DNO boosts Iraq output, resumes Yemen operations

Norwegian oil firm DNO International said it is ramping up oil production in Iraq as it confirmed an oil discovery in the country’s resource-rich Tawke field and has resumed drilling operations in Yemen.

DNO, which explores and produces oil and gas in Iraq and Yemen and plans to expand activities in North Africa and the Middle East, had a gross production of 50,948 barrels of oil equivalent per day in the first quarter in the Kurdistan region, making up the bulk of the company’s output.

“In parallel with its stepped up operational activities in the Kurdistan Region of Iraq, the company continues to ramp up production and sales of oil to the local market,” it said in a statement on Thursday, without providing further details.

Asked how higher production and sales in Kurdistan could affect earnings, DNO spokesman Tom Bratlie said: “We expect that the second quarter will be in line with our guidance.”

DNO shares were up marginally in early trade, outperforming a small decline on the Oslo benchmark index.

DNO also confirmed oil in its Peshkabir-1 well, in an area west of its prize Tawke field in the Kurdistan region, which is currently producing oil.

It will now undertake a detailed evaluation of the results, temporarily suspending the well for possible reentry later this year.

DNO, one of the first oil firms to enter Iraq after the U.S.-led invasion that toppled Saddam Hussein, is halfway to its planned 3,085-metre depth in its Tawke-18 well.

DNO has been aiming for Tawke to produce 100,000 barrels per day before the end of this year.

DNO also provided an update on its activities in Yemen, where it has restarted active operations following the return of service contractors and rig personnel.

Yemen’s oil and gas pipelines have long been targets of attacks by militants in the unstable and impoverished country, but attacks on energy infrastructure have become more frequent since anti-government protests last year created a power vacuum.

Drilling in DNO’s Tsour-27 well was due to start on July 2 while the company expects to produce its first oil in Yaalen at the end of 2013. Early production capabilities in this well could deliver 5,000 barrels of oil per day and output could double at a later stage, the firm said.

Qatar-backed VW, Porsche shares gain on tie-up plans

Shares in German carmaker Volkswagen jumped on Thursday after its agreement to buy the remaining half of sports car maker Porsche. Gulf state Qatar owns significant stakes in both companies.

Europe’s second largest carmaker saw its shares rise 5.3 percent and Porsche’s holding company stock was up 1.3 percent after the announcement VW would pay 4.46 billon euros ($5.9 billion) in cash for the 50.1 percent of Porsche’s autos business that it did not already own.

“VW is getting a good deal,” said London-based Morgan Stanley analyst Stuart Pearson, predicting in a note to investors that its completion would lift VW earnings by 6 percent next year. “Porsche is the world’s best premium car story,” he said.

With sales volumes running close to 20 percent above their previous record, Porsche’s main challenge is “securing sufficient production capacity”, and integration with VW may help, Pearson added. VW already plans to begin assembling some Porsche models in its own plants.

VW has been pushing for rapid integration of Porsche’s automotive businesses to generate annual cost savings of 700 million euros and erase about 2 billion euros of debt at the sports car maker’s holding company.

Both carmakers have strong links to Qatar, with the Qatar Investment Authority (QIA) owning 17 percent of VW and a 10 percent stake in Stuttgart-based Porsche.

Porsche and VW agreed a merger in August 2009 after the maker of the iconic 911 sports coupe racked up more than 10 billion euros of debt attempting to buy VW, pitting the Porsche family against the rival Piech dynasty.

VW had abandoned the earlier merger plan last September, citing unquantifiable legal risks from lawsuits filed by short-sellers in the United States and Germany who accuse Porsche of secretly piling up VW shares during its failed takeover attempt, causing investors to lose billions of dollars.

At a press conference at its Wolfsburg, Germany, headquarters on Thursday the company said it expected the integration of Porsche to be fully ratified by August 1.

Full consolidation of Porsche’s auto-making operations will boost VW’s full-year financial result by more than 9 billion euros and shrink its net liquidity by about 7 billion euros, the company has said.

Both companies had for months been exploring ways to avoid taxes of as much as 1.5 billion euros that would have been incurred if VW were to seal the purchase before August 2014.

Submitting a single common VW share to Porsche SE may classify the deal as a restructuring under Germany’s so-called reorganisation tax law, enabling VW to complete the transaction ahead of schedule without incurring a huge tax bill.

QIA, Qatar’s sovereign wealth fund also owns a 5.2 percent stake in Tiffany, the US-based jewellery retailer, London department store Harrods and a one percent stake in LVMH, the French luxury group which owns Louis Vuitton.

* With Reuters

Drew Brees Tops the Power 100 in 2012

Drew Brees, the New Orleans Saints’s popular quarterback, had an exceptional season in 2011, breaking a number of records. It reaffirmed his elite status and catapulted him to new levels of fame and influence.

The 6 ft., 209 lb. quarterback broke Dan Marino’s 27-year-old National Football League record for most passing yards in a season, finishing the season with 5,476 yards. Brees, 33, also completed a record 71.2 percent of his passes and threw for more than 300 yards in 13 of 16 regular-season games, the most in NFL history.

That performance, coupled with lingering goodwill for the role he played in helping the City of New Orleans claw its way back from Hurricane Katrina’s devastation, vaulted Brees to the No. 1 spot in this year’s Power 100, a ranking by CSE, an integrated sports and marketing firm in Atlanta, and Horrow Sports Ventures that uses data from Encino (Calif.)-based research company E-Poll Market Research.

