Sunday 1st February 2015
NEWS TICKER FRIDAY, JANUARY 30TH: Morningstar has moved the Morningstar Analyst Rating™ of the Fidelity Japan fund to Neutral. The fund was previously Under Review due to a change in management. Prior to being placed Under Review, the fund was rated Neutral. Management of the fund has passed to Hiroyuki Ito - a proven Japanese equity manager, says Morningstar. Ito recently joined Fidelity from Goldman Sachs, where he successfully ran a Japanese equity fund which was positively rated by Morningstar. “At Fidelity, the manager is backed by a large and reasonably experienced analyst team, who enjoy excellent access to senior company management. While we value Mr Ito’s long experience, we are mindful that he may need some further time to establish effective working relationships with the large team of analysts and develop a suitable way of utilising this valuable resource,” says the Morningstar release - The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of administrative enforcement actions taken against banks and individuals in December. No administrative hearings are scheduled for February 2015. The FDIC issued a total of 53 orders and one notice. The orders included: five consent orders; 13 removal and prohibition orders; 11 section 19 orders; 15 civil money penalty; nine orders terminating consent orders and cease and desist orders; and one notice. More details are available on its website - Moody's Investors Service has completed a performance review of the UK non-conforming Residential Mortgage Backed Securities (RMBS) portfolio. The review shows that the performance of the portfolio has improved as a result of domestic recovery, increasing house prices and continued low interest-rates. Post-2009, the low interest rate environment has benefitted non-conforming borrowers, a market segment resilient to the moderate interest rate rise. Moody's also notes that UK non-conforming RMBS exposure to interest-only (IO) loans has recently diminished as the majority of such loans repaid or refinanced ahead of their maturity date - The London office of Deutsche Bank is being investigated by the Financial Conduct Authority (FCA), according to The Times newspaper. Allegedly, the bank has been placed under ‘enhanced supervision’ by the FCA amid concerns about governance and regulatory controls at the bank. The enhanced supervision order was taken out some months ago, says the report, however it has only just been made public - According to Reuters, London Stock Exchange Group will put Russell Investments on the block next month, after purchasing it last year. LSE reportedly wants $1.4bn - Legg Mason, Inc. has reported net income of $77m for Q3 fiscal 2014, compared with $4.9m in the previous quarter, and net income of $81.7m over the period. In the prior quarter, Legg Mason completed a debt refinancing that resulted in a $107.1m pre-tax charge. Adjusted income for Q3 fiscal was $113.1m compared to $40.6m in the previous quarter and $124.6m in Q3 fiscal. For the current quarter, operating revenues were $719.0m, up 2% from $703.9m in the prior quarter, and were relatively flat compared to $720.1m in Q3 fiscal. Operating expenses were $599.6m, up 5% from $573.5m in the prior quarter, and were relatively flat compared to $598.4min Q3 of fiscal 2014. Assets under management were $709.1bn as the end of December, up 4% from $679.5bn as of December 31, 2013. The Legg Mason board of directors says it has approved a new share repurchase authorisation for up to $1bn of common stock and declared a quarterly cash dividend on its common stock in the amount of $0.16 per share. - The EUR faces a couple of major releases today, says Clear Treasury LLP, and while the single currency has traded higher through the week, the prospect of €60bn per month in QE will likely keep the euro at a low ebb. The bigger picture hasn’t changed, yesterday’s run of German data was worse than expected with year on year inflation declining to -.5% (EU harmonised level). Despite the weak reading the EUR was unperturbed - The Singapore Exchange (SGX) is providing more information to companies and investors in a new comprehensive disclosure guide. Companies wanting clarity on specific principles and guidelines on corporate governance can look to the guide, which has been laid out in a question-and-answer format. SGX said listed companies are encouraged to include the new disclosure guide in their annual reports and comply with the 2012 Code of Corporate Governance, and will have to explain any deviations in their reporting collateral. - Cordea Savills on behalf of its European Commercial Fund has sold Camomile Court, 23 Camomile Street, London for £47.97mto a French pension fund, which has entrusted a real estate mandate to AXA Real Estate. The European Commercial Fund completed its initial investment phase in 2014 at total investment volume of more than €750m invested in 20 properties. Active Asset Management in order to secure a stable distribution of circa 5% a year. which has been achieved since inception of the fund is the main focus of the Fund Management now. Gerhard Lehner, head of portfolio management, Germany, at Cordea Savills says “With the sale of this property the fund is realising a value gain of more than 40%. This is the fruit of active Asset Management but does also anticipate future rental growth perspectives. For the reinvestment of the returned equity we have already identified suitable core office properties.” Meantime, Kiran Patel, chief investment officer at Cordea Savills adds: “The sale of Camomile Court adds to the £370m portfolio disposal early in the year. Together with a number of other asset sales, our total UK transaction activity since January stands at £450m. At this stage of the cycle, we believe there is merit in banking performance and taking advantage of some of the strong demand for assets in the market.” - US bourses closed higher last night thanks to much stronger Jobless Claims data (14yr low) which outweighed mixed earnings results. Overnight, Asian bourses taken positive lead from US, even as Bank of Japan data shows that inflation is still falling, consumption in shrinking and manufacturing output is just under expectations. According to Michael van Dulken at Accendo Markets, “Japan’s Nikkei [has been] helped by existing stimulus and weaker JPY. In Australia, the ASX higher as the AUD weakened following producer price inflation adding to expectations of an interest rate cut by the RBA, following other central banks recently reacting to low inflation. Chinese shares down again ahead of a manufacturing report.” - Natixis has just announced the closing of the debt financing for Seabras-1, a new subsea fiber optic cable system between the commercial and financial centers of Brazil and the United States. The global amount of debt at approximately $270m was provided on a fully-underwritten basis by Natixis -

