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Jan 29, 2019

EU FX I Currencies: Sterling rises before Brexit votes, dollar flat

Holly Ellyatt

Premium: Euro notes 171120
Euro notes and coins
Danita Delimont | Getty Images
Sterling rose on Tuesday before British lawmakers were scheduled to vote on whether to take a proposal off the table to leave the European Union without a deal, while the U.S. dollar was little changed ahead of a Federal Reserve two-year policy meeting.
The euro, yen and other major currencies were locked in narrow trading ranges, with traders reluctant to take big positions due to uncertainty over the U.K. parliamentary vote.
There were also clues from the U.S. central bank that it might pause from its current rate-hike campaign.
Investors expect the Fed to adopt a more cautious stance, pressured by signs of a peak in U.S. corporate earnings and the threat of an economic slowdown both at home and globally.
Fed policy makers convene Tuesday and are expected to release a policy statement on Wednesday at 2 p.m., followed by a press conference from Fed Chairman Jerome Powell.
“You are not going to see any breakout in currencies at this point,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management at Horsham, Pennsylvania.
Investors were also jittery after U.S. officials announced criminal charges against China’s Huawei Technologies for violating U.S. sanctions against Iran. This ratcheted up tensions between Washington and Beijing before trade talks this week.
At 1:15 a.m. ET, an index that tracks the dollar against a basket of currencies was up slightly at 95.81. It touched a two-week low during the session.
The yuan was steady at 6.7304 per dollar, scaling back from Monday when it reached its strongest level since July.
The pound was down 0.15 percent at $1.3142. The euro slipped 0.05 percent at $1.1427.
After rejection of Prime Minister Theresa May’s Brexit proposal this month, other lawmakers offered amendments. One would postpone the March 29 Brexit deadline if a deal with the European Union is not approved by Feb 26.
Traders are betting parliament will not pull out of the EU without terms on trade and business activities, fearing such a “no-deal Brexit” could severely disrupt the economy. Voting on the amendments will begin at 2 p.m.

Source: CNBC

Bond Yields Closing Report: US Treasury yields slip ahead of Fed meeting

Silvia Amaro

U.S. Markets Overview: Treasurys chart

US 3-MOU.S. 3 Month Treasury2.4230.000.00
US 1-YRU.S. 1 Year Treasury2.591-0.0080.00
US 2-YRU.S. 2 Year Treasury2.571-0.020.00
US 5-YRU.S. 5 Year Treasury2.542-0.0380.00
US 10-YRU.S. 10 Year Treasury2.71-0.0340.00
US 30-YRU.S. 30 Year Treasury3.041-0.0190.00
Market focus is largely attuned to global trade developments, after prospects for a long-awaited U.S.-China trade deal were dealt another setback. It comes after Washington leveled sweeping charges against Beijing’s telecom giant Huawei.
Investors are also looking ahead to a speech by Federal Reserve Chairman Jerome Powell due Wednesday. The central bank is starting its two-day policy meeting on Tuesday. Market players are keen to understand if the Fed will slow down its hiking cycle this year.

Source: CNBC

Wall Street Closing Report: Dow posts slight gain as Wall Street braces for Apple earnings

Fred Imbert

The Dow Jones Industrial Average rose on Tuesday as Wall Street awaited the latest quarterly results from tech giant Apple.
The 30-stock index gained 90 points, or 0.37 percent. The S&P 500 slipped 0.1 percent while the Nasdaq Composite was down 0.6 percent.
Apple shares declined 0.1 percent ahead of the company’s report, which is scheduled for release after the close. The report comes after the iPhone maker slashed its revenue guidance for the previous quarter earlier this month, citing weaker growth in China.
“We view the overall risk/reward on AAPL as neutral,” KeyBanc Capital Markets analyst Andy Hargreaves wrote in a note last week. “While the Company’s buyback and historically strong customer loyalty provide some measure of protection, we see little to cure the unit and pricing challenges faced in the iPhone segment.”

