Main Page «
Front Page «
Metro «
International «
Sports «
National «
Editorial «
Op-Ed «
Home «
Timeout «
Letters «

Archive «
Launch Supplement «
Special Supplements «

City markets saw a further increase in the prices of milk powder and salt last week while tea price marked an abrupt rise.
   Prices of some essentials maintained pre-Eid higher levels despite a lull in post-Eid sales as the comeback of many city-dwellers, who left Dhaka with families to celebrate the festeval Eid in villages and home towns, took the whole week to complete.
   Traders attributed supply shortage to the fresh rise in the prices of some essentials, including milk powder.
   After several rounds of increase during last few months, price of milk powder increased further by Tk 10-15 per kilogram towards the weekend.
   A kilogram packet of Dano and Diploma brands milk reached Tk 290 and Tk 265, from Tk 275 and Tk 255 respectively two weeks back and Tk 235 and Tk 260 two months ago.
   ‘Supply of milk powder remains tight for the past few weeks and companies increased the rates showing increased import costs due to rise in international market,’ said Golam Mowla, a trader of Maulvibazar, county’s largest commodity wholesale market.
   Price of salt increased to Tk14 a kilogram against Tk 12-13 a week back and Tk 10-11 a month ago.
   At wholesale level, price of a 25-kilogram bag of salt rose to Tk 285-298 from Tk 230-240 a month back.
   Supply shortage of raw salt to processors and packers has pushed the price up, said market sources.
   Increased demand for unrefined salt by raw hide processors during the Eid-ul-Azha contributed to short supply to millers, market sources said.
   Price of tea increased last week by Tk 20 per kilogram due to increased price in Chittagong tea auction market.
   A packet of popular 400-gram tea of Ispahani Mirzapur, the highest selling brand of tea, rose to Tk58 from Tk 50.
   Among other major essentials, rice and atta maintained high levels.
   Coarse rice of pari variety was selling at Tk 18 and fine nazirshail and miniket varities at Tk 21-24 per kilogram at New Market and Shantinagar kitchen markets Friday.
   Prices of some spices, which marked an increase ahead of Eid, remained unchanged. Traders said it will take at least one more week for spice prices to stabilise with the resumption of normal supply to the wholesale market.
   Prices of different varieties of fish remained somewhat stable due to lower-than-usual consumption, which also pushed down egg price to Tk36-38 per dozen from Tk 39-42 in pre-Eid time.
   Vegetable prices did not see any remarkable change last week.

Procter & Gamble Co. said on Friday it would buy Gillette Co. for about $57 billion in stock, uniting two iconic US producers of household goods ranging from Pampers diapers to Duracell batteries.
   The combined company would boast more than $60 billion in annual revenues, giving it increased leverage at stores ranging from discounters to grocers.
   The maker of Tide is paying an 18 per cent premium for Gillette, best known for its razors. P&G promised cost cuts of up to $16 billion, heralded lay-offs of 4 per cent of the combined 140,000 workforce and set a stock buyback of up to $22 billion in the next 18 months.
   The news spurred a rise in shares of European consumer goods companies such as French pen, lighter and razor maker Bic and UK household cleaning goods maker Reckitt Benckiser, on speculation the deal could spark merger activity in a sector long believed ripe for consolidation.
   Retailers, led by discounter Wal-Mart Stores Inc., have pressured consumer products makers to keep prices low, pinching profits.
   ‘That is a hell of a big deal and it gets people thinking that Unilever or others could go back on the acquisition trail,’ said one dealer in Paris, adding that Bic would be an obvious target. Colgate-Palmolive Co. might eye Reckitt, traders said.
   By 3:50 a.m. EST, Reckitt shares were up 3.4 per cent at 1,593 pence. Bic jumped 6.8 per cent to 42.34 euros and Anglo-Dutch Unilever gained 0.9 per cent to 496 1/2p.
   In Davos, EU antitrust chief Neelie Kroes said she expected to review the planned deal by P&G and Gillette.
   P&G, which will discuss the tie-up with analysts and investors Friday morning in New York, also raised its annual sales growth target to 5 per cent to 7 per cent, up from 4 per cent to 6 per cent.
   The transaction has the support of billionaire investor Warren Buffett, whose Berkshire Hathaway Inc. has a 9 per cent stake in Gillette. Buffett said in a statement he would raise his holding in the combined company by 7 per cent to 100 million P&G shares, a $350 million investment at current prices.
   ‘This merger is going to create the greatest consumer product company in the world,’ Buffett said. ‘It’s a dream deal.’
   It would be the largest transaction since J.P. Morgan Chase & Co purchased Bank One Corp. for $56.8 billion last January, according to research firm Dealogic.
   P&G, based in Cincinnati, is swapping 0.975 shares of its stock for each Gillette share. That values Boston-based Gillette at $53.94 per share, an 18 per cent premium to its closing stock price on Thursday.
   The price values Gillette at 28 times projected 2005 earnings, a 40 per cent premium over rival Colgate’s price earnings ratio of 20 and double the PE of battery maker Energizer Holdings Inc..
   P&G plans to buy back between $18 billion and $22 billion of the company’s stock within the next 18 months—about one 10th of the companies’ combined market value. The buyback means that P&G essentially is buying Gillette for 60 per cent stock and 40 per cent cash, the company said.
   P&G said it would achieve revenue and cost synergies between $14 billion and $16 billion from the transaction, which would also result in the loss of about 6,000 jobs, or 4 per cent of the firms’ combined 140,000 workforce.
   Gillette reported just over 1 billion shares outstanding as of October, giving the transaction a total equity value of $54 billion. P&G said the deal carried a value of $57 billion but did not explain the difference.
   The deal would give P&G strength in categories where it currently has little presence, including shaving supplies, where Gillette ranks No. 1 worldwide. It also expands its retail shelf space, possibly giving it more leverage in price negotiations.
   Richard Hastings, a retail economist at Variant Research Corp., said the deal would bolster P&G’s promotion strength and ability to trim costs but it remained unclear whether it would give P&G enough clout to dictate pricing to large retailers such as Wal-Mart.
   ‘I don’t think Wal-Mart effect is the main driver,’ he said.
   Under Chairman and CEO Jim Kilts, Gillette has spent the past few years shedding costs and underperforming brands while boosting marketing dollars behind its higher-margin products.
   The company has withstood a recent challenge from Schick-Wilkinson Sword in razors and has seen battery rivals like Energizer and Rayovac attempt to diversify into other products to compete.
   The company’s stock has climbed nearly 50 per cent since the beginning of 2003, and profits jumped as the company focused on premium-priced products such as M3Power razors and employed long-term contracts to control rising raw material costs.
   P&G named Kilts vice chairman with responsibility for Gillette.
   Merrill Lynch advised P&G on the deal. UBS and Goldman Sachs acted for Gillette.

