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RCBC, thrift arm secure BSP’s okay for merger

THE MERGER of Rizal Commercial Banking Corp. (RCBC) and its thrift banking subsidiary, which is intended to reduce operating costs and consolidate the lender’s retail base, has been approved by the central bank.

In a regulatory filing on Tuesday, RCBC said the Bangko Sentral ng Pilipinas (BSP) approved on June 17 its merger with its thrift bank arm RCBC Savings Bank (RSB).

“We have received officially the approval of the BSP. We will now continue to work with the other regulatory approvals. After the BSP, we also have to consider other government agencies that have to approve the merger,” RSB President Rommel S. Latinazo said on the sidelines of RCBC Investment Forum yesterday.

In a previous disclosure, RCBC said it expects to complete its merger with RCBC Savings Bank on July 1, with RCBC assuming all assets and liabilities of the thrift bank.

Following the central bank’s approval of the consolidation, Mr. Latinazo said the banks still need the green light from the Securities and Exchange Commission as well as the Bureau of Internal Revenue.

“We have a team that’s working on the approvals. What we can say is the process is ongoing. It’s moving as planned,” he said, adding he is hopeful of meeting the July 1 completion target.

“Once we get the approvals, we should be able to effect the merger and the target is July.”

Announced in September, the consolidation of RCBC and its thrift bank will allow for more efficient capital deployment and operational cost efficiencies, the listed parent has said.

Once the merger is complete, RCBC will have a combined branch network of over 400, with 149 offices coming from its savings arm.

Mr. Latinazo said roughly 500,000 RSB clients will be infused into the client base of RCBC.

“In terms of products, the unibank has more products to offer both depository and other banking services. And from a consumer business standpoint, it means a bigger access of customer base for us, especially if you’re talking about consumer finance,” he added.

Mr. Latinazo earlier said RCBC’s consumer lending business will expand further as its thrift banking arm is absorbed by the parent.

He added that the bank would “like to be guided” by the 20% compounded annual growth of its consumer lending business for the past five years.

With the consolidation of the thrift lender into its parent bank, Mr. Latinazo said the consumer business will continue to be “one of the pillars of growth” for RCBC.

Apart from the consolidation, the robust growth in the middle market will boost RCBC’s consumer lending going forward.

Latest central bank data showed RSB was the third-biggest thrift bank in asset terms at P139.92 billion as of end-2018.

RCBC posted a P1.3-billion net income in the first quarter, up 15% from the P1.1 billion booked in the same period in 2018.

Its shares closed at P28.05 apiece on Tuesday, down 30 centavos or 1.06%. — Karl Angelo N. Vidal

Conrad exhibit combines good feng shui and art

FOR THE 9th installment of its ongoing Of Art and Wine series, the Conrad Manila features the works of Filipino-Chinese artist Elizabeth Anne “Lizanne” Uychaco, who is known for combining modern art and the art of feng shui. It is ongoing until Aug. 11 at the hotel’s Gallery C.

“I grew up with a feng shui master [organizing our homes]… In one of our homes, there was like an area missing in the ‘wealth area’ and so he had given us this really, really big sculpture of gold coins that drove the interior designer crazy. So I painted and sculpted some coins… and showed it to the feng shui master and asked if I could put [my work instead of his in the ‘wealth area’] and he gave his blessing. The started a niche for me… that there are people looking for feng shui art,” Ms. Uychaco said during her speech at the exhibit’s opening on June 11.

Feng shui or Chinese geomancy is the belief that energy forces can be used to harmonize individuals with their environment.

Ms. Uychaco is widely considered as one of the few (if not the only) feng shui artists in the country, but her love affair with lucky Chinese symbols started when she was young when a feng shui master gave her a Chinese gold coin (which is used as a symbol of wealth and prosperity) to “protect me from sickness and bring me luck.”

The gold coin became her signature as it is found in almost all of her artworks. The works in Of Art and Wine: Heaven and Earth are no exception — the 24-piece exhibit features the gold coin among other Chinese symbols of luck and Filipino symbols like the bulul (the carved figures of granary gods from the Mountain Province).

