INTERNATIONAL

 

Dec 13 - 19, 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

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UK IMPORTS AT RECORD MONTHLY HIGH

The UK's trade gap widened sharply in October, as imports hit a record monthly high of 21.5bn.
The trade-in-goods deficit deteriorated sharply to 5.3bn, from 4.4bn in September, much higher than analyst forecasts of a 4.7bn gap.
The Office for National Statistics (ONS) blamed a 7.5% drop in non-EU exports for the gap, which was partly attributed to sterling strength.
The trade gap so far this year is 34bn, 1.2bn more than the 2003 gap.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A breakdown of the data shows that the UK's trade gap with the European Union (EU) grew to 2.4bn in October from 2.1bn a month earlier.

The deficit with non-EU countries jumped to 2.9bn from 2.4bn as the UK exported less manufactured goods, despite stronger global growth. This is partly because a strong pound, worth almost $2, has made the cost of UK goods prohibitive.

The country's surplus on trade in services remained steady for the fourth month in a row at 1.5bn.

The country's oil balance moved back into surplus after registering its first deficit in 13 years in September. The deficit was largely attributed to maintenance work on North Sea rigs hitting production.

"These figures are yet another disappointing set of UK trade numbers and despite strong global growth over the past year, Britain still can't seem to close its trade gap," Philip Shaw at Investec added.

Weak manufacturing data earlier this week, and a slowdown in consumer spending as the year's four interest rate rises bite could all contribute to a slowdown in the UK economy, Capital Economics UK economist Paul Dales said.

AD SPEND TO RISE FURTHER IN 2005

The amount spent on global advertising in 2005 will be higher than previously forecast, according to a number of the world's leading ad buyers.

Several agencies have upped estimates for spending, saying the industry has fully recovered from its 2001-2 slump.

This year's ad market was boosted by huge spending on the Olympics and the US Presidential election but underlying growth will continue unabated in 2005.

The internet will be the fastest growing advertising medium in 2005.

Universal McCann, part of the Interpublic Group, has increased its 2005 growth forecast not adjusted for inflation from 5.9% to 6.1%.

It says overall ad expenditure will total $553.4bn (284.9bn) next year.

ZenithOptimedia which is owned by the Publicis advertising network has raised its own growth forecast to 5% from its earlier 4.5% estimate.

Separately, British advertising services giant WPP has expressed optimism about its future growth.

Chief executive Sir Martin Sorrell said last Monday that he expected the company's earnings per share to grow by at least 10% in 2005.

The agencies highlighted a greater willingness by companies to launch new products and stronger competition in the auto and pharmaceutical sectors.

Growth will be slower than in 2004 when the combination of the Olympics, the US Presidential election and Euro 2004 football tournament added up to $3bn to advertisers' budgets.

According to Zenith Optimedia, global expenditure is expected to grow by about 7% to $369bn this year.

JAPAN NARROWLY ESCAPES RECESSION

Japan's economy teetered on the brink of a technical recession in the three months to September, figures show.

Revised figures indicated growth of just 0.1% - and a similar-sized contraction in the previous quarter.

On an annual basis, the data suggests annual growth of just 0.2%, suggesting a much more hesitant recovery than had previously been thought.

A common technical definition of a recession is two successive quarters of negative growth.

The government was keen to play down the worrying implications of the data.

But in the face of the strengthening yen making exports less competitive and indications of weakening economic conditions ahead, observers were less sanguine.

EUROZONE STATES SEEK DOLLAR MOVE

The dollar hit a fresh low against the euro on December 7, despite warnings by European officials over the issue.

In early trade in the Far East the dollar fell to a low of $1.3468 per euro, before pulling back to $1.345 in early trading in Europe.

The 12 eurozone members have urged the US to take action to address the "excessive volatility" of the dollar.

In a thinly veiled reference to the US, they called for "all major countries" to begin to tackle the issue. Eurozone members want the US to rectify its huge trade and budget deficits.

 

 

INDIA WINS $77M STEEL INVESTMENT

BlueScope Steel, Australia's largest steelmaker, is to invest $77m (40m) on building three new manufacturing plants in India.

The firm is also studying a possible joint venture with India's Tata Steel on a metal coating and paint facility.

BlueScope chief Kirby Adams said the move forms part of the company's expansion plans in Asia.

The plants in Pune, Chennai and New Delhi, will supply the growing Indian building and construction market.

S AMERICA LAUNCHES TRADING BLOC

Representatives from 12 South American countries have signed an agreement to create a political and economic bloc modelled on the European Union.

The new South American Community of Nations was launched at a summit in the Peruvian city of Cuzco.

Peruvian president Alejandro Toledo, said a new country was being born, which would one day have a common currency, parliament and passport.

Members of the new community will start by phasing out tariffs.

Leaders also hope it will increase South America's clout in international trade talks.

BIG ATLANTIC OIL FIND REVEALED

A "significant" oil and gas find has been made in the Atlantic just west of Shetland, it has been announced.

The ChevronTexaco find is 78 miles (126km) offshore in the Faroe-Shetland channel at the Rosebank/Lochnagar well.

President of ChevronTexaco Overseas Petroleum George Kirkland said the find "positioned the company for continued growth in the region".

Further tests will be carried out on the well to appraise fully the find, made by the West Navigator drill ship.

The well, located in 3,600ft (1,100m) of water and completed on 30 August, detected two oil and gas "accumulations".

