INTERNATIONAL

 

Apr 25 - May 08, 2005

 

1.INTERNATIONAL

2. PAKISTAN

 

TORY PLAN TO CUT STAMP DUTY TAX

The Conservatives are expected to unveil plans to devote 1bn to a tax cut on stamp duty.
The threshold could be raised from 60,000 to 250,000 - higher than the Lib Dems, who have promised a 150,000 limit, and Labour's target of 120,000.
Meanwhile, Labour will put law and order in the spotlight with a pledge to cut crime by 15% by 2008 if re-elected.
Lib Dem leader Charles Kennedy will explain plans to scrap tuition and top-up fees to reduce student debt.

Of the 4bn set aside by the Conservatives for tax cuts, 3bn has already been earmarked to pay for council tax discounts and a benefit on savings for pensions with 1bn expected to go towards cutting tax on stamp duty.

BBC correspondent Jo Coburn said the Tories were banking on a change of fortunes in the polls, which had so far been disappointing for them.

The Guardian newspaper, meanwhile, has published what it claims is a leaked memo from the Conservative's election strategist Lynton Crosby to candidates, warning them to keep their nerve and remain focused in the run-up to the general election.

Labour leader Tony Blair is expected to put a new Crime Bill to be introduced early in the next Parliament at the heart of efforts to reduce anti-social behaviour and crime.

Ministers will use the latest British Crime Survey figures, published last Thursday, to highlight what they say is a 15% fall in crime since 1997.

Labour plans include local policing teams, six times more community support officers, local input into police strategy, public naming of the anti-social and a new non-emergency number to report anti-social behaviour.

UK BORROWING 'IN LINE' AT 34.5BN

UK public sector net borrowing (PSNB) is almost in line with the chancellor's forecasts for the fiscal year 2004/5 as tax revenues flowed in, figures show.

The Office for National Statistics (ONS) said borrowing for the year was 34.5bn down 1.3bn on last year.

Tax receipts rose 1.6bn in the year to 36.6bn, leaving net borrowing broadly on course to hit Treasury forecasts.

Mr Brown had predicted that net borrowing would be 34.4bn, though some analysts said it would top that figure.

Mr Brown has said he is in line to meet his "golden rule" of borrowing only to invest with 6bn to spare.

To do this, Mr Brown will have to balance borrowing and current spending in the public sector budget during the economic cycle the current cycle is expected to end early next year.

ONS figures showed that public sector spending had been reined in, with the deficit on the current budget 16.6bn for the fiscal year to March.

That's less than the 21.1bn seen last year, but more than the Chancellor's budget forecast of 16.1bn.

Analysts said that the 4.5bn improvement in the current budget position left little room for manoeuvre if Mr Brown is to stick to his "golden rule".

The majority of analysts have predicted that even if Mr Brown does manage to stick to the rule during the current cycle, he will face a budget deficit in the next cycle which will force him to raise taxes by up to 10bn a year.

"With the economy unlikely to meet Mr Brown's forecast of 3% growth this year we still expect taxes to have to rise after the election to put the public finances on a more sustainable footing," Capital Economics' chief UK economist Jonathan Loynes said.

GASOLINE PRICES FUEL US INFLATION

The core rate of US inflation has risen at its steepest rate in two-and-a-half years, fuelled by a sharp rise in gasoline (petrol) prices.

The 0.4% core inflation figure for March was the highest seen since August 2002 and double what economists had expected. February saw a 0.3% rise.

The jump increases the likelihood of a corresponding hike in interest rates.

The wider Consumer Price Index (CPI) figure, which also includes energy and food costs, rose by 0.6%.

This was the biggest rise in the CPI since last October, US Labor Department figures showed. It followed a 0.4% increase in February.

Over the first three months of 2005 as a whole, CPI inflation rose at an annual rate of 4.3%, a full point above the 3.3% seen across the 12 months of 2004.

The latest figures are expected to raise concerns that the US Federal Reserve will start increasing interest rates at a greater pace to try to compensate for increasing inflationary pressures.

The Fed, and its chairman Alan Greenspan, have already suggested this could be a real possibility.

This was reiterated on Wednesday, when the Fed's latest "beige book" summary of economic conditions across the US, found upward price pressures in a number of 12 Federal Reserve districts.

Since last June the Fed has increased rates by seven quarter points to 2.75%, with the last rise coming on 22 March.

During March, gasoline prices climbed 7.9%, overall energy costs by 4%, food by 0.2%, and clothing by 0.8%.