The Global Alliance for Fair Trade in Textiles (GAFTT) has asked the governments as well as the World Trade Organisation to take necessary steps to stop Chinese monopolisation of the international trade in textile and clothing.
   The alliance reassert the call on Wednesday at Washington, D.C. when representative of the alliance along with government officials from 25 countries met there, said a statement of the alliance.
   The alliance, representing 96 trade groups from 54 countries, repeatedly express apprehension that China would be largely benefited by phasing out of multifiber arrangement with effect from January 1, 2005.
   The alliance also said that Chian is aggressively grabbing the global market share by using unfair means threatening small exporting countries.
   In this connection, the alliance urged the governments, especially those of the United States, European Union and Canada, to take move to implement the WTO special China textile safeguards to prevent China from monopolizing worldwide textile and apparel trade.
   An report by the alliance revealed that China has already controls a combined 40 percent share of world exports for cotton and man-made fiber trousers, men's woven shirts, cotton and man-made fiber knit shirts, and underwear.
   It also said that when one excludes U.S. and E.U. exports in these categories, China's world export market share rises to an astounding 57 percent. Finally, in these same categories, China already controls an 88 percent market share of the lucrative Japanese and Australian markets.
   "China's strategy for world domination has been evidenced by the fact that China has
   dominated world sales of textile and apparel machinery for the past four years, in some cases consuming up to two-thirds of world production of textile machinery (weaving looms)," the report said.
   "Chinese government statistics reveal that China has invested $21.2 billion over the past three years in order to
   dramatically increase its textile and apparel production capacity."
   In this context, the alliance stressed on reviewing the impact of the quota phase-out by the WTO and market distorting trade practices which threaten to monopolize trade in this vital sector in the hands of one or two countries.
   The alliance also said that the WTO have to develop new permanent instruments as part of the Doha Round to prevent the textile and clothing sector from being monopolized in the future.
   The alliance is likely to meet US government officials and the US Congressmen to discuss the issue.
   The alliance announced that its efforts over the next twelve months would be focused on ensuring that safeguard actions are implemented in key markets and that unfair monopolistic trade practices are attacked.

Oil prices eased on Friday as OPEC looked set to keep its output unchanged at its meeting this weekend, but concern ahead of Sunday’s election in Iraq prevented prices sliding further.
   US light crude was down 22 cents at $48.62 a barrel, after gaining six cents on Thursday. London’s IPE Brent crude was down 11 cents at $46.33 a barrel.
   Sunday has been flagged as a big day for oil markets due to the coincidence of the OPEC meeting and the Iraqi election.
   Ministers from the Organization of Petroleum Exporting Countries look unlikely to agree any change in the group’s crude oil output at Sunday’s meeting.
   Several ministers have said that a cut in output to prevent a rapid build in global stocks as oil demand falls in the second quarter cannot be justified due to the current high price of oil.
   Saudi Arabia’s Oil Minister Ali Al-Naimi said on Thursday that OPEC could afford to wait at least until March before reducing supply.
   Algeria’s Oil Minister Chakib Khelil said strong oil prices and high inventory levels meant that current oil market conditions suited both producers and consumers.
   ‘Lights are flashing green for the market,’ he said. ‘Prices are good, stocks are high, speculators are back. Supply is more than demand, what else do you want.’
   Market participants are concerned that militants in Iraq may attack oil infrastructure as the country goes to the ballot box for the first time since the US led invasion of the country and the overthrow of Saddam Hussein in April 2003.
   Attacks on Iraq’s oil installations limited the country’s exports for over a month.
   The flow of crude from Iraq’s northern oil fields through the pipeline to Turkey was paralyzed by an attack on December 18, and attacks since then have prevented the line reopening.
   With the pipeline closed, Iraq has been relying entirely on its southern Basra terminal for oil exports.
   If the weekend passes uneventfully, then traders and analysts fear sentiment could turn bearish for the oil market, which has rallied.
   Forecasts for the US Northeast, the world’s largest heating oil market and a key driver of winter oil prices, are for higher than normal temperatures in February and March.

