Monday, 1 October 2007
Dominique Strauss-Kahn says that the slowdown in the US sub-prime mortgage market should not have a dramatic impact on the world economy.
Mr Strauss-Kahn was giving his first news conference since being named as the next head of the International Monetary Fund (IMF) on Friday.
"I think the situation is now under control," the socialist former French finance minister said.
"The bases of world growth today are solid bases," he added.
Sub-prime mortgages are offered to homebuyers with low incomes or poor credit records.
There have been record defaults on them in the US as rising interest rates and falling house prices have caused problems for borrowers.
The defaults have raised questions about the value of debt that has been passed around the banks.
The former head of the Federal Reserve, Alan Greenspan, predicted on Monday that the sub-prime crisis would lead to, at best, an economic slowdown and more likely a recession in the US that would have knock-on effects worldwide.
Renewed criticism
Mr Strauss-Kahn will take over as managing director of the IMF on 1 November.
The IMF is a multinational body charged with giving financial aid and assistance to developing countries to secure global financial stability.
His appointment renewed criticism of the system under which Europe gets to choose the head of the IMF while the US chooses the boss of the World Bank.
Describing himself as a "free-market socialist", he said that he would gear policy to meet the needs of emerging and low-income economies.
Some of those countries have complained that the IMF is too dominated by rich countries and that the conditions they place on their loans are too strict.
Mr Strauss-Kahn said he had travelled 100,000km (60,000 miles) to convince many of the IMF's 185 member countries that he had a workable plan for the future of the institution.
IMF boss 'calms slowdown fears'
Record close for New York shares
Monday, 1 October 2007
New York's leading shares have broken their record closing level after economic data made an interest rate cut more likely.
The rises came after a report showed that manufacturing grew at its slowest pace for six months in September.
The Federal Reserve's next rate-setting meeting is on 30-31 October.
The Dow Jones Industrial Average closed up 1.38% or 191.92 points at 14,087.55 - the first climb above 14,000 since mid-July.
Shares in banks were boosted by the perception that the worst of the summer's credit problems may be over.
Both Citigroup and UBS gave indications of the amount that the upheaval in credit markets had cost them in the past three months, but were confident that business was now returning to normal.
There was also a technical effect on trading from the start of the new financial quarter.
Many options expired on Friday, leaving traders free to set up new positions.
The technology-based Nasdaq rose 39.49 points or 1.46% higher at 2,740.99.
The S&P 500 index rose 20.28 points or 1.32% to 1,547.03.
Palm in red as iPhone grabs sales
Monday, 1 October 2007
The US handheld computer maker Palm has reported a three-month loss as the launch of Apple's iPhone hit sales of its own smartphones.
It made a net loss of $841,000 (£412,000) between June and August, compared with a profit of $16.5m in the same three months of 2006.
Palm warned on 19 September that it was likely to report a loss.
Analysts blamed it on increased competition from Apple and other manufacturers of high-end phones.
It is the first set of results since Palm sold one quarter of its shares to the private equity house Elevation Partners.
"As we move toward completing the recapitalization transaction with Elevation Partners, we are excited to strengthen our ability to accelerate Palm's growth in the future," said Palm's chief executive Ed Colligan.
Apple launched its iPhone in the US on 29 June.
Palm's Treo systems may also have been losing out to the Blackberry devices made by Research in Motion.
Palm recently withdrew its Foleo keyboard and monitor devices for its Treo smartphones.
But it has launched its Centro device, which is a lightweight, cheaper device, designed to compete with manufacturers such as Samsung.
World Bank's record $3.5bn pledge
Friday, 28 September 2007
The World Bank has promised to contribute a record $3.5bn (£1.7bn) to help the world's poorest countries.
The figure is double what the agency initially said it would give to its unit in charge of distributing funds.
New World Bank president Robert Zoellick said the move was designed to encourage rich countries to increase their donations.
He also reduced the charges on loans to emerging countries, such as China, for the first time in nine years.
"The board agreed to vastly simplify and do away with most of the fees and waivers and just have an upfront commitment fee and a spread over our borrowing, which will enable us to cut prices back to 1998 levels," Mr Zoellick said.
Dramatic move
The dramatic step is part of the World Bank's strategy to increase its business with 79 nations classified as middle income, including India, Brazil, Russia and South Africa and get them to help with poverty-fighting efforts.
