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European Shares Recover As Investors Asses Short-Selling Ban

by AP on August 12, 2011

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BRUSSELS — Bank stocks jumped after several eurozone countries banned short selling, helping European markets push higher Friday ahead of an expected further rise on Wall Street. The advance in Europe follows big gains in the United States on Thursday, which helped support most stocks in Asia. However, wild swings over recent days, with shares often changing direction every few hours, highlight how volatile trading is at the moment amid concerns over the global economy and the levels of debt in both the U.S. and Europe. In Europe, London’s FTSE 100 rose 1.4 percent to 5,234 points, while Germany’s DAX was 2.3 percent higher at 5,933. The CAC-40 in France gained 2.3 percent to 3,154, even after data showed the French economy did not grow in the second quarter. Wall Street also was poised for a higher open after Thursday’s big gains. Dow futures were up 0.6 percent at 11,147m while futures for the broader Standard & Poor’s 500 index rose 0.7 percent to 1,176. The gains in Europe came after regulators in France, Italy, Spain and Belgium imposed temporary bans on short-selling of financial shares late Thursday, following sharp selloffs and temporary gains in French bank shares in particular that were blamed on false rumors. The share prices of French banks, which fluctuated sharply in recent days, appeared to stabilize Friday, with Societe General up 3 percent and Credit Agricole up 1.3 percent. Belgium’s Dexia was doing particularly well, trading 14 percent higher. However, analysts question whether the short-selling ban would be successful in the long run, since many experts claim that a similar move in 2008 actually contributed to investor uncertainty. Short selling is a way for an investors to bet a stock will go down. It is done by selling borrowed shares in hopes of buying them back at a lower price and pocketing the difference. The practice has not been banned in Britain or Germany. “With deteriorating investor confidence in eurozone debt likely to continue driving reduced investor confidence in European banks’ ability to withstand the fallout from the euro-zone debt crisis, we doubt that downward pressure on European financials will now dissipate,” said Lee Hardman, an analyst at Bank of Tokyo-Mitsubishi UFJ. The gains in Europe came despite figures showing France’s economy unexpectedly ground to a halt in the second quarter on the back of a sudden reversal in consumer spending and stagnation by the country’s exporters. The halt in the French economy is set to exacerbate concerns over the eurozone in general, where the three bailout countries of Greece, Ireland and Portugal are in recession and Italy and Spain are struggling with lackluster growth. Data also showed that Greece’s economy shrank 6.9 percent in the second quarter from the year before. France is already facing speculation that it may soon lose its AAA rating due to its high debt load. “With the economy stagnating and elections coming up next spring, it will be extremely difficult to implement the aggressive austerity measures that are needed to convince markets that the government finances are on a stable footing,” said Jennifer McKeown, senior European economist at Capital Economics. The euro also was seemingly unaffected by the French and Greek data, trading 0.3 percent higher at $1.425. Earlier in Asia, the session was far less volatile than of late. Hong Kong’s Hang Seng added 0.1 percent to 19,620.01. Australia’s S&P/ASX 200 gained 0.8 percent to 4,237.90, while benchmarks in New Zealand and Singapore also rose. But Japan’s Nikkei 225 stock average was lower – closing down 0.2 percent to 8,963.72 after spending the morning in positive territory. A stronger yen, which reduces the value of profits earned overseas, pummeled export shares. The dollar is trading around the 76.50 yen mark, which is not far off the levels that prompted the Bank of Japan to intervene directly in the markets to stem the export-sapping appreciation of the yen. Mainland Chinese shares, however, traded higher for a fourth day, with the absence of bad news helping boost sentiment, traders said. The Shanghai Composite Index gained 0.5 percent to 2,593.17 while the Shenzhen Composite Index gained 1 percent to 1,158.96. In the oil markets, prices fell as traders booked some profits garnered over the previous session, when crude rose 3.4 percent. Benchmark oil for September delivery was down 16 cents at $85.56 a barrel in electronic trading on the New York Mercantile Exchange. _____ Pamela Sampson in Bangkok contributed to this story.

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CRU 16th World Aluminium Conference To Be Held On 13-15 June In Barcelona, Spain

by on May 24, 2011

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CRU 16th World Aluminium Conference To Be Held On 13-15 June In Barcelona, Spain

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CRU 16th World Aluminium Conference To Be Held On 13-15 June In Barcelona, Spain

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Micromet’s Search-and-Destroy Cancer Missiles Lure Boehringer, Sanofi

June 14, 2010

By Ellen Gibson June 14 (Bloomberg) — Micromet Inc. , a 17-year-old biotechnology company with no medicines on the market, is attracting attention from product-hungry drugmakers. The lure: a technology for fighting cancer without using toxic chemicals. What Micromet has developed is a way to activate T-cells , the elite troops of the immune system, to attack malignancies, including a rare leukemia that strikes children. It has signed partnerships with five of Europe’s largest drug companies: Bayer AG , Sanofi-Aventis SA , AstraZeneca Plc , Merck KGaA and Boehringer Ingelheim GmbH . For years, companies like Micromet have struggled to perfect so-called immunotherapies that mobilize the body’s natural defenses against cancer. At the European Hematology Association ’s meeting in Barcelona on Saturday, Micromet announced that its leukemia treatment led to remission in almost four-fifths of patients in a trial. “With Micromet’s technology, you can give any T-cell the ability to recognize and kill the tumor,” said Michael Morse, an associate professor of medicine and tumor immunology specialist at Duke University School of Medicine in Durham, North Carolina. Although the technology is not fully tested, “there’s every reason to believe that this could work.” The company’s most-advanced drug, blinatumomab, is derived from a common immune-system protein called an antibody that its scientists refashioned to carry out an unnatural task. One end of the protein attracts T cells; the other is engineered to latch onto specific types of cancer cells. Replenishing Armies When batches of these proteins, called BiTEs, for bispecific T-cell engager, are released into the bloodstream, they not only summon the immune cells to attack the cancer, they also stimulate the body to produce more of the cells, thus replenishing its armies. “We’re leveraging the most potent arm of the patient’s immune system and directing it onto the tumor,” said Micromet chief executive officer Christian Itin in an interview. Immunotherapies got a boost on April 29 when the U.S. Food and Drug Administration approved Dendreon Corp. ’s first-of-its- kind cancer vaccine for prostate tumors. The day of its approval, Dendreon’s stock soared as much as 38 percent, and the Nasdaq Biotech Index had its biggest one-day rise in six months. It was a “landmark approval” that gave “positive momentum to the whole biotech space,” said Joseph Pantginis , an analyst at Roth Capital Partners LLC in Newport Beach, CA. Changing Mindset Like Micromet’s drug, Provenge primes the patient’s natural immune system. To make the vaccine, doctors extract white blood cells from a prostate-cancer patient, mix them with vaccine components and inject the combination back into the bloodstream. Provenge “opens a door and changes people’s mindset” about the immunotherapy approach, said Jeffrey Crawford , chief of medical oncology at Duke. The disease blinatumomab is designed to treat, acute lymphocytic leukemia or ALL, isn’t common, but it is a high priority for some doctors. One reason is that two-thirds of the 5,400 new cases in the U.S. each year are children, many of whom only survive with painful chemotherapy that continues for years. In adults the disease is harder to treat than in children; only 30 percent to 40 percent are cured with conventional chemotherapy. At the Barcelona hematology meeting, Micromet showed that blinatumomab can induce complete remission in patients who still had residual leukemia cells after multiple rounds of chemotherapy. About 80 percent of patients who stayed in the study were relapse-free at a median follow-up of 11 months. Killing Leukemia “With older patients, it’s very difficult to rout out the last bit of leukemia,” said Peter Marks , director of leukemia services at Yale-New Haven Hospital. Immunologic methods such as Micromet’s “can be very powerful,” he said. “A treatment that could specifically kill leukemia without causing toxicity would certainly be in demand,” he said. Micromet will begin the last phase of testing required for European approval of blinatumomab this June. Edward Tenthoff , an analyst with Piper Jaffray & Co. in New York, said it could be cleared for use in the U.S. by 2012, and within five years could see $1 billion in annual sales. “There have been no improvements in ALL treatment in three decades,” said Mark Reisenauer , Micromet’s chief commercial officer. “The only comparably underserved disease is melanoma.” Riddled With Cancer Libby Johns is the kind of patient who inspires cancer researchers to try harder. She was diagnosed with ALL in June 2009, a month after her second birthday. When her parents noticed bruising all over her legs, they brought her to the hospital, where doctors found that 90 percent of her bone marrow was riddled with cancer cells. Now three years old, Libby has had blood transfusions and continuous chemotherapy at the Hospital for Sick Children in Toronto, said her mother, Megan. The girl takes pills every day, has intravenous treatments once a month, and shots in the spine once every three months. This cycle, known as the “ maintenance ” phase of treatment, lasts 20 months. Libby must continue the regimen until August of next year. In the course of treatment, Libby’s hair has fallen out three times, and Megan says it’s a struggle to keep the girl’s weight up. Fevers and low blood sugar have put her in and out of the hospital, and when she’s home, the drugs can leave her lethargic. “Some days she doesn’t have the energy to do much,” her mother said. “We just stay home, watch movies, have picnics in the house. I try to let her lead as normal a life as possible.” Few Options While Libby is responding well to treatment, few options are available to children who are not cured with chemotherapy. For adults, who have a high relapse rate, an ineffective procedure called stem cell transplant is the only other line of defense, according to Yale’s Marks. Proven drugs are “very much needed,” he said. Each of Micromet’s partnerships with large drugmakers is aimed at a different, hard-to-treat cancer. The collaboration with Boehringer, announced May 5, will take aim at multiple myeloma , a deadly disease that starts in the bone marrow and often fails to respond to chemotherapy. Pantginis said drugmakers’ interest in the startup goes beyond a desire to license the small company’s drugs. They’re eyeing Micromet’s platform as a way to boost the effectiveness of cancer drugs they already sell, and also to extend the patent protection on those products, he said. If the companies can retool their older drugs using BiTE technology, they can stave off competition from generics in the future. Lab-Grown Proteins The concept of immunotherapy took a long time to bear fruit. In the early 1970s scientists started developing lab- grown proteins called monoclonal antibodies , designed either to block tumor growth or make tumors visible to other immune-system cells. They do this by homing in on specific molecules or “targets” on the surface of cancer cells. The first commercial success came in 1997, when Genentech Inc. and Biogen Idec Inc. launched Rituxan, a drug for non- Hodgkin’s lymphoma. This was followed by best-selling drugs led by Roche Holding AG ’s colon cancer drug Avastin, with almost $6 billion in global sales last year. While these drugs are a big business for companies, most have shortcomings as medicines, said Steven Rosenberg , chief of surgery at the National Cancer Institute in Bethesda, Maryland. “We need to do better than prolonging survival by months,” Rosenberg said. Most of these drugs target just one of multiple drivers of tumor growth. In just a matter of months, tumors in many patients grow resistant to the drugs. Second Generation Scientists at Micromet and other biotech companies said that second-generation antibodies of the sort they are testing will be more effective. Companies like Bothell, Washington-based Seattle Genetics Inc. and Waltham, Massachusetts-based Immunogen Inc. employ what’s known as the “payload” technique. The idea is to link a targeted antibody to a toxic drug that is unleashed once the medicine enters the tumor. One of these experimental drugs, T-DM1 for breast cancer, joins Roche’s best-selling Herceptin to a cancer-killing toxin using Immunogen’s technology and could be approved next year. “The industry understands the limitations of traditional antibodies,” said Micromet CEO Itin. “We’re starting to see very interesting clinical candidates to enhance the activity of antibodies. We’re seeing an evolution.” To contact the reporters on this story: Ellen Gibson in New York at egibson9@bloomberg.net ;

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China’s `Buy Local’ Wind Policy Costs GE, Vestas in Largest Turbine Market