Airline tickets rose by 2.7%, the biggest increase in nearly four years, as the companies pass on their increased fuel costs.

TECH REVIVAL LEADS SHARE REBOUND

Shares have revived worldwide after heavy falls on Monday, as investors hunted for bargains.

Tuesday saw the UK's FTSE rise 0.4% by lunchtime, with Japan's Nikkei having closed up 1.2% buoyed by overnight gains for US tech stocks.

Markets in Asia and Europe had slumped the day before on concerns about US growth and the health of tech firms.

Despite the rebound, caution remains about a possible slowdown, ahead of key company earnings announcements.

In Europe, Germany's Dax index was up 0.37% despite a weak showing for the ZEW investor confidence index, while the Paris Cac 40 gained 0.54%.

The technology sector is still the main focus, with chip giant Intel due to report its earnings later this week.

Techs were the main driver for Europe's gains, with German chipmaker Infineon up 1.6%.

Monday's declines had been fed by worries about US techs, after weak US consumer confidence data and poor results from IBM and others took 190 points off the Dow Jones index on Friday.

Germany's Dax ended down 2.6% or 110 points at 4,202.2, while in Paris the Cac 40 lost 2.1% or 82.7 points to end at 3,949.6.

In London, the FTSE 100 gave up 1.3% or 64.5 points to fall to 4,827.1, further hit by investor concern that demand had peaked for steel giant Corus, whose shares finished down 1.5%.

And in Italy car maker Fiat's shares were temporarily suspended after they dropped 10% to a new all-time low on reduced confidence in European car sales.

But Japan's Nikkei 225 index suffered the most on Monday, falling 3.8% in the face of both US gloom and ongoing tensions between Japan and China.

WILDFIRE CHINESE GROWTH PERSISTS

China's breakneck growth has continued into 2005 despite official efforts to take the economy off the boil.

The latest figures show the Chinese economy was 9.5% bigger at the end of March than a year earlier.

The expansion matches the wildfire pace of 2004, and remains well ahead of the official target of 8%.

The government has been clamping down on both consumer and business credit, but now says it needs even tighter controls on investment.

China has now been growing at an annual rate of more than 9% since the start of 2003.

China's rapid economic growth has been accompanied by a surge in exports, up 35% from a year earlier.

It has also helped drive world prices for oil and other commodities sharply higher.

Massive investment by China's industries, up 23% over the year, has led the growth, but this growth is also sparking fears that the economy could overheat amid a speculative leap in property values.

The construction industry is one of the main focuses for investors, with luxury apartment blocks shooting up across China's big cities.

ANCIENT NECROPOLIS FOUND IN EGYPT

Archaeologists say they have found the largest funerary complex yet dating from the earliest era of ancient Egypt, more than 5,000 years ago.

The necropolis was discovered by a joint US and Egyptian team in the Kom al-Ahmar region, around 600 km (370 miles) south of the capital, Cairo.

Inside the tombs, the archaeologists found a cow's head carved from flint and the remains of seven people. They believe four of them were buried alive as human sacrifices.

MORTGAGE LENDING HOLDING STEADY

The UK mortgage market has "stabilised" in March after several months of falling consumer demand, UK banks and building societies have said.

The Building Societies Association (BSA) saw mortgage lending rise, while the British Bankers Association (BBA) said lending was a little weaker.

The Council of Mortgage Lenders (CML) said mortgage lending rose from 17.8bn in February to 20.1bn in March. All three groups said mortgage lending had fallen since March last year.

UK INFLATION RATE JUMPS TO 1.9%

The annual rate of UK inflation increased to a greater-than-expected 1.9% in March, its highest level for nearly seven years.

The Office for National Statistics (ONS) said price rises in petrol, air fares and food contributed to the rise.

The March figure is up from an annual 1.6% rise in February but still within the government's 2% target.

Economists remain split as to whether the rise will put pressure on the Bank of England to increase interest rates.

CAR GIANTS RACE FOR CHINA SALES

Competition is heating up between giant carmakers for a bigger share of China's fast-growing market.

General Motors, the world's biggest auto firm, said last Tuesday that it expects a fierce price war with its rivals to intensify.

Results from the firm are expected to show growth flagging elsewhere in the world.

GM says it will invest $3bn to double Chinese production by 2007, while Ford has announced a new engine plant.

Ford's new venture in the eastern city of Nanjing is a joint operation with Chinese firm Changan and Japan's Mazda.

It will supply a neighbouring manufacturing plant, the construction of which started in January.

