US Dollar 59.9 60
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Japanese Yen 0.508 0.51
Kuwaiti Dinar 204 204.1
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Last updated: Friday 23 Dec, 2005-12.30 P.M (PST)



In oC




Today 12 26 38 Sunny
Tomorrow 11 27 38 Sunny
Day after 11 28 38 Sunny
Today 1 20 87 Sunny
Tomorrow 2 20 87 Sunny
Day after 2 21 87 Sunny
Today 0 18 59 Sunny
Tomorrow 0 18 59 Sunny
Day after 0 21 59 Sunny
HUM%: Humidity In %
FOR.: Weather Forecast
updated: Fri - Sun 23-25 Dec, 2005




KARACHI         - 021 LAHORE          - 042 ISLAMABAD    - 051 FAISALABAD   - 041 MULTAN          - 061 PESHAWAR    - 0521 CANADA          - 1 KUWAIT           - 965 INDIA               - 91 IRAN                - 98 U.K                   - 44 U.A.E                - 971 U.S.A                - 1








 Oct 10 - 16, 2005


Jean-Claude Trichet, President of the European Central Bank (ECB), has said that economic growth in the eurozone is not "fully satisfactory".

However, he added that economic growth would be helped by a central bank policy that ensured price stability and low inflation expectations.

The comments come as the ECB resists pressure to cut interest rates.

It has left rates unchanged for more than two years despite evidence that growth and manufacturing was slowing.

The ECB's benchmark interest rate is currently 2%, compared with 4.5% in the UK.

Critics have accused the ECB of not doing enough to stimulate growth and of ignoring the problems faced by many companies in the 12 countries that share the single European currency.

Mr Trichet has argued that borrowing costs are at the right level and that inflation, driven higher by record oil prices, needs to be kept under control.

During a speech to the Danish central bank on Monday, Mr Trichet said that, "you will probably share the view that the growth performance of the euro area cannot be deemed fully satisfactory".

"But it is equally true to say that the single monetary policy, geared towards price stability and the anchoring of inflation expectations, lends ongoing support to economic activity," he added. ECB-watchers will be pouring over Mr Trichet's comments for any indication of future interest rate moves.

The majority of analysts do not expect a rate cut this year, especially as there are signs that the economic environment is improving.


Japanese business confidence rose by less than expected in the last quarter after sentiment was dampened by the ongoing high global oil prices.

The Bank of Japan's key tankan survey of sentiment among big manufacturers showed a positive balance of 19 for the three months to the end of September.

This compared with +18 for the previous quarter and with the +20 balance which had been expected by the markets.

Japanese shares and the yen both fell after the publication of the report.

By mid-afternoon trading, the Nikkei 225 index of leading stocks was down 22 points to 13,552, while the yen had dropped to a 16-month low against the US dollar.

Growing economy

The Bank of Japan's tankan survey comes to its figure by subtracting the percentage of firms reporting unfavourable conditions from those reporting favourable ones.

"It [the latest business confidence survey] was slightly softer than expected, likely due to a rise in input costs and higher energy prices," said Masaaki Nanno, managing director of research at JP Morgan.

High global oil prices are being driven by strong demand, particularly from China.

The recent hurricanes in the US have also kept prices high after they damaged a number of refineries in the Gulf of Mexico.

A separate report from the Ministry of Finance showed last week that Japan's economy grew in August, boosted by a rise in household spending and a decline in unemployment.

Industrial output also rebounded during the month, rising 1.2% in August from July, the government said.


Asian and European oil firms have won most of the contracts on offer at Libya's second open licence auction.

Five Japanese companies, including Mitsubishi and Nippon Petroleum, were awarded permits to develop oil fields.

Italy's Eni Gas and British Gas were also successful, with just one US firm, Exxon Mobil, gaining a contract.

In January, Libya's first offer of exploration licences in 40 years mainly benefited US oil companies, prompting complaints from European firms.