May 13, 2010

By Mark Scott May 14 (Bloomberg) — Western wind turbine manufacturers are losing ground in China, the world’s fastest-growing green energy market. The combined market share for companies such as General Electric Co. and its European rivals Vestas Wind Systems A/S and Siemens AG fell to 14 percent last year from 71 percent in 2005, according to Bloomberg New Energy Finance. Sales are being eroded by local companies including Sinovel Wind Co. Ltd. and Xinjiang Goldwind Science & Technology Co. Ltd. “It’s a tough market,” says Jesus Zaldua , president of Gamesa Corp. Tecnologica SA ’s Chinese subsidiary, which has four wind-turbine factories in the northeast city of Tianjin. “Some companies will have to leave China in the next five years.” To get back in the game, the foreign companies are introducing newer technology. Siemens, based in Munich, expects to open an $80 million plant this year in Shanghai that can build 3.6-megawatt turbines. That’s bigger than anything now made by a Chinese company. Gamesa plans to build 2-megawatt turbines after retrofitting its existing plants. It will also open its fifth factory in China next year. The Spanish company’s machines cost a third more and are more reliable than Chinese models, according to Beijing-based renewable consultancy Mint Research. “Competing on cost isn’t the way to go,” said Jens Tommerup, president of the Chinese business unit of Vestas, which is based in Denmark. “It’s about quality.” Chinese Competition Chinese manufacturers say they are improving their quality. Goldwind and Sinovel plan to introduce higher-output turbines next year. “We already have 2.5-megawatt and 3-megawatt products” under development, Thomas Yao, Goldwind’s public relations director, said in a telephone interview. “We are going to produce some 2.5-megawatt (turbines), and they will be put into mass production early next year.” The head start in technology may pay off for western companies, particularly as the Chinese venture abroad, said Keith Hays, global wind research director at Emerging Energy Research . Western bankers, who would finance the majority of projects outside of China, have more faith in U.S. and European turbine makers because of the companies’ experience, he said. “For now, the West has an advantage in quality,” said Hays, an industry consultant in Barcelona and Cambridge, Massachusetts. “But the Chinese are catching up fast.” Wind Power Boom Buoyed by $47 billion in stimulus spending for environmentally friendly power over two years, China installed more than double the number of wind turbines in 2009 than in the previous year. This year, the country plans to add 18 gigawatts of wind capacity, the equivalent of 15 nuclear power plants. That’s double what’s expected in the U.S., the No. 2 market, according to estimates from New Energy Finance. Germany and Spain, Europe’s largest wind energy markets, will add 1.8 gigawatts and 1 gigawatt in 2010, respectively. Vestas, the top foreign wind turbine maker in China, installed turbines with a total capacity of 620 megawatts on the mainland last year, New Energy Finance said. Despite losing market share, Western turbine makers still are selling more units in China, UBS AG estimates. The biggest domestic competitor, Sinovel, which is based in Beijing, sold turbines with a capacity of 3,523 megawatts. Sinovel and Goldwind, the second-biggest Chinese wind- turbine maker, are ranked among the top five global turbine manufacturers, even though they have almost no sales overseas, according to the Danish wind advisory firm MAKE Consulting. Vestas and GE were respectively the first and second- largest suppliers of turbines worldwide in 2009, according to annual rankings compiled by MAKE Consulting. Sinovel finished third, followed by Germany’s Enercon GmbH. Goldwind was fifth. Expanding Abroad Tao Gang, a vice president at Sinovel, said in an interview the company is in discussion about opening factories overseas. “We are open to all business models,” he said, without providing further detail. Chinese companies have kept costs down by licensing older technology from overseas rivals, including Vestas, Japan’s Mitsubishi and others that sell their own turbines in China. While the Chinese pay royalties to the foreign firms, those payments don’t come close to making up for the business the foreign companies are losing in China, according to Emerging Energy Research’s Hays. China’s so-called “buy local” policy steers most state- financed energy contracts to domestic players, said Magued Eldaief , a GE Energy executive who formerly oversaw the Fairfield, Connecticut, company’s Asia Pacific unit. “There’s no question preference is given to Chinese companies,” Eldaief said. “It’s a reality you have to live with.” For Related News and Information: Top alternative energy stories: GREEN Today’s top energy news: ETOP For Bloomberg New Energy Finance: TNEF

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Real Madrid Plans More Purchases After $300 Million Spree on Kaka, Ronaldo

May 13, 2010

By Alex Duff May 13 (Bloomberg) — Real Madrid spent more than $300 million on assembling a team featuring Cristiano Ronaldo, Kaka and Karim Benzema in the last off-season. It’s not done yet. The world’s richest soccer club is planning another round of transfer negotiations after the season ends this weekend, club director Emilio Butragueno said in an interview. The team has been linked with players including Bayern Munich playmaker Franck Ribery by French newspaper L’Equipe and other media. Butragueno declined to discuss possible targets. “The sports directors will try to improve some positions, strengthen them,” Butragueno, the team’s director of institutional relations, said. “We invested a lot of money, it’s true, but it’s difficult to build a champion team in two months. In life, you always have to try and improve things.” The nine-time European champion will end the season without a trophy if Barcelona wins its last league game at home to Real Valladolid in three days to retain the Spanish championship. Barcelona, which lost one of 37 games this season, is one point ahead of Madrid, which plays at Malaga. Real Madrid hasn’t won Europe’s Champions League since 2002 and lost to Lyon in the round of 16 this year. Less-storied rival Atletico Madrid collected more silverware this season: It beat Fulham 2-1 after extra time last night to win Europe’s second-tier Europa League. TV Rights Real was loaned 151.5 million euros ($192 million) by Banco Santander SA and Caja Madrid to finance last year’s signings, according to club accounts. While it will seek reinforcements before next season, “everything depends on the financial restrictions,” Butragueno said in the club’s offices at the Santiago Bernabeu stadium. Separately, Real Madrid is willing to reconsider how television rights are negotiated in Spanish soccer, Butragueno said, without being specific. By bargaining individually, the pair gets more than half of the 520 million euros a year the league generates from Spanish broadcasters, 15 times as much as seven of its smallest top-tier rivals, according to London-based researcher Sportcal Global Communications. Twenty-seven of Spain’s top 42 teams three days ago agreed to ask the government to make negotiating the rights as a group compulsory to bring the league in line with the English Premier League and Italy’s Serie A. Florentino Perez , the Real Madrid president, will be able to broker a solution to the disunity, Butragueno said. ‘Great Strategist’ “Florentino is a great strategist and I’m sure he’ll find a way to make everyone happy,” Butragueno said. Real Madrid and Barcelona’s television contracts with closely held Mediaproduccion SL expire in 2013. The pair is among first-division teams that want the top tier managed separately from the second level to help challenge the Premier League in global popularity, Butragueno said. “We want a deep reflection on what type of league we want so we can create a brand like the Premier League,” Butragueno said. “The best players in the world are here in Spain and we have to profit from it.” To contact the reporter on this story: Alex Duff in Madrid at aduff4@bloomberg.net .

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VW Makes `Last Attempt’ to Save Seat as Greek Debt Crisis Spreads to Spain

May 13, 2010

By Andreas Cremer May 13 (Bloomberg) — Seat, Volkswagen AG’s most unprofitable unit, aims to stem losses within five years and halt a flight of customers to rivals by expanding its model range and growing outside the Spanish home market. “This is the last attempt for Seat as a brand, it would not be sensible to view things differently,” Chief Executive Officer James Muir said yesterday in Hamburg. “If one would want to get rid of Seat, one would have to give the other party money to take it.” VW named Muir, Mazda Motor Corp. ’s former European chief, as Seat CEO last September after predecessor Erich Schmitt failed in his three-year effort to turn it around. Concern about Spain’s economy amid contagion from Greece’s fiscal crisis may further hamper efforts to boost revenue from the unit. Martorell, Spain-based Seat’s first-quarter operating loss of 110 million euros ($139 million) was more than double VW’s two other unprofitable units, Bentley and commercial vehicles. Without a turnaround, Seat may endanger the German carmaker’s plan to become the largest automaker by 2018, analysts say. “It will be difficult to turn Seat around,” said Marc- Rene Tonn, an analyst at M.M. Warburg in Hamburg, who recommends buying VW shares. “Most of their sales stem from southern Europe where the crisis has hit small-car makers particularly hard.” Ibiza Compact Deliveries of Seat vehicles such as the Ibiza compact and Alhambra minivan fell 8.5 percent to 337,000 units last year. Spanish car sales slumped 21 percent in 2009, according to the Brussels-based European Automobile Manufacturers’ Association. Spain’s once-booming economy started contracting in the second quarter of 2008 and has taken six months longer than the 16-nation euro area as a whole to return to growth as households pay down debt. First-quarter economic expansion was 0.1 percent. Spain has the eurozone’s highest jobless rate at 20.1 percent. Standard & Poor’s cut the country’s credit rating on April 28, saying the government was underestimating its fiscal woes and overestimating growth prospects. Prime Minister Luis Rodriguez Zapatero said yesterday he will cut public wages this year amid pressure to rein in Spain’s budget deficit. “Seat is the undisputed trouble-spot in VW’s brand portfolio,” said Stefan Bratzel , director of the Center of Automotive at the University of Applied Sciences in Bergisch Gladbach, Germany. “Solving the problems there may take years and a clear-cut remedy isn’t in sight.” Surpassing Toyota Seat, which gets 56 percent of its sales from the Ibiza model, must expand its range of offerings for models such as the Leon compact and reduce its reliance on Spain, Muir told journalists during a roundtable discussion. Fixing Seat will be key to plans by VW, which also makes Skoda, Audi and the namesake VW brand cars, to surpass Toyota Motor Corp. in profitability and deliveries in 2018. As part of that target, Muir yesterday reiterated VW’s goal of more than doubling Seat’s sales to 800,000 vehicles. Wolfsburg, Germany- based VW posted record sales last year of 6.3 million units. “It seems to me that VW hasn’t fully committed itself yet to the brand image of Seat,” said Mike Tyndall , an automotive analyst at Nomura Securities in London. “At some point they wanted Seat to be the sporty brand within the VW family, but some of the model decisions don’t add up.” VW Chief Financial Officer Hans-Dieter Poetsch said March 11 that a “comprehensive program” of cost cuts was under way to return Seat to profit after the unit’s operating loss in 2009 quadrupled to 339 million euros. The goal is to trim fixed outlays by raising capacity utilization, he said. Martorell Plant To that end, VW will build Audi’s new Q3 compact SUV at Seat’s main plant in Martorell, near Barcelona, beginning next year, with a goal of making 80,000 vehicles a year. The factory, which can produce 500,0000 vehicles per year, has a capacity utilization of 60 percent currently, Muir said, adding that he needs to reach 90 percent to hit the break-even point. “Our clear focus over the next three years will be to improve utilization,” Muir said. “One cannot solely rely on cost reductions to make Seat profitable.” Muir has made his own missteps since taking over Seat, running into resistance from the German carmaker’s labor leaders after announcing plans to lay off about 300 workers. He later backed away from that plan after works council chief Bernd Osterloh criticized his efforts, saying cost reductions weren’t enough to save Seat. VW has owned Seat since 1986. Worker representatives hold half the seats on VW’s supervisory board and have played a crucial role in the past in ousting executives that tried to cut jobs, including former CEO Bernd Pischetsrieder . “I’m coming from outside the company straight into the CEO position,” Muir said. “That’s a sign that there is a certain frustration about Seat at VW.” To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net

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Matador Is Spain’s Hottest Ticket as Protestors Seek Ban on Bullfighting

April 1, 2010

By Alex Duff April 1 (Bloomberg) — Bullfighter Jose Tomas Roman is staging what protesters hope is a last stand for his bloody trade. The 34-year-old is attracting sellout crowds amid dwindling interest among young Spaniards in bullfighting, which dates back as far as 1090 when a “corrida” was held to celebrate the marriage of King Alfonso VI’s daughter. The parliament of Catalonia, the second most-populated region, is considering banning the spectacle. Police estimated about 2,500 people marched against the sport last weekend in Madrid. Jose Tomas wows crowds by working more closely to the bull than his peers, according to his admirers. Ticket prices to see him in the northern town of Arnedo on March 20 rose to 1,600 euros ($2,190) from face value of 185 euros. That’s more than double the highest fee on tengoentradas.com to watch world soccer player of the year Lionel Messi turn out for Barcelona at Real Madrid later this month and 25 times the rate to see Grammy-winning singer Alicia Keys ’ June concert in Barcelona. “People still want to see the very best shows,” said Manuel Moles, a bullfighting commentator on Promotora de Informaciones SA’s Canal+. “Jose Tomas is like jamon de pata negra when he’s on form,” referring to the most expensive and tastiest cut of cured Spanish ham, he said. Resale prices for his shows are also soaring amid Spain’s worst recession in 60 years because he refuses to appear on television and has cut his performances to 20 a year from 60, Moles said. He often performs at remote bullrings at shows bankrolled by local town halls. His March 6 show in Olivenza, near Spain’s border with Portugal, lured visitors from the U.S., France and U.K., bringing some 5 million euros of spending to the region, show promoter Jose Coutinho said. ‘Enough’ Killing While bullfighting has been part of regional festivals in Spain for centuries, the number of animals slain in 2008 fell to 5,491 from 6,396 in 2003, the Interior Ministry said. Most shows feature three matadors and six bulls. Spaniards are debating whether the sport should be kept alive. On March 17, a parliamentary committee in Catalonia heard arguments for and against a proposal to ban the sport in which bulls are stabbed, goaded and then killed. An anti-bullfight group “ Prou ,” which means “enough” in the Catalan language, forced the debate after gathering 180,000 signatures. The legislative process to prohibit it could take two years, Prou spokesman Leonardo Anselmi said from Barcelona. In response, Esperanza Aguirre , president of the Madrid region, said March 4 she would begin actions to make bullfighting a protected part of its cultural heritage. ‘$575,000 Fee’ Jose Tomas was raised 30 miles outside Madrid. The nephew of a bull breeder, he fought in bullrings in Mexico to earn a living in his teens before finding fame in the late 1990s. Just before ending four years of retirement with a 2007 comeback fight in Barcelona, he told El Pais newspaper that “living without bullfighting isn’t living.” He wasn’t available for interview, his agent, Salvador Boix, said. The matador is said to get as much as $575,000 for a two- hour show, or $11.5 million a year, according to Moles. Boix declined to discuss financial details. Typically, a bullfighter gets an appearance fee of about $70,000, according to Coutinho. “He’s the bullfighter who charges the most but also the one who generates the most,” Coutinho said. Cachet Jose Tomas objected to appearing live on television as long ago as 1999 because networks negotiate directly with promoters and not with bullfighters, Boix said. He has turned down “millions” by refusing to appear on Canal+, which screens top festivals, Boix said. About two years ago, he also rejected a preliminary overture from a Spanish businessman about appearing on a pay-per-view bullfight channel mooted by News Corp.’s Fox, Boix said. Dan Bell , a spokesman for Fox Sports in Los Angeles, couldn’t confirm the proposal. “The fact that the only way to see Jose Tomas is to go along to the bullring obviously adds to the cachet,” Brian Harding, 68, a retired film producer who had travelled to Olivenza from London, said. The Buzz About 5,400 spectators in Olivenza, who chattered and cracked jokes while the first bullfighter performed, fell silent when Jose Tomas shuffled toward the panting bull in a mauve sequined suit holding a red cape behind him. When he was six feet away Jose Tomas twitched the cape. The half-ton bull charged and, as the crowd gasped, its horn missed his stomach by inches. Fans roared approval and waved white handkerchiefs, a sign of appreciation, after he plunged a sword into its neck to slay it. Outside the bullring, Pierre Baldry, a dentist from Bordeaux, France, who paid 1,200 euros for the trip to see Jose Tomas, said he was a “hero” because of his single-minded bravery. His reserved character adds to his mysterious allure, promoter Coutinho said. In Olivenza, retired waiter Jose Maria Salcedo said he was offering an 87-euro ticket for 300 euros to help his son pay for a new motorbike. “There is a buzz when he’s in town,” Salcedo, 51, said. To contact the reporter on this story: Alex Duff in Madrid at at aduff4@bloomberg.net

