INTERNATIONAL

 

Apr 19 - 25 , 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

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UK ECONOMIC RECOVERY 'IMPROVING'

The UK's economic recovery is improving with output, confidence and demand all on the up, the British Chambers of Commerce (BCC) has said.
In the first three months of the year, manufacturing employment surged to its best level in six years and confidence was at its best level since 1997.
But the BCC added that the service sector "flat-lined", with employment dipping and weak export markets.
The BCC warned that any interest rate rise may jeopardise the recovery.

 

 

 

 

The group's survey of 6,149 firms found the balance of manufacturers reporting a rise in export sales rose to 19%, up from 17% in the last three months of 2003.

David Kern, BCC chief economist, admitted that the Bank of England would have to raise interest rates in future if the recovery continued.

But he added: "We urge them to maintain a cautious stance, taking fully into account the problems facing the manufacturing sector and the strength of sterling."

The upbeat picture painted by the BCC's survey contrasts sharply with official figures released by the Office for National Statistics (ONS) earlier this month.

The ONS figures showed that manufacturing output fell by 0.6% during February.

CHINA'S BOOM FUELS FEARS OF SLUMP

China's economy has recorded another quarter of rapid growth, fuelling fears of unstable overheating last week.

Gross domestic product was up 9.7% year on year in the first quarter of 2004, while investment in fixed assets soared by 43%.

While such figures look only positive, economists worry that unchecked growth could topple over into a slump, with an effect on the rest of Asia.

The Chinese Government has moved to play down such fears.

In particular, it has sought to calm runaway bank lending, the source of much speculative financing, especially in the property sector.

The investment figure, which at least partly reflects spending on housing and other construction, is seen as a cause for especial concern.

"The risks are that investment spending will remain strong for the next six months at least," said JP Morgan economist Ben Simpfendorfer.

"The faster it grows, the higher it rises, the further it has to fall, eventually.

"It simply raises the risk of a correction further down the track."

Earlier, the State Council, or cabinet, vowed again to take "resolute steps" to smooth out any economic boom-and-bust cycle.

It had been expected that the latest batch of economic data would show some slowing, as a sluggish global economy bites into demand for China's exports.

But there has been little sign of that.

Factory output was 19% higher in March than a year earlier, and exports were 43% higher.

Inflation, a key indicator of overheating, remains modest. The consumer-price index was up just 2.8% year on year in the first quarter.

BANGLADESH TO TRIPLE FARM SUBSIDIES

The Bangladesh government plans to triple subsidies for farmers to $152m (85m) to boost farm production.

Agriculture accounts for around 30% of the country's total economic output.

A reminder of the vulnerability of the industry came the day of the announcement, when a tornado ripped through farming villages in the north.

Population is increasing rapidly, but with decreasing amounts of arable land the government needs the farming sector to become more efficient.

Finance Secretary Zakir Ahmed Khan said the subsidies would help offset the higher costs of irrigation and seeds.

To maintain economic growth in Bangladesh the country relies heavily on agriculture.

"We have no option but to increase crop production," Mr Khan said, pointing out that better irrigation would help farmers grow more with the land available.

Severe environmental challenges exacerbate the problems Bangladeshi farmers face, such as monsoon rains which can leave hundreds of thousands homeless and farm land unusable.

Economists report that to address widespread poverty, which affects more than half of its 130 million people, economic growth needs to be at least 7%.

Forecasts show growth is likely to miss this target in 2003-04, reaching only 5.5% although that outstrips the average of 5% over the past decade.

Farmers recently welcomed a 2% cut in interest rates on farm loans to 8% and a waiver on interest owing to each farmer of 5,000 taka ($85; 48).

BANGLADESH STORM TOLL RISES

Relief operations are under way in northern Bangladesh after tornadoes left at least 66 people dead and about 1,000 injured.

Medical teams have also been sent to Mymensingh and Netrokona districts amid fears the number of dead could rise further.

Prime Minister Khaleda Zia and opposition leader Sheikh Hasina have also visited the affected areas. On April 14 storm hit at least 12 villages in the two districts.

Thousands of people have been left homeless as their houses were blown away by the strong winds and rains.

