Commerzbank: capital shortfall a matter of mindset


Beumer said the question of whether there was a capital shortfall depended on how urgently regulators wanted to see the Basel III banking rules implemented.”That’s really a difference in mindsets in that discussion,” said Beumer, who was in Tokyo for a reception marking the German bank’s 50 years in Japan.Earlier this week bankers wrote to the German finance minister protesting that the move to tighten up capital standards using an “artificially tightened definition of equity capital” could exacerbate the crisis.Beumer said the real issue was to get sovereign debt levels under control.”It’s a little bit of an unbalanced discussion. The discussion about banking before we discuss solutions of government, has to be the other way around,” Beumer told Reuters.Beumer declined to comment on whether Commerzbank could raise capital in the current environment, adding that there were possibilities to do so, but not opportunities he would like to talk about in public.Commerzbank’s core tier one capital ratio was 9.9 percent at the end of June, and its exposure to Greece was 3.1 billion euros ($4.2 billion).Beumer said the bank expected loan loss provisions at the Mittelstandsbank unit, which mainly makes loans to small and medium-sized companies, to rise in 2012. ($1 = 0.731 Euros)

UPDATE 1-Encana inks deal to boost natural gas production


* Says plant capacity expansion scheduled to come on stream in late-2013Oct 14 (Reuters) - Encana Corp , Canada’s largest gas producer, has entered into an agreement with Pembina Pipeline Corp as it looks to triple liquids-rich natural gas production in the Alberta deep basin.Pembina, which operates several conduits that transport crude oil and gas liquids to major pipeline hubs, will invest about C$230 million to expand the processing and liquids extraction capacity of the Resthaven plant.The Resthaven area, located in west central Alberta, is known for its prolific liquids rich natural gas supply.In the first of the two-phase expansion, Encana expects to boost extraction of natural gas liquids (NGLs) at Resthaven to about 8,000 barrels per day (bpd) from about 1,000 bpd.The second phase is expected to add another 4,000 barrels per day of extracted NGLs from Encana’s liquids-rich natural gas production in the region.Encana, which has been looking to divest $1-$2 billion worth of non-core assets, sold some natural gas midstream assets in Colorado and its Barnett Shale natural gas assets in North Texas to cut back on spending and cope with weak natural gas prices.”Over the next number of years, we expect our NGLs extraction to triple from about 10,000 barrels per day to about 30,000 barrels per day,” said Renee Zemljak, Encana’s executive vice-president, marketing, midstream & fundamentals.Encana is looking at production of 12,000 bpd at Resthaven, about 5,000 bpd at Musreau and more than 3,000 bpd at Gordondale, representing an incremental growth of about 20,000 bpd of NGLs.The plant capacity expansion is scheduled to come on stream in late-2013.While Encana shares closed at C$20.77 on Thursday, Pembina closed at C$25.50 on the Toronto Stock Exchange.

RPT-UPDATE 1-Russian watchdog questions Norilsk share buyback


* Norilsk says it is not breaking any laws* Norilsk board approved $4.5 bln buyback offer in SeptMOSCOW, Oct 12 (Reuters) - Russia’s anti-trust body has written to Norilsk Nickel questioning aspects of its planned share buyback, a development that analysts said may delay the metals group’s $4.5 billion share purchase.Norilsk said it was proceeding with the buyback and was preparing a response to the Federal Anti-Monopoly Service (FAS). The FAS could not be reached for comment.”The FAS letter confirms that the buyback is only possible with the permission of the government commission (on foreign investments, headed by Prime Minister Vladimir Putin),” Norilsk shareholder UC RUSAL said in an e-mailed statement.”Without the permission, all Norilsk deals within the buyback are null and void.”In a separate press release issued late on Wednesday, Norilsk Nickel also said it is not breaking the investment law.”The Company believes that completion of the offer to purchase…will not violate the Strategic Investment Law,” it said in the statement.Norilsk’s board approved on Sept. 13 a buyback of 7.7 percent of its shares at $306 each, a total of $4.5 billion.The offer came after the board of the world’s biggest aluminium producer, RUSAL, rejected an offer for its Norilsk shares, also at $306 each.Norilsk has been pushing for a buyback to resolve a long-standing dispute between rival oligarchs Vladimir Potanin, whose Interros investment company holds about 30 percent of Norilsk, and Oleg Deripaska, who controls RUSAL.Alfa Bank analysts said the letter referred to an article of the law on competition.This states a group of investors controlling more than 10 percent of shares, or a foreign investor buying shares in a strategic company, must first receive approval from the commission.”The most likely outcome is that the commission will grant approval, but the process may delay the buyback,” Alfa Bank said in a note.Norilsk said it was preparing a response to the government body.”The letter does not contain any demands and is just part of an exchange of letters between the company and the FAS started in August 2011, following appeals by RUSAL and Norilsk,” it said in a statement.”Currently, the (buyback) programme is proceeding at full speed in accordance with the announced conditions.”RUSAL and Norilsk declined to provide a copy of the letter.