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Zapatero’s Campaign to Avoid Greek Deficit Fate Hobbled by Spanish Regions

March 18, 2010

By Emma Ross-Thomas March 18 (Bloomberg) — Prime Minister Jose Luis Rodriguez Zapatero ’s drive to show Spain can avoid Greece’s fate is being held hostage by the country’s regional governments. As Zapatero tries to cut the euro area’s third-highest budget deficit , regional chiefs facing elections over the next year are refusing to trim spending. The European Commission said yesterday Spain may need deeper budget cuts to meet its deficit goals, and the regions’ performance is “an additional risk.” Zapatero’s room to maneuver is limited by the 17 regions that control 37 percent of public spending. Zapatero is being hobbled by a 30-year shift in power to Catalonia, the Basque country and other territories that now control almost twice as much spending as the Madrid government. The risk is that Zapatero won’t be able to move fast enough on a deficit that climbed to 11.4 percent of gross domestic product last year. That may prompt investors to consider dumping Spanish bonds along with their Greek counterparts . “The pressure is on, but I think some regions will resist,” said Angel de la Fuente, an economist at the National Research Council’s Institute of Economic Analysis in Barcelona and the author of several books on regional economics. The Greek crisis is a “useful scare” showing what may happen to Spain if it doesn’t get its finances in order. Additional Measures Spain may need to adopt additional budget cuts to meet its goal of bringing the shortfall back within the EU’s 3 percent limit in 2013 as the government’s economic forecasts are too optimistic, the commission said yesterday in a report. With government forecasts showing the regions will account for more than half of Spain’s 7.5 percent deficit in 2011, Finance Minister Elena Salgado will try to forge a pact with local politicians this month after a push by Zapatero failed in December. Zapatero’s struggle to break the stalemate is shining a spotlight on a country whose economy is four times the size of Greece and has a jobless rate of 18.8 percent, the euro region’s highest. The extra yield investors demand to hold Spanish debt rather than German equivalents is 74 basis points. While that’s about a quarter of Greece’s spread, it’s still almost double what it was two years ago. ‘Next Greece’ “No country wants to be the next Greece,” said Olaf Penninga , a senior portfolio manager at Robeco Group in Rotterdam, which manages 140 billion euros ($192.5 billion). It has sold most of its Spanish government bonds, replacing them with Italian equivalents. The Greek crisis “has clearly put more pressure on Spain to take credible measures to reduce the deficit.” The government will have to contend with opponents such as Madrid President Esperanza Aguirre from the People’s Party, who called on March 10 for a “rebellion” against a proposal to raise sales tax to 18 percent from 16 percent. Even Zapatero’s allies are showing resistance. Angel Agudo , economy chief in the northern Cantabria territory, was quoted by newswire Efe last month as saying the deficit-cutting burden needs to be shared and he won’t “pick up other people’s bill.” Fourteen regions will probably hold elections by the end of 2011. Regional governments, which control health and education spending, are reluctant to join the deficit-cutting drive as the recession reduces the flow of funds they receive from the central government. Taxes tied to property sales, which accounted for as much as 20 percent of some regions’ revenue in the boom, have declined to half of that, Standard & Poor’s estimates. Regional Power “The key problem is that the regions have been given power over spending without the responsibility of having to go to the taxpayer to ask for money,” said Luis Garicano , an economics professor at the London School of Economics. “They don’t have the right incentives to spend in line with their revenue capabilities.” Spain’s atomized structure, which has evolved since the death of General Francisco Franco in 1975, contrasts with the more centralized powers of the Irish government. While Zapatero needs to curry favor with regional rulers to make sure cuts are made, his counterpart in Ireland only needed a majority in the national parliament to pass unprecedented austerity packages. The deficit stalemate may start to weigh further on credit ratings. S&P, which cut Spain one notch to AA+ last year, says regional governments may see downgrades this year. Ratings Concern Spain may be “over-optimistic” on revenues, said Myriam Fernandez de Heredia , head of the company’s European local and regional government team. Catalonia is one of the lowest-rated Spanish regions on AA-, and the Madrid region is rated AA. Fitch Ratings, which has an AAA rating on Spain, is skeptical that regions can cut spending growth to 2.6 percent this year as budgeted, compared with an average of 9 percent in the five years through 2007. Nor can Madrid claw back the power it has ceded and assert its authority. The government’s lack of control was clear on Jan. 29 when it presented a plan to save 50 billion euros by 2013 that left the section on regional finances blank. “Everybody still remembers the initial presentation with the holes,” Penninga said. The one measure of control the government does have is that it has to sign off on regions’ debt issuance. Carlos Ocana , the deputy finance minister responsible for budgets, said on Feb. 24 that the central government would be “rigorous” this year when assessing borrowing needs. For Zapatero, the challenge will be to cajole regions into cutting spending without losing support in the national assembly, where he lacks a majority and needs the backing of parties such as Catalonia’s Republican Left, the National Galician Block or the Nationalist Basque Party. “Politically, it’s difficult because the government also needs the votes of certain parties to govern,” said Alfredo Pastor , a former deputy finance minister and a professor at IESE business school in Madrid. “Cutting expenditure is harder than it looks.” To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

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Jim Luce: C.E.O. Brooke Partridge Helps Lead Technology Thought in Developing World

March 14, 2010

Despite our best efforts to meet in Barcelona, at the GSM World Congress , with 49,000 participants spread between 1,300 vendors, C.E.O. Brooke Partridge and I missed each other. We succeeded in connecting between New York and Palo Alto by phone a week later. It had been my impression that she was someone I had to interview, but I did not realize how integral she was to thought leadership on technology in the developing world until we spoke. Brooke Partridge of Vital Wave Consulting helps steer the direction of technology in emerging markets. She’s been moving in this space for a long time. Brooke started Vital Wave Consulting nearly five years ago after a decade at HP as a leader in emerging technologies and emerging markets. She was key in dragging the emerging-market focus from the realm of corporate social responsibility (CSR) into the business units. During that period, HP had a head start on emerging markets, and Brooke saw that other companies getting into the space were looking for strategic support and guidance. She started Vital Wave Consulting to serve a wider base of companies, and Brooke and the rest of her firm became advisors for some of the biggest tech companies in the world. This “wag the dog” approach had a strong impact on several multinational organizations that were able to maximize their impact on global business and the developing world with her firm’s advice. Brooke has been quietly moving behind the scenes for many years now helping technology companies strategize and tool up for successful revenue growth in emerging markets. Indeed, she counts Intel, Microsoft, and other Fortune 500 firms among Vital Wave’s customers. “One of the reasons our company has survived in this economy is because of this role. We go beyond talking about the size and importance of these markets. We really quantify and characterize the opportunity, creating specific plans to help companies capture it.” Initially, Brooke saw the need for a firm that would specialize in helping companies grow profitably in these countries. Up until then, technology corporations either ignored emerging markets or dealt with them in their philanthropic or CSR areas. Not always, anymore. Brooke Partridge and David Lehr with the Xian Province Ministry of Commerce in China. “But if you want financially sustainable investments in poor countries,” she says, “you have to talk about the P word.” Profitability, that is. Among many who work in the NGO and development communities, the idea of making money from people in poor countries remains taboo, but Brooke sees it as vital. “If you want companies to invest in these markets for the long term, you have to demonstrate that they can make money in them. And that’s what we help to do,” she says. Yet a funny thing happened along the way. “A few years ago, the development community came to us,” says Brooke. Leading foundations such as the Gates Foundation , the U.N. Foundation , the GSMA Development Fund , and the Cherie Blair Foundation for Women liked Vital Wave’s approach to the challenge of financially sustainable development – and began working with the company. It was organic growth. What Vital Wave Consulting does for the private sector has proved valuable for NGOs, and they reached out to Vital Wave Consulting themselves. The company has since authored several reports in collaboration with these foundations, on topics such as Mobile Healthcare , Health Information Systems , and Mobiles and Women in the Developing World. The reports stress multi-sector collaboration and highlight the need for the private sector to be involved in these solutions. A seasoned globe-trotter, Brooke enjoys a moment to relax with kids in Egypt. Brooke’s personal background, how she got here, is an integral piece of the picture. Brooke grew up in Silicon Valley as it grew up – when San Jose and Santa Clara were known for agriculture not computer chips. She was in one of the first middle schools to have an Apple Macintosh and a computer programming class (two computers shared among 30 programming students!). She grew up a few miles from Apple and HP offices in Cupertino. There were entrepreneurs all around. What Brooke calls “A heritage of entrepreneurship.” Then, when she was 15, she went to Peru for a summer – her first exposure to both poverty in the developing world and the innovative ways that poor people earn money. She watched what people do every day in low-income areas to creatively increase their income, utilize what assets they have to make extra revenue. People maximize and monetize whatever assets they have available. Own a wheelbarrow? Use it! Move things for people and charge money for it. Eventually, one has to ask, “How could someone make more money with a computer, a cell phone, a server?” Not long after, she found herself living in Mexico, and Chile, plus a year living in Madrid. Eventually, she was focused heavily on markets like South Africa, China, and India. With her unusual background, no wonder Brooke landed at the intersection of technology, entrepreneurship, business growth, and emerging markets. Brooke Partridge and China Specialist, David Lehr, visit the Rural China Rain Gold Junior Middle School. When Brooke Partridge was in high school, her guidance counselor asked her what she wanted to do as a career. When Partridge replied that she wanted to work internationally, the guidance counselor said “Oh, that just means you want to travel. But what do you want to do for work?” Little did he know just how serious Brooke was. Partridge’s early experiences led her to study international affairs and economics in her undergraduate and graduate studies, but her early corporate experiences left her wanting more. Brooke was nearly always working on new, “disruptive” technology solutions – for both developed and developing-country markets. Disruptive means that the new technological solution would disrupt existing but weaker solutions. Ultimately, she became the business director of HP’s Emerging Market Solutions organization where her passion for and experience in disruptive technology, international business and development came together. Brooke presents “Best Practices” at HOIT 2007, IIT in Madras, India. From her early days in developing countries, she had always been convinced of the connection between profitable business and economic development. This was her first opportunity to demonstrate it. And through Vital Wave Consulting, those opportunities keep coming. “That is really my guiding philosophy, and that of Vital Wave Consulting. I don’t apologize appealing to corporations’ profit motive. I think that even the development community is seeing that profit – i.e., sustainable business models – is essential for scaling their programs. “There is big money in making products for emerging markets, and it results in good development. People in emerging markets want choices, they spend their money wisely, and the market economy can work for them.” Paul Stevers, founder of CharityHelp International ( CHI ), agrees with the view that profitability is good for development. Paul told me, “Thought leaders like Brook Partridge and Muhammad Yunus ( Grameen Bank ) are leading the way on how to develop sustainable business models that can be scaled up significantly and benefit millions of people in developing countries.” Brooke’s vision stems from her total emersion in local cultures – here, in China. C.E.O. Brooke Partridge of Vital Wave Consulting does not believe in hand-outs. She is involved in developing the world hands-on. Through her global vision, multi-national corporations and international philanthropic organizations will be able to assist the developing world develop itself. That, my friends, is true leadership. Other Stories by Jim Luce : Peter Buffett and Angelique Kidjo Release Single to Support Girls in Africa (HuffPo) From Kansas to Cairo: Introducing Soliya’s World-Changing “Terana” (HuffPo) U.S. Congresmember Carolyn Maloney on Abhorrent Anti-Gay Legislation in Uganda (HuffPo) Goldman Sachs Helps 10,000 Women, Including Andeisha Farid (HuffPo) Chatting with UNICEF’s Director Ann Veneman (HuffPo) NBC’s Brian Williams: Changing the World for the Better (HuffPo) Sweden’s Queen on “Fire Souls” – Leaders in Child Protection (HuffPo) Asia Society’s Prez on Global Citizens Like Obama (HuffPo ) Interview with the Red Cross Secretary General in Geneva (HuffPo) Pending: Earth Institute at Columbia Takes Leading Role on Cell Phones for Social Change Pending: Gates Foundation’s Ignacio Mas on eFinance in the Developing World Pending:GSMA and the Cherie Blair Foundation for Women Publish Women & Mobile: A Global Opportunity Report Pending:mHealth: Alliance: Partnership Between the U.N. and Vodafone Pending:Queen Rania on the Role of Cell Communications in Advancing Education Around the World Pending:Rockefeller Foundation Leads Panel on Mobile Transformation of Developing World

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Red-Coral Rescue Plans Endanger Italian Jewelry Makers of Torre del Greco