CSE evaluated about 600 of the best-performing athletes from a pool of 3,000 based on statistics, the popularity and viewing audience of their sports, endorsement earnings, and their reach on social media. Nielsen/E-Poll N-Score data, based on surveys that evaluate such factors as players’ name and face awareness, appeal, influence, and trustworthiness, were also included to measure athletes’ endorsement potential. (Here’s more about the methodology.)

Football Dominates the Pack

The NFL dominated this year’s Top 100 list with 26 players, followed by the National Basketball Assn., with 20 players, and Major League Baseball, with 16.

In 2011, Brees led the Saints to a 13-3 regular-season record (later losing to the San Francisco 49ers in the playoffs), and his “record-breaking on-field performance, combined with universal recognition of his charitable and community work” pushed him to the top spot, says Rick Horrow, president of Horrow Sports Ventures. The Brees Dream Foundation, which he founded in 2003, has contributed over $7 million to cancer research and care and to rebuild schools, parks, playgrounds, and athletic fields in New Orleans, San Diego, and Purdue, Ind., according to the foundation’s website.

“He’s clearly an endorsement darling now,” says Horrow. The quarterback earned $16 million in salary and endorsements in 2011, according to data from CSE.

Brees first appeared in the 2010 Power 100 at 25th place. He led the Saints to their first-ever Super Bowl victory that year and has since soared in the ranking, to seventh place in 2011.

Absent: Lance Armstrong

Rounding out this year’s top five: Green Bay Packers quarterback Aaron Rodgers (who had $19 million in earnings, estimates CSE), New England Patriots quarterback Tom Brady ($28 million), Miami Heat basketball forward LeBron James ($61 million), and tennis champion Rafael Nadal ($21.7 million).

Newcomers to the list include Novak Djokovic (who had a near-perfect tennis season) at No. 9, rising golf star Rory McIlroy at No. 21, and the Los Angeles Dodgers’s Matt Kemp, who signed a contract extension worth $160 million over eight years, the largest in National League history, at No. 32.

As Brees rose to the top, last year’s most powerful athlete, Peyton Manning, fell to 51st place because of injuries. Golfer Phil Mickelson dropped from No. 4 to No. 18 after a disappointing season. Lance Armstrong, No. 8 last year, fell off the list entirely. The pro cyclist announced his retirement in February and came under scrutiny for alleged drug use; Armstrong denied doping allegations.

“The real key is measuring how these superstars perform,” says Horrow. In athletics, power means “earning power for athletes, owner, agents, communities, and corporate brands.” As this year’s list shows, an athlete’s value can change dramatically in one year.

(Click here to see the complete 2012 Power 100.)

25 Ways to Make LinkedIn Work for You


LinkedIn is a networker’s dream: an easy way to learn about, and reach out to, millions of businesspeople and thousands of employers. Yet many LinkedIn users don’t take advantage of the site’s features even though the vast majority are free.

Here are my top 25 recommendations for getting past “Well, I’ve got a login” and making the site really work for you, whether you’re job hunting, hiring, growing your entrepreneurial business, or just seeing and being seen in the online branding arena.

You’ll start by creating your LinkedIn profile and adding connections. Then you’ll use LinkedIn’s fancier features to do such things as reach out to friends of friends, join a Group or a LinkedIn Answers conversation, or enhance your profile with apps.

Our first 13 LinkedIn tips focus on your profile:

Name: Use your “business” name. My given name is Elizabeth but no one calls me that, so I use Liz in my profile and on my business card. Don’t add extraneous information in the Name field (like “5,000+ connections”) unless you want to brand the size of your Rolodex rather than yourself.

Headline: Your LinkedIn headline, just below your name, is a huge branding opportunity. When another user searches the LinkedIn user database, your name and headline are the only things they’ll see before deciding whether to click on your full profile. Make your headline count. “Marketing Manager” isn’t much of a branding statement, but “Marketer Specializing in Social/Content Marketing for Hospitals” separates you from the pack.

Photo: Don’t leave your LinkedIn profile photoless. Upload any decent-looking, digital head-and-shoulders photo. You don’t need business attire for this shot. Just use a photo that sends the message, “This is a business or professional person,” meaning (as you may have guessed) last year’s beach vacation shots might not be your best pick. (Then again, it all depends on your brand.)

URL: Make sure your LinkedIn profile bears your own stamp in the form of a personalized URL, like http://www.linkedin.com/in/lizryan. Once you’ve got that customized URL, you can use it on your résumé, in your e-mail signature, and on your business card.

Summary: Here’s where you can tell your story. “Results-oriented Finance professional” makes you sound like a robot or a zombie. “I started out in Accounting before morphing into a Sales Operations guy” gives us a feel for your path and your personality. Have fun with your LinkedIn summary—it’s the one free-form (and long!) field on LinkedIn where you can speak to the reader (the person viewing your profile) in a human voice.

Specialties: The Specialties section of your LinkedIn profile is another great field. You can use terms like “Supply Chain Management” and “Safety Training,” but you can also talk about your Irish wolfhounds and salsa dancing in this field. Prospective clients and employers want real, live, entangled, interesting people on their teams. Business is personal these days, and your outside-of-work interests (the ones you care to share, anyway) are part of your professional persona.

Add Sections: A powerful new LinkedIn feature is Add Sections, which lets you amplify your profile with additional information about past jobs, projects, organization memberships, and more. Click on the Add Sections link to preview the various enhancements you can make to your profile just by providing a bit more background.