US MOBILE GIANTS IN MERGER TALKS

US mobile operators Sprint and Nextel are in talks about a $70bn merger according to newspaper reports.

The deal would create the country's third-biggest mobile operator which would have 38.5 million customers, according to The Wall Street Journal.

Nextel has high average revenues per user due to its popular push-to-talk walkie talkie service on mobiles.

STATE REDUCES STAKE IN AIR FRANCE

France may cut its share in Air France-KLM to just 18% by trading free shares in the carrier for staff pay cuts, Reuters has said citing bank sources.

On December 9, the government agreed to sell 17.7% of its stake in the carrier, raising 700m euros ($931m; 486m).

That, already flagged, move will see its holding reduced to 25% from 44%.

AIR CHINA RAISES $1.07BN IN IPO

Air China, the biggest airline in China, raised $1.07bn (558m), after pricing its flotation near the top of its range, sources said.

It sold 2.8 billion shares, or 31% of its equity, at HK$2.98 ($0.38) each, near the top of a HK$2.35-$3.10 range.

DISNEY BACKS SONY DVD TECHNOLOGY

A next generation DVD technology backed by Sony has received a major boost.

Film giant Disney says it will produce its future DVDs using Sony's Blu-ray Disc technology, but has not ruled out a rival format developed by Toshiba.

BANK LEAVES RATES ON HOLD AGAIN

UK interest rates have been kept on hold at 4.75% by the Bank of England in a widely-expected move.

Following the final monthly meeting of 2004, the Bank's Monetary Policy Committee (MPC) decided to take no action amid signs of a slowing economy.

The Bank's base lending rate has stood still for the past four months, having risen five times between November 2003 and August 2004.

ONE IN 10 FAMILIES 'PAYS BRIBES'

One in 10 people says they or a member of their household has paid a bribe in the past year, according to a global opinion survey published on Thursday.

It suggests that Cameroon is the most corrupt country, as a majority of those surveyed there admitted paying bribes.

It was followed by Nigeria, Kenya, Lithuania and Moldova all countries where at least one in three people admitted paying bribes. Transparency International released its poll to mark UN Anti-Corruption Day.

SNOW STAYS AS US TREASURY CHIEF

US Treasury Secretary John Snow is to remain in his post for George W Bush's second term as president, the White House has confirmed.

There had been speculation that Mr Snow, 65, would resign from the cabinet to work as a congressional enforcer for Mr Bush's economic policy.

Eight members of the cabinet have already resigned from their posts.

Mr Snow joined the administration when Mr Bush's first treasury secretary, Paul O'Neill, stood down in early 2003.

NINTENDO'S DS BEATS SALES TARGET

Nintendo, the Japanese computer games firm, has raised targets for its new DS handheld games console after it sold a million units in its first few weeks.

The company said there were product shortages in both the US and Japan and that it was starting to ship the DS by air to the US to meet demand.

It now expects to ship 40% more of the video game consoles before the end of the year.

CHINESE FIRM BUYS IBM PC BUSINESS

IBM, a pioneer of the personal computer business, is selling its PC hardware division to China's number one computer maker Lenovo.

After days of rumours, the announcement heralds a $1.75bn (900m) deal which will make the combined operation the third biggest PC vendor in the world.

BLACK QUOTA MOVES FOR SA TOURISM

More than one-fifth of South Africa's tourism industry must be in the hands of black investors within five years, according to a new draft charter

The black empowerment document was given to the government last week.

Within a decade the proportion must be 35% according to the draft, drawn up by South Africa's tourism industry the country's top foreign-exchange earner.

NO IAMGOLD MERGER FOR GOLD FIELDS

South Africa's under-pressure Gold Fields has lost a shareholder vote over its merger with Canada's Iamgold.

Gold Fields is the subject of a $6.25bn (3.2bn) hostile takeover bid from rival Harmony and had hoped to find security in a deal with Iamgold.

Gold Fields needed approval of 50% of shareholders plus one vote, but only 48.2% of shareholders voted in favour of the tie-up.

BANK CALLS FOR ARGENTINE REFORMS

The World Bank has approved a $200m (103m) loan for infrastructure projects in Argentina but also demanded more reforms to the country.

The Bank said in a statement that conditions for loans for the recovery of the country "have not been met yet".

The institution froze $500m in June until the government resumed talks with the International Monetary Fund.

SWISS INSURER SELLS UK LIFE UNIT

Insurance firm Swiss Life has announced it is selling its UK life assurance business to Resolution Life Group (RLG) for 205m ($396m).

Swiss Life has been looking for a buyer for the business since 2002 when it ceased writing new policies and indicated it wanted to exit the market.

The company has been restructuring and outsourced its group income protection business to UnumProvident last year.

TATA SIGNS IT DEAL WITH FERRARI

Tata Consultancy Services of India has signed a deal to provide information technology to famous Italian Formula One racing team Ferrari.

India's largest software services firm will also provide engineering services for the development of the team's racing car for the 2005 season.

EU BACKS LAMY FOR TRADE POSITION

The European Commission supported former EU trade commissioner Pascal Lamy to become the next head of the World Trade Organisation (WTO).

Commission spokeswoman Claude Veron-Reville said the matter had been discussed with EU governments and that Mr Lamy had "significant support".

The next WTO director general will take up the job from September next year.

 

 

The current WTO head, Supachai Panitchpakdi of Thailand, is due to stand down on 30 August 2005.