Some pieces of note are Origins of Wealth which features the Chinese gold coin in the center with a border made of bululs, and Best of Times which looks like a king from China’s Manchu-led Qing dynasty (1636-1912) whose ears are made from jade bangles and a necklace from Chinese beads.

“I’m not a feng shui master and usually their feng shui masters do the choosing,” she said referring to her clients. [But] I did learn a bit because my father was friends with a feng shui master,” Ms. Uychaco told reporters.

Her exhibit features largely mixed media work as she took classes in “sculpture, pottery, jewelry-making, silver craft, gold-gilding, calligraphy, painting in watercolor, oils, and acrylics,” said a press release.

Her artworks were described as “clearly rooted in Oriental art [while] utilizing miniature Philippine objects that are symbols of protection and prosperity,” said the release.

It took her two years to complete the 24 pieces as she only had time to work on her art on weekends — on weekdays she works as SM Investments’ Senior Vice-President for Corporate Services.

“This is two years in the making… I also took a vacation leave to paint because this is bigger than my normal every year [exhibit which usually has] about eight to 10 pieces,” she said.

“I think [my art] is very easy to recognize and when I was studying painting and art, one of the professors actually said, ‘you know people shouldn’t have to read an artists’ name to know [who made them].’ You need to have a unique style and some originality that really reflects yourself,” Ms. Uychaco explained.

Ms. Uychaco’s Of Art and Wine: Heaven on Earth exhibit in on view until Aug. 11 at Conrad Manila’s Gallery C in Pasay City. The artworks are for sale with prices ranging from P208,000 to P888,000.

For more information about the exhibit and the price list, call (632) 833-9999 (Angelica Restivera) or e-mail conradmanila@conradhotels.com. — Zsarlene B. Chua

Shipbuilder Austal allots $20M for PHL expansion

SHIPBUILDER Austal Philippines is investing $20 million to expand its operations in the country as it bids to supply ships for the Philippine Navy.

Austal Philippines, the local unit of Australian shipbuilder Austal Ltd., said it is looking to expand its shipyard in Balamban, Cebu to fuel its growth.

“Since 2012, we’ve expanded the land area, we’ve reclaimed land and we built new sheds that allow increased production… The $20 million is mainly preparing the land, building the new buildings, hiring new people and training them,” Austal Marketing Manager Paul Sparke told reporters Tuesday.

“Our strategy is to continue to build commercial ships. We’re also bidding for the OPVs (offshore patrol vessels) for the Navy,” he added.

The company said the fresh investment is expected to be completed next month.

“This expansion will last to operate for the foreseeable future with enough space now to deliver the OPVs as well as our commercial contract commitments. So this will keep us going for a number of years, but we’ve also got space and ability to expand further, Mr. Sparke said.

Austal Philippines intends to increase its employee base to more than 1,000 people from 900 at present, as it expects to receive more orders for ships in the coming years. In particular, the company is hoping to seal the deal to deliver six OPVs for the Philippine Navy.

“If we win this contract (with the Philippine Navy), we’d certainly be looking at…maybe another 100-200 (workers) to help build the new ships,” Mr. Sparke said.

“We’re going through a process at the moment. We’re expecting that they’ll be putting out a request for tender later this year. At the moment, they’ve put out a request for information, so we’re talking to the Navy about what they would like, and we’ve forwarded our design for the Philippine Navy,” he added.

The Navy’s patrol vessels are part of the modernization program being undertaken by the Armed Forces of the Philippines. Austal said it has provided a similar type of vessel to the Royal Australian Navy and the Australian Border Force, but the one for the Philippines Navy is a larger variant of the Cape-class boats.

The company already built 17 ships from its operations in the Philippines since it started in 2012.

Majority of these ships, or 14 out of 17, were exported to countries such as Germany, United Kingdom, South Korea and Taiwan. There are also current orders for ships to be delivered to Norway and Spain.