Nestle SA, the world’s largest foodmaker, can trademark the phrase ‘Have a Break’ for chocolate products other than its Kit Kat candy bars because the slogan may be distinctive, an adviser at Europe’s highest court said.
   Juliane Kokott, an advocate-general at the European Court of Justice in Luxembourg, said phrases can become distinctive if used frequently with other trademarks. Nestle argued the slogan gained distinctiveness through extensive use with the UK trademark ‘Have a Break... Have a Kit Kat.’
   ‘The use of a word sequence as part of a word mark can, as a matter of principle, lead to that word sequence acquiring the requisite distinctive character in order to be registrable as a trademark,’ Kokott said in a statement yesterday. A ruling by the full court, which follows the advocate-general’s opinion in about 85 per cent of cases, is due later this year.
   The Vevey, Switzerland-based company wants to boost its share of the UK chocolate market, which is Europe’s largest and was worth about 3.6 billion pounds (US$6.8 billion) in sales last year, according to market researcher Datamonitor Plc.
   Rival candy-maker Mars Inc argued that such common phrases should not be trademarked because it would give businesses too much power to restrict competition.
   Kokott said ‘Have a Break’ on its own is not distinctive.
   The foodmaker must show that ‘the relevant consumer’ understands that the phrase, on its own, designates a product that comes from a specific company and distinguishes it from others, rather than a mere association with the Kit Kat trademark.
   Nestle must show that ‘Have a Break’ ‘will in fact be attributed by the relevant consumers to the manufacturers of Kit Kat,’ Kokott said in the statement.
   Nestle sold about 258 million pounds ($487 million) worth of Kit Kats in the United Kingdom in 2003. It has tested Christmas Pudding flavoured Kit Kats in the United Kingdom to gain a larger share of the British market from market leader Cadbury Schweppes Plc, which has introduced new chocolate products including Dairy Milk Wafer.

The European Commission proposed a new 200 million euro (260 million dollar) aid package for Iraq, as a sign of the EU’s support for a new Iraqi government after weekend elections.
   ‘Our proposal means that we will be significant partners for the new Iraqi administation. 2005 will be a critical year for Iraq,’ said EU external relations commissioner Benita Ferrero-Waldner.
   “We remain committed to reconstructing the country under the newly-elected transitional government and to imporoving the political situation and the lives of the Iraqi people,” she added.
   The new proposed aid includes 130 million euros to boost essential services and jobs; 15 million for technical assistance to help build Iraq’s capacity in energy and trade and 10 million to support the political process “perhaps including help in drafting the new constitution,” said a statement.
   In addition 45 million euros will be held in reserve “to allow a flexible response to changing circumstances on the ground ... and to respond to the needs identified by the new Iraqi government formed after the elections,” it said.
   ‘This new contribution is a further indication of the commission’s determination to support the political and economic transition in Iraq,’ it added.

The director general of the World Trade Organisation, Supachai Panitchpakdi, urged member states to speed up global trade talks and map out their objectives by February 14. The global trade chief’s appeal during the World Economic Forum came as officials and experts at the meeting warned that the fragilised WTO was now an essential part of the world economy.
   Supachai said most of the 148 member trading nations had been eyeing completion of a new round of trade liberalisation in 2006, but warned that they had still not laid out what they wanted to achieve at a WTO ministerial conference in Hong Kong in December.
   ‘They have moved, but they have not moved far enough to guarantee what I would see as a real progress at Hong Kong,’ Supachai told journalists.
   The former Thai minister said they had to come up with objectives for the ministerial at a scheduled meeting of the principal Trade Negotiating Committee in Geneva on February 14.
   ‘I hope by that time people will be prepared to come up and say, courageously, what they intend to achieve by December this year, and what kind of a roadmap, work programmes they would like to see,’ he said.
   Supachai said he might table some key issues during an informal meeting of trade ministers on the sidelines of the forum in the Swiss mountain resort of Davos on Saturday.
   The trade chief said he was trying to “step up the pressure” and stimulate some political involvement after months of technical work since talks on the Doha round, principally on agriculture, were wrenched out of deadlock in July at a meeting in Geneva.
   ‘I have been overly anxious to get things moving at the beginning of the year,’ Supachai said, adding that ‘the majority view of members’ was completion of the round in 2006.
   However, he warned that to achieve that target, trading nations needed to come up with outlines of concrete figures for liberalisation in a broad spectrum of areas, not only farm produce.
   ‘The July package was not meant to be the end of the round, it was meant to salvage the round, because it was moribund, we were coming to the brink,’ Supachai said during a debate on the future of the WTO.
   ‘What we are going to do this year in Hong Kong is to call the bluff, the put the money where the mouth is, to make countries deliver on their commitment,’ he added.
   The US Trade Representative, Robert Zoellick, said he would join his fellow trade officials there to examine how to “sharpen the focus” of the Doha round and “press for ambition this year as we look towards the December ministerial in Hong Kong”.
   ‘Much hard work remains if we are to realize the promise of Doha,’ he said in a statement.
   ‘We must continue to clear away the remaining underbrush and focus on reaching ambitious and achievable benchmarks among the three core areas of agriculture, goods and services,’ Zoellick added.
   Although detailed discussion was not expected in Davos, Supachai said he might raise the issue of setting an end-date for the elimination of export subsidies.
   ‘We need to be able to agree on a formula for Non-Agricultural Market Access (industrial goods) before the summer break,’ he added.
   The current round of trade negotiations, aimed mainly at widening the benefits of the free-trade system for developing countries, was launched at a ministerial meeting in Doha, Qatar in 2001.
   But the talks — which have been dominated by efforts to break down barriers, such as subsidies in agriculture — have been dogged by disputes between rich and poor countries that have almost led to their collapse.
   ‘If we don’t move on agriculture, we will have a more and more divided world between the rich countries and the poor countries,’ Luiz Furlan, Brazil’s industry and trade minister, told the forum during a debate on the WTO’s future.
   Former WTO chief and EU Commissioner Peter Sutherland said the WTO was ‘fragile’ but had to survive the ‘difficult’ round of negotiations.
   ‘It’s provided a rule-based solution which is crucial for the interests of the weak, otherwise we have the law of the jungle,’ he added.

