Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts

TSX opens higher on RIM gain, European data






TORONTO (Reuters) – Canada’s main stock index opened higher on Tuesday, led by resource stocks, which climbed with commodity prices as data showed signs of a recovery in the European economy.


The Toronto Stock Exchange‘s S&P/TSX composite index <.gsptse> was up 47.85 points, or 0.38 percent, at 12,765.47 shortly after the open.</.gsptse>






A five percent gain in shares of BlackBerry also boosted the index. The stock had rallied on Monday after an upgrade by Bernstein Research. BlackBerry last week launched its new line of smartphones.


(Reporting by John Tilak; Editing by Jeffrey Hodgson)


Economy News Headlines – Yahoo! News





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Visa sued by Australia regulator







Australia’s competition watchdog has sued credit card company Visa for alleged “misuse of market power”.






It has accused Visa of preventing customers from using a currency of their choice in transactions.


The regulator also alleged that Visa “engaged in exclusive dealing” and barred retailers from using rival currency conversion services.


The Australian Competition and Consumer Commission alleged that such practices were meant to boost Visa’s revenue.


Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC) said that such moves meant that travellers to Australia were not able to decide “who does their currency conversion when withdrawing cash from an ATM”.


“In particular, they are denied the ability to know the cost of transactions in their own currency at the time the transaction is made.”


He added that Visa’s practices of not allowing use of rival currency conversion systems at merchant outlets also meant that retailers were denied opportunity to share the revenue arising from such transactions.


“Finally, it is alleged that Australian suppliers of dynamic currency conversion (DCC) services were, and continue to be, denied the opportunity to compete with Visa in relation to DCC services at ATMs.”


BBC News – Business





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Ofgem wants ‘rogue’ broker powers







Energy regulator Ofgem is urging the government to give it the power to protect firms from what it calls rogue brokers, mis-selling energy deals.






Its research found that between 14% and 17% of businesses which had used brokers were not satisfied with them.


They were concerned about cold calling, high-pressure sales tactics and unprofessional behaviour from brokers.


Citizens Advice said 42% of complaints it received from small businesses about mis-selling had mentioned brokers.


Ofgem spokesman Mark Wiltsher told the BBC: “We’ve had quite outrageous behaviour; sometimes energy brokers have phoned up impersonating another company, to try and get an energy company switch, and also we’ve had brokers telling a company ‘You’ll get a cheaper deal’, and once they sign up, they find out they are paying more for their energy.”


“We don’t actually have powers over these energy brokers, because they’re independent, so what we’re asking today is for powers so we can take energy brokers that mislead business to court, and if they carry on doing that they will be in contempt of court.”


Welcoming the calls from Ofgem, Adam Scorer from Consumer Focus said: “There is a real protection gap on energy issues for small businesses.”


“Many don’t have the resource or knowledge to tackle the confusing process and high pressure tactics often encountered from energy salespeople.”


BBC News – Business





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China poised to control strategic Pakistani port






KARACHI, Pakistan (AP) — China is poised to take over operational control of a strategic deep-water Pakistani seaport that could serve as a vital economic hub for Beijing and perhaps a key military outpost, according to officials.


The construction of the port, in the former fishing village of Gwadar in troubled Baluchistan province, was largely funded by China at a cost of about $ 200 million. It has been a commercial failure since it opened in 2007, because Pakistan never completed the road network to link the port to the rest of the country.






Chinese control of the port would give it a foothold in one of the world’s most strategic areas and could unsettle officials in Washington, who have been concerned about Beijing’s expanding regional influence.


The port on the Arabian Sea occupies a strategic location between South Asia, Central Asia and the Middle East. It lies near the Strait of Hormuz, gateway for about 20 percent of the world’s oil.


China’s interest is driven by concerns about energy security as it seeks to fuel its booming economy. It wants a place to anchor pipelines to secure oil and gas supplies from the Gulf. Beijing also believes that helping develop Pakistan will boost economic activity in its far western province of Xinjiang and dampen a simmering, low-intensity rebellion there.


Some experts view Gwadar as the westernmost link in the “string of pearls,” a line of ports from China to the Gulf that could facilitate expansion of the Chinese Navy in the Indian Ocean. That has sparked concern in both the U.S. and India.


Pakistan’s Cabinet agreed Wednesday to a proposal for a company owned by the Chinese government, China Overseas Port Holdings Limited, to purchase control of the port from Singapore’s PSA International Pte Ltd., which won a bid in 2007 to operate the port for 40 years. The transaction has not yet occurred, a spokesman for Pakistan’s Ministry of Ports and Shipping, Mohammed Raza, said Friday.


Pakistan views China as one of its most important allies and a counterweight to the United States, which has given Islamabad billions of dollars in aid but is often viewed as a fickle taskmaster.


China is expected to pay $ 35 million for control of the port to PSA and two other groups that own an interest, said Aqeel Karim Dhedhi, one of the other shareholders. The third shareholder is the National Logistics Cell, which is controlled by the Pakistani army. The Chinese are waiting for a Pakistani court case challenging PSA’s control of the port to be dismissed to complete the transaction, Dhedhi said.


A senior Pakistani official said Beijing has agreed to spend hundreds of millions of dollars to finish a 900-kilometer (550-mile) road that would link the port with Pakistan’s north-south Indus Highway, facilitating overland transport from Gwadar to China. The Pakistani government was supposed to complete the road in 2012, but it is only 60 percent finished, said the official, speaking on condition of anonymity because he was not authorized to talk to reporters.


It will still be a tough drive, passing along the Karakorum Highway that winds through the rugged mountains of northern Pakistan and then into Xinjiang province via a border crossing point at an elevation of 4,693 meters (15,397 feet). The path is often blocked by snow in winter.


Even so, the route will cut the overland distance from China’s western provinces to the sea in half, from about 4,000 kilometers (2,500 miles) to China’s east coast, to just 2,000 (1,250 miles) south to Gwadar.


Longer-term plans also call for road and rail links from Gwadar that would pass through strife-torn Afghanistan to energy-rich Central Asian states.


Asked about the port on Thursday, Chinese Foreign Ministry spokesman Hong Lei said “as long as projects are conducive to China-Pakistan relations, the Chinese side will positively support them.”


The port is operating at only about 15 percent capacity now, and machinery originally installed by China is rusting for lack of use, said a Pakistani port worker, speaking on condition of anonymity because he was not authorized to talk to reporters.


On a purely economic basis, the level of trade through the port should be zero because of its drawbacks, but the government is spending millions of dollars in subsidies to ship fertilizer through the facility. It would be cheaper to send the shipments through the coastal city of Karachi, 700 kilometers (430 miles) to the east, the worker said.


