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Politics this week: 13th – 19th May 2006

May 18, 2006 Leave a comment

Politics this week

May 18th 2006
From The Economist print edition

EPA
EPA

The sectarian carnage in Iraq continued, especially in Baghdad. The prime minister-designate, Nouri al-Maliki, promised to unveil a national unity government, with top jobs shared out among the country’s three main groups, before the constitutional deadline of May 22nd.

Clashes between Islamist gunmen and the warlords’ Alliance for the Restoration of Peace and Counter-Terrorism continued in Somalia‘s capital, Mogadishu, despite a ceasefire that was signed on May 14th.

Israel’s Supreme Court narrowly rejected petitions from two human-rights groups to overturn a law that stops Arab residents of the West Bank and Gaza who marry Israelis from getting Israeli citizenship, residency or entry permits. See article

Mahmoud Abbas, the Palestinian president, sent thousands of police to the Gaza Strip after the new Hamas government challenged his authority by deploying its own armed militias.

The United States resumed full diplomatic relations with Libya, once one of its most virulent critics, as a reward for helping America in its war against terrorism and for abandoning plans to acquire weapons of mass destruction. See articleE+

The UN Security Council endorsed a peace accord in Sudan’s troubled western province, Darfur, and called for a UN peacekeeping force to replace the struggling African Union force as fast as possible.

Nigeria’s president, Olusegun Obasanjo, accepted the verdict of the Senate after it defeated a bill that would have let him run for a third term of office. See articleE+

Some 150 people were killed, a quarter of them policemen, after a criminal gang, based in the prison system, launched attacks on police stations, buses and bank branches in and around São Paulo, Brazil’s largest city. The gang’s leaders opposed their imminent transfer to a maximum-security jail, and wanted televisions to watch the soccer World Cup. See articleE+

Ecuador’s government joined the wave of oil nationalism sweeping Latin America, ending a contract with Occidental, an American oil company that is the largest foreign investor in the country. The government said it would not pay any compensation. See articleE+

Bolivia’s leftist government outlined plans to redistribute idle agricultural land. Officials said this would not involve expropriation, but landowners expressed concern. The government also said that it would take control of private pension funds’ shares in the state-owned oil company and review the contracts under which private firms run the country’s airports. See articleE+

Reuters
Reuters

The United States’ government said that it would ban arms sales to Venezuela. It said that Hugo Chávez’s government was not co-operating in fighting terrorism. Mr Chávez brushed off the announcement, saying: “it’s the empire”.

The Dominican Liberation Party of Leonel Fernández, the reforming president of the Dominican Republic, seemed to have won a majority in a congressional election. Officials said that turnout was low. See article

President George Bush announced a plan to send up to 6,000 members of the National Guard to the Mexican border for at least a year. At the same time he repeated his desire for a guest-worker programme to allow illegal immigrants to work legally and, eventually, become citizens. See article

Anxious to energise the Republican base before November’s mid-term elections, Mr Bush signed into law $70 billion in tax cuts. They included a two-year extension of the reduced 15% tax rate for capital gains and dividends, which Democrats had condemned as a sop to the rich.

The Republican governor of Kentucky, Ernie Fletcher, was indicted on charges of handing out government jobs as political favours. He is the third governor to be indicted in the state’s history. See articleE+

The European Commission recommended that a decision on whether Bulgaria and Romania should join the European Union on January 1st 2007 should be postponed until the autumn. It also recommended that Slovenia, but not Lithuania, should be allowed to join the euro. See articleE+

The new Italian prime minister, Romano Prodi, announced his government. The finance minister will be Tommaso Padoa-Schioppa, a former central banker; the foreign minister will be Massimo D’Alema, who was prime minister in the late 1990s. See articleE+

A prominent Somali-turned-Dutch critic of Islam, Ayaan Hirsi Ali, said she was leaving the Netherlands for America after she was found to have falsified her asylum application. She was also stripped of her Dutch citizenship. Ms Hirsi Ali wrote the script for a controversial film attacking Islam made by Theo van Gogh, who was murdered two years ago by a radical Islamist. She has since been living under police protection. See articleE+

A gunman shot dead one judge and wounded four others in a senior court in Turkey. The motives for the attack were unclear, but one of the wounded judges had ruled last year against teachers wearing the Muslim headscarf. Some reports said the gunman shouted “I am the soldier of God” as he fired.