GP: Traders NYSE active 190114
Traders work on the floor of the New York Stock Exchange, Jan. 14, 2019.
Michael Nagle | Bloomberg | Getty Images
This is the busiest week of the current earnings season. When the dust settles, more than 100 companies in the S&P 500 will have posted their quarterly results. Through Tuesday morning, more than 70 percent of the companies that have reported have beaten analyst expectations, according to FactSet data.
3M was among the companies that posted better-than-expected earnings on Tuesday, sending its stock up 1.9 percent. Allergan and Verizon posted stronger-than-forecast profits, but their shares fell. Pfizer shares gained 2.5 percent on earnings.
Lockheed Martin shares rose 1 percent after posting quarterly earnings that were roughly in line with expectations. L3 Technologies shot up more than 8 percent and was on track for its best day since Oct. 15.
Amgen rose 0.3 percent ahead of its earnings release. eBay, which is also scheduled to report after the bell slipped 0.7 percent.
Market focus was also largely attuned to global trade developments, after prospects for a long-awaited U.S.-China trade deal were dealt another setback. It comes after Washington leveled sweeping charges against Beijing’s telecom giant Huawei.
The U.S. Department of Justice filed criminal charges Monday against Meng Wanzhou, the chief financial officer of China tech giant Huawei and the daughter of its founder and president Ren Zhengfei.
The news comes shortly before Chinese Vice Premier Liu He is set to meet U.S. officials on Wednesday and Thursday. Market participants fear the jolt to Huawei could undermine the chances of the world’s two largest economies reaching a comprehensive trade deal.
White House economic advisor Larry Kudlow said Tuesday, however, that President Donald Trump is “moderately optimistic” about China and the U.S. striking a deal before a March 1 deadline. The Nikkei Asian Review later reported that Chinese officials are expected to present a roadmap to achieving structural reforms this week.
Investors also looked ahead to a monetary policy decision from the Federal Reserve. Market expectations for a rate hike being announced Wednesday afternoon are zero, according to the CME Group’s FedWatch tool.
The moves Tuesday come after the major indexes fell sharply on the back of disappointing guidance from Caterpillar and Nvidia. Both companies cited slowing growth in China for their forecasts.
“One key common thing that high-profile companies are pointing to is weakness in overseas markets,” said Michael Geraghty, equity strategist at Cornerstone Capital Group. “It’s very important to keep remembering that about half of the earnings in the S&P 500 come from overseas.”
“Economic data from overseas continues to be very weak,” Geraghty said. “I don’t think some investors fully appreciate how weak the economies are overseas and what a toll this is taking on the earnings of U.S. corporations.”
—CNBC’s Sam Meredith and Silvia Amaro contributed to this article.

Source: CNBC

Brexit: British Parliament moves to take greater control, asserts that Britain shouldn’t leave E.U. without a deal

