File_path
stringclasses 5
values | Articles
stringlengths 502
25.5k
| Summaries
stringlengths 227
12.3k
|
|---|---|---|
business | BBC poll indicates economic gloom..Citizens in a majority of nations surveyed in a BBC World Service poll believe the world economy is worsening...Most respondents also said their national economy was getting worse. But when asked about their own family's financial outlook, a majority in 14 countries said they were positive about the future. Almost 23,000 people in 22 countries were questioned for the poll, which was mostly conducted before the Asian tsunami disaster. The poll found that a majority or plurality of people in 13 countries believed the economy was going downhill, compared with respondents in nine countries who believed it was improving. Those surveyed in three countries were split. In percentage terms, an average of 44% of respondents in each country said the world economy was getting worse, compared to 34% who said it was improving. Similarly, 48% were pessimistic about their national economy, while 41% were optimistic. And 47% saw their family's economic conditions improving, as against 36% who said they were getting worse...The poll of 22,953 people was conducted by the international polling firm GlobeScan, together with the Program on International Policy Attitudes (Pipa) at the University of Maryland. "While the world economy has picked up from difficult times just a few years ago, people seem to not have fully absorbed this development, though they are personally experiencing its effects," said Pipa director Steven Kull. "People around the world are saying: 'I'm OK, but the world isn't'." There may be a perception that war, terrorism and religious and political divisions are making the world a worse place, even though that has not so far been reflected in global economic performance, says the BBC's Elizabeth Blunt...The countries where people were most optimistic, both for the world and for their own families, were two fast-growing developing economies, China and India, followed by Indonesia. China has seen two decades of blistering economic growth, which has led to wealth creation on a huge scale, says the BBC's Louisa Lim in Beijing. But the results also may reflect the untrammelled confidence of people who are subject to endless government propaganda about their country's rosy economic future, our correspondent says. South Korea was the most pessimistic, while respondents in Italy and Mexico were also quite gloomy. The BBC's David Willey in Rome says one reason for that result is the changeover from the lira to the euro in 2001, which is widely viewed as the biggest reason why their wages and salaries are worth less than they used to be. The Philippines was among the most upbeat countries on prospects for respondents' families, but one of the most pessimistic about the world economy. Pipa conducted the poll from 15 November 2004 to 3 January 2005 across 22 countries in face-to-face or telephone interviews. The interviews took place between 15 November 2004 and 5 January 2005. The margin of error is between 2.5 and 4 points, depending on the country. In eight of the countries, the sample was limited to major metropolitan areas. | In percentage terms, an average of 44% of respondents in each country said the world economy was getting worse, compared to 34% who said it was improving.The poll found that a majority or plurality of people in 13 countries believed the economy was going downhill, compared with respondents in nine countries who believed it was improving.The Philippines was among the most upbeat countries on prospects for respondents' families, but one of the most pessimistic about the world economy.Most respondents also said their national economy was getting worse.Almost 23,000 people in 22 countries were questioned for the poll, which was mostly conducted before the Asian tsunami disaster.The countries where people were most optimistic, both for the world and for their own families, were two fast-growing developing economies, China and India, followed by Indonesia.Citizens in a majority of nations surveyed in a BBC World Service poll believe the world economy is worsening.Pipa conducted the poll from 15 November 2004 to 3 January 2005 across 22 countries in face-to-face or telephone interviews."While the world economy has picked up from difficult times just a few years ago, people seem to not have fully absorbed this development, though they are personally experiencing its effects," said Pipa director Steven Kull.But when asked about their own family's financial outlook, a majority in 14 countries said they were positive about the future. |
business | Markets fall on weak dollar fears..Rising oil prices and the sinking dollar hit shares on Monday after a finance ministers' meeting and stern words from Fed chief Alan Greenspan...The London FTSE fell 0.8% while Tokyo's Nikkei 225 dropped 2.11%, its steepest fall in three months. G20 finance ministers said nothing about supporting the dollar, whose slide could further jeopardise growth in Japan and Europe. And Mr Greenspan warned Asian states could soon stop funding the US deficit...On Monday afternoon, the euro was close to an all-time high against the dollar at above $1.30. Oil pushed higher too on Monday, as investors fretted about cold weather in the US and Europe and a potential output cut from oil producers' group Opec, although prices had cooled by the end of the day. In London, the benchmark Brent crude price closed down 51 cents at $44.38 a barrel, while New York light sweet crude closed down 25 cents at $48.64 a barrel. The slide comes as the US has been attempting to talk up the traditional "strong dollar" policy...The latest to pitch in has been President George W Bush himself, who told the Asia Pacific Economic Co-operation (Apec) summit in Chile that he remained committed to halving the budget deficit. Together with a $500bn trade gap, the red ink spreading across America's public finances is widely seen as a key factor driving the dollar lower. And last week US Treasury Secretary John Snow told an audience in the UK that the policy remained unaltered. But he also said that the rate was entirely up to the markets - a signal which traders took as advice to sell the dollar. Some had looked to the G20 meeting for direction. But Mr Snow made clear exchange rates had not been on the agenda...For the US government, letting the dollar drift is a useful short-term fix...US exports get more affordable, helping perhaps to close the trade gap. In the meantime, the debt keeps getting bigger, with Congress authorising an $800bn rise in what the US can owe - taking the total to $8.2 trillion. But in a speech on Friday, Federal Reserve chairman Alan Greenspan warned that in the longer term things are likely to get tricky. At present, much of gap in both public debt is covered by selling bonds to Asian states such as Japan and China, since the dollar is seen as the world's reserve currency. Similarly, Asian investment helps bridge the gap in the current account - the deficit between what the US as a whole spends and what it earns. But already they are turning more cautious - an auction of debt in August found few takers. And Mr Greenspan said that could turn into a trend, if the fall of the dollar kept eating into the value of those investments. "It seems persuasive that, given the size of the US current account deficit, a diminished appetite for adding to dollar balances must occur at some point," he said. | And Mr Greenspan warned Asian states could soon stop funding the US deficit.And Mr Greenspan said that could turn into a trend, if the fall of the dollar kept eating into the value of those investments.The slide comes as the US has been attempting to talk up the traditional "strong dollar" policy."It seems persuasive that, given the size of the US current account deficit, a diminished appetite for adding to dollar balances must occur at some point," he said.For the US government, letting the dollar drift is a useful short-term fix.Rising oil prices and the sinking dollar hit shares on Monday after a finance ministers' meeting and stern words from Fed chief Alan Greenspan.G20 finance ministers said nothing about supporting the dollar, whose slide could further jeopardise growth in Japan and Europe.At present, much of gap in both public debt is covered by selling bonds to Asian states such as Japan and China, since the dollar is seen as the world's reserve currency.Similarly, Asian investment helps bridge the gap in the current account - the deficit between what the US as a whole spends and what it earns.US exports get more affordable, helping perhaps to close the trade gap. |
business | Tsunami 'to hit Sri Lanka banks'..Sri Lanka's banks face hard times following December's tsunami disaster, officials have warned...The Sri Lanka Banks Association said the waves which killed more than 30,000 people also washed away huge amounts of property which was securing loans. According to its estimate, as much as 13.6% of the loans made by private banks to clients in the disaster zone has been written off or damaged. State-owned lenders may be even worse hit, it said...The association estimates that the private banking sector has 25bn rupees ($250m; £135m) of loans outstanding in the disaster zone. On one hand, banks are dealing with the death of their customers, along with damaged or destroyed collateral. On the other, most are extending cheap loans for rebuilding and recovery, as well as giving their clients more time to repay existing borrowing. The combination means a revenue shortfall during 2005, SLBA chairman - and Commercial Bank managing director - AL Gooneratne told a news conference. "Most banks have given moratoriums and will not be collecting interest, at least in this quarter," he said. In the public sector, more than one in ten of the state-owned People's Bank's customers in the south of Sri Lanka were affected, a bank spokesman told Reuters. He estimated the bank's loss at 3bn rupees. | According to its estimate, as much as 13.6% of the loans made by private banks to clients in the disaster zone has been written off or damaged.In the public sector, more than one in ten of the state-owned People's Bank's customers in the south of Sri Lanka were affected, a bank spokesman told Reuters.The association estimates that the private banking sector has 25bn rupees ($250m; £135m) of loans outstanding in the disaster zone.Sri Lanka's banks face hard times following December's tsunami disaster, officials have warned."Most banks have given moratoriums and will not be collecting interest, at least in this quarter," he said. |
business | Diageo to buy US wine firm..Diageo, the world's biggest spirits company, has agreed to buy Californian wine company Chalone for $260m (£134m) in an all-cash deal...Although Diageo's best-known brands include Smirnoff vodka and Guinness stout, it already has a US winemaking arm - Diageo Chateau & Estate Wines. Diageo said it expects to get US regulatory approval for the deal during the first quarter of 2005. It said Chalone would be integrated into its existing US wine business..."The US wine market represents a growth opportunity for Diageo, with favourable demographic and consumption trends," said Diageo North America president Ivan Menezes. In July, Diageo, which is listed on the London Stock Exchange, reported an annual turnover of £8.89bn, down from £9.28bn a year earlier. It blamed a weaker dollar for its lower turnover. In the year ending 31 December 2003, Chalone reported revenues of $69.4m. | "The US wine market represents a growth opportunity for Diageo, with favourable demographic and consumption trends," said Diageo North America president Ivan Menezes.Diageo said it expects to get US regulatory approval for the deal during the first quarter of 2005.It said Chalone would be integrated into its existing US wine business.Diageo, the world's biggest spirits company, has agreed to buy Californian wine company Chalone for $260m (£134m) in an all-cash deal. |
business | Deutsche Telekom sees mobile gain..German telecoms firm Deutsche Telekom saw strong fourth quarter profits on the back of upbeat US mobile earnings and better-than-expected asset sales...Net profit came in at 1.4bn euros (£960m; $1.85bn), a dramatic change from the loss of 364m euros in 2003. Sales rose 2.8% to 14.96bn euros. Sales of stakes in firms including Russia's OAO Mobile Telesystems raised 1.17bn euros. This was more than expected and helped to bring debt down to 35.8bn euros...A year ago, debt was more than 11bn euros higher. T-Mobile USA, the company's American mobile business, made a strong contribution to profits. "It's a seminal achievement that they cut debt so low. That gives them some head room to invest in growth now," said Hannes Wittig, telecoms analyst at Dresdner Kleinwort Wasserstein. The company also said it would resume paying a dividend, after two years in which it focused on cutting debt. | A year ago, debt was more than 11bn euros higher.This was more than expected and helped to bring debt down to 35.8bn euros.Sales rose 2.8% to 14.96bn euros.Sales of stakes in firms including Russia's OAO Mobile Telesystems raised 1.17bn euros. |
business | Hariri killing hits Beirut shares..Shares in Solidere, the Lebanese company founded by assassinated former prime minister Rafik Hariri, fell 15% in renewed trading in Beirut...The real estate firm, which dominates Lebanon's stock exchange, ended the day down at $8.08. Traders said there was some panic selling during Friday's session, the first since a three-day market closure to mourn the death of Mr Hariri. Beirut's benchmark BLOM stock index closed down 7.9% at 642.80...Solidere, in which Mr Hariri was a major shareholder, was the major drag on the index. The company owns much of the property in central Beirut, which it restored and redeveloped following the end of Lebanon's bitter 15-year civil war. "Solidere should be above $10 but because of this disaster it is falling," said one trader. "If Solidere drops much lower I would consider it a buying opportunity. This is a very big company held by many Lebanese." Critics had accused Mr Hariri of using Lebanon's post-war reconstruction drive for his personal financial gain. But his assassination on Monday sent shudders through Lebanon's business community, which saw the billionaire tycoon as the country's best hope for economic revival. Solidere posted profits of $12.5m in the first half of 2004, and its shares had been gaining in recent months. | Solidere, in which Mr Hariri was a major shareholder, was the major drag on the index.Shares in Solidere, the Lebanese company founded by assassinated former prime minister Rafik Hariri, fell 15% in renewed trading in Beirut.Critics had accused Mr Hariri of using Lebanon's post-war reconstruction drive for his personal financial gain.Traders said there was some panic selling during Friday's session, the first since a three-day market closure to mourn the death of Mr Hariri.The company owns much of the property in central Beirut, which it restored and redeveloped following the end of Lebanon's bitter 15-year civil war. |
business | Google shares fall as staff sell..Shares in Google have fallen 6.7% after employees and early investors in the web search took advantage of the first chance to sell their holdings...Restrictions were imposed ahead of its flotation in August, to prevent shares being dumped quickly onto the market. In one of the most closely-watched initial public offerings in stock market history, the US-based company sold 19.6 million shares at $85 each. Google shares have risen since but fell $12.33 on Tuesday to close at $172.55. The restriction - known as a lockup - is being eased piecemeal: in all, some 227 million additional shares will become free to trade by February 2005. Selling the shares could turn many of Google's workers into millionaires...There were fears that the potential increase of shares in circulation from Tuesday would ease demand for stock. However, analysts say they expected most shareholders would be holding back from selling all their shares immediately, as Google's good performance and future growth potential means demand will hold...In its first earnings report since floating on the stock market, Google said it made a net profit of $52m in the three months ending 30 September. Sales surged to $805.9m in the third quarter, up from $393.9m a year earlier. Google's main service - its internet search - is free to users, so the firm makes much of its money from selling advertising space linked to the words for which its users search. It also sells the use of its technology to companies who need to make either their websites, or their internal information systems, searchable. | Google shares have risen since but fell $12.33 on Tuesday to close at $172.55.There were fears that the potential increase of shares in circulation from Tuesday would ease demand for stock.In one of the most closely-watched initial public offerings in stock market history, the US-based company sold 19.6 million shares at $85 each.Selling the shares could turn many of Google's workers into millionaires.However, analysts say they expected most shareholders would be holding back from selling all their shares immediately, as Google's good performance and future growth potential means demand will hold. |
business | Ericsson sees earnings improve..Telecoms equipment supplier Ericsson has posted a rise in fourth quarter profits thanks to clients like Deutsche Telekom upgrade their networks...Operating profit in the three months to 31 December was 9.5bn kronor (£722m; $1.3bn) against 6.3bn kronor last year. Shares tumbled, however, as the company reported a profit margin of 45.6%, less than the 47.3% forecast by analysts and down from 47.1% in the third quarter. Ericsson shares dropped 5.9% to 20.7 kronor in early trading on Thursday. However, the company remained optimistic about its earnings outlook after sales in the fourth quarter rose 9% to 39.4bn kronor. "Long-term growth drivers of the industry remain solid," Ericsson said in a statement...Chief executive Carl-Henric Svanberg explained that about "27% of the world's population now has access to mobile communications". "This is exciting for a company with a vision of an all-communicating world," he added. Mr Svanberg, however, warned that the extra demand that had driven 2004 sales had already dissipated and it was "business as usual". He added that sales in the first three months of 2005 would be subject to "normal seasonality". For the whole of 2004, Ericsson returned a net profit of 19bn kronor, compared with a loss of 10.8bn kronor in 2003. Sales climbed to 131.9 billion kronor from 117.7bn kronor in 2003. | For the whole of 2004, Ericsson returned a net profit of 19bn kronor, compared with a loss of 10.8bn kronor in 2003.Operating profit in the three months to 31 December was 9.5bn kronor (£722m; $1.3bn) against 6.3bn kronor last year.However, the company remained optimistic about its earnings outlook after sales in the fourth quarter rose 9% to 39.4bn kronor.Sales climbed to 131.9 billion kronor from 117.7bn kronor in 2003.Ericsson shares dropped 5.9% to 20.7 kronor in early trading on Thursday. |
business | Soros group warns of Kazakh close..The Open Society Institute (OSI), financed by billionaire George Soros, has accused Kazakhstan officials of trying to close down its local office...A demand for unpaid taxes and fines of $600,000 (£425,000) is politically motivated, the OSI claimed, adding that it paid the money in October. The organisation has found itself in trouble after being accused of helping to topple Georgia's former president. It denies having any role, but offices have had to close across the region...The OSI shut its office in Moscow last year and has withdrawn from Uzbekistan and Belarus. In the Ukraine earlier this year, Mr Soros - who took on the Bank of England in the 1990s - and won, was pelted by protestors. "This legal prosecution can be considered an attempt by the government to force Soros Foundation-Kazakhstan to cease its activities in Kazakhstan and shut its doors for Kazakh citizens and organisations," the OSI said...The OSI aims to promote democratic and open, market-based societies. Since the break up of the Soviet Union in 1991, Kazakhstan has been dominated by its president Nursultan Abish-uly Nazarbayev. He has powers for life, while insulting the president and officials has been made a criminal offence. The government controls the printing presses and most radio and TV transmission facilities. It operates the country's national radio and TV networks. Recent elections were criticised as flawed and the opposition claimed there was widespread vote rigging. Supporters, however, say he brings much needed stability to a region where Islamic militancy is on the rise. They also credit him with promoting inter-ethnic accord and pushing through harsh reforms. | The Open Society Institute (OSI), financed by billionaire George Soros, has accused Kazakhstan officials of trying to close down its local office.The OSI shut its office in Moscow last year and has withdrawn from Uzbekistan and Belarus.He has powers for life, while insulting the president and officials has been made a criminal offence."This legal prosecution can be considered an attempt by the government to force Soros Foundation-Kazakhstan to cease its activities in Kazakhstan and shut its doors for Kazakh citizens and organisations," the OSI said.Since the break up of the Soviet Union in 1991, Kazakhstan has been dominated by its president Nursultan Abish-uly Nazarbayev.The organisation has found itself in trouble after being accused of helping to topple Georgia's former president. |
business | European losses hit GM's profits..General Motors (GM) saw its net profits fall 37% in the last quarter of 2004, as it continued to be hit by losses at its European operations...The US giant earned $630m (£481.5m) in the October-to-December period, down from $1bn in the fourth quarter of 2003. GM's revenues rose 4.7% to $51.2bn from $48.8bn a year earlier. The fourth-quarter losses at General Motors Europe totalled $345m, up from $66m during the same period in 2003. GM's main European brands are Opel and Vauxhall...Excluding special items, GM's global income from continuing operations totalled $569m during the quarter, down from $838m a year earlier. The results were in line with Wall Street expectations and shares in GM rose by about 1% in pre-market trade. For the whole of 2004, GM earned $3.7bn, down from $3.8bn in 2003, while its annual revenue rose 4.5% to $193bn. GM said its profits were also hit by higher healthcare costs in the US. "GM reported solid overall results in 2004, despite challenging competitive conditions in many markets around the globe," GM chairman and chief executive Rick Wagoner said in a statement. The company recently announced that it expected profits in 2005 to be lower than in 2004. | For the whole of 2004, GM earned $3.7bn, down from $3.8bn in 2003, while its annual revenue rose 4.5% to $193bn.GM's revenues rose 4.7% to $51.2bn from $48.8bn a year earlier.General Motors (GM) saw its net profits fall 37% in the last quarter of 2004, as it continued to be hit by losses at its European operations.The US giant earned $630m (£481.5m) in the October-to-December period, down from $1bn in the fourth quarter of 2003.GM said its profits were also hit by higher healthcare costs in the US. |
business | Telegraph newspapers axe 90 jobs..The Daily and Sunday Telegraph newspapers are axing 90 journalist jobs - 17% of their editorial staff...The Telegraph Group says the cuts are needed to fund an £150m investment in new printing facilities. Journalists at the firm met on Friday afternoon to discuss how to react to the surprise announcement. The cuts come against a background of fierce competition for readers and sluggish advertising revenues amid competition from online advertising. The National Union of Journalists has called on the management to recall the notice of redundancy by midday on Monday or face a strike ballot...Pearson's Financial Times said last week it was offering voluntary redundancy to about 30 reporters...The National Union of Journalists said it stood strongly behind the journalists and did not rule out a strike. "Managers have torn up agreed procedures and kicked staff in the teeth by sacking people to pay for printing facilities," said Jeremy Dear, NUJ General Secretary. NUJ official Barry Fitzpatrick said the company had ignored the 90-day consultation period required for companies planning more than 10 redundancies. "They have shown a complete disregard for the consultative rights of our members," said Mr Fitzpatrick, who added that the company now planned to observe the consultation procedures. The two Telegraph titles currently employ 521 journalists...Some broadsheet newspapers - especially those which have not moved to a tabloid format - have suffered circulation declines, which are hitting revenues. The Telegraph has announced no plans to go tabloid although both The Independent and The Times have seen circulation rise since shrinking in size...The Guardian is hedging its bets, planning a larger tabloid format like those popular in continental Europe. The Telegraph Group was bought by the Barclay twins - Frederick and David - last year, having previously been owned by Lord Conrad Black's Hollinger International. The brothers are currently mulling the sale of another of their businesses, retailer Littlewoods...Telegraph executive Murdoch MacLennan said the two newspapers would add eight colour pages in the coming months..."Journalists are the lifeblood of any newspaper, and maintaining the quality of The Daily Telegraph and The Sunday Telegraph for our readers is vital," he said. "However, action to improve our production capability and secure our titles against the competition is also vital." Many newspapers are investing in new printing machinery that enables them to print more colour pages, or in some cases, have colour on every page. They are hoping that by boosting colour it will make their publications more attractive to advertisers and readers alike. In recent months News Corp's News International unit, which publishes The Sun and the News of the World, the Guardian Media Group, Trinity Mirror and the Daily Mail & General Trust have all announced substantial investments in new printing plants. | "Journalists are the lifeblood of any newspaper, and maintaining the quality of The Daily Telegraph and The Sunday Telegraph for our readers is vital," he said.The two Telegraph titles currently employ 521 journalists.Telegraph executive Murdoch MacLennan said the two newspapers would add eight colour pages in the coming months.The Daily and Sunday Telegraph newspapers are axing 90 journalist jobs - 17% of their editorial staff.The Telegraph Group says the cuts are needed to fund an £150m investment in new printing facilities.The National Union of Journalists said it stood strongly behind the journalists and did not rule out a strike.The Telegraph has announced no plans to go tabloid although both The Independent and The Times have seen circulation rise since shrinking in size.Many newspapers are investing in new printing machinery that enables them to print more colour pages, or in some cases, have colour on every page.NUJ official Barry Fitzpatrick said the company had ignored the 90-day consultation period required for companies planning more than 10 redundancies. |
business | Steady job growth continues in US..The US created fewer jobs than expected in December, but analysts said that the dip in hiring was not enough to derail the world's biggest economy...According to Labor Department figures, 157,000 new jobs were added last month. That took 2004's total to 2.2 million, the best showing in five years. Job creation was one of last year's main concerns for the US economy. While worries still remain, the conditions are set for steady growth in 2005, analysts said. The unemployment rate stayed at 5.4% in December, and about 200,000 jobs will need to be created each month if that figure is to drop..."It was a respectable report," said Michael Moran, analyst at Daiwa Securities..."Payroll growth in December was a little lighter than the consensus forecast, but we had upward revisions to the prior two months and an increase in manufacturing employment." "Manufacturing is a cyclical area of the economy and if it's showing job growth, it's a good indication that the economy is on a solid growth track." That means that the Federal Reserve is likely to continue its policy of raising interest rates. The Fed lifted borrowing costs five times last year to 2.25%, citing evidence the US economic recovery was becoming more robust...Job creation was one of last year's main concerns for the US economy, and proved to be a main topic of debate in the US presidential election. While demand for workers is far from booming, the conditions are set for steady growth. "Overall, compared to the previous year it looks great, it just keeps going stronger and stronger and I expect that to be the case" in 2005, said Kurt Karl, economist at Swiss Re in New York. Meanwhile, economists cautioned against reading too much into data from the Federal Reserve showing an unexpected $8.7bn drop in consumer debt in November. A fall in consumer spending, which makes up about two-thirds of all US economic activity, could help limit the extent of any future interest rate rises. But economists said there could be a number of reasons for a fall in the borrowing, which include credit cards and personal loans, while noting that such figures can vary on a month-to-month basis. | Job creation was one of last year's main concerns for the US economy.Job creation was one of last year's main concerns for the US economy, and proved to be a main topic of debate in the US presidential election.The US created fewer jobs than expected in December, but analysts said that the dip in hiring was not enough to derail the world's biggest economy."Manufacturing is a cyclical area of the economy and if it's showing job growth, it's a good indication that the economy is on a solid growth track."While worries still remain, the conditions are set for steady growth in 2005, analysts said.The Fed lifted borrowing costs five times last year to 2.25%, citing evidence the US economic recovery was becoming more robust.The unemployment rate stayed at 5.4% in December, and about 200,000 jobs will need to be created each month if that figure is to drop. |
business | BP surges ahead on high oil price..Oil giant BP has announced a 26% rise in annual profits to $16.2bn (£8.7bn) on the back of record oil prices...Last week, rival Shell reported an annual profit of $17.5bn - a record profit for a UK-listed company. BP added that it was increasing its fourth-quarter dividend by 26% to 8.5 cents, and that it would continue with share buybacks. BP chief executive Lord Browne said the results were strong "both operationally and financially."..The company is earning about $1.8m an hour...Despite the record annual profits figure, BP's performance was below the expectations of some City analysts. However, BP's share price rose 4p or nearly 1% in morning trading to 548p. Its profit rise for the year included profits of $3.65bn (£1.97bn) for the final three months of 2004 - up from $2.89bn a year ago but below its third quarter...Speaking on the BBC's Today programme on Tuesday, Lord Browne said the profits were not solely down to the high oil price alone..."The profits are up more than the price of oil is up," he said. Lord Browne pointed out that BP was reaping the benefits of its investment in oil exploration. "We have spent many years buying (assets) when the price is low," he said. The company has made new discoveries in Egypt, the Gulf of Mexico and Angola...However, Lord Browne rejected calls for a windfall tax on his company's huge profits, saying that in the North Sea it paid progressively more tax, the more profits it made. Lord Browne believes oil prices will remain quite high. Currently above $40 a barrel, he said: "The price of oil will be well supported above $30 a barrel for the medium term." BP put production for the year at 3.997 billion barrels of oil, up 10% on 2003, but slightly lower than the four billion barrels it had initially aimed for. | "The profits are up more than the price of oil is up," he said.Speaking on the BBC's Today programme on Tuesday, Lord Browne said the profits were not solely down to the high oil price alone.Oil giant BP has announced a 26% rise in annual profits to $16.2bn (£8.7bn) on the back of record oil prices.Lord Browne believes oil prices will remain quite high.Last week, rival Shell reported an annual profit of $17.5bn - a record profit for a UK-listed company.Lord Browne pointed out that BP was reaping the benefits of its investment in oil exploration.Currently above $40 a barrel, he said: "The price of oil will be well supported above $30 a barrel for the medium term." |
business | Yukos accused of lying to court..Russian oil firm Yukos lied to a US court in an attempt to stop the Russian government selling off its key production unit, the court has heard...The unit, Yugansk, was sold to pay off a $27.5bn (£14.5bn) back tax bill. Yukos argued that since it had a US subsidiary and local bank accounts, the US court could declare it bankrupt and stop the auction of Yugansk. But Deutsche Bank - itself a target of a Yukos lawsuit - said documents had been backdated to strengthen the case...Deutsche Bank's evidence came on the first day of a two-day hearing in Houston. Its lawyer, Hugh Ray, told the court that Yukos had claimed it had transferred $27m into two Texas bank accounts opened by its new US subsidiary. By doing so, he said, the firm had intended to reinforce its US presence - and thus its chances of getting its case heard in US courts. But he said that the papers documenting the transaction were not drawn up till weeks after Yukos made its bankruptcy application on 14 December, and then backdated...Yukos chief financial officer Bruce Misamore, who had moved to the US in early December to set up Yukos USA, acknowledged the point. He said the discrepancy was only in the paperwork, but that money had indeed been transferred on 14 December. Even so, he told the court that only $480,000 had been in the accounts that day, with the rest arriving a day later...Deutsche Bank is involved in the case because it is itself being sued by Yukos. It had agreed to loan to an arm of Russian state gas firm Gazprom the money to bid for Yuganskneftegaz, as the Yukos unit is formally known. The sale went ahead, despite an order from the US bankruptcy court ordered that it should be stopped. In the end, the auction was won by an unknown shell company for $9.4bn - much less than most assessments of its value - before ending up in the hands of state-controlled oil firm Rosneft. Rosneft, meanwhile, has agreed to merge with Gazprom, bringing a large chunk of Russia's very profitable oil business back under state control...Yukos maintains that it filed for bankruptcy in the US because it feared it would not be able to do so in Russia. It also said that in the event of going bust, it could offer the chance of restructuring. "It gives us a kind of life after death alternative," said Yukos chief executive Steven Theede. Yukos is currently suing four companies - Gazprom, its unit Gazpromneft, Rosneft and the shell company which won the bidding - for their part in Yugansk's disposal. It has also threatened to sue the Russian government for $28bn. Analysts have questioned whether a US court has any jurisdiction over Russian companies, while Moscow officials have dismissed Yukos' legal wrangling as meaningless. Yukos claims that the rights of its shareholders have been ignored and that is has been punished for the political ambitions of its founder Mikhail Khodorkovsky. Mr Khodorkovsky, once Russia's richest man, is in prison, having been charged with fraud and tax evasion and repeatedly denied bail. | Russian oil firm Yukos lied to a US court in an attempt to stop the Russian government selling off its key production unit, the court has heard.Yukos argued that since it had a US subsidiary and local bank accounts, the US court could declare it bankrupt and stop the auction of Yugansk.But Deutsche Bank - itself a target of a Yukos lawsuit - said documents had been backdated to strengthen the case.Analysts have questioned whether a US court has any jurisdiction over Russian companies, while Moscow officials have dismissed Yukos' legal wrangling as meaningless.Its lawyer, Hugh Ray, told the court that Yukos had claimed it had transferred $27m into two Texas bank accounts opened by its new US subsidiary.Yukos chief financial officer Bruce Misamore, who had moved to the US in early December to set up Yukos USA, acknowledged the point.Deutsche Bank is involved in the case because it is itself being sued by Yukos.Yukos maintains that it filed for bankruptcy in the US because it feared it would not be able to do so in Russia.It had agreed to loan to an arm of Russian state gas firm Gazprom the money to bid for Yuganskneftegaz, as the Yukos unit is formally known.By doing so, he said, the firm had intended to reinforce its US presence - and thus its chances of getting its case heard in US courts. |