Work History: It takes only a few seconds to upload your text résumé to LinkedIn, and it will save you time creating the Work History section of your profile. You can amplify this field with your proudest accomplishments or particular responsibilities you want readers to know about. It’s important to include the dates (and employer names) for each past assignment so LinkedIn can match you up with colleagues who have worked alongside you.

Additional Information: Your profile’s Additional Information field lets you round out the “Story of You” with the URL for your website and/or blog, your Twitter account, honors and awards you’ve won, and your interests (the books you read, the sports you play or follow, or anything else you want to share).

Personal Information: You can list as little or as much personal information as you want on your profile. It’s your choice.

Education: Including accurate dates in the Education section of your profile will make it easy for the LinkedIn database elves to match you up with classmates who may be on LinkedIn now, waiting for you to reach out and refresh the connection.

Contact: The “Contact [Person X] for:” section toward the bottom of your profile is another great field because it forces you to think about what you want from LinkedIn and from your networking in general. This is where you get to decide which types of contacts you want and don’t want. Which conversations are you willing to have, and which ones are a waste of your time?

Applications: You can attach Box.net files to your profile in order to showcase events you’ve produced, articles you’ve written, or photos you’ve taken, or to append a full-text résumé to your profile (for instance, if you’re a graphic designer and want to show off what you can do). I could write multiple articles about LinkedIn Applications, but for now I’ll just say check them out.


Your LinkedIn profile is in great shape. Now all you need is a network. Here are four tips for bringing your crew back into reach or converting 3D friends and contacts into LinkedIn connections.

Connections: Look for the green Add Connections bar on nearly every page of LinkedIn. Use this link to invite folks to join your first-degree network. In most cases you’ll need their e-mail addresses. If LinkedIn gives you the opportunity (some invitation channels do, and some inexplicably don’t), change the standard boilerplate invitation language to sound more like your own voice. Be wary of sending invitations to people who aren’t expecting them—you could lose your invitation privileges that way.

Colleagues: The Colleagues feature lets you quickly see which LinkedIn members have worked with you during your career. That’s incredibly handy because we can easily forget people, and we often don’t have current e-mail addresses for our long-ago workmates.

Address Book: If you have an address book on Gmail, Hotmail, Outlook, or another popular e-mail application, you can download your entire contact list into LinkedIn. Don’t panic—LinkedIn won’t send spam; it will just tell you which of these contacts are already using LinkedIn.

Classmates: Just as the Colleagues feature does, Classmates lets you reconnect with people from your past. Invite people to join your network via the Classmates channel with caution, because this is where LinkedIn invitation spam tends to congregate. A helpful reminder in the body of your invitation (“I remember how much fun it was traveling to Tel Aviv with you in 1993.”) can help refresh the memory of classmates you haven’t been in touch with for a while.


My last eight LinkedIn tips will get you using the site actively rather than sitting around waiting for people to reach out to you. Try one a day and build up your LinkedIn chops from “novice” to “cocky” status by next weekend.

People Search: Use the People Search link in the upper righthand corner of nearly every LinkedIn page. (I’ve had no luck whatsoever with the quick-search feature; I use Advanced People Search, however, several times a day.) You can search the LinkedIn database on every imaginable field, from a person’s name or industry to his or her virtual proximity to you. Searching LinkedIn is a free and easy way to build up your business-intelligence acumen and data warehouse. Try it!

Companies: LinkedIn’s Companies database is another treasure trove of useful information for job seekers, business developers, headhunters, and everyone else. When you find a company that interests you, click once to “Follow” that company and receive updates on its hires and other news.

Connections: When you’re ready to use LinkedIn as a networking tool, browse your first-degree connections’ connections to find someone you’d like to talk to. Make sure you appeal to the recipient and aren’t just asking a favor. You can make contact with the one-hop-away networker using the Get Introduced Through function.

Answers: LinkedIn Answers is a feature that lets you ask and answer questions among the massive LinkedIn user community. I use Answers about once a month to inquire about research studies or to get opinions on issues I’m thinking or writing about. And I respond to queries posted by others on topics ranging from HR policies to breast-feeding at work. Answering and posting your own LinkedIn questions adds to your understanding of business topics and increases your networking visibility and credibility.

Groups: LinkedIn Groups are magnificent idea-sharing and networking tools because they bring together subsets of the overall LinkedIn population, making it easy to converse and view one another’s profiles. Some Groups require approval from the moderator to join.

Jobs: LinkedIn includes job openings, but most of the time when I ask job seekers, “Where are you focusing your search?” they mention Monster, Craigslist, and jobs aggregators Simply Hired and Indeed. Those are all great sites, but let’s not overlook LinkedIn, which is unique because it links job openings to actual LinkedIn profiles. In an era when Black Hole recruiting abounds, it’s nice to be able to view a job listing AND the profile of the person who posted it.

Updates: Just like Twitter and Facebook, LinkedIn updates keep your network current on what’s new in your life and work. You can update your status on the LinkedIn site or with a multiple-updates application like Hellotxt (which will update your Twitter feed, Facebook status, and LinkedIn status all at once).

Endorsements: LinkedIn endorsements, also called Recommendations, are an essential piece of the online networking-and-branding puzzle, but we’ve saved them for last because they require a bit more thought and care. It’s possible to ask people to endorse you on LinkedIn, but I recommend endorsing others first and letting them return the favor for you (LinkedIn prompts them to endorse you once you’ve completed a Recommendation for them).