Microsoft Corp, the world’s largest software maker, on Thursday reported that its quarterly profit doubled on stronger demand for personal computers and video games as well as lower costs.
   The Windows operating system developer also raised its outlook for its current fiscal year ending in June, and its shares rose 1.7 percent in after-hours trade.
   Microsoft posted a net profit of $3.46 billion, or 32 cents a share, for its fiscal second quarter ended in December, compared with $1.55 billion, or 14 cents a share, a year earlier.
   Excluding stock-based compensation, Microsoft said it had a profit of 35 cents a share, compared with Wall Street expectations of 33 cents, according to Reuters Estimates.
   Revenue rose 6.6 percent to $10.82 billion.
   ‘You can’t punch a hole in these numbers,’ said Charles Di Bona, an analyst at independent research firm Sanford C. Bernstein & Co.
   Microsoft reported that sales of the video game “Halo 2” — which totaled 6.3 million copies — for its Xbox game console improved results in its home and entertainment division.
   ‘The PC environment is actually quite healthy,’ Microsoft Chief Financial Officer John Connors said in an interview, saying that Microsoft expects PC shipment growth of 9 percent to 11 percent for the fiscal year to June.
   “Home and entertainment was also a highlight for us. ... We’re very pleased with ‘Halo 2’ results and Xbox Live (online game service),” Connors said.
   Analysts had been looking for such an improvement, as it could raise prospects for its next generation of Xbox video game consoles, expected by the 2005 holiday season.
   Microsoft said that sales of its software for networked computers as well as revenue in its fledgling cell-phone software division also contributed to growth.
   With growth slowing in the company’s core Windows and Office businesses, Microsoft Chief Executive Steve Ballmer is counting on its newer products to fuel future growth.
   Shares in Microsoft, based in Redmond, Washington, rose 44 cents to $26.55 in after-hours trade on the Inet electronic brokerage from a $26.11 Nasdaq close. The shares are down 6 percent from a year earlier and have lost half of their value in the last five years since the peak of the tech boom.
   After paying out its first-ever dividend, ending employee stock options and doling out the biggest-ever cash payout by a U.S. company, Microsoft is finding it tougher to convince investors it can match historical growth rates.
   ‘The question is sustainability,’ said Di Bona, referring to the Xbox business’s strong performance in the last three months of 2004.
   Microsoft’s home and entertainment division, which includes Xbox, reached its first quarter of operating profits since launching the rival to Sony Corp.’s (6758.T) PlayStation 2 system in 2001. Microsoft also raised its forecast for Xbox video game console sales to a worldwide installed base of 21 million to 22 million Xboxes, up from a prior estimate of just under 20 million units.
   For Microsoft’s current third fiscal quarter, the company expects a profit of 27 or 28 cents a share on revenue between $9.7 billion and $9.8 billion. Analysts on average had been expecting a profit of 27 cents a share on $9.66 billion in revenue.
   ‘They beat their own and the Street’s expectations for the December quarter, but their own guidance is a bit light for the March quarter,’ said Barry Randall, portfolio manager of the $100 million First American Technology Fund, which does not own Microsoft stock.
   Microsoft is seeking to cut a billion dollars in costs, and it reported that its stock-based compensation costs were lower in the latest quarter.
   For the full fiscal year to June, Microsoft raised its earnings outlook to $1.09 to $1.11 a share from its previous forecast of $1.07 to $1.09.
   The revenue outlook for fiscal 2005 was raised to a range of $39.8 billion to $40.0 billion from the previous projection of $38.9 billion to $39.2 billion. Analysts had expected $39.3 billion.

