Steinhoff scandal wipes out $12 bn of shareholder value

Shocked Steinhoff shareholders have wiped more than $12 billion off its value since it revealed "accounting irregularities" and parted ways with its chief executive, in a dramatic fall from grace for the South African retailer.

Once a must-have for investors who backed its reinvention as a retail empire including brands such as Mattress Firm and Poundland under veteran CEO Markus Jooste, Steinhoff shares fell by 43 percent on Thursday, compounding the previous day's more than 60 percent fall.

This collapse leaves South African tycoon Christo Wiese, Steinhoff biggest shareholder and chairman, seriously out of pocket, eroding more about $2.8 billion of his net worth.

It also prompted an urgent call by South Africa's Finance Minister Malusi Gigaba for pension fund managers to report back on their exposures to the sudden sell-off, saying that the accounting issue was a "grave concern".

South Africa's Public Investment Corporation (PIC), the retailer's second-largest shareholder, said the allegations against Steinhoff were "serious concerns".

The PIC, which manages civil servants' pension funds, said in a statement it holds around 10 percent of Steinhoff's stock.
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VW brand upbeat as cost cuts, new models boost Sept quarter earning

Cost cutting and new models such as the Arteon fastback should continue to boost Volkswagen's main car brand in the fourth quarter after it doubled core earnings in July-September, it said on Monday.

Analysts see reviving the VW brand, which has long suffered from high staff and development costs, as crucial to the group's ability to recover from its diesel emissions scandal.

The brand said on Monday it expected sales and profits to keep growing in October-December, despite the hit across the industry to demand of diesel vehicles and their resale value in the wake of the German carmaker's 2015 scandal.

"Our model offensive is increasingly paying off, the turnaround programmes in the markets are having an effect," VW brand chief Herbert Diess said in a statement.

Operating profit at the brand doubled to 728 million euros ($847 million) in the three months to Sept. 30, helped by cost cuts and staff reductions agreed with labour unions last year.

Volkswagen shares were up 2.9 per cent to 156.40 euros at 1150 GMT.

By contrast, the group's premium Audi division said it was bracing for a "demanding quarter" with costs for vehicle overhauls including the high-end A6, A7 and A8 as well as the Q3 and A1 compacts weighing on results.
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Germany urges North Korea, Trump to scale down nuclear rhetoric

Germany on Wednesday urged North Korea and the United States to show "restraint" after apocalyptic threats from President Donald Trump and Pyongyang in their mounting war of words.

"We are watching the increasing rhetorical escalation regarding the Korean Peninsula with the greatest concern," foreign ministry spokesman Martin Schaefer told reporters.

"That is why we call on all sides to use restraint."

Schaefer said Berlin was convinced a "military option" could not be "the answer in the quest for a nuclear weapon- free Southeast Asia".

He urged the international community to "thoroughly implement" the latest round of sanctions against North Korea approved by the United Nations Security Council.

And he backed a call by US Secretary of State Rex Tillerson to resume talks with Pyongyang if it halts ballistic missile tests.
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Airbus sells 140 planes worth $23 billion to China in one of its major deal

Airbus has signed an agreement to sell 140 aircraft to China, it said on Wednesday, in a deal worth almost $23 billion at list prices.

The agreement, signed during a visit by Chinese President Xi Jinping to Germany, is for 100 A320 family aircraft and 40 A350 planes, Airbus said.

"It's one of the biggest deals that we've signed in a long time," Airbus Group Chief Executive Tom Enders told journalists after signing the deal in Berlin.

The planes will be purchased by state-owned China Aviation Supplies Holding Company, which will then allocate them to Chinese airlines.

The A320 planes will be a mixture of the older CEO and the new NEO version with revamped engines, while the majority of the A350 orders are for the -900 model. The deal is flexible pending negotiations with the airlines.

Enders said he expected up to 50 per cent of the A320 family planes would come from the Airbus final assembly line in China.

Enders was making his first public appearance since Airbus rolled out a new structure, completing a recent merger between its parent company and its dominant planemaking arm, changes which included a shift in the reporting line for its commercial sales team to Enders.

Enders said the shift in reporting lines for the sales team reflected the fact that commercial aircraft head Fabrice Bregier had been given more tasks in his new role as group-wide chief operating officer.

With orders slowing and the focus shifting to the backlog, Enders said the shake-up allows Bregier to concentrate on deliveries.

"This is merely a burden sharing mechanism because the focus should be on execution and this is what it's all about," Enders said.\
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Germany bus crash: 18 dead, 30 injured in Bavaria

A bus carrying German senior citizens on vacation crashed into a truck today on a highway in Bavaria and burst into flames, killing 18 people and injuring 30 others, some seriously, officials said.