Meanwhile, Mr Zoellick warned that if the Group of Eight industrialised nations stuck to their promise made in 2005 to cancel the debts of the world's poorest countries, a shortfall was likely to emerge in the World Bank's aid pot.
He urged developed countries to increase their donations so as to help impoverished economies invest in their infrastructure and become sustainable, and not leave them to rely on money from countries that do not have their best interests at heart.
Further signs of US economic pain
Friday, 14 September 2007
Retail sales and industrial output both slowed in the US last month, as the economy felt the strain from the housing slump and credit squeeze.
Shop sales grew 0.3% in August, below market expectations of a 0.5% rise and below July's 0.5% increase.
Industrial output rose 0.2%, the slowest pace in the past three months.
Analysts said the figures reinforced the case for the Federal Reserve to cut interest rates when it meets to decide on borrowing costs next week.
US stock markets fell on the news, the Dow Jones index dropping 76 points to 13,349 just after opening in New York.
Eyes on the Fed
When it meets on 18 September, the Fed will be under enormous pressure to act to lower the cost of consumer borrowing.
Many believe such a move would limit the wider economic fallout from the current turbulence in financial markets triggered by the crisis in the sub-prime mortgage market.
Recent indicators have pointed to a slowdown in economic activity, with the economy shedding 3,000 jobs last month.
The latest figures showed output at U.S. factories fell 0.3% last month, the first decline in manufacturing after five straight increases.
So far, consumer spending has remained resilient, but excluding car sales, which are at their strongest in two years, retail spending actually declined 0.4% in August.
Meanwhile, figures from the University of Michigan showed that consumer confidence remained close to a yearly low.
Most leading analysts have reduced their forecasts for economic growth for the rest of the year, concluding that the housing contraction will drag on the wider economy.
'Chinks in armour'
The latest figures have sharpened calls for a rate cut. Analysts said the key question was whether policymakers would opt for a quarter or half-point reduction.
"The Fed will most likely implement a quarter-point cut," said Kevin Flanagan, fixed income strategist at Morgan Stanley, adding that recent evidence pointed to "some chinks in the armour of the economy".
But some experts believe more drastic action is required to restore market confidence.
"With August employment weak and retail sales down, the Fed will be concerned about consumer spending drying up," said Richard Huber, economist with AG Edwards & Sons.
In a piece of more positive economic news, the US balance of payments deficit narrowed to $190.8bn in the second quarter from $197.1bn in the previous three months.
The large current account deficit - the broadest measure of US trade with the rest of the world - has been a major factor in the weakness of the US dollar in the past year.
Barclays investors back ABN bid
Friday, 14 September 2007
Barclays Bank has won the backing of most of its investors to go ahead with its takeover of Dutch bank ABN Amro.
The UK bank said 90% of shareholders had voted in favour of the deal - well above the required 50%.
But Barclays could still lose out in the takeover battle to a consortium led by rival Royal Bank of Scotland (RBS).
RBS has tabled a mostly-cash bid worth 71bn euros ($98.5bn; £49bn). But a mainly-shares offer from Barclays has dipped recently, along with its stocks.
The drop in Barclays' share price means its offer is now worth around 58bn euros ($80.5bn; £40bn) - significantly less that the RBS bid.
US woes
Barclays shares have suffered in recent weeks after it emerged it may be sitting on hefty losses through its role in complicated investments, backed by once-lucrative US home loans which are now largely worthless.
Reports have suggested that Barclays' losses would be limited to no more than £75m, but the UK bank has not officially reassured the market and so fears have not been eased.
Meanwhile, fallout from US sub-prime mortgage problems has also weighed on the financial sector, adding to the pressure on Barclays.
The bank's offer was initially accepted by the ABN Amro board, but it withdrew its backing in July to "ensure a level playing field" after RBS entered the fray.
Barclays has been bitterly trying to fend off a rival bid to control ABN from a consortium led by Royal Bank of Scotland, which sweetened its offer last month, upping its cash element from 71% to 93% in an effort to win over shareholders.
Northern Rock shares plunge 32%
Friday, 14 September 2007
Shares in one of the UK's largest mortgage lenders, Northern Rock, have fallen 32% after it had to ask the Bank of England for emergency funding.
But experts say it does not mean Northern Rock, which has £113bn in assets, is in danger of going bust.
