BBC News - Golden Spike space firm plans $1.4bn Moon trips

A team of former Nasa executives has launched a private venture to send two people to the Moon for $1.4bn (£871m).

After the space race of the 1960s, interest in the moon for exploration has waned

Golden Spike Company says it will use existing rocket and capsule technology, and will aim for a first launch before the end of the decade.

The firm is one of many new private firms hoping to follow the success of Space X, which has ferried cargo to the International Space Station (ISS).

The US became the first and only country to reach the Moon in the 1960s.

But costs and waning interest has prevented any other lunar mission. US President Barack Obama cancelled a planned Nasa return to the moon, saying the US had already been there.

Golden Spike, run by former Nasa associate administrator Alan Stern, says it is looking offering voyages to the governments of other countries - such as South Africa, South Korea and Japan - expecting interest for scientific research or national prestige.

"It's not about being first. It's about joining the club," he said on Wednesday. "We're kind of cleaning up what Nasa did in the 1960s. We're going to make a commodity of it in the 2020s."

Odds against

The firm says it expects to make about 15 to 20 launches in total.

Golden Spike is full of space veterans: the board chairman is Apollo-era flight director Gerry Griffin, who once headed the Johnson Space Center.

Advisors include former a space shuttle commander and manager, former UN Ambassador Bill Richardson, engineer-author Homer Hickam as well as Hollywood directors and former House Speaker and space policy enthusiast Newt Gingrich.

However, Harvard University astronomer Jonathan McDowell, who tracks launches worldwide, told the Associated Press that many of the new space firms will fail before anything is built.

"This is unlikely to be the one that will pan out," Mr McDowell said, citing Golden Spike's hefty price tag.

Reuters News - Cheap loans, market surge fuel record year for Thai M&A

By Saeed Azhar and Anshuman Daga and Denny Thomas

SINGAPORE/HONG KONG | Thu Dec 6, 2012 1:33am EST

(Reuters) - Thai corporates armed with cheap debt and record stock prices have spent a record $27 billion shopping for overseas assets this year, putting the Southeast Asian nation firmly on the region's M&A map for the first time.

The land of exotic beaches has emerged as an unexpected fee pool for deal-starved bankers in the region, with the nation ranking No. 3 in Asian outbound deal volumes this year, behind Japan and Greater China.

The second-half surge in Thai purchases this year has been fuelled by a steady stream of loans, which carries an added layer of risk compared with all-cash acquisitions.

Thailand's M&A spree has catapulted some of the country's reclusive tycoons into the media spotlight and made them formidable competitors in auctions for overseas assets.

Gutsy bids for London's Cove Energy and Singapore conglomerate Fraser & Neave Ltd (F&N) (FRNM.SI) underscore the ambition of these tycoons, who have been bolstered by a surging stock market and the first period of relative political stability in more than six years.

With the latest transaction, total Thai M&A volumes could exceed the combined total of the previous four years, with more action in the country this year than Australia, Malaysia and South Korea combined.

"This could be the best time for Thai companies to get capital or funding cheaply and pursue growth where they are good at," said Daphne Roth, head of Asia equities research at ABN AMRO Private Banking.

Some analysts and bankers say the flurry of deal activity in Thailand is a one-off event, with little chance of matching its M&A volumes next year.

Still, after three domestic insurance auctions launched this year, plus several major cross-border deals, yet another major Thai deal emerged with just a few weeks left in the year.

On Wednesday, a group linked to Thailand's wealthiest businessman, Dhanin Chearavanont, agreed to buy HSBC's (HSBA.L) entire stake in China's Ping An Insurance (601318.SS) for $9.38 billion.

"Myriad Thai corporates across industry segments are seeing greater opportunities to expand their footprint, both across the region as well as on a global basis," said David Aronovitch, co-head of Southeast Asia investment banking at Morgan Stanley, which is advising the Thai group involved in the F&N bid.

"Whilst Asia-Pacific is the natural focus for many of these businesses, there is an increasing appetite to identify and pursue opportunities beyond the region, and in particular in Europe."

