27 - Dec 03, 2000
World economy to grow
The OECD said on Monday the global economy was
likely to expand by a healthy 4.75 per cent in 2001, as the U.S.
powerhouse loses some steam, Europe settles back into cruising speed
and Japan pulls out of the slow lane.
But it said world oil prices, at 60 per cent above
last year's level, were a worry which could be aggravated by either
conflict in the Middle East or a harsh winter, even if the toll was
far less than during the oil crises of the 1970s.
"Global economic growth appears to have peaked
during the first half of 2000, but world economic prospects remain
relatively bright," the Organization for Economic Cooperation and
Development said in its twice-yearly economic outlook.
It said growth across its 29 members as a whole was
set to slow by about one per centage point in 2001 from 4.3 per cent
this year but that a sharper-than-expected upturn in countries beyond
the OECD bloc would secure global growth of 4 per cent or more in the
coming two years.
"If oil prices go back to where they were a
few months ago, $38 or $39 ... we could see a reduction in growth by
4/10 of a per cent and an increase in inflation by half a per
cent," OECD chief economist Ignazio Visco said.
The report said it was assuming an OECD oil import
price — which is about $1.0 cheaper than benchmark Brent crude
prices on average — of $30 dollars a barrel until the middle of next
year and a slight drop to $27 by the second half of 2002.
The report saw U.S. growth slowing to 3.5 per cent
next year and 3.3. per cent in 2002, after 5.2 per cent this year.
The U.S. Federal Reserve might have to raise
interest rates a bit more to help ease the pace in the short term. The
OECD based its forecasts on an assumption it would raise its key fed
funds rate half a per centage point, from 6.5 per cent currently.
EU seeks foreign economic migrants
The European Union should end its decades-old
policy of "zero" immigration and start seeking out foreign
economic migrants, the bloc's executive agency said on Wednesday.
Acknowledging for the first time that the EU needs
foreign labour to work in its information technology and other
sectors, the European Commission said the 15 nation bloc should hammer
out common entry rules for foreign workers to fill the domestic skills
"It is clear from an analysis of the economic
and demographic context of the Union that the 'zero' immigration
policies of the past 30 years are no longer appropriate," the
Commission report said.
Since growing shortages of labour at both skilled
and unskilled levels were already forcing a number of EU states to
seek out foreign workers, this recruitment of foreign labour should be
properly regulated at the EU level, the Commission said.
Adding to the appeal during a visit to Brussels,
German Chancellor Gerhard Schroeder said simply: "We need
Although conservative parties in Germany and
elsewhere were exploiting the issue for political reasons, Schroeder
said it was important to take the debate on immigration in a
EU officials stress that a fresh look at
old-fashioned immigration policies is urgently required to compensate
for Europe's ageing population.
Recent studies show that Europe's working age
population (20 to 64 years) will begin to decline within the next 10
year, falling from 225 million in 1995 to 223 million in 2025. At the
same time, the over-65 age group will continue to rise and reach 22.4
per cent of the population in 2025.
Admission rules for economic migrants should
clearly address the needs of the market place, allowing the EU to
respond quickly and efficiently to labour market requirements at
national, regional and local level.
Nikkei edges higher
Tokyo's stock market recovered from an early drop
Friday and ended the morning session mixed, with large-cap issues like
Sony Corp. and Fujitsu Ltd. taking cues from a rebound in Nasdaq
The Nikkei average rose 34 points, or 0.24 per
cent, to end the morning session at 14,335.31. It had dipped to a low
of 14,229.65 in early trade when investors were spooked by Wednesday's
4.04 per cent tumble in the Nasdaq composite index
The capital-weighted TOPIX index was slower to
recover, finishing the morning down 7.08 points, or 0.53 per cent, at
The S&P/ASX 200 index dipped 2.5 points to
3,278.7. In comparison, the energy index rallied about 0.8 per cent.
The banking sector, which outperformed the wider market on Thursday,
was down 0.6 per cent in early trade.
Singapore's main share index rose more than one per
cent in early Friday trade. The key Straits Times Index was up 1.11
per cent or 21.58 points at 1,961.85.