By William Booth and William Booth London bureau chief 

Karla Adam
London correspondent covering the United Kingdom
BREAKING NEWS: Lawmakers Tuesday voted in favor of amendments that seek to take the threat of a no-deal exit off the table and that endorse sending Prime Minister Theresa May back to Brussels to renegotiate a withdrawal deal with the European Union. Britain is scheduled to leave the E.U. on March 29.
This is a developing story and will be updated.
LONDON — Prime Minister Theresa May told her divided Parliament on Tuesday that she wants one more chance to go back to Brussels to reopen talks with European leaders on how Britain leaves the European Union.
May almost pleaded with members of her own Conservative Party to come together behind a common vision for Brexit, now just 60 days away.
“The world knows what this House does not want,” May told the raucous chamber. “Today we need to send an emphatic message about what we do want.”
May faces deeply skeptical European leaders, who have grown weary with her delays and the inability to pass her government’s withdrawal agreement through Parliament.
The Europeans seem in no mood to grant May what she needs to pass her deal, which is a new way for Britain to guarantee that whenever else this chaotic Brexit yields, it will not mean a return of a hard border — with checkpoints, passport controls and customs inspectors — between Ireland and Northern Ireland.
“We’re not going to reopen the agreement,” Sabine Weyand, the E.U.’s deputy negotiator, said at a European Policy Center event on Monday
The prime minister appeared before a House of Commons that is trying to wrest control of Brexit from her, as the clock ticks down toward Britain’s scheduled departure.
Members of Parliament will spend Tuesday debating and voting on cross-party amendments designed to steer the government one way or another on Brexit.
May’s initial deal was crushed by a humiliating defeat in Parliament two weeks ago. She survived a subsequent no-confidence challenge on a party-line vote.
Parliament remains gripped by deadlock, without a consensus on how to exit the E.U. after four decades of free trade and shared governing.
The flamboyant, sharp-tongued speaker of the House of Commons, John Bercow, has upended tradition by allowing a raft of possible amendments to be debated — leading his critics to charge that the speaker is trying to help backbench renegades foil Brexit by taking control away from the government.
The debate on Tuesday afternoon was heated. 
“Order! The House must behave with decorum!” Bercow bellowed. 
One of the most popular amendments to be considered Tuesday, written by two backbenchers from opposing parties, seeks to give May until the end of February to secure a deal with Brussels that could pass the Parliament. If the prime minister fails again, then the chamber wants her to seek permission from E.U. leaders to delay Brexit beyond the scheduled departure date of March 29.
There is disagreement over whether such a delay should be a few months long — or until the end of 2019, as the amendment proposes.
In the parliamentary debate, Yvette Cooper, the Labour politician pushing the proposal, repeatedly asked if May would rule out delaying Brexit.
And May, repeatedly, dodged the question.
May said that she hopes to bring a revised deal back to the House of Commons for a meaningful vote “as soon as we possibly can.” If that hasn’t happened by Feb. 13, May said the government would make a statement and then give lawmakers a chance to re-open the debate on the way forward.
Another amendment seeks to stop May’s government from allowing Britain to crash out of the E.U. in two months’ time with no deal at all.
Other countries have raised concerns about the growing prospect of Britain exiting the E.U. without a deal — the default legal position.
Dan Coats, the head of U.S. intelligence, told a U.S. Senate Intelligence Committee hearing on “worldwide threats” on Tuesday that there would be economic disruptions if Britain fails to exit the bloc in a smooth and orderly way.
“This would cause economic disruptions that could substantially weaken the U.K. and Europe,” he said.
Delaying Brexit or avoiding a no-deal scenario would require a formal request from Britain and the approval of the 27 other E.U. leaders.
The last of seven amendments to be debated Tuesday, the one endorsed by May, calls for her to go back to Brussels and seek “alternative arrangements” on the Irish border question — the “backstop” that locks Britain into a European customs regime unless a free trade deal obviates the need.
This will be a tough sell. Ireland’s Europe minister, Helen McEntee, tweeted Tuesday, “There can be no change to the backstop. It was negotiated over 18 months with the U.K. and by the U.K. A bit of realism is needed at this stage.”
It was also unclear exactly what alternative arrangements Britain would be seeking. 
Angela Eagle, a Labour lawmaker, told Parliament that there was still “puzzlement” after listening to the prime minister for over an hour. “We are still no nearer any detail on what the phrase ‘alternative arrangements’ mean, except that the prime minister said that they were ‘arrangements’ that were ‘alternative.’” 
The Northern Irish politician Sylvia Herman agreed. “The prime minister is trying to encourage this house to vote for an amendment which uses the words ‘alternative arrangements’ to avoid a hard border on the island of Ireland,” she said. “Forgive me, prime minister, if I say those words are nebulous.” 
Attention will also be focused on amendments over the no-deal scenario, unpopular among many members of Parliament, but a real possibility. Governments and businesses in Britain and across Europe are preparing to spend billions on contingency plans.
Richard Harrington, an undersecretary for industry and energy, told a gathering in London that a no-deal Brexit would be “a total disaster for the economy.”
Yet some hardcore Brexiteers support leaving the European trading bloc with no deal, because of their extreme dislike of May’s approach, which seeks to keep Britain closely tied to European rules.
Many ordinary citizens who support Brexit are telling pollsters the same thing and that they are sick and tired of the endless dithering and just want out.
Andrea Leadsom, the Tory leader of the House, told the Sunday Times that “taking no deal off the table has been used as a thinly veiled attempt to stop Brexit.”
Recent days have seen British business leaders warn that a no-deal scenario poses real risks to the economy.
The British Retail Consortium, which includes major grocery store chains, warned Parliament that it is reliant on fresh produce from growers in the European Union — and that it would be impossible to stockpile greens and fruits if Britain crashes out of the trading bloc with no deal.
“We are extremely concerned that our customers will be among the first to experience the realities of a no deal Brexit,” the association said in a letter reported by the BBC.
Airbus chief executive Tom Enders said last week, “Please don’t listen to the Brexiteers’ madness, which asserts that ‘because we have huge plants here we will not move and we will always be here.’ They are wrong.”
Airbus employs 14,000 people in Britain, manufacturing airplane wings.
“It is a disgrace that, more than two years after the result of the 2016 referendum, businesses are still unable to plan properly for the future,” Enders said.
His remarks came as the company that assembles Jaguars and Land Rovers, Britain’s biggest carmaker, said it would extend its annual spring assembly-line stoppage for an extra week because of Brexit uncertainties.
In a briefing with reporters on Monday at 10 Downing Street, May’s official spokesman, who goes unnamed according to protocol, said that the prime minister wants two more weeks to try to change the withdrawal agreement she spent two years negotiating in Brussels.
The most contentious section of the failed agreement involves the legally binding guarantee, the “backstop,” which is designed to prevent a hard border between Northern Ireland and Ireland — essentially between Britain and the E.U. — after Brexit.
The Irish border backstop requires Britain to remain closely aligned with E.U. rules and customs arrangements if it is unable in the future to agree a new free-trade deal with the bloc.
Critics say the provision could trap Britain in the E.U. forever.
Boris Johnson, a leading Brexiteer and former foreign secretary who has previously argued that Britain should have the courage to leave with no deal, now appears to be tacking.
If May were able to secure a “freedom clause” from Brussels that would make the backstop time-limited or allow Britain to leave on its own, without permission from the E.U., she would win the “full-throated” approval of the entire nation, Johnson wrote in his weekly column in the Daily Telegraph.
Read more