CHEAP FUNDING

In addition to an equity boom that is helping fuel the activity, the ambition for Thai corporates to grow outside their saturated home market is another major factor behind the money.

Many of these deals are backed by cheap bank loans.

Companies linked to beer mogul Charoen Sirivadhanabhakdi lined up S$11.8 billion ($9.7 billion) to buy a 34 percent stake in F&N and bid for shares they do not already own. China Development Bank is financing CP Group's purchase of Ping An.

"After a decade-long slumber, Thailand's M&A scene has burst into life over the last 12 to 18 months and is now one of the most vibrant and interesting M&A markets in the Asia-Pacific region," said Citigroup's Asia-Pacific M&A head Colin Banfield.

"Personally, I am spending more time in Thailand now with our local clients than at any time since the Asian Crisis back in 1997-98," said Banfield, who expects the M&A trend to continue next year, given the pipeline of deal activity.

Prime Minister Yingluck Shinawatra's Puea Thai Party swept to victory in a general election in July 2011 and Thailand has since enjoyed a period of relative calm after the convulsions that followed the ousting of her brother, Thaksin Shinawatra, from the premiership in a 2006 coup.

But the country remains politically fractured between the pro- and anti-Thaksin camps, and Thai billionaires may be moving money overseas to reduce their dependence on their home market.

"Usually when you see tycoons do this, they try to move money overseas," said an investment banker who asked not to be named. "They want to de-risk themselves from any one geography."

The banker said he does not expect the same pace of dealmaking next year, but identified Thailand's Central Group as one of the groups which could still seek retail assets abroad.

Last year, the group's Central Retail Corp bought Italian department store chain La Rinascente SpA.

The banker said Malaysian companies have also been pursuing a similar strategy, buying real estate and other assets to reduce their reliance on one market.

SURPLUS

Mark Matthews, head of Asia research at Bank Julius Baer, said Thai offshore deals had accelerated in the last two years as prior to the fourth quarter of 2010 Thai companies were heavily restricted in their overseas investments by the Bank of Thailand.

"Thailand runs a current account surplus so if the central bank didn't let the private sector re-cycle some of the inflow, it might create unhealthy distortions in the domestic economy," he said.

Thailand had a current account surplus of $11.9 billion by the end of last year, IMF data shows.

Acquisitions can bring growth, but also risks.

ABN AMRO's Roth pointed to Thai coal producer Banpu Pcl's BANP.BK acquisitions in China and Australia over the last few years, some of which have not gone smoothly.

"We have seen that when the tide turns and when coal prices started to fall, then we don't get the visibility from both demand and supply, then that could also cause the stocks to underperform," she said.

Roth said weakened valuations in Europe might throw up a lot of opportunities for Thai companies, but she would take a cautious view on firms making acquisitions outside their core area of business.

Thai equities have been among the best performers in Asia and globally, with the benchmark index .SETI trading at a 16-1/2 year high on Tuesday. The index has surged 30 percent so far this year.

Last month, HSBC strategists retained their overweight call on Thai equities and said the country was on "cruise control". A tight labor market and low household leverage supported resilient domestic consumption, the brokerage said.

"If I talk to ASEAN companies, in general, many of these Thai companies are more proactively thinking of entering their hinterland - Myanmar, Laos, Cambodia, Vietnam, but also thinking about the business implications of the ASEAN (economic plan) whereby some of the trade restrictions go away," said Herald van der Linde, head of Asia Pacific equity strategy at HSBC.

($1 = 1.2175 Singapore dollars)

(Reporting by Saeed Azhar, Anshuman Daga and Denny Thomas; Editing by Michael Flaherty and Alex Richardson)

Reuters News : Fed to launch fresh bond buying to help economy

By Alister Bull

WASHINGTON | Wed Dec 5, 2012 1:22am EST

(Reuters) - The Federal Reserve is set to announce a fresh round of Treasury bond purchases when it meets next week, avoiding monetary policy tightening to maintain support for the weak U.S. economy amid uncertainty over the looming year-end "fiscal cliff."