FTSE looks to break out of range, led by miners


* Technical indicators suggest FTSE could head higherBy David BrettLONDON, Oct 12 (Reuters) - Miners led a rebound by Britain’s top shares by midday on Wednesday, on hopes of further demand being seen in China, while technical indicators suggested the FTSE might break out of its recent range.The mining sector, which remains off 30 percent this year despite a 20 percent rise in the past week, gained in tandem with base metal prices as expectations rose of potential restocking in China boosting demand.LME copper stocks in Korea and Singapore, locations nearest China, have been declining sharply since the end of September.Miners bounced back from a weaker start when the sector was hit by disappointing results from U.S. aluminium group Alcoa , and a warning from its CEO of weak economic conditions through the year, particularly in Europe.In the same sector silver and gold miner Fresnillo was down 2.5 percent after cutting its silver output target for 2011 due to extra safety measures following the deaths of 10 workers.The FTSE 100 , however, remained robust in the face of threats to global growth, rising 25.92 points, or 0.5 percent to 5,421.62 by 1104 GMT,.The index bounced off an intraday low of 5,348.16 in tandem with a turnround in U.S. futures, which pointed to a sharp rise at the open on Wall Street.”The market is feeling a bit more protected with the level of ‘puts’ going up on the volatility index. I still feel it hasn’t got any momentum behind it and 3Q earnings may be bearish on outlook statements,” a London-based trader said.The trader also pointed out the FTSE had taken out the 5,413.43 and 5,418.65 resistance levels and was within about 20 points of a potential break to the upside of 5,644.05, with 5,449.67 seen as paramount.DATA BOOSTTraders said economic data was also helping boost risk appetite, as euro zone industrial production figures came in much stronger than expected in August.In the UK, however, unemployment rose to its highest level since 1994.”Economic data is, on aggregate, nowhere near as bad as anticipated,” a trader at a U.S. investment bank said. “The significant downside risk is slowly being taken out of the market because it looks as if there is a concerted economic effort across the euro zone, so the ‘black swan’ negativity has … been removed and given people a little more stability.”He said with hedge fund performance also being so poor, there could also be a little bit of an environment where they’re forced to chase the market.Man Group shed 5.6 percent after the hedge fund firm said its flagship AHL fund fell 5.5 percent last week.Elsewhere, there were soothing words from Slovakia where lawmakers had overnight rejected a plan to bolster the European Financial Stability Facility (EFSF).Despite the initial “no” vote, parties in Prime Minister Iveta Radicova’s outgoing government will hold talks with the opposition to reach a quick agreement on ratifying a plan to strengthen the EFSF, a party spokesman said.Slovakia is the only euro zone member yet to ratify the plan, which would give the EFSF bigger powers to fight the spreading debt crisis.Banks , beaten down this year on worries over exposure to the euro zone crisis, rallied, with Barclays up 2.2 percent.In a note, SocGen said it remains very upbeat on UK domestic banks, and reiterated “buy” recommendations on Royal Bank of Scotland , Lloyds Banking Group and Barclays, despite cutting target prices across the sector.”Each has a high quality core business earning double-digit returns on equity, despite the macro backdrop, but the overall picture is marred by significant low return/high risk non-core assets,” SocGen analysts said.Meanwhile, engineers were boosted with IMI and Weir up 2.8 and 4 percent respectively as Berenberg Bank starts its coverage on both firms with a “buy” rating.Ex-dividend factors knocked 2.70 points off the FTSE, with Capital Shopping Centres , Old Mutual , Smith & Nephew , Tesco , Wolseley , and WPP Group all losing their payout attractions.On the macro economic front, in the United States the main focus will be on the release of minutes for the Sept. 20-21 FOMC meeting, due after the London close at 1800 GMT.