Some government officials have claimed that violence in Baluchistan has prevented them from completing the road network. Baluch nationalists have waged a decades-long insurgency against the government, demanding greater autonomy and a larger share of the province’s natural resources.


Gunmen shot to death two Pakistani air force personnel and a shopkeeper in a town near Gwadar on Tuesday, said local police official Izat Ali.


Other officials said the ruling Pakistan People’s Party simply shifted priorities away from Baluchistan and spent the money building roads in its main areas of support in Sindh province.


“The solution to Gwadar is the Chinese, since they have shown the willingness to work in Pakistan under tough conditions,” said shareholder Dhedhi.


___


Associated Press writers Adil Jawad in Karachi, Pakistan, Munir Ahmed in Islamabad and Joe McDonald in Beijing contributed to this report.


Economy News Headlines – Yahoo! News





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Barclays chief to waive his bonus







The chief executive of Barclays bank, Antony Jenkins, is to waive his bonus for last year






He said it would be wrong for him to receive a bonus, given what had been a “difficult” year for Barclays.


It is thought Mr Jenkins was in line to receive about £1m of a potential maximum entitlement of £2.75m.


Mr Jenkins took over as chief executive last August, just as Barclays was being rocked over mis-selling scandals and other issues.


He said in a statement: “To avoid further unnecessary public debate on this matter, I wish to make clear that I concluded early this week that I do not wish to be considered for a bonus award for 2012 and I have communicated that decision to the board.


“The year just past was clearly a very difficult one for Barclays and its stakeholders, with multiple issues of our own making besetting the bank.




George Osborne says bankers need to be “sensible” about their pay



“I think it only right that I bear an appropriate degree of accountability for those matters and I have concluded that it would be wrong for me to receive a bonus for 2012 given those circumstances.”


Mr Jenkins’ total potential pay package, including pension, basic salary, and incentives, was £8.6m.


Banks are currently reviewing the size of bonuses for senior staff, and there were reports this week that Royal Bank of Scotland will set aside £250m for payments. Last year, RBS’s chief executive, Stephen Hester, waived his bonus.


Sign up, or resign


Barclays hit trouble last June, when it was fined £290m by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.


The scandal sparked the resignations of three Barclays senior board members, including ex-chief executive Bob Diamond. He was replaced by Mr Jenkins, who was formerly head of retail and business banking.


Barclays has also set aside £2bn to compensate customers for the mis-selling of payment protection insurance.


On Friday, Barclays faced new claims that UK financial regulators were investigating the bank over money received from Qatar.


The Financial Times alleged that Barclays lent Qatar money to invest in the bank in 2008. Barclays was not immediately available for comment.


Last month, Mr Jenkins ordered all Barclays staff to sign up to a new ethical code of conduct or quit.


BBC News – Business





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Banks pay for ‘swap’ mis-selling







Four banks will now compensate tens of thousands of small businesses who were mis-sold complex insurance deals, says the Financial Services Authority.






In a pilot study, the FSA found that 90% of deals sold to “unsophisticated” customers broke at least one rule.


Some 40,000 “interest rate hedging products” (IRHPs) have been sold to small businesses since 2001.


Last summer, the FSA said several banks were guilty of mis-selling and decided that compensation should be paid.


Following last June’s initial announcement that redress was due, the FSA ordered the banks to carry out the study to see precisely how it should be calculated.


The FSA says the four big banks involved – Barclays, HSBC, Lloyds and the Royal Bank of Scotland – will now have to work out how much their customers lost.


It is not yet clear how many businesses are likely to receive compensation.


“It depends whether a business would have bought that product anyway,” says Martin Wheatley, the incoming chief executive of the new Financial Conduct Authority (FCA), which will replace the FSA later this year.


“In such cases, it’s a case of ‘caveat emptor’ ['let the buyer beware'], but in other cases, the contract should be ripped up,” he told the BBC.


Who will get compensation?


The idea behind the original deals mis-sold to bank customers was to swap the variable interest rates on their loans for fixed rates, thus insuring the businesses if interest rates rose.


But in recent years, interest rates have fallen to record low levels, leaving many businesses paying an excessive interest rate on their loans, which many did not understand would happen when they took out their loans.


In some cases, there were also expensive fees to get out of the deals.



As a result of the pilot review, the FSA has now decided exactly how the banks should proceed, and has also revised the criteria for who can claim.


For instance, it was concerned that some companies, which might not have understood the complexity of the products they were being sold, might have been excluded from any redress.


For example, a bed and breakfast business may, on paper, look like a large operation, purely because it employs a large number of seasonal staff.


But it still may not have been sophisticated enough to fully understand the hedging policies it was sold.


The Federation of Small Businesses (FSB) has welcomed the decision to broaden the compensation criteria, but it is still concerned that payments to the banks have not been automatically suspended.


It is also worried that there is no clear way for businesses to appeal if they are refused compensation by their banks.


“With the pilot showing such a significant level of mis-selling, we are concerned that the FSA has not mandated that all payments are suspended when a firm enters into the scheme,” said John Walker, the FSB’s national chairman.


Principles of redress


The FSA has now established how compensation should be calculated.


Continue reading the main story

There is a lack of clarity on what full redress looks like, with banks determining what constitutes consequential losses, and how an appeals process will work”



End Quote John Walker Federation of Small Businesses


It says redress “should aim to put customers back in the position they would have been in, had the breach of regulatory requirements not occurred”.


For full compensation, customers will have to show that they would not have bought an IRHP, had the sales rules not been broken.


If they would have bought a different kind of product from the one recommended, they might be offered partial compensation, depending on the losses they suffered.


But if the business suffered no loss, or if they would have bought the product anyway, had it not been improperly sold to them, they will be offered no compensation.


The British Bankers’ Association (BBA), which represents all of the UK’s banks, says that where customers have been treated unfairly, they will be compensated.


“Banks will be contacting those companies affected shortly, prioritising those with the greatest need,” said BBA chief executive Anthony Browne.


“Any business which is currently facing financial distress and is seeking a suspension of payments should get in touch with their bank immediately.”


“Consequential” losses


Some small business have complained of making huge losses beyond the money they were paying out on their loans.


Some said they had ended up having to sack staff, or sell assets, in order to save money to make the loan repayments.


These costs, known as “consequential losses,” might also include overdraft charges or additional borrowing costs.


The banks will have to ask whether these losses were directly caused by their rule breaches and whether such losses were foreseeable at the time.


But John Walker, of the FSB, was sceptical about the process.


“There is a lack of clarity on what full redress looks like, with banks determining what constitutes consequential losses and how an appeals process will work,” he said.


The FSA review only covers mis-selling by the first four banks identified.