Many economists think the U.S. central bank will announce monthly bond purchases of $45 billion after its policy gathering on December 11-12, signaling it will continue to pump money into the U.S. economy during 2013 in a bid to bring down unemployment.

"We expect status quo," said Laurence Meyer of the forecasting firm Macroeconomic Advisers. "We expect purchases will continue at the same monthly rate as over the last three months; that the composition will be the same, and that the maturities distribution will be the same."

The decision would cement expectations that the Fed will keep buying a combined $85 billion of Treasuries and mortgage-backed bonds a month, while repeating that it expects to hold interest rates near zero until at least mid-2015.

The Fed could even decide to announce a larger level of purchases if it wanted to exceed expectations and give the market a bigger jolt to press borrowing costs lower.

"If the market expects $45 billion, maybe they should deliver $60 billion ... get markets more excited and really push rates down," said Torsten Slok with Deutsche Bank in New York.

U.S. unemployment remains high at 7.9 percent and the economy, while doing better than Europe's, is expected to grow at a meager rate of only around 2 percent next year.

OPERATION TWIST

The fresh bond purchases will replace a program called Operation Twist, which expires at the end of the year. Under Twist, the Fed bought $45 billion of longer-dated bonds a month with the proceeds from the sale of its shorter-date holdings.

Fresh outright purchases would therefore create new money, whereas no new action by the Fed would amount to a tightening in monetary policy as Twist came to an end.

Add in monthly $40 billion mortgage-backed bond purchases which it began in September, this would boost the Fed's balance sheet by $1.2 trillion, to $4 trillion, by end-2013 if it keeps buying assets at this pace, as economists expect.

"I think it is going to be (maintained) into 2014 because they are not looking for much improvement in the unemployment rate over 2013," said Stephen Oliner, a resident scholar at the American Enterprise Institute.

The Fed has promised to maintain its efforts to stimulate growth until it sees a substantial improvement in the outlook for the U.S. labor market.

THRESHOLDS

However, it has not spelled out exactly what that means and is not likely to use next week's meeting to act on an idea advanced by some senior Fed officials to adopt numerical thresholds for unemployment and inflation to guide policy.

These have been floated as a better way to give markets and the public so-called forward guidance on when the Fed will start raising rates, rather than its current calendar date commitment.

The idea is to create a tolerance zone within which the Fed would leave rates on hold. But economists think it would prefer not to risk confusing markets by making too many big announcements when it releases its policy decision on Wednesday, expected at 12:30 p.m. ET. The statement will be followed by a news conference with Fed Chairman Ben Bernanke.

Analysts also doubt policymakers have had enough time to reach a consensus on measures that amount to a major step forward for the central bank's communication strategy that would influence Fed policy for years to come.

"At this point, I'd be a little surprised if they had actually managed to reach agreement about what the quantitative thresholds should be," said David Stockton, senior fellow at the Peterson Institute for International Economics in Washington.

Both Bernanke and Vice Chair Janet Yellen have indicated support for the idea, which has been advanced by several of their colleagues.

But analysts felt it made more sense to take the step in the early part of next year and concentrate on explaining the decision to increase asset purchases at the news conference next week.

Policymakers must also update quarterly economic forecasts despite uncertainty over how much of a drag fiscal policy will exert on growth as Congress and the Obama administration fight over taxes and spending designed to lower the U.S. deficit.

Failure to agree on a deal could tip the economy over a so-called fiscal cliff of tax hikes and automatic spending cuts, which many fear could trigger another U.S. recession, and which the Fed has repeatedly said it would not be able to offset.

(Reporting By Alister Bull; Editing by Steve Orlofsky)

BBC News - Australia's central bank cuts main interest rate to 3%

Australia's central bank has cut its benchmark interest rate by 25 basis points to 3%, as it looks to counter a slowdown in its mining sector.

A resource boom has been the main driver of Australia's economy

It has also been struggling with a stubbornly strong Australian dollar. A rate cut usually weakens a currency.

The rate cut is the second since October and came after the Reserve Bank of Australia's monthly policy meeting.