The accident took place around 7 am when the bus rear- ended a trailer-truck at the end of a traffic jam on the A9 highway near Muenchberg, not far from the Czech border. The accident led to long traffic jams on the A9, the main thoroughfare from Berlin to Munich.

It was not immediately clear what caused the crash, but prosecutors have opened an investigation.

The bus seemed to have caught fire immediately upon impact with the truck, Transport Minister Alexander Dobrindt told reporters after touring the crash site. The truck's trailer also burst into flames.

"Two people are still in life-threatening condition," Dobrint said.

Two drivers and 46 passengers were on the bus. The remains of all bodies were recovered from the bus, including that of the driver at the wheel during the crash, police said.

Police said the truck driver was not injured.

Some 200 emergency crews rushed to the scene and five helicopters whisked the injured to nearby hospitals. Simple wooden coffins were wheeled in for the remains recovered from the blackened, twisted wreckage of the bus.

Police said the ages of those on the bus ranged from 41 to 81 and they were primarily from the eastern German state of Saxony. The news agency dpa reported that all the passengers were German.

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Brexit and US trade protectionism: catalyst for India-EU FTA

With the India-EU Free Trade Agreement (FTA) failing to reach a conclusion for a decade now, changed geopolitical circumstances could infuse a sense urgency in striking the deal. Brexit and trade protectionist policies of the US are beginning to play in favour on the deal, according to top representatives of the European Union Parliament in charge of relations with India.

Last week, at the fourth India-Germany Intergovernmental Consultations in Berlin, both Prime Minister Narendra Modi and German Chancellor Angela Merkel, reiterated the need for a successful dialogue for an India-EU FTA. Unlike previous discussions, the call for an FTA this time was more than a rhetoric.

“Since 2007 there has been efforts of FTA between EU and India. There has been a lack of vitality on both sides. Now, there is a bit more willingness to get things moving. One of the incentives has been Brexit. There are a lot of vital interest at stake,” Geoffrey Van Orden, Chair of The European Parliament Delegation for relations with India, told Business Standard.

Notably, Orden, a member of the European Parliament, belongs to the Conservative Party in the UK and is also batting for an India-UK FTA. However, an India-UK FTA is unlikely to be without hitches, for the UK is likely to maintain a tough stand on issues like the movement of people and outsourcing of jobs, hinted Orden.

We will have a UK-India trade relationship based on what we have negotiated with the wider EU. In UK India FTA, India places a lot of importance to transfer of personals. I feel quite sure this will continue, but it will be more controlled as the UK would like to see more highly-skilled people. There will be a reluctance to have unskilled labourers,” said Orden.

One of the demands of the British government was deeper cuts on tariffs on wines and spirits, particularly Scotch Whisky. Even with a tariff of close to 150 per cent, India is the third-biggest export market for Scotch at 41 million bottles, according to data from The Scotch Whisky Association (SWA)

Germany, by far the strongest leaders of the EU, has been pushing for an FTAs at the regional levels in the face of protectionist policies of the US government, as evident from the US pullout from Trans-Pacific Partnership and Paris Accord.
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We could file suit against Trump at WTO over border tax: Germany

Germany could file a suit against the United States at the World Trade Organization over President Donald Trump's proposed border tax, the economy minister said on Friday ahead of a meeting between Chancellor Angela Merkel and Trump later in the day.

Trump has warned that the United States will impose a border tax of 35 percent on cars that German carmaker BMW plans to build at a new plant in Mexico and export to the U.S. market.

Asked how Germany would react to the proposed tax, Economy Minister Brigitte Zypries told Deutschlandfunk radio it was very difficult because of the complexities of such a tax system.

"The other option is that we file a suit against him at the WTO - there are procedures laid out there because in the WTO agreements it is clearly laid out that you're not allowed to take more than 2.5 percent taxes on imports of cars," Zypries said.

Later on Friday Trump and Merkel are due to hold their first meeting since the new U.S. president took office in January. Merkel is likely to press Trump for assurances of support for a strong European Union and a commitment to fight climate change while he is expected to seek her support for his demand that NATO nations pay more for their defense needs.

Germany's 50 billion euro trade surplus with the United States has been a source of tension between Washington and Berlin.

"We know ourselves that that's a problem and we're working on it," Zypries said.

"Thankfully we just heard today that wage rises have been agreed again so that means domestic demand can increase again and we want to address tax incentives for research ... so we're on a good path," she added.

Around 72,000 steel workers in northwestern Germany will get 2.3 percent more pay from April and then a further wage increase of 1.7 percent from May 1, 2018 employers' group Arbeitgeberverband Stahl said on Friday.

"The Americans need our machines and our plants ... and the other point is that we only have an export surplus in the machines and plants sector; in the service sector it's the other way round," due to big internet companies in the United States, Zypries said. (READ MORE)