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Jun 05 - Jun 11, 2000

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Expo 2000 launched in Hanover

German President Johannes Rau opened the 30th world's fair, Expo 2000, outside the north German city of Hanover Thursday, ceremoniously cutting a ribbon as a barrage of coloured balloons floated into the sky.

Welcome to the world exhibition, said Rau as drums rolled and he cut the red ribbon to let the first visitors in to the sprawling park with exhibits from 173 nations and 14 international organizations.

Those who come to visit us should find a hospitable and tolerant Germany, open to the world, said Rau.

The central theme of the international exhibition, Man-Nature-Technology — A new world rising, seeks to present an optimistic approach to the problems of the world and their solution.

Laid out on a sprawling 160-hectares (about 400 acres) site, which has some of the airs of a fantasy megapolis, the fair will last for 153 days until October 31.

For the reunited Germany, the event is an important showcase to the rest of the world.

This is the first time that Germany has hosted a world exposition, and its leaders are conscious that this honour and privilege coincides with both the dawn of a new millennium and the maturing of a new Germany, economically strong and politically more confident, after the 1990 reunification.

Rau said he hoped the fair with its exhibits showing how differrent cultures are preparing for the future, will help people look ahead with hope and not anxiety.

A total 173 nations and 14 international organisations are officially present at the world's fair, each with their own stands and pavilions, from the modest to the grandiose.

'Ugly side of globalization'

Malaysia's deputy premier sounded a warning on Wednesday against "the ugly side of globalization" and the power of the Internet.

The danger is that we become servants to the process of globalization and to the power of the Internet, Abdullah Ahmad Badawi said in his closing speech to an Asia-Europe business conference.

The danger is that sovereign governments that derive their legitimacy from their citizens are superseded by people and corporations that are not accountable to anyone.

Mahathir warns against mega mergers

Mega-mergers in the world's oil industry will leave "midget" Asian players helpless against giant competitors, Malaysian Prime Minister Mahathir Mohamad warned.

Malaysian Prime Minister Mahathir Mohamad slammed the wave of oil company mergers, saying the new global giants were the tools of rich nations to " invade " developing countries.

In his trademark slashing style, Mahathir accused foreign oil titans of teaming up to monopolise the global industry and harm smaller nations' state oil firms.

Opening a two-day Asia Oil and Gas Conference, Mahathir said a wave of mega-mergers had led to the creation of "giant entities dominating and dictating to the industry. "

"Over the last three years, we have seen a few of such mega-mergers: BP and Amoco, Exxon and Mobil, Total Fina and Elf, and then BP Amoco and Arco," he said.

"We see a return of oligopoly, only the oil companies are many, many times bigger and richer than before."

The premier said U.S. industrialist John D. Rockefeller had "almost complete monopoly" of the oil business until the U.S. government halted it through an anti-trust act and broke up his company into several smaller entities.

"The offsprings of the Rockefeller monopoly are coming together again. They are in fact, teaming up with the other oil majors to form an even tighter oligopoly," he said.

"Together they can control the production, refining, marketing and also the relatively new petrochemical industries."

Mahathir said the new alliances led to an uneven playing field for Asian players, mostly made up of national oil companies which he described as "midgets of the world."

Japan joins market mirth

Asia's major markets closed higher Thursday, with Japan's leading technology stocks gaining ground while Singapore and Hong Kong remained upbeat despite a drop for the U.S. Nasdaq composite a day earlier.

Tokyo's benchmark Nikkei 225 average advanced 361.85 points, or 2.2 per cent, to 16,694.30, as some investors jumped back into stocks in the belief recent declines in top Japanese technology shares have taken them to unjustifiably low levels.

Hong Kong's Hang Seng index closed up 227.33 points, or 1.6 per cent, at 14,941.19, boosted by a surge in demand late in the day as leading telecommunications firms headed higher.

Singapore's Straits Times index added 42.13 points, or 2.4 per cent, to close at 1,837.26.