SA TRADE DEAL BOOSTS GREEN ENERGY

A renewable energy trading scheme has been launched in South Africa to encourage businesses to switch to sustainable electricity sources.

The scheme links companies that wish to use green energy with companies that are producing it.

The initial phase of the project will market power from sugar mills, which burn waste material to produce energy.

This energy will be loaded onto the national grid in the required amounts.

Eskom, the national monopoly electricity supplier, will measure the quantities of electricity being loaded onto the grid as part of the scheme.

Amatola Green Power, the company brokering the deal, expects the first agreements to be concluded on Tuesday.

G7 FAILS TO AGREE ON DEBT RELIEF

The world's most developed nations have reaffirmed the need to provide debt relief to poor countries.

After talks in Washington, the G7 finance ministers said they were prepared to offer up to 100% relief on a case-by-case basis.

But they failed to announce any concrete measures on how to do it.

Development lobby groups criticised the G7 for "yet another missed opportunity" to deliver the debt cancellation they promised in London in February.

The finance ministers' joint statement came after talks hosted by US Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan.

Ministers and their central bank governors said high oil prices were hampering economic growth, but the outlook for 2005 pointed to "solid growth".

AFRICA HITS RECORD GROWTH: IMF

Economic growth in sub-Saharan Africa reached an eight-year high of 5% last year, according to a report by the International Monetary Fund.

Inflation meanwhile fell to its lowest rate in 25 years.

The IMF said about 20 countries in the region had achieved growth of more than 5%, with inflation of less than 10%.

It warned though that African economies are still not growing fast enough to reach poverty reduction targets and that many are not business friendly.

The report says that oil producing countries such as Angola and Gabon benefited from high oil prices.

Oil importers, on the other hand, have had the pain of the rising price eased by the decline of the dollar the currency in which oil is priced. Cotton producers have been badly hit by declining prices.

BURMA 'USED CHEMICALS ON REBELS'

An international human rights group has accused the Burmese army of using chemical weapons in an attack on rebel groups in the country.

The incident is alleged to have taken place near Burma's north-western border with Thailand in February.

The attack left Karen fighters vomiting blood and unable to walk, Christian Solidarity Worldwide says.

The group says it has evidence which suggests that chemical weapons were responsible for the men's injuries.

MANILA AND REBELS REACH AGREEMENT

The Philippine government and Muslim rebels have announced a breakthrough in preliminary peace talks in Malaysia.

Manila and the Moro Islamic Liberation Front (MILF) said they had reached an agreement over ancestral land, a major stumbling block in negotiations.

A joint statement hailed the talks as a "breakthrough toward a just and durable solution to the Mindanao conflict".

The MILF has fought for a separate state in the predominantly Catholic Philippines for nearly 30 years.

ISRAEL ARMY PREPARES TO QUIT GAZA

The Israeli army has begun moving equipment out of its bases in the Gaza Strip in preparation for the pull-out from the Palestinian territory.

A spokesman said about 30 containers of non-military equipment were leaving a base in southern Gaza.

The move comes as Israel's government considers delaying the start of the withdrawal by three weeks.

About 8,000 Jewish settlers and the soldiers who guard them are to leave this summer. Israel will continue to control Gaza's external borders, coastline and airspace after the pull-out.

FIFTY BODIES FOUND IN IRAQI RIVER

The bodies of more than 50 men, women and children have been recovered from the River Tigris in the town of Suwayra, south of Baghdad.

Many had been badly mutilated, Iraqi authorities said.

President Jalal Talabani said the bodies were those people taken hostage and killed in the town of Madain.

But police officials said some of the bodies are badly decomposed and have been pulled from the river over a period of about seven weeks. There were at least three blasts in Baghdad, including one inside the heavily fortified Green Zone.

EBAY SEES HIGHER PROFITS

Internet auction site eBay saw profits rise 28% as it beat expectations but forecasts for the future were more cautious on fears of slowing growth.

Profits for the three months to the end of March rose to $256.3m (134m), compared with $200.1m a year earlier.

Sales rose $1.03bn from $756.2m a year ago buoyed by strong overseas sales as the firm launched new auction sites.

ROVER CARS TO BE MADE IN CHINA

China's largest car maker, Shanghai Automotive Industry Corporation (SAIC), is set to build Rover cars in China.

Officially the company says that no decision has yet been made, but sources close to the company have told the BBC that the plan is likely to proceed.

