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  DEPARTMENTS
 

IN THE NEWS
. INTERNATIONAL
. PAKISTAN
 

 

 

 

 
  INTERNATIONAL

Oct 17 - 23, 2005

S. ARABIA'S ECONOMY GREW BY 5.3PC IN 2004

Riding on high oil prices, the Saudi GDP grew by 5.3 per cent in 2004, the Saudi Arabian Monetary Agency (SAMA) said in a report presented to King Abdullah.

Spelling out the country's major economic achievements in 2004, SAMA Governor Hamad Al-Sayari said the kingdom had achieved a record budget surplus of SR107 billion ($28.5bn) last year as a result of soaring world oil prices.

While receiving the report on the health of the Saudi economy, the king reiterated that Saudi Arabia would continue efforts to attract more foreign investment by revising its regulations.

King Abdullah also reaffirmed the kingdom's resolve to go ahead with its reform programmes in order to achieve continuous progress and prosperity. He emphasized the government's policy of increased spending on long-term productive projects that promote prosperity of its citizens, create job opportunities and strengthen the economy.

Presenting the SAMA report to the king, Sayari predicted that the Kingdom's economy would achieve strong growth this year and in the coming years. "The Kingdom's balance of payments registered a record surplus of SR194.7 ($51.92) billion in 2004," Sayari said.

During 2004 the Kingdom achieved high economic results in various sectors, for the third consecutive year. "The national revenue grew by 16.8 percent and the actual gross domestic product increased by 5.3 percent in 2004," he said, adding that there was substantial increase in monetary supply and bank loans. "This again shows the dynamic role of the private sector," he pointed out.

Saudi Arabia is expected to register even a huge budget surplus in 2005. The Samba Financial Group has predicted that the kingdom's real GDP growth will be 6.5 per cent in 2005 and oil export revenues will be SR589 billion. The budget surplus will be SR191 billion.

JAPANESE ECONOMY RECOVERING

Japanese corporate profits and consumer spending are picking up, the government said in a monthly report on Wednesday in which it maintained its assessment that the economy is in a moderate recovery.

"The economy is recovering at a moderate pace," the government said in its October report.

The headline statement took out September's reference to improving business and household conditions, but the Cabinet Office said the change was simply to reflect confidence that the better conditions would continue.

The only other change in the report was a slight tweaking in the view of overall business conditions, which was altered to say they were "improving" rather than "recovering".

Economic data since the government's last monthly report has been upbeat.

Earlier this month, the Bank of Japan's tankan survey showed business confidence improved in the July-September quarter, although the results were weaker than forecast by economists.

Exports are also picking up after months of weak growth. In volume terms, exports rose 2.0 per cent in August year-on-year after falling 0.8 per cent in July.

Particularly encouraging was a pick-up in exports to Asia, an official at the Cabinet Office said.

"Exports to Asia, especially China, had been weak for a while so the latest figures may mean the risk of weak exports is abating," he said.

The report reiterated that consumer spending was increasing moderately and manufacturing output was flat.

On the outlook, the report repeated the government's concerns on oil prices, saying they should be monitored for their effects on both domestic and overseas economies.

CHINA TO OPEN UP BANKING SECTOR FURTHER

China aims to open up its banking sector further by raising the cap on foreign banks' stakes and making it easier for them to set up branches, a senior bank regulator said.

Foreign investors, eager to boost their market presence, have lobbied hard for China to drop its 25 per cent ceiling on foreign ownership of a local bank. A single overseas owner is limited to a 20 per cent stake.

Li Fuan, deputy chief of policy and regulation at the China Banking Regulatory Commission (CBRC), said the government would set varied ceilings on foreign ownership in domestic banks, allowing smaller lenders to sell a bigger chunk of shares.

"The 25 per cent cap is transitional and it will be changed shortly," Mr Li told Reuters in an interview. He did not give a timeframe.

Beijing, worried that domestic banks are unprepared for greater competition, is trying to entice foreign capital and expertise into a sector saddled with $200 billion in bad loans.

UZBEKISTAN TO INVEST IN TEXTILE

Uzbekistan foresees investment of $1.5 billion in its textiles sector over the next three years as it tries to add value to its cotton output, a senior Uzbek official said.

The Central Asian country, currently the world's sixth largest cotton producer and second largest exporter, has earmarked 100 projects that will boost textile production, said Rustam Azimov, minister for foreign economic relations.

"In 2008 we will be processing 51 per cent of the cotton fibre produced inside the country," Azimov told a cotton trade fair in Tashkent.

This year Uzbekistan plans to export 860,000 tons of cotton fibre. But in three years' time, growth in textile production will mean raw cotton exports dropping to 530,000 tonnes, Azimov said.

GOLD PRICES

Gold clearing volumes rose just over 15 per cent to a daily average of 17.5 million ounces in September, the highest level for that month since 2001 and the second-highest for the current year, the London Bullion Market Association (LBMA) said.

Based on an average fixing of $456.05 an ounce, up $18 from August, the LBMA said value rose to a daily average of $8.0 billion from $6.7 billion in August. The number of transfers surged 21.4 per cent to an average of 965 a day, the highest since October 1999.

WH SMITH

The WH Smith reported pre-tax profits before one-off costs of 64m ($112m) for the year to 31 August, reversing a loss of 135m in 2004.

BIRD FLU FOUND IN ROMANIAN DUCKS

The EU has banned all bird and poultry products from Romania after tests confirmed the presence of a strain of bird flu there.