SEC I Press Release: SEC Charges Four Public Companies With Longstanding ICFR Failures

5-7 minutes


Washington D.C., Jan. 29, 2019 —
The Securities and Exchange Commission today announced settled charges against four public companies for failing to maintain internal control over financial reporting (ICFR) for seven to 10 consecutive annual reporting periods. Two of the charged companies also failed to complete the required evaluation of the effectiveness of ICFR for two consecutive annual reporting periods.
According to the SEC’s orders, year after year, the four companies disclosed material weaknesses in ICFR involving certain high-risk areas of their financial statement presentation. As discussed in the SEC orders, each of the four companies took months, or years, to remediate their material weaknesses after being contacted by the SEC staff. One of the companies is still in the process of remediating its material weaknesses.
“Adequate internal controls are the first line of defense in detecting and preventing material errors or fraud in financial reporting,” said SEC Chief Accountant Wesley Bricker.  “When internal control deficiencies are left unaddressed, financial reporting quality can suffer.”
Melissa Hodgman, an Associate Director in the SEC’s Enforcement Division, added, “Companies cannot hide behind disclosures as a way to meet their ICFR obligations. Disclosure of material weaknesses is not enough without meaningful remediation. We are committed to holding corporations accountable for failing to timely remediate material weaknesses.”
Without admitting or denying the findings, each of the four companies agreed to a cease and desist order making certain findings, requiring payment of civil penalties, and requiring an undertaking for one of the companies as detailed below:
  • Grupo Simec S.A.B de C.V. disclosed material weaknesses in its annual filings for 10 consecutive years, from 2008 to 2017. In both 2015 and 2016, its management failed to complete the required ICFR evaluation. The company did not make significant progress in devising a control structure and remediating material weaknesses until after the SEC staff contacted it. The company continues to have material weaknesses that are being addressed through remediation. The Commission’s settled order includes violations of Exchange Act Section 13(b)(2)(B) and Rules 13a-15(a) and 13a-15(c), thereunder, payment of a $200,000 civil penalty, and an undertaking requiring retention of an independent consultant to ensure remediation of material weaknesses, including those involving related party transactions.  
  • Lifeway Foods Inc. disclosed material weaknesses in each of its Forms 10-K for a period of nine years, from 2007 through 2015, and significant deficiencies that in the aggregate constituted a material weakness in 2016. In both 2013 and 2014, company management failed to complete the required ICFR evaluation. Lifeway did not fully remediate its material weaknesses and conclude that ICFR was effective until its fiscal year ended December 31, 2017. Lifeway’s failure to address its material weaknesses was compounded by three announced restatements since fiscal 2012, including two restatements announced during fiscal 2016. The Commission’s settled order includes violations of Exchange Act Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), and Rules 13a-1, 13a-15(a) and 13a-15(c), thereunder, and payment of a $100,000 civil penalty.
  • Digital Turbine Incdisclosed material weaknesses in each of its Forms 10-K over a period of seven years, from fiscal year 2011 through fiscal year 2017. The company did not fully remediate its material weaknesses until the end of fiscal year 2018, as disclosed in its Form 10-K for the year ended March 31, 2018. The Commission’s settled order includes violations of Exchange Act Section 13(b)(2)(B) and Rule 13a-15(a), thereunder, and payment of a $100,000 civil penalty.  
  • CytoDyn Inc. disclosed material weaknesses in each of its Forms 10-K over a period of nine years, from 2008 through 2016. CytoDyn included in its public filings the same, nearly boilerplate, disclosure of material weaknesses for nine consecutive years. CytoDyn remediated its material weaknesses and determined that ICFR was effective as of May 31, 2017. The Commission’s settled order includes violations of Exchange Act Section 13(b)(2)(B) and Rule 13a-15(a), thereunder, and payment of a $35,000 civil penalty.  
The SEC’s investigation was conducted by members of the Division of Enforcement’s Financial Reporting and Audit Group (FRAud Group) including John Archfield, Yolanda Lavery, Tonya Tullis, and Juan Migone, and supervised by Margaret McGuire, Chief of the FRAud Group, and Ms. Hodgman.

