Russia stocks higher at close of trade; MICEX up 0.16%

Russia stocks were higher after the close on Thursday, as gains in the Power, Mining and Telecoms sectors led shares higher.

At the close in Moscow, the MICEX gained 0.16%.

The best performers of the session on the MICEX were Magnit, which rose 3.59% or 312.0 points to trade at 9012.0 at the close. Meanwhile, Inter rao ees added 3.02% or 0.0740 points to end at 2.5240 and Polymetal International PLC was up 2.68% or 23.00 points to 881.50 in late trade.

The worst performers of the session were MVideo, which fell 7.68% or 25.10 points to trade at 301.70 at the close. Uralkaliy declined 2.05% or 3.65 points to end at 174.80 and AK Transneft OAO Pref was down 1.71% or 2900 points to 166500.

Falling stocks outnumbered advancing ones on the Moscow Stock Exchange by 114 to 95 and 36 ended unchanged.

Shares in Polymetal International PLC  rose to all time highs; rising 2.68% or 23.00 to 881.50.

The Russian VIX, which measures the implied volatility of MICEX options, was down 1.17% to 33.780.

Gold for August delivery was down 0.58% or 7.75 to $1319.15 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in August fell 2.19% or 1.09 to hit $48.79 a barrel, while the September Brent oil contract fell 2.32% or 1.19 to trade at $50.13 a barrel.

USD/RUB was up 0.17% to 63.9347, while EUR/RUB fell 0.20% to 70.741.

The US Dollar Index was up 0.55% at 96.22.

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Sterling firms, Asian stocks wobble ahead of Brexit vote

By Saikat Chatterjee

HONG KONG (Reuters) - Sterling rose and Asian stocks crept higher in cautious trade on Thursday though many investors sought shelter in safe-haven assets such as the yen and government debt as they braced for Britain's vote on its fate in the European Union.

Sterling climbed to a six-month high against the dollar, cementing an impressive 6 percent rise since last week as investors squared short positions ahead of the referendum later in the day.

European stocks are expected to open flat to slightly higher.

While two opinion polls published late on Wednesday, a few hours before voters were due to begin to cast their votes, showed the "Remain" camp nudging ahead in the closely divided campaign, trading activity in Asian hours remained erratic, thin and cautious.

MSCI's broadest index of Asia-Pacific shares outside Japan  rose 0.2 percent. Many markets in Asia were flat to slightly negative with China's main index <.SSEC> among the biggest losers. Japan's Nikkei (N225) was a notable exception with the market up nearly 1 percent.

"Most people at this point expect a rise in the market" on expectations the vote will favor Britain staying in the EU, said Isao Kubo, an equity strategist at Nissay Asset Management.

"But you never know, and it will be clear by tomorrow so you don't want to take new positions now."

Various market volatility indicators edged higher in the run-up to the referendum. A volatility gauge for the Hong Kong stock market (VHSI) has climbed to more than 25 compared with around 18 at the end of December while the more popular VIX index (VIX) approached its highest levels seen this year.

Investors remained largely on the sidelines ahead of the referendum as a closely fought vote meant any large positions taken before the outcome was vulnerable to being stopped out. A Bank of America Merrill Lynch  fund manager poll last week found investors' cash levels at their highest since November 2001.

Some investors such as George Soros expect the value of the British pound to decline by as much as 15 percent from current levels in the event of a British exit from the EU.

On Thursday, sterling was changing hands at $1.4798, after hitting $1.4847, its highest against the dollar in 2016.

The demand for the perceived safe-haven yen remained broadly intact with the dollar adding just 0.2 percent to 104.63 yen , while the euro gained 0.6 percent to 118.67 yen (EURJPY=).

"It will be hard for the market to move until the poll results are released. The pound obviously will take center stage. But other European currencies and particularly dollar/yen also bear watching as the pair will reflect swings in risk sentiment," said Shin Kadota, chief Japan FX strategist at Barclays  in Tokyo.

Before the vote, exchanges and market regulators moved in to tighten risk management systems. Singapore's stock exchange (SI:SGXL) said it has raised the amount of cash firms must pledge to cover trading positions while central banks stood by to pump in emergency cash.

The euro rose 0.4 percent to $1.13430 , while the dollar index, which tracks the greenback against a basket of six rival currencies, slipped 0.1 percent to 93.479 (DXY).

(Latest Reuters news on the referendum, including full multimedia coverage:)

Government bonds held firm with 10-year Japanese bonds yielding 0.13 percent while the spread between 10- and two-year debt also held steady at 95 basis points.

Crude oil prices rose after settling down more than 1 percent on Wednesday, after the U.S. government reported a smaller-than-expected inventory drawdown. [O/R]

Brent (LCOc1) added 0.7 percent to $50.21 a barrel after shedding 1.5 percent on Wednesday, while U.S. crude (CLc1) was up 0.7 percent at $49.48 after giving up 1.4 percent in the previous session.

Spot gold plumbed a two-week low of $1,260.36 an ounce and was last down 0.4 pct at $1,261.24.