The bank has struggled to raise money to finance its lending ever since money markets seized up over the summer.
Other bank shares fell, with those in Alliance & Leicester, HBOS and Barclays down by 8%, 5% and 4% respectively.
House builders were also hit, Barratt Developments' shares falling 8%, while the London stockmarket's benchmark index, the FTSE 100, at one point dropped more than 2.2% before recovering during the afternoon.
Northern Rock said that its profits for 2007 would be hit, but that it remained solvent.
Unlike most banks, which get their money from customers making deposits into savings accounts, Northern Rock is built around its mortgage business.
It raises most of the money which it provides for mortgages by borrowing from banks and other financial institutions.
Speaking on BBC Radio 4's Today programme, Chancellor Alistair Darling said: "The problem here is there is a lot of money in the system but they are reluctant to lend it to each other at the moment."
Queues at branches
Mr Darling said that "in order to create a stable banking system, the Bank [of England] steps in and it makes facilities available to the Northern Rock."
"Northern Rock can draw on them when it requires, but it means it can carry on trading, people can use their accounts in the normal way, they carry on making their mortgage payments in the usual way, Northern Rock will be able to carry on its business."
Angela Knight, chief executive of the British Bankers' Association, said that anybody who was "either a saver with Northern Rock or has got a mortgage... can be absolutely confident that they have got their money with or they have borrowed from a very sound financial institution."
Despite the reassurances, there have been reports that long lines of customers have formed outside several Northern Rock branches around the UK.
Several customers showed BBC reporters slips that suggest some did withdraw sums of £100,000 and more.
Dozens of Northern Rock customers have contacted the BBC to complain that the bank's website was inaccessible, while all the bank's phone lines were jammed.
Emergency reserve untouched
The emergency lending facility to Northern Rock was agreed by Mr Darling, on advice from Mervyn King, governor of the Bank of England.
Northern Rock chief executive Adam Applegarth said that it had not yet borrowed any of the "unlimited" funds available.
He urged customers to remain calm, and stressed that it was "business as normal".
However he indicated that it may, in future, be more expensive worldwide for institutions to borrow money, and that in turn could mean that mortgages generally become more expensive.
'Lender of last resort'
The decision for the Bank of England to become the "lender of last resort" is extremely rare - and also comes after consultation with the Financial Services Authority (FSA).
It is an unlimited facility, with interest rated at a "penal rate" of more than 1% above Bank base rate.
To obtain the money, the Northern Rock will have to deposit some of its customers' mortgages as collateral, which are regarded by the Bank of England as sound.
In a statement, Northern Rock said it had "agreed with the Bank of England that it can raise such amounts of liquidity as may be necessary by either borrowing on a secured basis from the Bank of England or entering into repurchase facilities with the Bank of England".
"On the assumption that the current conditions remain until the end of 2007, there will clearly be an impact on Northern Rock's 2007 asset growth and, therefore, on profits."
An FSA statement said Northern Rock "exceeds its regulatory capital requirement and has a good quality loan book". 
Dollar hits new low versus euro
Thursday, 13 September 2007
The US dollar has fallen to new record lows against the euro as investors fret about a world credit crunch.
In European trading, the greenback dropped as low as $1.3927 against the euro, deepening Wednesday's losses.
The dollar has fallen in the past week, amid hopes that Federal Reserve will cut interest rates in a bid to reassure markets over current credit fears.
Analysts expect rates to fall by between a quarter and half a percentage point when the Fed meets next week.
However, as the dollar has weakened, the euro has gained momentum after recent comments from the European Central Bank (ECB) hinting at the possibility of future interest rate rises.
Further gains?
The health of Europe's economy - underlined by strong growth and inflation figures from France - could help push the euro through the $1.40 barrier, some experts suggested.
"The catalyst sending the euro to its latest high against the dollar is the growing expectation that the Fed could trim interest rates by up to 50 basis points at its 18 September policy meeting," said Global Insight economist Howard Archer.
"The euro seems likely to remain well supported against the dollar in the near term at least and could well break through $1.40 imminently."
At the heart of the dollar's decline have been problems in the US housing market, caused by the Fed increasing interest rates in order to slow accelerating inflation.
The increases have led to higher borrowing costs, triggering an increase in the number of people defaulting on loans, especially in the sub-prime mortgage market.
The sub-prime sector specialises in lending to people with poor or non-existent credit histories.