business | Qantas considers offshore option..Australian airline Qantas could transfer as many as 7,000 jobs out of its home country as it seeks to save costs, according to newspaper reports...Chief executive Geoff Dixon was quoted by The Australian newspaper as saying the carrier could no longer afford to remain "all-Australian". Unions criticised the possible move - which may affect cabin and maintenance staff - saying Qantas was profitable. More than 90% of the airline's staff are based in Australia...Qantas confirmed it was looking at whether it might recruit and source products overseas - potentially through joint ventures - but said it would continue to create jobs in Australia...Despite making a record Australian dollars 648m ($492m) profit last year, Qantas has argued that it needs to make considerable savings if it is to remain competitive. "We're going to have to get the lowest cost structure we can and that willmean sourcing things more and more from overseas," the newspaper quoted Qantas chief executive Geoff Dixon as saying. Early this year, Qantas increased the number of flight attendants based in London from 370 to 870. If Qantas were to follow the lead of other airlines moving staff 'offshore' 7,000 jobs could shift overseas, the newspaper reported. In a statement, Qantas said it was looking to build its operations overseas. However, it stressed this would not result in large scale redundancies in its home market, where most of its 35,000 staff are employed. "We are totally committed to continuing to grow jobs in Australia," Mr Dixon said. "We are, however, operating in a global market and there is no room for complacency simply because we are currently profitable and successful."..Unions reacted angrily to the reported disclosure, arguing that Qantas was profitable and did not need to take such action. "We could understand if Qantas was a struggling airline about to go under," Michael Mijatov, international division secretary of the Flight Attendants Association, told Agence France Presse. "Qantas announced a record profit last year and is on course this year for an even greater profit so it is totally unnecessary." In an effort to meet the challenge posed by low cost carriers, Qantas sought a tie-up with Air New Zealand last year However, the deal was thrown out by the New Zealand High Court on competition grounds. | If Qantas were to follow the lead of other airlines moving staff 'offshore' 7,000 jobs could shift overseas, the newspaper reported.In a statement, Qantas said it was looking to build its operations overseas.Unions criticised the possible move - which may affect cabin and maintenance staff - saying Qantas was profitable.Qantas confirmed it was looking at whether it might recruit and source products overseas - potentially through joint ventures - but said it would continue to create jobs in Australia.Australian airline Qantas could transfer as many as 7,000 jobs out of its home country as it seeks to save costs, according to newspaper reports.Unions reacted angrily to the reported disclosure, arguing that Qantas was profitable and did not need to take such action."We're going to have to get the lowest cost structure we can and that willmean sourcing things more and more from overseas," the newspaper quoted Qantas chief executive Geoff Dixon as saying. |
business | Borussia Dortmund near bust..German football club and former European champion Borussia Dortmund has warned it will go bankrupt if rescue talks with creditors fail...The company's shares tumbled after it said it has "entered a life-threatening profitability and financial situation". Borussia Dortmund has posted record losses and missed rent payments on its Westfallen stadium. Chief executive Gerd Niebaum stepped down last week and creditors are now pushing for greater control. Shares in Borussia Dortmund, Germany's only stock-market listed football club, dropped by almost 23% to 2.05 euros during early afternoon trading...Fund manager Florian Hamm - Borussia Dortmund's largest investor - said he would only invest more money in the company if he got a greater say in how it is run. "I demand better transparency," he is quoted as saying by Germany's Manger Magazin. The club has also faced calls to appoint executives from outside the club...Borussia Dortmund posted a record loss of 68m euros ($89m; £47m) in the 12 months through June. It made a loss of 27.2m euros in the first half of the current fiscal year and said that total debts will increase to 134.7m euros by the middle of 2006 unless a restructuring plan is pushed through. "This is the bill for their mismanagement over the past years," said HVB analyst Peter-Thilo Halser. The club appointed an auditor, who has recommended a number of steps, including deferring the rent due on the stadium and suspending debt repayments until at least the 2006-2007 fiscal year. Stephen Schechter, a UK investment banker who has held talks with Borussia Dortmund over a possible bond sale, said the club needs a capital injection of 35m euros. "They need strong people on the board who do not have a history with the club," he said. | Stephen Schechter, a UK investment banker who has held talks with Borussia Dortmund over a possible bond sale, said the club needs a capital injection of 35m euros.Borussia Dortmund has posted record losses and missed rent payments on its Westfallen stadium.German football club and former European champion Borussia Dortmund has warned it will go bankrupt if rescue talks with creditors fail.Shares in Borussia Dortmund, Germany's only stock-market listed football club, dropped by almost 23% to 2.05 euros during early afternoon trading.Borussia Dortmund posted a record loss of 68m euros ($89m; £47m) in the 12 months through June.The club has also faced calls to appoint executives from outside the club. |
business | WMC profits up amid bid criticism..Australian mining firm WMC Resources has seen a fivefold rise in profits while continuing to be the target of a hostile takeover bid...WMC said it made net profits of 1.33bn Australian dollars ($1bn; £550m) in 2004, up from A$246bn the year before. It is currently arguing against an offer from Swiss Xstrata, which the firm raised to A$8.4bn last week after WMC said it was an undervaluation. Now reports say that the Australian government is against the deal...Trade Minister Mark Vaile has said that the bid may be "against the national interest". Mr Vaile, who was quoted in the Australian Financial Review, compared Xstrata's attempt to take over WMC to a similar bid by oil giant Shell for Australia's Woodside Petroleum in 2001. The bid was thrown out by Treasurer Peter Costello on national interest grounds. WMC's interests in uranium deposits were a contributing factor, Mr Vaile said. WMC itself, however, has no objection in principle to being bought out, having spun off its aluminium operations in 2002 to make itself a more tempting target - as long as the price is right. Its stellar performance in 2004 has been built on sky-high prices for metals. Copper and nickel in particular have been in high demand thanks to China's booming economy, which expanded more than 9% in each of the past two years. Nickel prices rose 43% during the year, with copper up 36%. | Trade Minister Mark Vaile has said that the bid may be "against the national interest".Australian mining firm WMC Resources has seen a fivefold rise in profits while continuing to be the target of a hostile takeover bid.WMC said it made net profits of 1.33bn Australian dollars ($1bn; £550m) in 2004, up from A$246bn the year before.Mr Vaile, who was quoted in the Australian Financial Review, compared Xstrata's attempt to take over WMC to a similar bid by oil giant Shell for Australia's Woodside Petroleum in 2001.WMC itself, however, has no objection in principle to being bought out, having spun off its aluminium operations in 2002 to make itself a more tempting target - as long as the price is right. |
business | Qantas sees profits fly to record..Australian airline Qantas has posted a record fiscal first-half profit thanks to cost-cutting measures...Net profit in the six months ending 31 December rose 28% to A$458.4m ($357.6m; £191m) from a year earlier. Analysts expected a figure closer to A$431m. Qantas shares fell almost 3%, however, after it warned that earnings growth would slow in the second half. Sales will dip by at least A$30m after the Indian ocean tsunami devastated many holiday destinations, Qantas said..."The tsunami affected travel patterns in ways that we were a bit surprised about," chief executive Geoff Dixon explained. "It certainly affected Japanese travel into Australia. As soon as the tsunami hit we saw ... a lessening with bookings for Australia." Higher fuel costs also are expected to eat into earnings in coming months. "We don't have as much hedging benefit in the second half as we had in the first," said chief financial officer Peter Gregg. Qantas is facing increased pressure from rivals such as low-cost carrier Virgin Blue and the Australian government is in talks about whether to allow Singapore Airlines to fly between the Australia and the US - one of Qantas' key routes...Even so, the firm is predicting that full-year earnings will increase from the previous 12 months. Analysts have forecast full-year profit will rise about 11% to around A$720 million ($563 million). Qantas boss Mr Dixon also said he would be reviewing the group's cost-cutting measures. During the first six months of the fiscal year, Qantas made savings of A$245m, and is on track to top its target of A$500m for the full year. Last month, the company warned it may transfer as many as 7,000 jobs out Australia, with Mr Dixon quoted as saying that the carrier could no longer afford to remain "all-Australian". | Qantas boss Mr Dixon also said he would be reviewing the group's cost-cutting measures.Qantas shares fell almost 3%, however, after it warned that earnings growth would slow in the second half.During the first six months of the fiscal year, Qantas made savings of A$245m, and is on track to top its target of A$500m for the full year.Australian airline Qantas has posted a record fiscal first-half profit thanks to cost-cutting measures.Qantas is facing increased pressure from rivals such as low-cost carrier Virgin Blue and the Australian government is in talks about whether to allow Singapore Airlines to fly between the Australia and the US - one of Qantas' key routes.Sales will dip by at least A$30m after the Indian ocean tsunami devastated many holiday destinations, Qantas said.Last month, the company warned it may transfer as many as 7,000 jobs out Australia, with Mr Dixon quoted as saying that the carrier could no longer afford to remain "all-Australian". |
business | Georgia plans hidden asset pardon..Georgia is offering a one-off 'tax amnesty' to people who hid their earnings under the regime of former president Eduard Shevardnadze...The country's new president, Mikhail Saakashvili, has said that anyone now willing to disclose their wealth will only have to pay 1% in income tax. The measure is designed to legitimise previously hidden economic activity and boost Georgia's flagging economy. Georgia's black market is estimated to be twice the size of its legal economy...Mr Saakashvili, elected president in January after Mr Shevardnadze was toppled, has urged the Georgian Parliament to approve the amnesty as soon as possible. It is one of a series of proposals designed to tackle corruption, which was rampant during the Shevardnadze era, and boost Georgia's fragile public finances...The new government is encouraging companies to pay taxes by scrapping existing corruption investigations and destroying all tax records from before 1 January, three days before President Saakashvili was elected. "There are people who have money but are afraid to show it," the president told a government session. "Documentation about where this money came from doesn't exist because under the former, entirely warped regime, earning capital honestly was not possible."..By declaring their assets and paying the one-off tax, people would be able to "legalise their property", Mr Saakashvili stressed..."No one will have the right to check this money's origin. This money must go back into the economy." The amnesty will not extend to people who made money through drugs trafficking or international money laundering. Criminal investigations in such cases -thought to involve about 5% of Georgian businesses -are to continue. Mr Saakashvili has accused the Shevardnadze regime, which was toppled by a popular uprising in November, of allowing bribery to flourish. Georgia's economy is in a desperate condition. Half the population are living below the poverty line with many surviving on income of less than $4, or three euros, a day. The unemployment rate is around 20% while the country has a $1.7bn public debt. | Mr Saakashvili, elected president in January after Mr Shevardnadze was toppled, has urged the Georgian Parliament to approve the amnesty as soon as possible.The new government is encouraging companies to pay taxes by scrapping existing corruption investigations and destroying all tax records from before 1 January, three days before President Saakashvili was elected.Georgia is offering a one-off 'tax amnesty' to people who hid their earnings under the regime of former president Eduard Shevardnadze.Mr Saakashvili has accused the Shevardnadze regime, which was toppled by a popular uprising in November, of allowing bribery to flourish.It is one of a series of proposals designed to tackle corruption, which was rampant during the Shevardnadze era, and boost Georgia's fragile public finances.The country's new president, Mikhail Saakashvili, has said that anyone now willing to disclose their wealth will only have to pay 1% in income tax."There are people who have money but are afraid to show it," the president told a government session.Georgia's economy is in a desperate condition. |
business | Slowdown hits US factory growth..US industrial production increased for the 21st month in a row in February, but at a slower pace than in January, official figures show...The Institute for Supply Management (ISM) index fell to 55.3 in February, from an adjusted 56.4 in January. Although the index was lower than in January, the fact that it held above 50 shows continued growth in the sector. "February was another good month in the manufacturing sector," said ISM survey chairman Norbert Ore..."While the overall rate of growth is slowing, the overall picture is improving as price increases and shortages are becoming less of a problem. Exports and imports remain strong," he said. Analysts had expected February's figure to be stronger than January's and come in at 57. Of the 20 manufacturing sectors surveyed by ISM, 13 reported growth. They included the textiles, apparel, tobacco, chemicals and transportation sectors. The ISM's index of national manufacturing activity is compiled from the responses of purchasing executives at more than 400 industrial companies. | "February was another good month in the manufacturing sector," said ISM survey chairman Norbert Ore. "While the overall rate of growth is slowing, the overall picture is improving as price increases and shortages are becoming less of a problem.Although the index was lower than in January, the fact that it held above 50 shows continued growth in the sector.Of the 20 manufacturing sectors surveyed by ISM, 13 reported growth.The Institute for Supply Management (ISM) index fell to 55.3 in February, from an adjusted 56.4 in January. |
business | Newest EU members underpin growth..The European Union's newest members will bolster Europe's economic growth in 2005, according to a new report...The eight central European states which joined the EU last year will see 4.6% growth, the United Nations Economic Commission for Europe (UNECE) said. In contrast, the 12 Euro zone countries will put in a "lacklustre" performance, generating growth of only 1.8%. The global economy will slow in 2005, the UNECE forecasts, due to widespread weakness in consumer demand...It warned that growth could also be threatened by attempts to reduce the United States' huge current account deficit which, in turn, might lead to significant volatility in exchange rates...UNECE is forecasting average economic growth of 2.2% across the European Union in 2005. However, total output across the Euro zone is forecast to fall in 2004 from 1.9% to 1.8%. This is due largely to the faltering German economy, which shrank 0.2% in the last quarter of 2004. On Monday, Germany's BdB private banks association said the German economy would struggle to meet its 1.4% growth target in 2005...Separately, the Bundesbank warned that Germany's efforts to reduce its budget deficit below 3% of GDP presented "huge risks" given that headline economic growth was set to fall below 1% this year. Publishing its 2005 economic survey, the UNECE said central European countries such as the Czech Republic and Slovenia would provide the backbone of the continent's growth. Smaller nations such as Cyprus, Ireland and Malta would also be among the continent's best performing economies this year, it said. The UK economy, on the other hand, is expected to slow in 2005, with growth falling from 3.2% last year to 2.5%...Consumer demand will remain fragile in many of Europe's largest countries and economies will be mostly driven by growth in exports. "In view of the fragility of factors of domestic growth and the dampening effects of the stronger euro on domestic economic activity and inflation, monetary policy in the euro area is likely to continue to 'wait and see', the organisation said in its report. Global economic growth is expected to fall from 5% in 2004 to 4.25% despite the continued strength of the Chinese and US economies. The UNECE warned that attempts to bring about a controlled reduction in the US current account deficit could cause difficulties. "The orderly reversal of the deficit is a major challenge for policy makers in both the United States and other economies," it noted. | The eight central European states which joined the EU last year will see 4.6% growth, the United Nations Economic Commission for Europe (UNECE) said.UNECE is forecasting average economic growth of 2.2% across the European Union in 2005.Publishing its 2005 economic survey, the UNECE said central European countries such as the Czech Republic and Slovenia would provide the backbone of the continent's growth.The UK economy, on the other hand, is expected to slow in 2005, with growth falling from 3.2% last year to 2.5%.Global economic growth is expected to fall from 5% in 2004 to 4.25% despite the continued strength of the Chinese and US economies.Separately, the Bundesbank warned that Germany's efforts to reduce its budget deficit below 3% of GDP presented "huge risks" given that headline economic growth was set to fall below 1% this year.On Monday, Germany's BdB private banks association said the German economy would struggle to meet its 1.4% growth target in 2005.The European Union's newest members will bolster Europe's economic growth in 2005, according to a new report. |
business | Aviation firms eye booming India..India's defence minister has opened the country's Aero India 2005 air show with an invitation for global aerospace firms to outsource jobs to the nation...Pranab Mukherjee said such companies could take advantage of India's highly skilled workers and low wages. More than 240 civil and military aerospace firms from 31 countries are attending the show. Analysts said India could spend up to $35bn (£18.8bn) in the aviation market over the next 20 years. Giants such Boeing and Airbus - on the civil aviation front - as well as Lockheed Martin and France's Snecma - on the military side - are some of the firms attending the show. "There is tremendous scope for outsourcing from India in areas where the companies are competitive," said Mr Mukerjee. "We are keen to welcome international collaborations that are in conformity with our national goals."..Lockheed said it had signed an agreement with state-owned Hindustan Aeronautics (HAL) to share information on the P-3 Orion maritime surveillance aircraft...In fact, the Indian Armed Force is considering the buying of used P-3 Orion as well as F-16 fighter jets from Lockheed. The US military industry has show a strong interest to open a link with India, now that relations between the two countries have improved a lot. In fact, it is the first time the US Air Force will attend the air show since sanctions imposed in 1998 after India's nuclear tests were lifted. But the Indian Air Force is also considering proposals from other foreign firms such as France's Dassault Aviation, Sweden's Saab and Russia's Mikoyan-Gurevich. Meanwhile, France's Snecma has also said it plans a joint venture with HAL to make engine parts, with an initial investment of $6.5m...On the civilian front, Boeing announced a deal with India's HCL Technologies to develop a platform for the flight test system of its 787 Dreamliner aircraft. The US company also said it had agreed with a new Indian budget airline the sale of 10 737-800 planes for $630m. The airline, SpiceJet, will also have the option to acquire 10 more aircraft. Airbus has also recently signed fresh deals with two Indian airlines - Air Deccan and Kingfisher. In addition, the European company has plans to open a training centre in India. Meanwhile, flag carrier Air India is considering to buy 50 new aircraft from either Boeing or Airbus. "No other market is going to see the growth that will be seen here in the coming years," said Dinesh Keskar, senior vice president Boeing. | The US company also said it had agreed with a new Indian budget airline the sale of 10 737-800 planes for $630m.Giants such Boeing and Airbus - on the civil aviation front - as well as Lockheed Martin and France's Snecma - on the military side - are some of the firms attending the show.Airbus has also recently signed fresh deals with two Indian airlines - Air Deccan and Kingfisher.Meanwhile, flag carrier Air India is considering to buy 50 new aircraft from either Boeing or Airbus.India's defence minister has opened the country's Aero India 2005 air show with an invitation for global aerospace firms to outsource jobs to the nation.But the Indian Air Force is also considering proposals from other foreign firms such as France's Dassault Aviation, Sweden's Saab and Russia's Mikoyan-Gurevich.The US military industry has show a strong interest to open a link with India, now that relations between the two countries have improved a lot.Meanwhile, France's Snecma has also said it plans a joint venture with HAL to make engine parts, with an initial investment of $6.5m. |
business | Cactus diet deal for Phytopharm..A slimming aid made from a southern African cactus is set to be developed by UK firm Phytopharm and Unilever...Anglo-Dutch food giant Unilever will help the pharmaceutical firm develop the snacks containing Hoodia extract. Phytopharm shares jumped 10.7% on the news, with analysts saying sales of $600m (£309m) a year were possible. The plant, licensed to Phytopharm in 1997, has been used for thousands of years by the Sans bushmen of the Kalahari desert to stave off hunger. Studies have reportedly shown the plant curbs appetite instead of reducing calorific intake like many existing products...Phytopharm will receive an initial fee of £6.5m from Unilever - out of a potential total of £21m - as well as future royalties on product sales. Under the deal, production of the Hoodia cactus at Phytopharm's nursery in South Africa will also rise from eight million plants to potentially hundreds of millions, said Phytopharm chief executive Richard Dixey. The firm had initially hoped to market a slimming drug from Hoodia with Pfizer. But the research collaboration came to an end in 2003. Analysts said Unilever could launch the new products in 2007. "This deal goes a long way to restoring the market faith in Phytopharm's pipeline after the Pfizer exit," said analyst Erling Refsum at Nomura. | A slimming aid made from a southern African cactus is set to be developed by UK firm Phytopharm and Unilever.Under the deal, production of the Hoodia cactus at Phytopharm's nursery in South Africa will also rise from eight million plants to potentially hundreds of millions, said Phytopharm chief executive Richard Dixey.Phytopharm will receive an initial fee of £6.5m from Unilever - out of a potential total of £21m - as well as future royalties on product sales.The firm had initially hoped to market a slimming drug from Hoodia with Pfizer.Anglo-Dutch food giant Unilever will help the pharmaceutical firm develop the snacks containing Hoodia extract. |
business | Ore costs hit global steel firms..Shares in steel firms have dropped worldwide amid concerns that higher iron ore costs will hit profit growth...Shares in Germany's ThyssenKrupp, the UK's Corus and France's Arcleor fell while Japan's Nippon Steel slid after it agreed to pay 72% more for iron ore. China's Baoshan Iron and Steel Co. said it was delaying a share sale because of weak market conditions, adding it would raise steel prices to offset ore costs. The threat of higher raw material costs also hit industries such as carmakers. France's Peugeot warned that its profits may decline this year as a result of the higher steel, plastic and commodity prices...Steelmakers have been enjoying record profits as demand for steel has risen, driven by the booming economies of countries such as China and India. Steel prices rose by 8% globally in January alone and by 24% in China...The boom times are far from over, but analysts say that earnings growth may slow. The share price fall was initially triggered by news that two of the world's biggest iron ore suppliers had negotiated contracts at much-higher prices. Miners Rio Tinto and Cia. Vale Do Rio Dolce (CVRD) this week managed to boost by 72% the price of their iron ore, a key component of steel. Analysts had expected Japan's Nippon to agree to a price rise of between 40% and 50%. Steel analyst Peter Fish, director of Sheffield-based consulting group MEPS, said the extent of CVRD's price rise was "uncharted territory", adding that the steel industry "hasn't seen an increase of this magnitude probably in 50 years". Analysts now expect other iron ore producers, such as Australia's BHP Billiton, to seek annual price rises of up to 70%...The news triggered the share price weakness. "It sparked worries that steel makers might not be able to increase product prices further [ to cover rising ore costs]" explained Kazuhiro Takahashi of Daiwa Securities SMBC. In Europe, Arcelor shed 2.1% to 17.58 euros in Paris, with ThyssenKrupp dropping 1.7% to 16.87 euros. In London, Corus fell 2.2% to 55.57 pence. Japan's biggest steel company Nippon Steel lost 2.5% to 270 yen, with closest rival JFE Holdings down 3.4%. China's Baoshan, the country's largest steel producer, said that the uncertainty surrounding the industry has prompted it to pull its planned share sale. The firm had been expected to offer 22.5bn yuan ($2.7bn) worth of shares to investors. No date has been given for when the 5 billion shares will come to the market. Baoshan stock climbed on news of the delay and its decision to increase the price of its steel by 10%. | Shares in Germany's ThyssenKrupp, the UK's Corus and France's Arcleor fell while Japan's Nippon Steel slid after it agreed to pay 72% more for iron ore. China's Baoshan Iron and Steel Co. said it was delaying a share sale because of weak market conditions, adding it would raise steel prices to offset ore costs.Vale Do Rio Dolce (CVRD) this week managed to boost by 72% the price of their iron ore, a key component of steel.Shares in steel firms have dropped worldwide amid concerns that higher iron ore costs will hit profit growth.Baoshan stock climbed on news of the delay and its decision to increase the price of its steel by 10%.Steel analyst Peter Fish, director of Sheffield-based consulting group MEPS, said the extent of CVRD's price rise was "uncharted territory", adding that the steel industry "hasn't seen an increase of this magnitude probably in 50 years".Steel prices rose by 8% globally in January alone and by 24% in China.The share price fall was initially triggered by news that two of the world's biggest iron ore suppliers had negotiated contracts at much-higher prices.The news triggered the share price weakness.Japan's biggest steel company Nippon Steel lost 2.5% to 270 yen, with closest rival JFE Holdings down 3.4%. |
business | Latin America sees strong growth..Latin America's economy grew by 5.5% in 2004, its best performance since 1980, while exports registered their best performance in two decades...The United Nations' Economic Commission for Latin America and the Caribbean said the region grew by 5.5% this year. The Inter-American Development Bank (IADB) said regional exports reached $445.1bn (£227bn;331bn euros) in 2004. Doubts about the strength of the US recovery and overheating of the Chinese economy do however pose risks for 2005. Both organisations also warned that high oil prices raise the risk of either inflation or recession...Nevertheless, the Economic Commission for Latin America and the Caribbean (ECLAC) still forecasts growth of 4% for 2005. Strong recovery in some countries, such as Venezuela and Uruguay, boosted the overall performance of the region. ECLAC also said that the six largest Latin American economies (Argentina, Brazil, Chile, Colombia, Mexico and Venezuela) grew by more than 3% for only the second time in 20 years. Chinese and US economic strength helped boost exports, as did strong demand for agricultural and mining products. In fact, Latin American exports to China grew 34%, to $14bn. Higher oil prices also helped boost exports, as Mexico and Venezuela are important oil exporters. Regional blocs as well as free trade agreements with the US contributed to the region's strong performance, the IADB said. | The United Nations' Economic Commission for Latin America and the Caribbean said the region grew by 5.5% this year.ECLAC also said that the six largest Latin American economies (Argentina, Brazil, Chile, Colombia, Mexico and Venezuela) grew by more than 3% for only the second time in 20 years.Latin America's economy grew by 5.5% in 2004, its best performance since 1980, while exports registered their best performance in two decades.In fact, Latin American exports to China grew 34%, to $14bn.Chinese and US economic strength helped boost exports, as did strong demand for agricultural and mining products. |
business | Cairn Energy in Indian gas find..Shares in Cairn Energy rose 3.8% to 1,088 pence on Tuesday after the UK firm announced a fresh gas discovery in northern India...The firm, which last year made a number of other new finds in the Rajasthan area, said the latest discovery could lead to large gas volumes. However, chief executive Bill Gammell cautioned that additional evalution was first needed at the site. Cairn has also been granted approval to extend its Rajasthan exploration area. This approval has come from the Indian government...A spokesman said the company's decision to carry out further investigations at the new find showed that it believed there was significant gas. But he added: "It's still too early to say what the extent of it is." Cairn's string of finds in Rajasthan last year saw it elevated to the FTSE 100 index of the UK's leading listed companies. The company had bought the rights to explore in the area from oil giant Shell. Mr Gammell is a former Scottish international rugby player. | The firm, which last year made a number of other new finds in the Rajasthan area, said the latest discovery could lead to large gas volumes.Cairn has also been granted approval to extend its Rajasthan exploration area.A spokesman said the company's decision to carry out further investigations at the new find showed that it believed there was significant gas.Cairn's string of finds in Rajasthan last year saw it elevated to the FTSE 100 index of the UK's leading listed companies. |