US and EU trade sanctions against Tripoli were lifted last year after Libyan leader Muammar Gaddafi agreed to renounce weapons of mass destruction.

Dozens of companies from all over the world put in bids for the 44 different concessions on offer in Libya, which has the world's eighth-largest oil reserves.

The country is a major producer of light crude oil, the kind favoured by refineries.


Muslim countries have been urged to set up an Islamic common market as a way of boosting trade and development.

The call came at the end of a three-day World Islamic Economic Forum held under the auspices of the Organization of the Islamic Conference (OIC).

The forum in Kuala Lumpur said the OIC's 57 nations could gain economic clout internationally by signing an Islamic free trade agreement.

At present, OIC countries' collective GDP is less than 5% of the world total.

Trading between OIC countries is worth about $800bn (456bn) - no more than 7% of global trade as a whole.

The current OIC chairman, Malaysian Prime Minister Abdullah Ahmad Badawi, told the forum that the world's 1.5 billion Muslims were "a huge Islamic consumer market".


House price inflation rose in September according to the latest figures from the Halifax bank.

The country's biggest mortgage lender says prices are now rising at an annual rate of 3%.

The figure is slightly higher than the 2.5% rate recorded in August - and includes a 2% rise in just the past three months.

That puts the Halifax in line with other recent reports indicating the housing market may be picking up again.

The mortgage lender's chief economist Martin Ellis said the Bank of England's decision to cut interest rates in August had give a boost to would-be home buyers. But he doubted that rampant inflation will start again.


Insurance market Lloyd's of London has said it should still record a profit this year despite the costs of Hurricanes Katrina and Rita.

Its comments came as it reported a 1.4bn ($2.5bn) profit for the six months to 30 June, up 21% on last year.

However, Lloyd's said the hurricane costs would make a significant impact on full-year profits.


Oil prices fell further on Thursday last after data from the US Energy Department said American demand was now below the level seen a year ago.

Analysts said crude was being hit by falling US consumption of petrol and heating oil in the face of high prices.

The cost of petrol and heating oil rose sharply after Hurricanes Katrina and Rita damaged US refineries.

A barrel of US light crude was down 29 cents to $62.50 in Far East trading, after earlier falling as low as $62.23.

London's Brent crude was also down 29 cents at $59.83 a barrel.

Crude prices have now fallen by 5% so far this week, and by almost 12% since August.

In the immediate aftermath of Hurricane Katrina, US light crude reached a record high of $70.85 a barrel.


Passenger traffic at British Airways has bounced back in September, despite in-flight meal problems it faced in the wake of the Gate Gourmet catering row.

The airline said it carried 3.21 million people on scheduled routes in September, up 2.8% on the year before.

Asia Pacific flights showed the biggest rise at 18.8%, with North and South American traffic 8.1% higher.

Traffic fell 0.7% in August when BA staff went on strike in sympathy with sacked Gate Gourmet workers.


Patriotism alone is not enough to sell British food, according to new research conducted by food think-tank IGD.

Researchers found 87% of people consider farming to be important to Britain, but only one in five will go out of their way to buy British food.

The study was conducted for food suppliers and the government to find out how to bolster British produce.

It comes as the EU's farmers move from production subsidies towards producing what customers will pay for.

Country of origin seems to be low on the list of what shoppers look for, according to the findings.


UK plasterboard maker BPB has promised its shareholders more cash as a reward for supporting its defence against a French takeover bid.

BPB has said it will hand back 600m through share buybacks and has pledged to increase dividend payouts.

Hostile bidder Saint-Gobain is offering 3.6bn ($5.5bn) for the firm, but BPB has said that the bid "fundamentally undervalues" the company.

Saint-Gobain has received interest from less than 1% of BPB shareholders.

BPB said its full-year dividend will rise from 23 pence in 2005/6 to 30 pence by 2007/8.


Zimbabwe's economic decline has worsened, the International Monetary Fund (IMF) has said, with inflation set to reach 400% by the end of the year.

