UK banks allowed to cut cash holdings
Britain's eight top lenders can cut their cash reserves by a collective £90bn ($140bn) and use the funds to support economic growth, the Bank of England's new governor Mark Carney said on Wednesday.
Britain's lenders were forced to build up buffers of cash and UK government bonds far earlier than required under a globally-agreed timetable.
The buffers help cushion them from short-term market shocks so they can keep operating for a month even if markets freeze, as they did during the 2007-09 financial crisis.
UK government bonds, known as gilts, fell after Carney's announcement as investors factored in the likelihood that the banks will sell off some of their holdings.
Carney, in his maiden speech as governor of the Bank of England, said it "will help to underpin the supply of credit, since every pound currently held in liquid assets is a pound that could be lent to the real economy".
In a separate statement, the central bank's Prudential Regulation Authority, which supervises UK lenders, said banks could scale back the liquidity buffers on condition they have a separate, minimum core capital ratio of 7% a new requirement.
The watchdog has said it expects the lenders to meet this capital ratio by the end of the year after some had to take steps to find more capital.
The eight are: HSBC, Barclays, Co-op, Lloyds, RBS, Standard Chartered, Santander UK and Nationwide.
The PRA is implementing a policy that the BoE's Financial Policy Committee decided on in June. The policy would allow the four biggest banks to scale back their liquidity buffers to 80% of where they should be if in full compliance with the global Basel III accord, not due until 2018.
This would release £70bn but, by extending the change to the eight main lenders, a further £20bn can potentially be released.
The British Bankers' Association said banks would be re-assessing how much of the £90bn can be redeployed into lending to small and medium businesses and households, as they are committed to doing.
No mission accomplished
The banks are under political pressure to increase lending to business following criticism that they are focusing on home mortgages and consumer credit rather than productive industry, encouraging a lop-sided economic recovery.
The banks argue that lending levels reflect the amount of demand.
Carney signalled that banks face having to hold more capital against mortgages if house price growth becomes unsustainable.
Like his predecessor Mervyn King, he insisted that well-capitalised banks are in a better position to lend, saying U.S. banks have rebuilt their capital bases and now lend far more than their British peers.
But Carney avoided some of King's harsh rhetoric towards the British banks, striking a more conciliatory tone that was welcomed by Philip Hampton, chairman of Royal Bank of Scotland, during a visit to Reuters.
"Most people like Mark Carney and they think they can do business sensibly with him," Hampton said.
Britain's banks will face further capital requirements because of their size or market dominance, but Carney said his task would be to manage this transition "in a gradual way that supports continued confidence in growth".
With a 7% core capital ratio, banks would be "adequately capitalised" to start that transition, he said.
"There is no mission accomplished banner that the banking system is fixed," Carney added.
Banks have been using cash and top-quality government bonds such as UK gilts in their liquidity buffers. The PRA said on Wednesday that up to 40% of the buffers could in future be in corporate bonds, shares and retail mortgage-backed securities, giving them greater flexibility.
Corporate suicides highlight stresses
The suicides of two top executives in Switzerland has prompted calls for greater support for boardroom high-fliers.
Heavy workloads, frenetic schedules and extensive overseas travel has obliterated the so-called "work-life balance" for many bosses and the financial crisis has piled on the pressure with job cuts, fire sales and the scramble to survive.
"It has always been tough at the top and it has always been lonely at the top and certainly since the global financial crisis, it's got even lonelier and even tougher," said executive mentor David CM Carter, author of self-help book Breakthrough.
"That's why it's really important that those people at the top pay attention to the need for balance," he said, pointing to entrepreneurs such as Richard Branson and Bill Gates, who have teamed glittering careers with a successful family life.
"They do hot air ballooning, they save the planet as well as running their fantastic empires. They have holidays and hobbies or they focus on their family and their relationships and on their health."
But career chief executives often face more pressure from shareholders and their boards than company founders such as Branson and Gates.
And while they usually have a coterie of staff running around them, chief executive officers often feel isolated by their position and the high-stakes decisions they have to take. The need always to present a "game face" can inhibit them from confiding in colleagues.
Zurich Insurance Group's chief financial officer Pierre Wauthier was found dead at his home on Monday in what police said appeared to be a suicide.