business | Iraqi voters turn to economic issues..Beyond the desperate security situation in Iraq lies an economy in tatters...A vicious cycle of unemployment, poor social services and poverty has been made worse by a lack of investment. So there is much hope that an elected government will break the deadlock. "First rule of law, then the economy," says Radwan Hadi, deputy managing director of Aberdeen-based oil and gas consultancy Blackwatch Petroleum Services, which entered Iraq in 2003. Mr Hadi's view about what the new government's priorities should be is shared by many Iraqis. The economy has become the second-most dominant issue for many political parties ahead of Sunday's election, according to Bristol University political scientist Anne Alexander, who is working on a project that looks at governance and security in post-war Iraq...Job creation ranks high both on election manifestos and on the Iraqi people's wish list. Nobody knows exactly how many Iraqis are out of work, but it is clear that the situation is dire. "Estimates of Iraq's unemployment rate vary, but we estimate it to be between 30-40%," the Washington-based independent think-tank The Brookings Institution says in its Iraq Index. But some progress has been made, largely thanks to the country's oil revenues which have exceeded $22bn since June 2003...Iraq's infrastructure is on the mend, with notable improvements having been made in areas such as electricity supply, irrigation, telephone networks and the re-opening of hospitals. But serious problems remain and the growing divide between haves and have-nots is angering voters. One Iraqi woman told Ms Alexander about her frustration as she watched TV adverts for private hospitals soon after having failed to track down basic medicines from Baghdad's pharmacies. Observes Mr Hadi: "The economy at present marks a big divide; the rich get richer, the poor get poorer." An indication of this can be seen in the world of finance where, in contrast with the daily plight of ordinary people, 19 private banks operate, only one of which is run in accordance with Islamic banking principles. Hopes are high for the future of finance, so foreign banks have been buying into the sector. National Bank of Kuwait has bought a majority stake in Credit Bank of Iraq, the Jordanian investment bank Export & Finance Bank has bought 49% of National Bank of Iraq...Foreign firms also hope to cash in on the reconstruction effort. Bechtel's efforts to rebuild schools and restore power have attracted controversy as well as boosting its bottom line while Halliburton has enjoyed a wealth of military contracts. But the involvement of foreign firms in the health and banking sectors and beyond sits uneasily with many Iraqis who are accustomed to the state taking responsibility for functions that are essential to making society work, observes Ms Alexander. "It is seen as a selling off of Iraq's assets and bringing in multinationals at the expense of Iraqi businesses and Iraqi workers," she says. Consequently, the transitional government has been forced to backtrack in recent months over its proposal to allow 100% foreign ownership of Iraqi assets, she explains. In the West, it is easy to forget that the otherwise brutal Baathist regime used to look after the majority of Iraq's citizens rather well in terms of job creation, social security and healthcare. Opinion polls suggest that "people still want the state to take a leading role in providing these things", Ms Alexander says...Yet in some areas of the economy, investment from abroad is still warmly welcomed, insists Mr Hadi, an Iraqi who left the country three decades ago. "I think the private sector will evolve incredibly fast," Mr Hadi says. "Iraq's vast natural resources can support any magnitude of economic growth."..Many foreign companies say they are keen to get in on the act, yet few are actually entering the country in any meaningful way. But there are exceptions. Mr Hadi's Blackwatch is just one of many small operators preparing for a much bigger future. Blackwatch's Baghdad-based affiliate Falcon Group has dozens of people working for it across the country in Kirkuk and Baghdad, and its engineers and geo-scientists work with the Iraqi oil ministry to hammer out technology transfer issues, Mr Hadi points out. "These guys are trying to work. The Iraqi business people will do business at all times. "Life goes on in Iraq, the people take responsibility, they want to live normal lives." | Blackwatch's Baghdad-based affiliate Falcon Group has dozens of people working for it across the country in Kirkuk and Baghdad, and its engineers and geo-scientists work with the Iraqi oil ministry to hammer out technology transfer issues, Mr Hadi points out.But the involvement of foreign firms in the health and banking sectors and beyond sits uneasily with many Iraqis who are accustomed to the state taking responsibility for functions that are essential to making society work, observes Ms Alexander.Yet in some areas of the economy, investment from abroad is still warmly welcomed, insists Mr Hadi, an Iraqi who left the country three decades ago."It is seen as a selling off of Iraq's assets and bringing in multinationals at the expense of Iraqi businesses and Iraqi workers," she says.The economy has become the second-most dominant issue for many political parties ahead of Sunday's election, according to Bristol University political scientist Anne Alexander, who is working on a project that looks at governance and security in post-war Iraq.National Bank of Kuwait has bought a majority stake in Credit Bank of Iraq, the Jordanian investment bank Export & Finance Bank has bought 49% of National Bank of Iraq.Mr Hadi's Blackwatch is just one of many small operators preparing for a much bigger future.Consequently, the transitional government has been forced to backtrack in recent months over its proposal to allow 100% foreign ownership of Iraqi assets, she explains.Observes Mr Hadi: "The economy at present marks a big divide; the rich get richer, the poor get poorer."Hopes are high for the future of finance, so foreign banks have been buying into the sector."I think the private sector will evolve incredibly fast," Mr Hadi says.The Iraqi business people will do business at all times.Many foreign companies say they are keen to get in on the act, yet few are actually entering the country in any meaningful way.Mr Hadi's view about what the new government's priorities should be is shared by many Iraqis. |
business | Christmas shoppers flock to tills..Shops all over the UK reported strong sales on the last Saturday before Christmas with some claiming record-breaking numbers of festive shoppers...A spokesman for Manchester's Trafford Centre said it was "the biggest Christmas to date" with sales up 5%. And the Regent Street Association said shops in central London were also expecting the "best Christmas ever". That picture comes despite reports of disappointing festive sales in the last couple of weeks...The Trafford Centre spokeswoman said about 8,500 thousand vehicles had arrived at the centre on Saturday before 1130 GMT. "We predict that the next week will continue the same trend," she added...It was a similar story at Bluewater in Kent. Spokesman Alan Jones said he expected 150,000 shoppers to have visited by the end of Saturday and a further 100,000 on Sunday. "Our sales so far have been 2% up on the same time last year," he said. "We're very busy, it's really strong and people will be shopping right up until Christmas. "Over the Christmas period we're expecting people to spend in excess of £200m at the centre."..On Saturday afternoon, a spokeswoman for the St David's Shopping Centre in Cardiff said it looked like being its busiest day of the year with about 200,000 shoppers expected to have visited by the close of play. At the St Enoch's Shopping Centre in Glasgow, more than 140,000 shoppers - an all-time record - were expected to have passed through the doors by its closing time of 1900 GMT. Senior business manager Jon Walton said: "It has been phenomenal - absolutely mobbed. "Every week footfall has been showing strong growth and at the weekends it has been going mad." Regent Street Association director Annie Walker said on Saturday: "The stores were heaving today and a lot of people are going to be doing last minute shopping as many people finished work on Friday and can go in the week."..She said reports of a slump in pre-Christmas sales were related to the growing popularity of internet sales. "I do think this has had a lot to do with reports of lower sales figures," she said. "Internet shopping has gone up enormously and not all stores have websites." | A spokesman for Manchester's Trafford Centre said it was "the biggest Christmas to date" with sales up 5%."I do think this has had a lot to do with reports of lower sales figures," she said."Our sales so far have been 2% up on the same time last year," he said.Regent Street Association director Annie Walker said on Saturday: "The stores were heaving today and a lot of people are going to be doing last minute shopping as many people finished work on Friday and can go in the week."On Saturday afternoon, a spokeswoman for the St David's Shopping Centre in Cardiff said it looked like being its busiest day of the year with about 200,000 shoppers expected to have visited by the close of play.The Trafford Centre spokeswoman said about 8,500 thousand vehicles had arrived at the centre on Saturday before 1130 GMT.She said reports of a slump in pre-Christmas sales were related to the growing popularity of internet sales.Shops all over the UK reported strong sales on the last Saturday before Christmas with some claiming record-breaking numbers of festive shoppers. |
business | Bush to outline 'toughest' budget..President Bush is to send his toughest budget proposals to date to the US Congress, seeking large cuts in domestic spending to lower the deficit...About 150 federal programs could be cut or axed altogether as part of a $2.5 trillion (£1.3 trillion) package aimed at curbing the giant US budget deficit. Defence spending will rise, however, while the proposals exclude the cost of continuing military operations in Iraq. Vice-President Dick Cheney said the budget was the "tightest" so far...At the heart of the administration's fifth budget, presented to Congress on Monday, is an austere package of domestic measures. These would see discretionary spending rise below the projected level of inflation...Such belt-tightening is designed to tackle the massive budget deficit increases of President Bush's first term. Mr Cheney admitted that the budget was the toughest of the Bush Presidency but argued it was "fair and responsible". "It is not something we have done with a meat axe, nor are we suddenly turning our back on the most needy people in our society," he said. The wars in Iraq and Afghanistan, increased expenditure on national security after 9/11 and the 2001 recession wiped out the budget surplus inherited by President Bush in 2001 and turned it into a record deficit. The shortfall is projected to rise to $427bn in 2005...Education, environmental protection and transport initiatives are set to be scaled back as a first step towards reducing the deficit to $230bn by 2009...Most controversially, the government is seeking to cut the Medicaid budget, which provides health care to the nation's poorest, by $45bn and to reduce farm subsidies by $587m. Spending on defence and homeland security is set to increase, although not by as much as originally planned. President Bush's proposals would see the Pentagon's budget rise by $19bn to $419.3bn while homeland security would get an extra $2bn...The budget does not include the cost of running military operations in Iraq and Afghanistan, for which the administration in expected to seek an extra $80bn from Congress later this year...Also not featuring in the proposals is the cost of funding the administration's radical proposed overhaul of social security provision. Some expects believe this could require borrowing of up to $4.5bn trillion over a twenty year period. Despite the Republicans holding a majority in both houses of Congress, the proposals will be fiercely contested over the next few months...John McCain, a Republican Senator, said he was pleased the administration was prepared to tackle the deficit. "With the deficits that we are now running, I am glad the president is coming over with a very austere budget," he said. However, Democratic Senator Kent Conrad said the proposals exposed the country to huge financial commitments beyond 2009. "The cost of everything he [President Bush] advocates explodes," he said. | President Bush's proposals would see the Pentagon's budget rise by $19bn to $419.3bn while homeland security would get an extra $2bn.President Bush is to send his toughest budget proposals to date to the US Congress, seeking large cuts in domestic spending to lower the deficit."With the deficits that we are now running, I am glad the president is coming over with a very austere budget," he said.The budget does not include the cost of running military operations in Iraq and Afghanistan, for which the administration in expected to seek an extra $80bn from Congress later this year.Such belt-tightening is designed to tackle the massive budget deficit increases of President Bush's first term.The wars in Iraq and Afghanistan, increased expenditure on national security after 9/11 and the 2001 recession wiped out the budget surplus inherited by President Bush in 2001 and turned it into a record deficit.Vice-President Dick Cheney said the budget was the "tightest" so far.Defence spending will rise, however, while the proposals exclude the cost of continuing military operations in Iraq."The cost of everything he [President Bush] advocates explodes," he said.John McCain, a Republican Senator, said he was pleased the administration was prepared to tackle the deficit. |
business | Nasdaq planning $100m share sale..The owner of the technology-dominated Nasdaq stock index plans to sell shares to the public and list itself on the market it operates...According to a registration document filed with the Securities and Exchange Commission, Nasdaq Stock Market plans to raise $100m (£52m) from the sale. Some observers see this as another step closer to a full public listing. However Nasdaq, an icon of the 1990s technology boom, recently poured cold water on those suggestions...The company first sold shares in private placements during 2000 and 2001. It technically went public in 2002 when the stock started trading on the OTC Bulletin Board, which lists equities that trade only occasionally. Nasdaq will not make money from the sale, only investors who bought shares in the private placings, the filing documents said. The Nasdaq is made up shares in technology firms and other companies with high growth potential. It was the most potent symbol of the 1990s internet and telecoms boom, nose-diving after the bubble burst. A recovery in the fortunes of tech giants such as Intel, and dot.com survivors such as Amazon has helped revive its fortunes. | The owner of the technology-dominated Nasdaq stock index plans to sell shares to the public and list itself on the market it operates.The Nasdaq is made up shares in technology firms and other companies with high growth potential.Nasdaq will not make money from the sale, only investors who bought shares in the private placings, the filing documents said.According to a registration document filed with the Securities and Exchange Commission, Nasdaq Stock Market plans to raise $100m (£52m) from the sale. |
business | Yukos unit buyer faces loan claim..The owners of embattled Russian oil giant Yukos are to ask the buyer of its former production unit to pay back a $900m (£479m) loan...State-owned Rosneft bought the Yugansk unit for $9.3bn in a sale forced by Russia to part settle a $27.5bn tax claim against Yukos. Yukos' owner Menatep Group says it will ask Rosneft to repay a loan that Yugansk had secured on its assets. Rosneft already faces a similar $540m repayment demand from foreign banks. Legal experts said Rosneft's purchase of Yugansk would include such obligations. "The pledged assets are with Rosneft, so it will have to pay real money to the creditors to avoid seizure of Yugansk assets," said Moscow-based US lawyer Jamie Firestone, who is not connected to the case. Menatep Group's managing director Tim Osborne told the Reuters news agency: "If they default, we will fight them where the rule of law exists under the international arbitration clauses of the credit."..Rosneft officials were unavailable for comment. But the company has said it intends to take action against Menatep to recover some of the tax claims and debts owed by Yugansk. Yukos had filed for bankruptcy protection in a US court in an attempt to prevent the forced sale of its main production arm. The sale went ahead in December and Yugansk was sold to a little-known shell company which in turn was bought by Rosneft. Yukos claims its downfall was punishment for the political ambitions of its founder Mikhail Khodorkovsky and has vowed to sue any participant in the sale. | Yukos' owner Menatep Group says it will ask Rosneft to repay a loan that Yugansk had secured on its assets.State-owned Rosneft bought the Yugansk unit for $9.3bn in a sale forced by Russia to part settle a $27.5bn tax claim against Yukos.The sale went ahead in December and Yugansk was sold to a little-known shell company which in turn was bought by Rosneft.But the company has said it intends to take action against Menatep to recover some of the tax claims and debts owed by Yugansk."The pledged assets are with Rosneft, so it will have to pay real money to the creditors to avoid seizure of Yugansk assets," said Moscow-based US lawyer Jamie Firestone, who is not connected to the case. |
business | Parmalat bank barred from suing..Bank of America has been banned from suing Parmalat, the food group which went bust in 2003 after an accounting scandal...The bank - along with investors, auditors and the group's managers - wants damages for being a victim of fraud at the hands of the Italian firm. But a judge has barred Bank of America and two auditors from the case. The bank, and Italaudit - formerly the Italian arm of auditor Grant Thornton - face lawsuits and possible prosecution. A second auditor, Deloitte & Touche, has also been banned from the case. Grant Thornton - now rid of the Italian unit at the centre of the case - is still being permitted to sue, as are Consob, Italy's stock market regulator, hundreds of small investors and Parmalat's new managers. Parmalat collapsed in December 2003 after it emerged that the 4bn euros ($5.2bn; £2.8bn) it supposedly held in a Bank of American offshore account did not in fact exist. | But a judge has barred Bank of America and two auditors from the case.The bank, and Italaudit - formerly the Italian arm of auditor Grant Thornton - face lawsuits and possible prosecution.A second auditor, Deloitte & Touche, has also been banned from the case. |
business | Nissan names successor to Ghosn..Nissan has named a lifetime employee to run its operations after Carlos Ghosn, its highly successful boss, takes charge at Renault...As chief operating officer, Toshiyuki Shiga will run Nissan on a daily basis, although Mr Ghosn, who masterminded its recovery, will remain chief executive. Mr Ghosn is to become chairman and chief executive of Renault, which owns 44% of the Japanese carmaker, in April. Mr Ghosn transformed Nissan into a fast-growing and profitable business...Mr Shiga will nominally serve as Mr Ghosn's deputy. However, he will be Nissan's most senior Japan-based executive and will be in charge of the firm's global sales and marketing...He is currently in charge of Nissan's operations across Asia and Australasia and is credited with significantly improving its sales in China. He will inherit a strong legacy from Mr Ghosn, who has overseen a dramatic turnaround in Nissan's fortunes in the past five years. Dubbed 'le cost killer' for pushing through huge cost cuts in previous jobs, Mr Ghosn reduced Nissan's overheads by 20% and trimmed its workforce by about 200,000 after taking charge in 1999. These actions helped Nissan turn a 684bn yen ($6.4bn) loss in 2000 into a 331bn yen ($2.7bn) profit the following year. During his tenure, Nissan has increased its market share and made significant strides in key export markets. Nissan aims to increase vehicle sales to more than four million by 2008, launching 28 new models in the process...In his new job as Renault chief executive, Mr Ghosn will devote 40% of his time to Renault, 40% to Nissan and the rest to the group's activities in North America and other key markets...Mr Ghosn said Mr Shiga's appointment would ensure a "seamless" transition in management. "I need a leadership team capable of accelerating the performance and delivery of results that has characterized Nissan over the past six years," Mr Ghosn said. "I have full confidence in Toshiyuki Shiga and the new leadership team to help me implement the next chapter of Nissan's growth." Nissan also announced a number of other management appointments with promotions for several younger executives. | Mr Ghosn transformed Nissan into a fast-growing and profitable business.In his new job as Renault chief executive, Mr Ghosn will devote 40% of his time to Renault, 40% to Nissan and the rest to the group's activities in North America and other key markets.As chief operating officer, Toshiyuki Shiga will run Nissan on a daily basis, although Mr Ghosn, who masterminded its recovery, will remain chief executive."I need a leadership team capable of accelerating the performance and delivery of results that has characterized Nissan over the past six years," Mr Ghosn said.Mr Ghosn said Mr Shiga's appointment would ensure a "seamless" transition in management.Mr Ghosn is to become chairman and chief executive of Renault, which owns 44% of the Japanese carmaker, in April.He will inherit a strong legacy from Mr Ghosn, who has overseen a dramatic turnaround in Nissan's fortunes in the past five years. |
business | Arsenal 'may seek full share listing'..Arsenal vice-chairman David Dein has said the club may consider seeking a full listing for its shares on the London Stock Exchange...Speaking at the Soccerex football business forum in Dubai, he said a full listing was "one of the options" for funding after the club moves to its new stadium. The club - which is currently listed on the smaller Ofex share exchange - is due to move into its new 60,000-seater Emirates Stadium at Ashburton Grove for the start of the 2006/07 season. Mr Dein also warned the current level of TV coverage of the Premiership may be reaching saturation level, with signs that match attendances have been dropping off in the first few months of this season...When Arsenal moves to its new stadium it will see its proportion of turnover from media earnings drop from 52% this season to 34% in two years' time. The club is hoping to increase matchday earnings from 29% to 40% of turnover, and has not ruled out other money-earning means, including a full share listing. "When the new stadium opens we will go through a thorough financial review," Mr Dein said..."Listing would be one option, but we are flexible and no decisions have been made on that issue yet. "We want to be in the best financial health - maybe clubs can do it (listing), Manchester United have been a success."..Mr Dein said that, although television money and coverage had driven the English game forward in the past 10 years, he feared there might now be too many games being shown. Since the formation of the Premier League in season 1992/93, Premiership clubs have seen their income from television soar. "Television has been the driving force over the past 10 years... but we must constantly improve if we want to remain as the world's leading league competition. "We must monitor the quality of the product and ensure attendances do not decline, and we must balance that with the quantity of exposure on TV too. "I think we have practically reached saturation point... sometimes I think less is more."..The club is funding its move to Ashburton Grove through a number of sources, including debt from banks, from money it already has and will receive in coming years from sponsors, and from the sale of surplus property, including its Highbury Stadium. It is also looking to create new revenue streams from overseas markets, including Asia. "We have two executives travelling round Japan and China at the moment building relationships with organisations and clubs, and we know our supporters clubs are growing there too, as they are around the world. "We have got a very good product, so it is very important we go and look at these markets, and make sure we are on the case." | Speaking at the Soccerex football business forum in Dubai, he said a full listing was "one of the options" for funding after the club moves to its new stadium.Arsenal vice-chairman David Dein has said the club may consider seeking a full listing for its shares on the London Stock Exchange.The club - which is currently listed on the smaller Ofex share exchange - is due to move into its new 60,000-seater Emirates Stadium at Ashburton Grove for the start of the 2006/07 season.The club is hoping to increase matchday earnings from 29% to 40% of turnover, and has not ruled out other money-earning means, including a full share listing."When the new stadium opens we will go through a thorough financial review," Mr Dein said.When Arsenal moves to its new stadium it will see its proportion of turnover from media earnings drop from 52% this season to 34% in two years' time.The club is funding its move to Ashburton Grove through a number of sources, including debt from banks, from money it already has and will receive in coming years from sponsors, and from the sale of surplus property, including its Highbury Stadium.Mr Dein also warned the current level of TV coverage of the Premiership may be reaching saturation level, with signs that match attendances have been dropping off in the first few months of this season. |
business | Kraft cuts snack ads for children..Kraft plans to cut back on advertising of products like Oreo cookies and sugary Kool-Aid drinks as part of an effort to promote healthy eating...The largest US food maker will also add a label to its more nutritional and low-fat brands to promote the benefits. Kraft rival PepsiCo began a similar labelling initiative last year. The moves come as the firms face criticism from consumer groups concerned at rising levels of obesity in US children. Major food manufacturers have recently been reformulating the content of some calorie-heavy products...Kraft's new advertising policy, which covers advertising on TV, radio and in print publications, is aimed at children between the ages of six and 11. It means commercials for some of its most famous snacks and cereals shown during early morning cartoon shows on TV will now be replaced by food and drink qualifying for Kraft's new "Sensible Solution" label. But the firm said it would continue to advertise all its products in media seen by parents and "all family" audiences. "We're working on ways to encourage both adults and children to eat wisely by selecting more nutritionally balanced diets," said Lance Friedmann, Kraft senior vice president. | Kraft plans to cut back on advertising of products like Oreo cookies and sugary Kool-Aid drinks as part of an effort to promote healthy eating.It means commercials for some of its most famous snacks and cereals shown during early morning cartoon shows on TV will now be replaced by food and drink qualifying for Kraft's new "Sensible Solution" label.The largest US food maker will also add a label to its more nutritional and low-fat brands to promote the benefits.Kraft's new advertising policy, which covers advertising on TV, radio and in print publications, is aimed at children between the ages of six and 11. |
business | Parmalat sues 45 banks over crash..Parmalat has sued 45 banks as it tries to reclaim money paid to banks before the scandal-hit Italian dairy company went bust last year...The firm collapsed with debts of about 14bn euros ($19bn; £10bn) and new boss Enrico Bondi has already taken legal action against a number of lenders. He claims the banks were aware of the problems but continued to work with the company so they could earn commissions. Parmalat has not identified which banks it has gone after this time. Under Italian law, administrators can seek to get back money paid to financial institutions prior to insolvency, if there is a suspicion that the institutions knew that the company was in financial trouble. The firm also said it is preparing further law suits...According to the Reuters news agency, 35 of the companies sued on Thursday are Italian while the remaining 10 are international. The unidentified Parmalat source also told Reuters that the company was planning to take action against a total of 80 financial institutions. Among those already targeted are Bank of America, UBS, Credit Suisse First Boston, Deutsche Bank and Citigroup. It has also gone after auditors Grant Thornton. They have all denied any wrongdoing. Parmalat was declared insolvent in December 2003 after it emerged that 4bn euros thought to be held in an offshore account did not in fact exist. In the investigation that followed it became apparent that the company, among other things, had been billing clients twice in order to boost sales and bolster the balance sheet. That enabled Parmalat to borrow heavily and expand overseas, allowing it to become a darling of the Italian stock exchange. | Parmalat has sued 45 banks as it tries to reclaim money paid to banks before the scandal-hit Italian dairy company went bust last year.Parmalat has not identified which banks it has gone after this time.The unidentified Parmalat source also told Reuters that the company was planning to take action against a total of 80 financial institutions.Under Italian law, administrators can seek to get back money paid to financial institutions prior to insolvency, if there is a suspicion that the institutions knew that the company was in financial trouble.It has also gone after auditors Grant Thornton.He claims the banks were aware of the problems but continued to work with the company so they could earn commissions. |
business | India's Reliance family feud heats up..The ongoing public spat between the two heirs of India's biggest conglomerate, Reliance Group, has spilled over to the board meeting of a leading company within the group...Anil Ambani, vice-chairman of India Petrochemicals Limited (IPCL), stayed away from a gathering of senior managers on Thursday. The move follows a decision earlier this month by Anil - the younger brother of Reliance Group president Mukesh Ambani - to resign from his post. His resignation was not accepted by his brother, who is also the boss of IPCL. The IPCL board met in Mumbai to discuss the company's results for the October-to-December quarter...It is understood that the board also considered Anil's resignation and asked him to reconsider his decision. However, Anil's demand that Anand Jain - another IPCL board member accused by Anil of creating a rift in the Ambani family - be thrown out, was not met. Anil has accused Anand Jain, a confidant of his brother Mukesh, of playing a negative role in the Ambani family, and being responsible for the trouble between the brothers. On Wednesday, the board of Reliance Energy, another Reliance Group company, reaffirmed its faith in Anil, who is the company's chief. Reliance Group acquired the government's 26% stake in IPCL - India's second-largest petrochemicals company - in 2002, as part of the privatisation drive. Meanwhile, the group's flagship company, Reliance Industries, has its board meeting on Friday to consider its financial results. Mukesh is the company's chairman and Anil its deputy, and it is expected that both brothers will come face to face in the meeting. The Ambani family controls 48% of the group, which is worth $17bn (£9.1bn; 745bn Indian rupees). It was founded by their father, Dhiru Bhai Ambani, who died two years ago. | However, Anil's demand that Anand Jain - another IPCL board member accused by Anil of creating a rift in the Ambani family - be thrown out, was not met.On Wednesday, the board of Reliance Energy, another Reliance Group company, reaffirmed its faith in Anil, who is the company's chief.The move follows a decision earlier this month by Anil - the younger brother of Reliance Group president Mukesh Ambani - to resign from his post.The ongoing public spat between the two heirs of India's biggest conglomerate, Reliance Group, has spilled over to the board meeting of a leading company within the group.Anil has accused Anand Jain, a confidant of his brother Mukesh, of playing a negative role in the Ambani family, and being responsible for the trouble between the brothers.Reliance Group acquired the government's 26% stake in IPCL - India's second-largest petrochemicals company - in 2002, as part of the privatisation drive. |
business | M&S cuts prices by average of 24%..Marks & Spencer has cut prices in London and the regions by an average of 24%, according to research from a City investment bank...Dresdner Kleinwort Wasserstein said: "In spite of the snow in the UK, it still feels very early to be cutting prices of spring merchandise." Stuart Rose, head of M&S, said last year its prices were too high. "We are bringing in ranges at new price points to compete against mid-market retailers like Next," said M&S...Next is one of M&S's biggest competitors and the move may force it to lower prices. DrKW said the cuts are either to clear stock or could indicate a longer term "step change in pricing in certain areas" at M&S. "Either way, this cannot be good news for M&S' margin," it added. "We have brought in quite a lot of new clothing at new price points as part of Stuart Rose's strategy of quality, style -and price," said the M&S spokesman. Many analysts believe February is proving to be a difficult month for retailers and British Retail Consortium figures, due in a few weeks, are expected to reflect the tough trading environment. Separately, investment bank Goldman Sachs produced reseach showing that a basket of 35 M&S goods is now 11% above the high-street average, compared with 43% higher last year...It has been a strange week for M&S, which on Tuesday received a statement from Philip Green, the billionaire Bhs owner, confirming he was not rebidding for the company. This was followed the same day by Mark Paulsmeier, a South African financier, issuing a press release saying his Paulsmeier Group was interested in M&S. A sudden spike in M&S's share price followed. However, an M&S spokesman said on Sunday it had no evidence that Mr Paulsmeier had lined up sufficient finance for a bid. He also said the Takeover Panel and the UK's financial watchdog the Financial Services Authority had been in touch with M&S at the beginning of the week to find out what it knew about the Paulsmeier developments. | "We are bringing in ranges at new price points to compete against mid-market retailers like Next," said M&S.Stuart Rose, head of M&S, said last year its prices were too high."We have brought in quite a lot of new clothing at new price points as part of Stuart Rose's strategy of quality, style -and price," said the M&S spokesman.However, an M&S spokesman said on Sunday it had no evidence that Mr Paulsmeier had lined up sufficient finance for a bid.DrKW said the cuts are either to clear stock or could indicate a longer term "step change in pricing in certain areas" at M&S.He also said the Takeover Panel and the UK's financial watchdog the Financial Services Authority had been in touch with M&S at the beginning of the week to find out what it knew about the Paulsmeier developments. |
business | Venezuela identifies 'idle' farms..Venezuelan authorities have identified more than 500 farms, including 56 large estates, as idle as it continues with its controversial land reform policy...Under a 2001 land law, the government can tax or seize unused farm sites. A further 40,000 farms are yet to be inspected, the state's National Land Institute has told Associated Press. Vice president Jose Vicente Rangel has said farmers and ranchers with their titles in order and their lands productive have "nothing to fear." Critics of the land reform policy claim president Hugo Chavez is trying to enforce a communist-style economic programme that ignores property rights and will damage the country. Land owners claim the National Land Institute has made mistakes in classifying lands as public or private...But the government - Venezuela's largest land owner - say they are proceeding cautiously to prevent conflicts. In a statement, Mr Rangel said the land reform is not against the constitution, which permits private property, while stressing the efforts are to "vindicate social and economically" years of inequality in the country...One property in conflict with the government is the El Charcote cattle ranch, run by Agroflora, a subsidiary of the UK food group Vestey. Agriculture minister Arnoldo Marquez told Reuters news agency the site's documents "do not guarantee that this is a private land". Administrators of the ranch, however, have complained that pro-Chavez squatters have taken over 80% of the property in the last four years, and the UK government has asked Venezuelan authorities to resolve the conflict. "You should ask the company when they are going to put their papers in order and hand over the land that is not theirs," said Mr Marquez. | Land owners claim the National Land Institute has made mistakes in classifying lands as public or private.Under a 2001 land law, the government can tax or seize unused farm sites.In a statement, Mr Rangel said the land reform is not against the constitution, which permits private property, while stressing the efforts are to "vindicate social and economically" years of inequality in the country.A further 40,000 farms are yet to be inspected, the state's National Land Institute has told Associated Press.Vice president Jose Vicente Rangel has said farmers and ranchers with their titles in order and their lands productive have "nothing to fear." |