POLL BUOYS S KOREA ECONOMIC HOPES

The South Korean election spells an end to political uncertainty and a return to economic stability, the government has said.

Voters have given a majority in the National Assembly to the liberal Uri party, which supports embattled President Roh Moo-hyun.

"This will greatly help the economy's international credibility," said Finance Minister Lee Hun-Jai.

"The government will strive to accelerate recovery."

The end of the elections, he said, meant both the government and the public could concentrate on the economy once again.

Investors did not seem quite so certain: South Korean shares fell by 1% after the poll results.

But most analysts said the longer-term economic effects would be positive, if parliamentary support helps shore up Mr Roh.

CUBA SIGNS $13M IN US FOOD DEALS

Cuba has signed contracts for food and farm goods with the United States worth over $13m (7m).

About 300 US farming representatives are visiting Havana, hoping to make sales worth some $100m (55m) during the three-day meeting.

The four-decade long trade embargo between the US and Cuba has an exception which allows commercial sales of American farm goods.

The meeting is organised by the Cuban government food import firm Alimport.

The biggest contract announced on the first day of the meeting, was for $8.9m (4.9m) worth of corn with Archer Daniels Midland of Decatur, in Illinois.

Since 2000, when Cuba started to take advantage of the exceptional rule in the US trade embargo, farm product contracts worth $430m excluding costs have been signed, according to the US-Cuba Trade and Economic Council.

JAPAN ECONOMIC OUTLOOK IMPROVES

The Japanese central bank has issued an upbeat report on the economy, lifting hopes of a sustainable recovery.

The Bank of Japan said on April 16 the economy was improving "gradually," amid strengthening domestic demand and rising corporate profits.

The report is the latest in a series of signals that Japan may be emerging from a decade-long period of stagnation.

But the Bank said it was keeping interest rates on hold at zero in order to stimulate the economy.

It added that deflation where falling prices curb consumer spending, slowing economic growth had not yet been defeated.

"Consumer prices are projected to continue falling slightly on a year-on-year basis," the Bank said.

Japan's economic prospects have brightened in recent months, with a stable yen exchange rate supporting an export boom.

The Bank said the benefits of the export boom had begun to spill over into the wider economy.

FRANCE BACKS BROWN'S AID PROJECT

France is backing UK Chancellor Gordon Brown's call for global aid to be doubled to $100bn (54bn) a year.

"What will weigh more on... our economies?" said French Finance Minister Nicholas Sarkozy.

"Terrorism, poverty, despair - or a possible tax that pushes back poverty, despair and hence terrorism?"

Mr Brown secured the backing of Mr Sarkozy but not yet that of Germany or the US at a summit in Paris attended by ministers from 56 nations.

The chancellor called for world leaders to "accept the challenge for our time and for our generation" and said they should have "the strength together to fight poverty, remove destitution, end illiteracy, and cure disease in the developing world".

He added: "I propose we all commit ourselves, as partners together, to work to make the radical changes required."

CHINA FEARS BOOM AND BUST CYCLE

The Chinese government has issued a new warning that too much bank lending for real estate and certain industrial projects could lead to supply gluts and trigger a financial crisis.

The country's central bank, the People's Bank of China, has taken fresh measures to try to curb the amount of money that Chinese banks are lending.

The move comes after Premier Wen Jiabao warned last month of the need to avoid a boom and bust cycle.

All over China, gleaming new towers of steel and concrete are going up, bridges and roads are mushrooming, and factories are springing up.

ANC SET TO CELEBRATE ELECTION WIN

South Africa's ruling African National Congress is heading for its biggest election victory, 10 years on from the end of apartheid.

With 90% of polling districts now accounted for, the ANC has 70% of the vote with the opposition Democratic Alliance in second place with 13%.

Later on, President Thabo Mbeki is due to address supporters at a huge celebration party in Johannesburg.

For the first time the ANC is set for a two-thirds parliamentary majority.

SAMSUNG

Roaring demand for computer chips, flat screens and mobile phones has seen profits treble at Samsung, Asia's biggest electronics manufacturer.