Just weeks earlier, Carsten Schloter, the chief executive of telecoms group Swisscom, killed himself.
The deaths shocked Switzerland's corporate community and have highlighted the sometimes lonely existence of high-ranking executives.
In media interviews, Schloter expressed regret about the distance between him and his three children in Germany, whom he saw far less frequently due to the breakdown of his marriage. He also said he found it "difficult to unwind".
Executives often spend large amounts of time away from their friends and family and it is not uncommon for bosses to live in a different city or even country for work and commute home at weekends.
Schloter had also faced pressure after an acquisition he championed led to €1.3bn euros of writedowns. More recently, Switzerland's competition body said it had opened a probe into Swisscom after a rival suggested it abused its market position.
Burn out
Corporate over-achievers are often reluctant to seek help in managing their professional burdens until too late, according to Jenny Gould, executive coach and life coach with Oxford-based stress management and coaching company STP Consultancy.
"Stress is something that's very insidious - you can deal with it for quite a long time before you then begin to find yourself burning out from it," she said.
In 2011, Lloyd's Banking Group Chief Executive Antonio Horta-Osorio took a temporary leave of absence to recover from overwork, sleep deprivation and exhaustion.
Horta-Osario was just eight months into his role at the bailed out lender, where he had embarked on a large scale restructuring programme. He returned after two months off.
"Stress is often caused by a lack of control and a lack of support. If you feel like you can't control certain outcomes and don't have anybody to discuss your worries and feelings with... that's potentially a toxic mix," Gould said.
In the past year, the chief executive of energy giant Shell has quit and the chairman of luxury goods group Richemont has taken a year-long sabbatical despite facing no obvious pressure to leave.
They cited a desire for a change of lifestyle or simply a break from the life at the top.
But companies need to watch for signs that all staff, junior and senior, are coping with their increasingly demanding roles.
Bank of America Merrill Lynch said last week it would review the working conditions for junior employees after a 21-year old intern, Moritz Erhardt, died after allegedly working 72 hours without sleep.
The cause of his death is not yet known.
Neil Shah, director at Stress Management Society, a non-profit organisation dedicated to helping people tackle stress, said firms who turn a blind eye to the pressures on overworked executives are exposing themselves to commercial risk.
"We need to view stress as a health and safety risk hazard," Shah said. "In the UK, we are legally required to risk assess for display screen equipment but you're not at this stage legally required to assess for stress.
"This is a major issue not just causing, in the worst case scenario, loss of life, but it has an impact on productivity, efficiency and causes absences. Those are real financial costs."
UK patients pay too much - watchdog
Private healthcare patients in Britain are paying too much because of a lack of competition, the country's market regulator said in a ruling that could lead it to force some operators to sell hospitals.
The Competition Commission (CC) said on Wednesday it had identified 101 private hospitals that faced little local competition, some of them in clusters owned by one of the major hospital groups BMI Healthcare, Spire and HCA International.
It could force operators to sell some hospitals in areas where they dominated, it said, adding that it had pinpointed about 20 such sites.
Asked about the discrepancy between the two figures, a commission spokesman said many areas had local monopolies or duopolies, so forcing sales would make no difference.
The state-run National Health Service (NHS) is by far the leading provider of treatment in Britain, where the market for privately funded healthcare was worth £6.4bn ($10bn) in 2011, according to consultants Laing and Buisson.
The major private hospital groups denied the assertion that they made excessive profits from their dominance of the market, But Bupa, one of the insurers which fund most private treatments through employee-medical insurance schemes, welcomed the report.
Mark Jackson, special adviser at advisory and restructuring practice Zolfo Cooper, said forced hospital sales would create uncertainty for lenders and investors in the sector which was already under pressure from a decline in the take-up of private medical insurance and an increase in lower-margin NHS work.
The CC said that the major health insurance groups, Bupa and AXA PPP, did not have the power to fully offset the dominance of the big private hospital groups.
Presenting the provisional findings of an investigation into the sector, it said this dominance raised insurance costs for all private patients because premiums, often paid by employers, are set nationally.
"The lack of competition in the healthcare market at a local level means that most private patients are paying more than they should either for private medical insurance or for self-funded treatment," said Competition Commission chairman Roger Witcomb.