In the Philippines, Austal has two local clients: 2GO Group, Inc. and VS Grand Ferries Corp. — Denise A. Valdez

A songbook of life and love

By Michelle Anne P. Soliman, Reporter

THEATER REVIEW
Beautiful: The Carole King Musical
Presented by AtlantisTwenty
June 14 to July 7
Meralco Theater, Pasig City

THE ORCHESTRA began playing a medley of Carole King songs. First on the lineup was “So Far Away” (this writer’s personal favorite). The singer-songwriter was wearing a long bright pink dress as she sang on the piano. Then, she stopped singing mid-way to do a spiel.

It was not really a concert, but the opening scene of Beautiful: The Carole King Musical, the scene set during the singer-songwriter’s performance at Carnegie Hall in 1971.

Producing plays this year under the sobriquet AtlantisTwenty to mark its 20th year in the business, Atlantis Theatrical Entertainment Group brings the Tony, Olivier, and Grammy Award-winning musical on stage this month at the Meralco Theater in Pasig City.

Written by Douglas McGrath, the musical follows the young Carole King’s journey from schoolgirl to songwriter. She meets her song-writing partner and husband Gerry Goffin, and as their songs become popular, they develop a friendship and rivalry with the song-writing duo Barry Mann and Cynthia Weil. The musical also tackles King’s troubled marriage and the decision that led to her transition from songwriter to performer.

Beautiful makes the audience aware (for those like me who did not know their history despite being familiar with the songs) that Carole King (played by Kayla Rivera), Gerry Goffin (Nick Varricchio), Cynthia Weil (Mikkie Bradshaw-Volante), and Barry Mann (George Schulze) all began their careers in the music industry in the early 1960s by writing songs for artists from across genres.

The relationship of both song-writing duos was competitive professionally. They got along very well despite the challenge in writing the next number one hit. Their dynamic felt more of a friendship than a rivalry.

From the opening scene, Act 1 transitions to the time of young King’s decision to move to 1650 Broadway, which was the epicenter of New York’s music publishing world. Impressed by her songwriting skills, music publisher Don Kirshner helps fulfill her dream and she starts to create chart-topping hits.

Act 1 is light, with audience-pleasing comic lines and song numbers that earned resounding applause and cheers. Many of the songs were performed not by King and Goffin, but by the groups they wrote the songs for including The Shirelles and The Drifters. The atmosphere in Act 2 is more serious as King’s relationship with Goffin struggles. After an emotional scene where King sees Goffin with singer Marilyn Wald, this writer did not expect to cry during the reprise of “Will You Still Love Me Tomorrow.”

The songs used during the second half on the show were those written and inspired by the artists’ personal experiences such as “It’s Too Late” and “You’ve Got a Friend.”

Beautiful celebrates artists of ambition and persistence whose songs now belong not only to fellow singers but to everyone.

Ms. Rivera as Carole King was marvelous. Her voice found its own sound when performing King’s songs without resorting to voice mimicry.

Throughout the show, the song performances by various artists were entertaining and nostalgic. My favorite would have to be the performance of “The Locomotion” by Little Eva, an energetic number made more fun by the actors’ bright pink costumes.

I normally cry when I hear nostalgic songs, but this was the first time that I had a big smile on my face while hearing the old songs.

The production’s colorful set filled with retro 1960s colors and patterns, it felt like we were members of a live studio audience at the taping of a TV variety show.

The musical was fast-paced, hilarious, and so enjoyable that I did not notice the passage of time. Towards the end, get up to sing along when the situation permits it. Stand up and dance, if you must.

That night, I left the theater with a gleeful soul.

For tickets to Beautiful, visit www.ticketworld.com.ph or call 891-9999.

BoJ set to debate rising overseas economic risks

BANK OF JAPAN Governor Haruhiko Kuroda said the central bank will discuss rising overseas risks at its meeting this week. — REUTERS

TOKYO — Bank of Japan (BoJ) Governor Haruhiko Kuroda said the central bank will “certainly” debate heightening overseas risks at a rate review this week, underscoring concerns among policy makers about the economic fallout of a US-China trade war.

The trade frictions and slowing global demand have cast doubt on the BoJ’s forecast that Japan’s economy will continue to expand moderately, pressuring central bank to deploy additional monetary easing to underpin growth.