The Korean firm earned 3.1 trillion won (1.5bn; $2.7bn) in the three months to end-March, well ahead of forecasts.

UK UNEMPLOYMENT AT 20-YEAR LOW

UK unemployment has fallen to its lowest level in 20 years, down another 33,000 to just 1.43 million in the three months to February.

The so-called ILO rate of unemployment, the government's preferred measure, now stands at 4.8%.

And the number claiming jobseekers allowance in March also fell, down 4,200 people to 882,200.

INDIA'S WIPRO JOINS THE $1BN CLUB

Wipro, India's number-three software exporter, has joined rival Infosys in smashing through the $1bn sales mark for the 2003 business year.

Wipro had revenues of $1.4bn ($750m) in the year to March, a 49% jump on the previous year.

IBM'S PROFITS INCREASE AGAIN

IBM has seen its profits grow for the fifth quarter in succession. The company known as "Big Blue" made a $1.6bn (893m) profit in the first quarter of 2004, compared to $1.38bn for the same period last year.

Its quarterly revenue in turn rose by 11% to $22.2bn, from $20.1bn for the first quarter of 2003.

US AIRLINES COMPLAIN AT FUEL COST

US airlines Continental and Southwest have each used their first quarter results to complain about the high cost of fuel.

Continental, America's fifth largest airline, lost $124m (70m) in the three months to March, down from $221m in the same period in 2003.

Southwest, meanwhile, scored a profit of $26m for its first quarter, a slight increase on $24m a year earlier.

CITIGROUP REPORTS RECORD PROFITS

Citigroup has announced its highest quarterly profit. The company, the world's largest financial services group, made net earnings of $5.27bn (2.96bn) in the first three months of 2004.

The figure is a 29% increase on the $4.1bn made in the same period last year, and ahead of analyst expectations.

 

 

SUN REPORTS LOSS

Software and computer server maker Sun Microsystems has as expected made a substantial third-quarter loss.

The Californian company made a net loss of $760m (424m) in the three months to March, compared with a $4m profit the same time last year.

Sun's revenue fell for the 12th quarter in succession, falling to $2.65bn from $2.79bn.

US PLEDGES AID FOR UNITED CYPRUS

The United States has pledged $400 million in aid to support a UN plan to end the 30-year division of Cyprus.

But it stressed the money will only be paid if both Greek and Turkish Cypriots back the UN peace plan in referendums on April 24.

Thirty nations and organisations are currently attending a pre-donors' conference in Brussels to calculate the costs of the UN plan.

The EU is expected to announce plans for about $385 million in aid.

TENDER LAUNCHED FOR SICILY BRIDGE

Italy has launched a tender for construction of a long-awaited bridge linking Sicily with mainland Italy, Italian television has reported.

According to state TV channel Rai Uno, prospective contractors have until 13 July to submit their bids.

Construction of the bridge expected to cost 4.6bn euros ($5.5bn; 3.1bn) will begin in late 2005 and take more than six years, the report said.

The toll for cars using the 3.6 kilometre bridge will be 9.5-16 euros.

OXFAM SLAMS EUROPEAN SUGAR TARIFF

Oxfam has called for an end to guaranteed prices for European sugar producers because it says the practice is unfair to poorer farmers.

The development charity has criticised the European Union's sugar industry for subsidising its farmers.

It says the system denies farmers in poorer countries access to the market.

But Tate & Lyle, one of six sugar companies singled out for criticism, says the charity has presented a distorted picture of the market.

Oxfam says EU taxpayers are in effect giving a billion dollars in a year in subsidies.

IPOD HELPS APPLE TRIPLE PROFITS

Computer group Apple has seen its profits more than triple, thanks in no small part to the ongoing success of its iPod personal music player.

The firm earned a total of $46m (26m) in its three months to March, up more than 300% from the $14m it achieved for the same period a year previously.

HARLEY-DAVIDSON PROFITS UP

Motorcycle manufacturer Harley-Davidson has reported a 10% rise in quarterly profit, as it revs up for the key spring riding season in the US.

The iconic US company saw its first quarter net income rise to $204.6m compared to the $186.2m a year ago.