A report on a further six banks will follow in the next few weeks.


BBC News – Business





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US economy in surprise downturn







The US economy unexpectedly shrank at an annualised rate of 0.1% in the fourth quarter of 2012, initial official estimates indicate.






If confirmed, it would be the first contraction logged by the US economy since the 2009 global recession.


The world’s largest economy grew 3.1% in July to September.


The fourth quarter period was dominated by the “fiscal cliff” – the spending cuts and tax rises that had been due to come into force from 1 January.


These were avoided by a last-minute deal between the Republican-dominated Congress and the White House. However, economists warned at the time that fears of an abrupt cut in government spending were undermining business and consumer confidence.


However, part of that deal includes tax rises for the highest-earning Americans and – more significantly for the economy – the expiry of a payroll tax holiday for all US employees, something which is widely expected by economists to further weigh on growth during the current quarter.


Spending cuts


The fourth-quarter shrinkage in economic output comes as a shock to analysts on Wall Street, who had been expecting 1.1% growth according to a poll by news agency Reuters. Not one economist surveyed had predicted an economic contraction.


It will add to pressure on the US Federal Reserve to do more to stimulate the economy. Members of its Federal Open Markets Committee are due to announce the conclusions of their latest policy-setting meeting later on Wednesday, and will have had an advance look at the economic data.


Growth was dragged down by public spending cuts – notably a 22% reduction in federal defence spending – and by the decision of many businesses to halt the rapid rebuilding of their inventories that began over the summer.


However, consumer spending did pick up, as did business investment, suggesting that the economy may have some underlying momentum. Sales of computers and cars both made positive contributions to the economy’s performance.


Residential investment also grew 15%, adding to evidence that the housing market has finally turned the corner.


Growth for 2012 as a whole came in at 2.2%, up from 1.8% in 2011, but still unusually slow compared with previous economic recoveries in the US following recessions in the post-War era.


The recently re-elected President Barack Obama and Congress are expected to clash once again in the coming months over the debt ceiling.


The US Treasury is approaching the $ 16.4tn (£10.3tn) legal limit on its total debt, and must gain permission from Congress to borrow the money needed for it to continue meeting its bills.


Last time there was a stand-off over the issue, in the summer of 2011, the political deadlock prompted ratings agency Standard & Poor’s to deprive the US of its top AAA rating, a move that sent stock markets sharply lower.


The US House of Representatives has passed a bill to extend the country’s debt limit until May, deferring the budget debate for a few months at least.


BBC News – Business





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Wall Street flat, investors look for new catalyst






NEW YORK (Reuters) – Stocks were flat on Tuesday as investors looked for new reasons in economic data or earnings to extend a rally that pushed major averages near five-year highs.


Equities have been on a tear lately, with the S&P 500 recently climbing for eight straight sessions, extending its rise in January to 5.1 percent. The index hovered around 1,500, suggesting there was still support for a market that has been hovering around five-year highs.






“A move like this in one month is extraordinary, and keeping the gains going will depend on concrete news like earnings and data that show the economy is getting better,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “We haven’t seen enough of that to make people jump in after the rally we’ve had.”


The gains have largely come on a strong start to earnings season, though results were mixed on Tuesday with Pfizer Inc rising but Ford Motor Co dropping after its report.


Both companies reported profits that topped expectations, but Ford also forecast a wider loss in its European segment. Shares dropped 3.6 percent to $ 13.32 as one of the biggest percentage losers on the S&P 500.


Pfizer, a Dow component, rose 1.2 percent to $ 27.16 after its results while Eli Lilly and Co rose 1.2 percent to $ 53.25 after reporting adjusted fourth-quarter earnings and revenue that beat expectations.


In economic news, stocks retreated slightly after data showed U.S. consumer confidence dropped to its lowest level in more than a year in January. Americans were more pessimistic about the economic outlook and their financial prospects, according to the Conference Board.


In addition, home prices rose 0.6 percent in November, as expected, according to the S&P Case/Shiller Home Price Index. The news comes a day after data showed an unexpected drop in December pending home sales.


Thomson Reuters data showed that of the 150 companies in the S&P 500 that have reported earnings so far, 67.3 percent have beaten analysts’ expectations, which is a higher proportion than over the past four quarters and above the average since 1994.


The Dow Jones industrial average <.dji> was up 13.40 points, or 0.10 percent, at 13,895.33. The Standard & Poor’s 500 Index <.spx> was down 1.01 points, or 0.07 percent, at 1,499.17. The Nasdaq Composite Index <.ixic> was down 18.21 points, or 0.58 percent, at 3,136.09.</.ixic></.spx></.dji>


The Nasdaq was pressured by a pair of disappointing tech outlooks. Seagate Technology Plc forecast third-quarter revenue below expectations while BMC Software Inc gave a 2013 profit view that was below forecasts.


Seagate shares slumped 8.7 percent to $ 34.10 while BMC fell 7.8 percent to $ 41.


On the upside in technology, Yahoo Inc rose 1.2 percent to $ 20.55 a day after forecasting a rise in annual revenue.


The Federal Reserve’s Open Market Committee is due to hold two days of meetings on interest rates beginning on Tuesday.


In a sign of an improved view towards equities, investors poured $ 55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record, research provider TrimTabs Investment Research said.


(Editing by Kenneth Barry and Nick Zieminski)


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Osborne: HS2 is engine for growth









George Osborne: “I think it is the engine for growth in the north and the midlands”



The HS2 high-speed rail network will be an “engine for growth” for the north of England and the Midlands, the chancellor has said.


George Osborne admitted the £32bn project was expensive and would take many years, but said it would create “tens of thousands of jobs”.


But critics say the plan is flawed.


Some argue that there is little evidence to suggest the introduction of the line will help reduce regional inequalities in the country.


The first phase of the high-speed rail project will link London to Birmingham. Now the government has announced that its preferred route for phase two will run northwards along two branches – one to Manchester and Manchester Airport; the other to Toton near Nottingham, and then on to Sheffield and Leeds.


Heal the divide?


Mr Osborne’s fellow Conservative MP, Andrew Bridgen, said his North West Leicestershire constituency would have “all the pain and none of the gain”.


Continue reading the main story



This morning all roads to Manchester were gridlocked. As usual. All snarled up, a nasty mess of lorries and commuters.


There’s a huge infrastructure problem here. Freight has increased 60% since 1995. There simply isn’t enough rail capacity to shift it off the roads.


But what if there was an additional rail line to London? HS2 as well as the West Coast main line. North West-based haulage giant Eddie Stobart says the increase in capacity would transform its business. In doing so, it might also transform many people’s commute.


