WASHINGTON (Reuters) – President Barack Obama will join former President Bill Clinton and former Secretary of State Hillary Clinton on Wednesday in a wreath-laying ceremony at John F. Kennedy’s grave to commemorate the 50th anniversary of his assassination.First lady Michelle Obama will also attend the ceremony at Arlington National Cemetery on November 20, two days before the anniversary of the president’s death, a senior administration official said on Saturday.Kennedy, the 35th president of the United States, was killed at the age of 46 during a trip to Texas on November 22, 1963. He was buried at the military cemetery in Arlington, Virginia, across the Potomac River from the Lincoln Memorial.Also on Wednesday Obama will present the Presidential Medal of Freedom, established by Kennedy, to recipients at the White House. The award is considered the nation’s highest civilian honor.(Reporting by Jeff Mason; editing by Jackie Frank)
WASHINGTON (Reuters) – In the most significant legislative rebuke to President Barack Obama’s healthcare overhaul, 39 members of his Democratic Party voted for a Republican bill in the House of Representatives on Friday aimed at undermining his signature domestic policy.The measure, which would allow insurance companies to renew and sell inexpensive, limited-coverage policies that have been canceled because they don’t meet the standards of the new healthcare law that took effect on October 1, passed 261-157.The 39 Democrats who supported the bill – nearly one-fifth of the party’s caucus – reflected the alarm that spread within Obama’s party this week over the political damage from the botched rollout of the Affordable Care Act, also known as Obamacare.Republicans have vowed to make Democratic support for the troubled law the top issue in the 2014 elections. Twenty-nine of the 39 Democrats who voted for the Republican bill are running for re-election in competitive races, according to rankings by the nonpartisan Cook Political Report.Obama’s approval ratings have plunged during the past six weeks, as the rollout of the healthcare program that is his top domestic achievement has been beset by technical glitches with the federal online insurance website designed to allow consumers to shop for policies.View gallery.”U.S. President Barack Obama meets with health insurance chief executives at the White House in Washi …In recent days, HealthCare.gov’s problems have been overshadowed by reports that insurance companies were canceling the policies of millions of Americans whose policies did not meet the new law’s requirements that policies cover emergency treatment, hospital stays and prescription drugs, among other things.For years, Obama had promised that Americans would be able to keep their policies if they liked them.But the wave of cancellations has fueled the biggest political crisis of Obama’s presidency and led to an extraordinary scene at the White House on Thursday, as a contrite Obama took the blame for the healthcare program’s dismal start.He said he believed that he had to win back the confidence of the American people, and offered an administrative „fix” that would allow some people to retain their non-conforming insurance policies for at least a year.Obama’s plan dismayed some of his supporters who say that the cheap, limited-coverage plans that the new law aims to phase out often give consumers a false sense of having meaningful health coverage.View gallery.”U.S. President Barack Obama meets with health insurance chief executives at the White House in Washi …It also created concern in the insurance industry – which for years had planned the health insurance exchanges created by Obamacare – and among state insurance commissioners.Industry advocates warned that Obama effectively was tinkering with the delicate and complex funding behind the healthcare law, and that premiums could begin soaring in 2015 if millions of consumers who were projected to be in Obamacare’s health exchanges continued to hold limited-coverage policies instead.Obama met with health insurance chief executives at the White House on Friday to discuss his proposal’s potential impact on the insurance market.”What we’re going to be doing is brainstorming on how do we make sure that everybody understands what their options are,” Obama told reporters in a brief photo opportunity as the meeting began. „We’re going to be soliciting ideas from them.”‘FRUSTRATED AND ANGERED’View gallery.”U.S. President Barack Obama meets with health insurance chief executives at the White House in Washi …Friday’s bill, introduced by Republican Representative Fred Upton of Michigan, represented the latest in a series of legislative attacks on the healthcare law by the chamber, which has held more than 40 votes to limit or curtail Obamacare.In touting his bill, Upton said that Obama „personally promised that if people liked their current health care plan, they could keep it ‘no matter what.’ But cancellation notices are now arriving in millions of mailboxes across the country. It’s cancellation today, sticker shock tomorrow.”It is unlikely to pass the Democrat-controlled Senate, and the White House has said Obama would veto the legislation if it reached his desk.The House bill would allow people whose low-cost coverage was canceled to keep those policies, and also would allow insurers to continue selling policies that do not cover basic services and offer little financial help for catastrophic health events.Critics said the House bill would undermine Obamacare’s attempt to improve the healthcare system.View gallery.”
