INTERNATIONAL

 

July 26 - Aug 01, 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

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JAPAN BOOSTS ANNUAL GROWTH TARGET

Japan has almost doubled its economic growth forecast for the 12 months to March 2005, helping underpin optimism that recovery is on track.
The Cabinet Office expects growth of 3.5% during the current fiscal year, having previously forecast 1.8%.
Such a rate would be the country's fastest annual expansion since 1996.
The surge is being fuelled both by exports such as cars and electronics, and domestic demand driven in part by a summer heat wave.

 

 

 

 

Last Tuesday, temperatures in Tokyo touched 39.5 degrees Celsius, or 103 degrees Fahrenheit, the hottest since records began more than 80 years ago.

That is expected to boost sales of cold drinks and products such as air-conditioning equipment, analysts said.

According to Yasuo Goto, an economist at the Mitsubishi Research Institute, the effect of the record summer weather "could be quite substantial".

Although the heat-wave was a "one-off factor" which provided no guarantees that it could continue to support consumer spending, he said, it was "certainly a factor that will add momentum to the current economic recovery".

Also boosting optimism were upbeat comments by Alan Greenspan, chairman of US Federal Reserve.

Mr Greenspan said that growth in the US, the world's biggest economy and a major importer of Japanese products, was likely to pick up in coming months.

He added that the recent drop in consumer spending probably would prove to be short-lived.

GREENSPAN POSITIVE ON US ECONOMY

Alan Greenspan, the Federal Reserve Chairman, has given a positive report on the US economy, playing down the threat of rising inflation.

Appearing before the Senate's Banking Committee, he said economic trends this year had been "quite favourable".

Mr Greenspan acknowledged that growing consumer demand had lead to a rise in inflation but stressed that current economic growth was sustainable.

Analysts said his remarks pointed to the likelihood of interest rate rises.

In testimony to Congress on US monetary policy, Mr Greenspan said the US economy had enjoyed broad-based growth so far this year.

Growth was likely to increase in the second half of the year, he said, while indicators were favourable that inflation would be contained.

He said: "Economic developments have generally been quite favourable in 2004, lending increasing support to the view that the expansion is self-sustaining."

Consumer spending had slowed in recent months, Mr Greenspan noted, as a result of a rise in inflationary pressures, in turn brought about by the surge in energy prices.

But Mr Greenspan said he believed this would be "short-lived".

He said there had been signs of a recovery in the labour market over the past six months which should filter through to household spending.

"Despite the softness of recent retail sales, the combination of higher current and anticipated future income, strengthened balance sheets and still low interest rates bodes well for consumer spending," he said.

Analysts said Mr Greenspan's upbeat outlook for growth this year indicated the central bank could raise interest rates more quickly than expected.

BUSH WELCOMES 9/11 REPORT

President George W Bush has welcomed the report of the independent commission set up to investigate the 11 September terror attacks.

Mr Bush said he agreed with its conclusion that the hijackers had exploited deep institutional failings.

But he also pointed out that many of its recommendations were already being implemented.

The commission recommends a wide-ranging overhaul of US intelligence services and congressional oversight.

"Where government needs to act, we will," President George W Bush said after receiving his copy of the report which comes after two years of exhaustive investigation.

"We will give serious consideration to every idea because we share a common goal," he added.

His Democratic challenger in this November's presidential elections, John Kerry, urged the president to act fast.

"If I am elected president and there has still not been sufficient progress on these issues, I will not wait a single day more. I will lead," he said.

Intelligence bodies have come under harsh criticism for failing to avert the airliner hijackings, in which about 3,000 people died.

But no single individual is to blame, said Republican chairman Thomas Kean of the panel that produced the report.

"Yet individuals and institutions cannot be absolved of responsibility," he said.

Bob Hughes, the father of a victim of the attacks, said "there is plenty of blame to go around".

"There's really no closure for me and my wife," Mr Hughes said.

UK'S ECONOMY 'BEST SINCE 1990S'

The UK economy is now in its best shape since the 1990s and will grow by 3.5% this year and 3% in 2005, according to an influential economic think tank.