China sets ambitious shale gas output targets-paper


The targets, if confirmed, would loom large as China has yet to have any commerical shale gas production so far and the 2020 goal would be equivalent to about 85 percent of the country’s natural gas output in 2010.China has not unveiled any supportive measures for shale gas development and the government should announce incentives as soon as possible, Song Xiaodan, deputy chief engineer with CNPC’s planning department was quoted as saying.PetroChina , a listed unit running the majority of CNPC’s oil and gas businesses, said in August it would pump 1.5 bcm of shale gas in 2015.For a factbox of China’s shale gas sector, click:China has also aimed for 21.5-23.5 bcm of coalbed methane gas output by 2015, a separate report by the China Securities Journal said, citing a government plan to be disclosed soon to the public by the National Development and Reform Commission.

Jaguar says support grows for a RIM shake-up


Jaguar Financial Corp said it expects the percentage of RIM stock that supports its position to keep rising as it talks with more institutional shareholders about joining its campaign for sweeping change.”Our supportive shareholders approve Jaguar’s plan to negotiate, at this point in time, changes in governance and the pursuit of a value creation transaction,” Jaguar Chief Executive Vic Alboini told Reuters on Tuesday.Shares of RIM, which makes the BlackBerry smartphone and Playbook tablet computer, have been battered this year, reflecting a steady erosion of market share to devices made by Apple or powered by Google’s Android software.Jaguar, a Canadian merchant bank that targets underperforming companies, wants RIM to hire a new chief executive to replace current co-CEOs Mike Lazaridis and Jim Balsillie, and to put itself up for sale, either as a whole or in parts.With 8 percent support Jaguar could demand a shareholders meeting, ratcheting up the pressure on RIM’s board and management to address its demands, Alboini said.RIM said at its annual meeting in July that holders of more than 90 percent of its voting shares had backed the reelection of a slate of directors that includes the co-CEOs.RIM could not be reached for immediate comment on Tuesday.Stock in the company hit a 52-week low of $19.29 a share on the Nasdaq on October 4, less than a third the C$70.54/share high it touched in February.Alboini said a reasonable range for RIM’s stock valuation would be between C$40 and C$60/share, depending on the nature of any change fostered at the company.”Everybody is in support of a sale of RIM or another value creative transaction,” Alboini said. “Like splitting the company into separate public companies - a network company, a device company and a patents company.”Alboini said Jaguar’s campaign for a shake-up at RIM would gather steam as talks with other institutional shareholders deepened. He said Jaguar had so far only spoken to about 20 of the larger institutional holders, compared with the more than 1,000 investment managers listed by Thomson One as stockholders.”We haven’t adopted a call-center approach,” he said. “It has been very highly targeted, but now that we’ve got the response, you know we are going to go out and see how many more we can get.”Alboini said he had not been in contact with activist investor Carl Icahn and could not confirm speculation in recent weeks that Icahn might take a stake in RIM.Alboini says RIM’s leaders have lost their way in competing in a technology landscape that has changed dramatically, forcing it to play catch-up to the likes of Apple, Google, Microsoft, Samsung Electronics and HTC.”It is time for RIM to bring in a transformational leader and a respected independent chairman,” said Alboini, who has accumulated more shares of RIM since its stock price plunge.