Crude Oil Price Closing Report: Oil prices rise as US imposes sanctions on Venezuela

Tom DiChristopher

Reusable: Oil pump 150921
Oil prices rebounded on Tuesday from steep losses in the previous session after Washington imposed sanctions on Venezuelan state-owned oil firm PDVSA in a move that may curb the country’s crude exports.
Despite the move, which comes as the U.S government looks to pile pressure on President Nicolas Maduro to step down, traders said ample global oil supply and an economic slowdown, especially in China, were keeping crude prices in check.
U.S. West Texas Intermediate crude futures were up $1.38, or 2.7 percent, at $53.37 per barrel around 1:53 p.m. ET. WTI fell 3.2 percent in the previous session.
International Brent crude futures rose $1.54, or 2.6 percent, to $61.47 per barrel, after tumbling nearly 2 percent on Monday.
Venezuela has the world’s biggest proven oil reserves, but its potential has not been realized due to a lack of investment. The country is also a member of OPEC, which is implementing a supply cut deal.
“The Latin American country is predominantly the producer of heavier crude, exactly what (U.S. Gulf) refiners are thirsty for,” PVM said in a note.
“They will now have to turn elsewhere (possibly to Mexico, Saudi Arabia and Iraq) to satisfy their needs for this type of crude, which would inevitably lead to a price spike.”
Venezuela’s exports fell to little more than 1 million barrels per day in 2018 from 1.6 million bpd in 2017, according to Refinitiv ship tracking data and trade sources.
The United States has been the biggest buyer of Venezuelan oil despite their political differences, taking around half of the country’s export volumes, followed by India and China.
Petromatrix estimated that Venezuelan exports will drop by around 500,000 barrels a day under current conditions.
Meanwhile, Libya’s biggest oilfield, El Sharara, will remain shut until departure of an armed group occupying the site, the head of National Oil Corp said.
However, global oil supply remains high, largely because of a more than 2 million bpd increase in U.S. crude oil production last year to a record 11.9 million bpd.
”(The) focus will be intensifying on the U.S. inventory data tomorrow, with expectations of a further build in stocks — a larger build will likely see crude taking a further step downwards,” Cantor Fitzgerald Europe said in a note.
There are also concerns in the oil industry that crude demand could stutter amid an economic slowdown.
Activity in China’s vast manufacturing sector likely shrank for the second straight month in January, a Reuters poll showed.
Warnings from Caterpillar and Nvidia on Monday about weakening demand from China have concerned investors.
— CNBC’s Tom DiChristopher contributed to this report

Source: CNBC

Metals Closing Report: Gold hits 8-month peak on US-China trade worries; focus on Fed