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Saudi Arabia stocks lower at close of trade; Tadawul All Share down 0.37%

Saudi Arabia stocks were lower after the close on Thursday, as losses in the Media & Publishing, Insurance and Petrochemicals sectors led shares lower.

At the close in Saudi Arabia, the Tadawul All Share lost 0.37%.

The best performers of the session on the Tadawul All Share were National Gas & Industrialization Co, which rose 6.75% or 1.65 points to trade at 26.10 at the close. Meanwhile, Saudi Advanced Industries Co. added 2.82% or 0.30 points to end at 10.95 and Dar Alarkan Real Estate Development  was up 2.59% or 0.15 points to 5.95 in late trade.

The worst performers of the session were Al-Rajhi Cooperative Insurance, which fell 8.46% or 2.20 points to trade at 23.80 at the close. United Cooperative Assurance Co (SE:8190) declined 5.93% or 0.70 points to end at 11.10 and Yanbu National Petrochemical Co  was down 4.37% or 1.90 points to 41.60.

Falling stocks outnumbered advancing ones on the Saudi Arabia Stock Exchange by 115 to 29 and 25 ended unchanged.

Crude oil for July delivery was down 1.73% or 0.83 to $47.18 a barrel. Elsewhere in commodities trading, Brent oil for delivery in August fell 1.72% or 0.84 to hit $48.13 a barrel, while the August Gold contract rose 2.00% or 25.80 to trade at $1314.10 a troy ounce.

EUR/SAR was down 0.92% to 4.1843, while USD/SAR rose 0.00% to 3.7504.

The US Dollar Index was up 0.61% at 95.25.

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Sweden stocks lower at close of trade; OMX Stockholm 30 down 1.59%

Sweden stocks were lower after the close on Tuesday, as losses in the Oil & Gas, Basic Materials and Financials sectors led shares lower.

At the close in Stockholm, the OMX Stockholm 30 lost 1.59% to hit a new 3-months low.

The best performers of the session on the OMX Stockholm 30 were Getinge AB ser. B, which fell 0.30% or 0.5 points to trade at 166.9 at the close. Meanwhile, ABB Ltd  fell 0.42% or 0.7 points to end at 167.4 and Atlas Copco AB ser. A was down 0.44% or 0.9 points to 205.0 in late trade.

The worst performers of the session were Fingerprint Cards AB ser. B , which fell 6.29% or 5.60 points to trade at 83.45 at the close. SSAB AB ser. A declined 5.39% or 1.10 points to end at 19.31 and Lundin Petroleum AB was down 3.37% or 5.20 points to 149.00.

Falling stocks outnumbered advancing ones on the Stockholm Stock Exchange by 494 to 92 and 39 ended unchanged.

Crude oil for July delivery was down 1.17% or 0.57 to $48.31 a barrel. Elsewhere in commodities trading, Brent oil for delivery in August fell 1.49% or 0.75 to hit $49.60 a barrel, while the August Gold contract fell 0.14% or 1.75 to trade at $1285.15 a troy ounce.
EUR/SEK was up 0.15% to 9.3061, while USD/SEK rose 0.80% to 8.3024.

The US Dollar Index was up 0.60% at 94.99.

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China must quickly tackle rising corporate debt, warns IMF official

SHANGHAI (Reuters) - China must act quickly to address mounting corporate debt, a major source of worry about the world's second-largest economy, a senior International Monetary Fund (IMF) official said on Saturday.

David Lipton, first deputy managing director of the IMF, warned in a speech to a group of economists in the southern city of Shenzhen that companies' indebtedness is a "key fault line in the Chinese economy".

"Company debt problems today can become systemic debt problems tomorrow. Systemic debt problems can lead to much lower economic growth, or a banking crisis. Or both," Lipton said, according to a copy of his prepared remarks provided to Reuters.

China, whose economy grew in 2015 at its slowest pace in a quarter of a century, has been grappling with rising debt levels and overcapacity.

Last week, the People's Bank of China warned in its mid-year work report that the government's push to reduce debt levels and overcapacity could increase bond default risks and make it more difficult for companies to raise funds.

Lipton said corporate debt in China stands at about 145 percent of gross domestic product, a high ratio. He singled out state-owned enterprises, which he said accounted for about 55 percent of corporate debt but only 22 percent of economic output, according to IMF estimates.

Referring to other countries' experience, he said that China needed to deal with both creditors and debtors and to address governance problems in both the corporate and banking sectors.

"The lesson that China needs to internalize if it is to avoid a repeating cycle of credit growth, indebtedness, and corporate restructuring, is to improve corporate governance," he said.

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US stocks end lower after weak jobs report

US stocks finished lower on Friday, led down by financeial shares, after a surprisingly weak jobs report prompted doubts about the US economy and its ability to sustain a near-term interest rate hike.

The US economy created the fewest number of jobs in more than 5-1/2-years in May as manufacturing and construction employment fell sharply.

Nonfarm payrolls increased by only 38,000 jobs last month, well below economists' forecast for an increase of 164,000.

The group dropped 1.38 per cent, its worst fall in about two months, with declines in shares of Bank of America (BAC.N) and Citigroup (C.N).