Output from South Korea’s industries, the backbone of the economy, fell suddenly last month, according to official figures published on Friday that cooled tentative hopes of an economic recovery.
   Production of mobile phones dropped particularly sharply as exporters such as Samsung Electronics, the world’s second-largest handset maker, suffered from the Korean won’s rapid appreciation against the US dollar and tough global competition.
   Coming in the same week as both the finance ministry
   and the central bank said
   consumer spending was starting to recover from its two-year slowdown, Friday’s figures showed Asia’s third-largest economy remains mired in a slump.
   ‘Although there is some anecdotal evidence that domestic demand might be picking up, the economy is still weak and it’s still far to early to be complacent,’ said Lim Ji-won, economist at JP Morgan in Seoul.
   The National Statistical Office on Friday said industrial production fell by 1.9 per cent in December from the previous month, against many analysts’ expectations that output would be flat. Compared with a year earlier, output grew by only 4.5 per cent, the smallest rise in 16 months.
   The production of telecommunications equipment, including mobile phones, fell by 2.2 per cent in December compared with the previous year, a sharp drop from the 17.2 per cent annual rise recorded in November.
   Samsung and LG, world leaders in mobile phones and flat-screen televisions and two of South Korea’s best-performing companies, have reported ‘challenging’ business conditions as the rising won makes their products more expensive overseas.
   The won has appreciated by 14 per cent in the past year and forced companies to adjust their spending plans.
   Friday’s figures showed capital investment shrank by 2 per cent year-on-year, a sharp reversal from November’s 3.5 per cent gain. The contraction will worry Lee Hun-jai, the finance minister, who had announced a 10 per cent tax break on investment in plant and machinery in attempt to boost corporate spending.
   The government has been counting on a recovery in domestic demand to offset the expected slowdown in export growth this year. Underlining the economy’s dependence on exports, central bank figures on Friday showed South Korea’s current account surplus hit $27.6bn last year, the second highest on record.
   But Mr Lee this week said there were signs that consumer spending was finally starting to pick up, with credit card usage and department store sales both rising.
   Park Seung, the Bank of Korea governor, had said the consumer slump appeared to have passed its lowest point.
   Economists, however, are not yet convinced.
   ‘It remains to be seen if the recent strong export growth will feed through to domestic demand,’ said Kim Sun-bae of Goldman Sachs. ‘We remain doubtful. The pass-through from the external sector continues to be hampered by the nation’s consumer debt overhang.’

US Trade Representative Robert Zoellick is expected to discuss possible US trade preferences for countries hit by the Asian tsunami when he meets this week in Switzerland with top officials from Indonesia, Malaysia and India.
   Zoellick will hold bilateral talks with Indonesian Trade Minister Mari Pangestu, Malyasian Deputy Prime Minister Najib Razak and Indian Trade Minister Kamal Nath while attending the World Economic Forum in the Swiss mountain resort town of Davos from Friday to Sunday, his office said on Thursday.
   The U.N. Conference on Trade and Development and the head of the World Trade Organization have called on trading partners to eliminate duties on imports from the Tsunami-affected countries as part of their assistance efforts.
   US Under Secretary of State Alan Larson told lawmakers in the House of Representatives on Wednesday the United States has had held talks with trade ministries ‘to discuss ways to help facilitate reconstruction efforts, such as extending preferential trade access.’
   The aid organization Oxfam has urged the United States to eliminate tariffs on textiles and clothing from Indonesia, Sri Lanka and the Maldives as part of any trade assistance for the region. However, that proposal faces stiff opposition from the US textile industry.
   The tsunami hit the Asian region shortly before the Jan. 1 expiration of a decades-old textile trade quota system that has left textile and clothing industries around the world wondering how they are going to compete with China.
   A bill introduced by Sen. Gordon Smith, an Oregon Republican, attempts to address both problems. It would provide duty-free access for textiles and clothing from 14 ‘least developed countries,’ including the Maldives.
   The bill would not provide any new trade benefits for Indonesia, a large clothes-exporting nation that was hardest hit by the tsunami and has too high a national income to qualify as an LDC. But it does include Sri Lanka under a special emergency provision.
   Other beneficiaries would include Bangladesh, Nepal and Cambodia, Smith’s office said.

Shareholder governments of the International Monetary Fund on Thursday agreed to a plan that will subsidise assistance for countries hit by natural disasters by providing loans at below-market interest rates.
   The decision follows the devastating tsunami that struck countries from Asia to Africa on Dec. 26 and comes in time for countries hit by the disaster to apply for IMF aid.
   Sri Lanka is the only country which has indicated it will seek help under the disaster facility, to help its economy deal with costs from the tidal wave.
   The global lender estimated it will require about $68 million to $98 million in new aid from shareholders over the next five years to support the move.
   Grant contributions would be used to subsidize the rate of charge to 0.5 per cent a year, the same interest rate charged on loans for the IMF’s poorest borrowers.
   Before the change, the global lender provided loans for natural disaster relief at a market-based rate of 3-1/4-5 years from the date of purchase.
   In a statement by the IMF board, France immediately pledged to contribute funding, while other countries ‘stated readiness of their authorities to consider providing subsidy contributions.’
   ‘Beneficiaries of this initiative will include members affected by the recent tsunami and those that have previously received emergency assistance for natural disasters but have not yet fully repaid such assistance,’ the board said.
   The new policy would allow ‘a quick response by the fund to assist low-income members facing natural disaster on terms that are less likely to contribute to a debt burden than at present,’ the IMF added.
   The IMF already provides subsidized lending for countries affected by conflict, which has been backed with money by Canada, Belgium, Netherlands, Norway, Sweden, Switzerland and Britain.