„I think it’s fair to say that I know a little bit about sanctions, since we set them up and made sure that we mobilized the entire international community so that there weren’t a lot of loopholes and they really had bite,” he said, thanking Congress for „help” in developing the sanctions regime.
But this grossly simplifies the history of sanctions on Iran. In December 2011, the Senate voted 100-0 to adopt a punishing new bipartisan sanctions plan over stiff opposition from the Obama administration, which argued that doing so risked fracturing the diplomatic consensus on isolating Iran.
The uproar forced Obama to backpedal. He’ll now allow health insurance companies to continue to offer plans that do not meet his law’s standards for an additional year, to give people more time to transition to the new federal marketplace.But Obama’s fix does not actually guarantee that millions of people will be able to keep their plans. Insurance is regulated at the state level, and state officials can reject Obama’s request. Secondly, insurers themselves are not required to reoffer the out-of-date plans to consumers.As of Friday afternoon, regulators in at least three states had already announced they plan to reject the president’s request.Arkansas Insurance Commissioner Jay Bradford said the change would be “too confusing” and would create “chaos.” Meanwhile, regulators in Vermont and Washington said they too were rejecting the renewals.Erin Yang, a spokeswoman for the National Association of Insurance Commissioners, said the organization is concerned the president’s extension “could potentially be pretty damaging.” The organization worries that changing the rules so late in the game — when rates and plans for next year are already set — could create uncertainty and disruption in the market, Yang said.View gallery.”President Barack Obama gestures as he speaks about his signature health care law, Thursday, Nov. 14, …Insurers and regulators were already three years into the process of phasing out plans that did not meet the law’s requirements and transitioning to the new federal and state marketplaces that rolled out on Oct 1.Some states, however, jumped at the opportunity to re-enroll people in their old plans. Florida’s insurance commissioner said the state would allow the change, and Florida Blue, the state’s largest insurance carrier, announced it would send new letters to the 300,000 people who received cancellation notices and offer to extend their old coverage. Ohio and Kentucky’s commissioners also said they would allow the change, but mentioned it would be up to the insurers themselves whether to reach out to people with canceled plans and offer them renewal.The vast majority of states are still deciding what to do, Yang said, as they try to work out with insurance companies whether the extension is even feasible.“What we’ve heard from the rest of our members is, we’re talking to our carriers,” Yang said.The insurance industry has not reacted favorably to Obama’s plan. America’s Health Insurance Plans’ President and CEO Karen Ignagni said in a statement Thursday that Obama’s fix could “destabilize the market and result in higher premiums for consumers.” Ignagni said the change means more people could end up staying on their old plans, which will hike up costs for people participating in the new exchange. Many people on the individual market are younger and healthier, which means they are especially needed to participate in the new marketplace and offset the costs of older and sicker consumers.But the federal subsidies available for many people through the federal exchange may lure consumers over on their own. People who stay with their old plan will not be eligible for subsidies.And if many state regulators end up rejecting the change, it doesn’t appear that there would be a big affect on the exchange. Timothy Jost, a health care expert at Washington and Lee University, told Yahoo News he believes the impact on premiums and the insurance market will be negative, but small.It would be a different story, however, if Congress compelled regulators and insurers to play ball. Thirty-nine House Democrats joined with more than 200 Republicans to pass a bill Friday that would go a step further than Obama’s plan, by actually requiring the insurers to extend their plans to people who received cancellation notices. Obama has threatened to veto the bill if it passes the Senate.About 106,000 Americans signed up for individual coverage on the exchange in its first month of operation, far below the Obama administration’s targets. Federal budget officials expected 7 million people to enroll by the end of March.