This, in turn, has spread to global credit markets, as many of the sub-prime mortgages were repackaged and sold on to European and UK banks as investment assets.
Good and bad
The impact on the consumer and businesses may be mixed, analysts said.
According to Howard Archer of Global Insight, "eurozone consumers could benefit from cheaper prices for some imported goods".
At the same time, he said that there is some good news for eurozone companies because oil, metals and many raw material prices are quoted in dollars, and "the strength of the euro should dampen firms' input costs".
However, while the strong euro may cut some import costs, it could also have a negative effect on exports as European-made goods become more expensive. The US is one of Europe's largest trading partners.
"Everything that has a disadvantageous effect on exports is a problem, and the rising euro is part of that," Peter Bofinger, a member of the German government's independent economic advisory panel, was quoted as saying.
Speaking to the Berliner Zeitung, Mr Bofinger said that if the euro gets much stronger, then governments should think about buying the dollar in order to weaken the euro.
Dollar at record low against euro
Wednesday, 12 September 2007
The US dollar has fallen to a record low against the euro as investors bet that the Federal Reserve will cut interest rates to help the economy.
The US dollar dropped to $1.3889 per euro, passing the previous record of $1.3852 that was set on 24 July.
Many analysts are predicting that the Fed will cut interest rates next week as it looks to reassure markets and consumers amid a global credit crunch.
The dollar has weakened against the euro for six sessions in a row.
"The market's main focus remains on US economic fundamentals," said Tomohiro Iwata of Goldman Sachs.
He added that investors would be debating whether the Fed would cut rates by a quarter or a half of a percentage point, and what comments they might make following any move.
"Dollar weakness is still the story of the day," said David Jones of CMC Markets in London.
"Markets seem to be expecting a rate cut - I think half a percentage point - and that has been weighing on the dollar," he explained.
Rate spread
At the heart of the dollar's decline have been problems in the US housing market, caused by the Fed increasing interest rates in order to slow accelerating inflation.
As a result of the higher borrowing costs, an increasing number of borrowers have defaulted on loans, especially in the sub-prime mortgage market, which specialises in lending to people with poor or non-existent credit histories. 
This, in turn, has spread to global credit markets, as many of the sub-prime mortgages were repackaged and sold on to European and UK banks as investment assets.
Analysts are now speculating that the Fed will cut its main interest rate to ease the pressure on consumers, and help reassure the global markets that it is willing to intervene to ensure financial stability.
The Fed's main interest rate is currently at 5.25% and any cut would be the first in four years.
At the same time, there is speculation that European rates may rise as the region's economy grows by more than 2% this year.
On Tuesday, Jean-Claude Trichet, the president of the European Central Bank, said once again that the European economy was healthy.
However, he warned that market volatility could continue.
"We have seen a distinct possibility that the ongoing deterioration of credit worthiness of borrowers in the US sub-prime mortgage market could be a trigger for a more broad-based market correction," he said.
US home woes 'near-perfect storm'
Tuesday, 11 September 2007
The downturn in the US housing and mortgage sectors now represents "a near-perfect storm", one of the country's leading lenders has warned.
Washington Mutual chief executive Kerry Killinger said the result would likely be falling house prices across many parts of America into 2008.
Centred on the sub-prime sector, the crisis in the US mortgage market has been sparked by record loan defaults.
Washington Mutual may put aside an extra $500m (£247m) to cover bad loans.
This would come on top of the $1.5bn to $1.7bn of exposure the company - now America's sixth largest mortgage lender - had forecast in July.
"Most housing markets appear to be weakening, to us," said Mr Killinger.
Global issue
In recent weeks, US house price figures have been mixed.
Last month, the Commerce Department said new homes sales held up in July, while further figures from the National Association of Realtors showed sales of existing properties fell to a near five-year low in the same month.
The crisis in the US sub-prime mortgage sector has been sparked by American mortgage rates rising sharply over the past year.
As a result more than 50,000 jobs have been lost in the US mortgage industry so far this year, including 12,000 announced last week by the largest lender Countrywide.
The crisis has spread overseas, and to the wider global financial sector, because US sub-prime debt is often resold as part of a wider debt package.
As a consequence, banks and investors are, as yet, unsure about how far the sub-prime downturn could spread.