Unilever is facing mounting pressure to dismantle its twin-leader structure that has stood with only minor changes since 1930.
   The $57bn merger announced on Friday of rivals Procter & Gamble and Gillette, which creates a combined group that would overtake Unilever as the world’s largest consumer and household goods company by market capitalisation and revenue, underscores the need for the Anglo-Dutch group to further streamline its structure to face competitive threats.
   The maker of Hellman’s mayonnaise and Dove soap has come under fire from investors for sluggish growth and missed forecasts and is understood to be considering scrapping its current model whereby joint chairmen run its Dutch and UK parent companies. It would be replaced by a more conventional structure with a single chairman and single chief executive.
   Investors and analysts suggest Unilever’s annual results presentation on February 10 would be an appropriate forum for an announcement.
   In the view of one person aware of Unilever’s thinking, the company is inching closer to a decision to scrap the current structure. ‘That is what they are considering and it is very likely to happen,’ the person said.
   One analyst said: ‘I would be flabbergasted if they didn’t discuss it [on February 10], and surprised if they didn’t move to something more streamlined.’ Unilever declined to comment.
   Analysts expect that if change comes, Anthony Burgmans, the Dutchman who heads the UK parent company, will be appointed chairman. Frenchman Patrick Cescau, his counterpart in the Netherlands, would be sole chief executive. But it is also possible the company is exploring alternatives, said another person following developments.
   One possibility being mooted is for Bergmans to be an executive chairman, with his eventual successor being non-executive.
   Unilever has been under pressure from investors and analysts after a profit warning in September triggered by a price war and the move by customers away from branded products in favour of cheaper generic alternatives.
   The company responded by cutting prices and increasing spending on marketing but analysts believe the twin-leader structure has hampered its ability to react quickly.
   In the past, Unilever has argued that under the existing system the two executives work much as any chairman and chief executive in mapping common strategy on core issues.

Major currencies stuck to tight ranges on Friday as investors waited to see-how Group of Seven and key emerging nations meetings next week would pressure China and other Asian countries to let their currencies rise.
   The yen see-sawed yet again as comments from Chinese central bank officials stirred speculation whether or not China would revalue its pegged yuan currency after the G7 meeting.
   It hit a 1-1/2 week high after a monetary policy committee member of the Chinese central bank said in Switzerland the time was ripe for China to move toward a more flexible FX regime. The yen then erased gains after another central bank official in Beijing said China would keep the yuan basically stable.
   'Movements are in line with comments coming out of China. There is high sensitivity especially with the G7 coming up, although we don't think anything major will come out of the G7,' said Trevor Dinmore, currency strategist at Deutsche Bank.
   By 3:50 a.m. EST the dollar was at 103.20 yen after falling to 102.38 earlier in the day. The euro was slightly higher on the day at 134.58 yen. The euro was steady at $1.3037, in the middle of recent ranges.
   In the run-up to the meeting, European monetary policymakers have been urging Asia to let their currencies rise to share the burden of dollar weakness.
   Comments from Chinese officials in recent days have sparked a rash of knee-jerk buying and selling of the yen, used as a proxy for Asian currency speculation.
   China has resisted pressure for revaluation, saying more work needs to be done before changing the policy.
   Yu Yongding, economist at the Chinese Academy of Social Science, also said in Davos the switch from the pegged yuan would also help a necessary shift away from an export-driven growth model. He stressed his views were personal and that they did not reflect either the government or central bank policy.
   'It seems some players weren't aware that Yu had made it clear it was his personal view and that's why there was a delayed reaction,' said Mitsuru Sahara, senior vice president of the forex dealing group at UFJ Bank.
   Apart from speculation over China, markets are gradually losing expectations anything new would come out at all from the G7 meeting in London which starts on Friday next week.
   Germany's deputy finance minister Caio Koch-Weser told Reuters on Thursday markets should not have excessive expectations.
   Other G7 officials have said the group was likely to stand by its currency statement adopted last February in Boca Raton, Florida.
   The industrialized nations said last February excessive volatility and 'disorderly movements' in currency exchange rates were undesirable.

The G20 group of developing nations aims to set out negotiating targets designed to keep the Doha round of trade talks on track when they meet on Saturday ahead of a meeting of key global trade ministers.
   Indian Commerce Minister Kamal Nath said on Friday he planned to push for progress in the complicated area of services, including banking and insurance, at the Saturday meetings, to take place in the Swiss resort town of Davos.
   Nath, speaking to Reuters, said the developing country ministers led by Brazil would discuss ‘contentious issues’ and aimed to lay out negotiating milestones from now leading up to a meeting of WTO members in Hong Kong in December.
   ‘We must see that there is a balance between agriculture and goods and services,’ Nath said.
   India has pushed hard to liberalise trade in the service sector due in part to booming growth in its information technology industry.
   The G20 developing country alliance played a key part in the failure of trade talks in Cancun, Mexico, in 2003.
   Now, however, Nath said he was eager to reach a deal and that he was optimistic that negotiators would meet the December deadline—even as worries mount at the WTO that members are dragging their feet. ‘Everyone is eager to see that there are some rules set up,’ he said.
   Late on Thursday, World Trade Organisation Chief Supachai Panitchpakdi said he had ‘real concerns’ that delays in the Doha Round were hurting the negotiating process.
   ‘I have really been jumping up and down, pushing people to get their political acts together,’ he told journalists at the annual meeting of the World Economic Forum.
   Already, discontent with trade liberalisation among some Latin American nations had risen as the Doha process dragged on, Supachai said. ‘That’s why I want to push as hard as possible,’ he said.
   Supachai, due to step down in August, said he hoped the two dozen trade ministers meeting in Davos on Saturday would ‘commit themselves as much as possible’ to progress in the Doha Round.
   The meeting will be attended US Trade Representative Robert Zoellick and European Union Trade Commissioner Peter Mandelson.
   Negotiators must meet a series of deadlines starting as early as next month if the round, already behind schedule, is to conclude successfully within two years.