You must have a first-degree connection with someone in order to endorse them. Make sure your endorsements are pithy and specific. The presence of Recommendations on your LinkedIn profile improves your results in database searches … and LinkedIn endorsements have their own power, especially if they’re well-written.

To give you an idea of how robust LinkedIn’s features are, we’ve barely scratched the surface here. Try some of our 25 tips this week and grow your online networking mojo in the process.

2012 Honda CR-V

Editor’s Rating:

The redesigned Honda CR-V’s fuel efficiency, interior, and standard equipment are better than ever. Too bad it’s so underpowered

The Good: Improved mileage, looks, and interior; top safety rating; more standard equipment.
The Bad: Still only comes with a small, four-cylinder engine and five-speed automatic.
The Bottom Line: Honda loyalists will love the new CR-V; others should check out the new Ford Escape and Toyota RAV4 before buying.

Make: Honda
Model: CR-V
Model Year: 2012
Body Type: Four-door, five-passenger
Price Class: Mid-Range
Product Name: Honda CR-V

Up Front

You have to wonder how long Honda (HMC) can keep riding on its laurels. Each time the company redesigns one of its top-selling models, you have the feeling that designers were on the defensive, making as few changes as they could get away with just to avoid falling behind faster-moving rivals. That’s what Honda did with the new Civic, earning lukewarm reviews and prompting Consumer Reports to drop the model from its Recommended list. Now there are reports that Honda will refresh the Civic again for 2013 to address some of the criticisms. (The company has no comment.)

I have the same feeling about Honda’s redesign of its popular CR-V compact SUV as I did about the new Civic: It isn’t quite bold enough. Honda loyalists will love the new model. But the 2012 CR-V, which is due out Dec. 15, comes up short in some respects, especially if you don’t exactly fit the middle-of-the-road buyer profile Honda is aiming at. My advice is to wait and check out the redesigned 2012 Toyota Toyota (TM) RAV4 (due out Dec. 20) and the upcoming 2013 Ford (F) Escape (due out next spring) before buying a CR-V. The Escape has already overtaken the CR-V as the top-selling SUV in America this year, and the new Escape promises to be much better than the current one.

To be sure, the new CR-V is an improvement over the old one, too. It’s better-looking, quieter, and has a nicer interior, slightly more luggage space, more standard equipment, and a better all-wheel-drive system than the previous model’s. Fuel economy is up, too. With front-wheel drive, the 2012 CR-V is rated at 23 miles per gallon in the city, 31 on the highway, and 26 on average (2 mpg more than the outgoing CR-V). With all-wheel drive, it’s rated at 22/30/25 (also up 2 mpg).

However, the new CR-V shares some of the weaknesses of the previous model. Notably, it only comes with one engine, a 2.4-liter, 185-horsepower four-cylinder engine. That’s an increase of a mere 5 hp, and the engine still provides barely adequate oomph.

The RAV4 is available with a V6 that makes it as quick as some sport coupes. The 2013 Escape will be offered with three engine choices, a basic 2.5-liter four-banger and two turbocharged four-cylinder versions of the company’s marvelous EcoBoost engine, one a 1.6-liter and the other a 2.0-liter. With the latter EcoBoost engine, the new Escape also promises to be much quicker than the Honda.

With the smaller EcoBoost engine, Ford says, the new Escape will beat the fuel economy of competitors, including the CR-V. Indeed, that version of the Escape is expected to be so efficient that it’s replacing the Escape Hybrid for 2013. A version of General Motors’ (GM) Chevy Equinox already matches the CR-V, getting 32 mpg on the highway and 26 mpg on average.

One reason the CR-V isn’t the clear fuel economy leader, I suspect, is that Honda skimped on technology. The company decided to stick with a five-speed automatic as the only choice of transmission, while Chevy, Ford, Hyundai and Kia have all moved to more efficient six-speed automatics (the Escape, Hyundai Tucson, and Kia Sorento also are available with a stick shift). Honda also didn’t go with more efficient direct fuel injection in the new CR-V’s engine, as Ford has done in its EcoBoost engines.

Pricing hasn’t been announced yet but Honda says the new CR-V will continue to sell in the same $21,000-to-$30,000 range as the previous model, which means it will probably continue to be slightly more expensive than its competitors. (Keeping the price under 30 grand is one reason you can get a new CR-V with a rear-seat entertainment system or a navigation system—but not with both.)

Safety remains a strong selling point: Honda expects the new CR-V to earn top five-star government safety ratings and to be a Top Safety Pick of the Insurance Institute for Highway Safety. Standard gear includes stability control, braking assist, and front-side and head-protecting side curtain air bags.

The CR-V has continued to sell well, despite weather-related disruptions in Asia. U.S. sales of the CR-V were up 11.1 percent, to 180,361, in the first 10 months of this year compared with the same period last year. However, the Ford Escape’s sales soared 31.4 percent, to 206,896, during the first 10 months of this year. Other rivals also are gaining ground on the CR-V: Chevy Equinox sales were up 43.2 percent, to 160,143, and Kia Sorento sales jumped 22.7 percent, to 109,903, through October.

Toyota has been the big loser: RAV4 sales fell 24.3 percent, to 106,800, during the first 10 months of this year. But the new CR-V could suffer, too, if consumers don’t cotton to the redesign and the RAV4 makes a comeback.

Behind the Wheel

The CR-V has never been much fun to drive. When you punch the gas to, say, accelerate onto a freeway, the engine really strains and fuel economy plunges. Of course, the same is true of rival models powered by the base engine, but you also sometimes have the choice of a more powerful engine if you want one.