They packed into wedding halls and drifted into makeshift shacks after escaping the steadily intensifying fighting that began on Friday, said Bassel Hojeiri, former mayor of the Lebanese town of Arsal where most of the refugees have headed.A Syrian government offensive in the rugged Qalamoun hills, which stretch from Damascus to Lebanon, seeks to cut rebel supply lines to opposition-held enclaves around the capital.Activists and analysts say the battle may be the final blow that dislodges rebels from the Damascus periphery, where food is running short and opposition fighters have lost a series of strongholds in recent weeks to forces loyal to Syrian President Bashar Assad.Former mayor Hojeiri estimated some 10,000 people had fled to Arsal, saying an influx of Syrians during the past three years of conflict had caused the population to nearly double.Dana Sleiman of the United Nations High Commission for Refugees put the total number of refugee arrivals over the weekend at around 1,000 families. She said many had not registered yet with the U.N. and so they could not provide more definite numbers.The UNHCR’s Sleiman said refugees weren’t able to reach an official border crossing because of the fighting, which began on Friday. Some families were in such a hurry that they could not collect any belongings before they fled, arriving „without anything except the clothes on their backs,” she said.The U.N. was distributing blankets, mattresses, food, diapers and hygiene kits to the refugees. She said some were settling into tin shack slums that dot eastern Lebanon’s Bekaa Valley, and they were being offered thick plastic to reinforce their feeble homes against the cold.Syrian refugees have overwhelmed Lebanon since the uprising began three years ago. Lebanese officials estimate there are 1.4 million Syrians in the country, including 800,000 registered refugees.The battle for Qalamoun has been expected for weeks, with both government and opposition reinforcing their positions in the sector ahead of winter when much of the area is covered with snow.Activists say one of the main sites of the battle is around the town of Qara, which lies near a main highway leading from Damascus to the central city of Homs. Controlling the region thus makes it easier to assert control over movement down the length of Syria.On Sunday, two pro-rebel activist groups and the British-based Syrian Observatory for Human Rights reported two airstrikes hitting the town. They said highway was severed and regime forces had gathered on nearby hills, trying to cut supplies to rebels inside the city.Syria’s pro-government media vowed the battle would be decisive.”The army is shaking Qalamoun Mountains and has tightened its siege around terrorists in Qara,” read a front-page article in the al-Watan newspaper.Meanwhile, a series of mortar rounds hitting the center of Damascus killed four people, the Syrian official news agency SANA said. While mortar fire into the capital is becoming a regular occurrence, residents said the shelling from nearby rebel-held areas into the center was particularly heavy this week.___Albert Aji in Damascus contributed to this report.
The 24-year-old anthropology student is the informal leader of a group that has occupied Sofia University’s main building since the end of October in hopes of forcing Bulgaria’s Socialist-led government to resign.”We want morality in politics, we want our politicians to work for the people and not for the Mafia,” Dinev said. „That is the main reason we want the government to resign.”Bulgaria has struggled for decades against corruption. In the 28-nation EU, it lags only behind Greece on Transparency International’s corruption perception index. In the country’s courts, magistrates have accepted bribes to end some corruption investigations and not a single high-profile person has been sent to jail.The century-old occupied building is in the very center of Sofia, the capital, just 200 meters (yards) from Parliament. Behind entrances locked with iron chains and makeshift security checkpoints, a few hundred young men and women have barricaded themselves in what they call the „free territory of the students.”Under a huge symbolic sign „1968” — the year that Czech students challenged their country’s powerful former Communist regime — a banner reads: „Now it is our time.”View gallery.”This Tuesday, Nov. 12, 2013 photo shows a bandaged hand of a student pinned by a clenched fist power …”As a growing parallel power, we are sending from our free territory critical messages to all political parties about the future of the country,” Dinev told The Associated Press in an interview.The Sofia University occupation has spawned other university sit-ins, energizing a 5-month-old movement against the government over allegations that its leaders have ties to shady businessmen. Public opinion polls show about two-thirds of Bulgaria’s 7.3 million people support the protesters, including several hundred university professors.Bulgaria is a member of the 28-nation European Union but its people have the bloc’s lowest incomes — an average monthly wage of just 400 euros ($537) and an average pension of just 150 euros ($202). Youth unemployment is at 28.7 percent. Growing economic pains and widespread poverty have created deep divisions in society.The 50 students who first occupied Sofia University say they will stay until the government steps down, Dinev said, adding that their numbers have swelled to 500.The mood inside the century-old building was upbeat. Slogans reading „Resignation” and „Mafia” were up on inner courtyard walls. Sleeping bags were draped on benches in the corridors as makeshift beds.View gallery.”This photo dated Tuesday, Nov. 12, 2013, shows Ivailo Dinev, an anthropology student. Dinev believes …Some students carried