-2017.

"Although it is tempting to blame this on speculative positioning, the materially stronger fundamental developments that contributed to this surge in speculative interest are likely to underpin a more bullish environment for copper," Goldman analysts wrote in early December.

Increased demand from China will leave the market tighter than previously expected, which supports a more "bullish" environment for copper at least to mid-2017.
They predict prices to hit $6,200 a tonne over the next six months and has lifted its 3, 6 and 12-month forecasts to $5,800, $6,200 and $5,600 a tonne, respectively from $5,000, $4,800 and $4,800.

Molly Shutt, commodities analyst at BMI Research, is also positive on the outlook for copper. She expects the global market to shift into a slight deficit by 2019, a bit sooner than previously anticipated, as steady demand growth is expected to outpace decelerating production growth.

BMI attributes the slowing supply growth outlook primarily to production cuts in China, the world’s top consumer, and declining ore grades in Chile, the world’s largest producer of the red metal.

Shutt says the sharp spike following the surprise election of Donald Trump as US President reflects unfounded expectations for his infrastructure spending plan, as well as rampant speculative trading in China.

Even under a best-case scenario for Trump’s infrastructure plan, BMI analysts emphasize that the strongest US metal demand growth outlook would have a minimal impact on the global metal market balance.

She lists several reasons for that, including the small size of the US market (according to ICSG data, the US has accounted for only 7.7% of global copper demand this year), a positive impact on the global market diluted by an 'America First' metals procurement policy and increased output triggered by higher copper prices.

“As such, we expect prices to shed some of the gains acquired since the beginning of November (already, they have been testing support and look ready to break lower) and return to a more gradual incline,” she says.

As a result, BMI has revised up its 2017 expected price to $5,150 a tonne from $4,900 a tonne, thanks to strong Chinese demand growth that will tighten the market faster than previously expected.

Copper to be best performing commodity of 2017 — analystsLooking beyond copper, most analysts are positive towards commodity prices over a 12-month horizon and expect almost all to average higher year-on-year.

Andrew Cole, the Metal Bulletin Research’s principal base metals analyst and editor of the Base Metals Forecaster, said earlier this month it was evident that investors were coming back to commodities:

“Copper itself looks like it could be one of the top performers. It was undervalued for much of 2016, weighed down by perceptions of a weak China and rising supply,” he says. “Since both of those views have swung around completely, there may still be some catching up to do in terms of investors who had been underweight copper moving to reposition to a more bullish stance, by increasing allocations and building long positions.”

Long-time coming
BHP Billiton (ASX:BHP), the world’s No.1 miner, and Caterpillar (NYSE:CAT), the largest heavy equipment maker, has bet on a copper recovery for months.

BHP, already the world's second-biggest listed copper miner, wants to increase its exposure to the red metal.
BHP, already the world's second-biggest listed copper miner, hiked its annual exploration spending by 29% this year, allocating nearly all its $900 million budget to finding new copper and oil deposits. The firm, who wants copper to be one of the pillars of its future growth, is already looking for more of the red metal in Chile, Peru, the US, Canada and South Australia, as well as eyeing new partnerships to boost its growth pipeline.

In the short term, however, BHP is not that optimistic. "A deficit is expected to emerge as grade declines, a rise in costs and a scarcity of high-quality future development opportunities are likely to constrain the industry’s ability to cheaply meet this demand growth," it said in its annual report.

Caterpillar, the world's No.1 heavy machinery maker, recently said it believed iron ore and copper miners would be leading the way in terms of an increase in equipment demand in the next three to five years. Currently CAT makes the most sales to the coal, copper and iron ore sectors, in that order.

Rio Tinto (LON, ASX:RIO), another heavyweight in the industry, said in early December that it expected the copper market to go into deficit by 2020, just when the extension of its Oyu Tolgoi mine in Mongolia comes on stream.

Arnaud Soirat, chief executive of Rio's copper and diamonds division, told Reuters that while the iron ore market is expected to stay in oversupply for the foreseeable future, the copper sector faces declining supplies and the prospect of increased demand, driven by infrastructure, electric vehicles and other renewable technologies.

Russia Sets Oil Production Record in 2016 www.themoscowtimes.com

Russia set a record for annual oil extraction in 2016 amid some of the lowest oil prices in recent history.

Bitcoin jumps above $1,000 for first time in three years www.reuters.com

Digital currency bitcoin kicked off the new year by jumping above $1,000 for the first time in three years late on Sunday, having outperformed all central-bank-issued currencies with a 125 percent climb in 2016.