And hey presto, the region’s moving again. Or so the theory goes. It’s about keeping people, parts and products on the move.


But what about the businessman who told me he’d leave Warrington if HS2 didn’t stop at his town? There may also be economic losers if it gets businesses relocating too.



“It’s going to cut my constituency north to south, destroy lots of countryside and put fear and planning paralysis to a lot of my communities.”


Mr Osborne acknowledged that “you can’t build a brand new railway line without having some impact on families” but added that there would be “a very generous compensation scheme”.


On Sunday, Deputy Prime Minister Nick Clegg suggested that the extension of the high-speed rail line would “heal the north-south divide”.


But Prof John Tomaney from the School of Planning at University College London (UCL) said that, given the evidence in countries where high-speed lines have been introduced, such as France, Spain and South Korea, there was very little evidence of reducing regional inequalities.


“On the contrary, in fact the evidence seems to suggest that it’s the capital cities which gain principally from these developments,” he told the BBC.


“A very good example would be the Madrid to Seville line in Spain. That line was built in order to promote the growth of Seville. But in actual fact, following its completion, Madrid grew at a much faster rate than Seville.


“In fact the gap between their economic performances widened. The relationship between Seoul and Busan [in South Korea] is very similar.”


Regeneration debate


Music mogul and rail enthusiast Pete Waterman said that HS2 would regenerate major areas of Britain.


“Just look at what the Olympics did for parts of South East London – some people complain about the cost, but the area has been completely transformed. The same will happen [with the HS2 hubs],” he told the BBC.


But Richard Wellings from the Institute of Economic Affairs (IEA) disputed this.


“If you look at somewhere like Doncaster, which has had a very fast link to London for decades now, it still remains one of the poorest towns in the UK. If you compare its policy statistics with neighbouring boroughs that don’t have the same links to London, they’re very similar.”


‘Economic error’


There have been many estimates of the economic benefits of HS2.


The HS2 business case, put forward by the Department for Transport in February 2011, concluded that phase one, from London to the West Midlands, would generate £20bn in economic welfare benefits, mostly as a result of time savings to business travellers.


The total benefits for the whole network were estimated at £44bn, although the accountants KPMG put their estimate much lower, saying HS2 could boost annual economic output between £17bn and £29bn in 2040.


According to the government, phase one would create about 40,000 jobs. That includes a potential 30,000 jobs in “planned employment growth” around the high-speed rail stations, 9,000 in construction of the line and 1,500 in the operation of the trains.


But groups who oppose HS2 say the business case is based on unrealistic assumptions – that projections do not take into account competition from conventional rail – and question the strategic benefits.


A separate study by KPMG, commissioned by the West Midlands Integrated Transport Authority (Centro), found that HS2 would add some £1.5bn in gross value to the West Midlands, the equivalent of a £300 rise in average wages.




IEA Deputy Editorial Director, Richard Wellings questions the business case for High Speed 2.



But the IEA’s Mr Wellings said the government was making “a basic economic error” with HS2.


“It’s not just the basic cost of around £33bn, there’ll also be loads of add-ons – leaking infrastructure around the stations, the huge regeneration schemes that will be taxpayer funded – the kind of thing we saw along the route of HS1.


“So this is very, very bad news for taxpayers and the wider economy,” he told the BBC.


But the British Chambers of Commerce (BCC) said projects like HS2 created “confidence, jobs and competitiveness”.


And Sir Richard Leese, chair of Manchester City Council, said that while high-speed rail did not guarantee growth, it would give both major cities and smaller towns in the north “a better chance”.


“Fundamentally in the north of England it’s not about speed, although shorter journeys are better for the economy, it is about capacity. It’s about more capacity for passengers and more capacity for freight as well.”


BBC News – Business





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Kuwait MPs target financial help for citizens






KUWAIT (Reuters) – A parliamentary committee in Kuwait proposed on Sunday that the government pay a portion of the interest on citizens’ personal loans and give a 1,000 Kuwaiti dinar ($ 3,500) gift to each Kuwaiti without such debts, state news agency KUNA reported.


The proposal from the financial and economic affairs committee, which is made up of members of parliament, would need approval of the wider assembly and the country’s ruler if it is to be passed into law.






Lawmakers elected in December had originally sought a complete bailout of billions of dollars of household debt but were met with strong resistance from policymakers who said the plans were not feasible.


If the proposal becomes law it would not be the first time that Kuwait, one of the world’s richest countries per capita, gives out such financial aid.


In 2011, to mark three major anniversaries, ruler Sheikh Sabah al-Ahmad al-Sabah granted 1,000 dinars to each of the country’s 1.2 million citizens and as well as free food rations for 13 months.


Kuwait’s oil wealth and generous welfare state have helped to shield the Gulf country from severe Arab Spring-style unrest, although there have been frequent demonstrations over political participation and other local issues.


Under the plan proposed on Sunday, the government would pay off interest incurred on loans. KUNA said this applied to the period between January 2002 to April 2008, citing committee rapporteur Safa al-Hashem. ($ 1 = 0.2818 Kuwaiti dinars)


(Reporting by Sylvia Westall; Editing by Alison Birrane)


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Bankers, policymakers say Europe’s crisis not over






DAVOS, Switzerland (Reuters) – International bankers and finance ministers warned on Saturday that Europe‘s crisis was not over even though the euro currency is now stabilized, it will take years to overcome economic malaise and mass unemployment in Europe.


After a private meeting of leading commercial bankers, government officials, central bankers and trade union officials, Swedish Finance Minister Anders Borg told Reuters: “There is a clear divide between the financial markets, who think a lot of this is fixed, and the people in the real economy and particularly from our side as the governments.”






Unemployment in Europe would only fall from 11.8 to 11.7 percent this year, growth was stagnant, real wages were not rising in most countries and it would take countries such as Sweden and France years to reform their labor markets, he said.


“So it is very dangerous to declare that the crisis is over because that would undermine the crisis insight that we need to have among the companies, among the population, among the unions, to be able to go through this process,” Borg said.


Sweden is not a member of the 17-nation euro zone and Borg has been among the strongest critics of the bloc’s handling of its sovereign debt crisis since late 2009.


International Monetary Fund Managing Director Christine Lagarde and Deutsche Bank co-chief executive Anshu Jain, who co-chaired the closed-door meeting on the sidelines of the World Economic Forum in Davos, declined to speak to reporters.


Participants said the mood this year was far more relaxed than 12 months ago, when there was a sense of emergency about saving the single currency from break-up.


European Central Bank President Mario Draghi left Davos for home before the meeting and EU Economic and Monetary Affairs Commissioner Olli Rehn, who was in Davos, did not attend.