“As for recent overseas economic developments, there are strong downside risks regarding the Sino-US trade friction and China’s economy,” Kuroda told parliament on Tuesday.

“We’ll certainly debate such overseas developments” at the upcoming rate review, he said, but added that the BoJ is already keeping monetary policy ultra-loose.

At the two-day meeting kicking off on Wednesday, the BoJ is expected to keep monetary policy steady but signal its readiness to ramp up stimulus if growing overseas risks threaten the economy’s modest expansion.

“The BoJ will guide monetary policy appropriately taking into account the impact overseas economic changes could have on Japan’s economic outlook and the momentum for achieving our inflation target,” Kuroda said.

Under a policy dubbed yield curve control (YCC), the BoJ guides short-term interest rates at -0.1% and the 10-year government bond yield around zero percent in an effort to accelerate inflation to its elusive 2% target.

Some analysts say the central bank could be forced to ease more if the US Federal Reserve cut interest rates in coming months and trigger an unwelcome yen rise against the dollar in a blow to Japan’s export-reliant economy.

Many BoJ policy makers are wary of deploying stimulus any time soon, given their dwindling ammunition and the rising cost of prolonged easing such as the damage years of near zero rates are inflicting on financial institution’s profits.

Barclays expect financial markets to start factoring in the chance of additional easing at the BoJ’s July policy meeting.

“We expect the BoJ to keep any actual easing measures on hold for now, instead strengthening its forward guidance” at the July meeting, their analysts wrote in a research note. — Reuters

PAL prexy Bautista retires; Vivienne Tan named OIC

PHILIPPINE Airlines (PAL) operator PAL Holdings, Inc. is preparing for the daughter of Chairman and Chief Executive Officer (CEO) Lucio C. Tan to take the reins of the company, following the retirement of President and Chief Operating Officer Jaime J. Bautista.

In a statement Tuesday, the listed company said PAL Executive Vice-President Vivienne K. Tan has been named the officer-in-charge (OIC) after Mr. Bautista, 62, filed for retirement.

“The airline said Chairman and CEO Dr. Lucio C. Tan and members of the PAL board of directors have accepted Mr. Bautista’s retirement after he expressed his desire to spend more time with his family,” the statement read.

The flag carrier noted it will be “business as usual” despite the changes in leadership in the company. All concerns that were previously assigned to Mr. Bautista as PAL president will now be redirected to Ms. Tan.

“As this is the beginning of (Mr. Bautista’s) retirement life with his family, let it also be the beginning of even greater dreams for PAL and all PALers,” Ms. Tan was quoted in the statement as saying.

“On behalf of my father, I am asking all of you to continue working towards our goals. I am personally committed to working with all of you hand in hand and build on what we have already accomplished,” she added, addressing PAL employees.

On top of her new role in PAL, Ms. Tan is a sitting board member at the family’s holding firm LT Group, Inc.; Philippine National Bank; Eton Properties Philippines, Inc.; Dynamic Holdings Ltd.; University of the East; and University of the East Ramon Magsaysay Memorial Medical Center.

PAL is eyeing to secure a five-star airline rating from Skytrax next year, after it was conferred the four-star title last year. It is expanding regional routes and long-haul flights with the expected delivery of additional aircraft through 2024.

The listed firm booked an attributable net loss of P838.17 million in the first quarter, lower by 24.3% compared to the same period last year, due to an increase in passenger volume from adding flight frequencies and new routes. — Denise A. Valdez

EDC tapped for BGCI’s global tree assessment program

ENERGY Development Corp. (EDC) has been tapped as Botanic Gardens Conservation International’s (BGCI) first and only local partner for its Global Tree Assessment (GTA) program.

In a statement on Tuesday, the Lopez-led company said under the partnership, it will be receiving a P1-million grant over a two-year period.