March 11, 2010

March 11 (Bloomberg) — The people of Torre del Greco, 10 miles south of Naples, have lived off the red corals found in the Mediterranean Sea for more than two millennia. A proposal to list the species as endangered may push the seaside town’s $217 million-a-year coral industry into extinction. The U.S., the largest consumer of corals for use in decoration and jewelry, is proposing that all 31 species of red and pink coral be added to the Convention on International Trade in Endangered Species, or CITES, treaty at a meeting in Doha, Qatar, starting March 13. The European Union, of which Italy is a member, backed the plan yesterday while asking for an 18-month delay in implementation. “We’ve survived world wars, economic crises and anything God and Mount Vesuvius have thrown at us, but this will kill us,” said Antonino de Simone, whose family has been fashioning brooches, rings and necklaces out of coral since 1830. He fears he’ll have to let go of his 25 employees and close shop. The added paperwork and damage to Torre del Greco’s image resulting from a CITES listing will cost $135 million in three years, says industry group Assocoral. Former high-end clients such as Tiffany & Co. and Bulgari SpA no longer want the town’s coral jewelry, and a campaign to end the use of the sea animal in fashion goods led by the environmental group Seaweb has gained support of designers Paloma Picasso and Kimberly McDonald. Torre del Greco was once a favored beach destination of Italian movie stars. Now tourists gravitate further down the Amalfi coast, leaving coral as the mainstay of the economy. The industry employs 5,000 people in a region suffering from chronic unemployment. Risk of Collapse The U.S. proposal would allow trade in the corals only if nations issue an export certificate showing they were sustainably harvested, said Andy Bruckner, the National Oceanic and Atmospheric Administration ecologist who drafted the plan. “If we let them keep going the way that they are, the industry is going to collapse,” Bruckner said. “If we can come up with a sustainable way to harvest it, we can have this industry continue into the future forever. That’s what the whole goal is. It’s really not to shut them down.” Producers in Torre del Greco pride themselves on protecting their local reefs, though about two-thirds of the coral used to make their jewelry is imported from Pacific stocks. A destructive form of trawling that involves dragging weighted nets along the seabed is still in use there even though it’s been banned in the Mediterranean since 1994. ‘It’s Crazy’ Michele Palomba, a coral fisherman for 30 years like his father before him, is today one of the 100 licensed locals who between May and September dive 80 meters (262 feet) with scuba gear to collect the coral. At such depths, one can stay under for no more than four minutes. “It’s crazy to me how they can say we have decimated our supplies, it’s simply not true,” Palomba said. “No one knows and loves and respects our sea more than us. This is our livelihood; why would we destroy it?” Unlike the Pacific variety, the coral in the Mediterranean is small and doesn’t grow in shallow waters, Palomba says. He and his colleagues handpick branches from healthy colonies, he said. Not everyone agrees the methods are sustainable. Waters shallower than 90 meters in the Mediterranean used to contain older corals that stood 50 centimeters (20 inches) tall, said Georgios Tsounis, a marine biologist at the Institute of Marine Sciences in Barcelona, whose research is cited by Seaweb. Now “they’ve basically gone” and those found in unprotected waters average about 4 centimeters and rarely exceed 10 centimeters, he said. Transformation “Once the fishery grew to industrial levels, it transformed virtually all known coral communities from a forest- like structure into a grassland-type structure,” Tsounis said. “Although harvesting does not seem to threaten the corals with extinction, it does impact their ecological function of serving as fish nurseries and helping preserve biodiversity.” It’s a fight the locals feel they cannot win. “We are up against the might of the U.S., misinformed environmentalists and big companies: We are doomed,” said Mauro Ascione, 45, one of eight siblings running the oldest coral- jewelry maker in Torre del Greco. “Our father wanted a big family to grow our business. Instead, we’ll attend its funeral.” For Related News and Information: Top Italian news stories: TOP IT Top Environment stories: GREEN Most-read environment stories: {MNI ENVIRONMENT )

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Investors Turn Bullish on Stocks Worldwide as Concern About Greece Wanes

March 10, 2010

By Craig Trudell March 10 (Bloomberg) — Investor confidence returned to stocks from New York to Paris to Tokyo on growing signs that the budget crisis in Greece won’t derail the global economy. Sentiment improved this month in 8 of 10 nations tracked by the Bloomberg Professional Confidence Survey. The measure for the Standard & Poor’s 500 Index jumped 34 percent to 47.80, the third-biggest advance since the survey began in November 2007. Responses from 1,401 Bloomberg users were gathered March 1-5 as the MSCI World Index gained 3.3 percent, its biggest weekly climb in five months. Stock markets rebounded after the biggest losses in a year between Jan. 19 and Feb. 8, as government reports showed fewer- than-estimated job cuts and higher consumer spending in the U.S., the world’s largest economy. European leaders pledged more support for Greece as the government agreed to cut its deficit, the biggest in the region, by 4.8 billion euros ($6.5 billion). “There’s enough momentum to push the stock market to a new high,” said James Paulsen , who helps oversee about $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. The MSCI World Index rallied 7.5 percent through yesterday after falling to a five-month low a month ago. The measure of stocks in 23 developed nations had retreated 9.2 percent in three weeks as investors speculated that Greece, Spain and Portugal will struggle to control budget deficits and U.S. President Barack Obama proposed limiting risk taking at banks. Last Month’s Slump Sentiment toward U.S. stocks slumped 34 percent to 35.62 last month amid the S&P 500’s three-week retreat of 8.1 percent. Readings greater than 50 mean investors forecast gains for their nation’s benchmark stock index in the next six months. The U.S. Labor Department said March 5 that payrolls dropped by 36,000 in February, half the median forecast of 82 economists surveyed by Bloomberg, as manufacturers added workers for a second straight month. Consumer spending increased 0.5 percent in January, the fourth consecutive gain, the Commerce Department said March 1. The sentiment measure for France jumped 18 percent, the second-biggest increase behind the U.S., to 62.50. The CAC 40 Index gained 7.4 percent through yesterday since Feb. 25, the day before German lawmakers said they may buy Greek bonds. The European Union is developing a contingency rescue plan for Greece to be funded by its member governments, according to two people briefed by an EU official. Weathering the Storm “Markets seem to have weathered the Greece storm,” said Fernando Espinosa , a money manager at Interbrokers Espanola de Valores in Barcelona who took part in the survey. His firm oversees 40 million euros. “Many of the problems are still there but are abating.” Switzerland’s confidence index rose 8 percent to 54.26, and Spain’s gained 3.9 percent to 36.72. The measure for Italy climbed 5 percent to 58.33. It has exceeded 50 for eight straight months, longer than every other European nation. The FTSE MIB Index has fallen 3.8 percent in 2010 after advancing 19 percent last year. The Bloomberg indexes for shares traded in Germany and the U.K. dropped for a second consecutive month, falling 14 percent to 43.33 and 7.6 percent to 41.33, respectively. Japan’s confidence measure rose 7.7 percent to 54.25 after the Nikkei 225 Stock Average fell in January and February. Investors in Mexico, who have been bullish 12 straight months, sent the nation’s sentiment index up 6.3 percent to 64.71. Brazil’s index added 1.4 percent to 69.50. While that was the smallest increase among the 10 nations, it was the highest reading in the survey. To contact the reporter on this story: Craig Trudell in New York at ctrudell1@bloomberg.net .

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Mittal Puts Credibility to Test in $9 Billion Bharti Offer for Zain Africa

February 17, 2010

By Mehul Srivastava Feb. 18 (Bloomberg) — For Sunil Mittal , Bharti Airtel Ltd .’s founder and chairman, there’s a lot riding on the planned $9 billion purchase of the African assets of Kuwait’s Zain, not least of which is his credibility. The 52-year-old self-made entrepreneur, who built his mobile-phone company from scratch into India’s largest wireless operator with a market value of $23 billion, has failed twice to take over South Africa’s MTN Group Ltd . Mittal is seeking assets in Africa as an increasingly crowded market at home brings him call rates of less than half a U.S. cent a minute. He can’t afford to fail a third time, investors said. “The credibility of Mittal will be at stake this time; your ability to close deals, your killer instinct,” said A. S. Thiyaga Rajan , senior managing director at Aquarius Investment Advisors Pte in Singapore, which manages $260 million in assets, including Bharti shares. “He wasn’t able to convince MTN that they would be better off by going to bed with them. If he doesn’t succeed now, then what next?” Completing the purchase would give Bharti 42 million customers across 15 African markets, creating the world’s ninth- largest mobile-phone operator. He needs to convince investors who drove Bharti stock to a 16-month low within two days of its Feb. 15 announcement that the purchase fits Bharti’s larger strategic plan and that he’s not paying too much. Mittal said he can do both, given a little time. “We believe we have the right price,” he said in an interview in Barcelona, Spain. “It’s not a distressed asset for sure but is it over the top? The answer is no. Analysts don’t have enough information at the moment, and I am constrained from giving out more information.” Search for Size Bharti investors have seen their holdings lose 22 percent of their value since January 2009. Profit growth has slowed for 10 straight quarters for South Asia’s largest mobile-phone company as price competition in India from newcomers such as Japan’s NTT DoCoMo Inc. and Norway’s Telenor SA slashed rates for many of Bharti’s 125 million customers. Bharti was the second-worst performing stock amongst 87 telecommunications stocks tracked globally by Bloomberg, and is the worst performing member this year. In the past year, Mittal started mobile-phone operations in Sri Lanka and paid $300 million to buy 70 percent of the Bangladeshi assets of Abu-Dhabi based Warid Telecom. If the Zain transaction succeeds, Mittal will create a company selling mobile services to 1.75 billion people from the western coast of Africa to the Himalayas. In the countries Mittal is negotiating to buy Zain assets, mobile penetration is an average of 36 percent for a population of 479 million, according to a September Zain investor presentation. ‘Inferior Profits’ “The real attraction lies in the size and geographies” that Bharti may be able to access, said John Slettevold , an analyst with UBS Securities in Johannesburg. While Bharti needs to look beyond its home market for growth, it may be overpaying, says Macquarie Securities Ltd. Regional Head of Telecom Research, Shubham Majumder , who says the Zain assets are “inferior in terms of profitability, metrics and growth,” to MTN’s. France’s Vivendi SA walked away from a Zain Africa deal in July after the asking price of $10 billion didn’t fit “its usual criteria of profitability and financial discipline.” “The prevailing sense that there is no future in developed markets is pushing up the prices for assets in developing markets,” said Aquarius’s Rajan. Nigerian Woes Fissures have appeared, suggesting the Zain deal won’t be easy. Johannesburg-based Econet Wireless Holdings Ltd., involved in an ownership dispute with Zain’s Celtel Nigeria B.V. unit, this week said it’ll block the sale of the unit. Mittal says he isn’t worried. If Zain says they are “selling something that they own, I have to believe them,” he said. “The seller will definitely have to give the comfort to the buyer that what they are selling is correct.” Nigeria, Africa’s largest mobile-phone market by subscribers, is a key piece of Mittal’s purchase. Zain has lost both money and subscribers in Nigeria in the six months ending Dec. 31, according to Macquarie. Zain invested $435 million in Nigeria in the last 12 months, while revenue per subscriber fell 30% in the period to $7. Zain’s Nigeria unit lost $58 million, contributing to a net loss of Zain’s Africa assets of $35 million. “It is my view that Nigeria amongst the pieces that Zain has is the important piece and we are committed in developing the Nigeria asset extremely well,” said Mittal. Speed Mittal will need to work quickly to complete the deal before the March 25 deadline for exclusive talks. He says he’s not averse to acting fast. “If you’re caught between speed and perfection, always choose speed, and perfection will follow,” he told the U.S.- India Business Council , according to an interview published by the University of Pennsylvania’s Wharton School of Business. “In business, you don’t have time.” Mittal’s rise in telecommunications has been meteoric since he set eyes on his first mobile phone in 1991 on a European trip. Until then, he had dabbled in building bicycle parts, importing timber, plastics, zipper fasteners and portable generators. His first brush with telecommunications came with assembling phones from Siemens AG parts. Bharti won its first mobile-phone license in 1994. “For me, new things, a larger canvas, is very important,” he said in a Bloomberg Markets interview in 2004. “I don’t see any new fun in the market or regulation in four years.” In 2008, he made his first bid for MTN. Lesson Learned Mittal is hands-on in negotiations and yesterday said he has met with ministers of many of the 15 countries in which Zain operates, and “they were very warm.” By Mittal’s reckoning, the Zain deal is different from his unsuccessful MTN bids. “One of the biggest lessons we learned was that a deal can be one of two things: the deal can be big and needs to be simple, or it can be a helluva complicated deal, but needs to be small,” Mittal said yesterday. “MTN was both big and complicated. Thankfully, this one is big, but very straight.” —With Assistance from Simon Thiel and John Dawson in Barcelona. Editors: Vidya Root , Robert Valpuesta To contact the reporters on this story: Mehul Srivastava at msrivastava6@bloomberg.net .