Japan’s unemployment rate hit a six-year low in December but the world’s second-largest economy is levelling off as a whole with strong growth in the coming months unlikely, economists said Friday.
   Official data for December showed the unemployment rate improved to 4.4 per cent from 4.5 per cent in November while industrial output fell 1.2 per cent month-on-month, both largely within forecast ranges.
   Core consumer prices fell 0.2 per cent in December and were down 0.1 per cent in 2004, indicating Japan still needs to keep fighting deflation to help boost consumer spending.
   ‘The economy as a whole is levelling off, with automakers and some other sectors faring well while the electronics sector is still saddled with high inventories,’ said Toshio Sumitani, economist at Tokai Tokyo Research Center.
   Daiwa Institute of Research senior economist Junichi Makino said: ‘Judging from the silicon cycle, production in the electronic devices sector is unlikely to see a notable rebound before mid-2005.’
   Sumitani said the economy was expected to ‘grow somewhat later in the year but is unlikely to surge ahead.
   ‘Domestic demand is not strong enough to boost the economy,’ he said, arguing there were no clear recovery signs in consumer spending, which typically accounts for some 60 per cent of economic activity in a developed country.
   ‘Foreign demand is also unlikely to rise sharply as we can hardly expect the US and Chinese economies will show explosive growth,’ he said.
   Consumer spending may even slacken due to the phasing out of temporary income tax breaks starting this year, economists said.

China’s biggest personal computer (PC) maker Lenovo said yesterday it was optimistic about completing the purchase of IBM’s PC business - despite the deal facing challenges from US Congress.
   Lenovo’s US$1.75 billion purchase - the largest overseas acquisition by a Chinese company - was cast into doubt after a trio of high-ranking Republican members of the House of Representatives called for a full security review of the sale this week.
   They reportedly feared the deal could threaten the US security interests and help the transfer of US military-related technologies to China.

German stock exchange operator Deutsche Boerse AG formalised its offer Thursday of 1.4 billion pounds ($2.6 billion) to buy the London Stock Exchange PLC — which swiftly rejected the bid.
   The LSE — which also has been approached about a merger by Euronext NV, which unites the stock exchanges in Amsterdam, Brussels, Lisbon and Paris — had rejected the Deutsche Boerse offer on Dec. 13 as too low.
   It said Thursday that the offer ‘does not recognize the inherent value in the London Stock Exchange’s business, the related synergies available in a combination and the attractive growth prospects that the London Stock Exchange enjoys under its existing management team.’
   The LSE suggested shareholders take no action.
   Euronext, which hasn’t made a public offer, declined to comment on Deutsche Boerse’s announcement.
   Deutsche Boerse said it would offer not less than 530 pence ($9.86) a share to acquire the exchange, on the condition that the LSE board gives an ‘unqualified and unconditional recommendation’ to its shareholders to accept the bid.
   Deutsche Boerse said its proposed takeover would create the pre-eminent markets company in Europe and would provide the opportunity for the new group to become the first global exchange organization.
   It added that the takeover would create lower customer costs for trading and clearing, spur the creation of a unified trading platform for cash equities and derivatives and foster the establishment of a robust derivatives market in London. Deutsche Boerse vowed to cut fees and other costs for users, and restated its promise to retain the London exchange’s structure and regulations.
   ‘This just formalizes what we’ve put forward,’ Deutsche Boerse spokesman Alastair Crabbe said. ‘We’re bringing it out into the open.’
   Crabbe said the announcement meant Deutsche Boerse could give its shareholders more details of the offer, in particular regarding likely synergies.
   Numis Securities said Thursday’s statement provides more clarity, ‘setting out the Boerse’s proposals in more detail and enabling the various parties, including the LSE’s customers, to evaluate the proposals.’
   Crabbe said the two companies were still in talks about the original offer. ‘This is not a hostile bid,’ he added.
   When it rejected the Deutsche Boerse offer in December, the LSE said it would continue meeting with the company to see whether a ‘significantly improved’ offer would be of interest to shareholders. It echoed those sentiments Thursday
   Since the first offer, LSE stock has soared from 430 pence to 580.25 pence ($10.92) in Thursday morning trade, up 1 per cent on Wednesday’s close. Deutsche Boerse shares were 1.3 per cent higher at 47.50 euros ($62.11) in Frankfurt.
   Deutsche Boerse, which would retain its headquarters in Frankfurt, said the acquisition would create 100 million euros ($130.8 million) in annual revenue and cost synergies per year from 2008. It said there would be 100 million euros ($130.8 million) in restructuring costs upfront, largely on merging the two exchanges’ trading platforms.
   Chief Executive Werner Seifert said tariffs for London traders would decline by 10 per cent overall by Jan. 1, 2006 and be capped at the new level for at least five years, with additional reductions expected.