Tom DiChristopher

Reusable: Gold coins
Gold jumped to its highest in more than eight-months on Tuesday, on doubts surrounding U.S.-China trade relations and ahead of a Federal Reserve meeting with increasing expectations for a pause to the central bank’s rate hike trajectory.
Spot gold was up 0.48 percent to $1,309.71 per ounce as of 11:55 a.m. ET, having hit its highest since May 15 at $1,311.67 in the session.
U.S. gold futures were up 0.41 percent at $1,308.40 per ounce.
“The main catalysts for gold prices moving up today is an expected fallout in the (U.S.-China) trade war,” said Jeffrey Sica, founder of Circle Squared Alternative Investment.
“There are also questions as to whether the economy is slowing, with a lot of indications that it is, and the trade war with China could escalate over the situation with Huawei.”
The United States issued criminal charges against Chinese firm Huawei and its chief financial officer. Chinese Foreign Ministry spokesman Geng Shuang hit back at the U.S. asking it to end “unreasonable suppression” of Chinese companies.
Investors fear the charges could complicate high-level U.S.-China trade talks set to begin on Wednesday.
Also adding to the mix are growing concerns over global growth after profit warnings from Caterpillar and Nvidia on Monday, soon after European Central Bank President Mario Draghi reiterated worries about the economy.
Additional impetus for gold came from expectations that the Fed will terminate its rate-hiking cycle. Fed policy makers are expected to release a policy statement on Wednesday at 2 p.m. (1900 GMT), followed by a press conference from Fed Chairman Jerome Powell.
Gold tends to rise on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion.
“There’s plenty of reason to still look at gold as a means to have some protection” given expectations that other markets will continue to struggle, especially stocks, Saxo Bank analyst Ole Hansen said.
“The momentum in gold has been established now. We just need to work out how strongly the momentum has been backed by speculative interest.”
The metal has risen over 13 percent from a more than 1-1/2-year low touched in August last year, mostly due to volatile stock markets and a softer dollar.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.73 percent to 815.64 tonnes on Monday, their highest since June 2018.
Silver rose 0.48 percent to $15.82 per ounce, having hit its highest since July 2018 at $15.92.
Palladium rose 1.62 percent to $1,352.50, while platinum was up 0.2 percent at $811.11.

Source: CNBC

Metals I CMI I Spot Prices as of the Close of Trading in New York

Spot Prices as of close of trading in New York
Tuesday, January 29, 2019

Source: CMI

UAE firms tie up in three-way mega merger to create $114 billion banking giant ( Aprox 5 hours Ago)

Dan Murphy,Natasha Turak

190129 Abu Dhabi Commercial Bank view EU
General view of Abu Dhabi Commercial Bank logo on January 4, 2017 in Dubai, United Arab Emirates.
Tom Dulat | Getty Images
Abu Dhabi Commercial Bank (ADCB), Union National Bank (UNB) and Bank Al Hilal have announced a major three-way merger deal that will create the fifth-largest lender in the Middle East and North Africa with combined assets of $114 billion.
The deal, confirmed at the close of trade on Tuesday, marks the second bank tie-up in Abu Dhabi in recent years and follows a wave of consolidation efforts in the sector.
The new banking group is expected to have around 1 million customers, with a significant share of the UAE market: 15 percent share of total assets, 21 percent share of retail loans, and 16 percent of deposits.
“This is a very exciting transaction that will create a larger, preeminent and resilient banking group. It is a landmark deal for the UAE that will contribute significantly to our national ambitions,” Eissa Mohamed Al Suwaidi, the chairman of ADCB, said in a statement Tuesday.
“The new banking group will carry the ADCB identity and will continue to benefit from strong institutional backing, through the Government of Abu Dhabi’s majority ownership,” a press release from Abu Dhabi Securities Exchange said. Al Hilal Bank will keep its current name and brand, operating as a separate Islamic banking entity within the group.
The transaction, recommended unanimously to shareholders by the ADCB and UNB boards, is subject to regulatory and shareholder approvals to be sought in the coming weeks, according to the release. The deal makes ADCB the third largest bank in the UAE, following First Abu Dhabi Bank and Emirates NBD.
Shares of both listed firms were halted ahead of the announcement.
All three banks have one mutual majority shareholder, the Abu Dhabi Investment Council (ADIC) — which owns more than 60 percent of ADCB and 50 percent of UNB. It owns 100 percent of Bank Al Hilal, which is not publicly listed.
ADIC is part of Mubadala, the investment arm of the Abu Dhabi government, which has assets worth more than $225 billion. Through ADIC, the Abu Dhabi government will own 60.2 percent of the combined bank. Other ADCB shareholders will own 28.0 percent, and other UNB shareholders will own 11.8 percent of the combined bank.
Seeking synergies
“We view that a three-way merger could release long-term value through economies of scale, synergies and overall restructuring for ADIC,” Ehsan Khoman, MUFG head of MENA research and strategy, said in a recent research note.
“Therefore, such a proposition would make sound business rationale for ADIC as it would merely own a more profitable combined banking group after cost restructuring has been implemented, which will in-turn lead to surplus capital release, reduce the cost of funding and enhance asset quality,” he added.
A key value driver of banking mergers are cost synergies, which are achieved through headcount reduction. At least 500 jobs could be cut as part of the merger, with UNB and Al Hilal shouldering the bulk of the job cuts, Reuters reported on Monday.