In the test drives I did at a Honda press event, I wasn’t able to time the 2012 model, but I’d guess it accelerates from zero to 60 about as slowly as the outgoing CR-V—in about 10 seconds. With six-cylinder power, the current RAV4 jumps from zero to 60 in about 6.5 seconds. The 2013 Ford Escape may offer similar quickness when powered by the 2.0-liter EcoBoost engine.

The CR-V’s new motion-adaptive power steering system doesn’t provide much feedback to the driver, but it’s great for maneuvering in tight spaces. Honda also has upgraded the CR-V’s all-wheel drive to an electronically controlled system designed to respond instantly to even slight wheel slippage. The suspension has been softened and made more car-like, too.

A feature I really like is Eco Assist. You push a button on the dash and the vehicle goes into a fuel-saving mode that doesn’t seem to affect acceleration much. Numerous readouts help the driver conserve gas. Among other things, a ring around the right side of the speedometer glows green when you’re driving efficiently. I found I could easily achieve the CR-V’s rated mileage.

The CR-V’s cabin feels more upscale than before. The center stack is nicer-looking, and attractive leather upholstery continues to be offered on the high-end trim levels. However, there’s still too much hard plastic on the dash and doors, and there are too many seams in the dash, as if it were cobbled together from pieces. The dash in the new Ford Focus, for one, is less busy-looking and more attractive.

Bluetooth connectivity is standard on the new CR-V, as are both a Pandora Internet radio interface and SMS text-messaging. A backup camera and hands-free phone capability also now come standard.

Luggage space behind the CR-V’s rear seats is up 1.5 cu. ft., to a voluminous 37.2 cu. ft., expanding to 70.9 cu. ft. with the rear seats folded down. One of the CR-V’s handiest new features allows the rear seats to fold down nearly (but not quite) flat in a 60/40 pattern at the flick of a lever. There had been some speculation in the automotive press that Honda would offer a third-row seat in the CR-V, to match the one offered in the RAV4, but that didn’t happen.

Buy It or Bag It?

The CR-V remains an excellent vehicle. Honda loyalists who simply go out and buy one will be happy with their decision. However, the Kia Sorento is cheaper, and the new Escape and RAV4 offer options the Honda doesn’t. In short, like the Civic, the CR-V is no longer the clear top choice in its segment.

Click here to see more of the 2012 Honda CR-V.

Engine woes again force A400M out of air demo: sources

Wed Jul 4, 2012 2:54pm EDT

PARIS (Reuters) – Airbus (EAD.PA) is pulling Europe’s A400M airlifter out of flying displays at next week’s Farnborough Airshow due to continued engine problems, forcing it to sit out popular annual stunts for the second year running, industry sources said.

The move repeats a decision at last year’s equivalent event outside Paris, but is not expected to disrupt plans to deliver it to its first customer, France, around the end of the year.

The A400M cost 20 billion euros to develop and is designed to add airlift capacity for seven European NATO nations — Britain, Belgium, France, Germany, Luxembourg, Spain and Turkey.

It has suffered a series of teething problems that led to a four-year delay and billions of euros in cost overruns, mainly due to engine software delays and glitches with other systems.

A gearbox failure forced Airbus to scratch the A400M from the flying display list on the eve of last year’s Paris show.

Continued problems mean it will again be withdrawn from the prestigious flight displays at next week’s Farnborough Airshow in the UK, but it will be flown in and parked on display for visitors from potential importing countries and other delegates.

“Based on engine issues it has been decided not to participate in the flight display but the aircraft will be on static display,” an industry source told Reuters.

The A400M has not been grounded and has been seen at several events in the past year. But the gearbox problems have led to restrictions that would rule out the kind of stunts popular at Farnborough, such as the A400M’s trademark steep, slanting turn.

Airbus last week announced the A400M and A380 — respectively Europe’s largest defense and commercial aviation projects — would be on the Farnborough flying display, which unusually this year also features a 787 jetliner from Boeing.

Airbus had no immediate comment on any change in its air show plans but stressed its delivery plans were on schedule.

“The engine maturity is still not where we want it to be, but the schedule is not affected and we expect the first delivery at the turn of the year,” an Airbus spokesperson said.

Maturity refers to the speed at which problems common in aircraft developments are ironed out in flight testing.

Eyes in the aircraft industry will be on the loss-making aircraft’s status as it awaits full certification around mid-year, a step that must be completed before it can be delivered and bring in further payments for Airbus parent EADS (EAD.PA).

“The problem with the gearbox on the A400M is not completely resolved,” said a source with direct knowledge of the project, adding, “It’s pulling too hard”.

The A400M is powered by the West’s largest turboprop engines and designed to perform multiple roles in remote or rugged locations, fitting between the smaller Lockheed (LMT.N) C-130 turboprop and larger jet-powered Boeing (BA.N) C-17.

Air chiefs from nations that launched the A400M are due to adopt the airplane – nicknamed “Grizzly” by its pilots – by renaming it “Atlas” at a ceremony at a military show on Friday.

(Reporting by Cyril Altmeyer, Tim Hepher; Editing by Christian Plumb)

Exclusive: Mexico’s Slim not eyeing more Europe buys for now

Wed Jul 4, 2012 1:12am EDT

MEXICO CITY (Reuters) – Mexican tycoon Carlos Slim said on Tuesday he has no immediate plans for further telecommunications purchases in Europe after buying into Dutch firm KPN and Telekom Austria.