Australia's cost of borrowing is now at the same level it was during the global financial crisis of 2009.

The Australian dollar was little changed on the news, while the main Sydney stock exchange was down slightly.

Mining slowdown

Analysts said that as the mining boom starts to run out of steam, the other sectors of the economy will have to take over and drive growth.

"The urgency to actually find a replacement for mining investment has become quite acute," said Brian Redican of Macquarie Bank.

Mr Redican said more action will be required from the Reserve Bank of Australia.

"In 2013 there will be further aggressive rate cuts, although there is nothing in this statement that suggests that the Reserve Bank is thinking along those lines."

Demand for Australian commodities has meant that its economy has remained buoyant during the recent global slowdown whilst Europe and the US have slowed down.

However, that demand mainly from China is beginning to taper off as the slowdown starts to hurt Asia as well.

Prices for Australia's commodities have fallen as a result and the value of its exports has been reduced.

Dollar woes

The strength of the Australian dollar is also causing problems for the economy hurting sectors such as tourism and manufacturing.

In a statement on Tuesday, central bank governor, Glen Stevens, said the dollar remains "higher than might have been expected" given lower export prices and a weaker global outlook.

The Australian dollar is above parity with the US dollar.

Businesses have been suffering as a result with the unemployment rate at a two-and-a-half year high.

BBC News - UK economic contraction 'less than thought' for 2012

The British Chambers of Commerce (BCC) has increased its forecast for UK growth for 2012, but still expects the economy to shrink.

The Olympic lift was enough to help boost the economy for the whole year, the BCC said

The UK will shrink by 0.1% this year, less than the 0.4% contraction it had predicted previously, the BCC said.

That is "entirely due to the stronger-than-expected" growth in the last quarter, helped by the Olympic Games.

But it now sees growth of 1% for the whole of 2013, down from the 1.2% it had forecast in September.

"As we wait in anticipation for the chancellor to deliver his Autumn Statement tomorrow, our new forecast highlights the challenges still facing the UK economy over the months and years ahead," said John Longworth, director-general of the BCC.

"The fact remains that growth is still too weak. Thankfully, we have businesses here in the UK that are ambitious, determined and resilient."

Chancellor George Osborne gives the Autumn Statement on Wednesday. Over the weekend, he admitted that curbing the UK's financial deficit was "taking longer" than planned.

The BCC said that public sector borrowing would be £104.1bn for 2012/13 - more than £12bn higher that it had predicted in March.

"Many firms are expanding exports, investing, and creating jobs, but more must be done to support the aspirations of growing companies that will be the wealth creators of tomorrow," Mr Longworth said.

Last month, it emerged that the UK economy had bounced back from recession in the three months to September.

The economy grew by 1.0%, after contracting for the previous nine months. The UK has still not recovered the levels of output seen before the financial crisis in 2008.

For 2014, the BCC cut the forecast to 1.8%, from 2.2%.

The BCC said that the lower GDP growth forecasts for 2013 and 2014 were due to the fact that the "international environment has worsened, as growth forecasts for world trade, for the eurozone, and for other major economies have been revised down in recent months" and that more spending cuts were likely in the UK.

Reuters News - Greece to buy back bonds via Dutch auction

By George Georgiopoulos and Deepa Babington

ATHENS | Mon Dec 3, 2012 4:03am EST

(Reuters) - Greece said on Monday it would buy back bonds through a Dutch auction as part of efforts to cut its ballooning debt, allowing it to assess the level of demand before setting a final price for the deal.

The bond buyback is central to the efforts of its foreign lenders to put Greece's debt back on sustainable footing, and its success will pave the way for the country to get long-delayed funding to avoid bankruptcy.

Since plans for the buyback were announced last week, questions have swirled about whether it will tempt enough bondholders to cut Greek debt by a net 20 billion euros -- the target set by euro zone finance ministers and the International Monetary Fund.

The buyback will be conducted through a modified Dutch auction that allows it to introduce an element of competition among investors to get the best price.

Greece set a price range to buy back each of its 20 series of outstanding bonds with a spread of two percentage points - from a minimum of 30.2 to 38.1 percent and a maximum of 32.2 to 40.1 percent depending on the bond maturities.