Utilities .SPLRCU, a high-dividend-paying group whose appeal declines when rates go up, rose 1.66 per cent.

The Dow Jones industrial average .DJI fell 31.5 points, or 0.18 per cent, to 17,807.06, the S&P 500 .SPX lost 6.13 points, or 0.29 per cent, to 2,099.13 and the Nasdaq Composite .IXIC dropped 28.85 points, or 0.58 per cent, to 4,942.52.

Six of 10 S&P sectors finished lower. The Nasdaq snapped a seven-day winning streak.

Stocks had fallen more steeply during the morning but pared back losses by the afternoon, encouraging some investors. The S&P 500 ended within 1.5 per cent of its record closing high.

The S&P 500 is up about 2.7 per cent in 2016 after a gloomy start to the year amid jitters about the global economy and a volatile oil market.

Among the few bright spots on Friday, Broadcom (AVGO.O) rose 4.9 per cent to $162.56 after the chipmaker reported better-than-expected quarterly profit and revenue.

About 7 billion shares changed hands on US exchanges, slightly above the roughly 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Advancing issues outnumbered declining ones on the NYSE by 1,644 to 1,376, for a 1.19-to-1 ratio on the upside; on the Nasdaq, 1,743 issues fell and 1,077 advanced for a 1.62-to-1 ratio favoring decliners.

The S&P 500 posted 35 new 52-week highs and 1 low; the Nasdaq recorded 48 new highs and 29 lows, according to a news agency report.

-SRS-

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Payday loans face new limits under proposal from U.S. consumer bureau

By Lisa Lambert

WASHINGTON (Reuters) - The U.S. agency charged with protecting consumers from financial abuse unveiled a proposal on Thursday that would limit short-term borrowings known as “payday” loans, which can carry interest rates as high as 390 percent.

The Consumer Financial Protection Bureau’s proposal includes having lenders determine if some borrowers can afford to take out debt. It also calls for restrictions on loan rollovers.

Payday lenders typically cater to low-income borrowers who need cash in a pinch but cannot access financing from mainstream banks. The name comes from the idea that a borrower would take out an emergency loan and repay it with the next paycheck. Since the loans often are not collateralized, lenders take the risk of not being repaid and charge higher rates.

"Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt," said CFPB Director Richard Cordray in a statement, calling the proposal "mainstream" and "common-sense."

"It’s much like getting into a taxi just to ride across town and finding yourself stuck in a ruinously expensive cross-country journey."

The industry has braced for new regulation from the CFPB since the 2010 Dodd-Frank Wall Street reform law gave it authority over the payday loan market, and anticipation of new federal rules has already created political fractures on Capitol Hill.

Meanwhile, the Federal Bureau of Investigation and Internal Revenue Service have cracked down on alleged fraud and racketeering in the industry. Payday lenders are one of the targets of "Operation Chokepoint," an FBI investigation into business relationships between banks and potential law-breaking companies.

The CFPB's proposal includes a "full-payment" test for people borrowing up to $500 over a short period. Lenders would have to determine whether a borrower could afford each loan payment and still meet basic living expenses, according to a summary.

It would bar lenders from taking auto titles as collateral and would make it difficult for them to "push distressed borrowers into reborrowing." It would also cap the number of short-term loans made in quick succession. At the same time, it would limit the number of times a lender could try to debit a borrower's bank account for an outstanding payment, with the CFPB saying failed withdrawal attempts rack up bank fees for borrowers.

The proposal presents two alternatives for longer-term loans. One caps interest rates at 28 percent and the application fee at $20. The other is an installment loan of equal payment amounts, with the loan's total cost capped at 36 percent.

The agency said current practices ensnare borrowers in "debt traps" with accumulating fees and interest, and that they encourage people to take out new loans to pay off old debts, all of which can leave them broke, without bank accounts, or carless.

Lenders say they fill a critical hole in the economy, allowing people living paycheck to paycheck to cover basic costs and those in need, who may have poor credit records, to quickly take out loans.

LONG FIGHT, POLITICAL FRACTURES

The fight over the proposal will span months. The agency will evaluate comments on the proposal, due Sept. 14, before issuing final regulations. It is also beginning a review of "other potentially high-risk loan products and practices" such as open-end credit.

Cordray was scheduled to discuss the proposal later on Thursday at a hearing in Kansas City, Missouri. A coalition of advocacy groups supporting reforms planned a rally in the city, while detractors have already begun voicing concerns.

On the political front, Republicans, who are widely critical of the bureau, say restricting small dollar, short-term loans will cut off struggling consumers' access to a legal financial lifeline during emergencies.

Democrats generally support reform, but are divided on how it should be carried out.

Massachusetts Senator Elizabeth Warren and other proponents for stronger financial regulation have lined up behind the CFPB.

Democratic National Committee Chair Debbie Wasserman Schultz, on the other hand, has promoted the approach used in her home state of Florida which is considered more permissive. She has sponsored a bill with other members of the House of Representatives from the state to delay the CFPB rules for two years and exempt states with laws similar to Florida's.

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