Asked if he was looking to expand further in Europe after the two recent deals, Slim told Reuters: “No, no. We’re not looking for nothing now. We are going to consolidate what we’ve got.”

Slim’s America Movil, which is present in roughly a dozen Latin American countries, is establishing a beachhead in Europe where a combination of tough competition, regulatory pressure and recession in many markets has beaten down some company valuations to near decade lows.

Unlike his expansion in Latin America, where the 72-year-old entrepreneur has purchased much bigger stakes or whole companies, he has taken a more cautious approach in Europe.

Slim recently increased his stake in KPN to 27.7 percent and boosted his stake in Austria Telekom to 23 percent, his biggest foray yet into the European market.

His arrival in Europe touched off a period of turbulence in the telecoms sector, with industry executives and analysts questioning if it would lead to a long-awaited consolidation in some markets like Germany or Spain.


With an empire stretching from banking to hotels to mining, the world’s richest man said he remained open to opportunities.

“We’re always open in the world for everything… Well not everything,” he said in English at an Independence Day party at the U.S. ambassador’s residence in Mexico City, laughing as party guests snapped pictures of him with their phones.

“Careful, you’ll fall in the water,” he warned one picture taker who was backing away to get a wider angle and nearly fell into the ambassador’s swimming pool.

Austria’s competition watchdog said on Monday it was examining America Movil’s bid to buy up to 25.9 percent of Telekom Austria and will give its decision in four weeks’ time.

Slim is spending over $1 billion on the stake in the Austrian telecoms firm, most of which he is buying from investor Ronny Pecik and his partner, Egyptian telecom tycoon Naguib Sawiris.

(Reporting By Simon Gardner and Krista Hughes; Editing by Ryan Woo)

No let up in gloom for Europe’s big economies

Wed Jul 4, 2012 9:57am EDT

LONDON (Reuters) – All of Europe’s biggest economies are in recession or heading there and there is little sign things will improve soon, surveys showed on Wednesday, backing a growing view the region’s major central banks are poised to ease policy this week.

Business surveys covering thousands of companies suggested the euro zone economy contracted again between March and June, and that Britain’s mild recession extended into a third straight quarter.

The latest batch of purchasing managers’ indexes did nothing to alter expectations the European Central Bank will cut interest rates to a new record low on Thursday, or that the Bank of England will turn its printing presses on again to buy bonds.

“The PMIs are bottoming out at a level consistent with further contraction of activity in the second quarter,” said James Nixon, chief European economist at Societe Generale, of the euro zone PMIs.

Markit’s Eurozone Composite PMI was revised up in June to 46.4 from a preliminary reading of 46.0 that matched the May figure, but the index has undercut the 50 mark that divides growth from contraction for nine of the last 10 months.

“We are looking for GDP to decline by 0.3 percent in the euro area in Q2 and these numbers are perfectly consistent with that,” Nixon said.

PMI compiler Markit said the surveys were consistent with a 0.6 percent contraction for the euro zone economy in the second quarter, and 0.1 percent for Britain.

Worryingly, there were clear signs that Germany, Europe’s biggest economic engine, is also entering a modest downturn. Its services sector unexpectedly stagnated in June, as its PMI reading fell to its lowest since September last year.

“Germany looks to have fallen into a renewed decline, though only a very modest drop in output is signalled. The pace of downturns in other major euro member states is far more worrying,” said Chris Williamson, chief economist at PMI provider Markit.

He said output in Italy probably declined 1 percent in the second quarter, with steep downturns also on the cards in Spain and France.

Perhaps the only bright spot in the PMIs was a sharp drop in price pressures among companies in the euro zone, suggesting inflation will decline in coming months.

A sharp fall in oil prices held inflation steady at a 16-month low of 2.4 percent in June, cited by many economists as a major reason why the ECB may cut interest rates this week by 25 basis points to a record low 0.75 percent.

News euro zone retail sales rose 0.6 percent in May after falling 1.4 percent in April failed to overcome the gloomy mood in markets, as European shares retreated from two-month highs on Wednesday after three days of gains. MKTS/GLOB

U.S. data, due on Thursday on account of the Independence Day national holiday, is also expected to show growth of activity among American services firms slowed in June.


The PMIs showed little sign of relief for workers – euro zone firms cut jobs for the sixth straight month in June, suggesting the currency union’s record unemployment rate of 11.1 percent in May has further to climb.

“Job losses are mounting as a result of falling demand, as companies seek to reduce costs and prepare for the possibility that worse is to come,” added Williamson.

While the euro zone’s services PMI also edged up slightly to 47.1 in June from 46.7 in the previous month, it was still anchored below the 50 mark for a fifth straight month.

Britain’s dominant service sector, which accounts for the vast majority of its private economy, grew at a much weaker pace than expected last month, as the PMI fell to 51.3 from May’s 53.3 compared with an expected 52.8.

The latest round of gloomy data will solidify expectations the Bank of England will start another round of quantitative easing (QE) asset purchases when it meets on Thursday.

“The sharp deterioration in June’s UK CIPS services survey seals the deal for more QE tomorrow,” said Vicky Redwood, chief UK economist at Capital Economics.

“If we are right in thinking that the surveys have underestimated the impact of June’s extra bank holiday, the economy is actually probably still in recession.”

Faced with a struggling economy, the BoE is expected to flood markets with another 50 billion pounds of cash this week, on top of the 325 billion pounds it has already pumped in, according to a Reuters poll taken last week. BOE/INT

News from Asian PMIs on Wednesday was fairly mediocre too. China’s developing service sector grew at its slowest pace in 10 months in June, hit by new order growth pushing the PMI down by over two points to 52.3 from 54.7 in May.