AP
AP

Almost a million people were evacuated as Typhoon Chanchu hit southern China. At least eight people were killed and dozens of Vietnamese fishermen were reported missing at sea.

About 60 people were reported killed in a clash between Taliban fighters and the police in the Helmand province of southern Afghanistan where thousands of British troops are currently deployed.

Five people died of bird flu in Indonesia, bringing the death toll there to 30. The government said there was no evidence of transmission between humans.

Vietnam’s prime minister, Phan Van Khai, announced that he is to step down after serving two five-year terms. He nominated Nguyen Tan Dung, his 56-year-old deputy, to succeed him.

The chairman of Hyundai Motor was indicted in South Korea for his alleged role in a bribery and embezzlement scandal. Chung Mong-koo is accused of creating funds that were used to bribe politicians and officials.

Categories: Uncategorized

Business this week: 13th – 19th May 2006

May 18, 2006 Leave a comment

Business this week

May 18th 2006
From The Economist print edition

Financial markets had a nervous week. Higher-than-expected inflation numbers in America, released on May 17th, led to expectations that the Federal Reserve would continue raising interest rates. Soaring petrol prices contributed to consumer-price inflation of 0.6% in April. Equities and government bonds fell in turn. The dollar wobbled amid expectations that it may need to fall further because of global economic imbalances. Gold and oil prices tumbled. Metals prices, hit earlier in the week, later recovered. See articleE+

Vivendi rejected an informal bid approach of more than euro40 billion ($51.4 billion) from Sebastian Holdings, a private-equity group. Vivendi denied that an actual approach was made, but it has voiced concerns that a takeover of the company would possibly mean breaking it up.

Xstrata bid C$16.1 billion ($14.5 billion) for Falconbridge, a Canadian mining company, in an effort to thwart a merger between two rivals. The Swiss firm offered C$52.50 a share in cash for the 80% of Falconbridge it does not already own. The bid tops an earlier offer from Inco, another Canadian mining firm. The deal would create one of the world’s biggest mining companies. Analysts predicted that Inco would raise its offer, potentially leading to a takeover battle.

Amid a flurry of speculation about consolidation among financial exchanges, shareholders at Borsa Italiana met in Milan to consider the prospect of going public, a move its chief executive favours. Shareholders at the Spanish markets operator, BME, will consider a similar move on June 5th. Meanwhile, the London Metal Exchange is planning a review that could lead to a change in its ownership structure and, potentially, a future listing. See articleE+

Standard & Poor’s, a rating agency, downgraded NASDAQ, a big American financial exchange, to junk-bond status. The agency cited NASDAQ‘s debt, part of which is due to its 24% stake in the London Stock Exchange.

Some of Europe’s biggest energy groups were raided by EU competition regulators. Brussels is intensifying an antitrust investigation into alleged competition abuses in the electricity and gas industries. Co-ordinated raids were held at more than 20 sites in six countries. The raids targeted offices of e.ON, RWE, Gaz de France, Eni and OMV.

Wal-Mart said its profit rose by 6.3% in the first quarter, driven by the biggest sales gain in two years. The result exceeded analysts’ expectations, with same-store sales rising by 3.8%. But the big retailer’s chief executive, Lee Scott, gave warning that rising petrol prices could affect this quarter’s sales. Wal-Mart’s international sales rose by 23%, but profit and same sales fell at Asda, its supermarket chain.

Target, another big retailer, said first-quarter earnings rose by 12%, to $554m. Despite this, it reported the first decline in profit in the past two years. Home Depot, a big home-improvement retailer, said first-quarter profit rose by 19% from a year earlier. The result failed to meet analysts’ expectations, and Home Depot’s shares fell. See articleE+

The Securities and Exchange Commission said it will not exempt small companies from investor-protection rules in the Sarbanes-Oxley Act. It will, however, postpone implementation for them. The decision was a disappointment for business groups.

Eurotunnel, the Anglo-French group that operates the cross-channel rail tunnel, held talks with creditors and banks about restructuring its ��6.2 billion ($11.7 billion) debt to avoid bankruptcy. In April Eurotunnel said it could not guarantee its survival beyond the end of 2006.

Hewlett-Packard said sales grew by 5%, to $22.6 billion, in its second quarter from a year earlier, meeting most analysts’ projections. The printer and computer maker said operating profit was $1.7 billion, on a general accounting basis. The firm plans to consolidate 85 data centres around the world into six large facilities in America, which it projects will save about $1 billion in costs per year in future.