bags of food partly donated by supporters, while in a coffee shop, small groups were debating the future they want to build. No classes are being taught in the building — home to the law, philosophy and language departments — but at a daily conference in the main hall, students meet to outline future actions.As his phone rings, Dinev says the students have rejected several invitations to collaborate with Bulgaria’s established political parties.On Tuesday, police clashed with protesting students who tried to make a human chain around Parliament in an attempt to blockade lawmakers inside.”We cannot just stand and watch these atrocities that are happening in the country, we cannot sit at home and wait for new elections and we cannot vote for someone else’s nominees and to feel forced to leave the country because there are no normal living conditions,” said Alexander Popov, 25, one of the students injured in clashes.The Socialist-backed government took office after an early election in May, following the resignation of the previous cabinet amid anti-austerity protests. But it was the June 14 appointment of media mogul Delyan Peevski as head of the national security agency that sparked public anger and new street protests. The appointment was immediately revoked but to demonstrators it was a clear sign of the corruption and nepotism practiced by group of businessmen and politicians they believe run the country behind the government.View gallery.”This photo dated Tuesday, Nov. 12, 2013, shows Ivailo Dinev, an anthropology student. Dinev believes …”If there has to be a power above the government, then this should not be some behind-the-curtain player but rather the citizens themselves,” said Dinev.Prime Minister Plamen Oresharski has so far rejected calls to resign and has criticized the students for blocking access to education. But his governing coalition is weak, made up of Socialists and an ethnic Turkish party with only 120 seats in the 240-seat Parliament. Last week, authorities launched investigations into alleged tax fraud and money laundering by Hristo Biserov, the deputy leader of the Turkish party.Most analysts believe the only way to ease tensions is to set a date for early elections, possibly in May, when Bulgarians will also vote for European Parliament seats.Dinev believes it is up to the „kids of transition,” as he dubbed his generation, to bring morality to politics. More than a million mostly young, well-educated Bulgarians have left since the 1989 fall of communism, but that’s not the goal of these protesters.”You can emigrate, we will stay here,” read one slogan at the protest before Parliament.
Portugal in sight of World Cup after Ronaldo’s winner vs Sweden, France loses 2-0 to Ukraine
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Merkel and SPD coalition talks enter final make-or-break phase
Reuters/Reuters – Germany’s Chancellor Angela Merkel addresses a news conference during a European Union leaders summit in Brussels October 25, 2013. REUTERS/Francois Lenoir
EU launches new drive to end deadlock over Ukraine’s Tymoshenko
AFP/Clinton Foundation/AFP/File – File photo taken on July 17, 2012 shows former South African President Nelson Mandela during a visit by former US president Bill Clinton at his home in Qunu, Eastern Cape
South Africa’s Nelson Mandela remains „quite ill” and is unable to speak, using facial expressions to communicate as he receives intensive medical care at home, his former wife told a Sunday newspaper.Winnie Madikizela-Mandela said the 95-year-old former president was not on life support, but he was no longer talking „because of all the tubes that are in his mouth to clear (fluid from) the lungs” and prevent infection returning.„He can’t actually articulate anything” as a result, she told The Sunday Independent.„He communicates with the face, you see. But the doctors have told us they hope to recover his voice.”Mandela was discharged in a critical condition on September 1 to his home in Johannesburg’s upmarket Houghton suburb after nearly three months in hospital for a lung infection.„I have heard this nonsense that he is on life support. He is not,” Madikizela-Mandela said.The country’s anti-apartheid hero is under the care of 22 doctors, and while his pneumonia has cleared, his lungs remain sensitive, she said, adding that it was „difficult for him”.„He remains very sensitive to any germs, so he has to be kept literally sterile. The bedroom there (in Houghton) is like an ICU ward,” she explained.„He remains quite ill, but thank God the doctors were able to pull him through from that (last) infection,” she said in the interview which was also carried in the Sunday Independent’s sister papers.Mandela, who spent 27 years in apartheid jail before becoming South Africa’s first black leader, has faced several health scares.His most recent 86-day hospital stay was his longest since he walked free from prison in 1990.Mandela was in „an atmosphere he recognises”, Madikizela-Mandela said.„When he is very relaxed, he is fine and it has given us a lot of hope.”Earlier this month, fellow Robben Island prisoner Tokyo Sexwale also said Mandela was „fine”.Mandela has been in and out of hospital since last year with lung-related complications .His Johannesburg home has been reconfigured for him to receive intensive care on his release from hospital in a critical and at times unstable condition.A globally admired figure for steering South Africa peacefully into democracy, Mandela’s health problems prompt outpourings of well wishes around the world.These are particularly pronounced at home where he remains a symbol of unity, despite having been out of the public eye for several years.Mandela served one term as president after he became the nation’s first leader elected in all-race polls in 1994.