Lagarde said in a speech on Thursday it was vital for Europe, the United States and Japan to keep up the momentum for economic reform and put their public finances in order at an appropriate pace, without crushing growth.


Chinese central bank deputy governor Yi Gang, who attended the session, said he had voiced most concern about trade protectionism and the negative consequences of money-printing by the U.S., Japanese, British and other central banks.


“Protectionism is a big problem and also you see quantitative easing of developed economies is generating uncertainties in financial markets in terms of capital flow,” he told Reuters in an interview.


“There is too much liquidity, a glut of global liquidity. Competitive devaluation is certainly one aspect of that. If everybody is QE or super QE and you want to depreciate, what currency do you depreciate against?”


One senior European commercial banker, who declined to be identified, said financial market optimism that the risk of a break-up of the euro was over had gotten ahead of reality.


“The crisis is not over and the notion that tail risk is gone is a dangerous one,” the banker said.


The economic term “tail risk” refers to the possibility of an asset suddenly losing value due to a rare event.


Rehn told Reuters the conclusion of this year’s Davos meetings about the euro was “no tail risk, growing confidence, no complacency, stay the course”.


However, a larger-than-expected early repayment of cheap three-year loans by some euro zone banks to the European Central Bank on Friday fuelled sentiment that the worst of the single currency’s debt crisis is now over and markets are stabilizing.


Banks are expected to repay more than 130 billion euros of crisis loans to the European Central Bank next week in a sign that at least some parts of the financial system are returning to health.


The ECB made over 1 trillion euros in ultra-cheap three-year loans to banks in lending operations in December 2011 and February 2012, a process which ECB President Mario Draghi said had “avoided a major, major credit crunch”.


(Writing by Paul Taylor; editing by Jason Neely)


Business News Headlines – Yahoo! News





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Samsung leads in phone shipments







Samsung accounted for one in four of all mobile phones shipped worldwide last year, as its shipments rose nearly 20% to 396.5 million, a report says.






Apple’s phone shipments grew by 46% to a record 135.8 million mobile phones worldwide in 2012.


But Nokia’s global phone shipments fell by 20% from 417.1 million units in 2011 to 335.6 million.


Overall, total shipments grew by 2% annually to reach 1.6 billion units in 2012, according to Strategy Analytics.


Neil Shah, senior analyst at the research firm, said: “Ongoing macroeconomic challenges in mature markets like North America and Western Europe, tighter operator upgrade policies, and shifting consumer tastes” were among the reasons for the modest global growth figure.


He added: “Fuelled by robust demand for its popular Galaxy models, Samsung was the star performer, shipping a record 396.5 million mobile phones worldwide and capturing 25% market share to solidify its first-place lead.


“However, Samsung’s total volumes for the year fell just short of the 400-million threshold.”
























Global mobile handset shipments (2012)


CompanyUnits (millions)Market share

Source: Strategy Analytics



Samsung



396.5



25.2%



Nokia



335.6



21.3%



Apple



135.8



8.6%



ZTE



71.7



4.6%



Other



635.4



40.3%



Meanwhile Strategy Analytics said global smartphone shipments grew by 43% annually to a record 700 million units in last year.


Global smartphone shipments for the full year reached a record 700.1 million units in 2012, from 490.5 million units in 2011, but there were signs that shipments of smartphones began to mature in developed regions such as North America and Western Europe.


Continue reading the main story

Start Quote



In little over 24 hours we have seen results from three of the biggest players in smartphones – which may now be the world’s most important industry”



End Quote



Once again Samsung had the biggest market share, at 30% worldwide and extending its lead over Apple and Nokia.


The research comes as Samsung reported a 76% jump in profits for the last three months of 2012, helped by sales of its Galaxy smartphones.


Net income rose to a record 7.04tn won ($ 6.6bn; £4.2bn), up from 4.01tn won in the same period a year earlier, beating analysts’ expectations.


The Korean firm said its mobile profits more than doubled over the same period.


Last year, Samsung became the world’s biggest smartphone maker, overtaking Apple, its main rival in the sector.This week Apple also reported quarterly results, showing flat profits, unchanged from a year earlier at $ 13.1bn, and record quarterly revenue of $ 55bn.


But it was not enough to overcome disappointment over sales of the company’s new iPhone 5, as analysts said the firm was in danger of becoming a victim of its own success.


The firm said late on Wednesday it had sold more iPhones (47.8 million) and iPads (22.9 million) in the final three months of last year than in any previous quarter, but investors had expected more.


‘Emerging markets’


Continue reading the main story

Start Quote



This is an extremely competitive place, and it is difficult to see any… brands capturing the mid-market, which is so fragmented”



End Quote Mark Newman Informa


“If you look at Apple, their position of strength in the smartphone market has generally been in Europe and North America, ” said Mark Newman, head telecoms analyst at research firm Informa.


“A lot of their continued growth will be in emerging markets, in Bric countries such as Brazil, India and China. There has certainly been this feeling that Samsung is catching up up, and overtaking Apple in terms of sales.”


Meanwhile Nokia, the struggling Finnish mobile phone maker which once dominated the global mobile market, said on Thursday that it had swung back into profit in the last three months of 2012.


Pre-tax profit for the quarter was 375m euros (£316m), against a 974m-euro loss last year. Nokia said it sold 15.9 million smartphones in the quarter, down from 19.6 million a year earlier.


“We have seen Nokia hit rock bottom but there are now some gentle signs of a recovery,” said Mr Newman.


He said in that the smartphone marketplace Apple and Samsung currently occupied the top tier, with “many players vying for position in the mid-range marketplace,” including Nokia, and others such as LG, Motorola, HTC. and Sony.


“This is an extremely competitive place, and it is difficult to see any of these brands capturing the mid-market, which is so fragmented,” added Mr Newman.


He said at the bottom end of the smartphone market there was “pent-up demand” for a phone retailing at about 100 euros, and Chinese firms Huawei and ZTE were “making most of the running here”.


BBC News – Business





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Hey Microsoft, Here’s Why Apple Still Gets the Girl








d3149  3Gduepif0T1UGY8H4yMDoxOm1qO387Kn Hey Microsoft, Heres Why Apple Still Gets the GirlPlay


If you want to understand the plight of Microsoft in a consumer product world dominated by Apple, all you need to do is watch “Pretty in Pink”. Senior correspondent Sam Grobart explains.










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Apple and Google: Slouching Toward Steady Profits






Here’s the thing about perpetual-motion machines: They don’t exist. That’s worth considering during all the hand-wringing surrounding earnings announcements from Apple (AAPL) and Google (GOOG).