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Domingo Sings Live at Movie Theater Near You as New York’s Met Goes Global

February 5, 2010

By Kristen Schweizer Feb. 5 (Bloomberg) — Sally Greenhill, who dreams of seeing the Metropolitan Opera in person one day, has found the next best thing: watching it live at a London movie theater. A project by Met General Manager Peter Gelb to make opera cheaper, more accessible and appealing to younger people has turned into sold-out performances aired live in film theaters worldwide. With an average price of $25 a ticket, it’s easier on the wallet: a top seat at the Met in Manhattan costs $375. “I have never been to the Met and would love to go; however the cinema version is a great second-best,” said Greenhill, a semi-retired photographer who will see tomorrow’s live transmission at a London cinema of Verdi’s “Simone Boccanegra,” with Placido Domingo in an unusual baritone role. “It’s the backstage stuff and interviews with opera stars at the intervals that attracts me,” Greenhill said. The effort, which began in December 2006, has taken off with more than 30 shows beamed live to about 1,000 movie cinemas worldwide, subtitled in English, Spanish, French or German. The project has become a new source of revenue for opera companies and is a shot in the arm for cinemas that have been losing audiences to DVDs and online offerings. “It’s all about controlling content,” Gelb said. “The Internet is thought of as free; movie theaters are not.” Opera companies in London, Barcelona, Milan and Paris have followed suit, with shows transmitted from London’s Royal Opera House and Milan’s La Scala to cinemas in Huntsville, Alabama; Kalamazoo, Michigan; Budapest and Johannesburg. Worldwide Audience “It was a great deal of effort to convince the public and artists and unions as well that this could work,” Gelb said. “A lot of people didn’t believe the public would be interested in participating this way.” Gelb, who formerly ran the Sony Classical record label, said the Met in Manhattan operates at 88 percent capacity, from 76 percent when the live shows started. An estimated 10 percent of cinema-goers are new to the opera and new artists have signed up to star at the Met because they now have a worldwide audience, he said. About $30 million of the Met’s $290 million annual budget is spent on media activities such as filming the performances in-house in high-definition using 12 cameras, Gelb said. Transmissions are sent by satellite from a truck outside the Met. Each live show costs about $1.25 million and the Met earns 50 percent of all box office revenue. Gelb said each of the shows makes money. Bizet’s “Carmen” last month was the most successful, reaching 330,000 people. ‘Logical Step’ Emerging Pictures , a New York-based distributor of digital transmissions of opera, ballet, and other events to 350 locations worldwide, works with venues such as La Scala, Barcelona’s Gran Teatre del Liceu and the Bolshoi and Mariinksy theaters in St. Petersburg, its managing partner Giovanni Cozzi said in an interview in Milan. “The project is helping get people interested in operas,” he said. “It’s also good for opera houses because after seeing an opera in a cinema, the next logical step is going into an opera house.” Emerging Pictures ended a partnership with the Met after its first year of transmissions as many cinemas didn’t want to air opera live on Saturday evenings, the busiest day for moviegoers. Cinemas get between 40 percent and 50 percent of the ticket revenue, with the rest divided among production companies, distributors and opera houses, he said. Good for Business Transmissions can produce revenue in other ways. “Once you’ve invested in actually making the film let’s say the Met could then recoup that money from cinemas, DVD sales, even CD sales as well as future income from digital downloads,” said Costa Pilavachi , the former head of Universal Music’s Decca record label and EMI Classics. The Met could eventually get a dedicated channel with cable and satellite providers, he said. “The cinema showings are making opera much cooler for a lot of people,” he said. Cineworld Group Plc , a U.K. cinema operator, has screened live Met and U.K. National Theatre performances as well as pre- recorded broadcasts from London’s Royal Opera House , said Stephen Wiener , Cineworld’s chief executive officer. Performances are not yet “hugely profitable,” Wiener said. “More important though than just boosting revenue is exposing people to more content and that’s driving people to see events live,” he said. The picture and sound quality at cinemas makes them the ideal choice to screen live events. Helen Mirren “When I first went to the cinema, I knew the quality of the performance would be good coming from the Met, but it was so good it blew my socks off,” said Michael Brownlee Walker, a pianist, who has seen Met shows in London. “You see every expression on the actor’s face because of the camera close-ups, which you don’t see in the actual Met opera house.” The U.K.’s National Theatre started its first season of live transmissions last year with “Phedre,” starring Helen Mirren, on more than 300 screens in Europe and the U.S., according to spokeswoman Lucinda Morrison . “It’s not paying for itself yet, though the motive for doing this is to take it to a far greater audience,” she said. An average ticket costs 10 pounds ($16). Unlike the U.S., where theaters and opera houses generally rely on donations, European institutions depend on taxpayer support. The annual 95 million-pound budget at London’s Royal Opera House is about 25 percent funded by the U.K. Arts Council, said spokesman Christopher Millard . Another U.K. movie operator, Vue Entertainment Ltd. , has been filling cinemas with people eager to see live concerts by “Take That” and “Genesis,” as well as live stand-up comedy, according to Chief Executive Officer Tim Richards . Vue formerly worked with the Met and now screens performances by the Royal Opera House and La Scala. “With opera, it’s about getting a whole new generation back to the cinema and it’s filling a time slot that wouldn’t otherwise be filled,” he said. Bloomberg LP, the parent of Bloomberg News, is the global corporate sponsor of “The Met: Live in HD.” To contact the reporter on this story: Kristen Schweizer at kschweizer1@bloomberg.net

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Spain’s Tax-Dodging Landlords, Tenants Adding to Country’s Burgeoning Debt

February 3, 2010

By Sharon Smyth Feb. 3 (Bloomberg) — More than half of Spain’s landlords are dodging taxes as the rental market expands, depriving the financially strapped government of more revenue each year. Owners are asking for payment in cash from tenants to avoid tax on 2.5 billion euros ($3.5 billion) of earnings annually, the Gestha union of tax inspectors estimates. An increase in rental properties nationwide hasn’t generated any more tax revenue. The Spanish government, seeking to pull the country out of its deepest recession in 60 years, needs all the money it can get right now. The slump was triggered by a crash in the housing market and has left Spain with the highest budget deficit since at least 1980. Taxes go unpaid on income equal to about a quarter of gross domestic product, Gestha estimates. “The deep economic crisis in which the country is submerged is once again making the hidden economy flourish,” said Juan Jose Figares , chief analyst at Link Securities in Madrid. “The government will be compelled to clamp down on rent fraud.” A drop in house prices starting in the second quarter of 2008 has forced many people who bought homes as investments to seek tenants for their properties rather than selling at a loss. At the same time, more Spaniards are trying to lease homes after they were priced out of the market in the years before the crash, making it easier for landlords to strike deals that don’t involve the taxman. The number of properties for rent increased 18 percent to 2.2 million units in 2008, according to data from Spain’s Housing Ministry. Rental income declared by landlords rose by just 0.1 percent over the same period, a report on the Web site of Spain’s tax office shows. Room to Grow The rental market has a lot of room to grow. At 13 percent, the proportion of renters to homeowners in Spain is still low compared with other European countries, where 40 percent to 60 percent of housing is rented, according to Madrid-based property consultant Aguirre Newman . Around 65 percent of Spaniards aged 25 to 29 live with their parents, compared with about 22 percent in France and the U.K., economic research institute Fedea estimates. “During the housing boom, the state was earning so much from home sales that it wasn’t worth chasing the odd landlord,” said Fernando Encinar, co-founder of Idealista.com , Spain’s largest real estate Web site. “Now, with the economic crisis, the government really does need the money and will make efforts to prosecute tax dodgers.” Easy to Dodge Encinar, whose company lists 360,000 properties for rent and purchase, said Gestha’s estimate that 54 percent of landlords are ducking taxes “falls short of the true figure, which is set to grow further.” The penalty for avoiding tax on rent is a fine equivalent to 150 percent of the unpaid amount, according to the Spanish tax office. The tax also must be repaid. There is no punishment for the tenant. The penalty is almost never applied because tax dodgers are not being investigated, Gestha General Secretary Jose Maria Mollinedo said. “As both the landlord and the tenant make an agreement not to declare tax or their residency, there is absolutely no way to prove that tax fraud is taking place and therefore no non- declaring landlords are brought to book,” Mollinedo said. A tax break adopted in 2008 accounts for part of the difference between rising rentals and the lack of tax revenue growth. It gives landlords a 100 percent tax break if they rent to tenants who are under 35, according to a spokesman for Spain’s tax office who declined to be identified by name, citing government policy. He didn’t provide information on how many landlords claimed the tax break. Weak Incentive The incentive makes little difference because most leaseholders are over 35 and landlords worry that the break will be repealed in a couple of years, after they’re all registered with the state, Mollinedo said. Spain can ill afford to lose revenue it should be collecting. The country went from a record budget surplus equal to 2 percent of GDP in 2006 to a deficit equal to 11.4 percent last year, according to the European Commission. The debt burden is forecast to rise to 66 percent of GDP next year from 36 percent before the crisis in 2007, the commission said. Sellers pay 18 percent capital gains tax in Spain on any profit made from home sales. There were 106,273 transactions in the third quarter of 2009, according to the most recently published data from the housing ministry. That was 14 percent lower than a year earlier and 58 percent less than the market’s peak in the second quarter of 2006. Values decreased much as 11 percent last year, Idealista.com said. Tip of the Iceberg Rent fraud is just the tip of the iceberg, with Spaniards avoiding tax on income of 240 billion euros, equivalent to 23 percent of the economy, according to Gestha. If Spain could reduce that figure 13 percent, the country generate another 25 billion euros of tax revenue annually, it said. Tenants, happy to find a place at all, aren’t likely to turn into whistleblowers. While rents fell 8.4 percent in Madrid and 12 percent in Barcelona during the first half of 2009, increases over the previous five years continue to squeeze budgets. Rent levels climbed 28 percent in the capital and 56 percent in Barcelona in the five-year period. Ruben Gonzalez, a 33-year-old Madrid resident, said he received 120 calls in four hours after placing an advertisement in Idealista.com for a 2-bedroom apartment on behalf of his current landlord. Then he turned his cell phone off. Gonzalez showed the first 30 callers around the 60-square- meter (645-square-foot) city center apartment, which has a broken refrigerator and faulty boiler, rising damp and peeling paint. “‘Everyone was fighting over the place because its better than a lot of what is out there and the owner is legal and insists on a contract.” Gonzalez said. “One couple even offered to pay more than the asking price and another offered a cash bribe to put them at the top of the list.” To contact the reporters on this story: Sharon Smyth in Madrid at ssmyth2@bloomberg.net .

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El Bulli’s Adria Promises to Stop Blowing Up Olives in 2012: Richard Vines

January 27, 2010

Commentary by Richard Vines Jan. 27 (Bloomberg) — Chef Ferran Adria’s decision to close El Bulli for two years is creating headlines around the world. This raises one obvious question: So what? El Bulli is a restaurant most people are never likely to eat in, and if they did they might not like it. When I dined there in 2007, the five-hour, 40-course dinner included an olive that exploded in the mouth; a hare dish where the meat was present only as gravy; and a polystyrene container filled with parmesan froth. The menu cost 185 euros ($260) per person. (Adria announced at the Madrid Fusion culinary conference yesterday that the restaurant will close for the 2012 and 2013 seasons while he takes a break and renews his creative juices.) El Bulli sits on a hilltop overlooking the sea at Roses, north of Barcelona. Adria didn’t create this culinary destination. It started life as a mini-golf course founded by a German doctor, Hans Schilling, in 1961. The doctor added a bar in 1964 and the eatery was born, with the name of a bulldog. Adria, 47, first visited El Bulli in 1983, on leave from military service in the Spanish navy, and joined the staff the following year. El Bulli’s ascent to worldwide fame is partly the result of Adria’s culinary creativity, partly the result of the Michelin guide’s recognition of Spanish gastronomy, and mainly a product of the World’s 50 Best Restaurant Awards . These awards, founded in 2002 as a marketing tool for “Restaurant” magazine, named El Bulli the world’s best restaurant. El Bulli has taken the spot for the past four years and has never been out of the top three. (The other two winners have been the French Laundry and the Fat Duck.) The result? Finding Blame According to El Bulli, more than two million diners apply for just 8,000 reservations each year. Who is to blame? “It’s your fault, you and all the other journalists,” Adria told me in an interview in London in September 2008. “The diners who come are the best marketing department you can have and once they’ve been they tell everyone about their experience. I say that with respect and love but it is the media that has created this effect. We don’t do any marketing.” (I’m a panelist for the awards, so he might have a point.) I’ve interviewed Adria twice — once before dinner at El Bulli — and met him several times. Don’t make the mistake of thinking of him as a cool celebrity chef. He is a rotund, smiley cook, as proud of his Catalan heritage as his fame. He will grab you in a bear hug and shake you and smack you on the back. Adria was quoted as saying he will hand back his three Michelin stars. That is nonsense. The guide is a tire company’s travel aid, not a head of state dispensing honors. But El Bulli’s temporary disappearance from the World’s 50 Best awards will be a good thing. Fat Duck Each year, El Bulli and the Fat Duck scoop the top places with the regularity of a cuckoo exiting a Swiss-made clock to announce the arrival of another hour. Precision and reliability are fine things but sometimes we need a little excitement. El Bulli is a wonderful culinary destination and Adria is the kind of innovative chef of whom there are only a few in a century. But why should we begrudge him a couple of years off? I am happy if he spends more time in his laboratory in Barcelona and less behind the stove at the former mini-golf course. Another question might be: Why wait a couple of years before closing? Well, Adria is big-hearted and the two million people in the queue for a table might require trauma counseling. ( Richard Vines is the chief food critic for Bloomberg News. Opinions expressed are his own.) To contact the writer on the story: Richard Vines in London at rvines@bloomberg.net .