In turn, global banks have become far more cautious about whom they lend to, and are stockpiling funds to cover any potential liabilities of their own.
The result has been a sharp downturn in available credit, and higher lending rates, both for companies wishing to borrow, and individuals trying to get a mortgage.
Opec discusses rise in oil output
Tuesday, 11 September 2007
Oil prices steadied in afternoon trade in Europe as Opec members discussed the possibility of a small rise in output.
The 12-nation oil producers' cartel is debating a proposal from key member Saudi Arabia to raise daily production by 1.7% at their meeting in Vienna.
US light crude fell from morning highs of $77.86 a barrel to $77.51, two cents up on Monday. In London, Brent crude was 13 cents down on the day at $75.35.
Earlier price rises had been caused by a series of attacks in Mexico.
'No consensus'
Opec ministers speaking during breaks in the ongoing meeting, said members were divided on Saudi Arabia's proposal.
"Everything is on the table, but there is no consensus," said Venezuelan Energy Minister Rafael Ramirez, who opposes any increase.
Until Tuesday, Opec ministers had insisted there would be no increase in supplies.
This was despite warnings from the International Energy Agency, which represents the world's top 26 oil consuming nations, that additional supplies will be needed to meet demand.
Economists have also suggested that an increase in Opec supplies, and the likely result that prices will fall, would help ease recent US economic and global stock market jitters.
Over the past year, Opec - which supplies more than a third of the world's oil - has cut deliveries by about 6%.
US light crude hit a record high of $78.77 a barrel on 1 August.
'People's war'
The dozen or so attacks on Mexico oil and gas facilities - which pushed crude prices to near record highs - have been blamed on a left-wing rebel group.
Mexican officials have insisted that although the country's gas output had been cut by a quarter, oil exports would not be affected.
The attacks were claimed by the People's Revolutionary Army, as part of what it says is a "prolonged people's war" against "the anti-people government".
Experts say it is a very secretive but also very small grouping.
Chinese copy row reaches car show
Tuesday, 11 September 2007
A Chinese car model that many had expected to see at the Frankfurt motor show is conspicuous by its absence, following legal threats from DaimlerChrysler.
But another model by the same Chinese firm, which is said to be similar to a BMW M5, is on show.
Chinese carmaker Shuanghuan Automobile had been accused of producing cars that are too similar to BMW's X5 sports utility vehicle and Daimler's Smart Fortwo.
And both of the German car makers had threatened legal action if the models went on display.
Poor fit
It is not clear whether the legal threat from Daimler influenced Shuanghuan's decision not to show the Noble.
"Ahead of the show, we asked the courts to clarify whether it would be legal to display the models here," Daimler chief Dieter Zetsche said.
"They said it would not, and perhaps that's got something to do with it?"
On the contrary, insisted China Automobile's managing director Karl Schloessl in an interview with industry trade magazine Automotive News Europe.
"We considered selling the Noble but decided it does not fit in with our line-up of Sports Utility Vehicles."
Mr Schloessl has decided to go ahead and show its other car, the CEO, even though BMW is taking legal action to stop sales of the model in Europe.
The car, which is imported by Martin Motors in Italy, is currently being distributed across Europe and is available to buy for about 26,000 euros ($36,000; £18,000).
Serious threat
At the time of the initial legal threats late last month, Shuanghuan insisted its CEO and Noble models were not similar to the German models.
But in a briefing to a group of international business journalists in Frankfurt, Mr Zetsche said he thought allowing them to be displayed would be "confusing to our customers".
"If you see another person who looks like another person, you think it is that person and you'll be surprised when you find out it's a twin," he said.
"We would have taken the necessary action," said Mr Zetsche.
Chinese action
Mr Zetsche believes the issue of creative property rights will be gradually solved over time as attitudes change. 
"In Asia in general, the culture does not define copying as something unethical," he said.
"We have a different understanding of that."
And as China's own innovativeness makes the emerging economy more reliant on international legislation that can protect its own commercial interests, it too will change its attitudes, Mr Zetsche predicts.
"In the medium- to long-term, I am convinced creative property rights will be fought for more fiercely by the Chinese government than by other governments," he said.
Nikkei plunges on economy fears
Monday, 10 September 2007
Japan's main share index has fallen sharply, hit by fears about the state of both the Japanese and US economies.
Data on Monday showing a 1.2% slowdown in the Japanese economy in the three months to 30 June, came after Friday's shock fall in US employment.