TV Closure Channels Opposition

Sunday, 01 July 2007
TV Closure Channels Opposition A majority of Venezuelans appear to support continued student protests over the closure of an opposition television channel in May this year, despite President Hugo Chavez insisting the demonstrations were part of a US plot to topple him. Chavez replaced RCTV, the country’s oldest broadcaster, with a state network last month. Since then, there have been regular protests by thousands of students accusing the president of undermining democracy. Chavez’s critics say his move to curb TV news and analysis are evidence of centralisation after the president politicised the military, judiciary and oil industry. Chavez is considering indefinite re-election, has won powers to rule by decree and is forging a single governing party to steer his self-styled socialist revolution. Ian Williams reports on a country in ferment. http://www.ftseglobalmarkets.com/

A majority of Venezuelans appear to support continued student protests over the closure of an opposition television channel in May this year, despite President Hugo Chavez insisting the demonstrations were part of a US plot to topple him. Chavez replaced RCTV, the country’s oldest broadcaster, with a state network last month. Since then, there have been regular protests by thousands of students accusing the president of undermining democracy. Chavez’s critics say his move to curb TV news and analysis are evidence of centralisation after the president politicised the military, judiciary and oil industry. Chavez is considering indefinite re-election, has won powers to rule by decree and is forging a single governing party to steer his self-styled socialist revolution. Ian Williams reports on a country in ferment.

At the end of May the screens went dark for Venezuela’s most popular TV station when Hugo Chavez’s government refused to roll over the expiring 20 year broadcast license for the privately owned RCTV and allocated its slot to yet another government owned station. Far away in Chile the Senate condemned it as a move against free speech, and human rights and journalists organisations’ across the world have complained in similar terms. As so often, the event is being presented in stark black and white terms by both supporters and opponents of Chavez. As usual, reality is a little more nuanced.

RCTV would not be anyone’s example of objective journalism — but there is also plenty of evidence that the Venezuelan government is squeezing dissident media, with ominous implications for the future. However, so far, everything has been done “legally” and through regulation rather than outright repression, suggests Patrick Esteruelas of the Eurasia Group, the global political risk and advisory firm.



Technically, under the media law, RCTV’s licence should have been automatically renewed, but the government added allegations of sexism and racism to lend verisimilitude to the real political agenda. RCTV was vigorously anti-government, and there is little doubt that its closure was politically motivated. It was alleged, and rebutted that the station had supported the 2002 coup — but there was no “due process” to test the allegations either way.

Diego Arria, who was information minister in Venezuela between 1978 and 1979 points out that while the RCTV was indeed a harsh critic of government — it was a critic of all governments, “including the one I served in. It was extremely critical and independent, but we did not consider closing it. It is the only station with a national reach”. Arria also acerbically comments on Chavez’s administration. “This is a military government, half of it is composed of officers. We should start calling them by their ranks to remind people” [of that fact].

RCTV continues on the Internet and on Cable, so it is not completely stifled — but only 20% of the population has access to cable, and few of those will be among the poorer sections of the population upon whose support Chavez relies. Ominously, the state-owned media, which now includes six TV and eight radio stations, ignored the vociferous student protests about the closure.