Georgian leader vows integration with EU, better ties with Russia
Reuters/Reuters – Newly elected Georgian President Georgy Margvelashvili delivers a speech during his inauguration ceremony in Tbilisi November 17, 2013. REUTERS/David Mdzinarishvili
By Margarita AntidzeTBILISI (Reuters) – Georgian President Georgy Margvelashvili said he was ready to mend ties with Russia strained under his predecessor by a brief war and by trade disputes, but stood by the ex-Soviet state’s pro-Western course at his inauguration on Sunday.Former President Mikheil Saakashvili led Georgia in a disastrous five-day war with Russia in 2008, which cemented Moscow’s control of two rebellious Georgian regions. His exit removes the main irritant in relations with Moscow.The nation of 4.5 million is at the centre of the Caucasus, a region in which Russia and the United States are battling for influence and which hosts a major pipeline pumping oil from the Caspian Sea to Europe.Margvelashvili was elected last month to take over from Saakashvili, who spent a decade in power pursuing friendly relations with the West often at the expense of ties with Russia.The former Soviet republic hopes eventually to sign an association agreement, mapping out a closer relationship with the EU, despite resistance by Moscow. A more distant goal is membership in the NATO defence alliance.„Full membership in the free world is a long-term guarantee of Georgia’s national security and stable development and it can be only achieved by integration into the European Union and NATO,” 44-year-old Margvelashvili said in a 12-minute speech.„Despite current difficulties, we express our readiness to deepen our dialogue with Russia along with our European and Euro-Atlantic integration,” he said.Margvelashvili takes on a diminished post as president following constitutional changes shifting executive powers to the government and parliament that came into effect on Sunday.Under the amendment intended to make Georgia a full parliamentary democracy, the prime minister’s post is now the most powerful office in the country. Margvelashvili will be head of state and commander-in-chief of the armed forces.Georgia’s current Prime Minister Bidzina Ivanishvili has said he will quit his post after the inauguration and has named Irakly Garibashvili – the interior minister – as his successor.Margvelashvili was brought into politics by the billionaire Ivanishvili when his Georgian Dream coalition ousted Saakashvili’s cabinet in a vote in October 2012. He was appointed education minister, and promoted to deputy prime minister within months.Ivanishvili has been the driving force behind attempts to build stronger ties with Russia while at the same time also deepening integration with the West, a balancing act in foreign policy that has proved hard to pull off. Margvelashvili as his close confidant, wants to continue this course.Russia opened its market for Georgian wine, mineral water and fruits this year, lifting a ban imposed in 2006.But improving relations with Moscow is likely to be complicated if Tbilisi moves further out of Moscow’s orbit.Relations with its former Soviet master remain tense after Russia recognised Georgia’s two breakaway regions as independent states following the war.While U.S. and EU representatives attended Margvelashvili’s swearing-in ceremony, Russian officials were not invited to the event in the courtyard of the former parliament building in the centre of the capital Tbilisi.(Editing by Ralph Boulton)
France’s Hollande in Israel for Iran-focused visit
By Herve Asquin | AFP – 2 hours 12 minutes agoView Photo
AFP/AFP – Israeli Prime Minister Benjamin Netanyahu (L) and French President Francois Hollande attends a welcome ceremony at Ben Gurion International Airport on November 17, 2013 in Tel Aviv
View PhotoIsraeli President Shimon Peres (L) and Israeli Prime Minister Benjamin Netanyahu …View PhotoFrench President Francois Hollande (C) walks alongside his Israeli counterpart Shimon …View PhotoFrench President Francois Hollande (C-L) stands with Israeli Prime Minister Netanyahu …France will never tolerate nuclear proliferation, President Francois Hollande vowed Sunday as he arrived in Israel for a visit set to be dominated by the dispute over Iran‘s nuclear programme.France, along with other major powers, took part in last weekend’s marathon negotiations in Geneva in a bid to convince Iran to freeze or curb its nuclear activities in exchange for some sanctions relief.Israel has expressed concern over the talks, warning Western powers against concessions and insisting they will get a better deal if they keep the crippling sanctions in place or even ratchet them up.The visit, Hollande’s first since he became president in 2012, will also see him travelling to the Palestinian territories to discuss Middle East peace talks which have been limping along for three months with little signs of progress.And with his ratings flatlining in the polls back home, Hollande will also use his three-day trip to try to boost trade with Israel, which stood at 2.3 billion euros ($3 billion) in 2011.But even before leaving the tarmac of Israel’s Ben Gurion airport for the drive to Jerusalem, Hollande addressed the question of Iran’s disputed nuclear programme, which Israel views as its greatest threat.