The gloomy figures caused Japan's main Nikkei 225 index to end down 2.2% or 357 points at 15,765.
Europe's main share indexes were mixed in Monday morning trade, with London's FTSE up while Germany's Dax was down.
By mid-morning, the FTSE 100 was up 24 points to 6,216, while the Dax had lost 1.2 points to 7,435.
'Bad news'
Japan's biggest exporters led the declines in Tokyo, as the dollar fell to a fresh 14-month low against the yen.
Sony's shares lost 6%, Canon declined 3.7%, and Toyota slid 2.4%, but analysts said falls were seen by firms in all sectors of the economy.
"Stocks are being sold across the board," said Yoshinori Nagano, chief strategist at Daiwa Asset Management.
"US employment data is bad news on fundamentals, and it's unclear how long negative market sentiment will linger."
Japan's second quarter 1.2% fall in gross domestic product, compared with a year earlier, was worse than market expectations of a 0.9% dip.
It was also the first time Japan's economy has contracted since the third quarter of last year, when it fell 0.5% in annual terms.
The Nikkei's Monday falls were mirrored elsewhere in the Far East, with Hong Kong's main Hang Seng index down 128 points to 23,854.
Buoyant sales outlook for Intel
Monday, 10 September 2007
The world's biggest chipmaker Intel says stronger-than-expected demand means it will beat its earlier forecasts for three month revenues.
Intel shares rose 2.5% to $26.11 in early trading following the news but eventually closed down 0.5% at $25.35.
Seen as a gauge for the whole of the technology sector, the news boosted trading in other shares on the Nasdaq.
It expects revenue for the three months to the end of September to be between $9.4bn (£4.6bn) and $9.8bn (£4.8bn).
This represents an increase from an earlier forecast of between $9.0bn and $9.6bn.
Intel also says that its gross margin will be in the upper half of the previous range of "52% plus or minus a couple of points".
New chips
It has been a good day for chipmakers with Intel's rival Advanced Micro Devices (AMD) unveiling its much-hyped new server chip.
It is AMD's first "quad-core" chip, which features four processors on a single chip.
The product launch is a key part of AMD's attempts to compete with Intel, which has a market value 21 times bigger than AMD.
AMD shares rose 2% in early trading.
Black empowerment deal for Sasol
Monday, 10 September 2007
South African oil giant Sasol has said it will transfer 10% of the company to black owners to qualify under Black Economic Empowerment (BEE) rules.
Sasol said it will sell the stake worth about 17.9bn rand ($2.4bn; £1.2bn) to black staff, investors and key partners in the biggest BEE deal to date.
The government programme aims to redress the worst distortions of wealth created by the apartheid regime.
Sasol's announcement coincided with the release of annual earnings, up 10%.
South Africa's BEE legislation has come under fire in the past for enriching people in the right political circles, leading to accusations of government cronyism.
But Sasol insisted that this transaction was "ground-breaking, not only in terms of its size, but also in terms of its overarching ambition to create a legacy of building skills and capacity in the South African economy."
A new image
In an interview with the BBC World Service, Sasol chief executive Pat Davies added: "The deal brings into the mainstream of the economy, people who were previously disadvantaged... and who probably wouldn't have been shareholders in a company like Sasol.
"It's great for the development of our economy. The better the economy does we, as a fairly significant player in the local market, benefit as a result."
If approved by shareholders, the transaction will be implemented in 2008, the Johannesburg-based firm said.
Sasol's image has traditionally been of a white, male-dominated corporation that grew rich during the apartheid years and therefore was often targeted by anti-apartheid campaigners for sanctions.
But since Mr Davies took the post of chief executive two years ago, the company has undergone a rapid pace of change, with more diversity apparent in senior management.
Deal terms
Under the terms of the deal, 3% of Sasol's shares will be earmarked for the black public, mainly black staff will be able to buy 4% and 1.5% will be available for strategic partners, such as unions and suppliers.
The rest will be owned by the Sasol Foundation, which will be created to offer skills development to South Africa's most disadvantaged, particularly women.
Funding for the stake will be provided by Sasol and bank loans and the shares must be held for a set period before they can be sold.
Separately the company said a weaker rand to the dollar and higher oil prices boosted headline earnings per share.