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Soccer Stars in Africa Cup Spur European Clubs to Urge Changing Start Date

January 13, 2010

By Tariq Panja Jan. 13 (Bloomberg) — European soccer clubs and fans say they have nothing against the Africa Cup of Nations, except the timing. Around the corner from Chelsea’s Stamford Bridge stadium, off-duty London firefighter David Barnard already misses Didier Drogba , his team’s top scorer. Drogba is among the 210 players on European soccer squads who’ve left for as long as a month to join their national teams for the event, the only major international soccer tournament held during the European season. “Drogba’s been class, absolute class,” said Barnard, 52, drinking with fellow fans at Conservative Club, a pub populated by Blues supporters. “He’ll be a huge loss.” It’s not just the fans that are missing the players. English League leader Chelsea and European champion Barcelona — through the European Club Association — are among the teams petitioning FIFA, the sport’s ruling body, to force the Confederation of African Football to move the tournament to the offseason. Fifty-seven percent of the 368 players in the event play for European clubs. Moving to the summer would put the competition in line with the World Cup, European Championships and South America’s Copa America, which are all held in the summer. Oldest Continental Championship The Africa Cup of Nations, the world’s oldest continental championship, is held every two years. It’s played now because African summers are so severe: Central and western parts of the continent get heavy rains while northern countries have temperatures that exceed 100 degrees Fahrenheit (38 Celsius), said Ian Hawkey, author of “Feet of the Chameleon: The History of African Football.” The event started Jan. 11, when host Angola surrendered a four-goal lead with 11 minutes left to wind up in a 4-4 draw with Mali. Players such as the 31-year-old Drogba, who is tied for the Premier League lead with 14 goals this season, and 24-year-old Salomon Kalou , left Chelsea to play for the Ivory Coast. Ghana’s Michael Essien and Nigeria’s John Mikel Obi also left the Blues. Champions League winner Barcelona lost midfielders Yaya Toure and Seydou Keita to the Ivory Coast and Mali. Inter Milan’s top scorer Samuel Eto’o is with Cameroon. In Chelsea’s case, it is inopportune timing. The Blues lead defending champion Manchester United by a point and hold a three-point advantage over fellow London club Arsenal. While United hasn’t lost any players to the tournament, the Gunners are missing midfielders Emmanuel Eboue (Ivory Coast) and Alexandre Song (Cameroon). Results In yesterday’s group games, record six-time winner and defending champion Egypt beat Nigeria 3-1 and Mozambique drew 2- 2 with Benin. Ivory Coast’s campaign got under way Jan. 11 with a 0-0 draw with Burkina Faso. Unlike other major events, the European clubs aren’t compensated for losing their players. For the World Cup in South Africa, FIFA has promised $40 million to clubs who provide players. UEFA, Europe’s soccer governing body, distributed 43.5 million euros ($62 million) to teams after Euro 2008. Still, the European clubs say that money is not the problem. “The bigger issue is the timing of the event,” said Therese Courvoisier, spokeswoman for the European Club Association, a lobby group for about 130 teams. “We know January isn’t practical.” A clash with the World Cup would mean any changes to the biennial event’s calendar would only affect every second tournament. Togo Attack Mahmoud Garga, a spokesman for the African soccer governing body, didn’t respond to calls and text messages seeking comment. FIFA deferred comment to the African organization. Some European clubs called for the event to be canceled after a machine-gun attack on the Togolese team bus on Jan. 8 killed a driver, assistant coach and press officer. Others, like Arsenal coach Arsene Wenger , disagreed. He said some teams would use the security concerns as “selfish motivation” to recall players. European teams shouldn’t complain, said Graham Taylor , a former coach of the English national team who has more than three decades of management experience. They knew what they were getting into. “I have no sympathy with managers who sign African international players and then complain when this tournament takes place in the middle of the season,” Taylor said in an interview. “You know that when you sign those players that you’re likely to lose them for the best part of the month.” Adding Players The competition takes place during the January transfer window, which allows coaches to sign players to fill in the gaps in their squads. The Daily Telegraph said Chelsea is considering a 30 million-pound ($48.4 million) offer for Atletico Madrid forward Sergio Aguero. Inter signed Macedonian striker Goran Pandev to prepare for Eto’o’s exit. The African contingent will be back in time for the start of the knockout phase of the Champions League in February after FIFA convinced organizers of the Africa Cup to bring forward the start of the 53-year-old event by 10 days. The final takes place in Luanda, Angola, on Jan. 31. Meantime, Barnard, the London firefighter, said moving it a week and a half isn’t enough. “It’s not just England that’s been affected, it’s the whole of Europe,” he said. “It should be in the summer.” To contact the reporter on this story: Tariq Panja in the London newsroom on at tpanja@bloomberg.net

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Michelin Guide Promotes Three Brothers’ Restaurant to Three Stars in Spa

November 25, 2009

By Richard Vines Nov. 26 (Bloomberg) — Michelin & Cie. creates a new three- star restaurant and elevates four establishments to two stars in the new guide to Spain & Portugal, which goes on sale today. El Celler de Can Roca , the Girona venue run by head chef Joan Roca and his brothers Josep and Jordi, is Spain’s latest to attain top ranking in the French dining guide. Seven now hold the coveted third star, including Ferran Adria’s El Bulli. Another 19 restaurants gain their first stars in the guide, taking the total to 130, compared with 12 that hold two. The new two-star establishments are Casa Marcial, Lasarte (Hotel Condes de Barcelona), La Terraza del Casino and Les Cols. Clermont-Ferrand, France-based Michelin, the world’s second-largest tiremaker, has been publishing dining guides for more than a century. Three stars denote “Exceptional cuisine, worth a special journey;” two stars, “Excellent cooking, worth a detour;” one star, “Very good cooking in its category.” El Celler de Can Roca came fifth in the World’s 50 Best Restaurants awards in April, jumping 21 places in a year. “Spain & Portugal 2010” costs 25.50 euros ($38) and will also go on sale in France in mid-December. To contact the writer on the story: Richard Vines in London at rvines@bloomberg.net .

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Cristiano Ronaldo Fails to Match Beckham Soccer Sales Boom for Real Madrid

November 9, 2009

By Alex Duff Nov. 9 (Bloomberg) — Cristiano Ronaldo , soccer’s most expensive player, can’t match the sales boom David Beckham triggered at Real Madrid. Sales of Adidas AG team jerseys are as much as 75 percent lower than when Beckham joined in 2003, according to managers of six sports apparel stores in Madrid. Vendors say Spain’s worst recession in 60 years and an unemployment rate of 19.3 percent is to blame. “The year Beckham came was amazing, even confectionery shops were putting his face on cakes,” said Isabel Botia, who has managed the Don Deporte store in the Salamanaca district of Madrid with her husband for 22 years. “We were sold out” of team jerseys. “Now we always have shirts in reserve.” Real Madrid, which gets a cut of uniform sales, said Sept. 20 it expects a 3.5 percent rise in total revenue to 421.7 million euros ($626 million) in the year through June 2010. Team income soared 27 percent in the year after the acquisition of Beckham from Manchester United, when 22 percent of revenue was from sales of team gear. Beckham joined Major League Soccer’s Los Angeles Galaxy in 2007. Real Madrid signed Ronaldo for a world-record 80 million pounds ($133 million) from United in June, three times as much as the former England captain cost. The Portuguese forward, the 2008 FIFA world player of the year, scored nine goals in seven games before injuring his ankle in September. New Contracts It will take at least a year before new sponsorship accords kick in for Real Madrid following Ronaldo’s arrival, club officials said Sept. 20. In August, the team signed an improved deal with jersey sponsor Bwin Interactive Entertainment AG that takes effect next season. Real Madrid is also seeking to improve its accord with Adidas, which ends in 2012. Retail sales in Spain have been falling since March 2008 as unemployment soared after the collapse of a decade-long property boom. Spain’s economy will shrink again next year, according to the International Monetary Fund. Even so, Real Madrid spent a record $360 million on off-season signings, also luring Brazil’s Kaka , France’s Karim Benzema and Xabi Alonso of Spain. It secured bank loans totaling 151.5 million euros repayable over six years to finance the spree. Club President Florentino Perez said in May he planned the outlay to kick-start a team that failed to reach the Champions League quarterfinals in each of the past five seasons and help generate more income. Real Madrid should focus on expanding economies like China’s to boost television, sponsorship and jersey income, according to Simon Chadwick , director of the Centre for the International Business of Sport at the U.K.’s Coventry University. Disposable Income About half of all Real Madrid jerseys are sold in Spain, and about 7 percent in the second-biggest market, China, an Adidas official said. “They have to look to places where there is more disposable income,” Chadwick said. “It won’t be easy. In China, Real Madrid is competing with luxury goods brands like Apple and Chanel.” Emilio Butragueno, Real’s director of institutional relations, said he supports a plan to bring forward the kickoff of some Spanish league matches to 3 p.m. to suit Chinese television, sports newspaper Marca reported Sept. 25. Games typically start at 9 p.m. in Spain, which is 4 a.m. in China. Club officials weren’t available for comment for this story. To be sure, Ronaldo is still helping sell as many as 100 Real Madrid jerseys a day at an Adidas store popular with tourists near the Plaza Mayor in downtown Madrid, Miguel Nieto, a store manager said. Adidas declined to give official data on sales of the team shirt. More Scope Ronaldo also has more scope to boost his brand than the 34- year-old Beckham, who is nearing the end of his career, Chadwick said. The club hasn’t had the chance to show off Ronaldo with a tour of Asia or the Middle East yet, he added. Real Madrid will boost sales if its on-field performance becomes more consistent, according to Eugenio Martinez, who owns the Futbol 100% store near Madrid’s Las Ventas bullring. The team lost 4-0 to third-tier Alcorcon on Oct. 27 in the opening game of a Spanish Cup match-up. It’s second in the Spanish league, one point behind archrival Barcelona, after scoring 26 goals in 10 games and level with AC Milan atop their Champions League group. Martinez said Real Madrid jersey sales are about 20 percent lower than during the Beckham era, when he played alongside Zinedine Zidane , Luis Figo and Brazilian striker Ronaldo . “There was a spike when Cristiano Ronaldo signed in the summer but there’s not such a big demand now,” Martinez said. “The economic crisis is taking its toll.” To contact the reporter on this story: Alex Duff in Madrid at at aduff4@bloomberg.net

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Apesoft Adds U.S. Headquarters, Names North American CEO

October 19, 2009

BARCELONA, SPAIN–(Marketwire – October 19, 2009) – Apesoft, a Business Intelligence software solutions company headquartered in Barcelona, announced a dual headquarters location in Atlanta, Ga., which will service North American customers. The company had already opened a sales office in Chicago last year. Mike Covol, a sales executive with many years of business intelligence experience with companies like Actuate and CorVu Corporation, will be the CEO for North America. In that position, he will be responsible for building the U.S. operations for sales, support, consulting and training for the growing American customer base.

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Oxbridge-Sounding Scammers in Spain Seduce British With Investing Schemes