BGCI is part of the International Union for Conservation of Nature (IUCN), an organization working in the field of nature conservation and sustainable use of natural resources. It also formulates measures for the protection of the environment through data gathering, research, field projects, advocacy, and education. By 2020, the GTA program should have the first global list of tree species and their conservation assessments

“This partnership with the IUCN and BGCI could not have come at a more opportune time. We welcome the privilege — albeit the daunting task of being the Philippines’ first and only assessor of 800 native trees species,” EDC Chairman and Chief Executive Officer Federico R. Lopez said in a statement.

EDC, through its Binhi program, will provide information on 800 Philippine endemic tree species to BGCI. BGCI noted that only 25,000 of 80,000 global tree species have been assessed in terms of their risk of extinction.

Through the Bihni program, EDC has reforested 9,500 hectares with indigenous species and has propagated 96 native tree species, which are about to be extinct.

Aside from gathering data, BGCI will also train the Binhi team and its partners, and the Department of Environment and Natural Resources (DENR) about the International Union for Conservation of Nature (IUCN) Red List methodology. — Vincent Mariel P. Galang

A piece of Venice Biennale’s PHL Pavilion comes home to Manila

ARTIST Manuel Ocampo stands next to one of his pieces during the opening of the restaged The Spectre of Comparison exhibit at MCAD.

A PART of the exhibit which made up the Philippine Pavilion at the 57th International Art Exhibition of La Biennale di Venezia in Venice, Italy, can now be seen in Manila, at the Museum of Contemporary Art and Design (MCAD), where it is on view until July 20.

The Spectre of Comparison features the works of two Filipino artists, Lani Maestro and Manuel Ocampo. The exhibit was inspired by the Spanish line “el demonio de las comparaciones (the demon of comparisons),” from the revolutionary novel Noli Me Tangere by the National Hero Jose Rizal, which summarized the experience of the novelist’s protagonist, Crisostomo Ibarra, as he gazed at the Botanical Garden of Manila while simultaneously fondly remembering the gardens of Europe.

The exhibit delves on the tainted viewpoints when one cannot help but juxtapose two different geographical areas.

Though both Maestro and Ocampo have resided abroad for years, they have maintained active personal engagements with the Philippines throughout their careers.

MCAD Director Joselina “Yeyey” Cruz, curator of this particular exhibit, said that mounting the exhibition is a big challenge. “It’s difficult to bring a whole exhibition to a different place and expect it to be the same when the venue and the context has hanged. Still, the team did its best to recreate an experience close to the original.”

The Museum of Contemporary Art and Design is located at the De La Salle-College of Saint Benilde School of Design and Arts (SDA) Campus, Dominga St., Malate, Manila.

PNB sets final terms for rights offer

PHILIPPINE NATIONAL Bank (PNB) has set the final terms for its stock rights offer (SRO) where it is looking to raise up to P12 billion to fund asset growth.

The Tan-owned PNB said in a disclosure to the local bourse on Tuesday it will offer 276.63 million common shares under the plan priced at P43.38 apiece, a 13.41% discount from its Tuesday close of P50.10 each.

The final number of shares on offer is lower than the bank’s initial plan to sell up to 300 million shares.

The offer will be conducted from July 3 to 12.

Eligible shareholders are entitled to subscribe to a share for every 4.516 common shares as of the June 21 record date. Ex-date was yesterday.

PNB said proceeds of the fund-raising activity will be used to fund the asset growth of the bank.

Apart from the SRO, PNB is also set to raise about $2 billion via euro medium-term note (MTN) program, double than the initial $1 billion announced.

The lender established its euro note program in April last year. During that month, it allocated $300 million in proceeds from the program to support its dollar lending.

In May, the lender said it wants to raise another $300 million in fresh funds through the MTN program.

PNB booked a net profit of P1.9 billion in the first quarter, up 30% from the same period last year.

The bank’s closing price yesterday was down P1.95 or 3.75% from Monday’s finish. — KANV

Cebu Pacific orders 31 Airbus jets worth $6 billion

LE BOURGET — Airbus struck a $6-billion plane deal with Philippines budget airline operator Cebu Air on Tuesday, extending its lead on orders at a subdued Paris Air Show as rival Boeing struggles following the grounding of its top-selling jet.