business | Liberian economy starts to grow..The Liberian economy started to grow in 2004, but "sustained and deep reform efforts" are needed to ensure long term growth, the International Monetary Fund (IMF) has said...An IMF mission made the comments in a report published following 10 days of talks with the transition government. The IMF said that, according to data provided by the Liberians, the country's GDP rose by 2% in 2004, after a 31% decline in 2003. Liberia is recovering from a 14-year civil war that came to an end in 2003. The power-sharing National Transition Government of Liberia will remain in place until elections on 11 October, the first presidential and parliamentary ballots since the conflict ended...The IMF said Liberia's economy started to grow last year thanks to a "continued strong recovery in rubber production, domestic manufacturing and local services including post-conflict reconstruction". The IMF however remains cautious about what it sees as a lack of transparency in government actions. In particular, it pointed to mystery surrounding the sale of iron ore stockpiles and the alleged disappearance of some import and export permits. These matters are now being investigated by the Liberian authorities and the IMF has called for their findings to be made public. The IMF also said it was crucial that the Central Bank of Liberia be strengthened, the national budget be effectively managed and a sound economic basis built to allow the country's large external debt to be addressed. "The IMF team stands ready to assist the (Liberian) authorities in strengthening the areas mentioned," said the report. "The team agreed with the (Liberian) authorities that the period until elections and the inauguration of a new government will pose exceptional challenges to fiscal management, and expresses its willingness to provide...continued support." | "The IMF team stands ready to assist the (Liberian) authorities in strengthening the areas mentioned," said the report.These matters are now being investigated by the Liberian authorities and the IMF has called for their findings to be made public.The Liberian economy started to grow in 2004, but "sustained and deep reform efforts" are needed to ensure long term growth, the International Monetary Fund (IMF) has said.An IMF mission made the comments in a report published following 10 days of talks with the transition government.The IMF said that, according to data provided by the Liberians, the country's GDP rose by 2% in 2004, after a 31% decline in 2003. |
business | Virgin Blue shares plummet 20%..Shares in Australian budget airline Virgin Blue plunged 20% after it warned of a steep fall in full year profits...Virgin Blue said profits after tax for the year to March would be between 10% to 15% lower than the previous year. "Sluggish demand reported previously for November and now December 2004 continues," said Virgin Blue chief executive Brett Godfrey. Virgin Blue, which is 25% owned by Richard Branson, has been struggling to fend off pressure from rival Jetstar. It cut its full year passenger number forecast by "approximately 2.5%". Virgin Blue reported a 22% fall in first quarter profits in August 2004 due to tough competition. In November, first half profits were down due to slack demand and rising fuel costs. Virgin Blue was launched four years ago and now has roughly one third of Australia's domestic airline market. But the national carrier, Qantas, has fought back with its own budget airline, Jetstar, which took to the skies in May 2004. Sydney-listed Virgin Blue's shares recovered slightly to close 12% down on Wednesday. Shares in its major shareholder, Patrick Corporation - which owns 46% of Virgin Blue - had dropped 31% by the close. | Shares in Australian budget airline Virgin Blue plunged 20% after it warned of a steep fall in full year profits.Virgin Blue said profits after tax for the year to March would be between 10% to 15% lower than the previous year.Virgin Blue reported a 22% fall in first quarter profits in August 2004 due to tough competition.Virgin Blue was launched four years ago and now has roughly one third of Australia's domestic airline market.Virgin Blue, which is 25% owned by Richard Branson, has been struggling to fend off pressure from rival Jetstar. |
business | Lufthansa may sue over Bush visit..German airline Lufthansa may sue federal agencies for damages after the arrival of US president George W Bush disrupted flights...Lufthansa said that it may lose millions of euros as a result of Air Force One landing at Frankfurt airport. Flights were affected for an hour on Wednesday morning, double the time that had been expected, leading to cancellations and delays. Lufthansa accounts for six out of every 10 planes using Frankfurt's airport..."We are doing research into the possibilities we have," Michael Lamberty, a Lufthansa spokesman told the BBC. "We are checking if there is action to be taken and in which courts it could be taken." Mr Lamberty explained that the company did not plan to pursue Germany's air traffic controllers' organisation or the airport authority but wanted instead to see if it was possible to sue the German federal agencies that gave the orders. The company said that it had to cancel 77 short and medium-distance flights, affecting about 5,000 passengers. Long-haul travellers were not disrupted...Central to the problem was that instead of half an hour, the arrival of President Bush on the German leg of his European tour took the best part of an hour, Lufthansa said. During that time, restrictions were put on planes taxiing, taking off and landing at Frankfurt's Rhein-Main airport. The extra time taken by President Bush and his entourage meant that there was a knock-on effect that led to significant delays. Mr Lamberty said that 92 outgoing flights and 86 income flights were delayed by an average of an hour following President Bush's arrival, affecting almost 17,000 passengers. Despite the problems, Mr Lamberty said that it was not certain that Lufthansa would take legal action. | German airline Lufthansa may sue federal agencies for damages after the arrival of US president George W Bush disrupted flights.Central to the problem was that instead of half an hour, the arrival of President Bush on the German leg of his European tour took the best part of an hour, Lufthansa said.Despite the problems, Mr Lamberty said that it was not certain that Lufthansa would take legal action.Mr Lamberty said that 92 outgoing flights and 86 income flights were delayed by an average of an hour following President Bush's arrival, affecting almost 17,000 passengers.Lufthansa said that it may lose millions of euros as a result of Air Force One landing at Frankfurt airport.Mr Lamberty explained that the company did not plan to pursue Germany's air traffic controllers' organisation or the airport authority but wanted instead to see if it was possible to sue the German federal agencies that gave the orders. |
business | South African car demand surges..Car manufacturers with plants in South Africa, including BMW, General Motors, Toyota and Volkswagen, have seen a surge in demand during 2004...New vehicle sales jumped 22% to 449,603 from a year earlier, the National Association of Automobile Manufacturers of South Africa (NAAMSA) said. Strong economic growth and low interest rates have driven demand, and analysts expect the trend to continue. NAAMSA said it expects sales to top 500,000 in 2005. During 2004 "South Africa was one of the best performing markets internationally" for car sales, NAAMSA said. While domestic demand is set to continue to enjoy rapid growth, foreign sales could come under pressure, analysts said. The vehicle industry accounts for about 13% of South Africa's total exports. However, the world auto market has its problems and analysts warn that overcapacity and the strength of the rand could hit exports. | New vehicle sales jumped 22% to 449,603 from a year earlier, the National Association of Automobile Manufacturers of South Africa (NAAMSA) said.During 2004 "South Africa was one of the best performing markets internationally" for car sales, NAAMSA said.While domestic demand is set to continue to enjoy rapid growth, foreign sales could come under pressure, analysts said.NAAMSA said it expects sales to top 500,000 in 2005. |
business | Yukos sues four firms for $20bn..Russian oil firm Yukos has sued four companies for their role in last year's forced state auction of its key oil production unit Yuganskneftegas...Yukos is claiming more than $20bn (£11bn) in damages after Yugansk was sold in December to settle back taxes. The four companies named in the law suit are gas giant Gazprom, its unit Gazpromneft, investment company Baikal, and state oil firm Rosneft. Yukos submitted the suit in Houston, where it filed for bankruptcy. As well as suing for damages, Yukos has asked the US court to send its tax dispute with the Russian government to an international arbitrator. It also has submitted a reorganisation plan as part of its Chapter 11 bankruptcy filing...The clash between Yukos and the Kremlin came to a head last year when Yukos was hit with a bill of more than $27bn in back taxes and unpaid fines. To settle the bill, Russia forced Yukos to sell off Yuganskneftegas...Yukos called the sale illegal and has turned to courts in the US in an effort to regain control of the oil production business. It also has vowed to use all legal means at its disposal to go after any firm that tries to buy or take control of its assets. Earlier this month it sued the Russian government for $28.3bn. Analysts have questioned whether a US court has any jurisdiction over Russian companies, while Moscow officials have dismissed Yukos' legal wrangling as meaningless. In Houston, bankruptcy Judge Letitia Clark will start a two-day hearing on 16 February to hear arguments on whether a US court is the proper forum for the case...The threat of legal action from Yukos and its bankruptcy filing in Houston did have an effect on last year's auction, however. Concerned that it would be caught up in a court battle, Gazprom and Gazpromneft withdrew from the auction, and Yuganskneftegas was sold to little-known investment firm Baikal Finance Group. A few days later, Baikal gave control of the company to state-run oil group Rosneft for $9.3bn. Rosneft, meanwhile, has agreed to merge with Gazprom, bringing a large chunk of Russia's very profitable oil business back under state control. Yukos claims that the rights of its shareholders have been ignored and that is has been punished for the political ambitions of its founder Mikhail Khodorkovsky. Mr Khodorkovsky, once Russia's richest man, is in prison, having been charged with fraud and tax evasion and repeatedly denied bail. | Russian oil firm Yukos has sued four companies for their role in last year's forced state auction of its key oil production unit Yuganskneftegas.Yukos called the sale illegal and has turned to courts in the US in an effort to regain control of the oil production business.As well as suing for damages, Yukos has asked the US court to send its tax dispute with the Russian government to an international arbitrator.The clash between Yukos and the Kremlin came to a head last year when Yukos was hit with a bill of more than $27bn in back taxes and unpaid fines.Analysts have questioned whether a US court has any jurisdiction over Russian companies, while Moscow officials have dismissed Yukos' legal wrangling as meaningless.Yukos submitted the suit in Houston, where it filed for bankruptcy.The threat of legal action from Yukos and its bankruptcy filing in Houston did have an effect on last year's auction, however.Yukos is claiming more than $20bn (£11bn) in damages after Yugansk was sold in December to settle back taxes. |
business | Krispy Kreme shares hit..Shares in Krispy Kreme Doughnuts have taken a dunking on Wall Street after the firm revealed it would have to restate its 2004 financial reports...The company warned the move would cut its profits by $3.8m to $4.9m (£2m to £2.6m) - or between 6.6% and 8.6%. Krispy Kreme said accounting errors had forced the move, adding that its board of directors made the decision to restate its accounts on 28 December. However, the company was unavailable to comment on why it had delayed the news...It also warned it might have to further restate results for 2004 and 2005...Shares in Krispy Kreme sank 14.87% - or $1.83 - to close at $10.48 on the news. The revelation comes just a month after the firm warned earnings would be cut by as much as 7.6% as a result of accounting errors. Krispy Kreme said the latest adjustments involved the way it accounted for the repurchase of three franchise restaurants. It added it would now be reviewing how it accounts for its leases. In a further blow, the firm said it had been advised that some of its franchise owners were not in compliance with their loan agreements, and warned it might need to borrow extra money if it was required to honour agreements on franchisee debts or operating leases...Krispy Kreme added that it had enough cash to fund its current operations, but it could not borrow any more under its existing agreements. "There are many more questions than answers, especially given increased concerns regarding company liquidity," JP Morgan Securities analyst John Ivankoe said in a research note on the firm. The announcement is the latest blow for the one-time darling of Wall Street, which has lost 80% of its stock value in just over a year. The firm is currently facing Securities and Exchange Commission investigation of its accounts. Shareholders have also launched lawsuits against the group, claiming it made false statements and inflated sales. | Shares in Krispy Kreme Doughnuts have taken a dunking on Wall Street after the firm revealed it would have to restate its 2004 financial reports.Krispy Kreme said accounting errors had forced the move, adding that its board of directors made the decision to restate its accounts on 28 December.The company warned the move would cut its profits by $3.8m to $4.9m (£2m to £2.6m) - or between 6.6% and 8.6%.The revelation comes just a month after the firm warned earnings would be cut by as much as 7.6% as a result of accounting errors.In a further blow, the firm said it had been advised that some of its franchise owners were not in compliance with their loan agreements, and warned it might need to borrow extra money if it was required to honour agreements on franchisee debts or operating leases.Shares in Krispy Kreme sank 14.87% - or $1.83 - to close at $10.48 on the news. |
business | Takeover rumour lifts Exel shares..Shares in storage and delivery firm Exel closed up 9% at a two-and-a-half year high on Tuesday on speculation it is to receive an imminent takeover bid...The talk in the City is that US giant United Parcel Services (UPS) is the most likely bidder for the firm. Yet other names mentioned in connection to buying Exel are DHL-owner Deutsche Post and finance firm GE Capital. With its shares closing Tuesday at 873p, Bracknell-based Exel is currently valued at £2.6bn ($6.3bn)...Exel employs 109,000 people in more than 120 countries and has itself been active in the consolidation of the logistics sector, paying £328m to buy fellow UK firm Tibbett & Britten last August. Its customers include Boots, Burberry, Mothercare and consumer products giant Procter & Gamble. Andrew Beh, of brokers ING, said UPS and Deutsche Post were the most likely bidders and an offer of 950p a share would be fair if a bidding battle did not break out. "It's a great strategic fit for both companies," he said. "Both are interested in expanding in logistics and you can make a decent case for cost synergies which could justify the premium and that's before you make any argument about revenue synergies." | Andrew Beh, of brokers ING, said UPS and Deutsche Post were the most likely bidders and an offer of 950p a share would be fair if a bidding battle did not break out.The talk in the City is that US giant United Parcel Services (UPS) is the most likely bidder for the firm.Yet other names mentioned in connection to buying Exel are DHL-owner Deutsche Post and finance firm GE Capital.Shares in storage and delivery firm Exel closed up 9% at a two-and-a-half year high on Tuesday on speculation it is to receive an imminent takeover bid. |
business | Q&A: Malcolm Glazer and Man Utd..The battle for control of Manchester United has taken another turn after the club confirmed it had received a fresh takeover approach from US business tycoon Malcolm Glazer...No formal offer has been made yet, but Manchester United have confirmed they have received a "detailed proposal" from the US entrepreneur which could lead to a bid. Reports have put the offer at 300p per share, which would value Manchester United at about £800m ($1.5bn). The approach by the 76-year-old owner of the Tampa Bay Buccaneers American football team is reportedly being led by his two sons, Avi and Joel. A previous approach to the United board by Mr Glazer in October last year was turned down. However, the BBC has learnt that the club is unlikely to reject the latest plan out of hand...Mr Glazer's previous offer involved borrowing large amounts of money to finance any takeover. That would have left the club with debt levels which were deemed "not... in the best interests of the company" by Manchester United's board when they rejected his approach last year. However, Mr Glazer's latest offer is reported to have cut the amount of borrowing needed by £200m...While United's board may be casting a serious eye over Mr Glazer's latest proposals, supporters remain fiercely opposed to any deal...Supporters' group Shareholders United - which has proved adept in rallying opposition to Mr Glazer's campaign - said it would fight any move. "Manchester United are a debt-free company. We don't want to fall into debt and we don't need to fall into debt," Shareholders United's Sean Bones told the BBC. United's players also appear unhappy at the prospect of a takeover. "A lot of people want the club's interest to be with people who have grown up with the club and got its interests at heart," Rio Ferdinand told BBC Radio Five Live. "No-one knows what this guy will be bringing to the table."..The key to any successful bid will be attracting the support of United's largest shareholders, the Irish horse racing tycoons John Magnier and JP McManus. Through their Cubic Expression vehicle they own 28.9% of the club. Mr Glazer owns 28.1%. Joe McLean, a football specialist at accountancy firm Grant Thornton, said the support of Mr Magnier and Mr McManus was "utterly crucial". "Mr Glazer's bid will not proceed without their support and they have previously indicated that they are holding their stake as an investment. "If that's the case, the shares will therefore need a price attachment of about 300 pence, maybe 305. "If that's the case then Mr Glazer might well secure their support - if he does, this bid could well go ahead."..Indeed it is. Malcolm Glazer was little-known in the UK until he started to build up his stake in Manchester United in late 2003. In February 2004 he said he was "considering" whether to bid for the club. No bid emerged, but Mr Glazer continued to increase his holding in the club. In October 2004, Manchester United said they had received a "preliminary approach", which turned out to have come from Mr Glazer. However, the board rejected the move because of the amount of debt it would involve. At the club's annual general meeting in November, Mr Glazer took revenge by using his hefty stake in the club to oust three directors from the board. Legal adviser Maurice Watkins, commercial director Andy Anson and non-executive director Philip Yea were voted out, against the wishes of chief executive David Gill. But the move led to bankers JP Morgan and public relations firm Brunswick withdrawing from the Glazer bid team. | In October 2004, Manchester United said they had received a "preliminary approach", which turned out to have come from Mr Glazer.A previous approach to the United board by Mr Glazer in October last year was turned down.No bid emerged, but Mr Glazer continued to increase his holding in the club.Mr Glazer owns 28.1%.The battle for control of Manchester United has taken another turn after the club confirmed it had received a fresh takeover approach from US business tycoon Malcolm Glazer.That would have left the club with debt levels which were deemed "not... in the best interests of the company" by Manchester United's board when they rejected his approach last year.At the club's annual general meeting in November, Mr Glazer took revenge by using his hefty stake in the club to oust three directors from the board.Supporters' group Shareholders United - which has proved adept in rallying opposition to Mr Glazer's campaign - said it would fight any move."If that's the case then Mr Glazer might well secure their support - if he does, this bid could well go ahead."However, Mr Glazer's latest offer is reported to have cut the amount of borrowing needed by £200m.Joe McLean, a football specialist at accountancy firm Grant Thornton, said the support of Mr Magnier and Mr McManus was "utterly crucial"."Mr Glazer's bid will not proceed without their support and they have previously indicated that they are holding their stake as an investment.Malcolm Glazer was little-known in the UK until he started to build up his stake in Manchester United in late 2003. |
business | Ebbers denies WorldCom fraud..Former WorldCom chief Bernie Ebbers has denied claims that he knew accountants were doctoring the books at the firm...Speaking in court, Mr Ebbers rejected allegations he pressured ex-chief financial officer Scott Sullivan to falsify company financial statements. Mr Sullivan "made accounting decisions," he told the federal court, saying his finance chief had "a keen command of the numbers". Mr Ebbers has denied charges of fraud and conspiracy. During his second day of questioning in the New York trial Mr Ebbers played down his working relationship with Mr Sullivan and denied he frequently met him to discuss company business when questioned by the prosecution..."In a lot of weeks, we would speak ... three or four times," Mr Ebbers said, adding that conversations about finances were rarely one-on-one and were usually discussed by a "group of people" instead...Mr Ebbers relationship to Mr Sullivan is key to the case surrounding financial corruption that led to the collapse of the firm in 2002 following the discovery of an $11bn accounting fraud. The prosecution's star witness is Mr Sullivan, one of six WorldCom executives indicted in the case, He has pleaded guilty to fraud and appeared as a prosecution witness as part of an agreement with prosecutors. During his time on the witness stand Mr Sullivan repeatedly told jurors he met frequently with Mr Ebbers, told him about changes made to WorldCom's accounts to hide costs and had warned him such practises were improper. However during the case on Tuesday Mr Ebbers denied the allegations. "I wasn't advised by Scott Sullivan of anything ever being wrong," he told the court. "He's never told me he made an entry that wasn't right. If he had, we wouldn't be here today." Mr Ebbers could face a jail sentence of up to 85 years if convicted of all the charges he is facing. Shareholders lost about $180bn in WorldCom's collapse, 20,000 workers lost their jobs and the company went bankrupt. The company emerged from bankruptcy last year and is now known as MCI. | Mr Ebbers relationship to Mr Sullivan is key to the case surrounding financial corruption that led to the collapse of the firm in 2002 following the discovery of an $11bn accounting fraud.During his time on the witness stand Mr Sullivan repeatedly told jurors he met frequently with Mr Ebbers, told him about changes made to WorldCom's accounts to hide costs and had warned him such practises were improper.Mr Ebbers has denied charges of fraud and conspiracy.During his second day of questioning in the New York trial Mr Ebbers played down his working relationship with Mr Sullivan and denied he frequently met him to discuss company business when questioned by the prosecution.However during the case on Tuesday Mr Ebbers denied the allegations.Speaking in court, Mr Ebbers rejected allegations he pressured ex-chief financial officer Scott Sullivan to falsify company financial statements.Mr Sullivan "made accounting decisions," he told the federal court, saying his finance chief had "a keen command of the numbers". |
business | Dutch bank to lay off 2,850 staff..ABN Amro, the Netherlands' largest bank, is to cut 2,850 jobs as a result of falling profits...The cuts - amounting to 3% of the bank's workforce - will result in a one-off charge of 790m euros ($1.1bn). About 1,100 jobs will go in investment banking while 1,200 and 550 will go in IT and human resources respectively. ABN Amro is the third large European bank to announce cutbacks in the past month following Deutsche Bank and Credit Suisse Group...Its profitability has been hit by a fall in mortgage lending in the United States - the bank's largest single market - following recent interest rate rises. ABN Amro's operations in the Netherlands and the United Kingdom will be hardest hit. Jobs will also be lost in the US - which accounted for 46% of profit in the first half of 2004 - and across its operations in the Americas and Asia-Pacific regions...The restructuring is designed to improve efficiency by reducing administrative costs and increasing focus on client service. The bank said it was on course for a 10% rise in net income this year but operating profits are set to fall because of a fall in US revenues. ABN Amro currently has more than 100,000 staff. "To get any profit growth in the coming years, they will have to lower costs, so shedding jobs makes total sense," Ivo Geijsen, an analyst with Bank Oyens & Van Eeghen, told Bloomberg. Europe's leading banks seem set for a period of retrenchment. Deutsche Bank said earlier this month it would reduce its German workforce by 1,920 while as many as 300 jobs will be lost at Credit Suisse First Boston. | ABN Amro, the Netherlands' largest bank, is to cut 2,850 jobs as a result of falling profits.ABN Amro is the third large European bank to announce cutbacks in the past month following Deutsche Bank and Credit Suisse Group.Deutsche Bank said earlier this month it would reduce its German workforce by 1,920 while as many as 300 jobs will be lost at Credit Suisse First Boston.The bank said it was on course for a 10% rise in net income this year but operating profits are set to fall because of a fall in US revenues.ABN Amro currently has more than 100,000 staff.ABN Amro's operations in the Netherlands and the United Kingdom will be hardest hit. |
business | GM pays $2bn to evade Fiat buyout..General Motors of the US is to pay Fiat 1.55bn euros ($2bn; £1.1bn) to get out of a deal which could have forced it to buy the Italian car maker outright...Fiat had sold GM a stake in 2000, as part of a partnership agreement. But Fiat's heavy losses have convinced GM - whose own European operations are in the red - to back away. The pay-off means the two firms will unwind joint ventures, but Fiat will keep supplying diesel engines and the money will allow it to reduce its debt. Fiat's shares on the Milan stock exchange rose 4.5% by 0900 GMT to 6.2 euros, having shot up more than 7% in early trading. "We now have absolute freedom to design our own future," said Fiat chief executive Sergio Marchionne...Analysts said Fiat seemed to have done well out of the deal, although some predictions had expected a 2bn euro pay-off. Fiat is to get 1bn euros immediately, with another 550m to follow within 90 days. The firm is Italy's largest private employer, and a failure to reach an agreement could have had severe consequences for thousands of workers and for the Italian economy. For its part, GM was keen to ward off any criticism that the deal had been a mistake..."We needed scale in Europe to get costs down, and we were able to do that in working with Fiat," said GM chief executive Rick Wagoner...The Fiat-GM alliance came about in 2000 as an alternative to selling Fiat outright. German-US car firm DaimlerChrysler had been willing to buy the firm, but Fiat patriarch Gianni Agnelli did not want to give up control. Instead, GM swapped a 6% stake in itself for 20% of Fiat - and gave Fiat a "put option" to sell GM the rest of the car maker between January 2004 and July 2009. But despite the alliance Fiat failed to put itself back on track, continuing to lose money and market share. As a result, the sell-off looked better and better for the Italians - and much worse for GM, which is struggling with its own loss-making European marques Opel and Saab. The relationship soured further after Fiat sold half its finance arm and recapitalised in 2003, halving GM's stake to 10%. | Instead, GM swapped a 6% stake in itself for 20% of Fiat - and gave Fiat a "put option" to sell GM the rest of the car maker between January 2004 and July 2009.Fiat had sold GM a stake in 2000, as part of a partnership agreement."We needed scale in Europe to get costs down, and we were able to do that in working with Fiat," said GM chief executive Rick Wagoner.General Motors of the US is to pay Fiat 1.55bn euros ($2bn; £1.1bn) to get out of a deal which could have forced it to buy the Italian car maker outright.Analysts said Fiat seemed to have done well out of the deal, although some predictions had expected a 2bn euro pay-off.Fiat is to get 1bn euros immediately, with another 550m to follow within 90 days.But despite the alliance Fiat failed to put itself back on track, continuing to lose money and market share. |
business | Bush budget seeks deep cutbacks..President Bush has presented his 2006 budget, cutting domestic spending in a bid to lower a record deficit projected to peak at $427bn (£230bn) this year...The $2.58 trillion (£1.38 trillion) budget submitted to Congress affects 150 domestic programmes from farming to the environment, education and health. But foreign aid is due to rise by 10%, with more money to treat HIV/Aids and reward economic and political reform. Military spending is also set to rise by 4.8%, to reach $419.3bn. The budget does not include the cost of running military operations in Iraq and Afghanistan, for which the administration is expected to seek an extra $80bn from Congress later this year...Congress will spend several months debating George W Bush's proposal...The state department's planned budget would rise to just under $23bn - a fraction of the defence department's request - including almost $6bn to assist US allies in the "war on terror". However, the administration is keen to highlight its global effort to tackle HIV/Aids, the BBC's Jonathan Beale reports, and planned spending would almost double to $3bn, with much of that money going to African nations. Mr Bush also wants to increase the amount given to poorer countries through his Millennium Challenge Corporation. The scheme has been set up to reward developing countries that embrace what the US considers to be good governance and sound policies. Yet Mr Bush's proposed spending of $3bn on that project is well below his initial promise of $5bn...A key spending line missing from proposals is the cost of funding the administration's proposed radical overhaul of Social Security, the pensions programme on which many Americans rely for their retirement income...Some experts believe this could require borrowing of up to $4.5 trillion over a 20-year period. Neither does the budget include any cash to purchase crude oil for the US emergency petroleum stockpile. Concern over the level of the reserve, created in 1970s, has led to rises in oil prices over the past year. The Bush administration will instead continue to fill the reserve by taking oil - rather than cash - from energy companies that drill under federal leases...The outline proposes reductions in budgets at 12 out of 23 government agencies including cuts of 9.6% at Agriculture and 5.6% at the Environmental Protection Agency. The spending plan for the year beginning 1 October is banking on a healthy US economy to boost government income by 6.1% to $2.18 trillion. Spending is forecast to grow by 3.5% to $2.57 trillion. But the budget is still the tightest yet under Mr Bush's presidency. "In order to sustain our economic expansion, we must continue pro-growth policies and enforce even greater spending restraint across federal government," Mr Bush said in his budget message to Congress. Mr Bush has promised to halve the US's massive budget deficit within five years. The deficit, partly the result of massive tax cuts early in Mr Bush's presidency, has been a key factor in pushing the US dollar lower. The independent Congressional Budget Office estimates that the shortfall could shrink to little more than $200bn by 2009, returning to the surpluses seen in the late 1990s by 2012. But its estimates depend on the tax cuts not being made permanent, in line with the promise when they were passed that they would "sunset", or disappear, in 2010. Most Republicans, however, want them to stay in place. And the figures also rely on the "Social Security trust fund" - the money set aside to cover the swelling costs of retirement pensions - being offset against the main budget deficit. | President Bush has presented his 2006 budget, cutting domestic spending in a bid to lower a record deficit projected to peak at $427bn (£230bn) this year.Yet Mr Bush's proposed spending of $3bn on that project is well below his initial promise of $5bn.Military spending is also set to rise by 4.8%, to reach $419.3bn.The budget does not include the cost of running military operations in Iraq and Afghanistan, for which the administration is expected to seek an extra $80bn from Congress later this year.The state department's planned budget would rise to just under $23bn - a fraction of the defence department's request - including almost $6bn to assist US allies in the "war on terror"."In order to sustain our economic expansion, we must continue pro-growth policies and enforce even greater spending restraint across federal government," Mr Bush said in his budget message to Congress.Mr Bush has promised to halve the US's massive budget deficit within five years.But the budget is still the tightest yet under Mr Bush's presidency.The deficit, partly the result of massive tax cuts early in Mr Bush's presidency, has been a key factor in pushing the US dollar lower.The spending plan for the year beginning 1 October is banking on a healthy US economy to boost government income by 6.1% to $2.18 trillion.The $2.58 trillion (£1.38 trillion) budget submitted to Congress affects 150 domestic programmes from farming to the environment, education and health. |
business | Barclays shares up on merger talk..Shares in UK banking group Barclays have risen on Monday following a weekend press report that it had held merger talks with US bank Wells Fargo...A tie-up between Barclays and California-based Wells Fargo would create the world's fourth biggest bank, valued at $180bn (£96bn). Barclays has declined to comment on the report in the Sunday Express, saying it does not respond to market speculation. The two banks reportedly held talks in October and November 2004...Barclays shares were up 8 pence, or 1.3%, at 605 pence by late morning in London on Monday, making it the second biggest gainer in the FTSE 100 index. UK banking icon Barclays was founded more than 300 years ago; it has operations in over 60 countries and employs 76,200 staff worldwide. Its North American divisions focus on business banking, whereas Wells Fargo operates retail and business banking services from 6,000 branches. In 2003, Barclays reported a 20% rise in pre-tax profits to £3.8bn, and it has recently forecast similar gains in 2004, predicting that full year pre-tax profits would rise 18% to £4.5bn. Wells Fargo had net income of $6.2bn in its last financial year, a 9% increase on the previous year, and revenues of $28.4bn. Barclays was the focus of takeover speculation in August, when it was linked to Citigroup, though no bid has ever materialised. Stock market traders were sceptical that the latest reports heralded a deal. "The chief executive would be abandoning his duty if he didn't talk to rivals, but a deal doesn't seem likely," Reuters quoted one trader as saying. | Shares in UK banking group Barclays have risen on Monday following a weekend press report that it had held merger talks with US bank Wells Fargo.A tie-up between Barclays and California-based Wells Fargo would create the world's fourth biggest bank, valued at $180bn (£96bn).UK banking icon Barclays was founded more than 300 years ago; it has operations in over 60 countries and employs 76,200 staff worldwide.Barclays has declined to comment on the report in the Sunday Express, saying it does not respond to market speculation.In 2003, Barclays reported a 20% rise in pre-tax profits to £3.8bn, and it has recently forecast similar gains in 2004, predicting that full year pre-tax profits would rise 18% to £4.5bn. |