"The lack of available and comparable information, often less than is available to NHS patients, also makes informed choices - which could help drive competition - for these patients difficult."
HCA charges highest
BMI, partly owned by South Africa's Netcare and private equity group Apax Partners, is the biggest private operator, with 69 hospitals, while Spire, owned by private equity group Cinven, owns 38.
HCA International, owned by US group HCA Holdings , charged significantly higher prices than other operators, the CC said, even allowing for higher costs of running its six London-based hospitals.
The three operators also faced little competition from new entrants in the market because of the high costs of setting up a hospital and flat demand for private healthcare services in recent years, it said.
The top five healthcare providers, which also include Ramsay Health Care UK and Nuffield Health, accounted for about 77 percent of the market by revenue in 2010, according to a 2011 report by the Office of Fair Trading. Smaller providers include Abbey, Aspen Healthcare, The London Clinic and The Horder Centre.
BMI said it disagreed with many of the findings of the investigation, and said it did not "hold the whip hand" in its relationship with insurers.
"We reject absolutely any assertion that BMI Healthcare and its hospitals exercise market power or that we make excess profits at the expense of patients," Chief Executive Stephen Collier said in a statement.
"The vast majority of BMI's 69 facilities, in a UK market with over 500 rival facilities, face very significant local competition from other private hospitals and, increasingly, from the NHS."
HCA International said it was disappointed in some of the findings. "London has witnessed a strong record of new entry and expansion of private health providers in recent years, demonstrating that barriers to entry are low," it said.
Spire disagreed with the CC's view that its hospitals faced little competition, made excess profits and had a disproportionate bargaining power over insurers.
"We believe these findings, and the remedies proposed, are based on an unrealistic assessment of the markets in which we operate and the level of investment necessary to operate a high-quality hospital," Chief Executive Rob Roger said in a statement.
But insurer Bupa said the findings were good news for patients.
"By tackling the lack of competition that has damaged the sector for too long, the Commission has understood the need for strong action and has put patients first," said Damien Marmion, managing director of Bupa Health Funding.
The Competition Commission's consultation is open until next month and a final report will be published by April 2014.
Luxury housing to be built on painter's grave
The burial place outside Moscow of the great Russian artist Kazimir Malevich, famed for his avant-garde works of the early Soviet era, has been paved over to make way for a luxury gated community, activists said on Wednesday.
A new construction project in the village of Nemchinovka near Moscow was allowed to cover the grave of the painter of the iconic "Black Square" composition, despite tireless petitions, local activist Alexander Matveyev told AFP.
Matveyev heads the group "Nemchinovka and Malevich" which researches the artist's life in the village and he said had provided authorities with the precise coordinates of the location of the grave.
Several well-known Russian cultural figures flocked to Nemchinovka in the 1920s, including Malevich and visionary Soviet filmmaker Sergei Eisenstein.
Malevich, an artist, sculptor and writer, who died in 1935 in what is now Saint Petersburg, was cremated and buried in Nemchinovka as per his wishes. The exact location of the grave was lost during World War II.
By the late 1980s, the area was an agricultural field so a plaque was erected on the edge of the field, about two kilometres away from the spot.
Two more decades passed before Matveyev and other activists in Nemchinovka were able to pinpoint the exact coordinates through surviving witnesses, radar equipment and military maps.
They even joined forces with German banker and Nemchinovka resident Jochen Wermuth in 2011 to build a memorial and museum centre in the area, only to see the area closed off by the construction company.
"The culture ministry ordered to stop construction works, but they only stopped for a few hours," Matveyev said.
"Now the spot has been covered with concrete."
He said that the exact location of the grave has now been paved over and is surrounded by housing which will form a gated community.
Moscow region culture official Oleg Rozhnov told RIA-Novosti news agency this week that by the time the grave was precisely located, it was too late to change the project, since "it was already inside the gated territory".
But Matveyev dismissed this as misinformation.
Once a bucolic country setting lying just west of the capital, Nemchinovka and the surrounding scenery that inspired Malevich is now covered with gated communities and housing complexes populated by affluent Moscow commuters.