Source: CNBC

Brexit vote latest news: Theresa May vows to reopen Withdrawal agreement to change backstop

Anna Mikhailova, Political Correspondent 29 January 2019 • 4:41pm

The European Union has rejected claims that the Malthouse Compromise could be used to break the Brexit deadlock, James Crisp writes.
Guy Verhofstadt, the European Parliament’s Brexit coordinator, repeated an earlier threat that MEPs would vote down any deal that did not have the backstop as currently negotiated.
“The European Parliament will not give its consent to a watered down Withdrawal Agreement,” he said. “The deal we have is fair and cannot be re-negotiated.
“The backstop is needed because of UK red – lines and was crafted by the UK and the EU to secure the Good Friday Agreement.
The Malthouse Compromise requires the backstop to be redrafted and asks for a longer transition period.
Margaritis Schinas, the European Commission’s chief spokesman, said that the transition period was inextricably linked to the withdrawal agreement and one could not be had without the other.
“I have the feeling we are repeating ourselves and saying things which have already been said,” he said wearily.
"There is nothing we can meaningfully say, he added,”This is not a Brussels day, this is a London day, we have a vote tonight and we take it from there. "
One European Parliament source told the Telegraph, that the compromise, “looked more like a brew that will scotch talks rather than a fine malt.”

Source: The Telegraph

European Markets Closing Report: Europe markets rally ahead of key Brexit vote; shares of Royal Mail tumble 10%

Sam Meredith

European stocks were higher Tuesday morning, as investors monitored global trade developments, fresh earnings reports and another potentially decisive Brexit vote.

European Markets: FTSE, GDAXI, FCHI, IBEX

FTSEFTSE 100FTSE6834.1487.041.29418640612
The pan-European Stoxx 600 index was up around 0.7 percent during mid-morning deals, with most sectors and major bourses in positive territory.
Europe’s utilities and personal and household goods were among the top performers, with each sector up more than 1 percent as investors flocked to stocks considered safe at times of economic uncertainty.
Looking at individual stocks, Germany’s SAP dipped into negative territory after the technology company released its latest earnings results. Europe’s most valuable tech firm said it would take restructuring charges of 800-950 million euros, mainly in the first quarter.
Meanwhile, Britain’s Royal Mail tumbled to the bottom of the European benchmark after it narrowed its profit view for the year. The London-listed firm saw shares plunge more than 10 percent on the news.
On the data front, Spain’s unemployment rate dropped to its lowest level in a decade during the final three months of 2018. Official data published Tuesday morning showed that more jobs in agriculture and construction helped the unemployment rate fall to 14.45 percent from 14.55 percent in the previous quarter.
Huawei charges
Market focus is largely attuned to global trade developments, after prospects for a long-awaited U.S.-China trade deal were dealt another setback. It comes after Washington leveled sweeping charges against Beijing’s telecom giant Huawei.
The U.S. Department of Justice filed criminal charges Monday against Meng Wanzhou, the chief financial officer of China tech giant Huawei and the daughter of its founder and president Ren Zhengfei.
The news comes shortly before Chinese Vice Premier Liu He is set to meet U.S. officials on Wednesday and Thursday. Market participants fear the jolt to Huawei could undermine the chances of the world’s two largest economies reaching a comprehensive trade deal.
Brexit vote
Back in Europe, British Prime Minister Theresa May will ask her Conservative lawmakers to send a message to Brussels that they would back her proposed Brexit deal if a plan to avoid a hard border with Ireland could be replaced.
On Tuesday evening, Westminster will once again have the chance to shape the future of the country’s exit from the European Union by debating and voting on what changes they want May to seek to her current withdrawal agreement.
The U.K. is expected to leave the bloc in exactly two months.