business | Euronext 'poised to make LSE bid'..Pan-European group Euronext is poised to launch a bid for the London Stock Exchange, UK media reports say...Last week, the LSE rejected a takeover proposal from German rival Deutsche Boerse - the 530 pence-a-share offer valued the exchange at about £1.35bn. The LSE, which saw its shares rise 25%, said the bid undervalued the business. Euronext - formed after the Brussels, Paris and Amsterdam exchanges merged - is reportedly working with three investment banks on a possible offer. The LSE, Europe's biggest stock market, is a key prize, listing stocks with a total capitalisation of £1.4 trillion...Euronext already has a presence in London due to its 2001 acquisition of London-based options and futures exchange Liffe. Trades on the LSE are cleared via Clearnet, in which Euronext has a quarter stake...Euronext, which also operates an exchange in Lisbon, last week appointed UBS and ABN Amro as additional advisors. It is also working with Morgan Stanley. Despite the rejection of the Deutsche Boerse bid last week, Werner Seifert, chief executive of the Frankfurt-based exchange, may well come back with an improved offer. It has long wanted to link up with London, and the two tried and failed to seal a merger in 2000. Responding to the LSE's rebuff, Deutsche Boerse - whose market capitalisation is more than £3bn - said it believed it could show its proposal offered benefits, and that it still hoped to make a cash bid...Last week the LSE said not only was the bid undervalued, but that it had "been advised that there can be no assurance that any transaction could be successfully implemented". However, it has indicated it is open for further talks. Meanwhile, German magazine Der Spiegel said part of Mr Seifert's negotiations with the LSE were about where to base the future board of any merged exchange. While Mr Seifert has suggested a merged company would be run out of London, the mayor of Frankfurt has raised concerns that such a move could cost German jobs. Many analysts believe German Boerse has more financial firepower than Euronext if it came to a bidding war. | Last week, the LSE rejected a takeover proposal from German rival Deutsche Boerse - the 530 pence-a-share offer valued the exchange at about £1.35bn.Euronext already has a presence in London due to its 2001 acquisition of London-based options and futures exchange Liffe.Last week the LSE said not only was the bid undervalued, but that it had "been advised that there can be no assurance that any transaction could be successfully implemented".Trades on the LSE are cleared via Clearnet, in which Euronext has a quarter stake.Pan-European group Euronext is poised to launch a bid for the London Stock Exchange, UK media reports say.Euronext, which also operates an exchange in Lisbon, last week appointed UBS and ABN Amro as additional advisors.While Mr Seifert has suggested a merged company would be run out of London, the mayor of Frankfurt has raised concerns that such a move could cost German jobs. |
business | Making your office work for you..Our mission to brighten up your working lives continues - and this time, we're taking a long hard look at your offices...Over the next few months, our panel of experts will be listening to your gripes about where you work, and suggesting ways to make your workspace more efficient, more congenial or simply prettier. This week, we're hearing from Marianne Petersen, who is planning to convert a barn in Sweden into a base for her freelance writing work. Click on the link under her photograph to read her story, and then scroll down to see what the panel have to say. And if you want to take part in the series, go to the bottom of the story to find out how to get in touch...Working from home presents a multitude of challenges. Understanding your work personality allows you to work in terms of your own style. Do you feel confident about your work output without conferring with others? Are you able to retain discipline and self motivate to get the job done? Do you build on the ideas of others - or are you a more introspective problem solver?. In order for a virtual office to succeed, keeping the boundary between work and home life is essential. It may be useful to be quite rigid about who is allowed to visit, and to keep strict office hours. Referring to the space as work will give those around you a clear message that this is professional space. It is imperative to consider how to bring the outside world into yours, keeping up to date with developments and maintaining a network. Isolated work environments mean this has to be carefully thought out, and a strategy has to be developed that suits both your personality and your industry. Joining professional groups or forming a loose association of like-minded people may assist. It is useful to structure these meetings in advance as often they get relegated to less important status when times are busy - with the danger that when the workload eases, they have to be resurrected.....Prior to any interior work being undertaken it is essential to ensure that the roof and walls are made water-and-weather-tight, and the structure is checked for stability. It appears that the roof trusses may need repairs and additional bracing...Ideally, the roof should be replaced with an outer material in keeping with the character and location of the barn. This would also allow for a well-insulated inner skin to be provided which should be light coloured. It is likely that the most efficient way of heating the building is with electricity. In order to provide this the owner will need to have an electrical engineer calculate the potential heating, power and lighting load to make sure the mains supply and distribution capacity are adequate. Ideally, it would be good to have a mains water supply and some means of drainage for toilet and washing facilities. The walls should be dry lined with a single skin of plasterboard laid over rockwool slab which will allow good wall insulation and the power and lighting circuits to be concealed, and the walls should be painted in a light colour. The owner mentions she might lay a new floor over the existing planks; this will improve the insulation and offer a level surface. I would suggest laying new oak veneer planks which can work in with the character of the barn. As for lighting, consider a combination of floor mounted uplights, wall lights (wall washers) and selected downlights. Use a combination of mains voltage fluorescent fittings and dimmable units which can vary the light levels and the feel of the interior.....Please click on the link to the right here to see my ideas for Marianne's barn...The layout of this office reflects the need to have a working area and a more relaxed meeting space. Large desk space and extensive storage would combine with tub chairs to maximise the space available. The finishes chosen for the furniture will need to reflect the unusual setting, while the lighting and temperature control mechanisms used will further influence the workplace.....Regarding accessing the internet via the connection in the main house, your plan of going wireless is sensible. A wireless router/access point in the house with a wireless LAN card in the PC in the renovated area may be sufficient. However, important points to consider are the distance between the two buildings and the nature of the materials through which the signals have to pass, which could result in a weak signal strength. You may require an additional wireless access point in the renovated area. Your local IT supplier will be able to advise on this. If you haven't already invested in robust firewall and anti-virus software, it is essential to do so, to protect your investment. To really take advantage of wireless technology, you might consider a laptop computer and a docking station with external mouse and monitor. Or you could use one of the new Tablet computers, which allow you to write directly on the screen and convert into text with built-in hand recognition software. And finally, you will save money and space by considering a multi-function product for print, scan, copy and fax. | In order for a virtual office to succeed, keeping the boundary between work and home life is essential.I would suggest laying new oak veneer planks which can work in with the character of the barn.The layout of this office reflects the need to have a working area and a more relaxed meeting space.Referring to the space as work will give those around you a clear message that this is professional space.Prior to any interior work being undertaken it is essential to ensure that the roof and walls are made water-and-weather-tight, and the structure is checked for stability.Understanding your work personality allows you to work in terms of your own style.You may require an additional wireless access point in the renovated area.A wireless router/access point in the house with a wireless LAN card in the PC in the renovated area may be sufficient.As for lighting, consider a combination of floor mounted uplights, wall lights (wall washers) and selected downlights.Do you feel confident about your work output without conferring with others?The walls should be dry lined with a single skin of plasterboard laid over rockwool slab which will allow good wall insulation and the power and lighting circuits to be concealed, and the walls should be painted in a light colour.This week, we're hearing from Marianne Petersen, who is planning to convert a barn in Sweden into a base for her freelance writing work.It appears that the roof trusses may need repairs and additional bracing.Over the next few months, our panel of experts will be listening to your gripes about where you work, and suggesting ways to make your workspace more efficient, more congenial or simply prettier.In order to provide this the owner will need to have an electrical engineer calculate the potential heating, power and lighting load to make sure the mains supply and distribution capacity are adequate.Ideally, the roof should be replaced with an outer material in keeping with the character and location of the barn.Please click on the link to the right here to see my ideas for Marianne's barn. |
business | Winn-Dixie files for bankruptcy..US supermarket group Winn-Dixie has filed for bankruptcy protection after succumbing to stiff competition in a market dominated by Wal-Mart...Winn-Dixie, once among the most profitable of US grocers, said Chapter 11 protection would enable it to successfully restructure. It said its 920 stores would remain open, but analysts said it would most likely off-load a number of sites. The Jacksonville, Florida-based firm has total debts of $1.87bn (£980m). In its bankruptcy petition it listed its biggest creditor as US foods giant Kraft Foods, which it owes $15.1m...Analysts say Winn-Dixie had not kept up with consumers' demands and had also been burdened by a number of stores in need of upgrading. A 10-month restructuring plan was deemed a failure, and following a larger-than-expected quarterly loss earlier this month, Winn-Dixie's slide into bankruptcy was widely expected. The company's new chief executive Peter Lynch said Winn-Dixie would use the Chapter 11 breathing space to take the necessary action to turn itself around. "This includes achieving significant cost reductions, improving the merchandising and customer service in all locations and generating a sense of excitement in the stores," he said. Yet Evan Mann, a senior bond analyst at Gimme Credit, said Mr Lynch's job would not be easy, as the bankruptcy would inevitably put off some customers. "The real big issue is what's going to happen over the next one or two quarters now that they are in bankruptcy and all their customers see this in their local newspapers," he said. | Winn-Dixie, once among the most profitable of US grocers, said Chapter 11 protection would enable it to successfully restructure.It said its 920 stores would remain open, but analysts said it would most likely off-load a number of sites.Yet Evan Mann, a senior bond analyst at Gimme Credit, said Mr Lynch's job would not be easy, as the bankruptcy would inevitably put off some customers.US supermarket group Winn-Dixie has filed for bankruptcy protection after succumbing to stiff competition in a market dominated by Wal-Mart.The company's new chief executive Peter Lynch said Winn-Dixie would use the Chapter 11 breathing space to take the necessary action to turn itself around. |
business | Card fraudsters 'targeting web'..New safeguards on credit and debit card payments in shops has led fraudsters to focus on internet and phone payments, an anti-fraud agency has said...Anti-fraud consultancy Retail Decisions says 'card-not-present' fraud, where goods are paid for online or by phone, has risen since the start of 2005. The introduction of 'chip and pin' cards has tightened security for transactions on the High Street. But the clampdown has caused fraudsters to change tack, Retail Decisions said...The introduction of chip and pin cards aimed to cut down on credit card fraud in stores by asking shoppers to verify their identity with a confidential personal pin number, instead of a signature. Retail Decisions chief executive Carl Clump told the BBC that there was "no doubt" that chip and pin would "reduce card fraud in the card-present environment". "However, it is important to monitor what happens in the card-not-present environment as fraudsters will turn their attention to the internet, mail order, telephone order and interactive TV," he said. "We have seen a 22% uplift in card-not-present fraud here in the UK... since the start of the year. "Fraud doesn't just disappear, it mutates to the next weakest link in the chain," he said...Retail Decisions' survey on the implementation of chip and pin found that shoppers had adapted easily to the new system, but that banks' performance in distributing the new cards had been patchy, at best. "The main issue is that not everyone has the pins they need," said Mr Clump. Nearly two thirds - 65% - of the 1,000 people interviewed said they had used chip and pin to make payments. Of these, 83% were happy with the experience, though nearly a quarter said they struggled to remember their pin number. However, only 34% said they had received replacement cards with the necessary 'chip' technology from all their card providers. Furthermore, 16% said that none of their cards had been replaced, while 30% said only some had. UK shoppers spent £5.3bn on plastic cards in 2003, the last full year for which figures are available from the Association of Payment Clearing Services (Apacs). Altogether, card scams on UK-issued cards totalled £402.4m in 2003. Card-not-present fraud rose an annual 6% to £116.4m, making it the biggest category even then. Within this, internet fraud totalled £43m, Apacs' figures show. | The introduction of chip and pin cards aimed to cut down on credit card fraud in stores by asking shoppers to verify their identity with a confidential personal pin number, instead of a signature.However, only 34% said they had received replacement cards with the necessary 'chip' technology from all their card providers.Furthermore, 16% said that none of their cards had been replaced, while 30% said only some had.New safeguards on credit and debit card payments in shops has led fraudsters to focus on internet and phone payments, an anti-fraud agency has said.Retail Decisions chief executive Carl Clump told the BBC that there was "no doubt" that chip and pin would "reduce card fraud in the card-present environment".The introduction of 'chip and pin' cards has tightened security for transactions on the High Street."The main issue is that not everyone has the pins they need," said Mr Clump.But the clampdown has caused fraudsters to change tack, Retail Decisions said. |
business | Brazil approves bankruptcy reform..A major reform of Brazil's bankruptcy laws has been approved by the country's Congress, in a move which it is hoped will cut the cost of borrowing...The bill, proposed in 1993, has finally been approved by the leadership of President Luiz Inacio Lula da Silva. The old law, dating from 1945, gave priority first to workers, second to tax revenue and finally to creditors. The new legislation changes this, giving priority to creditors and limiting payments to workers. The new regulations will limit payments to workers to 150 times the minimum monthly salary, which is currently $94. The law also makes it more difficult for a company to declare bankruptcy. However, when a firm is declared bankrupt it will gain protection from creditors for 180 days while a recovery plan is worked out...The proposals were opposed in the past by leftist parties, including Mr Lula's Worker Party. They considered that they undermined workers' rights. But President Lula became a defender of the reforms, arguing that the country's bank lending margins were among the highest in the world and were damaging the economy. According to Andreas Adriano of Latin Trade Magazine, the new bankruptcy law will help in reducing the spread - difference between the interest rates of the banks and federal bonds. Nevertheless, Mr Adriano said to reduce the basic interest rate the Central Bank needs to change its policy, focusing not only on inflation but also on economic growth. | The new legislation changes this, giving priority to creditors and limiting payments to workers.According to Andreas Adriano of Latin Trade Magazine, the new bankruptcy law will help in reducing the spread - difference between the interest rates of the banks and federal bonds.The old law, dating from 1945, gave priority first to workers, second to tax revenue and finally to creditors.A major reform of Brazil's bankruptcy laws has been approved by the country's Congress, in a move which it is hoped will cut the cost of borrowing.The law also makes it more difficult for a company to declare bankruptcy. |
business | Japan's ageing workforce: built to last..In his twenties he battled tuberculosis for eight years, then went on to run his own clothing business before marrying in his late thirties. And the 101-year-old Torao Toshitsune has eaten raw fish pretty much every day throughout his life...Mr Toshitsune is one of Japan's 23,000 centenarians - a club that is growing by 13% annually, and where the oldest member is 114. At his neat Osaka detached house, where he lives with one of his sexagenarian daughters, Mr Toshitsune keeps a regular routine of copying out Buddhist sutras and preparing the traditional Japanese tea ceremony. Between tasks, this remarkably active senior citizen reveals what his next goal is: "Well, what's most important for me is to be Japan's number one." Mr Toshitsune wants to outlive everyone. And when it comes to longevity, Japan, as a country, appears to be doing just that. Women can expect to live until 85, men until 78, four years longer than Americans and Europeans...On the outskirts of Kyoto, 83-year-old Yuji Shimizu contemplates this phenomenon during a round of golf with his younger friends, who are in their seventies..."I think this is because the food industry and the environment have improved," he remarks. "On average, we can live longer." Whether it's the diet, or the traditional family structure where roles were clearly defined, or just something in the genes, Japan's elderly are remarkable. But while life may be a game of golf for Mr Shimizu, his grandchildren have huge problems ahead. Japan is the world's least fertile nation with childbirth rates of just two thirds of that in the US...By 2007, Japan's population is expected to peak at 127 million, then shrink to under 100 million by the middle of the century. This means 30 million fewer workers at a time when the number of elderly will have almost doubled..."In the year 2050, if the birth rate remains the same people over 60 will make up over 30% of the population," explains Shigeo Morioka of the International Longevity Centre in Tokyo. So how will Japan's finances stay on track? After a decade of economic stagnation and huge deficit spending, the public sector debt is already about 140% of the country's gross domestic product (GDP), the highest rate among industrialised countries. The International Monetary Fund predicts that as the falling birth rate takes grip from 2010, the cost of running Japan's welfare state will double to more than 5% of GDP, while current account balances will deteriorate by over 2%. But unfortunately, Japan appears poorly prepared both financially and politically. Glen Wood, Vice President of Deutsche Securities Japan, asks; "Who's going to fund the pension fund for the next generation and indeed who are going to be the new Japanese worker? "Who is going to build the economy, who are going to be the leaders? Who are going to be the producers of the GDP going forward?" One option is further welfare reform. Another is immigration, possibly from the Philippines and Indonesia. But so far, any emerging policy appears restricted to a limited number of nursing staff...Standing next to Tokyo harbour is a version of New York's Statue of Liberty. But, as yet, Japan is not ready for an Ellis Island..."Japan has never really liked that option in its history and I think it's an option that's becoming more and more plausible and necessary," insists Mr Wood. In Japan, as in Europe which also faces a workforce decline, immigration is a very sensitive subject. But for the Japanese economy, facing 8% fewer consumers by 2050 means slumping domestic sales of cars, hi-tech kit and home appliances, perhaps even another property crash...Of course the Japanese could always have more children. The government is currently considering financial rewards for procreative couples similar to those in operation in Australia. But there would be no pay back until 2030, when today's babies are taxpayers, and the demographic crisis, like in Europe, starts to unfold in 2010. In contrast to Japan - and of course the European Union - the US population is expected to increase by 46% to 420 million by the middle of the century. Although President Bush must re-devise Social Security to take account of a 130% rise in America's over 65s, the IMF foresees a positive contribution to the US current account balance from the combined forces of fertility and immigration...Some voices in Japanese industry are calling for radical changes to the nature of the Japanese labour market. They want a shift towards financial services, though doubts persist over the country's ability, let alone willingness, to move away from manufacturing. "Japan still has problems getting a viable banking system, let alone shifting their auto business or their semi-conductor business or the broad based tech manufacturing business overseas," says Mr Wood. Japan can either drive some radical reforms or else run the risk of a vicious ageing recession. Falling demand and a lower tax take could result in soaring budget pressures and a basket case currency. Come 2020, Japan could be more dependent on a shrinking workforce than any other industrialised power. There are fears that the world's number two economy is doomed to a permanent recession. But none of this is Mr Toshitsune's concern anymore. At 101, he chuckles that, he feels fine. | Glen Wood, Vice President of Deutsche Securities Japan, asks; "Who's going to fund the pension fund for the next generation and indeed who are going to be the new Japanese worker?And when it comes to longevity, Japan, as a country, appears to be doing just that.In contrast to Japan - and of course the European Union - the US population is expected to increase by 46% to 420 million by the middle of the century."Japan has never really liked that option in its history and I think it's an option that's becoming more and more plausible and necessary," insists Mr Wood.Mr Toshitsune is one of Japan's 23,000 centenarians - a club that is growing by 13% annually, and where the oldest member is 114.Come 2020, Japan could be more dependent on a shrinking workforce than any other industrialised power."Japan still has problems getting a viable banking system, let alone shifting their auto business or their semi-conductor business or the broad based tech manufacturing business overseas," says Mr Wood.In Japan, as in Europe which also faces a workforce decline, immigration is a very sensitive subject.Japan is the world's least fertile nation with childbirth rates of just two thirds of that in the US.At his neat Osaka detached house, where he lives with one of his sexagenarian daughters, Mr Toshitsune keeps a regular routine of copying out Buddhist sutras and preparing the traditional Japanese tea ceremony.The International Monetary Fund predicts that as the falling birth rate takes grip from 2010, the cost of running Japan's welfare state will double to more than 5% of GDP, while current account balances will deteriorate by over 2%.But unfortunately, Japan appears poorly prepared both financially and politically.Japan can either drive some radical reforms or else run the risk of a vicious ageing recession.Mr Toshitsune wants to outlive everyone.By 2007, Japan's population is expected to peak at 127 million, then shrink to under 100 million by the middle of the century.But, as yet, Japan is not ready for an Ellis Island.But while life may be a game of golf for Mr Shimizu, his grandchildren have huge problems ahead.Between tasks, this remarkably active senior citizen reveals what his next goal is: "Well, what's most important for me is to be Japan's number one.""Who is going to build the economy, who are going to be the leaders? |
business | Mexican in US send $16bn home..Mexican labourers living in the US sent a record $16.6bn (£8.82bn) home last year...The Bank of Mexico said that remittances grew 24% last year and now represent the country's second-biggest source of income after oil. Better records and greater prosperity of Mexican expatriates in the US are the main reasons behind the increase. About 10 million Mexicans live in the US, where there are 16 million citizens of Mexican origin. Remittances now represent more than 2% of the country's GDP, according to the Bank of Mexico's figures. Last year, there were 50.9 million transactions, with an average value of $327 per remittance, the bank said. According to Standard & Poor's, which has recently upgraded Mexico's sovereign debt rating, the rise in remittances helps protect the Mexican economy against a potential fall in the international oil prices...The growth in remittances has sparked fierce competition between banks. Bank of America announced last week that it planned to eliminate transfer fees for some customers. Remittance charges are estimated to have dropped by between 50 and 60%, reports from the US Treasury and the Inter-American Development Bank have said. The Inter-American Development Bank estimates that remittances to Latin America and the Caribbean reached $45bn in 2004. | Last year, there were 50.9 million transactions, with an average value of $327 per remittance, the bank said.The Bank of Mexico said that remittances grew 24% last year and now represent the country's second-biggest source of income after oil.Remittance charges are estimated to have dropped by between 50 and 60%, reports from the US Treasury and the Inter-American Development Bank have said.The Inter-American Development Bank estimates that remittances to Latin America and the Caribbean reached $45bn in 2004.Mexican labourers living in the US sent a record $16.6bn (£8.82bn) home last year. |
business | Millions 'to lose textile jobs'..Millions of the world's poorest textile trade workers will lose their jobs under new trade rules to be introduced in the new year, a charity has warned...The World Trade Organisation (WTO) is to end its Multi-Fibre Agreement (MFA) on midnight of 31 December. Christian Aid condemned the move, saying it would see almost a million jobs in Bangladesh alone being axed. However, supporters of the change claim it will mean increased efficiency and lower costs for Western consumers...It will also see more jobs created in India and China, advocates argue. The WTO said that many developing countries support the end of quotas and stressed that funding was available to countries such as Bangladesh to help them make the transition to a fully liberalised market. "There will be a period of adjustment required," said WTO spokesman Keith Rockwell. "Some countries will do better than others but there is no one who is suggesting that no developing country will do well out of this. "Some countries where it may appear that orders will dry up have seen orders surging and there are many companies who will continue with existing trading relationships."..Christian Aid has called on British firms not to simply "cut and run" but look after their workers, in a new report called Rags To Riches To Rags...It added that with few employment alternatives available many sacked garment workers could end up in far worse jobs - with some of the mainly female workers forced into the sex trade. The WTO itself has warned that as many as 27 million jobs could be lost as a result of liberalisation in the textile industry. Some of the world's fastest developing countries which rely on textile exports to build growth - for example in Bangladesh textiles account for almost 85% of the country's exports and the industry employs around 1.5 million people. The MFA pact has helped developing countries get a bigger share of the world market. "The losers in this new trade landscape will be some of the most vulnerable workers in countries such as Bangladesh, Cambodia, Sri Lanka and Nepal," Andrew Pendleton, Christian Aid's head of Trade Policy, said. "They will be hard-pressed to cope when garment industries there lose their protection. "We are deeply concerned that the New Year will spell misery for huge numbers of garment workers." The WTO said there was no consenus among its members to retain the quotas and emphasised that funding was available to countries such as Bangladesh to help them adjust to the liberalised market...It added that the impact of the changes for workers most affected by the shake-up had not been considered, adding such seismic changes to policy should "put the interests of poor people first - rather than simply aiming to liberalise markets at any cost". While the current MFA was not perfect, its did allow Third World countries like Bangladesh to get onto the first rung of industrial development, Christian Aid said. "International trade must not be governed by a 'race to the bottom' that pitches one set of poor people against another," Mr Pendleton added. | The WTO said that many developing countries support the end of quotas and stressed that funding was available to countries such as Bangladesh to help them make the transition to a fully liberalised market."The losers in this new trade landscape will be some of the most vulnerable workers in countries such as Bangladesh, Cambodia, Sri Lanka and Nepal," Andrew Pendleton, Christian Aid's head of Trade Policy, said.Millions of the world's poorest textile trade workers will lose their jobs under new trade rules to be introduced in the new year, a charity has warned.The WTO said there was no consenus among its members to retain the quotas and emphasised that funding was available to countries such as Bangladesh to help them adjust to the liberalised market.While the current MFA was not perfect, its did allow Third World countries like Bangladesh to get onto the first rung of industrial development, Christian Aid said.The WTO itself has warned that as many as 27 million jobs could be lost as a result of liberalisation in the textile industry.The MFA pact has helped developing countries get a bigger share of the world market.It added that with few employment alternatives available many sacked garment workers could end up in far worse jobs - with some of the mainly female workers forced into the sex trade.Some of the world's fastest developing countries which rely on textile exports to build growth - for example in Bangladesh textiles account for almost 85% of the country's exports and the industry employs around 1.5 million people. |
business | Wall Street cheers Bush victory..The US stock market has closed higher in response to George W Bush's victory in the presidential elections...The benchmark Dow Jones share index closed more than 1% higher at 10,137, while the Nasdaq rose 0.9% to 2,004. Many investors believe that Mr Bush's policies are more business-friendly than those of his Democrat challenger, John Kerry. The higher share prices also reflect relief that a clear winner has emerged from what proved to be a tight poll...Investors had worried that the outcome of the poll would be inconclusive, paving the way for a repeat of the legal wrangling that marred the 2000 election...The Dow lost 5% of its value in the three weeks immediately after that election, when it was unclear who would occupy the White House. Mr Kerry conceded defeat on Wednesday, abandoning last-ditch hopes of carrying the vote in the swing state of Ohio. "The relief for the markets may be that we have a decision and can move forward," said Tim Ghriskey, chief investment officer of Solaris Asset Management. Some analysts predicted that the jump in share prices would be short-lived, saying investors would quickly focus once again on the health of the US economy. "I would look at the stock market rally for Bush as kind of a one-day event," said Ken Mayland at Clearview Economics. The US' recent economic performance has been mixed, with solid growth offset by disappointingly low job creation figures, and mounting worries over a record budget deficit. Elsewhere in the financial markets on Wednesday, the dollar dipped slightly against the euro and climbed against the yen, while US oil prices closed up $1.26 at $50.88 a barrel in New York. The rise in oil prices partly reflects the view that President Bush is less likely than Mr Kerry to release supplies from the US' strategic oil reserve. Share prices in London, Frankfurt and Paris also closed higher...Successive polls in the run-up to Tuesday's election had shown the two candidates running neck and neck...Economic issues, as well as the war in Iraq, were the forefront of the campaign. In key swing states such as Ohio, which has suffered substantial job losses in the past four years, President Bush's handling of the economy became a crucial election issue. Senator Kerry attacked President Bush's economic record during his campaign, hammering home the fact that a net 800,000 jobs were lost during his term in office. President Bush focused on the fact that two million jobs have been created in the past year, claiming that it has vindicated his tax-cutting agenda. As for future policies, both candidates pledged to bring America's $422bn federal budget deficit under control. Senator Kerry planned to increase taxes on those earning more than $200,000 a year. President Bush has placed reform of the pensions system at the heart of his economic agenda for a second term. However, economists have said both candidates' economic programmes rested on questionable assumptions about future growth. | Senator Kerry attacked President Bush's economic record during his campaign, hammering home the fact that a net 800,000 jobs were lost during his term in office.The US stock market has closed higher in response to George W Bush's victory in the presidential elections.The higher share prices also reflect relief that a clear winner has emerged from what proved to be a tight poll.The rise in oil prices partly reflects the view that President Bush is less likely than Mr Kerry to release supplies from the US' strategic oil reserve.In key swing states such as Ohio, which has suffered substantial job losses in the past four years, President Bush's handling of the economy became a crucial election issue.President Bush has placed reform of the pensions system at the heart of his economic agenda for a second term.President Bush focused on the fact that two million jobs have been created in the past year, claiming that it has vindicated his tax-cutting agenda.The US' recent economic performance has been mixed, with solid growth offset by disappointingly low job creation figures, and mounting worries over a record budget deficit.Share prices in London, Frankfurt and Paris also closed higher.Some analysts predicted that the jump in share prices would be short-lived, saying investors would quickly focus once again on the health of the US economy. |