In such an auction, if a bondholder tries to get a price close to the upper limit there is a risk he or she may be left out if the buyback amount is filled at lower prices. There will be one settlement price for each series of bonds.

Greek bonds eligible under the buy-back ranged from 25.15 to 34.41 cents in the euro at the close of trading on November 23, Reuters data showed.

Athens said it would not spend more than 10 billion euros on the buyback. Investors must declare their interest by December 7 and the expected settlement date is December 17.

Euro zone officials said the bloc hoped Greece would be able to repurchase at least 40 billion euros of its own bonds.

Athens unveiled the structure of the buyback before a meeting of euro zone finance ministers, at which Greek Finance Minister Yannis Stournaras will brief his counterparts.

Greece's lenders agreed last week that the bonds, which have a nominal value of 63 billion euros, would not be purchased for more than the closing price on that date. The offer goes in theory also to holders of about 4 billion euros of old Greek bonds, who refused to take part in a debt cut scheme in March.

A Reuters calculator on the buy-back shows that if the buy-back price was set at the November 23 closing prices, even a 50 percent participation rate would be enough for a successful deal - in this instance, Athens would have to spend just 8.7 billion euros to buy back debt worth 31.5 billion euros.

For Athens to spend 10 billion euros, it would have to buy back around 60 percent of the outstanding bonds. This could save Greece 39 billion euros gross on the face value of the bonds and the interest payments due on them.

(Additional reporting by Karolina Tagaris.; Writing by Deepa Babington, editing by Mike Peacock)

Reuters News - Wall Street finds a foreign detour around U.S. derivatives rules

(Reuters) - Wall Street banks are looking to help offshore clients sidestep new U.S. rules designed to safeguard the world's $640 trillion over-the-counter derivatives market, taking advantage of an exemption that risks undermining U.S. regulators' efforts.

U.S. banks such as Morgan Stanley (MS.N) and Goldman Sachs (GS.N) have been explaining to their foreign customers that they can for now avoid the new rules, due to take effect next month, by routing trades via the banks' overseas units, according to industry sources and presentation materials obtained by Reuters.

The rules, a result of Washington's Dodd-Frank reforms, aim to prevent financial catastrophes in the over-the-counter (OTC) market - a huge, opaque market which is partly blamed for felling Lehman Bros in 2008 and fuelling a global financial crisis.

They call for U.S. banks dealing in OTC instruments, such as interest-rate swaps and cross-currency options, to effectively set aside capital against the risk of trades turning sour, execute their trades on electronic platforms and report them to U.S. authorities - requirements that worry the banks' offshore clients and threaten to drive business away from Wall Street.

OTC brokers say liquidity has already begun to suffer.

In response, Wall Street has launched a last-minute effort to show foreign counterparties how they can keep doing business together and still keep trades out of the U.S. regulatory net.

The banks' solution is to route trades via their non-U.S. affiliates - subsidiaries with their own separate balance sheets, often in London - rather than the parent banks. It is a detour that could eventually be shut down by foreign regulators, but for now offers shelter from the U.S. regulatory storm.

"What we are seeing now is a gamesmanship dance in which firms do whatever they can to avoid regulation, which is an age-old phenomenon," said Thomas Cooley, a professor of economics at New York University's Stern School of Business.

Financial industry concerns over U.S. regulation of the OTC market focus mainly on trades in swaps, among the most common and flexible financial instruments, used to hedge all kinds of financial risks from interest rates to currency movements.

Under the new rules, any entity that trades more than $8 billion a year of swaps with a "U.S. person" is required to register with the Commodity Futures Trading Commission (CFTC) as "swap dealers", a designation that brings with it capital and margin requirements that could drive up costs.

But the precise definition of a "U.S. person" is unclear.

A presentation given on November 16 by Morgan Stanley to its Asian commodity clients explained how they might want to consider "cutting over trading to a non-U.S. swap dealer". One slide named Morgan Stanley & Co. International Plc, a London-based subsidiary, as an example of a non-U.S. swap dealer.