Source: CNBC

Trump confidant Roger Stone pleads not guilty to false statements, obstruction charges

By Spencer S. Hsu , Spencer S. Hsu Investigative reporter 

Devlin Barrett
Reporter focusing on national security and law enforcement
President Trump’s longtime friend Roger Stone pleaded not guilty Tuesday to charges stemming from special counsel Robert S. Mueller III’s investigation of Russian interference in the 2016 U.S. election.
Stone was indicted last week and accused of lying about his efforts to gather information about hacked Democratic Party emails at the direction of a unidentified senior Trump campaign official before the election.
Appearing before U.S. Magistrate Deborah A. Robinson, Stone’s plea was entered by his lawyer, Robert C. Buschel.
“A plea of not guilty is entered,” Robinson said in response.
As he walked into the courthouse Tuesday morning, some onlookers chanted “lock him up!” while others screamed their support for Stone. Afterward, some of those same people engaged in angry, profanity-laced arguments about the case.
After his indictment, Stone embarked on a blitz of weekend media appearances to declare his innocence, criticize prosecutors, and repeat his pledge that he would not testify against the president.

Roger Stone, longtime friend of President Trump, arrives at the federal courthouse in Washington, D.C., Tuesday. (Calla Kessler/The Washington Post)
He faces charges of lying, obstruction and witness tampering.
At an initial court appearance Friday in Florida after his arrest at his Fort Lauderdale home, the 66-year-old Stone appeared in shackles but was released on $250,000 bond.
Stone, a veteran GOP operative and friend of Trump for four decades, briefly advised the presidential campaign in 2015 and remained in contact with Trump and top advisers through the election.
The indictment centers on Stone’s alleged efforts to learn when potentially damaging internal emails from Hillary Clinton’s presidential campaign would be released by Julian Assange, WikiLeaks’s leader.
U.S. authorities in July indicted a dozen Russian military intelligence officers on charges they hacked Democrats’ computers, stole their data and published those files to disrupt the 2016 election, using as one of their conduits WikiLeaks, the global anti-secrecy group, which publicized the emails during the campaign’s final months.
In Stone’s indictment, prosecutors charged that after the initial July 22, 2016, release of stolen emails, “a senior Trump campaign official was directed to contact Stone about any additional releases and what other damaging information Organization 1 had regarding the Clinton campaign.” The indictment does not name the campaign official or who directed the alleged outreach to Stone.
The indictment states that Stone thereafter told the campaign about potential future releases by “Organization 1,” which people familiar with the case said is WikiLeaks.
Stone has given scores of interviews during the months that he’s been under investigation and preempted prosecutors by publicly releasing many of the emails and texts he knew they were examining before they could be used in legal action.
On social media since his arrest, Stone all but invited a federal judge to impose a gag order, saying a directive to mute him is “the fervent wish of the Deep State.”
Stone got his start in politics working for Richard Nixon’s 1972 reelection campaign and has a tattoo on his back of the disgraced ex-president. Since then, he has advised Republican and Libertarian candidates, including Ronald Reagan, Bob Dole and Gary Johnson.
After a formal entry of a plea before the federal magistrate, Stone’s case will go before U.S. District Judge Amy Berman Jackson of the District of Columbia for a scheduling hearing, expected as soon as Thursday.
In other Mueller cases assigned to her, Jackson — a former federal prosecutor, white-collar defense attorney and 2011 appointee of President Barack Obama — has not been reluctant to rein in attorneys and parties whose out-of-court comments she found likely to lead to pretrial publicity that might taint a jury or jeopardize a fair trial.
Jackson issued a gag order days after an attorney for former Trump campaign chairman Paul Manafort gave a statement outside the federal courthouse attacking the special counsel investigation and defending his client to reporters in November 2017.
Stone has repeatedly denied any contact with Russia or WikiLeaks. He has said he had no advance knowledge of what material WikiLeaks held, adding that predictions he made about the group’s plans were based on Assange’s public comments and tips from associates.
Stone and WikiLeaks and Assange have said they never communicated with each other.
The seven-count indictment against Stone asserts that after the election, he lied in congressional testimony about his activities and efforts to learn about the release of potentially damaging emails and that he attempted to persuade another witness, identified only as “Person 2,” to refuse to talk to the House Intelligence Committee.
People close to the case said Person 2 is New York comedian Randy Credico. A lawyer for Credico, Martin Stolar, has declined to comment.
Rosalind S. Helderman, Lori Rozsa and Manuel Roig-Franzia contributed to this report.