Apple’s stock is currently down around $ 504—a far cry from its high of $ 705 back in September 2012. Investors are worried that earnings may slip by around 2 percent, indicating a slowdown in demand for Apple’s products. Concern is greatest around Apple’s iPhone, the sale of which contributes more than half of the company’s revenue and profits.






If demand for the iPhone is slowing—particularly in the United States—it’s because that most people who want one probably have one. Somewhere between 50 and 60 percent of U.S. mobile phone users already have a smartphone. Of those people, around 53 percent have an iPhone, according to market researcher Kantar Worldmedia ComTech.


And so, momentum slows. Look beyond the U.S., and Apple has some potential in similarly wealthy markets: In Europe, its market share is a considerably lower 25.3 percent, which trails market leader Samsung by 19 points. But the real potential lies in places where the iPhone is just getting started—China, India and other developing markets. The problem, however, is that the iPhone itself is an expensive device: We pay $ 199 and up for it, but that’s because the handset’s cost is subsidized by the carriers. In other parts of the world, you buy the handset at full price, making the iPhone’s unsubsidized price of $ 649 and up prohibitive.


Maybe Apple can create a lower-priced phone for those international markets. Maybe it can create another industry-making device, the way the iPod basically created the music-player market, the iPhone revolutionized the smartphone market and the iPad upended the tablet market. Maybe that’s the much-rumored successor to Apple TV.


But there is also the possibility that none of those things will happen—or will have the desired effect that some investors seem to be looking for. And if that’s the case, then Apple will be simply a wildly profitable company that continues to be a major (or dominant) player in various product categories.


Google’s in a different situation, but there’s anxiety about its future earnings potential as well (even though the company beat estimates Tuesday, posting fourth-quarter profit at $ 10.65 a share; estimates were around $ 10.50 a share). The company made its bones–and billions of dollars–in desktop search, but the game has moved to mobile, and Google has to retool for that. Creating the Android operating system was one step to adapt—it’s a bank shot that hopes that creating a mobile operating system will draw more people into mobile browsing, which will in turn send more users and data to Google’s online services. Unfortunately, mobile advertising remains a challenge, if for no other reason than the fact that a mobile screen is small, so where do you put all those ads?


Buying Motorola was another way for Google to readjust. It would appear to be an admission from Mountain View that Apple’s method of designing software and hardware together yields greater benefits than entrusting it to third-party device manufacturers. But Motorola hasn’t yet paid off—none of its devices have really caught on with consumers, and unwinding non-essential businesses from the core handset operation has caused confusion among analysts and other company watchers.


And now Google has to contend with search features from its archrival, Facebook (FB). If Facebook’s Social Graph search is successful, which depends on Facebook users sharing more and more data about what they like, it could prove a more accurate—and therefore more valuable—search service than Google’s keyword-search method.


With both companies, there’s worry that the days of fabulous growth are rapidly fading into the past. Thing is, that may well be true, but it was bound to happen. At some point in a growth company’s life, it’s going to become a value stock. Issuing a dividend, which Apple started in October, is not an admission of defeat. It’s a way to return some of your earnings to shareholders, which is at the core of why people invest in a company to begin with.


The fear is that companies like Apple and Google will go in the direction of Microsoft (MSFT)—an otherwise wealthy company that drifts toward irrelevance. But there’s a big difference there: Microsoft’s troubles stem from an inability to penetrate key markets like tablets and mobile, while still dominating the desktop and gaming markets, to say nothing of enterprise software. Google and Apple are already big players in those markets. It may be that they continue to be steadily profitable in years to come. How boring.


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Is it Possible to Spot Earthquakes Before They Strike?







Warner Marzocchi remembers waking up well before dawn on Apr. 6, 2009, because the bed underneath him was trembling. Certain it was his wife having a nightmare, Marzocchi, a researcher at Italy’s National Institute of Geophysics and Vulcanology, reached out an arm and fell back asleep. It wasn’t until morning, when he saw the messages on his cell phone, that he learned the real cause of the shaking: An earthquake had struck the city of L’Aquila, some 60 miles from his home in Rome.


The powerful tremblor killed more than 300 people and left thousands homeless. Last October seven natural disaster experts were convicted on manslaughter charges for having failed to adequately warn the city’s residents that a quake was imminent, setting off an international controversy. Marzocchi, like other scientists around the world, has criticized the decision; jailing scientists for giving advice will deter others from using their expertise in the service of public safety, he says. Marzocchi also believes that, when it comes to warning the public about the risk of an earthquake like the one at L’Aquila, there’s much that can be improved.






Before the earthquake in L’Aquila, the bulk of scientific research into earthquake prediction focused on calculating the chance that a quake would strike a given region over the span of several years. This provided crucial information for the drafting of building codes and emergency response plans. But it did little for citizens and local officials faced with deciding whether to evacuate their communities. Everybody knew that L’Aquila was at risk of a major quake. Nobody knew how to predict exactly when it would strike.


That’s what tripped up the convicted experts. Members of a board called the National Commission for the Forecast and Prevention of Major Risks were called into the city on March 31, 2009, a week before the earthquake. Later, a leaked wiretap of a top government official would show that the meeting was less a scientific mission than an effort to calm residents of the city who were panicked by a series of small tremors and alarmist predictions issued by a local man who was not a scientist.


Given the tools at their disposal, the experts on the board were little-better-equipped than a layman to quantify the risk the city was facing. And so their conclusion—that an earthquake remained unlikely in the near term—was easily used by those looking to reassure the population of L’Aquila that it had nothing to worry about. This message, wrote the case judge in a 946-page ruling released on Jan. 18, had the effect of “producing devastating effects on the precautionary habits traditionally followed by the victims.” Rather than flee their homes as they normally would have done when the ground began to shake, residents in L’Aquila stayed put—with fatal consequences.


But what if the experts had been able to quantify the risk? Marzocchi argues that it could have saved the lives of some of the earthquake’s victims—not to mention the careers of his colleagues. On the day after the quake, Marzocchi set aside his other projects and concentrated on a computer model his team had developed to predict the risk of aftershocks. For weeks, he produced colored probability maps, rating the regions around the city according to the chance that they would be struck again. His predictions turned out to be strikingly accurate; the recorded aftershocks largely occurred in the areas where he expected them.


Buoyed by his model’s success, Marzocchi turned its calculations back in time by feeding it the data available before the main shock. The residents of L’Aquila had been right to be worried about the series of small tremors they had been feeling. In normal times, according to Marzocchi’s model, the chances of a major earthquake striking during any three-day period was about one in a million. In the days just before the disaster, it had jumped to about one in a thousand—a small probability, to be sure, but still cause for concern. The earthquake might not have predictable. But had the experts possessed analysis such as Marzocchi’s, they could have warned the public that the danger had risen. And the residents of L’Aquila could have decided for themselves whether to run or ride out the risk.