Duck samples tested positive for the H5 virus, contradicting earlier findings.

But there is no evidence yet that the strain is the serious H5N1 variety, which has killed 60 people in Asia. Further tests will be carried out.

TYPHOO TEA BOUGHT BY INDIAN FIRM

Typhoo tea has been sold to India's Apeejay Surrendra Group for 80m ($140m) by its UK owner Premier Foods.

The deal will see Apeejay buy Premier's entire tea business, which also includes the London Fruit & Herb, Lift and QT brands.

Premier's tea blending and packing unit at Moreton, Wirral, which employs 249 people, is also included in the deal.

IRAQ PROMISES OIL EXPORT GROWTH

Iraq is on course for a 20% rise in its oil exports by the start of 2006, the head of its energy council says.

Ahmad Chalabi said output for export should hit 1.8 million barrels a day by January, when elections take place and a new administration takes power.

Talking to Reuters, he backed the idea that US and UK oil firms should have priority in Iraq's oil sector.

Mr Chalabi, once a US favourite to lead Iraq before falling out with Washington DC, is now a key government figure.

IRAQI MPS APPROVE CHARTER CHANGES

Iraq's parliament has approved last-minute changes to the draft constitution aimed at overcoming Sunni Arab objections.

The changes - agreed by representatives of the communities on Tuesday night - were endorsed without voting.

One Sunni party has said it will back the draft if MPs elected in the December elections can review it. Other Sunnis maintain their boycott.

US-CHINA TEXTILE TALKS BREAK DOWN

The latest round of talks between the US and China aimed at settling the row over Chinese textile has failed.

In a statement, US negotiator David Spooner said the two could not reach an agreement "that meets the needs of our domestic manufacturers and retailers".

A surge in Chinese textile exports since the start of this year, when a global tariff deal lapsed, has sparked discontent in both the US and Europe.

The European Union has already agreed temporary limits on import growth.

After teething troubles, which saw the 2005 quotas filled up within weeks, the 25-nation bloc will cap expansion at 8%-12.5% a year till 2007.

The US would like a similar deal, not least to silence calls from both unions and legislators for tough action on China - perhaps including sanctions.

BHS

Department store chain Bhs reported sales of 889.2m ($1.5bn) in the year to 2 April, as operating profits fell 5.8% to 105.1m.

Managers shared a total dividend payout of 199.5m last year, after Bhs reported a record operating profit of 111.6m.

UK UNEMPLOYMENT

Unemployment fell by 7,000 between June and August to 1.42 million, according to figures from the Office for National Statistics (ONS).

This leaves the number of people in work at a record high of 28.76 million, the highest total since records began in 1971.

NO BREAKTHROUGH IN WTO TRADE TALK

World Trade Organization talks in Geneva have failed to find agreement after the US said the European Union (EU) was not making enough concessions.

Trade ministers had spent three days trying to secure the framework for a new global free trade agreement intended to be put in place in 2006.

The US and EU have so far failed to agree cuts to food import tariffs and subsidies for their own farmers. America's Rob Portman said the EU was proposing "insufficient" reductions.

IPOD HELPS APPLE

Apple has quadrupled its quarterly profits, thanks to global sales of more than 6.5 million of its iPod music players over the past three months.

Net profit in the fiscal fourth quarter ending 24 September rose to $430m (246m), from $106m a year earlier.

HARLEY-DAVIDSON SEES STRONG SALES

Motorcycle manufacturer Harley-Davidson thanked ongoing strong global demand for its bikes as it reported a 16% rise in third-quarter profits.

Beating market expectations, its net profits for the three months to 25 September were $265m (151m), up from $229m for the same time a year earlier.

Sales increased 10% to $1.43bn, from $1.3bn a year before, with double-digit rises seen in the US, Europe and Japan.

FED SAYS KATRINA IMPACT LIMITED

The US Federal Reserve voted to keep on raising interest rates last month because it did not think the impact of Hurricane Katrina warranted a pause.

Releasing its minutes of the 20 September meeting, the Fed said damage caused by Katrina would only have a temporary inflationary effect.

The Fed also said it did not want people to get the wrong idea that the US economy could be blown off course. Last month it raised rates by 0.25% for the 11th month in a row to 3.75%.

KATRINA CLAIMS WIDEN UK TRADE GAP

Britain's trade gap with the rest of the world hit a record high in August following insurance claims from Hurricane Katrina and lower oil output.

The Office for National Statistics (ONS) said the deficit grew to 5.3bn in August, after 3.9bn in July.

It is estimated the Lloyd's of London insurance market will have to pay about 1.4bn in claims arising from Katrina.

North Sea oil output fell due to longer than usual summer maintenance and a fire in one oil field.

GLOBALISATION 'GAINS' IN TEXTILES

Severe damage predicted to hit several Asian nations after textile quotas ended at the start of the year has failed to materialise, a report says.

The International Labour Organization (ILO) argues that - as foreseen - China and India are among the big winners.

But Bangladesh, which had been expected to be among the worst affected countries, saw exports rise in February and March 2005 after a fall in January.

But Europe and the US have lost jobs, and Africa has been hit hardest of all.

The report precedes a conference convened by the ILO in Geneva to discuss the future of the textile industry in the wake of the end of the Multi Fibre Agreement.

That agreement - which limited textile imports to rich countries - ended in January, leading to a free-for-all among developing countries.

 
 

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