The Rover brand name belongs to BMW, but the Chinese are confident they can secure the rights to call the Shanghai-built cars Rovers . SAIC last week pulled out of a last-ditch rescue deal for MG Rover.

VW'S PROFIT RISE FAILS TO IMPRESS

Volkswagen's first quarter results have failed to meet market expectations, despite seeing profits almost triple.

The German car maker made a net profit of 70m euros ($91.5m; 48m) between January and March, compared with 26m euros for the same period last year.

Sales were down to 21.12bn euros from 21.65bn a year earlier, as VW said the global car industry had seen a "relatively difficult start to 2005".

FORD SEES PROFITS FALL TO $1.2BN

US car giant Ford Motor saw its profits fall almost 40% in the first quarter, as falling US sales and rising prices for raw materials ate into margins.

The company said its net profit was $1.21bn (630m), on sales of $45.1bn.

The news comes less than a month after Ford warned it would fail to meet 2005 profit targets, and would miss its long-term annual profit goal of $7bn.

But its performance contrasts with that of arch-rival GM, which a day earlier said it lost $1.1bn in the same period.

BANK VOTED 7-2 TO FREEZE UK RATES

The Bank of England's rate-setting committee voted 7-2 to leave rates on hold at 4.75% earlier this month, minutes of the meeting show.

It decided to keep rates on hold amid uncertainty over slow consumer spending and the direction of consumer prices.

The majority of the nine-member Monetary Policy Committee (MPC) said there was insufficient evidence of rising inflation to raise rates.

YAHOO PROFITS

Strong growth in online advertising has helped internet media company Yahoo double its quarterly profits.

The web giant made a net first quarter profit of $205m (107m), compared with $101m for the same period last year.

Excluding the fees that Yahoo pays to its advertising partners, revenues grew to $821m, up from $550m a year earlier.

EMPOWERMENT DEAL FOR OLD MUTUAL

South African finance group Old Mutual is to hand over 12.75% of its local business to black investors and staff.

Old Mutual is complying with rules designed to spread ownership of South African firms to the black majority.

The 7.2bn-rand ($1.2bn; 600m) deal is one of the biggest black empowerment deals yet, with the biggest slice of the stake, 40%, going to employees.

This should defuse criticism that such deals usually only benefit wealthy black businessmen.

INTEL PROFITS

Intel has thanked strong demand for its Centrino laptop processors for a 29% rise in quarterly profits.

The world's largest chip maker saw net income for its first quarter ending 2 April increase to $2.2bn (1.1bn), against $1.7bn a year earlier.

Sales rose to $9.4bn the second highest in the firm's history up from $8.1bn in the same period in 2004.

The profit figure equates to 34 cents a share, above the average Wall Street expectation of 31 cents a share.

COSTLY CIGARETTES LIFT MARLBORO

Marlboro-owner Altria Group has thanked raising its cigarette prices in the US for an 18% jump in quarterly profits.

During the first quarter of 2005, the company made a net profit of $2.6bn (1.4bn) compared with $2.19bn from the same period a year earlier.

Total revenues rose 8.7% to $23.6bn in the three months as Altria further benefited from improved business at its other main subsidiary, Kraft Foods. Altria has increased the prices of its cigarette brands by up to $1 a pack.

PFIZER PROFITS DROP

Pfizer has seen its profits drop by 87% after being hit by a number of one-off charges including the suspension of its arthritis drug Bextra.

The world's largest drugs maker said it earned $301m (157m) during its first quarter from January to March, compared to $2.3bn for the same time last year.

COURT 'FREEZES' KEY YUKOS ASSETS

Shares in Russian oil giant Yukos fell in early trading on news its assets had been frozen by a Moscow court.

Yukos' former oil production unit Yuganskneftegas now owned by rival Rosneft - wants 163bn roubles ($5.87bn; 3.08bn) in damages from Yukos.

It says Yukos bought oil from it at below market prices.

Yukos is already being pursued by the state for $27.5bn (15bn) of back taxes while former boss Mikhail Khodorkovsky is awaiting sentence in a fraud trial.

ROMANIA TO RELAUNCH ITS CURRENCY

Romania is to relaunch its currency, knocking four zeros off the leu in a bid to make transactions simpler.

From 1 July, a cup of coffee currently costing about 50,000 Romanian lei will be priced at just five lei instead.

The leu's redenomination follows a similar move by Turkey, which chopped six zeros off the Turkish lira at the beginning of the year.

Romania is liberalising its economy, as the former communist state seeks membership of the European Union.