Cebu’s order included 10 of Airbus’s new long-range A321XLR passenger aircraft, which was launched at the show on Monday, as well as 16 wide-body A330neos and five single-aisle A320neos.

Reuters reported on Monday that Cebu Air, which operates Cebu Pacific, was poised to buy more than two dozen Airbus planes.

Sources familiar with the matter say American Airlines and leasing giant GECAS are also in talks to buy the A321XLR, which aims to carve out new routes for airlines with smaller planes and steal a march on Boeing’s plans for a potential all-new mid-market jet, the NMA.

Airbus shares were up 1.2% at 0800 GMT, at a record high of 126.48 euros.

Despite the flurry of activity around the A321XLR, however, dealmaking at the aerospace industry’s biggest annual event has been quieter than normal, fueling speculation that a decade-long boom in orders might be coming to an end.

With airlines struggling with over-capacity, slowing economies and geopolitical tensions, some analysts warn Airbus and Boeing could face a growing number of cancellations from their bulging order books.

Boeing in particular is suffering after the grounding of its MAX 737 aircraft in March following two deadly crashes.

However, the planemakers are confident of continued strong demand for more fuel-efficient planes as emissions regulations tighten and as air travel continues to rise, driven by Asia’s growing middle classes. Boeing on Monday increased its 20-year industry demand forecast.

“Although investors have started to ask questions about the state of the upcycle, the aerospace industry remains very confident in the current state of the market,” analysts at Vertical Research Partners said in a note.

Cebu Air Chief Financial Officer Andrew Huang told a news conference the 16 A330neo jets it was buying would have up to 460 seats, allowing the airline to add new international routes.

Cebu Air, which operates the Cebu Pacific brand, had a 51% share of the Philippine domestic market in 2018, according to company data. In the international market, its 19% share was second only to full-service rival Philippine Airlines with 28%.

After announcing no major aircraft orders on Monday, Boeing could unveil some on Tuesday, including a potential deal with Air Lease Corp. whose founder Steven Udvar-Hazy told reporters on Monday he would be “at Boeing tomorrow.” — Reuters

Bond traders dust off crisis playbook, fire up best quantitative easing trades

BOND INVESTORS are preparing for another wave of quantitative easing (QE) from the European Central Bank (ECB) by returning to some of their favorite post-crisis trades.

First up: buy the debt of nations such as France that have greater scope for purchases by the ECB. Next, bet on a drop in longer-maturity yields relative to near-term rates. Then go for the region’s higher-returning bonds, like Spain.

Some of the favored ECB QE restart trades already beginning to work

While fund managers are not expecting any immediate move by the ECB, many are factoring in action to stimulate the region’s flagging economy this year. The global trade conflict and record-low inflation expectations have turned money markets to price in rate cuts by 2020. Since the ECB has kept deposit rates negative, policy makers might be more inclined to re-visit QE first.

“I would expect further rate cuts, QE, a further extension of forward guidance,” said Russell Silberston, a fund manager at Investec Asset Management, which oversees $133.7 billion. “At the broadest level we like anything that benefits from lower for longer, so yield curve flatteners for example.”

ECB President Mario Draghi said at the bank’s last policy meeting that there is “considerable headroom on QE.” Other officials have since reinforced the message. Bank of Finland Governor Olli Rehn, a candidate to replace Draghi this year, tweeted the ECB has “gotta do what’s gotta do, as needed.”

In the last round of QE following the financial crisis, the ECB hovered up €2.6 trillion of debt from 2015 to the time they called it quits at the end of 2018. That insulated markets from risk and led to winning bets for funds buying German, French and Italian debt, which were among the biggest beneficiaries of the program and saw yields fall to historic lows.

The debt of nations with more longer-term securities that the ECB could still buy — such as France — are now outperforming in the latest rally. That’s because, with the ECB only taking bonds yielding more than its minus 0.4% deposit rate, those have become scarcer. It is also pushing long-dated yields down faster.