The Italian geologist isn’t alone in promoting this kind of approach. An international commission, of which Marzocchi was a member, came up with similar recommendations. “In some sense, this was the earthquake’s silver lining,” says Thomas Jordan, director of the Southern California Earthquake Center and chair of the commission. “It’s focused a lot of attention on these issues.” In the United States, the U.S.Geological Survey has begun to try to quantify the risk of earthquakes over a 24-hour period. Japan has launched a similar effort.


The projects are all in early stages. Models still need to be further developed, tested, and calibrated. But they do point to a way forward and to a bright spot in the legacy of the disaster in L’Aquila: a public that is more informed, better trusted in making its own decisions, and—ultimately—safer.



Faris is a Bloomberg Businessweek contributor.


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The Day Obama Moved Into The White House






After seven years as President Obama’s personal aide, or “body man,” Reggie Love resigned in late 2011 to attend the Wharton School. He recalls how he helped get the new president ready for the inauguration four years ago.


What time did you get up?






Oh, early! I think 5:30 or 6.


Where was he?


He was staying at the Blair House across the street from the White House. I spent the night at my apartment.


And Michelle and the girls?


They were there, but off somewhere prepping.


What’s the first thing you did–make sure his clothes and shoes were in order?


I had that stuff taken out already. One of the questions was whether he was going to wear a scarf. [He did for the parade, but not the swearing in.] The biggest portion of the day was prepping for the speech. He worked on that speech months in advance and spent a lot of late nights on it. When he gave it, he was comfortable with it.


Did he seem nervous?


If he was, he didn’t show it.


What was his mood?


It was pretty straightforward. He’s not a moody person. He’s not reactive to stuff. He doesn’t have highs and lows.


He went to church. What happened after that?


He went to the White House to meet the Bushes. And then they drove together in the same vehicle from the White House to the Mall.  I wasn’t in the car. In that car was just the president and the first lady, the president-elect and the first-lady-elect. When they get to the Capitol, they have a whole arrival ceremony. You walk through the Capitol and everyone greets you. They meet the Sargeant-at-arms. It didn’t feel like a big day for me, until you’re in the tunnel and you’re going out into the Mall. And you see all those people.


Was he cold?


Was he cold? He was freezing! There wasn’t anyone there that wasn’t.


Including you?


I haven’t told anyone this, but I wasn’t technically outside that day. I was inside the Capitol, behind him, so I wasn’t as cold as everyone else. Oddly enough, on that day I spent most of it at the White House meeting the staff, planning my office, figuring out where stuff goes. Because that was the first night he spent in the White House. There was this whole process of moving everything from the Blair House to the White House. It’s like moving, except it’s not your stuff and you need to be able to find it quickly.


What did he need to have quickly?


A tuxedo, a couple of options for those, a tie, a back-up pair of shoes, some work-out clothes, a computer.


And after the parade?


The parade ends at the White House. They went inside, got warm, and got changed. They had dinner, just the family.


What’s the difference between now and four years ago?


I know that if something goes wrong today,  I’m not responsible. And if I oversleep, I can always just watch on TV.


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Dotcom starts new file-sharing site







Megaupload boss Kim Dotcom has set up a new cloud storage and file-sharing site.






Mega, a web-based service that lets people upload and store files of any kind, is a sequel to the Megaupload system that was shut down last January.


Police raids on the offices and home of Kim Dotcom led to the closure of Megaupload.


The Mega site went online at dawn on Sunday, with Mr Dotcom due to hold a gala at his New Zealand mansion later.


Mr Dotcom has said the new site complies with the law and warned that attempts to take it down would be futile.


“This is not some kind of finger to the US government or to Hollywood,” he told Reuters on Saturday.


“Legally, there’s just nothing there that could be used to shut us down. This site is just as legitimate and has the right to exist as Dropbox, Boxnet and other competitors.”


Extradition hearing


Hours after the site was launched, Mr Dotcom tweeted that it had received 250,000 user registrations, although limited server capacity meant Mega was unreachable to many.


In a series of earlier tweets Mr Dotcom said every customer would have 50 gigabytes of free storage – far more than is offered by rival services such as Dropbox or Microsoft’s SkyDrive.


Mega will be encrypted so only those who upload data have access to it.


Data is also being held in the cloud to make it easy for users to get and share files.


The 2012 raids on Megaupload were carried out because, said US law enforcement, many users of Megaupload were engaged in pirating content and illegally sharing it.


They accused Mr Dotcom and other managers at Megaupload of profiting from piracy.


Mr Dotcom, who was born Kim Schmitz, has rebuffed the accusations and is fighting a legal battle to stay in New Zealand from where he ran Megaupload.


A hearing on whether he can be extradited to the US is due to be held in March.


The case has generated controversy in New Zealand over the way the police and intelligence services gathered evidence before the raid and won an apology to Mr Dotcom from the country’s prime minister.


Mr Dotcom has also won support from prominent computer pioneers such as Apple co-founder Steve Wozniak.


The raid on Megaupload put 25 petabytes of data uploaded to it by its 50 million members into a legal limbo.


In one message, Mr Dotcom said he was working with lawyers and the Electronic Frontier Foundation, which campaigns on digital rights issues, to get access to that seized data and return it to users.


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Boeing probe focuses on battery, 787 deliveries halted






SEATTLE/TAKAMATSU, Japan (Reuters) – U.S. and Japanese aviation safety officials finished an initial investigation of a badly damaged battery from a Boeing Co 787 Dreamliner jet on Friday as Boeing said it was halting deliveries until the battery concerns were resolved.


Boeing said it would continue building the carbon-composite 787, but deliveries were on hold until the U.S. Federal Aviation Administration approved and implemented a plan to ensure the safety of potentially flammable lithium-ion batteries that prompted a widespread grounding of the new airplane this week.






In Washington, the top U.S. transportation official, Ray LaHood, said the 787 would not fly until regulators were “1,000 percent sure” it was safe. A week earlier, LaHood said he would not hesitate to travel on a Dreamliner.


Officials from the Federal Aviation Administration (FAA), U.S. National Transportation Safety Board (NTSB) and Boeing joined Japanese authorities looking into what caused warning lights to go off this week on an All Nippon Airways Co domestic flight, prompting the aircraft to make an emergency landing at Takamatsu airport in western Japan.


The incident prompted regulators in the United States and around the world to ground the 50 Dreamliners in service. [ID:nL1E9CH8CJ] The jet has been flying safely for 15 months, carrying more than 1 million passengers, but it has run into problems in recent weeks, including problems with fuel leaks.