Economic growth in Africa should reach 5.8% this year, and 5.5% in 2007, according to a report from the OECD. Oil-exporting nations are leading growth in the region. Strong global demand for other raw materials is another factor in the economic growth. But other nations in the region continue to struggle.

Global share prices tumbled. Leading share indices have sunk in America, Britain and Japan. India’s stock index had its biggest drop ever.

Categories: Uncategorized

Business this week: 13th – 19th May 2006

May 18, 2006 Leave a comment

Business this week

May 18th 2006
From The Economist print edition

Financial markets had a nervous week. Higher-than-expected inflation numbers in America, released on May 17th, led to expectations that the Federal Reserve would continue raising interest rates. Soaring petrol prices contributed to consumer-price inflation of 0.6% in April. Equities and government bonds fell in turn. The dollar wobbled amid expectations that it may need to fall further because of global economic imbalances. Gold and oil prices tumbled. Metals prices, hit earlier in the week, later recovered. See articleE+

Vivendi rejected an informal bid approach of more than euro40 billion ($51.4 billion) from Sebastian Holdings, a private-equity group. Vivendi denied that an actual approach was made, but it has voiced concerns that a takeover of the company would possibly mean breaking it up.

Xstrata bid C$16.1 billion ($14.5 billion) for Falconbridge, a Canadian mining company, in an effort to thwart a merger between two rivals. The Swiss firm offered C$52.50 a share in cash for the 80% of Falconbridge it does not already own. The bid tops an earlier offer from Inco, another Canadian mining firm. The deal would create one of the world’s biggest mining companies. Analysts predicted that Inco would raise its offer, potentially leading to a takeover battle.

Amid a flurry of speculation about consolidation among financial exchanges, shareholders at Borsa Italiana met in Milan to consider the prospect of going public, a move its chief executive favours. Shareholders at the Spanish markets operator, BME, will consider a similar move on June 5th. Meanwhile, the London Metal Exchange is planning a review that could lead to a change in its ownership structure and, potentially, a future listing. See articleE+

Standard & Poor’s, a rating agency, downgraded NASDAQ, a big American financial exchange, to junk-bond status. The agency cited NASDAQ‘s debt, part of which is due to its 24% stake in the London Stock Exchange.

Some of Europe’s biggest energy groups were raided by EU competition regulators. Brussels is intensifying an antitrust investigation into alleged competition abuses in the electricity and gas industries. Co-ordinated raids were held at more than 20 sites in six countries. The raids targeted offices of e.ON, RWE, Gaz de France, Eni and OMV.

Wal-Mart said its profit rose by 6.3% in the first quarter, driven by the biggest sales gain in two years. The result exceeded analysts’ expectations, with same-store sales rising by 3.8%. But the big retailer’s chief executive, Lee Scott, gave warning that rising petrol prices could affect this quarter’s sales. Wal-Mart’s international sales rose by 23%, but profit and same sales fell at Asda, its supermarket chain.

Target, another big retailer, said first-quarter earnings rose by 12%, to $554m. Despite this, it reported the first decline in profit in the past two years. Home Depot, a big home-improvement retailer, said first-quarter profit rose by 19% from a year earlier. The result failed to meet analysts’ expectations, and Home Depot’s shares fell. See articleE+

The Securities and Exchange Commission said it will not exempt small companies from investor-protection rules in the Sarbanes-Oxley Act. It will, however, postpone implementation for them. The decision was a disappointment for business groups.

Eurotunnel, the Anglo-French group that operates the cross-channel rail tunnel, held talks with creditors and banks about restructuring its ��6.2 billion ($11.7 billion) debt to avoid bankruptcy. In April Eurotunnel said it could not guarantee its survival beyond the end of 2006.

Hewlett-Packard said sales grew by 5%, to $22.6 billion, in its second quarter from a year earlier, meeting most analysts’ projections. The printer and computer maker said operating profit was $1.7 billion, on a general accounting basis. The firm plans to consolidate 85 data centres around the world into six large facilities in America, which it projects will save about $1 billion in costs per year in future.

Economic growth in Africa should reach 5.8% this year, and 5.5% in 2007, according to a report from the OECD. Oil-exporting nations are leading growth in the region. Strong global demand for other raw materials is another factor in the economic growth. But other nations in the region continue to struggle.

Global share prices tumbled. Leading share indices have sunk in America, Britain and Japan. India’s stock index had its biggest drop ever.

Categories: Uncategorized