(Editing by Jeremy Gaunt.)

Shares, euro dragged lower by grim economic data

Wed Jul 4, 2012 12:20pm EDT

LONDON (Reuters) – World shares, the euro and oil prices fell on Wednesday as evidence grew of the headwinds facing the global economy, though hopes of policy easing by major central banks limited the falls.

Strong demand for safe-haven German debt at a bond auction also signaled that investors remain worried about the implementation of recently agreed measures to help ease the euro zone’s debt crisis, with Spanish and Italian bond yields higher.

However, activity was very subdued with U.S. markets closed for the Independence Day holiday and before policy decisions from the European Central Bank and Bank of England on Thursday.

In the quiet market Germany still found it easy to sell 3.3 billion euros ($4.2 billion) of 5-year government bonds, receiving bids for 2.7 times the amount on offer at an average yield of just 0.52 percent.

“What we are seeing is that … this demand for safety remains intact,” said Michael Leister, rate strategist at DZ Bank.

After the auction 10-year Spanish bond yields rose 14 basis points to 6.4 percent, and the Italian equivalent rose 12.5 basis points to 5.77 percent.

The euro steadied against the dollar to trade around $1.2525, under pressure from widespread expectations that the ECB is about to cut interest rates.

The single currency fell to an 11-1/2 year low against the higher-yielding Swedish crown when Sweden’s central bank kept its main interest rates unchanged.


European share markets ended three days of gains, with the FTSEurofirst 300 index .FTEU3 of top European shares finishing down 0.2 percent at 1,044.29 points, retreating from a two-month high set on Tuesday.

MSCI’s world equity index .MIWD00000PUS also snapped a three-day rally, dipping 0.1 percent to 316.03 points.

Equity markets began their latest rally on Friday, having fallen sharply for much of June, after European Union leaders agreed on new measures to support the region’s banks and address funding problems facing Spain.

Investors have also been encouraged back into riskier asset markets by the belief that the ECB will cut rates on Thursday and that it may also inject fresh funds to help boost the region’s struggling economy.

A Reuters poll of economists showed a majority of economists expect the ECB to cut its main rate by 25 basis points to 0.75 percent on Thursday, while money market traders are evenly split on whether the central bank will cut the deposit rate, a separate survey showed.

“Investors will also want to see if the ECB President (Mario Draghi) will highlight downside risks to growth and inflation, which will set the ground for more easing,” said Paul Robson, currency strategist at RBS.

The Bank of England is expected to launch a third round of monetary stimulus at its meeting.


Data releases from across the globe continue to add weight to the view that the world economy is slowing down.

An survey of private Chinese service sector firms showed their activity growing at the slowest rate in 10 months in June as new orders growth cooled, although the services Purchasing Managers Index has shown 43 months of expansion.

Another survey revealed that Germany’s services sector unexpectedly stagnated in June, ending an eight-month period of expansion as new orders dropped.

A composite Purchasing Managers’ Index (PMI) for the whole euro area, which surveyed thousands of companies, was revised up in June, but has been below the 50 mark that separates growth from contraction for nine of the last 10 months.

“The PMIs are bottoming out at a level consistent with further contraction of (economic) activity in the second quarter,” said James Nixon, chief European economist at Societe Generale, of the euro zone PMIs.


The prospect of further central bank monetary easing has supported the prices of gold and other commodities this week, but the increasingly grim news about the health of the world economy has sparked a retreat.

“We believe that the euro zone crisis, the U.S. fiscal cliff, and the possibility of a hard landing in China will give the markets plenty to worry about and will keep risk appetite low and constrained,” Societe Generale said.

The bank has lowered its price outlook for Brent crude by $5 a barrel to $100.

Brent crude, which had also been gaining on rising tension over Iran’s nuclear program, was $1.10 lower at $99.58 per barrel after jumping more than 3 percent on Tuesday.

Brent crude was trading as low as $88.49 on June 22.

Spot gold was little changed, holding near a two-week high of $1,624.70 an ounce at $1,616.05, having risen more than 4 percent since last Friday.

The gold market is likely to remain steady before the release of U.S. monthly employment data on Friday, which may encourage talk the Federal Reserve will join with its European counterparts in taking additional policy easing measures.

The U.S. monthly jobs report is expected to show 90,000 workers were added to non-farm payrolls in June and the unemployment rate held at 8.2 percent. ECONUS

(Additional reporting by Anirban Nag; Editing by David Stamp)

Diamond admits traders’ behavior "reprehensible"

Wed Jul 4, 2012 2:06pm EDT

LONDON (Reuters) – The chastened former head of Barclays apologized for the “reprehensible” behavior of his traders who fixed interest rates, but told British lawmakers on Wednesday his bank had been unfairly singled out after coming forward to admit wrongdoing.

Bob Diamond, 60, quit this week after Barclays agreed to pay nearly half a billion dollars in fines for manipulating the interest rates at the heart of the global financial system.

British politicians have seized on the case as a symbol of a culture of greed that has poisoned the entire financial industry. Newspapers have highlighted e-mails disclosed in the case which show traders congratulating each other for fiddling figures with promises of bottles of champagne.

Appearing thoughtful and humble before an often hostile parliamentary committee, the man who until Tuesday was one of the world’s highest paid and most powerful financial executives with an aggressive reputation acknowledged “inexcusable” behavior among his group’s traders.