FLATTENING CURVES
The flattening of yield curves “has much further to run” as the restart of QE was barely factored into markets before the ECB’s last meeting, according to Citigroup’s Jamie Searle in a note entitled “Flatteners, flatteners, flatteners”. He favors trades targeting a fall in Spain’s 30-year yields relative to 10-year bonds.

Investors have been piling into bonds since then, driving yields across the continent to fresh record lows and narrowing premiums over Germany. Danske Bank A/S likes bets on these spreads tightening further as it sees the pressure mounting on the ECB, while Rabobank’s head of rates strategy Richard McGuire recommends traders buy 30-year Belgian bonds versus Germany.

Others favor Italy, which has plenty of debt for the ECB to soak up. While Italian bonds have been weighed down by political risk in the past year, they “would be the clearest long in Europe” if QE were to restart, according to NatWest Market’s Giles Gale. He recommends five-year Italian debt against Germany.

SCARCITY TRADES
A restart of QE is far from set in stone as the ECB may need to see more signs of an economic slowdown in the second half of the year to act. Any easing of trade tensions could scupper trades placed too soon, while a revival of inflation expectations could also curb the market speculation.

“The macro picture is not bad enough yet to prompt more easing, but there has clearly been a shift in focus towards downside risks to growth and Draghi is prepping the market for more stimulus if things do get worse,” said Joubeen Hurren, a money manager at Aviva Investors. “Curves can still flatten.”

Restarting bond buying wouldn’t be without its hurdles either. The ECB is currently only allowed to buy 33% of the total stock of a given nation’s bond and it is already at that level in Germany, and close in the Netherlands, according to Citigroup Inc. By comparison, the bank estimates it has France and Italy at around 20%.

This issue of scarcity is leading some investors to buy bunds versus interest-rate swaps, which the ECB would be unlikely to buy. This trade could also serve as a hedge against turmoil, such as a flare up in Italian political risk, with the bonds outperforming from a flight to safety. Bank of America Merrill Lynch’s Sphia Salim favors buying 30-year German bonds against interest-rate swaps.

“We like owning shorter-dated bonds in Germany and also in European swaps,” said Grant Peterkin, a senior managing director at Manulife’s Absolute Return Rates Fund. “We still feel there is value in a world where inflation expectations continue to be muted and some form of stimulus will be needed to reflate the global economy.” — Bloomberg

Tiny bulletproof vests centerpiece of New York art exhibit on school shootings

NEW YORK — Rows of tiny bullet-proof vests hang on clothing racks and “safety defense” lunchboxes adorn the walls. It looks like an apparel store — almost.

But the Back to School Shopping art installation by the artist WhIsBe is a commentary on US mass school shootings, intended to raise the question: How long before life imitates art?

The child-sized bulletproof vests are adorned with cartoon characters Pikachu, Care Bears, and Teenage Mutant Ninja Turtles, while the lunch boxes are filled with replica guns, Tasers, and brass knuckles. The exhibit, in warehouse-style space in the heart of Manhattan’s Chelsea neighborhood, also features a game arcade claw machine filled with brightly colored cap guns.

The artist, whose nom de plume WhIsBe stands for “What is Beauty,” is aiming for a gut-punching reaction to an exhibit that he hopes will spur action to combat school shootings.

“The reactions are full spectrum from shock to upset to being angry, but not angry at what I’m doing, angry at the stark fact that this could be a reality,” the artist, who does not reveal his real name, said in an interview on Monday.

US schools have been rocked by a steady stream of shootings in the nearly two decades since the Columbine High School massacre that killed 13 people in 1999. A growing national campaign by young people to tackle gun violence and toughen laws on firearms sales has turned up the volume of the debate over guns in America, where the right to bear arms is protected under the Second Amendment of the Constitution.

Since 1970, there have been more than 1,300 incidents of gun violence at schools in the United States, according to the K-12 School Shooting Database maintained by the Naval Postgraduate School’s Center for Homeland Defense and Security.

The art exhibit, located in the Starrett-Lehigh Building in Chelsea, runs through June 30.

“I’m hoping that people are going to experience a different visceral reaction that will maybe change their thoughts about the matter into provoking them into action,” WhIsBe said. — Reuters

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