Morgan Stanley spokesman Mark Lake said the presentation "was an update to clients on Dodd-Frank regulation and clearly states that it was not intended as advice or a specific recommendation from Morgan Stanley".

"While we note that one option for certain non-U.S. clients trading swaps with a U.S. swap dealer may be to switch to a non-U.S. swap dealer, we also point out that all G-20 jurisdictions are expected to adopt similar requirements to the U.S."

Goldman Sachs, too, is sending a similar message. Its bankers are meeting counterparts from regional Asian banks, assuring them they can trade with Goldman's London entity, Goldman Sachs International, and not be subject to the new rules, according to sources familiar with the matter.

Goldman declined to comment on the matter.

"What banks are looking at is: can they put their business with non-U.S. counterparties through a London entity, and will the regulators in the UK accept all the business coming through those entities?" said Mark Austen, chief executive of the Asia Securities Industry & Financial Markets　Association.

Lawyers say the answer may be yes, for now - at least until foreign regulators, also mindful of avoiding another financial crisis, catch up with Washington and impose similar rules.

Gareth Old, a lawyer at Clifford Chance in New York, said the CFTC had made it clear that any swaps traded with the foreign affiliate of a U.S. bank would not count toward the $8 billion "de minimis" threshold for identifying a swap dealer.

"This is a very, very important exclusion. It means that non-U.S. financial institutions can continue to trade with at least a unit of a U.S. bank ... without running the risk of being a U.S. person," Old said.

However, lawyers say U.S. commercial banks like JPMorgan (JPM.N) and Citigroup (C.N) may find it harder to detour their clients around Dodd-Frank, noting that these banks tend to operate overseas through branches, not stand-alone affiliates.

Overseas branches of U.S. banks are expected to still be classed as a "U.S. person" under the new regulation.

It is not clear what JPMorgan and Citigroup are doing, if anything, to address the impact on their offshore clients.

Citigroup spokesman in Hong Kong, Godwin Chellam, declined to comment on the issue. JPMorgan also declined to comment.

FOREIGN BACKLASH

U.S. regulators want their derivative rules to apply to offshore trades by Wall Street banks as well as domestic ones, given that bad trades outside their borders can still rebound on the parent banks, weaken their balance sheets and add to risks that may be building up across the U.S. banking system.

"Swaps executed offshore by U.S. financial institutions can send risk straight back to our shores," said CFTC chairman Gary Gensler in June. "It was true with the London and Cayman Islands affiliates of AIG, Lehman Brothers, Citigroup and Bear Stearns."

However, Wall Street faces fierce resistance to the reforms from foreign counterparties, especially those trading around the $8 billion threshold which are seen as most likely to take the "affiliate" detour offered by U.S. banks.

Several mid-sized foreign banks, including Singapore's DBS (DBSM.SI), have said they do not intend to register with U.S. regulators as swap dealers. Some banks have even stopped trading with U.S. counterparts, brokers said.

In contrast, major foreign banks such as Germany's Deutsche Bank (DBKGn.DE), whose OTC trade would dwarf the threshold, are simply too big to escape the U.S. regulatory net entirely.

The CFTC is still working on cross-border guidance on the reach of the rules, raising doubts over whether it will close the affiliate exemption or not, but it clearly hopes foreign regulators will adopt most of the Dodd-Frank reforms anyway.

Morgan Stanley itself notes that the detour strategy may be short lived in the UK and other G-20 jurisdictions, saying that they are expected to eventually adopt similar rules.

Morgan Stanley's November 16 presentation in Asia was aimed at clients trading commodity swaps, but the rules will also apply to products such as interest rate swaps and cross-currency options. Foreign exchange forwards and swaps will be exempt, largely because the U.S. Treasury felt this market had been operating well for decades with its own risk-management systems.

(Reporting by Rachel Armstrong; Additional reporting by Douwe Miedema in Washington and David Henry and Lauren Tara LaCapra in New York; Editing by Jonathan Leff, Michael Flaherty and Mark Bendeich)