Allegedly, when ex-Serbian leader Slobodan Milosevic, was asked why he allowed newspapers to function uncensored, replied that few Serbs read newspapers, and those that did were not going to vote for him anyway. It was the radio and TV that he strictly controlled. Chavez seems to have adopted the same principle. The El Nacional newspaper is still critical but as Arria says, “newspapers are expensive, and have limited reach, while radio and TV really get out to the people”.

Eurasia Group’s Patrick Esteruelas rebuts the accusations that RCTV promoted the 2002 coup — although neither did it broadcast the protests that led to its reversal. “Even so, the channel played a fairly questionable role with its heavy editorialising,” he says. On the other hand, he explains, “It is the latest peak of the trend since the 2004 election. In the past the press operated in much greater freedom but now there is a culture of fear and self-censorship.”

A new media law, which was introduced in Venezuela in 2005 and which is locally known as the ‘Rebound Law’, extended in broad terms the bounds of what is defined as libellous or violent.  The law has also led to an increase in self-censorship and accommodation with the government on the part of some of the media owners. It has resulted in toned-down and non-aggressive criticism, and led to a change in the nature of TV news and analysis broadcasting. Before the law was introduced, early morning news and current affairs shows “had politicians arguing, lots of commentary — now it’s cartoons,” says Esteruelas.

Even the remaining private stations, such as Venevision, seem to have recognised the realities of power and have come to an editorial accommodation with the administration in order to remain on the air.

Washington’s campaign against Chavez has in some measure helped legitimise the president’s behaviour not only domestically but across the region, where Washington often seems blind to the unpopularity of many of its policies. This time, however it may be that Chavez might have gone too far.

A DATOS poll in June found 66.9% of respondents opposed the closure of RCTV. This chimed with a survey from Datanalisis in April that found nearly 70% opposed the shutdown however, most respondents were more concerned with the loss of their favourite soap operas than with press freedom. Esteruelas cautions that the “popular backlash is not just motivated by freedom of the press. It is also that the government has cut some of the nation’s most popular TV programming and replaced it with very dull fare”. Venezuelans are now missing their favourite TV shows, such as Who wants to be a Millionaire? and are not happy with re-runs interspersed with what is essentially feel-good propaganda for the government that now occupy the slot.

The DATOS poll of 600 Venezuelans, taken in early June, showed 56.2% of respondents in favour of the student demonstrators continuing their protests against closure with 23.8% against. Significantly 75% opposed the possible closure of Globovision, the last major independent station which still has 16 years of its licence to run. However, the  fact that its potential closure is on the agenda suggests public  appreciation of how flexible the rule of law has become. Only 7.6% of respondents thought the main pro-government state channel, praised by Chavez, was “good” or “very good”. DATOS found 81.1% of viewers thought it was “bad” or “very bad”.

President Chavez, a frequent and vocal critic of the United States and who was re-elected by a landslide in December 2006 on the back of his generous social spending, was dismissive of the poll results. “This is all part of the conspirators’ plan,” he said in his weekly TV show. “This is an attempt to incite them.” Chavez has accused the students of being part of a US-backed “soft revolution”.

It is unlikely.  However, even deprived TV addicts are not enough to overthrow a government.  Esteruelas says “at the moment there is no alternative, certainly not from the completely discredited opposition.” With gaping social and ethnic divides in the country, it is true that many middle class Venezuelans — and the media that some of them own — could not bring themselves to recognise Chavez’s election victory, and the opposition tactics have been almost criminally stupid.

The merging of all the (many) other leftist parties into one “Bolivarian” organisation does not bode well for the emergence of serious opposition to Chavez’s manifest authoritarian tendencies. Rising oil prices and the pork-barrel public expenditures have helped maintain popular support, but rising consumption and regulation and expropriation of the food sector have led to more food imports than ever before, while oil exports now account for 91% of exports.

Esteruelas identifies how sensitive the economy, and the government is to the maintenance of current oil prices since production is going down, and Chavez’s policies have cut off the foreign investment and expertise needed to develop and expand production. “There is no room for even a small dip in prices.” Of course, at the moment, betting on continuing oil price rises seems safe, but it may not always be so, which ties Chavez’s oil-barrel politics, both internationally and domestically to the global economy he  despises so much. As with the opposition, the crucial test of how authoritarian he is will be how he reacts to losing a parliamentary majority.

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