South Korea's KOSPI index, one of the region's top performers in recent days, rose 0.9 per cent while Taiwan's Weighted index dropped 1.1 per cent.

In other markets, Jakarta's battered JSX fell another 3.1 per cent, while Manila's PHS composite fell 0.6 per cent. In Bangkok, the SET index climbed 0.5 per cent, while Malaysia's KLSE composite in Kuala Lumpur fell 0.8 per cent, trimming its loss late in the session.

OECD: Europe's booming

Europe's 11-member common-currency zone is enjoying its best growth in over a decade and is set to start reducing its millions of unemployed, the Organization of Economic Cooperation and Development said Tuesday.

But the region faces a stiff challenge to keep up this tempo, said the OECD in its latest economic outlook. It warned that structural reform and the prudent use of government revenues will be crucial to prevent a modest boom becoming a damaging bust.

A sustained slide in the 18-month-old common currency has given European exports a significant shot in the arm.

The OECD estimates that the region can thank the weak euro for around one per centage point of its growth in 1999 and 2000.

Mergers & Acquisitions

French Telecom—Orange: France Telecom agreed Tuesday to buy U.K. mobile-phone operator Orange from Vodafone AirTouch in a long-anticipated deal worth 26.9 billion ($40.3 billion) in cash, stock and assumption of debt, creating Europe's second-largest cellular-phone company.

Alcan—Algroup: Canadian aluminum producer Alcan may announce as early as Thursday that it will raise its buyout bid for Switzerland's Algroup to $4.4 billion or more, according to published reports.

Sony—Verant Interactive: Sony Pictures Entertainment, a unit of Japanese electronics giant Sony Corp., on Thursday said it acquired online game company Verant Interactive Inc., known for the blockbuster game "EverQuest," to expand Sony's online game businesses.

Thomson—Community Newspaper Holdings: Community Newspaper Holdings Inc. said Thursday it has bid (about $500 million for 16 dailies and a number of weeklies) for newspapers owned by Thomson Corp., which is selling all but one of its papers to concentrate on electronic publishing.

Motorola—Flextronics: Motorola Inc., the world's second-largest supplier of wireless phones, signed a $30 billion manufacturing alliance Tuesday with contract electronics manufacturer Flextronics International Ltd.

Metsa—Modo Paper: Finnish paper maker Metsa-Serla agreed on Wednesday to acquire Modo Paper from two Swedish rivals for 2.3 billion ($2.14 billion), including debt, in the latest consolidation of the Scandinavian paper sector.

WPD—Hyder: U.S.-controlled Western Power Distribution (WPD) joined the battle for U.K. water and electricity supplier Hyder Wednesday with a 2.36 billion ($3.53 billion) counterbid to top an agreed offer from Japanese investment house Nomura International.

French jobless

France's unemployment rate fell to 9.8 per cent in April, dropping through the symbolic 10 per cent barrier for the first time since late 1991, according to official data released Wednesday.

Paris leads European surge

Europe's major stock markets all posted strong gains Thursday as investors turned again to telecom and technology stocks to push the blue-chip index in Paris into record territory with a 2.7 per cent gain while London and Frankfurt also closed ahead.

The CAC 40 in Paris closed up 173 points at a record 6,599.71 having earlier nosed above 6,000 as investors piled into its heavyweight telecom and media shares. technology stocks continuing to recover, outweighing weakness among retail stocks.

London's benchmark FTSE 100 index advanced 111 points, or 1.75 per cent, to close at 6,470.50 as its own media and telecom components urged in late afternoon trade.

Frankfurt's Xetra Dax closed up 163 points, or 2.29 per cent, at 7,272.76, with broad-based gains.

The pan-European FTSE Eurotop 300,a broader index of the region's largest stocks, rose 1.21 per cent to close at 1,614.70, with media and tech sub-indexes posting the strongest gains, while food and chemicals shares lost ground.

U.S. stocks fly higher

Investors looking for some sign that the red-hot economy could be slowing its pace were rewarded Thursday, after economic data raised hopes that interest rate hikes may be near an end, making it safe to start buying stocks.