The website of the complex, called Romashkovo City, boasts a "fenced territory and 24-hour video surveillance monitored by our own security team". Residents access the premises via electronic keys and will have their own private school and kindergarten.
Matveyev has now written to President Vladimir Putin asking to move the grave beyond the premises to a plot of land that is still available, with the dream of some day building a centre of avant-garde art.
"We need land to build the memorial," he said. "I think Malevich would approve."
He added that not all was lost since the precise spot has no housing built on top of it, just paving.
By the time of his death at 57 in 1935, Malevich had become a persona non-grata in the Soviet art establishment which had returned to conservatism after the bold experiments of the early 1920s. He had asked to be laid in a "Suprematist" coffin shaped like a cross.
A Moscow crematorium burned his body, and his ashes were buried under his favourite oak tree in Nemchinovka, marked with a black square.
In his will he asked that a monument on top of his grave contain a telescope pointed at Jupiter.
Costs threaten Merkel's energy overhaul
Angela Merkel's "green revolution" risks becoming a victim of its own success.
Seduced by generous subsidies, Germans are embracing the ambitious project with such fervour - installing solar panels on church roofs and converting sewage into heat - that instead of benefiting from a rise in green energy, they are straining under the subsidies' cost and from surcharges.
Merkel's ambitious experiment to wean Europe's biggest economy off nuclear and fossil fuels is being closely watched around the world. Should it work, others will follow. But her priority if, as expected, she wins a third term on September 22 will be finding a way to cap the rising cost of energy.
"Germany's dilemma is how to keep industry's energy prices low enough to remain competitive and meet ambitious (green) targets while also maintaining a balanced budget," said Will Pearson, head of global energy at the Eurasia Group in London. "Addressing these will pose a political challenge."
So attractive are the incentives, or feed-in tariffs, that the rapid expansion of renewable power has driven up the surcharges which fund them and are paid for by consumers. The charge rose by 47% this year alone.
Both households and industry are feeling the pain and exporters complain that the energy shift has driven up power prices so much that their competitiveness is being eroded.
Cost worries aside, polls show broad public support for the shift, announced by Merkel after Japan's Fukushima disaster in 2011. Responding to public fears, she accelerated Germany's nuclear exit and introduced targets for renewables to make up 35 percent of the power mix by 2020 and 80 percent by 2050.
Given that consensus, the struggling opposition finds it difficult in the election campaign to present energy policies that differ significantly from those of Merkel's conservatives.
No one advocates a dismantling of the project.
"The energy transformation is a bit like putting man on the moon - it offers Germany huge opportunities for future decades. I have nothing against the idea," said Peer Steinbrueck, the Social Democrat (SPD) candidate for chancellor. "But Mrs Merkel is messing up the implementation and we will change that."
The SPD, which introduced the first incentives for green energy more than a decade ago when it ruled with the Greens, wants to help consumers by cutting energy taxes.
Grass roots
While politicians squabble over how to keep a lid on costs - put at €1 trillion in the long run by the environment minister - voters are taking matters into their own hands.
Take projects like GruenEnergie, a scheme launched two years ago by city utility Stadtwerke Guetersloh in western Germany under which the local cooperative bank and turbine maker Enercon each match citizens' investments in a nearby wind park.
After just three weeks, it had raised enough, mainly from locals offering between 1,000 and 25 000 euros, to fund a park which produces power for 2 400 households a year. The project has expanded to buy a solar park in eastern Germany.
Investors get dividends from the project linked to the guaranteed prices paid for the power generated by the turbines
"Customers are motivated by an investment in green energy which is considered trendy," said the utility's head of energy services, Uwe Poeppelmann.
Such grass-roots activism is, say experts, one of the most striking results of Merkel's energy shift.
Some 1.3 million solar photovoltaic units are on stream, mostly owned by single households, and about 23,000 wind plants have been bought, mainly by groups of farmers who club together.
However successful she has been at fostering a new culture, Merkel would face tough decisions in a third term: namely how to reform a subsidy system which is a victim of its own success.
Households take a direct hit on their electricity bills and do not expect this year's jump in the surcharge to be the end of it - creating a source of anxiety for voters.