„France considers nuclear proliferation to be a menace, a danger, and in Iran particularly — a menace to Israel, to the region and clearly a menace to the entire world,” he told Israeli ministers and dignitaries lining the red carpet.„This is why France will not tolerate nuclear proliferation. And for France, as long as we are not certain that Iran has decided to give up on nuclear weapons, we will continue with all our demands and with sanctions.”An ‘unflinching stance’ on Iran France has been praised in Israel over the past week for taking a tougher stance than its Western partners in the latest round of talks with Iran in Geneva, which ended last weekend without an agreement.But with the negotiations due to resume on Wednesday, and talk of a deal in the offing, Israel was expected to pressure Hollande to remain strong.„We are full of admiration for your unflinching stance to prevent Iran from acquiring a nuclear weapon for mass destruction,” Israeli President Shimon Peres said at the welcoming ceremony.„We stand, together, against this attempt which hangs as a dark shadow over the skies of the Middle East, in fact over the skies of the entire world.”Israel and Western powers suspect Iran’s uranium enrichment programme is part of a covert drive to acquire a nuclear weapons capability, an allegation Tehran vehemently denies.Addressing Hollande as „my friend Francois,” Netanyahu praised the French leader for his „firm stance” against „the unstoppable attempts by Iran to arm itself with nuclear weapons.”As part of Netanyahu’s campaign to prevent world leaders from handing Iran „the deal of the century” by easing up on sanctions, Netanyahu will fly to Russia on Wednesday for talks with President Vladimir Putin.And he said he would also discuss the matter with US Secretary of State John Kerry in Jerusalem on Friday.„I hope we’ll be able to convince our friends this week and in the following days to get a much better deal. It can be achieved,” he said in a statement.„Continuing to apply pressure (on Iran) and even increasing it can yield a much better diplomatic result.”On Monday, the focus will likely switch to the struggling Middle East peace process, as Hollande goes to the West Bank city of Ramallah for talks with Palestinian president Mahmud Abbas.Kerry managed to relaunch direct talks between the two sides in July after a nearly three-year hiatus, but the Palestinians have said the negotiations are at risk of breaking down over Israeli settlement construction in the occupied West Bank and east Jerusalem.
View PhotoReuters/Reuters – Customers shop inside a department store in Shenyang, Liaoning province, November 6, 2013. REUTERS/Stringer
By Clement Tan
HONG KONG (Reuters) – China‘s mass consumer, healthcare and non-banking financial counters may well be the early winners in the country’s stock markets this week after Beijing promised the most sweeping economic and social reforms in nearly three decades.
Equity market investors are likely to cheer a plan to increase private ownership in state-owned enterprises, but the longer-term prognosis will likely vary across sectors.
The big losers could well be the „big four” state banks, ICBC, China Construction Bank, Agricultural Bank of China and Bank Of China, which dominate formal lending. They are already feeling the pinch of interest rate liberalisation and China’s leaders have promised to accelerate financial sector reform.
„In the near term, we believe market sentiment should be lifted by the detailed announcement of the Third Plenum released Friday night,” Goldman Sachs China equity strategists said in a client note referring to a four-day conclave of Communist Party leaders that set the reform agenda, promising „decisive” results by 2020.
The 60-point plan included land and residency reform to make it easier for rural Chinese to migrate to urban areas, a relaxation of the country’s one-child policy and allowing markets to play a greater role in the economy.