October 13, 2009

By Caroline Binham and Ben Sills Oct. 13 (Bloomberg) — Credit controller Linda Reay was sorting the daily pile of bills back in 2005 at the bed- manufacturing factory where she worked near Carlisle , an industrial city in northwestern England. Then she took a phone call that would destroy her retirement dreams. The smooth-talking caller identified himself as a London stockbroker named Robert Samuel. Nearing retirement from her 17,000-pound-a-year job, Reay took the salesman’s advice to invest in the stock market. Within six months, her family had sent more than 13,000 pounds ($20,570) to a St. Lucia-based company named Damak Group to invest in ValiRx Plc, which Samuel said was developing cancer-fighting therapies. Although ValiRx is a real London-based drugmaker , the investment pitch was pure fiction and Reay would never see her money again. “I thought you could make a little bit from what you’ve got,” says Reay, now 61 and retired. “You see that share prices can go up in a few days and you make money, so I thought maybe it could happen to me. It sounded aboveboard.” Robert Samuel was a false name, just one of a group of cocaine-fueled, self-styled “telesales terrorists” reading from a script 960 miles (1,545 kilometers) away in Barcelona. It was there that Damak preyed on investors with a series of share- selling scams known as boiler rooms. Reay is among 450 victims ripped off in the space of six months by Damak’s cold-callers. A two-year police investigation culminated in four people being sent to jail in April, and police officers are still on the hunt for the 2.4 million pounds stolen from investors and funneled through accounts in Hong Kong, St. Lucia and Spain. Cold Callers That’s just a fraction of the 300 million pounds that police estimate boiler rooms will steal from U.K. investors this year compared with 100 million pounds in 2007. They say cold- calling share sellers are finding it easier to lure victims as people look for quicker returns in the wake of the financial crisis. Spain is the friendliest locale for boiler rooms that target U.K. investors, investigators say. Its major cities are only a two-hour flight from London, and the country is home to 761,000 expatriate Britons, according to the U.K. Foreign Office, making it an ideal place to set up a stock-selling operation aimed at English speakers. About one-third of all known boiler rooms are located in Spain, according to data from the U.K. Financial Services Authority. That’s why British tabloid newspapers refer to the 1,000- mile stretch of Mediterranean coastline — which runs from Barcelona in the northeast to the resort of Marbella in the south — as the “Costa del Crime.” Criminal Haven Spain’s beach communities gained notoriety as a safe haven for British criminals in the early 1980s, when convicted robber Ronnie Knight spent a decade there on the run. A century-old extradition agreement between the U.K. and Spain lapsed in 1978 amid tensions over the status of Gibraltar, the self-governing British territory that Spain claims as its own. While the agreement was re-established in 1985 just before Spain joined the European Community, the predecessor to the European Union, the country didn’t shake off its image as a gangster refuge. “What do boiler rooms want?” asks Michael Levi, a professor of criminology at the University of Cardiff in Wales, who has written books on corporate crime. “They want a nice environment, and that means good telecoms and a local police and judiciary that aren’t too bothered about them. That has been true for Spain.” Small investors aren’t the only victims of the con artists. ValiRx, which is listed on London’s Alternative Investment Market , says its legitimate business and good name have been damaged by the Damak scam. Damaged Reputation “Cases like this have a very negative impact,” says ValiRx Finance Director George Morris. He traces problems back to Pacific Continental Securities (U.K.) Ltd., a legal London- based brokerage that the FSA liquidated in 2008, after the regulator found that Pacific Continental had shared client information with boiler rooms. The gang that targeted Reay was behind several share scam operations, including Blackwell Advisory Group, run from one of Barcelona’s most exclusive neighborhoods. Blackwell’s office was on the first floor of an apartment block with ceramic mosaics and wrought-iron balconies along the city’s Gran Via de les Corts Catalanes, near boutiques for Gucci Group NV and Giorgio Armani SpA . The firm was run by Danish-born Henrik Botcher, now 37. Fraser Jenkins, a 28-year-old Welshman, assisted Botcher by supervising the Blackwell Web site, showcasing information and live share prices about the companies being flogged by its salesmen. Mamet Play “He’s been to university; he’s a bright lad, and polite,” says Martin Hall, detective constable at the City of London police, about Jenkins. “I’m sure you wouldn’t mind taking him home to meet your mum.” The portrait of the Blackwell operation conveyed by court documents, police investigations and witness accounts shows a competitive, male-dominated world reminiscent of a David Mamet play. A team of 15 young men, who had answered advertisements in London newspapers seeking “telesales terrorists,” made several hundred calls each day. None of the workers knew the surnames of their two bosses, according to witness statements gathered by police. Quick Departures Henrik and Fraser paid salaries in cash and billeted the cold-callers in an apartment above a shuttered hairdresser’s shop. Such communal living is typical of boiler room operations because it increases competition among employees. Callers pulled down 4,000 pounds a month plus commissions-operating in a cutthroat world where a Rolex watch would be dangled off a hook on the office wall as a sales incentive. At night, the boiler room boys enjoyed a culture of heavy drinking and drug use, according to witness statements. The men frequently could be spotted outside, smoking furiously to relieve stress, says Juan Carlos Miguel, a barman at the cafe next door to Blackwell’s offices. “Then, from one day to the next, they were gone.” Spain’s national stock market regulator, the Comision Nacional del Mercado de Valores, had jurisdiction over only licensed brokerage firms until 2007. By the time it was granted legal powers to go after share fraud, a culture of crime had taken root, says Maria Gracia Rubio , a Madrid-based securities lawyer at Baker & McKenzie. “The law takes some time to permeate through society,” Gracia Rubio says. A spokeswoman for the CNMV declined repeated requests to comment. London Mastermind The Damak scam that stole Reay’s nest egg was masterminded by Claude Clifford Greaves, 52, a London-based tax adviser partial to wearing silk handkerchiefs in his suit pockets. Police say Greaves is a serial trickster responsible for at least 10 million pounds worth of fraud over five years. His financial web was spun from the U.K. and Spain to the Caribbean, Paraguay and Hong Kong. Greaves has traded in his bespoke clothes for the maroon sweater and green pants inmates are required to wear at a minimum-security prison on England’s southern coast, where he’s serving a sentence of five and a half years. He was found guilty by a London jury in March on charges of money laundering and selling financial products without authorization. Three other defendants were sentenced to a total of eight years and three months after pleading guilty to their part in the scheme that relieved the Reay family of its money. Easy Prey Boiler room criminals use technology and creativity to obscure their true locations. Overseas-based salesmen route calls through London dialing codes and direct investors to send checks to fancy addresses in the U.K. capital-where the companies maintain post office boxes. The men who make the calls are typically well-spoken: Police say recruitment is being stepped up on university campuses in England to attract students hungry for jobs. The callers often mesh two first names as a pseudonym, as Robert Samuel did. His real identity was never discovered. British investors are particularly vulnerable to cold calls because names of shareholders in each publicly traded company must be listed in registers. Addresses and the number of shares they own are also included. Those registries make it easy for smooth-talking sales agents to broaden their base of victims, says Bob Wishart, a detective superintendent at the City of London Police who heads Operation Archway, a task force dedicated to shutting down boiler rooms. “We had the Cambridge University professor, a member of the House of Lords — we’ve had them all,” Wishart says. Suckers’ Lists So-called suckers’ lists of investor telephone numbers are passed around boiler rooms, authorities say. Britain’s FSA last November wrote to warn 11,500 people that they were on a list obtained by regulatory counterparts in Canada. “Because we recognize that getting the funds back is so difficult, we focus our resources on trying to warn off members of the public from dealing with the share fraudsters in the first place,” says Jason Burt, an official at the U.K. regulator’s unauthorized business division. Before her first foray in the stock market, Reay had already dabbled, unsuccessfully, in other investments. She had lost money in land bank deals, where companies bundle undeveloped plots, organize development permission for the properties and flip them for a higher price. She believes those investments first put her name into play. Reay became suspicious about the fate of her money around Christmas 2006, when she still hadn’t received ValiRx share certificates. She looked up Damak Group on an Internet search and found a police notice urging people to come forward if they believed they had been scammed. Prison Sideline She was just one of thousands of victims targeted by various scams run by Greaves, who at the time was serving a three-year jail sentence in London at Her Majesty’s Prison, Wandsworth, for an unrelated 7.5 million pound fraud. He had been convicted of avoiding value-added tax payable on computer parts across the European Union in what’s known as a carousel fraud. By the end of 2006, Greaves was managing a network of about 30 people in three different countries while on day release from his first jail sentence. “Claude could talk and talk and talk,” says Hall, who led Operation Storm, the effort that brought down Damak. “He’s quite funny in a way. He’s nice enough to talk to. You wouldn’t want to invest your money with him but … .” Mayfair Address Born in Grenada in 1957, Greaves grew up in Peckham, a gritty part of south London. By the time of his arrest in 2008, Greaves was living in London’s exclusive Mayfair district, a short walk from Buckingham Palace. He qualified as a tax adviser with the U.K. Chartered Institute of Taxation in 1980, records show, and set up an accounting firm soon after. He eventually established a Mayfair tax advisory business, ROK International Ltd., in March 2004. It’s one of at least 60 companies in which Greaves has been listed as a director, according to U.K. corporate records. ROK International was located in a whitewashed Bruton Street townhouse that faces The Square, a Michelin-starred restaurant, and is around the corner from the jewelry stores and boutiques of Bond Street. His son and daughter, Leigh and Phillipa, both in their 20s, managed ROK during their father’s first stay at Her Majesty’s pleasure. Leigh Greaves, a technology support analyst, was never charged by police. His sister was found not guilty of conspiracy to defraud and of money laundering in the March trial that saw her father convicted. She’s still a tax adviser. Neither responded to e-mails seeking comment. Greaves, who’s appealing his conviction and sentence, declined to comment through his London-based lawyer, James Nicholls at Bark & Co. Tax Evasion Money from ROK’s accounts was funneled in 2004 to New Haven Trust Co., a Liechtenstein-based investment firm, police evidence shows. New Haven has its own colorful history. The firm’s director, Mario Staggl, helped set up accounts for billionaire Igor Olenicoff to evade U.S. tax liabilities. U.S. prosecutors separately indicted Staggl in court in Fort Lauderdale, Florida in April 2008 for allegedly helping wealthy Americans evade taxes. He has since been declared a fugitive. Staggl’s Vaduz, Liechtenstein-based lawyer, Andreas Schurti, declined to comment. Greaves’s clients have also attracted the attention of prosecutors. His first firm, Allen & Greaves Ltd., audited the accounts of two companies investigated in 2002 by the U.K. Serious Fraud Office. No charges were brought in the case, which centered on share-selling scams and pushing overpriced claret to wine investors. Rolston Allen, Greaves’s former partner at the firm, said in an e-mail that he considered himself a victim of Greaves and had cut off contact with him seven years ago. St. Lucia Damak falsely asserted that it held a stockbroker license from the St. Lucian regulator, investigators say. It bought blocks of shares-both publicly and in private, over-the-counter sales-in companies like ValiRx, which callers like Samuel would try to flog to Britons. Back in London, ROK handled Damak’s paperwork and shifted the money to an HSBC Holdings Plc bank account in Hong Kong. Share certificates, when they existed, were also mailed by ROK. Today, Botcher and Jenkins, the men who ran Blackwell, are serving prison sentences after pleading guilty in a London court in February to breaching two financial regulations and to money laundering. Botcher’s lawyer, John Milner at London-based Irwin Mitchell LLP, says his client is appealing the 45-month sentence and believed that Blackwell investors were high-net-worth individuals. Jenkins, who is appealing his 21-month sentence, was an administrator at a firm that fell afoul of the U.K. financial regulator, says his Manchester, England-based lawyer, Mike Brunskill at Pannone LLP. Last Deal Botcher had been recruited to the Greaves operation by Roozbeh Yazdanian, a fourth defendant, who also pleaded guilty to regulatory offenses. Yazdanian, 38, is appealing his sentence and declined to comment through his law firm, Russell Jones & Walker. The downfall of Greaves’s empire can be traced partly to a deal made with Ulrik Debo, another Dane. Debo was the majority investor in London-based Pantera Oil and Gas Plc, which was drilling in the Chaco Basin in Paraguay. He wanted to pull his money out to reinvest but couldn’t find a buyer. “Ulrik has this problem: He’s got a quarter of a million pounds’ worth of stock stuck in this company,” explains Hall of the City of London Police. “Henrik turns around and says, ‘We might be able to do something about that.’” Botcher brokered a meeting in May 2006 with Greaves, who said Damak Group would buy the stock. ‘Lost Every Penny’ Filings show that Pantera sold Debo’s 1,256,367 shares at 2.67 pence each to Damak in August 2006. Damak resold them to investors through Blackwell for 12 pence each. Blackwell’s salesmen promised that the company would soon list on London’s AIM. It never did. “I lost every penny I put into that company,” says Debo, who’s now the chief executive officer of London-based DeBondo Capital . He gave testimony in court and didn’t face any allegations of wrongdoing. He declined to comment further. Pantera changed its name to Artemis Energy Plc in December 2007. The brand has been tainted through association with Damak, says Mahesh Patel, Artemis’s company secretary. “We’ve not been able to raise a dime,” he says. Operation Storm, which triggered the end of Greaves’s adventure, was sparked when a victim contacted police in November 2006 and complained about losing money on Pantera stock after investing through Blackwell Advisors. The investor passed the police Damak’s share invoices, which had ROK’s address printed on them. Officers raided the Bruton Street offices and froze ROK’s bank account. Hong Kong police then froze about 400,000 pounds in the HSBC account where cash had been routed. Last Trip As police closed in, Jenkins, the Blackwell Web guru, booked a day-return flight from Barcelona to the U.K. and tried to withdraw about 50,000 pounds from his account. The bank tipped off the police, who arrested him. The game was up. Such successful prosecutions are rare, because resources are stretched and responsibility for fighting boiler rooms is shared between the police and the FSA. London’s Operation Archway, set up two years ago, has fewer than 10 full-time police officers. The FSA can freeze assets believed to belong to boiler rooms and can prosecute only U.K.-based operations or individuals. “I found out that, overall, the FSA were useless, the police were understaffed and weren’t given enough resources,” says Nigel Evans , a lawmaker in Britain’s Conservative Party who argues that the police need more manpower. His party, which is ahead of the ruling Labour Party in most U.K. polls, has pledged to abolish the FSA if it wins the next election and hand regulatory power back to the Bank of England. Light Jail Time Even if the authorities do succeed in taking down a boiler room, British jail sentences for company-related fraud tend to be just a fraction of penalties handed to their U.S. counterparts, whose terms increase in proportion to the size of thefts. “Criminals who defraud people of hundreds of millions of pounds and who ruin thousands of lives should face the threat of significant prison sentences,” says Margaret Cole, enforcement director for the FSA. “Prosecuting individuals for conducting unauthorized business, which carries a two-year maximum term, simply does not do justice to the offense and certainly not to the victims.” Back in Carlisle, Reay is still paying the price for her mistake. She’s on suckers’ lists being passed around illegal companies. “I’ve had 150 phone calls over three years — sometimes it’s twice a week,” she says. “Someone could call me up now and offer me the best thing in the world and I wouldn’t believe them.” The police say there’s a simple way to fight boiler room fraud: When a stranger calls and starts talking about your investments, hang up the phone — no matter how posh the caller sounds. To contact the reporters on this story: Caroline Binham in London at cbinham@bloomberg.net ; Ben Sills in Madrid at bsills@bloomberg.net

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Machu Picchu, Connecticut Highway on World Monuments Fund 2010 Watch List

October 6, 2009

By Patrick Cole Oct. 6 (Bloomberg) — The ancient Peruvian city of Machu Picchu, Jerusalem’s Cathedral of St. James and the Al-Hadba Minaret in Mosul, Iraq, are among 93 sites around the world at risk of deteriorating, the World Monuments Fund announced today. The fund’s 2010 World Monuments Watch ranges among 47 countries in noting structures that need to be preserved. Others listed this year include the scenic Merritt Parkway in Fairfield County, Connecticut, the wooden Machiya Townhouses in Kyoto, Japan, dating back to the 1600s, and the desert castles of Ancient Khorezm in Uzbekistan. “The 2010 Watch make it clear that cultural-heritage efforts in the 21st century must recognize the critical importance of sustainable stewardship,” fund President Bonnie Burnham said in a statement. “We must work closely with local partners to create viable and appropriate opportunities to advance this.” The New York-based nonprofit, founded in 1965, has worked to preserve more than 500 architectural and cultural sites in more than 90 countries, from Route 66 in the U.S. to St. Paul’s Cathedral in London. Three years ago, the fund placed the nation of Iraq on its list. “The sites on the 2010 Watch list make a dramatic case for the need to bring together a variety of sectors — economic, environmental, heritage-preservation and social — when we are making plans that will affect us all,” Burnham said. The fund listed nine sites in the U.S., including Phillis Wheatley Elementary School in New Orleans, which was damaged by Hurricane Katrina in 2005, Miami’s Marine Stadium , damaged by Hurricane Andrew in 1992, and the Atlanta-Fulton Central Public Library in Atlanta. Subway Threat Antoni Gaudi’s Temple Expiatori of the Sagrada Familia , a cathedral in Barcelona, made the list because a new underground train line through the city “will run precariously close” to its foundation, the fund said. The Suq Al-Qaysariya in Bahrain, one of the few remaining structures of its kind, made the list because it “may be razed in favor of a modern, upscale mall.” (The 2010 World Monuments Fund’s Watch list of 93 at-risk sites can be found at http://www.wmf.org ) To contact the writer on this story: Patrick Cole in New York at pcole3@bloomberg.net .