Further boosted by a strong global economy, the UK's growth will be robust over the next two years, said Ernst and Young's Item Club report.

Yet it cautioned that Chancellor Gordon Brown was spending too much, and that UK public debt was becoming a problem.

The report said the housing market would start to slow down but not crash.

"With a global economy firing on all four cylinders and a UK economy in its best shape since the late 1990s, we can look forward to robust growth in the next two years," said the Item Club's chief economic adviser Peter Spencer.

CHINA BOOM DRIVES SINOPEC OUTPUT

China's booming economy has pushed up output at the country's - and Asia's biggest oil refiner, Sinopec, by a fifth in the first half of 2004.

Sinopec said processing volume was up 19%, with sales rising nearly 30%.

China is seeing growth of more than 9% a year, despite state attempts to calm the economy amid fears of overheating.

Soaring energy demands have led to rolling blackouts, and firms are being forced to put staff on holiday and work at night to keep demand under control.

Over the weekend, Shanghai the economic powerhouse of central China increased by 25% to 2,000 the number of companies ordered to switch to night working, in the face of a heatwave which means air-conditioning usage is eating into power supplies.

 

 

SALES AND PROFITS UP AT MICROSOFT

Microsoft has thanked strong sales of personal computers for a quarterly rise in both sales and profits.

Reporting its results for the fourth quarter, it saw net profits increase to $2.7bn (1.5bn) from the $1.6bn (867m) for the same period last year.

Sales revenue in turn was up from $8.1bn to $9.3bn, said the software giant.

Yet on Wall Street, where Microsoft's shares fell slightly, analysts had been expecting yet higher profits.

They had been predicting profits of 29p a share rather than the 25p which $2.7bn represents.

Microsoft's quarterly results come a day after it announced plans to return more than $75bn (40.5bn) in cash to shareholders over the next four years, starting with a one-off dividend worth $32bn, or $3 a share, in December this year.

For its coming fiscal year Microsoft now expects to see sales revenue of $38.4bn to $38.8bn, up from previous guidance of $37.8bn and $38.2bn.

TURKISH TRAIN CRASH KILLS 36

At least 36 people were killed when a newly-introduced high-speed train came off the tracks between Turkey's main cities Istanbul and Ankara.

The government crisis centre initially put the death toll at 139 but later revised the figures downwards without giving an official explanation.

Carriages overturned when the packed express derailed near the town of Pamukova, in north-west Turkey.

The cause of the crash was not immediately known.

There had been criticism of compromises made when the new train began running along the modified railway track last month.

But officials insist the train, carrying 230 people from Istanbul to the capital Ankara, was not travelling fast at the time.

BAT SHRUGS OFF CHINA TOBACCO ROW

British American Tobacco is embroiled in an embarrassing row with Chinese regulators over its deal to become the first foreign cigarette maker in China.

BAT announced it would build a $1.5bn (800m) joint venture factory in China, churning out 100 billion cigarettes a year.

But the State Tobacco Monopoly Administration says it has not approved the deal.

BAT says it won clearance "from the highest levels of state government".

"We wouldn't have made an announcement of the magnitude that we did last Friday if we didn't have approval," BAT spokeswoman Teresa Lathangue told the BBC.

 

 

EURO 2004 LIFTS HIGH STREET SALES

UK's High Street sales raced ahead in June at the strongest pace for six months, boosted by the Euro 2004 football tournament, official figures show.

Retail sales grew by 1.1% on the month compared with 0.7% in May, the Office for National Statistics (ONS) said.

According to the ONS's figures, Euro 2004 pushed up sales of household goods as consumers bought new TV sets.

The data is likely to increase expectations that the Bank of England will raise interest rates next month.

US NUCLEAR LAB STAFF PUT ON LEAVE

The US's leading centre for nuclear weapons research have sent 15 employees on leave amid an investigation into the disappearance of secret information.

Four other employees have also been sent on leave after an intern was seriously injured with a laser.

Peter Nanos, the director of Los Alamos laboratory in New Mexico, said security breaches were threatening the centre.

SYMBOLIC BOSNIA BRIDGE TO REOPEN

One of the former Yugoslavia's most famous historical landmarks will be reopened soon, 10 years after it was destroyed during the Bosnian war.