business | Europe asks Asia for euro help..European leaders say Asian states must let their currencies rise against the US dollar to ease pressure on the euro...The European single currency has shot up to successive all-time highs against the dollar over the past few months. Tacit approval from the White House for the weaker greenback, which could help counteract huge deficits, has helped trigger the move. But now Europe says the euro has had enough, and Asia must now share some of the burden...China is seen as the main culprit, with exports soaring up 35% in 2004 partly on the back of a currency pegged to the dollar. "Asia should engage in greater currency flexibility," said French finance minister Herve Gaymard, after a meeting with his German counterpart Hans Eichel. Markets responded by pushing the euro lower, in the expectation that the rhetoric - and the pressure - is unlikely to ease ahead of a meeting of the G7 industrialised countries next week. Early on Tuesday morning, the dollar had edged higher to 1.3040 euros. The yen, meanwhile, had strengthened to 102.975 against the dollar by 0730 GMT. | European leaders say Asian states must let their currencies rise against the US dollar to ease pressure on the euro.The European single currency has shot up to successive all-time highs against the dollar over the past few months.China is seen as the main culprit, with exports soaring up 35% in 2004 partly on the back of a currency pegged to the dollar.But now Europe says the euro has had enough, and Asia must now share some of the burden. |
business | US Airways staff agree to pay cut..A union representing 5,200 flight attendants at bankrupt US Airways have agreed to a new contract that cuts pay by nearly 10%...The deal will help the carrier, trying to survive by cutting costs by nearly $1bn (£530m) a year, save about $94m. More than two thirds of its 28,000 staff have now accepted wage cuts. But talks are still continuing with a union representing mechanics, baggage handlers and cleaners, which has so far failed to negotiate a new contract. The seventh largest carrier in the US sought bankruptcy protection for a second time in two years last September. It had been one of the quickest to deal with difficulties faced by the aviation industry after the 9/11 attacks in 2001. But it emerged from Chapter 11 bankruptcy in March 2003 to face competition from low-cost carriers and higher fuel costs. US Airways management has said it may need to start liquidating assets if it does not receive concessions from all staff by the middle of this month. | The seventh largest carrier in the US sought bankruptcy protection for a second time in two years last September.A union representing 5,200 flight attendants at bankrupt US Airways have agreed to a new contract that cuts pay by nearly 10%.The deal will help the carrier, trying to survive by cutting costs by nearly $1bn (£530m) a year, save about $94m.US Airways management has said it may need to start liquidating assets if it does not receive concessions from all staff by the middle of this month. |
business | Parmalat to return to stockmarket..Parmalat, the Italian dairy company which went bust after an accounting scandal, hopes to be back on the Italian stock exchange in July...The firm gained protection from creditors in 2003 after revealing debts of 14bn euros ($18.34bn; £9.6bn). This was eight times higher than it had previously stated. In a statement issued on Wednesday night, Parmalat Finanziaria detailed administrators' latest plans for re-listing the shares of the group...As part of the re-listing on the Italian stock exchange, creditors' debts are expected to be converted into shares through two new share issues amounting to more than 2bn euros. The company's creditors will be asked to vote on the plan later this year. The plan is likely to give creditors of Parmalat Finanziaria shares worth about 5.7% of the debts they are owed. This is lower than the 11.3% creditors previously hoped to receive. Creditors of Parmalat, the main operating company, are likely to see the percentage of debt they receive fall from 7.3% to 6.9%...Several former top Parmalat executives are under investigation for the fraud scandal. Lawmakers said on Wednesday night Enrico Bondi, the turnaround specialist appointed by the Italian government as Parmalat's chief executive, spoke positively about the company during a closed-door hearing of the Chamber of Deputies industry commission. "Bondi supplied us with elements of positive results on the industrial positions and on the history of debt which will find a point of solution through the Parmalat group's quotation on the market in July," Italian news agency Apcom quoted several lawmakers as saying in a statement. | The plan is likely to give creditors of Parmalat Finanziaria shares worth about 5.7% of the debts they are owed.Creditors of Parmalat, the main operating company, are likely to see the percentage of debt they receive fall from 7.3% to 6.9%.As part of the re-listing on the Italian stock exchange, creditors' debts are expected to be converted into shares through two new share issues amounting to more than 2bn euros.In a statement issued on Wednesday night, Parmalat Finanziaria detailed administrators' latest plans for re-listing the shares of the group.Parmalat, the Italian dairy company which went bust after an accounting scandal, hopes to be back on the Italian stock exchange in July. |
business | Businesses fail to plan for HIV..Companies fail to draw up plans to cope with HIV/Aids until it affects 20% of people in a country, new research says...The finding comes in a report published on Thursday by the World Economic Forum, Harvard and the UN aids agency. "Too few companies are responding proactively to the social and business threats," said Dr Kate Taylor, head of the WEF's global Health Initiative. Nearly 9,000 business leaders in 104 countries were surveyed for Business and HIV/AIDS: Commitment and Action?..Dr Taylor described the level of action taken by businesses as revealed by the report as "too little, too late". The issue will be highlighted to business and world leaders at the World Economic Forum, which meets in Davos, Switzerland, next week. The WEF report shows that despite the fact that 14,000 people contract HIV/Aids every day, concern among businesses has dropped by 23% in the last 12 months. Most (71%) have no policies in place to address the disease. Nor could over 65% of the business leaders surveyed say or estimate the prevalence of HIV among their staff. The UN programme tackling Aids, UNAIDS, pointed out that having a clear strategy for dealing with HIV/Aids was a good investment as well as being socially responsible...One company that does have a plan is Anglo-American, the international mining company, which estimates an HIV prevalence of 24% among its 130,000-strong Southern African workforce...Over the last two years the company has implemented extensive voluntary counselling and testing for HIV infection, coupled with anti-retroviral therapy for employees progressing to Aids. Over 90% of the 2,200 employees who have accessed and remained on treatment are well and have returned to normal work. "Effective action on HIV/Aids is synonymous with good business management and leads to more profitable and sustainable operations," said Brian Brink, senior vice-president, health, at Anglo-American..."Companies should encourage all workers to know their HIV status, making it as routine as monitoring blood pressure or cholesterol," he said. "Providing access to treatment is a critical part of this." Across sub-Saharan Africa, even in countries with an HIV prevalence of 10-19%, only around 7% of companies have formal HIV/Aids policies in place, according to the report. The gap is even wider in China, Ethiopia, India, Nigeria and Russia, the so-called "next wave" countries, which are predicted to experience the highest numbers of new HIV/Aids cases worldwide by 2010. The report adds "an important building block to our understanding of how the business community is experiencing the HIV/Aids epidemic and to whether and how it is reacting," said David Bloom, professor of economics and demography at the Harvard School of Public Health...The WEF report concludes that businesses need to understand their exposure to HIV/Aids risks and come up with good local practices to manage them. A key priority, in both high and low-prevalence settings, said the WEF is to establish a policy based on non-discrimination and confidentiality. | Nearly 9,000 business leaders in 104 countries were surveyed for Business and HIV/AIDS: Commitment and Action?Across sub-Saharan Africa, even in countries with an HIV prevalence of 10-19%, only around 7% of companies have formal HIV/Aids policies in place, according to the report.The WEF report concludes that businesses need to understand their exposure to HIV/Aids risks and come up with good local practices to manage them.The WEF report shows that despite the fact that 14,000 people contract HIV/Aids every day, concern among businesses has dropped by 23% in the last 12 months."Effective action on HIV/Aids is synonymous with good business management and leads to more profitable and sustainable operations," said Brian Brink, senior vice-president, health, at Anglo-American.Nor could over 65% of the business leaders surveyed say or estimate the prevalence of HIV among their staff.The report adds "an important building block to our understanding of how the business community is experiencing the HIV/Aids epidemic and to whether and how it is reacting," said David Bloom, professor of economics and demography at the Harvard School of Public Health."Too few companies are responding proactively to the social and business threats," said Dr Kate Taylor, head of the WEF's global Health Initiative.Dr Taylor described the level of action taken by businesses as revealed by the report as "too little, too late". |
business | French wine gets 70m euro top-up..The French government is to hand its struggling wine industry 70m euros ($91m) in aid to help it battle falling sales and damaging overproduction...The financial package is aimed at assisting vintners in financial trouble and improving how its wine is marketed. The French wine industry, the world's second largest, has been hit by declining consumption at home and the growing popularity of New World wines. Wine makers, however, claimed the support did not go far enough. The package was announced by agriculture minister Dominique Bussereau after talks with vintners' representatives...The bulk of the money - about 40m euros - will be offered in the form of preferential loans to heavily indebted producers to enable them to reschedule their payments. A further 15m euros will be made available to wine cooperatives, which make up the majority of French producers, in low interest loans. Efforts to promote French wine abroad are to be boosted by an extra 3.5m euros in funding. France fell behind the 'New World' producers of Australia, Chile and the United States for the first time in 2003 in terms of exports...Domestic consumption, accounting for 70% of sales, has suffered from strict restrictions on advertising and tough drink-driving laws...The aid package would "create a positive climate around French viticulture," Mr Bussereau said. However, wine makers and farmers said the support was much less than they had been hoping for. "I am afraid the resources are not up to the ambitions," Jean-Michel Lemetayer, from the FNSEA agricultural union, told the Associated Press news agency. In an effort to tackle overcapacity, the government will agree that vines can be destroyed in areas where growers give their unanimous consent, while 500 vintners will be helped to take early retirement. The government will also seek European Union approval to distil about 250 million litres of excess wine into alcohol, with vintners receiving compensation. Production is currently outstripping demand by about 30%. The support is designed to make French producers more competitive in the face of increasing global consolidation across the wine industry. Wine makers in France's best-known regions, such as Burgundy, have found it hard to invest in new technology and to create recognisable brands to appeal to overseas buyers. | The French government is to hand its struggling wine industry 70m euros ($91m) in aid to help it battle falling sales and damaging overproduction.The support is designed to make French producers more competitive in the face of increasing global consolidation across the wine industry.The French wine industry, the world's second largest, has been hit by declining consumption at home and the growing popularity of New World wines.Efforts to promote French wine abroad are to be boosted by an extra 3.5m euros in funding.A further 15m euros will be made available to wine cooperatives, which make up the majority of French producers, in low interest loans.However, wine makers and farmers said the support was much less than they had been hoping for.The government will also seek European Union approval to distil about 250 million litres of excess wine into alcohol, with vintners receiving compensation.Wine makers, however, claimed the support did not go far enough. |
business | Fiat chief takes steering wheel..The chief executive of the Fiat conglomerate has taken day-to-day control of its struggling car business in an effort to turn it around...Sergio Marchionne has replaced Herbert Demel as chief executive of Fiat Auto, with Mr Demel leaving the company. Mr Marchionne becomes the fourth head of the business - which is expected to make a 800m euro ($1bn) loss in 2004 - in as many years. Fiat underperformed the market in Europe last year, seeing flat sales...The car business has made an operating loss in five of the last six years and was forced to push back its break-even target from 2005 to 2006. The management changes are part of a wider shake-up of the business following Fiat's resolution of its dispute with General Motors. As part of a major restructuring, Fiat is to integrate the Maserati car company - currently owned by Ferrari - within its own operations. Ferrari, in which Fiat owns a majority stake, could be separately floated on the stock market in either 2006 or 2007...Mr Marchionne, who only joined the company last year, said Fiat Auto was now the "principal focus" of his attention. "I have made the decision to take on the post of chief executive of the auto unit to speed up the company's recovery," he said. "A profound cultural transformation is underway following a management reorganisation that has delivered a more agile and efficient structure," he added...Although Mr Marchionne does not have a background in the car industry, he has been playing an increasing role in the group's activities. Last year, he said that a series of new models, launched as part of the group's recovery plan, had not boosted revenues as much as hoped. The car business, best known for its Alfa Romeo marque, is expected to make a loss of about 800m euros in 2004. Sales are expected to fall in 2005, Fiat said this week, as it exits unprofitable areas such as the rental car market. Mr Demel, a car industry veteran, took the helm in November 2003 after being recruited by former Fiat chief executive Giuseppe Morchio. Mr Morchio made a bid last year to become chairman after the death of president Umberto Agnelli. However, this was rejected by the founding Agnelli family and Mr Morchio subsequently resigned. Earlier this week, Fiat reached an agreement with GM to dissolve an alliance which could have obliged GM to buy the Italian firm outright. GM will pay Fiat $2bn as part of the settlement. | Mr Marchionne, who only joined the company last year, said Fiat Auto was now the "principal focus" of his attention.Sergio Marchionne has replaced Herbert Demel as chief executive of Fiat Auto, with Mr Demel leaving the company.Mr Demel, a car industry veteran, took the helm in November 2003 after being recruited by former Fiat chief executive Giuseppe Morchio.The chief executive of the Fiat conglomerate has taken day-to-day control of its struggling car business in an effort to turn it around.The car business has made an operating loss in five of the last six years and was forced to push back its break-even target from 2005 to 2006.Sales are expected to fall in 2005, Fiat said this week, as it exits unprofitable areas such as the rental car market.Fiat underperformed the market in Europe last year, seeing flat sales.GM will pay Fiat $2bn as part of the settlement. |
business | Burren awarded Egyptian contracts..British energy firm Burren Energy has been awarded two potentially lucrative oil exploration contracts in Egypt...The company successfully bid for the two contracts, granted by government owned oil firms, covering onshore and offshore areas in the Gulf of Suez. Burren Energy already has a presence in Egypt, having been awarded an exploration contract last year. The firm, which floated in 2003, recently announced a deal to buy 26% of Indian firm Hindustan Oil Exploration. The £13.8m deal gives Burren Energy access to the Indian oil and gas industry. This latest contract expands Burren Energy's global exploration and production portfolio - it also holds contracts in Turkmenistan and the Republic of Congo. "These assets significantly increase our exploration portfolio in Egypt and we continue to investigate further opportunities in this region," said chief executive Finian O'Sullivan. | British energy firm Burren Energy has been awarded two potentially lucrative oil exploration contracts in Egypt.Burren Energy already has a presence in Egypt, having been awarded an exploration contract last year.The £13.8m deal gives Burren Energy access to the Indian oil and gas industry. |
business | S&N extends Indian beer venture..The UK's biggest brewer, Scottish and Newcastle (S&N), is to buy 37.5% of India's United Breweries in a deal worth 4.66bn rupees ($106m:£54.6m)...S&N will buy a 17.5% equity stake in United, maker of the well-known Kingfisher lager brand, and make a public offer to buy another 20% stake. A similar holding will be controlled by Vijay Mallya, chair of the Indian firm. The deal was a "natural development" of its joint venture with United, said Tony Froggatt, S&N's chief executive...Its top brands include Newcastle Brown Ale, Foster's, John Smith's, Strongbow and Kronenbourg. In 2002 S&N and United agreed to form a strategic partnership, one that would include a joint venture business and a UK investment in the Indian brewer. The joint venture was established in May 2003. with both parties having a 40% stake in the venture - Millennium Alcobev. Millennium Alcobev will now be merged with United, which expects post-merger to have about half of India's beer market...India, with a population of more than one billion, consumes about 1.2 billion bottles of beer every year. Kingfisher has market share of about 29%. In addition to the equity stake S&N is to invest 2.47bn rupees in United through non-convertible redeemable preference shares. Meanwhile, United's budget airline, Kingfisher Airlines, is to buy 10 A320 aircraft from Airbus and has the option to buy 20 more aircraft in a deal worth up to $1.8bn. The airline, the brainchild of Mr Mallya, expects to start its operations by the end of April. The new airline would break even in the very first year of operation, Mr Mallya said. | The UK's biggest brewer, Scottish and Newcastle (S&N), is to buy 37.5% of India's United Breweries in a deal worth 4.66bn rupees ($106m:£54.6m).S&N will buy a 17.5% equity stake in United, maker of the well-known Kingfisher lager brand, and make a public offer to buy another 20% stake.In 2002 S&N and United agreed to form a strategic partnership, one that would include a joint venture business and a UK investment in the Indian brewer.Millennium Alcobev will now be merged with United, which expects post-merger to have about half of India's beer market.In addition to the equity stake S&N is to invest 2.47bn rupees in United through non-convertible redeemable preference shares.Meanwhile, United's budget airline, Kingfisher Airlines, is to buy 10 A320 aircraft from Airbus and has the option to buy 20 more aircraft in a deal worth up to $1.8bn. |
business | US insurer Marsh cuts 2,500 jobs..Up to 2,500 jobs are to go at US insurance broker Marsh & McLennan in a shake up following bigger-than-expected losses...The insurer said the cuts were part of a cost-cutting drive, aimed at saving millions of dollars. Marsh posted a $676m (£352m) loss for the last three months of 2004, against a $375m (£195.3m) profit a year before. It blamed an $850m payout to settle a price-rigging lawsuit, brought by New York attorney general Elliot Spitzer. Under the settlement announced in January, Marsh took a pre-tax charge of $618m in the October-to-December quarter, on top of the $232m charge from the previous quarter. "Clearly 2004 was the most difficult year in MMC's financial history," Marsh chief executive Michael Cherkasky said...An ongoing restructuring drive at the group also led to a $337m hit in the fourth quarter, the world's biggest insurer said...Analysts expect its latest round of cuts to focus on its brokerage unit, which employs 40,000 staff. The latest layoffs will take the total number of jobs to go at the firm to 5,500 and are expected to lead to annual savings of more than $375m. As part of its efforts to cut costs, the company said it was halving its dividend payment to 17 cents a shares from 34 cents, a move which should enable it to save $360m. Looking ahead, Mr Cherkasky forecast profitable growth for the year ahead "with an operating margin in the upper-teens, and with the opportunity for further margin expansion". Meanwhile, the company also announced it would spin-off its MMC Capital private equity unit, which manages the $3bn Trident Funds operation, to a group of employees. Marsh did not say when the move would take place, but said it had signed a letter of intent...The insurer hit the headlines in October last year when it faced accusations of price rigging. New York Attorney General Elliot Spitzer sued the company, accusing it of receiving illegal payments to steer clients to selected firms as well as rigging bids and fixing prices. In January, Marsh agreed to pay $850m to settle the suit - a figure in line with the placement fees it collected in 2003 - and agreed to change its business practices. In February, a former senior executive pleaded guilty to criminal charges in a wide-ranging probe of fraud and bid-rigging in the insurance industry. In January, a former senior vice president also pleaded guilty to criminal charges related to the investigation. In an effort to reform its business practises, Marsh said it has already introduced new leadership, new compliance procedures and new ways of dealing with customers. "As a result, we are ready to put these matters behind us and move ahead in 2005 to restore the trust our clients have placed in us and to rebuild shareholder value," Mr Cherkasky said. | "Clearly 2004 was the most difficult year in MMC's financial history," Marsh chief executive Michael Cherkasky said.Marsh did not say when the move would take place, but said it had signed a letter of intent.An ongoing restructuring drive at the group also led to a $337m hit in the fourth quarter, the world's biggest insurer said.The insurer said the cuts were part of a cost-cutting drive, aimed at saving millions of dollars.In an effort to reform its business practises, Marsh said it has already introduced new leadership, new compliance procedures and new ways of dealing with customers.As part of its efforts to cut costs, the company said it was halving its dividend payment to 17 cents a shares from 34 cents, a move which should enable it to save $360m.Under the settlement announced in January, Marsh took a pre-tax charge of $618m in the October-to-December quarter, on top of the $232m charge from the previous quarter.Marsh posted a $676m (£352m) loss for the last three months of 2004, against a $375m (£195.3m) profit a year before. |
business | S Korean consumers spending again..South Korea looks set to sustain its revival thanks to renewed private consumption, its central bank says...The country's economy has suffered from an overhang of personal debt after its consumers' credit card spending spree. Card use fell sharply last year, but is now picking up again with a rise in spending of 14.8% year-on-year. "The economy is now heading upward rather than downward," said central bank governor Park Seung. "The worst seems to have passed." Mr Park's statement came as the bank decided to keep interest rates at an all-time low of 3.25%. It had cut rates in November to help revive the economy, but rising inflation - reaching 0.7% month-on-month in January - has stopped it from cutting further. Economic growth in 2004 was about 4.7%, with the central bank predicting 4% growth this year. Other indicators are also suggesting that the country is inching back towards economic health. Exports - traditionally the driver for expansion in Asian economies - grew slower in January than at any time in 17 months. But domestic demand seems to be taking up the slack. Consumer confidence has bounced back from a four-year low in January, and retail sales were up 2.1% in December. Credit card debt is falling, with only one in 13 of the 48 million cards now in default - down from one in eight at the end of 2003. One of its biggest card issuers, LG Card, was rescued from collapse in December, having almost imploded under the weight of its customers' bad debts. The government last year tightened the rules for card lending to keep the card glut under control. | The country's economy has suffered from an overhang of personal debt after its consumers' credit card spending spree.The government last year tightened the rules for card lending to keep the card glut under control.Credit card debt is falling, with only one in 13 of the 48 million cards now in default - down from one in eight at the end of 2003.One of its biggest card issuers, LG Card, was rescued from collapse in December, having almost imploded under the weight of its customers' bad debts.Economic growth in 2004 was about 4.7%, with the central bank predicting 4% growth this year.Card use fell sharply last year, but is now picking up again with a rise in spending of 14.8% year-on-year. |
business | Parmalat boasts doubled profits..Parmalat, the Italian food group at the centre of one of Europe's most painful corporate scandals, has reported a doubling in profit...Its pre-tax earnings in the fourth quarter were 77m euros (£53m; $100m), up from 38m in the same period of 2003. Less welcome was the news that the firm had been fined 11m euros for having violated takeover rules five years ago. The firm sought bankruptcy protection in December 2003 after disclosing a 4bn-euro hole in its accounts. Overall, the company's debt is close to 12bn euros, and is falling only slowly. Its brands, well-known in Italy and overseas, have continued to perform strongly, however, and have barely lost revenue since the scandal broke...But a crucial factor for the company's future is the legal unwinding of its intensely complex financial position. On Tuesday, the company's administrator, turnaround expert Enrico Bondi, sued Morgan Stanley, its former banker, to return 136m euros relating to a 2003 bond deal. That brought to 49 the number of banks that Mr Bondi has sued, a mass of legal action that could bring in as much as 3bn euros. The company has also sued former auditors and financial advisors for damages. And criminal cases against the company's former management are proceeding separately. | On Tuesday, the company's administrator, turnaround expert Enrico Bondi, sued Morgan Stanley, its former banker, to return 136m euros relating to a 2003 bond deal.The company has also sued former auditors and financial advisors for damages.That brought to 49 the number of banks that Mr Bondi has sued, a mass of legal action that could bring in as much as 3bn euros.And criminal cases against the company's former management are proceeding separately.Overall, the company's debt is close to 12bn euros, and is falling only slowly. |
business | LSE doubts boost bidders' shares..Shares in Deutsche Boerse have risen more than 3% after a shareholder fund voiced opposition to the firm's planned takeover of the London Stock Exchange...TCI, which claims to represent owners of 5% of Deutsche Boerse's (DB) shares, has complained that the £1.35bn ($2.5bn) offer for the LSE is too high. Opposition from TCI has fuelled speculation that the proposed takeover could fail. Rival exchange operator Euronext has also said it may bid for the LSE. Euronext operates the Paris, Amsterdam, Brussels and Lisbon bourses, while Deutsche Boerse runs the Frankfurt exchange...BBC News spoke to a number of analysts on Monday morning about shareholder worries over Deutsche Boerse's bid for LSE. Although none were prepared to speak on the record, most thought it was unlikely that TCI's opposition would halt the deal.."Obviously we'll have to wait and see, but I don't think it will make much difference. Deutsche Boerse appears very committed," said one London-based broker. He forecast the takeover bid would succeed and was more concerned to see improvements in the daily running of the LSE. In voicing its opposition to the planned takeover, TCI said it would prefer to see Deutsche Boerse return $500m (£350m) to shareholders. The Deutsche Boerse was prepared to pay for the LSE "exceeds the potential benefits of this acquisition", said TCI...Another Deutsche Boerse shareholder on Monday also appeared to back TCI's call. Another investor in Deutsche Boerse has supported the view that a payout to shareholders would be preferable to Deutsche Boerse overpaying for the LSE, Reuters news agency reported. "We prefer a sensible entrepreneurial solution at a price that is not too high," said Rolf Dress, a spokesman for Union Investment. "If that cannot be achieved, then we would wish for a distribution of liquid assets to shareholders." The Financial Times also reported a third Deutsche Boerse shareholder as opposed to the deal. It quoted a spokesman for US-based hedge fund Atticus Capital complaining that the planned takeover appeared to be motivated by "empire-building" rather than the best interests of shareholders...TCI has called for Deutsche Boerse to hold an emergency general meeting to discuss the bid for LSE. Yet under German business law, DB does not have to gain shareholder approval before making a significant acquisition. Deutsche Boerse said TCI's opposition would not change its bid approach. "Deutsche Boerse is convinced that its contemplated cash acquisition of the London Stock Exchange is in the best interests of its shareholders and the company," it said. DB's shares were up 3.4% to 45.25 euros by 1030 GMT, the highest gainer in Frankfurt. | In voicing its opposition to the planned takeover, TCI said it would prefer to see Deutsche Boerse return $500m (£350m) to shareholders.Deutsche Boerse said TCI's opposition would not change its bid approach.Another investor in Deutsche Boerse has supported the view that a payout to shareholders would be preferable to Deutsche Boerse overpaying for the LSE, Reuters news agency reported.The Deutsche Boerse was prepared to pay for the LSE "exceeds the potential benefits of this acquisition", said TCI.Shares in Deutsche Boerse have risen more than 3% after a shareholder fund voiced opposition to the firm's planned takeover of the London Stock Exchange."Deutsche Boerse is convinced that its contemplated cash acquisition of the London Stock Exchange is in the best interests of its shareholders and the company," it said.TCI has called for Deutsche Boerse to hold an emergency general meeting to discuss the bid for LSE.Another Deutsche Boerse shareholder on Monday also appeared to back TCI's call.The Financial Times also reported a third Deutsche Boerse shareholder as opposed to the deal. |
business | Low-cost airlines hit Eurotunnel..Channel Tunnel operator Eurotunnel has seen sales fall in the face of the upsurge in European low-cost airlines...The firm said sales were down 4% in 2004 to 789m euros ($1.03bn; £548m). "The impact of the development of no-frills airlines is being felt ever more strongly," said chief executive Jean-Louis Raymond. Income from its vehicle-carrying shuttle services fell 7%, although 15% more passengers meant a 2% rise in railway revenue...The cross-Channel truck market is improving, Eurotunnel said, but warned that it was not benefiting since much of the traffic was in containers destined for ports. The passenger-only trains which use the tunnel are run by a separate company, Eurostar...Eurotunnel is still struggling with debts of more than 6bn euros. The company is currently kept afloat by the 200-plus banks to whom it owes the money. A shareholder revolt threw out the old board in 2004. But the BBC's business editor, Jeff Randall, said the banks could yet step in and take over altogether. "At the moment it can't even service the interest on its debt," he said. "This is a company in the departure lounge of life." | The firm said sales were down 4% in 2004 to 789m euros ($1.03bn; £548m)."At the moment it can't even service the interest on its debt," he said.Eurotunnel is still struggling with debts of more than 6bn euros.But the BBC's business editor, Jeff Randall, said the banks could yet step in and take over altogether.The cross-Channel truck market is improving, Eurotunnel said, but warned that it was not benefiting since much of the traffic was in containers destined for ports. |
business | Dollar gains on Greenspan speech..The dollar has hit its highest level against the euro in almost three months after the Federal Reserve head said the US trade deficit is set to stabilise...And Alan Greenspan highlighted the US government's willingness to curb spending and rising household savings as factors which may help to reduce it. In late trading in New York, the dollar reached $1.2871 against the euro, from $1.2974 on Thursday. Market concerns about the deficit has hit the greenback in recent months. On Friday, Federal Reserve chairman Mr Greenspan's speech in London ahead of the meeting of G7 finance ministers sent the dollar higher after it had earlier tumbled on the back of worse-than-expected US jobs data. "I think the chairman's taking a much more sanguine view on the current account deficit than he's taken for some time," said Robert Sinche, head of currency strategy at Bank of America in New York. "He's taking a longer-term view, laying out a set of conditions under which the current account deficit can improve this year and next."..Worries about the deficit concerns about China do, however, remain. China's currency remains pegged to the dollar and the US currency's sharp falls in recent months have therefore made Chinese export prices highly competitive. But calls for a shift in Beijing's policy have fallen on deaf ears, despite recent comments in a major Chinese newspaper that the "time is ripe" for a loosening of the peg. The G7 meeting is thought unlikely to produce any meaningful movement in Chinese policy. In the meantime, the US Federal Reserve's decision on 2 February to boost interest rates by a quarter of a point - the sixth such move in as many months - has opened up a differential with European rates. The half-point window, some believe, could be enough to keep US assets looking more attractive, and could help prop up the dollar. The recent falls have partly been the result of big budget deficits, as well as the US's yawning current account gap, both of which need to be funded by the buying of US bonds and assets by foreign firms and governments. The White House will announce its budget on Monday, and many commentators believe the deficit will remain at close to half a trillion dollars. | The dollar has hit its highest level against the euro in almost three months after the Federal Reserve head said the US trade deficit is set to stabilise.China's currency remains pegged to the dollar and the US currency's sharp falls in recent months have therefore made Chinese export prices highly competitive.Market concerns about the deficit has hit the greenback in recent months."I think the chairman's taking a much more sanguine view on the current account deficit than he's taken for some time," said Robert Sinche, head of currency strategy at Bank of America in New York.The recent falls have partly been the result of big budget deficits, as well as the US's yawning current account gap, both of which need to be funded by the buying of US bonds and assets by foreign firms and governments."He's taking a longer-term view, laying out a set of conditions under which the current account deficit can improve this year and next." |