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AstraZeneca’s Brilinta Cuts Heart Attack, Death More Than Sanofi’s Plavix

August 30, 2009

By Michelle Fay Cortez Aug. 30 (Bloomberg) — AstraZeneca Plc’s experimental blood-thinner Brilinta prevented 16 percent more heart attacks, strokes and deaths than standard therapy with Sanofi-Aventis SA’s and Bristol-Myers Squibb Co. ’s Plavix in a study. Brilinta’s potency didn’t cause more episodes of serious bleeding, a common complication seen with drugs that ward off heart conditions by preventing blood clots from developing, the research showed. The findings position Brilinta to rival Plavix, the second-biggest selling medicine in the world with almost $10 billion in annual revenue, for millions of patients suffering from heart attacks or severe chest pain. About 1.3 million Americans are hospitalized each year with heart attacks and chest pain known as acute coronary syndromes. While aspirin and Plavix have lowered their subsequent health risks, cardiovascular disease remains the leading cause of death worldwide. Death from any cause was also significantly lower in patients taking Brilinta, according to the results of the study known as Plato. “I think this will become the new standard of care,” said Douglas Weaver, a cardiologist at Henry Ford Hospital in Detroit and a past president of the American College of Cardiology, in an interview. “It’s more rapid, more effective and it appears to be safer” than Plavix and another competitor, Effient, from Eli Lilly & Co. and Daiichi Sankyo Co. “I don’t think they could have done much better than they did in this trial.” The trial, funded by London-based AstraZeneca, included 18,624 patients and was one of the most eagerly anticipated findings presented at the European Society of Cardiology meeting in Barcelona this week. It was simultaneously published in the New England Journal of Medicine. Sales Estimate Sachin Jain , an analyst at Bank of America Merrill Lynch in London, forecast $500 million in sales by 2015 in an Aug. 17 note to investors, and said he may raise his estimate to $1.3 billion if the drug has a meaningful benefit without serious side effects. AstraZeneca needs Brilinta to help replace sales lost to generic competition for its best-selling drugs, as products including Seroquel that now account for about 62 percent of the company’s revenue will face lower-priced competition by 2014. The Brilinta findings may not be enough to replace the lost sales, wrote Kevin Wilson , an analyst at Citigroup Inc. in London, in an Aug. 19 note to investors. “Brilinta peak upside sales of $4 billion would be expected to be reached more than five years post-launch, once physicians become comfortable with how to get the best out of the product,” he wrote. “Even exceptional Brilinta success is not enough,” given the time it would take for doctors to embrace it, he said. Seeking Approval AstraZeneca plans to file for approval of Brilinta in the fourth quarter and hopes to begin selling it next year, said Gunnar Olsson , the company’s head of cardiovascular therapy. Brilinta, Plavix and Effient all work by preventing platelets from clumping together in the blood to form clots. Plavix and Effient, which was approved this year in Europe and the U.S., last for the life of the platelet, or about a week, and are given once a day. Brilinta needs to be taken twice daily. About 30 percent of patients don’t respond well to Plavix. Brilinta’s effects wear off in a few days, making surgery easier for patients who need it. One in 10 patients rushed to the hospital with chest pain or heart attacks actually need by-pass surgery, said Christopher Cannon , a cardiologist at Brigham and Women’s Hospital in Boston. If they are given Plavix or Effient, they must wait five days before getting the surgery, he said. ‘Huge Conundrum’ “It’s a huge conundrum, a headache for doctors, hospitals and patients,” he said in a telephone interview. “This opens the door. It’s a neat differentiating factor that could open up treatment options.” In the study, 9.8 percent of patients taking Brilinta for a year after being treated for a heart attack or worsening chest pain suffered another heart attack or stroke, or died from vascular disease, compared with 11.7 percent of those given Plavix. Overall, 4.5 percent of Brilinta patients died from any cause, significantly fewer than the 5.9 percent of Plavix patients who died. The rates of major bleeding were similar between the two groups, occurring in 11.6 percent of those on Brilinta and 11.2 percent of those on Plavix. Fatal bleeding in the brain was more frequent in those given Brilinta, while fatal bleeding in other areas was more common with Plavix. Brilinta was linked to more serious bleeding in the brain and stomach of patients who didn’t undergo bypass surgery, the study found. Safety Monitoring In an accompanying comment in the New England Journal, Albert Schoemig of the German Heart Centre in Munich wrote that the safety of Brilinta, also known as ticagrelor, needs to be tracked closely. “The whole story concerning the adverse effects of ticagrelor may require evaluation in a much larger number of patients, something that may be beyond the capacity of a randomized trial,” Schoemig wrote. “We should carefully monitor patients receiving this drug to establish the overall impact of its side effects.” A separate study unexpectedly found high doses of Plavix and aspirin failed to reduce the risk of heart attack, stroke or death from cardiac causes better than lower doses. The trial, dubbed Current Oasis 7 , involved more than 25,000 patients and is one of the first to specifically compare the most widely used doses of the two drugs given to almost all patients with heart attacks and severe chest pain. Plavix Results About half of patients get the higher double dose of Plavix with the expectation that more medicine will better prevent deadly clots from forming, Cannon said. The same rationale is given for using more aspirin. “We’ve adopted this because it makes good sense, but there is very little evidence,” he said. “It’s a fascinating thing how hard it is to prove the right dose. Now, 10 years in, we’re seeing if a higher dose helps.” In patients who underwent procedures to clear clogged heart arteries, about 70 percent of those in the trial, the double 600-milligram dose of Plavix lowered heart risks by 15 percent. In them, 3.9 percent of those getting high dose Plavix for a week developed complications or died within a month, versus with 4.5 percent of those given the approved 300-milligram dose. The trial was funded by Sanofi and Bristol-Myers. It could change the way doctors view Lilly and Daiichi’s Effient, since studies used to get approval of the drug known chemically as prasugrel used the lower Plavix dose for comparison. Higher Dose The higher dose Plavix slashed the risk of stent thrombosis, a deadly complication that occurs when a blood clot clogs a device used to prop open the artery, by 42 percent, said Shamir Mehta, director of interventional cardiology at McMaster University in Hamilton, Canada. There were no differences in stroke and death rates from cardiovascular disease alone, or in bleeding rates, he said. “This will result in a change in practice so patients will be receiving a double dose of clopidogrel for a full week, rather than just when they first come in,” he said in a telephone interview, using the chemical name for Plavix. “All things considered, a double dose of clopidogrel looks pretty good. It comes down to safety, since the efficacy outcomes were very similar to each other.” To contact the reporter on this story: Michelle Fay Cortez in London at mcortez@bloomberg.net

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Gilts’ Biggest Rally of 2009 to End as U.K. Debt Sales Mount, Dealers Say

August 28, 2009

By Matthew Brown and Anchalee Worrachate Aug. 28 (Bloomberg) — U.K. gilts are about to lose their allure after the best month this year as investors turn their focus to increasing debt sales by the government , according to the firms that bid at bond auctions. The 10-year government bond yield will rise to 4 percent by year-end, according to the median forecast of 14 of the 15 primary dealers in a Bloomberg News survey. The yield was at 3.58 percent as of 8:41 a.m. in London today, from 3.80 percent at the end of July, While the Bank of England extended its so-called quantitative-easing program of asset purchases this month, the 175 billion-pound plan is set to expire in October, sending net government-debt issuance up to 180 billion pounds ($293 billion) in the year ended March 31, 2011, from 28.4 billion pounds this fiscal year. “The market is fretting over the lack of a credible roadmap for fiscal sustainability,” said Richard McGuire , head of European fixed-income strategy at Royal Bank of Canada in London. It “stems purely from supply-side concern.” Bond yields fell after the Bank of England unexpectedly extended its asset purchases on Aug. 6 and Governor Mervyn King said on Aug. 12 that he may lower the interest rate the central bank pays on reserves to encourage commercial banks to buy more of the securities. Policy makers voted 6-3 to spend an additional 50 billion pounds on quantitative easing, bringing the total to 175 billion pounds, the minutes of the Monetary Policy Committee’s meeting showed. King backed a 75 billion-pound increase. The central bank will complete the program at the end of October, and will decide whether to extend it at a meeting on Nov. 5. Best of G-10 British government bonds returned 3.79 percent this month, including reinvested interest, the most since December and better than any of the other Group of 10 nations, according to Merrill Lynch & Co.’s U.K. Gilts Index. Of the G-10 countries, Italy came closest, gaining 0.85 percent. German debt returned 0.37 percent and U.S. Treasuries 0.56 percent. The rally pushed the yield on the two-year gilt to a record low of 0.83 percent on Aug. 25, before rising to 0.91 percent today. The yield fell 279 basis points, or 2.79 percentage points, below that of 10-year notes on Aug. 13, the most in at least 17 years. Gilt yields “appear to be some 50 to 75 basis points lower than they would otherwise be,” as a result of quantitative easing, Deputy Governor Charles Bean said in a speech in Barcelona, Spain, on Aug. 25. Expanding Deficit “The rally has gone too far,” said Francis Diamond , a fixed-income strategist at JPMorgan Chase & Co. in London. “The very front end of the gilt market has outperformed too much on the back of concern around the Bank of England’s possibly lowering the bank rate or introducing a lower rate for deposit on reserves.” Prime Minister Gordon Brown’s government is pumping unprecedented amounts of cash into the economy to drag Britain out of its worst recession since World War II and rescue banks from Bradford & Bingley Plc, the biggest lender to U.K. landlords before it was nationalized, to Edinburgh-based Royal Bank of Scotland Group Plc, the 280-year-old lender that was once Europe’s biggest bank by assets. The Treasury plans to sell 220 billion pounds of gilts in the year through March 2010, up from 146.5 billion pounds last year. Falling government tax revenue and rising spending drove Britain’s budget deficit to 8 billion pounds in July, the largest for the month since records began in 1993, according to the Office for National Statistics. Yield ‘Uncertainty’ The 10-year gilt yield was 3.66 percent when the Bank of England announced the start of the program on March 5. It rose as high as 4.08 percent on June 11 amid growing evidence that the worst of the U.K. recession was over. “There’s a lot of uncertainty about what effect the quantitative easing has had on bond yields,” said Sean Maloney , a fixed-income strategist in London at Nomura International Plc. “It’s very hard to say what the net impact is going to be when it’s withdrawn.” Gross domestic product shrank 5.6 percent in the second quarter from a year ago, more than the U.S. and the euro zone , which declined 3.9 percent and 4.6 percent, respectively. The sputtering economy will create demand for government bonds, driving two-year gilt yields down to 0.75 percent by year-end, according to HSBC Holdings Plc. The 10-year yield will fall to 3.3 percent, the bank said. Yields ‘Anchored’ “The short end of the gilt curve should remain anchored and is unlikely to deviate for quite a while,” said Andre de Silva , HSBC’s deputy head of fixed-income research in London. “We have some question marks on the view of a very pronounced recovery.” The U.K. will exit the recession in the three months ended September, posting 0.2 percent quarterly growth, according to the median estimate of 13 economists in a Bloomberg survey. The economy will expand 0.3 percent in the fourth quarter and 0.4 percent in each of the first two quarters of 2010, the survey showed. Evidence of growth will push the yield on the 10-year note up to 4 percent by year-end as traders increase bets that the central bank will raise its benchmark interest rate from a record low 0.5 percent, according to Deutsche Bank AG. “Our forecasts for higher yields reflect our view that the economy is recovering,” said George Buckley , chief U.K. economist at Deutsche Bank in London. “The Bank of England will have to raise interest rates at some point, and they will have to take back quantitative easing.” The 14 primary dealers in the survey were Barclays Capital, BNP Paribas SA, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank, Goldman Sachs Group Inc., HSBC, JPMorgan, Merrill Lynch, Morgan Stanley, Nomura, Royal Bank of Canada, Royal Bank of Scotland and UBS AG. Winterflood Securities didn’t participate. To contact the reporters on this story: Matthew Brown in London at mbrown42@bloomberg.net ; Anchalee Worrachate in London at aworrachate@bloomberg.net

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World’s Poor Promise $7.9 Billion in Mobile Money for Vodafone, MTN Group

July 20, 2009

By Marcel van de Hoef and Sarah McGregor July 20 (Bloomberg) — James Muriithi used to make a day- long journey to deliver money to his relatives in a village 100 kilometers (62 miles) from Nairobi. Not any more

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