A 16th century bridge at Mostar was blown up during the bitter fighting between the city's Muslims and Croats in 1993.

More than $13m has been spent on restoring it and surrounding buildings.

The opening ceremony was due to be attended by presidents, prime ministers and royalty from across Europe.

Arching across the Neretva river the Stari Most, or old bridge, has been reconstructed using the same methods and materials which the original Turkish architects employed nearly 500 years ago.

AMAZON'S PROFITS BELOW THE MARK

Shares in online retailer Amazon fell in after-hours trading in New York after its latest profit figure came in just below market expectations.

Amazon's stock gave up $2.61 after it reported second quarter net profits of $76bn (41bn) or 18 cents a share, just below the predicted 19 cents.

NEW MENU GIVES LIFT TO MCDONALD'S

McDonald's has thanked the continuing success of its recently introduced salad range for its best quarterly sales growth figures in seven years.

The fast-food giant saw its global sales increase by 10% to $4.7bn (2.5bn) in the second quarter of 2004, compared to the same period of 2003.

Profits were up even higher, jumping by 25% to $590.7m, above expectations.

WAGES TO SURGE IN INDIA, SAYS IMF

Indians can look forward to their incomes increasing eightfold over the next four decades, according to International Monetary Fund economists.

India has the potential to boost output per person by 5.3% annually, new IMF research maintains.

India's economy grew 8.2% in the year to March the country's fastest expansion in 15 years.

SEARS SEES RESULTS TAKE A TUMBLE

Sears, the US's largest department store group, earned $53m (29m) between April and June, compared to $309m (167m) for the same period last year.

NEW DRUGS FUELLING ASTRAZENECA

AstraZeneca, the Anglo-Swedish drugs giant, has reported a sharp rise in sales fuelled by a strong take up of its new generation of drugs.

Sales in the three months to June rose by 19% to $5.29bn (2.87bn), with profits up 24% to $1.14bn (619.7m).

The company reported strong growth in products such as ulcer drug Nexium and anti-cholesterol product Crestor.

KFC SUPPLIER PROBES POULTRY ABUSE

A US supplier for Kentucky Fried Chicken has fired 11 workers after a video showed the poultry being kicked, stamped on and slammed against walls.

Pilgrim's Pride vowed to root out all who were responsible for the abuse at its Moorfield plant in West Virginia.

It came after the animal welfare group Peta released a secretly taped video showing workers "stomping on, kicking and throwing live chickens about".

KFC said it had suspended the buying of chicken from Moorfield.

Pilgrim's Pride the country's second-largest poultry producer said it had fired three managers and eight hourly workers as a result of its own internal investigation.

US ENERGY FIRMS FACING LAW SUITS

Eight US states have joined forces to file law suits against five giant power firms challenging their gas emissions.

The case was being launched in the federal district court of Manhattan using the common law of "public nuisance" to demand cuts.

The five are American Electric Power, Southern Co, Xcel Energy, Cinergy and the Federal Tennessee Valley Authority.

The New York Attorney General's office described the combined action as a "precedent-setting" move.

The states California, Connecticut, Iowa, New Jersey, New York, Rhode Island, Vermont and Wisconsin contend that the five are the US's biggest emitters of carbon dioxide.

MITSUBISHI SCALES DOWN US OUTPUT

Japanese carmaker Mitsubishi Motors is to lay off 1,200 workers at its only US factory later this year as part of a worldwide cost-cutting drive.

The measure is part of a radical restructuring of the firm's business forced upon it by a $9bn(4.8bn) debt a series of costly recall scandals.

More than 30% of workers at its plant in Illinois will be let go in October.

Mitsubishi received a $4bn(2.7bn) rescue package earlier this year after DaimlerChrysler removed its support.

The company will cut annual capacity by 22% to 140,000 units.

INTERNATIONAL SALES BOOST EBAY

Strong growth in international sales helped online auction firm eBay double its second quarter profits.

eBay, which recently acquired a leading shopping site in India, recorded a 51% increase in earnings to $190.4m(103m) in the first three months of the year.