The biggest safety concerns centered on its lithium-ion batteries, which are lighter than conventional batteries, pack more energy and are faster to recharge, but are also potentially flammable.


When the FAA announced the grounding of all six U.S.-operated 787s on Wednesday, the agency said airlines would have to show the batteries were safe and in compliance with its rules. It said both battery failures released flammable chemicals, heat damage and smoke – all of which could damage critical systems on the plane and spark a fire in the electrical compartment.


A Japanese safety official at Takamatsu airport told reporters that excessive electricity may have overheated the battery and caused liquid to spill out. Pictures released by investigators of the battery showed a burnt-out blue metal box with clear signs of liquid seepage.


GS Yuasa Corp, the Japanese firm that makes batteries for the Dreamliner, said it sent three engineers to Takamatsu to help the investigation.


A person at the company, who asked not to be named due to the sensitivity of the issue, said: “Our company’s battery has been vilified for now, but it only functions as part of a whole system. So we’re trying to find out exactly where there was a problem within the system.”


An official with Thales, the French company that makes control systems for the battery, referred all questions to Boeing.


At a news conference, the Japan Transport Safety Board (JTSB) said the charred battery and the systems around it would be sent to Tokyo for more checks. It said there were similarities with an earlier battery fire on a Japan Airlines Co 787 parked at Boston’s Logan International Airport.


“This information will go to Boeing and the FAA. They will assess it” before allowing the 787 to fly again in Japan, said Hideyo Kosugi, a JTSB inspector. He said the JTSB aimed to issue a report within a week but the U.S. review might take longer.


LaHood, the U.S. transportation secretary, said Friday he could not predict when the 787 would resume flight.


“So those planes aren’t flying now until we really have a chance to examine the batteries … That seems to be where the problem is,” said LaHood, who told a news conference on January 11 he would not hesitate to fly on the plane himself.


When pressed by reporters on Friday about whether he regretted his prior statements, LaHood said, “Last week it was safe.” What has changed since then, he said, is the fact that another incident occurred involving the batteries.


Karen Walker, editor of Air Transport World magazine, said La Hood and FAA Administrator Michael Huerta chose to “stand side by side” with Boeing executives and underscore the plane’s safety because of its huge importance to the U.S. economy as the first all-new American airliner in two decades.


“However, the joint statements of safety confidence and lack of an (airworthiness directive) until after a second serious incident … could potentially hurt Huerta and LaHood,” she wrote.


Boeing shares fell 0.3 percent to $ 75.04. Since the recent spate of issues began in early December, the stock is up 1.4 percent, against a gain of 5.4 percent for the S&P 500 over the same period.


Shares in the Kyoto-based battery maker GS Yuasa rose as much as 3.9 percent on Friday, having dropped around 18 percent since the January 7 battery fire in the auxiliary power unit (APU) of the JAL plane at Boston.


The U.S. investigation into that incident is focused on the Japanese-made batteries, with no indication the APU – built by United Technologies Corp’s Pratt & Whitney – was involved, said a person familiar with the government probe, who was not authorized to speak publicly.


Mark Rosenker, a former NTSB chairman, said Boeing conducted over 1.3 million hours of testing before deciding the lithium-ion batteries were safe to use on the 787, and the company had to satisfy additional rigorous tests to be granted a “special condition” by the FAA to use the batteries.


“I don’t believe there was corner cutting in any way. I believe the FAA has done a good job in its certification process. And Boeing is a very formidable and extremely careful airplane manufacturer. You don’t survive in this business by not making safe, efficient and reliable planes,” he said.


BIGGEST MARKET


Japan is the biggest market so far for the 787, with ANA and JAL operating 24 of the 290-seat wide-bodied planes, which have a list price of $ 207 million. Boeing has orders for close to 850 of the planes.


Goldman Sachs estimated the hit to ANA’s annual operating profit could be up to $ 40 million if the grounding of its 17 Dreamliners drags on through March. The plane makes up close to a tenth of ANA’s fleet and is crucial to its growth strategy.


ANA cancelled more than 60 domestic and international flights through Monday, affecting more than 10,000 passengers. JAL has cancelled 8 Dreamliner flights on its Tokyo-San Diego route until January 25. Other flights will switch to older planes.


A spokesman for the airline said ANA remained committed to the Dreamliner and would spare no effort to get it back in the air safely.


Australia’s Qantas Airways said it cancelled an order for one of 15 Dreamliners earmarked for its budget arm Jetstar. It said the decision to cancel was taken late last year, before the plane’s recent problems. Qantas has options to order 50 of the new generation aircraft.


Separately, Japan’s transport ministry said a fuel leak on another JAL-operated 787 last week was due to a malfunction in a drive mechanism that controls a valve. It said the British company that makes the valve was investigating. The ministry declined to name the firm.


BAD BATCH?


The use of new battery technology is among the cost-saving features of the 787, which Boeing says burns 20 percent less fuel than rival jetliners using older technology.


Hans Weber, president of TECOP International Ltd, a San Diego-based aviation consulting firm and former FAA adviser, said the incidents could be linked to a bad batch of batteries.


“We have to consider the suppliers were at one time producing a lot of equipment for the 787 and then everything got delayed, so some of the stuff they built has been sitting on the shelf for a while. Some of these might have been produced early in the production process and there may have been some deficiencies in the production process,” he said.


The 787, a leap in aircraft design, has been plagued by cost overruns and years of delays, though orders last year helped Boeing overtake rival Airbus as the world’s largest manufacturer of passenger jets.


(Additional reporting by Yoshiyuki Osada, James Topham, Mari Saito, Issei Kato, Maggie Lu Yueyang, Herng Shinn Cheng, Ruairidh Villar, William Rigby, Alina Selyukh and Andrea Shalal-Esa; Writing by Ian Geoghegan; Editing by Jeremy Laurence, Gary Hill, Kenneth Barry and David Gregorio)


Business News Headlines – Yahoo! News





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Wall Street edges lower on earnings, China data






NEW YORK (Reuters) – Stocks fell modestly on Friday, a day after the S&P 500 rose to its highest level in five years, as a weak outlook from Intel was weighed against encouraging data out of China and a fourth-quarter profit at Morgan Stanley .


The Dow Jones industrial average <.dji> was down 6.68 points, or 0.05 percent, at 13,589.34. The Standard & Poor’s 500 Index <.spx> was down 2.60 points, or 0.18 percent, at 1,478.34. The Nasdaq Composite Index <.ixic> was down 10.63 points, or 0.34 percent, at 3,125.37.</.ixic></.spx></.dji>






(Reporting by Angela Moon; Editing by Bernadette Baum)


Business News Headlines – Yahoo! News





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