Melbourne Business School ranked No 1
Financial Times ranked Melbourne Business School ‘Number one’ Australian business school in 2005. A media release said the Financial Times (FT) ranked the Melbourne Business School (MBS) 63rd in the world in its annual business school rankings. The FT survey reviews the top 100 business schools globally and cited MBS as only one of five business schools receiving a ranked position in the Asia Pacific region. In individual discipline rankings, MBS received a top ten global ranking (ranked six) in ‘Best in Economics.’ This ranking is especially gratifying, said Professor Seybolt, ‘because it is based on alumni perceptions to the value of the programme, and reinforces the fact that MBS pays very personal attention to the quality of he programme and to the MBA students’ needs through out their time at the school.
— New Age

Indian inflation
at 5.42pc
Indian wholesale prices rose 5.42 per cent in the year to Jan. 15, slowing from the previous week’s 5.60 per cent, the government said on Friday. The inflation rate was at 6.55 per cent during the corresponding week of the previous year. The decline was largely due to a high base effect and lower food and energy prices. The Reserve Bank of India expects the wholesale inflation rate will decline from a 3-1/2-year peak of 8.74 per cent in late August and economists say the gradual easing of price pressures should persuade it to leave interest rates unchanged for the next few months.
— Reuters

Wal-Mart expands family policy definition
Wal-Mart Stores Inc is expanding the definition of ‘immediate family’ in its employee-ethics policy to account for laws in states that recognise domestic partnerships and civil unions. The change drew quick praise from a major gay-rights lobbying organisation. The revised policy, which was disclosed Wednesday in a filing with the Securities and Exchange Commission recognises that in some states ‘immediate family’ includes an employee’s same-sex partner. The revisions deal with sections of the company’s ethics code that bar employees from using confidential information to benefit themselves or immediate family members and from approaching Wal-Mart’s suppliers about jobs for immediate family members, the company said Thursday. Wal-Mart spokesman Gus Whitcomb declined to say whether the change would affect benefits for employees of the nation’s largest employer or whether the revision meant the company was taking a position on same-sex marriage or civil unions. ‘We updated our statement of ethics,’ Whitcomb said. ‘That brings us into compliance with state laws in terms of how they look at individuals with regard to policies’ where a worker’s ‘immediate family’ would be a factor, he said.
— AP

Porsche expects boost in 1st-half profit
Luxury automaker Porsche AG said Friday it expects a 4.5 increase in net profit for the first half of 2005 with brisk sales of its redesigned mainstay 911 sports car. For the six months ending Jan. 31, Porsche said it expects a net profit of 125 million euros ($163 million), up from 120 million euros over the same period the previous year. First-half pretax profit is expected to rise 6.5 percent to 225 million euros ($293 million), while revenues should rise 3.4 percent to 2.95 billion euros ($3.84 billion). Though Porsche is heavily dependent on the US market, selling more than 40 per cent of its cars there, it has hedged its exposure to the US. dollar into 2008 and so expects to maintain its profit margins even if the dollar stays weak. The euro surged from $1.20 in September to an all-time high of $1.3667 at the end of December.
— AP

ChevronTexaco profit up on record prices
ChevronTexaco Corp, the No. 2 U.S. oil company, on Friday said quarterly profit jumped, driven largely by a sharp rise in oil and gas prices. Net income rose to $3.4 billion, or $1.63 a share, in the fourth quarter compared with $1.7 billion, or 82 cents a share, a year ago.
— Reuters

Siemens to cut 1,350 jobs in telecoms ops
German electronics giant Siemens said Friday it planned to cut 1,350 jobs in its new Siemens Com division, which covers the group’s activities in fixed-line and mobile communications. Around 600 jobs would be axed in Germany and a further 650 outside Germany, Siemens said in a statement. In addition, a further 100 administrative jobs would be cut by 2006. Siemens Com chief Lothar Pauly said that the job cuts would not automatically be redundancies. ‘Our aim is to offer the employees concerned new jobs within the Siemens group or socially acceptable solutions,’ Pauly said. Corresponding talks had already been initiated with unions and employee representatives.
— AFP

Air travel growth
lifts profit at BAA
BAA Plc’s nine-month profits rose 18.1 per cent as more people flew on cheap airfares and as long-haul travel recovered, Britain’s largest airport operator reported on Friday. But BAA, which owns London’s Heathrow, Gatwick and Stansted airports, flagged slower passenger growth and some higher costs next year as the rate of increase in the number of passengers slows from recent highs. ‘We do expect good growth, but we are looking at a significantly lower level of passenger growth next year, particularly as Heathrow is becoming very capacity-constrained,’ Finance Director Margaret Ewing told reporters on a conference call. BAA said pretax profits for the nine months to Dec. 31 were 521 million pounds ($978 million), compared with 441 million pounds a year ago. The result was in line with analysts’ expectations. BAA stock was up 0.1 per cent at 615-1/2 pence at 0856 GMT after earlier reaching a 2-1/2-year high at 617-1/2p, in a little-changed overall market.
— Reuters