"Surveys show people are concerned that the costs of the energy transformation will drive down living standards," said Emnid pollster Klaus-Peter Schoeppner.
Industry
Export-oriented German industry, already disappointed that shale gas is being shunned due to environmental fears, is angry about high energy costs, although exemptions help many firms in the cement, steel, paper and glass sectors.
Although wholesale power prices have plunged by about a fifth this year due to renewable supplies, end users have to pay the second highest prices in Europe thanks to fees and charges.
"Energy-intensive industry, which employs over 900,000 people, will have to leave Germany in the medium term if it does not get sustainably competitive energy prices," said the head of the BDI industry association last month.
Utilities like E.ON and RWE, hit by plunging prices for wholesale power which they sell, are also piling on pressure to reduce green incentives. Some have threatened to shut thousands of megawatts worth of plants unless there is a big rethink.
Merkel, who has promised to change but not abolish the incentive system right after the election, faces a delicate balancing act to ensure renewables continue to grow and keep consumers happy. Much will depend on her coalition partner.
If she renews her alliance with the business-friendly Free Democrats, who want a radical overhaul of the Renewable Energy Law, deep cuts to feed-in-tarifs may come. But if she switches to a "grand coalition" with the SPD, her scope may be smaller.
Whether her next coalition is centre right again or centre left, Merkel is set to scale back exemptions from the renewable surcharge and grid fees, as the European Union has urged.
She also needs to boost offshore wind, which was meant to be part of the energy switch but has proved costly, and the power grid needs to be expanded by up to 4 600 km and overhauled to cope with bursts of supply from renewables. But some local communities fiercely resist more power masts.
Australian opposition outlines budget savings
Australia's conservative opposition, heavily favoured in next month's election, outlined A$31bn ($27.8bn) in savings on Wednesday and promised to breathe new life into the economy by abolishing environment taxes polarising voters.
But Prime Minister Kevin Rudd said the opposition planned big cuts to key services and predicted voters would return to his Labor Party in the final week of campaigning. Most polls give the opposition under Tony Abbott a 53 to 47% lead, enough to give them a sizeable majority in parliament.
Opposition finance spokesman Joe Hockey, who would become treasurer of the world's 12th biggest economy if the polls prove true, said the conservatives were determined to better Labor's spending record, seen as one of Rudd's biggest electoral weaknesses.
"After six years of Labor getting every single budget number wrong, enough is enough," Hockey told reporters. "The coalition is absolutely committed to living within its means."
Labor, he said, had presided over a "dysfunctional" budget after ousting the conservatives in 2007.
The opposition has long made the abolition of a "carbon" tax on pollution and a tax on mining company profits the cornerstone of its bid to drive Labor from office, blaming the carbon tax for pushing up the price of electricity and other services.
Voters concerns over budget cuts, jobs
But budget cuts and their impact on jobs amid a slowdown remain a major concern among many of the 14 million voters. An Australian National University survey found jobs and management of the A$1.5 trillion economy to be the most important issue.
Rudd told a campaign event that Abbott planned in secret to "cut, cut and cut" health and education programmes, austerity measures that could hurt confidence and propel the country into its first recession for a generation.
"He is the master of the big cuts," the prime minister said.
He predicted Labor would make a big comeback despite the polls, as it did in the 1993 election.
"Mr Abbott thinks he's a shoo-in," Rudd said. "I think the Australian people don't like political leaders who arrogantly assume that they have their vote already in the bag."
Hockey, a former financial markets lawyer, went out of his way to say there would no cuts in social spending.
The conservatives, he said, would deliver a centrepiece promise of a A$9.8bn paid parental leave scheme, paid for in part through abolition of business compensation associated with the carbon and mining taxes to be eliminated. A further A$5.2bn would be saved by axing 12 000 government jobs.
As well, the opposition would keep savings adopted by Rudd in a pre-election budget statement that lowered growth forecasts to 2.5% from 2.75% this fiscal year, and forecast the jobless rate rising to 6.25%.
The one exception would be Labor's cuts to tax breaks for the automotive sector, still struggling to adjust to the Australian dollar's high levels in recent years and local costs which prompted a pullout this year by Ford, he said.