Nasdaq hits 13-month low
The Nasdaq fell 116.11 points, or 4 per cent, to
2,755.34. The loss marks the Nasdaq's lowest close since Oct. 19,
1999, when it finished at 2,688.18.
The Dow industrials shed 95.18 to 10,399.32, while
the S&P 500 lost 25.99 to 1,322.36.
Investors seeking safety from the sell-off snapped
up fixed-income securities, sending Treasurys higher.
But at least one market watcher forecasts an end to
More stocks fell than rose. Declining issues on the
New York Stock Exchange beat advancing ones 1,838 to 940. More than
965 million shares traded. Nasdaq losers topped winners 2,887 to 1,063
as nearly 1.87 billion shares changed hands.
Europe strong on techs
European markets soldiered higher without Wall
Street to break their momentum Thursday, with "new-economy"
stocks bouncing back strongly from the hammerings they've taken in
London's benchmark FTSE 100 index rose 65.9 points,
or 1.1 per cent, to 6,287.3, with optical-component maker Bookham
Technology and information technology company CMG leading gains.
France's CAC 40 jumped 108.34 points, or 1.8 per
cent, to 6,053.04, led by telecom equipment maker Alcatel and the
country's biggest TV-broadcaster TF1.
Frankfurt's late trading Xetra Dax climbed 1.4 per
cent to 6,602.85. Chipmaker Infineon Technologies and automaker
DaimlerChrysler powered the benchmark index to strong gains.
Amsterdam's AEX index dipped 0.5 per cent, Zurich's
SMI gained 0.5 per cent and Milan's MIB30 rose 0.8 per cent.
The broader FTSE Eurotop 300 index, a basket of
Europe's largest companies, rose almost 1 per cent with its telecom
and information technology sectors rising more than 2 per cent.
F'furt mulls tighter rules
The Frankfurt stock exchange may tighten rules on
the admission and conduct of companies listed on the Neuer Markt, its
market for high-growth stocks, and exchange executive said Thursday.
Acquisitions & Mergers
Dutch bank ABN Amro
bought Michigan National Corp. from National Australia Bank Wednesday
for $2.75 billion in cash.
NTT—AT&T: Japan's top mobile phone
company, NTT DoCoMo, is close to taking a minority stake in AT&T
Wireless Group Inc., a source close to the situation said Wednesday.
NBC—ValueVision: NBC and GE Equity upped
their ownership stake in ValueVision International Inc., a home
shopping network operator, to 44 per cent Tuesday, in exchange for a
10-year licensing agreement.
Fifth Third—Old Kent:
Fifth Third Bancorp.
agreed Monday to acquire Old Kent Financial Corp. in a nearly $5
billion stock swap, the biggest acquisition in Fifth Third's 142-year
Pogo—NORIC Corp: Oil and gas exploration
company Pogo Producing Co. agreed Monday to buy NORIC Corp., parent of
North Central Oil Corp., for about $630 million in cash, a move which
will significantly increase the company's reserves.
France Tel—Equant: France Telecom SA finally
took control of data network operator Equant NV in a $3.5 billion deal
Monday after months of wrangling between the two Paris-listed firms.
BSCH—Banespa: Spain's biggest bank Banco
Santander Central Hispano SA on Monday won Brazil's largest bank
privatization auction, offering 7.05 billion reais ($3.6 billion), or
more than three times the second-highest bid, for Banco do Estado de
Sao Paulo SA.
Softbank: Softbank Corp. estimated its
consolidated net profit at 36 billion yen ($330.9 million) for the six
months ended Sept. 30, making a solid turnaround from a loss of 3.52
billion yen in the year-earlier period.
Nissan: Nissan Motor Co. Ltd. reported a
consolidated operating profit of ¥134.4 billion ($1.24 billion) for
the April-September period on sales of ¥3.02 trillion. That was
slightly below a preliminary estimate of the half-year results given
three weeks ago, which put profit at ¥136.6 billion and sales at
NTT: Nippon Telegraph & Telephone Corp.
said operating profit reached ¥610.3 billion ($5.61 billion) in the
six months ended Sep. 30, up from ¥563.9 billion a year earlier and
easily beating analysts' forecasts of ¥400 billion.