The Californian company, which has operations in more than 17 countries, said its international sales had risen 76% to $273.7m(148m) over the period.

The company said it expected full year sales to total $3.1bn(1.6bn).

STOCK MARKET FLOAT FOR SHREK FIRM

DreamWorks Animation, the computer-generated cartoons studio which created the blockbuster Shrek, is to be floated on the US stock market.

The company which also made Chicken Run is an offshoot of parent DreamWorks, formed by three US entertainment moguls.

The initial public offering (IPO) may raise as much as $650m (353m).

BANK UNANIMOUS ON FREEZING RATES

Members of the Bank of England's Monetary Policy Committee (MPC) voted unanimously against a third successive rate rise at July's meeting.

Rates were kept on hold at 4.5% after inflation in May proved below target, and there were tentative signals that the house market was slowing.

Minutes of the meeting showed the MPC was waiting for August's inflation report to review the rate situation.

In May and June, the MPC raised rates by a quarter point in each month.

INTERNET BANK EGG SHRINKS LOSSES

Internet bank Egg has narrowed first-half losses as uncertainty over parent Prudential's stake in the firm mounts.

Egg reported a pre-tax loss of 4m ($7.37m) for the six months to 30 June, down from a 23m loss last year.

SALES JUMP LIFTS ERICSSON PROFITS

Shares in Ericsson, one of Europe's most-watched technology companies, have jumped after the firm reported better-than-expected quarterly profit.

The Swedish maker of telecommunications equipment said pre-tax profit for the April to June period was 7.8bn kronor (564.6m; $1.05bn; 848m euros).

TURKISH AIRLINES ORDERS 51 PLANES

Turkish Airlines, the country's state-run carrier, has announced plans to buy 51 new planes to expand its fleet.

The company is looking to benefit from accelerating domestic economic growth and a subsequent pick-up in air travel.

Turkish Airlines did not reveal details of what it will pay, but press agencies estimate that the deal may be worth as much as $4bn (2.2bn).

COURT RELIEF FOR BHOPAL VICTIMS

India's Supreme Court has ordered the government to release millions of dollars in compensation for victims of the 1984 Bhopal gas tragedy.

The court directed that 15bn rupees ($327.5m) be distributed among the more than 500,000 victims and dependants.

Some of the original compensation figure of $470m has already been paid out, but legal delays held up the rest.

UK MORTGAGE LENDING RISES SHARPLY

Mortgage lending rose sharply in June, figures from the British Bankers' Association (BBA) have shown.

Lending rose by 6.5bn, up from 5.1bn in May, and breached the recent monthly average of 5.7bn.

A similar picture came from the Council of Mortgage Lenders latest data, which showed a record 27.8bn was advanced in June, up from 24.1bn in May.

FRENCH BOSSES SLAM 35-HOUR WEEK

Many French bosses think the compulsory 35-hour week is having an adverse effect on the country's economy, according to new research.

Of 1,000 heads of small firms polled by Ifop, 93% said they would like to see restrictions on staff work hours eased.

The 1999 law was intended to reduce France's high unemployment rate.

CHINA BOOM LEAVES MANY BEHIND

The number of Chinese people living in abject poverty rose last year for the first time in a quarter of a century.

According to official figures, 800,000 Chinese citizens fell into abject poverty last year, with incomes of less than $77 a year.

State-run newspapers said natural disasters were to blame for the surge.

The figures show that the gap between urban and rural incomes is also widening, with China's economic reforms benefiting some more than others.

China's economic boom may be making headlines, but behind the glitzy new skyscrapers an old phenomenon is rearing its ugly head.

Poverty has increased in China for the first time since the economic reforms began 25 years ago.

INFLATION IN THE US RISES SLOWLY

US inflation growth slowed last month but rising petrol costs continued to push overall consumer prices up.

The Consumer Price Index, the best gauge of inflation, rose 0.3% in June, the US government said.

"This effectively takes a 50-basis-point [interest] rate hike out of the hands of the Fed in August," said Pepper Pike economist Ken Mayland.

In the eurozone, meanwhile, inflation fell in line with forecasts, from 2.5% in May to 2.4% in June.