business | US manufacturing expands..US industrial production increased in December, according to the latest survey from the Institute for Supply Management (ISM)...Its index of national manufacturing activity rose to 58.6 last month from 57.8 in November. A reading above 50 indicates a level of growth. The result for December was slightly better than analysts' expectations and the 19th consecutive expansion. The ISM said the growth was driven by a "significant" rise in the new orders. "This completes a strong year for manufacturing based on the ISM data," said chairman of the ISM's survey committee. "While there is continuing upward pressure on prices, the rate of increase is slowing and definitely trending in the right direction."..The ISM's index of national manufacturing activity is compiled from monthly responses of purchasing executives at more than 400 industrial companies, ranging from textiles to chemicals to paper, and has now been above 50 since June 2003. Analysts expected December's figure to come in at 58.1. The ISM manufacturing index's main sister survey - the employment index - eased to 52.7 in December from 57.6 in November, while its "prices paid" index, measuring the cost to businesses of their inputs, also eased to 72.0 from 74.0. The ISM's "new orders" index rose to 67.4 from 61.5. | The ISM manufacturing index's main sister survey - the employment index - eased to 52.7 in December from 57.6 in November, while its "prices paid" index, measuring the cost to businesses of their inputs, also eased to 72.0 from 74.0.The ISM's "new orders" index rose to 67.4 from 61.5.The ISM said the growth was driven by a "significant" rise in the new orders.Its index of national manufacturing activity rose to 58.6 last month from 57.8 in November."This completes a strong year for manufacturing based on the ISM data," said chairman of the ISM's survey committee. |
business | Boeing unveils new 777 aircraft..US aircraft firm Boeing has unveiled its new long-distance 777 plane, as it tries to regain its position as the industry's leading manufacturer...The 777-200LR will be capable of flying almost 11,000 miles non-stop, linking cities such as London and Sydney. Boeing, in contrast to European rival Airbus, hopes airlines will want to fly smaller aircraft over longer distances. Airbus, which overtook Boeing as the number one civilian planemaker in 2003, is focusing on so-called super jumbos...Analysts are divided over which approach is best and say that this latest tussle between Boeing and Airbus may prove to be a defining moment for the airline industry. Boeing plans to offer twin-engine planes that are able to fly direct to many of the world's airports, getting rid of the need for connecting flights...It is banking on smaller, slimmer planes such as the 777-200LR and its much-anticipated 787 Dreamliner plane, which is set to take to the skies in 2008. The 777-200LR, which had its launch delayed by the 11 September attacks in the US, is the fifth variation of Boeing's twin-aisle 777 plane. The company offically "rolled-out" the new 777 in Seattle at 2200 GMT. Better fuel efficiency from engines made by GE and lighter materials mean that the plane can connect almost any two cities worldwide..."Boeing has the latest variant in a very successful line of airplanes and there is no doubt it will continue to be very successful," said David Learmount, operations and safety editor at industry magazine Flight International. But the 777-200LR "is a niche player", Mr Learmount continued, adding that reach was not the only criteria airlines used when picking their aircraft. Mr Learmount pointed out that the 777-200LR has been on the market for a couple of years and only had limited success at attracting orders. He also said that while the plane may be able to fly to Sydney from London in one hit, prevailing winds meant that it would have to stop somewhere on the return journey...For Airbus, the future is big - it is pinning its hopes on planes that can carry as many as 840 people between large hub airports. From there, passengers would be ferried to their final destinations by smaller planes. Airbus is also keeping its options open and plans to compete in all the main categories of aircraft. It has been producing a rival to Boeing's 777 line for more than a year. "Airbus is now where Boeing was a few years ago" with its product range, said Flight International's Mr Learmount...Both Boeing and Airbus have been taking orders for their new planes. Boeing said it expected to sell about 500 of its 777-200LR planes over the next 20 years. It already has orders from Pakistan International Airlines and EVA of Taiwan. These orders should help underpin the company's profits. Boeing said earnings during the last three months of 2004 dropped by 84% because of costs relating to stopping production of its smallest airliner, the 717, and the cancellation of a US air force 767 tanker contract. Net profit was $186m (£98m; 143m euros) in the quarter, compared with $1.13bn in the same period in 2003. | Both Boeing and Airbus have been taking orders for their new planes.Boeing said it expected to sell about 500 of its 777-200LR planes over the next 20 years."Airbus is now where Boeing was a few years ago" with its product range, said Flight International's Mr Learmount.US aircraft firm Boeing has unveiled its new long-distance 777 plane, as it tries to regain its position as the industry's leading manufacturer.Boeing, in contrast to European rival Airbus, hopes airlines will want to fly smaller aircraft over longer distances.It is banking on smaller, slimmer planes such as the 777-200LR and its much-anticipated 787 Dreamliner plane, which is set to take to the skies in 2008."Boeing has the latest variant in a very successful line of airplanes and there is no doubt it will continue to be very successful," said David Learmount, operations and safety editor at industry magazine Flight International.Boeing plans to offer twin-engine planes that are able to fly direct to many of the world's airports, getting rid of the need for connecting flights.He also said that while the plane may be able to fly to Sydney from London in one hit, prevailing winds meant that it would have to stop somewhere on the return journey.Analysts are divided over which approach is best and say that this latest tussle between Boeing and Airbus may prove to be a defining moment for the airline industry. |
business | Feta cheese battle reaches court..A row over whether only Greece should be allowed to label its cheese feta has reached the European Court of Justice...The Danish and German governments are challenging a European Commission ruling which said Greece should have sole rights to use the name. The Commission's decision gave the same legal protection to feta as to Italian Parma ham and French Champagne. But critics of the judgement say feta is a generic term, with the cheese produced widely outside Greece...The Commission's controversial 2002 ruling gave "protected designation of origin" status to feta cheese made in Greece, effectively restricting the use of the feta name to producers there...From 2007 onwards, Greek firms will have the exclusive use of the feta label and producers elsewhere in Europe must find another name to describe their products. The German and Danish governments argue that feta does not relate to a specific geographical area and that their firms have been producing and exporting the cheese for years. "In our opinion it is a generic designation and we do not have any other name or term for this type of cheese," Hans Arne Kristiansen, a spokesman for the Danish Dairy Board, told the BBC. Denmark is Europe's second largest producer of feta after Greece - producing about 30,000 tonnes a year - and exports its products to Greece. It is concerned that the ruling could threaten the production of other cheeses in Denmark such as brie. "It would cost millions if we wanted to introduce a new designation," Mr Kristiansen said. "That is just one of the costs."..The case will also have a major impact on Britain's sole feta producer, Yorkshire company Shepherds Purse Cheeses...Judy Bell, the company's founder, said it would cost a huge amount to rebrand its product. "If we lose we will have to go through a massive re-merchandising process and reorganisation," she said. "We have never tried to pull the wool over anyone's eyes - it's very clear from the label that it's Yorkshire feta." The original decision was a victory for Greece, where feta cheese is believed to have been produced for about 6,000 years. Feta is a soft white cheese made from sheep or goat's milk, and is an essential ingredient in Greek cuisine. Greece makes 115,000 tonnes, mainly for domestic consumption. The Court is expected to reach a verdict in the case in the autumn. | The Commission's controversial 2002 ruling gave "protected designation of origin" status to feta cheese made in Greece, effectively restricting the use of the feta name to producers there.A row over whether only Greece should be allowed to label its cheese feta has reached the European Court of Justice.The original decision was a victory for Greece, where feta cheese is believed to have been produced for about 6,000 years.But critics of the judgement say feta is a generic term, with the cheese produced widely outside Greece.Denmark is Europe's second largest producer of feta after Greece - producing about 30,000 tonnes a year - and exports its products to Greece.The Danish and German governments are challenging a European Commission ruling which said Greece should have sole rights to use the name.The German and Danish governments argue that feta does not relate to a specific geographical area and that their firms have been producing and exporting the cheese for years.Feta is a soft white cheese made from sheep or goat's milk, and is an essential ingredient in Greek cuisine. |
business | US company admits Benin bribery..A US defence and telecommunications company has agreed to pay $28.5m after admitting bribery in the West African state of Benin...The Titan corporation was accused of funnelling more than $2m into the 2001 re-election campaign of President Mathieu Kerekou. At the time, Titan was trying to get a higher price for a telecommunications project in Benin. There is no suggestion that Mr Kerekou was himself aware of any wrongdoing. Titan, a California-based company, pleaded guilty to falsifying its accounts and violating US anti-bribery laws. It agreed to pay $13m in criminal penalties, as well as $15.5m to settle a civil lawsuit brought by the US financial watchdog, the Securities and Exchange Commission (SEC)...The SEC had accused Titan of illegally paying $2.1m to an unnamed agent in Benin claiming ties with President Kerekou. Some of the money was used to pay for T-shirts with campaign slogans on them ahead of the 2001 election. Shortly after the poll, which Mr Kerekou won, Benin officials agreed to quadruple Titan's management fee. Prosecuting attorney Carol Lam said: "All US companies should take note that attempting to bribe foreign officials is criminal conduct and will be appropriately prosecuted." The company says it no longer tolerates such practices. Under the US Foreign Corrupt Practices Act, it is a crime for American firms to bribe foreign officials. | A US defence and telecommunications company has agreed to pay $28.5m after admitting bribery in the West African state of Benin.The Titan corporation was accused of funnelling more than $2m into the 2001 re-election campaign of President Mathieu Kerekou.The SEC had accused Titan of illegally paying $2.1m to an unnamed agent in Benin claiming ties with President Kerekou.At the time, Titan was trying to get a higher price for a telecommunications project in Benin.Titan, a California-based company, pleaded guilty to falsifying its accounts and violating US anti-bribery laws. |
business | Glazer makes new Man Utd approach..Malcolm Glazer has made a fresh approach to buy Manchester United, which could lead to a bid valuing the Premiership club at £800m...The US tycoon, who has been wooing the club for the last 12 months, has approached the United board with "detailed proposals", it has confirmed. Mr Glazer, who owns the Tampa Bay Buccaneers team, hopes this will lead to a formal bid being accepted. His new offer is expected to contain substantially less debt. Mr Glazer has already had one takeover attempt turned down by the Red Devils and responded by using his 28.1% shareholding to vote off three board members last November...Man United had turned down the bid because it was based on a high level of borrowing. But newspapers have speculated recently that the tycoon had gained the support of leading banks to come up with a stronger and less debt-laden bid. Last week, however, Mr Glazer issued a statement to the Stock Exchange distancing himself from a new bid...Meanwhile, United's chief executive David Gill said in December that talks would not resume unless Glazer came up with "definitive proposals". Now the board has confirmed that the US bidder is back, with a statement issued on Sunday reading: "The board can confirm it has now received a detailed proposal subject to various preconditions which may form the basis of an offer. "A further announcement will be made in due course."..To succeed Malcolm Glazer will still need the approval of major shareholders John Magnier and JP McManus, who own 28.9% of the club. But the Irish duo have cut off talks with Glazer over the proposed sale of their stake and have so far made no comment on his latest approach. United fans have reacted with anger at the announcement. They have vehemently opposed any proposed takeover by Glazer since he first showed interest in the club in September 2003 and after Sunday's announcement they vowed to fight on. "We will fight tooth and nail to stop him whatever his offer says. We do not want him or anybody else taking over United," said Mark Longden of the Independent Manchester United Supporters' Association. "The campaign against this proposed takeover will continue as it has done since Glazer first showed interest in the club." | Malcolm Glazer has made a fresh approach to buy Manchester United, which could lead to a bid valuing the Premiership club at £800m."The campaign against this proposed takeover will continue as it has done since Glazer first showed interest in the club."The US tycoon, who has been wooing the club for the last 12 months, has approached the United board with "detailed proposals", it has confirmed.They have vehemently opposed any proposed takeover by Glazer since he first showed interest in the club in September 2003 and after Sunday's announcement they vowed to fight on.Last week, however, Mr Glazer issued a statement to the Stock Exchange distancing himself from a new bid.Mr Glazer has already had one takeover attempt turned down by the Red Devils and responded by using his 28.1% shareholding to vote off three board members last November.Mr Glazer, who owns the Tampa Bay Buccaneers team, hopes this will lead to a formal bid being accepted.Now the board has confirmed that the US bidder is back, with a statement issued on Sunday reading: "The board can confirm it has now received a detailed proposal subject to various preconditions which may form the basis of an offer. |
business | Train strike grips Buenos Aires..A strike on the Buenos Aires underground has caused traffic chaos and large queues at bus stops in the Argentine capital...Tube workers walked out last week demanding a 53% pay rise and in protest against the installation of automatic ticket machines. Metrovias, the private firm which runs the five tube lines in the city, has offered an 8% increase in wages. The firm promised no jobs would be lost as a result of new ticket machines. It said it would put this commitment on paper...Underground staff have warned they will continue with the protests until the management put an acceptable offer on the table. The Argentine Work Ministry has been mediating in the conflict and it could call an "obligatory conciliation", which would force both sides to find a solution and put an end to the conflict. Some tube commuters have not hidden their frustration at the ongoing strike and have broken the windows of the underground trains, according to the local press. "We are taken as hostages. I don't know who is right, but the harm ones are us," said accountant Jose Lopez. | It said it would put this commitment on paper.The Argentine Work Ministry has been mediating in the conflict and it could call an "obligatory conciliation", which would force both sides to find a solution and put an end to the conflict.The firm promised no jobs would be lost as a result of new ticket machines.Underground staff have warned they will continue with the protests until the management put an acceptable offer on the table. |
business | Call to save manufacturing jobs..The Trades Union Congress (TUC) is calling on the government to stem job losses in manufacturing firms by reviewing the help it gives companies...The TUC said in its submission before the Budget that action is needed because of 105,000 jobs lost from the sector over the last year. It calls for better pensions, child care provision and decent wages. The 36-page submission also urges the government to examine support other European countries provide to industry. TUC General Secretary Brendan Barber called for "a commitment to policies that will make a real difference to the lives of working people.".."Greater investment in childcare strategies and the people delivering that childcare will increases the options available to working parents," he said. "A commitment to our public services and manufacturing sector ensures that we can continue to compete on a global level and deliver the frontline services that this country needs." He also called for "practical measures" to help pensioners, especially women who he said "are most likely to retire in poverty". The submission also calls for decent wages and training for people working in the manufacturing sector. | The submission also calls for decent wages and training for people working in the manufacturing sector.The TUC said in its submission before the Budget that action is needed because of 105,000 jobs lost from the sector over the last year.TUC General Secretary Brendan Barber called for "a commitment to policies that will make a real difference to the lives of working people."The Trades Union Congress (TUC) is calling on the government to stem job losses in manufacturing firms by reviewing the help it gives companies. |
business | US trade gap ballooned in October..The US trade deficit widened by more than expected in October, hitting record levels after higher oil prices raised import costs, figures have shown..The trade shortfall was $55.5bn (£29bn), up 9% from September, the Commerce Department said. That pushed the 10 month deficit to $500.5bn. Imports rose by 3.4%, while exports increased by only 0.6%. A weaker dollar also increased the cost of imports, though this should help drive export demand in coming months. "Things are getting worse, but that's to be expected," said David Wyss of Standard & Poor's in New York. "The first thing is that when the dollar goes down, it increases the price of imports. "We are seeing improved export orders. Things seem to be going in the right direction."..Despite this optimism, significant concerns remain as to how the US will fund its trade and budget deficits should they continue to widen. Another problem highlighted by analysts was the growing trade gap with China, which has been accused of keeping its currency artificially weak in order to boost exports. The US imported almost $20bn worth of goods from China during October, exporting a little under $3bn. "It seems the key worry that has existed in the currency market still remains," said Anthony Crescenzi, a bond strategist at Miller Tabak in New York. The trade deficit and the shortfall with China "are big issues going forward". The Commerce Department figures caused the dollar to weaken further despite widespread expectations that the Federal Reserve will raise interest rates for a fifth time this year. Borrowing costs are tipped to rise by a quarter of a percentage point to 2.25% at a Fed meeting later on Tuesday. | The US trade deficit widened by more than expected in October, hitting record levels after higher oil prices raised import costs, figures have shown The trade shortfall was $55.5bn (£29bn), up 9% from September, the Commerce Department said.A weaker dollar also increased the cost of imports, though this should help drive export demand in coming months.The trade deficit and the shortfall with China "are big issues going forward".Imports rose by 3.4%, while exports increased by only 0.6%.That pushed the 10 month deficit to $500.5bn.The US imported almost $20bn worth of goods from China during October, exporting a little under $3bn. |
business | Disaster claims 'less than $10bn'..Insurers have sought to calm fears that they face huge losses after an earthquake and giant waves killed at least 38,000 people in southern Asia...Munich Re and Swiss Re, the world's two biggest reinsurers, have said exposure will be less than for other disasters. Rebuilding costs are likely to be cheaper than in developed countries, and many of those affected will not have insurance, analysts said. Swiss Re has said total claims are likely to be less than $10bn (£5.17bn). Swiss Re believes that the cost would be substantial but that it is unlikely to be in double-digit billions, the Financial Times reported. Munich Re, the world's largest reinsurance company, said that its exposure is less than 100m euros (£70m; $136m)...At least 10 countries have been affected, with Sri Lanka, Indonesia, India and Thailand among the worst hit. The region's resorts and Western tourists are expected to be among the main claimants...Lloyds of London told the Financial Times it expected its exposure to be limited to "holiday resorts, personal accident, travel insurance and marine risks". A spokeswoman for Hanover Re, Europe's fifth-largest reinsurance firm, estimated tsunami-related damage claims would be in the low double-digit millions of euros. The company has paid out about 300 million euros (£281m; $400m) to cover damage caused recently by four major hurricanes in the US...But insurers have not had long to assess the economic impact of the damage and reports of more casualties and destruction are still coming through..."So many things are unclear, it is just too early to tell," said Serge Troeber, deputy head of Swiss Re's natural disasters department. "You need very complicated processes to estimate damages. Unlike the hurricanes, you can't just run a model." He anticipated that his own company's total claims would be less then those from the hurricanes, which the company put at $640m. Allianz, a leading German insurer, said it did not know yet what its exposure would be. However, it said the tidal waves were unlikely to have a "significant" impact on its business. Zurich Financial said they could not yet assess the cost of the disaster...The impact on US insurance companies is not expected to be heavy, analysts said...Most US insurers have relatively little exposure to Asia and those that do, pass on a lot of the risk to reinsurance companies or special catastrophe funds. Insured damage could be a fraction of the "billions of dollars worth of destruction in Sri Lanka, India, Thailand, Indonesia, the Maldive Islands and Malaysia," said Prudential Equity Group insurance analyst Jay Gelb. "US insurers are likely to have only minimal to no exposure. It's more likely the Bermuda-based reinsurance [companies] might have some exposure," said Paul Newsome, an insurance analyst at AG Edwards & Co...Many of the affected countries, such as Indonesia, Sri Lanka or the Maldives, do not usually buy insurance for these kinds of disasters, said a US-based insurance expert. Early estimates from the World Bank put the amount of aid needed for the worst affected countries including Sri Lanka, India, Indonesia and Thailand, at about $5bn (£2.6bn), similar to the cash offered to Central America after Hurricane Mitch...Mitch killed about 10,000 people and caused damage of about $10bn in 1998. But the cost of the tsunamis on the individuals involved is incalculable. "We cannot fathom the cost of these poor societies and the nameless fishermen and fishing villages ... that have just been wiped out. Hundreds of thousands of livelihoods have gone," said Jan Egeland, head of the UN Office for the Coordination of Humanitarian Affairs. Tourists cutting short their holidays in affected areas may suffer a financial impact too. The Association of British insurers warned that travel insurance does not normally cover cutting short a holiday. It said loss of possessions will usually be covered, but the Association stressed the importance of checking the wording of travel policies. | The impact on US insurance companies is not expected to be heavy, analysts said.Rebuilding costs are likely to be cheaper than in developed countries, and many of those affected will not have insurance, analysts said.Munich Re, the world's largest reinsurance company, said that its exposure is less than 100m euros (£70m; $136m).Swiss Re has said total claims are likely to be less than $10bn (£5.17bn).Many of the affected countries, such as Indonesia, Sri Lanka or the Maldives, do not usually buy insurance for these kinds of disasters, said a US-based insurance expert.Allianz, a leading German insurer, said it did not know yet what its exposure would be.It's more likely the Bermuda-based reinsurance [companies] might have some exposure," said Paul Newsome, an insurance analyst at AG Edwards & Co.Zurich Financial said they could not yet assess the cost of the disaster.Munich Re and Swiss Re, the world's two biggest reinsurers, have said exposure will be less than for other disasters.Insured damage could be a fraction of the "billions of dollars worth of destruction in Sri Lanka, India, Thailand, Indonesia, the Maldive Islands and Malaysia," said Prudential Equity Group insurance analyst Jay Gelb."US insurers are likely to have only minimal to no exposure.Early estimates from the World Bank put the amount of aid needed for the worst affected countries including Sri Lanka, India, Indonesia and Thailand, at about $5bn (£2.6bn), similar to the cash offered to Central America after Hurricane Mitch.However, it said the tidal waves were unlikely to have a "significant" impact on its business.Most US insurers have relatively little exposure to Asia and those that do, pass on a lot of the risk to reinsurance companies or special catastrophe funds. |
business | Reliance unit loses Anil Ambani..Anil Ambani, the younger of the two brothers in charge of India's largest private company, has resigned from running its petrochemicals subsidiary...The move is likely to be seen as the latest twist in a feud between Mr Ambani and his brother Mukesh. Anil, 45, has stepped down as director and vice-chairman of Indian Petrochemicals Corporation (IPC). The company was not available for comment. IPC is 46%-owned by Reliance Industries which in turn is run by Mukesh. Mukesh has spoken of ownership issues between the two brothers, who took over control of the Reliance empire following the death of their father in July, 2002...Reliance's operations have massive reach, covering textiles, telecommunications, petrochemicals, petroleum refining and marketing, as well as oil and gas exploration, insurance and financial services. The brothers' spat has hogged headlines in India during recent weeks, despite a denial from the family that there was anything wrong. Speculation has been rife about what has triggered the stand-off, with some observers blaming Anil's political ambitions, others the heavy investment by Mukesh and Reliance in a mobile phone venture. Shares of IPC dipped on the news in Mumbai, but recovered to trade almost 6% higher. Reliance shares added 1.7%, while Reliance Energy, headed by Anil, jumped 7%. | Anil, 45, has stepped down as director and vice-chairman of Indian Petrochemicals Corporation (IPC).Mukesh has spoken of ownership issues between the two brothers, who took over control of the Reliance empire following the death of their father in July, 2002.IPC is 46%-owned by Reliance Industries which in turn is run by Mukesh.Speculation has been rife about what has triggered the stand-off, with some observers blaming Anil's political ambitions, others the heavy investment by Mukesh and Reliance in a mobile phone venture.Anil Ambani, the younger of the two brothers in charge of India's largest private company, has resigned from running its petrochemicals subsidiary. |
business | Cash gives way to flexible friend..Spending on credit and debit cards has overtaken cash spending in the UK for the first time...The moment that plastic finally toppled cash happened at 10.38am on Wednesday, according to the Association for Payment Clearing Services (Apacs) Apacs chose school teacher Helen Carroll, from Portsmouth, to make the historic transaction. The switch over took place as she paid for her groceries in the supermarket chain Tesco's Cromwell Road branch...Mrs Carroll was born in the same year that plastic cards first appeared in the UK. "I pay for most things with my debit card, with occasional purchases on one of my credit cards," said Mrs Carroll, who teaches at Peel Common Infants School in Gosport...Spending patterns for the year and estimates for December led Apacs to conclude that 10.38am was the time that plastic would finally rule the roost. Shoppers in the UK are expected to put £269bn on plastic cards during the whole of 2004, compared with £268bn paid with cash, Apacs said. When the first plastic cards appeared in the UK in June 1966, issued by Barclaycard, but only a handful of retailers accepted them and very few customers held them. "But in less than 40 years, plastic has become our most popular way to pay, due to the added security and flexibility it offers," said Apacs spokeswoman Jemma Smith. "The key driver has been the introduction of debit cards, which now account for two-thirds of plastic card transactions and are used by millions of us every day." | Mrs Carroll was born in the same year that plastic cards first appeared in the UK.Shoppers in the UK are expected to put £269bn on plastic cards during the whole of 2004, compared with £268bn paid with cash, Apacs said.Spending on credit and debit cards has overtaken cash spending in the UK for the first time.When the first plastic cards appeared in the UK in June 1966, issued by Barclaycard, but only a handful of retailers accepted them and very few customers held them. |
business | China continues rapid growth..China's economy has expanded by a breakneck 9.5% during 2004, faster than predicted and well above 2003's 9.1%...The news may mean more limits on investment and lending as Beijing tries to take the economy off the boil. China has sucked in raw materials and energy to feed its expansion, which could have knock-on effects on the rest of the world if it overheats. But officials pointed out that industrial growth had slowed, with services providing much of the impetus. Growth in industrial output - the main target of government efforts to impose curbs on credit and investments - was 11.5% in 2004, down from 17% the previous year...Still, consumer prices - at 2.4% - rose faster than in 2004, adding to concern that a sharp rise in producer prices of 7.1% could stoke inflation. And overall investment in fixed assets was still high, up 21.3% from the previous year - although some way off the peak of 43% seen in the first quarter of 2004. The result could be higher interest rates. China raised rates by 0.27 percentage points to 5.8% - its first hike in nine years - in October 2004...Despite the apparent rebalancing of the economy the overall growth picture remains strong, economists said. "There is no sign of a slowdown in 2005," said Tim Congdon, economist at ING Barings...China's economy is not only gathering speed thanks to domestic demand, but also from soaring sales overseas. Figures released earlier this year showed exports at a six-year high in 2004, up 35%. Part of the impetus comes from the relative cheapness of the yuan, China's currency. The government keeps it pegged close to a rate of 8.28 to the US dollar, - much to the chagrin of many US lawmakers who blame China for lost jobs and competitiveness. Despite urging to ease the peg, officials insist they are a long way from ready to make a shift to a more market-set rate. "We need a good and feasible plan and formulating such a plan also needs time," National Bureau of Statistics chief Li Deshui told Reuters. "Those who hope to make a fortune by speculating on a renminbi revaluation will not succeed in making a profit." | And overall investment in fixed assets was still high, up 21.3% from the previous year - although some way off the peak of 43% seen in the first quarter of 2004.Despite the apparent rebalancing of the economy the overall growth picture remains strong, economists said.Growth in industrial output - the main target of government efforts to impose curbs on credit and investments - was 11.5% in 2004, down from 17% the previous year.China's economy has expanded by a breakneck 9.5% during 2004, faster than predicted and well above 2003's 9.1%.China raised rates by 0.27 percentage points to 5.8% - its first hike in nine years - in October 2004.China's economy is not only gathering speed thanks to domestic demand, but also from soaring sales overseas.But officials pointed out that industrial growth had slowed, with services providing much of the impetus.Despite urging to ease the peg, officials insist they are a long way from ready to make a shift to a more market-set rate. |