In its 2005 review, the IMF estimated that Zimbabwe's GDP would fall 7% this year, a widening of 2004's 4% drop.

The IMF blames the situation on the growing inflation, foreign exchange shortages and low farm output - and on recent attacks on black market traders.

In contrast, the government in Harare predicts the economy will grow in 2005.

The administration of President Robert Mugabe has estimated that the economy shrunk just 2.5% in 2004, and will actually expand 2% this year on the back of improved tobacco and wheat crops and a successful mining sector.


Toyota has agreed to buy the 8.7% stake owned by General Motors in Fuji Heavy Industries, the owner of Subaru.

The 35.4bn yen ($310.5m; 176m) deal will make Toyota the biggest single shareholder in Fuji.

General Motors wants to exit completely from Fuji, and plans to sell its remaining 11.4% stake on the market.

Toyota and Fuji will now work to reach agreement on future collaboration, the two Japanese firms said. Toyota also has shares in Daihatsu.


Yum Brands, the company behind fast food operator KFC and the Pizza Hut chain of restaurants, has reported a 16% jump in profits.

Kentucky-based Yum said its third quarter net profits rose to $214m (122m), from $185m the previous year.

Yum, which also owns the Taco Bell fast-food chain, said strong sales in the US and robust growth overseas helped lift its earnings.

The firm also reported a 3% rise in revenues to $2.24bn.


US manufacturing posted a surprise increase during September despite a surge in raw material costs.

The Institute for Supply Management said its manufacturing index was 59.4 in September, up from 53.6 in August. Analysts had expected a reading of 54.

The Federal Reserve is now likely to keep raising interest rates to head off inflationary pressures, analysts said.

Crude oil and petrol prices jumped as the US was hit by hurricanes and there are concerns that costs will stay high.

The price index rose to 78 in September, up from 62.5 in August, the institute said.

Analysts warned that companies, already facing waning consumer demand, may struggle to pass on the higher costs.

As a result, corporate profits may decline. US shares fell on Monday because of these concerns.

The positive to take from the report is that the US economy's growth seems to be continuing along its road of recovery regardless of outside shocks, analysts said


The amount of money people are borrowing against the value of their homes has rebounded, figures show.

Mortgage equity withdrawal rose to 8.7bn between April and June from 6.44bn in the three months to the end of March, the Bank of England said.

It was the first quarterly rise since autumn 2003, when mortgage equity release peaked at 17.5bn.

The figure has fallen since then, a factor which experts say helped trigger the recent consumer spending slowdown.

The latest upturn in this form of borrowing may be linked to the increase in the number of property sales in the UK this year.

Tony Dolphin, chief economist at Henderson Investors said: "Perhaps this is another sign that the housing market has stabilised."


South Africa says it is discussing the future of an arms contract with India, after the Indian government apparently cancelled the deal.

An Indian military journal reported the deal with South African state arms maker Denel had been cancelled, after allegations of corruption.

India had been investigating the deal since April. Denel denies impropriety.


Global steel demand is expected to rise by between 4% and 5% in both 2005 and 2006, according to industry body the International Iron and Steel Institute.

The organisation said this growth would continue to be fuelled by China, despite efforts by Beijing to try to cool its runaway consumption this year.

Yet the IISI added that the picture was not perfectly clear and that global demand may be hit by high oil prices.

Higher raw materials costs also remained a challenge, it said.

The IISI estimates that global demand for finished steel products will be between 1.040 billion and 1.053 billion tonnes in 2006, compared with 972 million tonnes in 2004.

The public sector is creating new jobs at a faster rate than private business, according to the latest official data.

At the same time, UK productivity is now at its lowest level for 15 years, further figures from the Office for National Statistics showed.

Analysts have long argued that the government sector trails behind the wider economy in terms of productivity.

Overall productivity grew by 0.5% in the year to July, the lowest since 1990 and down from 2.5% a year earlier.


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