In response to the weakening economy, the Reserve Bank of Australia has cut its benchmark interest rate to a record low of 2.5%, while a A$33bn drop in tax revenue saw a forecast budget deficit this fiscal year of $A30.1bn, returning to a A$4.0bn surplus by 2016-17.
Global demand for iron ore, coal and other natural resources supported the economy for most of the past decade, but falling commodity prices and slowing growth in China, the country's top export market, have rattled confidence.
Hockey said the conservatives would more quickly wind back net government debt, now expected to peak at 13% of GDP by 2014-15, or A$212bn, up from the May forecast of A$191.6bn, or 11.4% of GDP in 2014-15.
"This is the most important election in a generation," he said.
Libya seeks end to crippling oil strikes
Libya is seeking a peaceful way to end oil strikes that have crippled its crude exports but will take alternative action if needed, Prime Minister Ali Zeidan said on Wednesday.
"We will take other measures if these peaceful measures do not succeed," he told a news conference, without elaborating.
Libya's oil production has fallen to about a fifth of the highs reached since its 2011 civil war due to a month-long disruption by armed security guards who shut the country's main export ports.
Zeidan said he had talked to tribal leaders in the east, the focus of oil sector disruption, and they rejected calls for partition of the country.
"They respect the legality and unity of the nation," he said.
Oil Minister Abdelbari al-Arusi on Tuesday blamed mainly non-oil workers and agitators pushing for federalism in Libya for the strikes, which he said had cost the country $2bn in lost revenues so far.
"These groups announced federalism and they don't recognise the government nor the general national council," the minister said.
The oil ports of Es Sider, Ras Lanuf, Zueitina and Marsa al Hariga, which are in the east where most of the country's oil production lies, remained closed.
Zeidan said he hoped there would be a breakthrough soon in talks to resolve the crisis but gave no indication of when oil output might be restored.
Libya's oil production has been cut to 250 000 barrels per day, he said, from prewar levels of 1.6 million bpd.
The latest fall in Libyan output was caused by an armed group that shut a pipeline linking the El Feel and El Sahara fields to ports late on Monday. The two fields have a combined output capacity of around 500 000 bpd.
Zeidan said the eastern Hamada field was also closed. The field had been pumping 10 000 bpd.
Swiss govt ready to sign tax deal
Switzerland said it is ready to end a long-running dispute with US prosecutors over Swiss banks that have sheltered tax evaders, without disclosing any terms of the deal.
The two governments have been at loggerheads over a tax evasion crackdown which has ensnared around a dozen Swiss banks, is threatening a raft of others, and earlier this year felled Wegelin, Switzerland's oldest bank, following an indictment.
The Swiss government said on Wednesday the signing of the joint statement with the US should enable Swiss banks to resolve the dispute with the United States while complying with existing Swiss laws. It gave no further details, and the finance ministry was absent at a weekly government press conference.
A Swiss newspaper reported the host of banks not yet under formal investigation in the US could face fines of as much as 50% of their American client assets. Government spokesperson Andre Simonazzi said the terms and conditions of the programme would not be immediately released, but would be communicated "as soon as possible".
While Switzerland's banking lobby and a banking employees association welcomed the move, a spokeswoman for the US justice department didn't immediately comment on the Swiss statement.
The agreement deals mainly with a settlement for the roughly 100 Swiss banks that had US clients, but are not yet being investigated by US justice authorities.
"The SBA welcomes the positive outcome of the Federal Council's decision, as this means that the final step towards a solution has been taken and the US can now launch the programme," the SBA said in a statement.
Around a dozen banks are under US investigation, including Credit Suisse, Julius Baer, the Swiss arm of Britain's HSBC, privately held Pictet and state-backed regional banks Zuercher Kantonalbank and Basler Kantonalbank .
Several of those banks have said they are preparing information of client withdrawals demanded by US investigators, after the Swiss government said it would allow them to circumvent secrecy and privacy laws to do so.
Last week, a Swiss government source told Reuters the US government had ratcheted up the pressure on Switzerland to strike a deal after the Swiss parliament rejected an accord in June, tightening its negotiating terms after the rebuff.
US pending home sales drop in July
US pending home sales dropped for the second month in a row in July as rising mortgage interest rates hit demand, an industry group said Wednesday.