business | Oil companies get Russian setback..International oil and mining companies have reacted cautiously to Russia's decision to bar foreign firms from natural resource tenders in 2005...US oil giant Exxon said it did not plan to take part in a new tender on a project for which it had previously signed a preliminary agreement. Miner Highland Gold said it regretted any limit on privatisation while BP, a big investor, declined to comment. Only firms at least 51% Russian-owned will be permitted to bid...The Federal Natural Resources Agency said "the government is interested in letting Russian companies develop strategic resources". The foreign ownership issue will be dealt with according to Russia's competition law, natural resources minister Yuri Trutnev was quoted as saying by the Interfax news agency. No further details were given, with Mr Trutnev suggesting that Russia may decide on a case-by-case basis. Observers said that the move may represent a shift in policy, as the administration of Vladimir Putin puts the protection of national interests above free market dynamics. Russia recently wrested back control of a large chunk of its oil industry from stock-market listed company Yukos, a move that prompted calls of outrage from many investors...Analysts warned that it was still too early to draw too many conclusions from this new set of proposals...Companies echoed this sentiment, saying that they would require more information before ringing the alarm bells. "It's not good. But it is very understandable," said Al Breach, an economist at UBS Brunswick. "But if the investment climate is stable - that's much more important. "Foreigners of course would like to have free entry but... this is not the end of the world." A number of other nations, including Mexico, Saudi Arabia and Kuwait, protect their national resources from foreign firms. What has surprised observers is that since the collapse of communism Russia has been courting foreign investment...BP spent $7.5bn to create Russian-registered oil company TNK-BP, and has a partnership to develop the Sakhalin 5 petroleum field with state-owned Rosneft. Exxon, the world's largest oil company, has signed preliminary agreements to develop the Sakhalin 3 field. Company spokesman Glenn Waller said Exxon still considered the deal valid, despite Russia inviting new offers for the land block. According to Mr Waller, Exxon "were not planning to bid at a new tender anyway". "We regret the ministry has taken such a decision," said Ivan Kulakov, deputy chairman of Highland Gold - a mining firm that has the motto "Bringing Russia's Gold to Market". "It would be a shame if that has a negative impact on the investment climate." Other firms that have been linked with investment in Russia include France's Total, the US-based ChevronTexaco, and miner Barrick Gold. | Exxon, the world's largest oil company, has signed preliminary agreements to develop the Sakhalin 3 field.International oil and mining companies have reacted cautiously to Russia's decision to bar foreign firms from natural resource tenders in 2005."We regret the ministry has taken such a decision," said Ivan Kulakov, deputy chairman of Highland Gold - a mining firm that has the motto "Bringing Russia's Gold to Market".Company spokesman Glenn Waller said Exxon still considered the deal valid, despite Russia inviting new offers for the land block.What has surprised observers is that since the collapse of communism Russia has been courting foreign investment."It would be a shame if that has a negative impact on the investment climate."US oil giant Exxon said it did not plan to take part in a new tender on a project for which it had previously signed a preliminary agreement.BP spent $7.5bn to create Russian-registered oil company TNK-BP, and has a partnership to develop the Sakhalin 5 petroleum field with state-owned Rosneft.Other firms that have been linked with investment in Russia include France's Total, the US-based ChevronTexaco, and miner Barrick Gold.According to Mr Waller, Exxon "were not planning to bid at a new tender anyway". |
business | India's rupee hits five-year high..India's rupee has hit a five-year high after Standard & Poor's (S&P) raised the country's foreign currency rating...The rupee climbed to 43.305 per US dollar on Thursday, up from a close of 43.41. The currency has gained almost 1% in the past three sessions. S&P, which rates borrowers' creditworthiness, lifted India's rating by one notch to 'BB+'. With Indian assets now seen as less of a gamble, more cash is expected to flow into its markets, buoying the rupee..."The upgrade is positive and basically people will use it as an excuse to come back to India," said Bhanu Baweja, a strategist at UBS. "Money has moved out from India in the first two or three weeks of January into other markets like Korea and Thailand and this upgrade should lead to a reversal." India's foreign currency rating is now one notch below investment grade, which starts at 'BBB-'. The increase has put it on the same level as Romania, Egypt and El Salvador, and one level below Russia. | India's rupee has hit a five-year high after Standard & Poor's (S&P) raised the country's foreign currency rating.India's foreign currency rating is now one notch below investment grade, which starts at 'BBB-'.S&P, which rates borrowers' creditworthiness, lifted India's rating by one notch to 'BB+'.The currency has gained almost 1% in the past three sessions. |
business | Ryanair in $4bn Boeing plane deal..Budget airline Ryanair has placed an order for 70 Boeing 737-800 planes, in a deal valued at $4bn (£2.1bn) which should lead to 2,500 new Ryanair jobs...It also has an option for a further 70 aircraft, a move which brings the Ryanair/Boeing order book up to 225 firm orders and options on 193 more. Ryanair said the new planes would help it to cut operating costs further. The carrier reported a drop in quarterly profit earlier this year after it was hit by higher fuel costs. However, when it reported the results, the airline was upbeat about prospects for 2005, despite tough competition in the budget airline market...Ryanair chairman David Bonderman said that the 737-800 had "significantly reduced our unit operating costs and allowed us to reduce air fares each year for the last five years"..."With this new order and new pricing in place, Ryanair expects that unit operating costs (excluding fuel) will continue to fall each year for the next five years," he added. At the end of this year, Ryanair will have taken delivery of about 100 new planes, while the 70 new orders are due for delivery between 2008 and 2012. The airline said that when all these planes have been delivered, it will be able to carry more than 70 million passengers a year, making it Europe's largest airline. About 2,500 new jobs should be created in the next seven years, it added. The order can be seen as good news for Boeing, which in recent years has been overtaken by European plane maker Airbus as the world's biggest-selling plane maker. | "With this new order and new pricing in place, Ryanair expects that unit operating costs (excluding fuel) will continue to fall each year for the next five years," he added.At the end of this year, Ryanair will have taken delivery of about 100 new planes, while the 70 new orders are due for delivery between 2008 and 2012.Budget airline Ryanair has placed an order for 70 Boeing 737-800 planes, in a deal valued at $4bn (£2.1bn) which should lead to 2,500 new Ryanair jobs.Ryanair said the new planes would help it to cut operating costs further.Ryanair chairman David Bonderman said that the 737-800 had "significantly reduced our unit operating costs and allowed us to reduce air fares each year for the last five years". |
business | ID theft surge hits US consumers..Almost a quarter of a million US consumers complained of being targeted for identity theft in 2004, official figures suggest...The Federal Trade Commission said two in five of the 635,173 reports it had from consumers concerned ID fraud. ID theft occurs when criminals use someone else's personal information to steal credit or commit other crimes. Internet auctions were the second biggest source of fraud complaints, comprising 16% of the total. The total cost of fraud reported by consumers was $546m (£290m)...The report marks the fifth year in a row in which identity fraud has topped the table. The biggest slice of the 246,570 ID fraud cases reported - almost 30% - concerned abuses of people's credit. Misusing someone's identity to claim new credit cards or loans comprised 16.5% of the total, with almost 12% coming from false claims on existing credit. Another 18% came from attempts to rip off people's bank accounts, while 13% of cases concerned attempts to defraud employers by abusing someone else's identity. Outside the field of ID theft, 53% of the near-400,000 complaints were internet-related. Among the 100,000 internet auction complaints, the failure of sellers to deliver or the supply of sub-standard goods were the most common woes reported. Catalogue and home-shopping frauds were next in line, accounting for 8% of total complaints, while concerns about internet services and computers - including spyware found on people's PCs and undisclosed charges for websites - amounted to 6% of complaints. | The biggest slice of the 246,570 ID fraud cases reported - almost 30% - concerned abuses of people's credit.The total cost of fraud reported by consumers was $546m (£290m).Internet auctions were the second biggest source of fraud complaints, comprising 16% of the total.The Federal Trade Commission said two in five of the 635,173 reports it had from consumers concerned ID fraud.Catalogue and home-shopping frauds were next in line, accounting for 8% of total complaints, while concerns about internet services and computers - including spyware found on people's PCs and undisclosed charges for websites - amounted to 6% of complaints. |
business | FBI agent colludes with analyst..A former FBI agent and an internet stock picker have been found guilty of using confidential US government information to manipulate stock prices...A New York court ruled that former FBI man Jeffrey Royer, 41, fed damaging information to Anthony Elgindy, 36. Mr Elgindy then drove share prices lower by spreading negative publicity via his newsletter. The Egyptian-born analyst would extort money from his targets in return for stopping the attacks, prosecutors said. "Under the guise of protecting investors from fraud, Royer and Elgindy used the FBI's crime-fighting tools and resources actually to defraud the public," said US Attorney Roslynn Mauskopf...Mr Royer was convicted of racketeering, securities fraud, obstruction of justice and witness tampering. Mr Elgindy was convicted of racketeering, securities fraud and extortion...The charges carry sentences of up to 20 years. When the guilty verdict was announced by the jury foreman, Mr Elgindy dropped his face into his hands and sobbed, the Associated Press news agency reported. He was led weeping from the court room by US marshals, AP said. Defense lawyers contended that Mr Royer had been feeding information to Mr Elgindy and another trader in an attempt to expose corporate fraud. Mr Elgindy's team claimed that he also was fighting against corporate wrongdoing. "Elgindy's conviction marks the end of his public charade as a crusader against fraud in the market," said Ms Mauskopf. One of the more bizarre aspects of the trial focused on the claims that Mr Elgindy may have had foreknowledge of the 11 September terrorist attacks in New York and Washington. Mr Elgindy had been trying to sell stock prior to the attack and had predicted a slump in the market. No charges were brought in relation to these allegations. | Mr Elgindy was convicted of racketeering, securities fraud and extortion.Defense lawyers contended that Mr Royer had been feeding information to Mr Elgindy and another trader in an attempt to expose corporate fraud.Mr Royer was convicted of racketeering, securities fraud, obstruction of justice and witness tampering.Mr Elgindy had been trying to sell stock prior to the attack and had predicted a slump in the market."Under the guise of protecting investors from fraud, Royer and Elgindy used the FBI's crime-fighting tools and resources actually to defraud the public," said US Attorney Roslynn Mauskopf.When the guilty verdict was announced by the jury foreman, Mr Elgindy dropped his face into his hands and sobbed, the Associated Press news agency reported.The charges carry sentences of up to 20 years. |
business | WorldCom trial starts in New York..The trial of Bernie Ebbers, former chief executive of bankrupt US phone company WorldCom, has started in New York with the selection of the jury...Mr Ebbers, 63, is accused of being the mastermind behind an $11bn (£6bn) accounting fraud that eventually saw the firm collapse in July 2002. His indictment includes charges of securities fraud, conspiracy and filing false reports with regulators. If found guilty, Mr Ebbers could face a substantial jail sentence. He has firmly declared his innocence...Under Mr Ebbers' leadership, WorldCom emerged from Mississippi obscurity to become a $160bn telecoms giant and the darling of late 1990s investors. Yet as competition intensified and the telecoms boom petered out, WorldCom found itself under growing financial stress. When WorldCom finally collapsed, shareholders lost about $180bn and 20,000 workers lost their jobs. Mr Ebbers' trial, which is expected to last two months, is the latest in a series of attempts by US prosecutors to pursue senior executives for fraud. It will coincide with the retrial of former Tyco International chief Dennis Kozlowski and his top lieutenant, accused of looting the industrial conglomerate to the tune of $600m. Trail preparations are also preparing for former executives of shamed US energy firm Enron. | The trial of Bernie Ebbers, former chief executive of bankrupt US phone company WorldCom, has started in New York with the selection of the jury.Mr Ebbers, 63, is accused of being the mastermind behind an $11bn (£6bn) accounting fraud that eventually saw the firm collapse in July 2002.Under Mr Ebbers' leadership, WorldCom emerged from Mississippi obscurity to become a $160bn telecoms giant and the darling of late 1990s investors.Mr Ebbers' trial, which is expected to last two months, is the latest in a series of attempts by US prosecutors to pursue senior executives for fraud.If found guilty, Mr Ebbers could face a substantial jail sentence. |
business | China Aviation seeks rescue deal..Scandal-hit jet fuel supplier China Aviation Oil has offered to repay its creditors $220m (£117m) of the $550m it lost on trading in oil futures...The firm said it hoped to pay $100m now and another $120m over eight years. With assets of $200m and liabilities totalling $648m, it needs creditors' backing for the offer to avoid going into bankruptcy. The trading scandal is the biggest to hit Singapore since the $1.2bn collapse of Barings Bank in 1995. Chen Jiulin, chief executive of China Aviation Oil (CAO), was arrested by at Changi Airport by Singapore police on 8 December. He was returning from China, where he had headed when CAO announced its trading debacle in late-November. The firm had been betting heavily on a fall in the price of oil during October, but prices rose sharply instead...Among the creditors whose backing CAO needs for its restructuring plan are banking giants such as Barclay's Capital and Sumitomo Mitsui, as well as South Korean firm SK Energy. Of the immediate payment, the firm - China's biggest jet fuel supplier - said it would be paying $30m out of its own resources. The rest would come from its parent company, China Aviation Oil Holding Company in Beijing. The holding company, owned by the Chinese government, holds most of CAO's Singapore-listed shares. It cut its holding from 75% to 60% on 20 October. | The rest would come from its parent company, China Aviation Oil Holding Company in Beijing.Scandal-hit jet fuel supplier China Aviation Oil has offered to repay its creditors $220m (£117m) of the $550m it lost on trading in oil futures.Chen Jiulin, chief executive of China Aviation Oil (CAO), was arrested by at Changi Airport by Singapore police on 8 December.Of the immediate payment, the firm - China's biggest jet fuel supplier - said it would be paying $30m out of its own resources.The firm had been betting heavily on a fall in the price of oil during October, but prices rose sharply instead. |
business | Aids and climate top Davos agenda..Climate change and the fight against Aids are leading the list of concerns for the first day of the World Economic Forum in the Swiss resort of Davos...Some 2,000 business and political leaders from around the globe will listen to UK Prime Minister Tony Blair's opening speech on Wednesday. Mr Blair will focus on Africa's development plans and global warming. Earlier in the day came an update on efforts to have 3 million people on anti-Aids drugs by the end of 2005. The World Health Organisation (WHO) said 700,000 people in poor countries were on life-extending drugs - up from 440,000 six months earlier but amounting to only 12% of the 5.8 million who needed them. A $2bn "funding gap" still stood in the way of hitting the 2005 target, the WHO said...The themes to be stressed by Mr Blair - whose attendance was announced at the last minute - are those he wants to dominate the UK's chairmanship of the G8 group of industrialised states. Other issues to be discussed at the five-day conference range from China's..economic power to Iraq's future after this Sunday's elections. Aside from Mr Blair, more than 20 other world leaders are expected to attend including French President Jacques Chirac - due to speak by video link after bad weather delayed his helicopter - and South African President Thabo Mbeki, whose arrival has been delayed by Ivory Coast peace talks. The Ukraine's new president, Viktor Yushchenko, will also be there - as will newly elected Palestinian leader Mahmoud Abbas. Showbiz figures will also put in an appearance, from U2 frontman Bono - a well-known campaigner on trade and development issues - to Angelina Jolie, a goodwill campaigner for the UN on refugees...Unlike previous years, protests against the WEF are expected to be muted. Anti-globalisation campaigners have called off a demonstration planned for the weekend. At the same time, about 100,000 people are expected to converge on the Brazilian resort of Porto Alegre for the World Social Forum - the so-called "anti-Davos" for campaigners against globalisation, for fair trade, and many other causes...In contrast, the Davos forum is dominated by business issues - from outsourcing to corporate leadership - with bosses of more than a fifth of the world's 500 largest companies scheduled to attend. A survey published on the eve of the conference by PricewaterhouseCoopers said four in ten business leaders were "very confident" that their companies would see sales rise in 2005. Asian and American executives, however, were much more confident than their European counterparts. But the political discussions, focusing on Iran, Iraq and China, are likely to dominate media attention. | At the same time, about 100,000 people are expected to converge on the Brazilian resort of Porto Alegre for the World Social Forum - the so-called "anti-Davos" for campaigners against globalisation, for fair trade, and many other causes.A survey published on the eve of the conference by PricewaterhouseCoopers said four in ten business leaders were "very confident" that their companies would see sales rise in 2005.Aside from Mr Blair, more than 20 other world leaders are expected to attend including French President Jacques Chirac - due to speak by video link after bad weather delayed his helicopter - and South African President Thabo Mbeki, whose arrival has been delayed by Ivory Coast peace talks.The World Health Organisation (WHO) said 700,000 people in poor countries were on life-extending drugs - up from 440,000 six months earlier but amounting to only 12% of the 5.8 million who needed them.Showbiz figures will also put in an appearance, from U2 frontman Bono - a well-known campaigner on trade and development issues - to Angelina Jolie, a goodwill campaigner for the UN on refugees.In contrast, the Davos forum is dominated by business issues - from outsourcing to corporate leadership - with bosses of more than a fifth of the world's 500 largest companies scheduled to attend.Climate change and the fight against Aids are leading the list of concerns for the first day of the World Economic Forum in the Swiss resort of Davos.Some 2,000 business and political leaders from around the globe will listen to UK Prime Minister Tony Blair's opening speech on Wednesday. |
business | Ethiopia's crop production up 24%..Ethiopia produced 14.27 million tonnes of crops in 2004, 24% higher than in 2003 and 21% more than the average of the past five years, a report says...In 2003, crop production totalled 11.49 million tonnes, the joint report from the Food and Agriculture Organisation and the World Food Programme said. Good rains, increased use of fertilizers and improved seeds contributed to the rise in production. Nevertheless, 2.2 million Ethiopians will still need emergency assistance...The report calculated emergency food requirements for 2005 to be 387,500 tonnes. On top of that, 89,000 tonnes of fortified blended food and vegetable oil for "targeted supplementary food distributions for a survival programme for children under five and pregnant and lactating women" will be needed...In eastern and southern Ethiopia, a prolonged drought has killed crops and drained wells. Last year, a total of 965,000 tonnes of food assistance was needed to help seven million Ethiopians. The Food and Agriculture Organisation (FAO) recommend that the food assistance is bought locally. "Local purchase of cereals for food assistance programmes is recommended as far as possible, so as to assist domestic markets and farmers," said Henri Josserand, chief of FAO's Global Information and Early Warning System. Agriculture is the main economic activity in Ethiopia, representing 45% of gross domestic product. About 80% of Ethiopians depend directly or indirectly on agriculture. | In 2003, crop production totalled 11.49 million tonnes, the joint report from the Food and Agriculture Organisation and the World Food Programme said.The Food and Agriculture Organisation (FAO) recommend that the food assistance is bought locally.Last year, a total of 965,000 tonnes of food assistance was needed to help seven million Ethiopians.The report calculated emergency food requirements for 2005 to be 387,500 tonnes.On top of that, 89,000 tonnes of fortified blended food and vegetable oil for "targeted supplementary food distributions for a survival programme for children under five and pregnant and lactating women" will be needed. |
business | Business fears over sluggish EU economy..As European leaders gather in Rome on Friday to sign the new EU constitution, many companies will be focusing on matters much closer to home - namely how to stay in business...Lille is a popular tourist destination for Britons who want a taste of France at the weekend. But how many tourists look at the impressively grand Victorian Chambre de Commerce, which stands beside the Opera House, and consider that it was built - like the town halls in many northern English towns - on the wealth created by coal, steel and textiles? Like northern England and industrial Scotland, those industries have been in long term decline - the last coal pit closed in 1990. Beck-Crespel is a specialist steel firm in Armentieres, about 20 miles from Lille. The company has not laid off a worker since 1945. It specialises in making bolts and fixings for power stations and the oil industry, but not many of those are being built in Europe these days...Director Hugues Charbonnier says he is under pressure because factories in the Far East are able to make some of his output more cheaply, while his key markets are now in China and India. "In our business the market is absolutely global, you can not imagine living with our size (of business) even within an enlarged European Union, (if we did that) we would need not 350 people but perhaps just 150 or 200," he says. It isn't just globalisation that is hurting; the law in France means workers are paid for a 39 hour week even though they work just 35 hours. But at least there is still a steel industry. Coal has now totally vanished and textiles are struggling. New business has been attracted, but not enough to make up the difference...That is one reason why people here are not great fans of the EU, says Frederic Sawicki, a politics lecturer at the University of Lille..."In the region today the unemployment rate is 12%, in some areas it is 15%. They don't see what Europe is doing for them, so there is a kind of euro scepticism, especially in the working classes," he says. Which is strange because Lille is at the crossroads of Europe - if anywhere should be benefiting from the euro it is here. The euro was designed to increase trade within the eurozone, but the biggest increase in trade has been with the rest of the world. Much of that trade passes through the world's largest port, Rotterdam, in Holland, home to specialist crane maker Huisman Itrec. Its cranes help build oil rigs and lifted the sunken Russian submarine Kursk from the sea bed, but Huisman Itrec is now setting up a factory in China, where costs are cheaper and its main customers are closer...Boss Henk Addink blames the low growth rate in Europe for the lack of orders closer to home. "In the US growth is something like 6%, in China they are estimating 15%, and in the EU it is more or less 1%," he says. Mr Addink blames the euro for stifling demand. He much preferred the old currencies of Europe, which moved in relation to each country's economic performance. In Germany, industry is exporting more these days, but the economy as a whole is once again mired in slow growth and high unemployment. Growth is likely to peak this year at just under 2%. In Britain that would be a bad year; in Germany it is one of the best in recent years. With Germany making up a third of the eurozone's economy, this is a major problem. If Germany doesn't once again become the powerhouse of Europe, growth across the bloc is never going to be as strong as it could be. However, at one factory near the Dutch border things are changing...The Siemens plant at Boscholt makes cordless phones and employs 2,000 staff. Staff have started working an extra four hours a week for no extra pay, after Siemens threatened to take the factory and their jobs to Hungary. Factory manager Herbert Stueker says that he now hopes to increase productivity "by nearly 30%". But Germany needs much more reform if all its industry is to compete with places such Hungary or China. The Government is reforming the labour market and cutting the generous unemployment system, but the real solution is to cut the wages of low skilled workers, says Helmut Schneider, director of the Institute for the Study of Labour at Bonn University. "Labour is too costly in Germany, especially for the low skilled labour and this is the main problem. If we could solve that problem we could cut unemployment by half," he says. The EU set itself the target of being the most efficient economy in the world by 2010. Four years into that process, and the target seems further away than ever. | In Germany, industry is exporting more these days, but the economy as a whole is once again mired in slow growth and high unemployment.But Germany needs much more reform if all its industry is to compete with places such Hungary or China.Boss Henk Addink blames the low growth rate in Europe for the lack of orders closer to home.If Germany doesn't once again become the powerhouse of Europe, growth across the bloc is never going to be as strong as it could be."In the US growth is something like 6%, in China they are estimating 15%, and in the EU it is more or less 1%," he says.Which is strange because Lille is at the crossroads of Europe - if anywhere should be benefiting from the euro it is here.It specialises in making bolts and fixings for power stations and the oil industry, but not many of those are being built in Europe these days.As European leaders gather in Rome on Friday to sign the new EU constitution, many companies will be focusing on matters much closer to home - namely how to stay in business.They don't see what Europe is doing for them, so there is a kind of euro scepticism, especially in the working classes," he says."Labour is too costly in Germany, especially for the low skilled labour and this is the main problem.That is one reason why people here are not great fans of the EU, says Frederic Sawicki, a politics lecturer at the University of Lille.The euro was designed to increase trade within the eurozone, but the biggest increase in trade has been with the rest of the world.With Germany making up a third of the eurozone's economy, this is a major problem.Director Hugues Charbonnier says he is under pressure because factories in the Far East are able to make some of his output more cheaply, while his key markets are now in China and India.New business has been attracted, but not enough to make up the difference.In Britain that would be a bad year; in Germany it is one of the best in recent years. |
business | BMW cash to fuel Mini production..Less than four years after the new Mini was launched, German car maker BMW has announced £100m of new investment...Some 200 new jobs are to be created at the Oxford factory, including modernised machinery and a new body shell production building. The result of the investment could be to raise output to more than 200,000 cars from 2007. The rise, from 189,000 last year, is a response to rapidly-rising demand and could help wipe out waiting lists. Before Wednesday's announcement, BMW had invested some £280m in Mini production...Since its launch during summer 2001, the new Mini has gone from strength to strength...Last year, almost one in six cars sold by the BMW group was a Mini. The company admits that the success of the brand came despite scepticism from many in the industry. "Our decision to produce a new Mini was not received well right away," said Norbert Reithofer, a member of the BMW management board. Initially, BMW said it would produce 100,000 Mini models a year at its vast Cowley factory on the outskirts of Oxford, but the target was quickly reached, then raised, time and time again. Not everyone is convinced that the boom can continue. "The risk is that after they've invested massively in the brand, demand tapers off like it did with the new VW Beetle," said Brad Wernle, from Automotive News Europe...The price of the car has also gone up. When it was launched, the cheapest Mini cost just more than £10,000. These days, buyers will have to fork out almost £11,500 to own a new Mini One, or even more for the Cooper S which costs up to £17,730. The Mini Convertible, which was launched last spring, costs up to £15,690 for the top model, and there is even a waiting list. Second-hand Minis are not cheap either. A Mini One bought when the model was launched should still fetch at least £8,000 for the cheapest model, while a used Cooper S is likely to be priced from £12,556, according to the-car buying website Parker's. The consumers' association Which operates with slightly different numbers, yet it confirms that the Mini Cooper 1.6 depreciates slower than any other car, other than the Mercedes Benz C180 SE and the BMW 1 Series 116i SE...The Cowley factory, which initially seemed far too large a production plant for just 100,000 Minis, is increasingly being put to good use...There are plans to tear down old buildings and build new ones and there are rumours that a new paint shop could be included in the plans. BMW's Mini adventure has made good much of what went wrong during its stewardship of the UK car maker Rover which it sold for £10 five years ago to the Phoenix consortium. In 1999, when BMW still owned Rover, the Oxford factory was producing the award-winning Rover 75. During that year, 3,500 people produced 56,000 cars. Last year, in the same factory, almost four times as many vehicles were produced by just 4,500 Mini-workers. The Mini factory's current output is equally impressive when compared with the main Rover factory in Longbridge, which in 1999 produced 180,000 Rover cars. Last year, MG Rover, which employs more than 6,000 people, produced just 110,000 cars, though it hopes to land a deal with Shanghai Automotive Industry Corporation (SAIC) that could help double the number of cars produced at Longbridge. Indeed, Mini is not only producing more cars than MG Rover does; it remains ahead even when the current sales of Land Rovers and Range Rovers (which are made by the former Rover unit that BMW sold to Ford) are taken into account. | Less than four years after the new Mini was launched, German car maker BMW has announced £100m of new investment.Last year, almost one in six cars sold by the BMW group was a Mini.Initially, BMW said it would produce 100,000 Mini models a year at its vast Cowley factory on the outskirts of Oxford, but the target was quickly reached, then raised, time and time again.When it was launched, the cheapest Mini cost just more than £10,000.These days, buyers will have to fork out almost £11,500 to own a new Mini One, or even more for the Cooper S which costs up to £17,730.The Mini Convertible, which was launched last spring, costs up to £15,690 for the top model, and there is even a waiting list.Last year, MG Rover, which employs more than 6,000 people, produced just 110,000 cars, though it hopes to land a deal with Shanghai Automotive Industry Corporation (SAIC) that could help double the number of cars produced at Longbridge.The Mini factory's current output is equally impressive when compared with the main Rover factory in Longbridge, which in 1999 produced 180,000 Rover cars.BMW's Mini adventure has made good much of what went wrong during its stewardship of the UK car maker Rover which it sold for £10 five years ago to the Phoenix consortium."Our decision to produce a new Mini was not received well right away," said Norbert Reithofer, a member of the BMW management board.In 1999, when BMW still owned Rover, the Oxford factory was producing the award-winning Rover 75.Before Wednesday's announcement, BMW had invested some £280m in Mini production. |
business | Durex maker SSL awaits firm bid..UK condom maker SSL International has refused to comment on reports it may be subject to a takeover early in 2005...A Financial Times report said business intelligence firm GPW was understood to be starting due diligence work on SSL International, for a corporate client. An spokesman for SSL, which makes the famous Durex brand of condom, would not to comment on "market speculation". However the news sent shares in SSL, which also makes Scholl footwear, up more than 6%, or 16.75 pence to 293.5p...The FT said most the high-profile firm that might woo SSL was Anglo-Dutch household products group Reckitt Benckiser. Eighteen months ago Reckitt Benckiser was at the centre of a rumoured takeover bid for SSL - but that came to nothing. Other firms that have been seen as would-be suitors include Kimberly-Clark, Johnson & Johnson, and private equity investors. Analysts have seen SSL as a takeover target for years. It sold off its surgical gloves and antiseptics businesses for £173m to a management team in May. SSL was formed by a three-way merger between Seton Healthcare, footwear specialists Scholl and condom-maker London International Group. Its other brands include Syndol analgesic, Meltus cough medicine, Sauber compression hosiery and deodorant products, and Mister Baby. | UK condom maker SSL International has refused to comment on reports it may be subject to a takeover early in 2005.A Financial Times report said business intelligence firm GPW was understood to be starting due diligence work on SSL International, for a corporate client.The FT said most the high-profile firm that might woo SSL was Anglo-Dutch household products group Reckitt Benckiser.Analysts have seen SSL as a takeover target for years.SSL was formed by a three-way merger between Seton Healthcare, footwear specialists Scholl and condom-maker London International Group. |
business | Ad firm WPP's profits surge 15%..UK advertising giant WPP has posted larger-than-expected annual profits and predicted that it will outperform the market in 2005...Pre-tax profits rose 15% from a year ago to reach £546m ($1.04bn), ahead of average analysts' forecasts of £532m. Revenues were £4.3bn while the firm's operating margins were 14.1%, which it said could reach 14.8% by 2006. During the year WPP bought US rival Grey Global, creating a giant big enough to rival sector leader Omnicom...Chief Executive Martin Sorrell on Friday told Reuters news agency that WPP had submitted a proposal for United Business Media's NOP World market research unit. Analysts say the unit sell could sell for up to £350m. WPP in recent years has also bought firms such as Ogilvy & Mather and Cordiant Communications. It also includes the firms Young & Rubicam and J Walter Thompson. Events such as the Olympics helped boost WPP's profits in 2004. The company said the US Congressional elections and the FIFA World Cup are likely to present advertising opportunities in the near future. The long-term outlook looks "very favourable" because of media and technology developments and the strength of the US economy, WPP said. | WPP in recent years has also bought firms such as Ogilvy & Mather and Cordiant Communications.UK advertising giant WPP has posted larger-than-expected annual profits and predicted that it will outperform the market in 2005.Pre-tax profits rose 15% from a year ago to reach £546m ($1.04bn), ahead of average analysts' forecasts of £532m.During the year WPP bought US rival Grey Global, creating a giant big enough to rival sector leader Omnicom.The long-term outlook looks "very favourable" because of media and technology developments and the strength of the US economy, WPP said. |
Subsets and Splits