Stock markets in Hong Kong and China had rallied on Friday after an apparent leak of part of the plan circulated on social media. The China Enterprises Index of the top offshore Chinese listings in Hong Kong jumped 3 percent for its biggest percentage gain in three months.
This could continue since investors are underinvested in Chinese equities, analysts said. A Bank of America-Merrill Lynch survey showed that just 11 percent of emerging market funds had an „overweight” position on Chinese equities in November ahead of the Communist Party meeting, down 45 percentage points from October. Since the reforms announced on Friday have helped dispel doubts about the reform credentials of President Xi Jinping, some of the funds could upgrade their view of the markets and filter money back in.
Investment into China-focused equity funds has been choppy in the last month, but data from global funds tracker EPFR showed there were net inflows in the week to November 13, despite market losses after the initial communiqué on the reforms released late on Tuesday had disappointed.
FOLLOW THROUGH KEY
Still, much will depend on how the relevant ministries and government agencies follow through on executing the reform blueprint. That will provide clues on the urgency and priorities of the reform programme, Goldman Sachs said.
China’s health ministry tempered expectations on Saturday that the relaxation of China’s one-child policy may eventually see restrictions lifted entirely, suggesting provinces may vary how quickly they implement the latest change. The reform plan increases the number of couples who can have a second child.
That uncertainty may temper gains for the Chinese dairy and baby goods sectors, whose sales could benefit from an increase in China’s birth rate. But for the economy as a whole, some scholars and analysts say the change in the one-child policy is unlikely to do enough to reverse China’s shrinking labour pool or convince many women to have more children as living costs rise.
Still, other consumer names, such as white goods retailers and food and beverage producers, will likely be lifted by plans to ease restrictions currently limiting the pace of rural-to-urban migration. Policymakers want to speed up the migration to bolster consumption and services, which they see as the future of the economy after years of investment- and export-led growth.
Limits on migration to China’s biggest cities largely remain, suggesting policymakers are eager to spur growth to second-tier cities, especially as rising property prices in first-tier cities are a major concern for the central government.
The reforms pointed to an acceleration of property taxes at „the appropriate time”, but did not explicitly mention crimping property demand as a policy priority.
The lingering policy uncertainty could trigger a rotation out of outperformers in the Chinese property sector such as Country Garden and Shimao Property into larger rivals, whose share prices have lagged this year, such as China Overseas Land and China Resources Land.
Still, Beijing’s move to make its urbanisation policy more equitable for rural land owners will lead to an acceleration of farmland transfers in 2014 as smallholdings are consolidated, Jefferies analysts Jack Lu and Laban Yu said in a client note.
They said this should benefit agricultural machinery and high-tech farming sectors in the months ahead, such as First Tractor, Gansu Dunhuang Seed and Jiangsu Yangnong Chemical.
A plan to increase the dividends that state-owned enterprises pay to the state will likely be channelled to pay for the expansion of the social security system, analysts said. That could give a further boost to the pharmaceutical and healthcare sectors. China’s healthcare sub-index has already risen 20 percent this year.
For state-owned enterprises, which dominate many economic sectors, the impact of the reforms were not clear, analysts said.
Fuel price reforms would encourage small competitors to loosen the state’s grip on the energy sector, but giving markets more influence to price energy could mean rising prices, boosting earnings of the likes of state-owned Sinopec Corp and Petrochina.
Petrochina has already reported a 20 percent rise in third-quarter profit after Beijing hiked gas prices and allowed petrol and diesel pump prices to track international crude costs more closely.
Interest rate liberalisation has already narrowed net interest margins for the „big four” state banks and the squeeze looks set to tighten further. China’s central bank governor pledged soon after the reforms were announced to „pull out all stops” to deepen financial sector reforms.
The introduction of private banks will increase competition for cash deposits and loan demand. A sub index of offshore Chinese financial listings in Hong Kong is down 4.5 percent so far this year, compared with a 1.4 percent loss for the MSCI China.
The banking sector is also vulnerable in the short term to a sharp rise in onshore money market rates amid a tightening of money supply. The central bank signalled earlier this month that it would rein in money supply growth.
On the other hand, non-banking financials, such as brokerages and insurers, will stand to gain from moves to deepen China’s capital markets. The reforms included making it easier for firms to launch initial public offerings, which have been suspended in mainland markets for more than a year.
(This version of the story corrects reference in paragraph eight to EPFR)
(Editing by Neil Fullick)