The Nasdaq composite index gained more than 5 per cent as technology stocks started to pique buyers' interest. Meanwhile, the Dow Jones industrial average also advanced, with Hewlett-Packard taking the blue-chip index higher.

Reports indicating a slowdown in manufacturing activity and construction spending hinted that the six Federal Reserve rate hikes since last June may be starting to work.

The Nasdaq rose 181.59 points, more than 5 per cent, to 3,582.50. The index is up nearly 12 per cent since the start of the year.

Meanwhile, the Dow jumped 129.87, or more than 1 per cent, to 10,652.20. The blue-chip index is up 7. 3 per cent for the year. The broader S&P 500 gained 28.21 to close at 1,448.81.


Boots: Annual profit rose 5 per cent at health and beauty retailer Boots. Revenue for the year ended March 31 rose 3 per cent to 5.19 billion ($7.7 billion), and underlying pretax profit rose to 587.4 million. Earnings per share gained 6 per cent to 45.4 pence.

NTT: Japan's Nippon Telegraph and Telephone said Friday its annual operating profit rose 12.6 per cent. The firm said operating profit rose to 980.3 billion ($9.2 billion) for the year to March 31 from 870.3 billion a year ago.

Air France: Air France said its net profit in the year ended Mar. 31 rose 42 per cent to 354 million. The airline said revenue rose 13.5 per cent to 10.3 billion, lifting operating income by just over a third to 358 million and giving earnings per share a 38 per cent boost to 1.75.

U.S. stocks to trade in HK

Seven Nasdaq-listed U.S. companies will begin trading on the Hong Kong Stock Exchange on Wednesday, in the latest move toward forging a global stock market.

Technology bellwethers Cisco Systems, Intel and Microsoft plus biotechnology firm Amgen and coffee retailer Starbucks will for the first time be bought and sold on Asia's second largest exchange. Dell Computer and Applied Materials, the semiconductor equipment maker, round out the list.

Currently, Asian investors buying U.S. stocks must go though their broker, who places the order and handles the currency conversion.

IMF urges Japan boost

The IMF on Monday urged Japan to consider another boost to public spending to revive the economy, but Finance Minister Kiichi Miyazawa, fretting over the nation's runaway debt, said he was in no hurry.

Stanley Fischer, the International Monetary Fund's first deputy managing director, told Miyazawa he thought it wise to consider downside risks to the economy, which has yet to pull decisively out of its worst postwar downturn, a Finance Ministry official said.

Fischer was quoted as noting that Japan regularly compiles extra budgets every year and that the government should consider one early for the fiscal year that began in April, to avoid a drop-off in fiscal support.

Miyazawa reiterated that gross domestic product would probably show a hefty rebound in the January-to-March period, but that he was unsure about April-June. Any decision on an extra budget can await the publication of economic growth data for April-to-June, due out in September, he said.

U.S. to overhaul export plans

The United States announced Monday that it will press ahead with its plans for overhauling a multi-billion-dollar U.S. export programme, despite objections from the European Union.

The EU said a U.S. proposal aimed at bringing the controversial U.S. Foreign Sales Corporation (FSC) scheme into line with global trade rules "does not meet basic WTO requirements."

"We regret that the [European] Commission has chosen not to engage in serious negotiations based on our proposal," Deputy U.S. Treasury Secretary Stuart Eizenstat said in a statement.

Little investor yen for

The Japanese yen hit six-week lows against the euro and fell to a two-week trough against the dollar Thursday amid worries about the health of Japan's financial sector.

The closure on Wednesday of medium-sized Japanese insurer Daihyaku Mutual Life triggered new fears about the state of the financial-services industry. On Thursday, Kyoei Life, another troubled Japanese insurer, resorted to outside financial help when it accepted U.S.-based Prudential Insurance Co.'s proposal to inject 30 billion ($278 million) into Kyoei.

While that news helped buoy Japanese shares it did not provide support to the beleaguered yen, traders said.