INTEL SEES PROFITS ALMOST DOUBLE

A recovery in global computer spending has helped chip giant Intel report an 89% increase in first-quarter profits.

For the three months to 27 March, the Californian-based company made a profit of $1.7bn, almost double the $915m recorded for the same period in 2003.

LESOTHO TO PRIVATISE POWER FIRM

Lesotho plans to sell 70% of its state electricity utility by the end of the year, officials say.

The move is part of an push to connect more homes in the tiny mountain kingdom to the national grid.

SALES TOP $1BN AT INDIA'S INFOSYS

Indian software exporter Infosys has seen profits and sales both soar in the past year.

Net profits for the firm rose rose to 12.4bn rupees ($280m; 155m) from 9.6bn rupees in 2003, as revenue surged 30% to 47.6bn rupees.

It is the first Indian software company listed on the US Nasdaq stock exchange to top the $1bn mark.

HSBC ROUTES CALLS TO PHILIPPINES

UK banking giant HSBC is to set up a call centre in the Philippines to handle customer service and backroom operations, company officials say.

The bank will initially hire 500 people for the operation, to be based on the outskirts of Manila.

HSBC said last year that it was cutting 4,000 jobs at its UK call centres over the next three years.

 

 

FORD RECALLS SPORTS UTILITY MODEL

Ford is recalling 363,440 of its Escape US compact sports utility vehicle as a result of a stalling problem.

Those vehicles affected are fitted with 3.0 litre V6 engines and made between 2001 and early 2003.

WALES TOPS HOUSE PRICE RISE LIST

Wales has seen the UK's biggest house price increases in 12 months, with prices up by 57% in some areas, according to a new survey.

Four of the top 10 counties which experienced the biggest gains were in Wales, Halifax mortgage lenders found.

Gwynedd prices rose by 57% and in the former county of West Glamorgan by 56%, while the former counties of Mid Glamorgan and Dyfed both saw rises above 30%.

The Bank of England's April meeting left interest rates unchanged at 4%, despite fears of a house price bubble.

ZIMBABWE WOOS NEW ASIAN TOURISTS

Zimbabwe is seeking to boost the number of visitors from Asia, to make up for the collapse in European tourism, an official says.

Asia was the biggest tourist growth market last year, state media reports.

Some 40,000 people, mostly from China, India and Japan visited in 2003, an increase of 40%.

Tourism used to be one of Zimbabwe's biggest industries but traditional markets in Europe, especially the UK, have collapsed due to security fears.

US PRICES SPARK RATE-RISE JITTERS

US inflation is rising faster than expected, increasing the possibility of a rise in interest rates.

The month of March saw the consumer price index rise 0.5%, fuelled by higher gasoline and clothing prices and the US economy's ongoing recovery.

The rise outstrips the 0.3% gain seen in February a figure economists had predicted March would match.

US exports have also risen, up by 4% in February to pull the trade deficit back from the record levels seen in January.

The boost to the CPI, the US government's most closely watched inflation guide, amounted to a return to form, since January had also produced a 0.5% hike.

'HEFTY' BALLERINA LOSES $1M LAWSUIT

A top Russian ballerina, sacked for being too heavy, lost a damages claim for $1 million against the chief of Moscow's Bolshoi Theatre.

Prima ballerina Anastasia Volochkova, fired in September for being too bulky for her partners to lift, sought the damages from the Bolshoi's general director Anatoly Iksanov for harming her personal and professional reputation.

BP TO LOAD FIRST AZERI CRUDE CARGO

Oil major BP will load the first cargo of Azeri crude from its flagship Baku-Ceyhan pipeline in late May 2005 at the earliest, the firm said.

"The first tanker will leave Ceyhan either at the end of May or at the end of June 2005," BP's head in Azerbaijan David Woodward said. BP had previously slated the first loading for spring 2005.

LARGE FALL IN US JOBLESS CLAIMS

The number of people filing new claims for unemployment benefit hit a three-year low in the US last week, according to government figures.

The number of newly unemployed claiming benefits dropped 14,000 to 328,000 in the week ending April 3.

The figures come a week after government data showed 308,000 new jobs had been created in March.