The National Association of Realtors' index for pending sales of previously owned homes, based on contract signings, fell 1.3% to 109.5 in July.
The index was 110.9 in June, after an unexpectedly strong jump to 112.3 in May, its highest level since December 2006.
The second straight monthly decline surprised analysts, who on average had predicted the index would rise 0.2% in July.
Although the housing market is still rising - pending sales were up 6.7% from July 2012 - higher mortgage rates are slowing the market, NAR said.
Lawrence Yun, NAR chief economist, downplayed the July figure, saying "the modest decline in sales is not yet concerning."
"However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West," he said.
The NAR data points to existing-home sales dipping in both August and September, said Ian Shepherdson of Pantheon Macroeconomics.
"Mortgage applications and mortgage lending are now trending downwards in the wake of the surge in mortgage rates over the past three months, and housing transactions will follow," he said.
"We are inclined to see the May surge as a signal that people were rushing to lock-in before rates rose further, rather than an indication of a further sustained pick-up in sales."
G4S boss seeks over $900m for turnaround
G4S, the world's largest security services firm, plans to raise about £600m by selling shares and assets as its new boss seeks to restore its battered reputation by cutting debt and focusing on emerging markets.
Chief executive Ashley Almanza, a former executive at oil and gas firm BG Group, was promoted from finance chief in June after a string of blunders by his predecessor, including a failed takeover bid in 2011, a botched contract to staff the 2012 Olympic Games and a profit warning in May.
He said on Wednesday he would give a detailed plan in November, but that the initial measures he was putting in place should help to avoid a costly credit-rating downgrade, improve profit margins and start to deliver tangible benefits in 2014.
Panmure Gordon analyst Mike Allen welcomed Almanza's debut announcement as chief executive. "We applaud the quick work undertaken by management to re-structure the group and shore up the balance sheet," he said.
At 09:05 GMT, G4S shares were up 3.7% at 255.14 pence, the biggest rise by a UK blue-chip company and reversing early losses. Shares often fall following the announcement of equity fundraisings, as these cut earnings per share for investors.
G4S, which runs services from managing prisons and transporting cash to guarding the Wimbledon tennis championships, aims to benefit from a trend among cash-strapped governments and businesses to outsource security work.
However, it has come under pressure as governments in developed markets in particular have cut back services.
The company said its first-half operating profit margin slipped to 5.5% from 5.9% in the same period last year, reflecting a lost prison contract in the Netherlands and squeezed pricing in Britain and elsewhere in Europe.
Net debt rose to £1.95bn as of June 30, some 3.2 times earnings before interest, tax, depreciation and amortisation compared with a target of 2-2.5 times.
However the group, which wants to grow revenue in developing markets in Asia, Africa and Latin America from a third to half of its total, said it had a global sales pipeline of 4 billion pounds. It did not provide details, but noted strong demand from financial services, mining and government sectors in Africa.
"G4S has excellent market positions, particularly in developing markets and as a result of which we have very material growth opportunities," Almanza said.
Raising money
G4S, which leads rival Sweden's Securitas by sales, said it would place 140.9 million new ordinary shares representing up to 9.99% of its existing share capital with new and existing investors via an accelerated bookbuild.
That equates to around £350m at current prices.
The company said its largest shareholder, Invesco, supported the placing and intended to participate in it. Citigroup, JP Morgan and Barclays are joint bookrunners for the share sale.
G4S also said it would sell a number of businesses, likely to be in developed markets, which could raise up to £250m in the next year, and would restructure other units in a group which spans 125 countries in order to improve margins.
On Wednesday - and included in the asset sale total G4S said it had agreed to sell its Canadian cash security and Colombia Data solutions businesses for £100m. The sale of its US business was ongoing, it added.
G4S said it had taken a one-off charge of £180m following a review of its assets and that it had started restructuring programmes including cutting staff numbers and ending some lower-margin services in Britain, Ireland and Europe at a cost of £30-35m over 2013 and 2014
Almanza declined to give an operating margin target.
First-half operating profit came in at £201m, little changed from a restated £202m a year earlier, with turnover up 7.2% to £3.65bn.
The firm also named Misys's Himanshu Raja as its new chief financial officer on Tuesday.
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