Singapore, the region's fastest growing economy,
hosts the ASEAN forum this week drawing together a group of troubled
neighbours who threaten the stability of the economic grouping.
Singapore says it will attempt to steer the meeting
toward measures to further integrate the 10 Association of Southeast
Asian Nations members as well as expand trade ties with China, Japan
and South Korea.
IMF leaves Russia
A top IMF team has left Moscow without agreeing to
a new programme of cooperation that would open the way for Russia to
restructure its massive Paris Club debts, the Fund said on Tuesday.
The IMF and Russia had agreed a programme in July
1999 allowing for loans of $4.5 billion, but the IMF suspended it two
months later because Russia was not moving fast enough on structural
reform. Russia inherited a backlog of debt when the Soviet Union
collapsed in 1991, and the country's debt to its public creditors, who
make up the Paris Club, has risen to $48 billion.
Russia pipeline in place
An international consortium has completed
construction of an oil pipeline connecting petroleum fields in western
Kazakstan to a Russian Black Sea port, giving a boost to Russia's
ambition to control a main route to world markets.
The 948-mile pipeline will deliver its first oil
from the Tengiz oil fields to the Russian port of Novorossiisk in
mid-2001, after pumping and signalling equipment is installed, said
Natalia Prutkovskaya, a spokeswoman for the Caspian Pipeline
The $2.5 billion pipeline is expected to ship
600,000 barrels a day — a substantial boost to the exports of
Kazakstan, which is believed to have the region's largest oil
Mortgage rates steady
U.S. Mortgage rates stayed flat in the absence of
new economic reports. But rates were slightly ahead of last year's
average, according to a survey released Wednesday by Freddie Mac.
The benchmark 30-year fixed-rate mortgage (FRM)
averaged 7.73 per cent for the week ending Nov. 24. The average this
week for a 15-year fixed-rate mortgage remained unchanged from the
previous week's average at 7.41 per cent. One-year adjustable-rate
mortgages (ARMs) this week averaged 7.28 per cent.
Treasurys take flight
U.S. Treasurys mounted a strong pre-Thanksgiving
rally on Wednesday, outperforming corporate and federal agency debt,
as the unsettled White House contest and concerns over corporate
earnings sent stocks tumbling.
Benchmark 10-year Treasury notes gained 8/32 to
100-28/32, as their yield, which moves inversely to price, dipped to
5.63 per cent. Thirty-year bonds gained 26/32 to 108-4/32, after being
up more than a full point earlier in the day. Their yields fell to
5.68 per cent. Two-year notes rose 1/32 to 99-26/32, yielding 5.84 per
cent, while five-year notes gained 4/32 to 100-19/32, yielding 5.61
Jobless claims climb
The number of Americans filing new claims for
unemployment benefits climbed to 336,000 for the week ended Nov. 18
from a revised 329,000 the previous week, the government reported
Yahoo! falls to 2-year low
Shares of Yahoo! Inc. tumbled Tuesday to their
lowest level in two years, after an influential Morgan Stanley analyst
said that the Internet portal has a 30 per cent chance of missing
revenue targets in the next few quarters.
U.S. trade gap hits record
The U.S. trade deficit widened to a record in
September as surging costs for oil, chemicals and other
petroleum-based products failed to offset the dollar value of goods
and services exported abroad, government figures released Tuesday
showed -- a sign that the economy is still being fueled by strong
The trade deficit, which measures the amount of
money spent on imports coming into the United States versus the amount
received from exports leaving the country, widened in September to a
record $34.26 billion. That was almost $5 billion higher than August's
revised $29.9 billion deficit and well above the $30.6 billion gap
expected by analysts polled by Briefing.com.
German biz optimism dips
Germany's key business barometer, the Ifo index,
fell in October for the fifth consecutive month to reach its lowest
level this year, reinforcing views that euro-area interest rates will
stay on hold for the time being.
The Ifo economic research institute's monthly
survey showed that the headline index of business confidence in
western Germany dropped to 97.2 from 98.0 in September, falling short
of experts' forecasts that it would remain unchanged from the previous