“When I read the e-mails from those traders, I got physically ill,” Diamond said. “That behavior was reprehensible, it was wrong. I am sorry, I am disappointed and I am also angry.”

He said those involved in rigging interest rates would be subject to criminal investigation and should be “dealt with harshly”.

The wrongdoing at the 300-year-old bank was “not representative of the firm that I love so much”, the American banker said, appearing on his nation’s Independence Day. But he insisted that Barclays was being made a scapegoat because it had cooperated with the authorities to help unearth the misdeeds.

“This week the focus has been on Barclays because they were the first,” Diamond said, describing years of cooperation with regulatory agencies to uncover the practice.

“I think it’s a sign of the culture of Barclays that we were willing to be first, we were willing to be fast and we were willing to come out with this.”

The decision by Britain’s third-biggest bank to cooperate with regulators may have been designed to limit damage but it appeared to have backfired, hurting Barclays’ reputation and costing Diamond his job, banking analysts said.

The case has reopened a debate in Britain on whether big banks should be split into retail and investments units, while also raising questions about the morality of bankers’ salaries and bonuses and whether banks should be more closely regulated.


Diamond testified for nearly three hours, during which time the Barclays share price was volatile before closing at 164.6 pence, almost exactly where it was when he started speaking.

In the committee room, he was accompanied by half a dozen Barclays staff but ignored them, not seeking any guidance.

He sipped water continuously from a plastic cup, especially when questions became more uncomfortable, downing so much he had to be given a new bottle.

The committee remained stoney-faced throughout, with their skepticism, frustration and open disdain at his answers becoming more and more apparent.

A composed Diamond also pointedly referred to each committee member by their first name, even in the face of hostile questioning with one MP calling Barclays a “rotten, thieving bank” and saying Diamond was either complicit in wrongdoing or “grossly incompetent”.

“My general impression was that it was not the kind of gun fight at the O.K. Corral that we had anticipated before the event,” said Richard Reid of the International Centre for Financial Regulation, a think tank. “No real smoking gun was found.”

Of his own decision to step down, a day after saying he wouldn’t, Diamond said he had realized that he had become a lightning rod for criticism. “The focus of intensity was my leadership. It was better for me to step down.”

Barclays has acknowledged that its traders colluded with others to manipulate the London Interbank Offered Rate, or Libor, the rate that big banks say they borrow from each other which underpins trillions of dollars in global contracts.

In addition to the manipulation by traders, which took place from 2005-2009, Barclays also has admitted it deliberately understated its submissions of Libor rates at the height of the 2008 financial crisis to make its balance sheet look stronger.

Lawmakers questioned Diamond over a 2008 memo, in which he appeared to suggest that the Bank of England or the government might be giving the firm the nod to report that it was able to borrow money at lower rates to make it look better.

At the time, Barclays was reporting Libor funding costs that were among the highest of the large banks, even though others were in much worse shape.

Diamond wrote in the memo that the Deputy Governor of the Bank of England, Paul Tucker, told him “it did not always need to be the case that we appeared as high as we have recently”.

Barclays has said that another senior executive – Chief Operating Officer Jerry del Missier, who also resigned on Tuesday – understood the memo as a green light to submit lower rates. Del Missier was not immediately available for comment.


Diamond said he interpreted Tucker’s call as a “heads up” that politicians were worried about the rates Barclays was reporting, but not as a green light to fiddle them.

Diamond feared at the time that if the British government believed Barclays’ costs were higher than those of other banks, it might have nationalized it, as it did with several competitors, he said.

“They might say to themselves, ‘My goodness, they can’t fund. We need to nationalize them.'”

The Bank of England said Tucker intended to present his own explanation of the phone call to lawmakers at a later hearing.

Britain’s finance minister, George Osborne, said the government of the previous prime minister, Gordon Brown, had some questions to answer.

“They were clearly involved and we just haven’t heard the full facts, I don’t think, of who knew what when,” Osborne said in an interview with the Spectator, a right-leaning political weekly.

Shareholders, meanwhile, also want answers.

“What was the nature of the manipulation? Who was involved, how long were they involved for? Was it escalated? If it was escalated, who was it escalated to?” asked Dominic Rossi at Fidelity Worldwide Investment, a top 10 Barclays investor.

“What did the people who it was escalated to actually do? Who did they inform? Did they inform the regulator? Did they inform the Bank of England? If they did, who within the Bank of England? Who within the FSA (regulator)? These are all the questions that we need to establish.”

The bank said in documents released ahead of Diamond’s appearance that it was “ironic” that there had been such an intense focus on it alone, as it had been lauded by regulators for its “exceptional level of cooperation” over the Libor probe.

But some investors accuse the bank of missing the “big picture”.

“The board should now proactively break the bank up into its constituent parts after putting in place a coherent bonus and remuneration clawback of all misdemeanors of the last decade, from Libor to mis-selling of mortgage protection and interest rates swaps,” said Neil Dwane, CIO Europe, Allianz Global Investors, which owns 13.4 million Barclays shares via its RCM unit.

“Break it up because it trades at half book value.”

Libor is compiled by Thomson Reuters on behalf of the British Bankers’ Association from estimates supplied by the world’s biggest banks of the amount they believe other banks will charge them for loans.

(Additional reporting by Steve Slater, Sinead Cruise, Raji Menon, Kirstin Ridley, Chris Vellacott and Tim Castle; Writing by Peter Graff; Editing by Will Waterman and Giles Elgood)