But further profits growth was hindered by maintenance shutdowns at its gas-to-liquids plant in Qatar.
Opec not expected to up supplies
Monday, 10 September 2007
Oil prices eased slightly in Monday trading, despite growing indications that producers' cartel Opec is not about to unveil a rise in supplies.
As the 12-nation group gathers in Vienna for a meeting on Tuesday, a number of Opec ministers said they saw no reason to boost supplies.
By afternoon in Europe, US light was down 72 cents to $75.98 a barrel, and Brent had lost 85 cents to $74.22.
More oil output could ease US economic jitters, it has been suggested.
'Very tight'
The International Energy Agency (IEA), which represents the world's leading 26 oil consuming nations, said on Monday that additional oil supplies will be needed in the coming months to meet demand.
"We think that the current market is very tight," said IEA executive director Nobuo Tanaka.
However, arriving in Vienna, Opec ministers do not seem to agree.
"There is enough crude in the market," said Iran's acting oil minister Gholam Hossein Nozari.
Nigeria's state minister for petroleum, Odein Ajumogobia, added that while he did not want to pre-empt the Opec meeting, he did not see any reason to alter current output levels.
Over the last year, Opec - which supplies more than a third of the world's oil - has cut deliveries by about 6%.
US light crude hit a record high of $78.77 a barrel on 1 August.
Other Opec members include Saudi Arabia, Iraq, and Venezuela.
Apec tackles stalled trade talks
Sunday, 9 September 2007
Asia-Pacific leaders have concluded a summit in Sydney with a statement that called for a rapid conclusion to long-running global trade talks.
World trade liberalisation talks known as the Doha Round have dragged on for more than six years and are now said to have reached a crucial stage.
The 21 members of the Asia-Pacific Economic Co-operation (Apec) account for nearly half of the world's trade.
On Saturday, leaders agreed on the need for action to tackle climate change.
China and the US - two of the world's biggest polluters - were among the nations that signed the statement of "aspirational" goal to restrain the rise of greenhouse gas emissions.
Australian Prime Minister John Howard called it "a very important milestone" towards an international deal.
The declaration "is part of a process, the next element of which will be the meeting of major economies in Washington later this month, and then the United Nations meeting," he said.
Environmentalists said the declaration was merely symbolic.
Make-or-break
The BBC's Nick Bryant in Sydney says Apec's members are impatient to break the current deadlock in the Doha Round of talks.
Negotiators have been unable to reach agreement over two main stumbling blocks - the massive agricultural subsidies given to farmers in Europe, the US and Japan, and restrictive industrial tariffs in emerging markets like China, India and Brazil.
Finance and trade ministers from Apec's member countries have already this week called for the free trade talks to be accelerated.
Now the leaders have weighed in with a statement calling for the Doha Round to enter its final phase this year.
The head of the World Trade Organization, Pascal Lamy, has said negotiations currently taking place in Geneva may be edging closer to a deal.
"There is a strong sense that it is a make-or-break moment. It may take a few weeks, but my sense is that there is a lot of focus and energy," Mr Lamy said.
He also gave a cautious "yes" when asked if there was an emerging consensus on farm subsidies and tariffs.
The US Trade Representative, Susan Schwab, said she had detected a greater sense of urgency but also warned the talks could meander, linger and then go into hibernation. 
US mortgage lender slashes jobs
Saturday, 8 September 2007
The biggest mortgage lender in the United States, Countrywide Financial, says it is making big job cuts.
Countrywide's Chief Executive, Angelo Mozilo, said the company, based in California, was being forced to cut up to 12,000 jobs, one-fifth of its staff.
Mr Mozilo said the firm had been badly hit by the US house price slump and the increasing number of buyers who are defaulting on mortgage repayments.
The firm expects new mortgages to fall by 25% in 2008, compared with 2007.
"During the past two years the growth in home price appreciation has stopped dead in its tracks," wrote Mr Mozilo in a letter to staff, "and in many areas of the country it has turned in the wrong direction."
In recent weeks Countrywide borrowed over $11.5bn (£5.6bn) and sold a $2bn stake to Bank of America so it could keep operating its retail banking and mortgage lending businesses.
As of July the company employed more than 61,000 people although about 1,400 posts were eliminated in the last few weeks.
Countrywide shares have fallen 57% this year.
"As we carry out our plan, the company's overarching focus is exactly where it has always been: to remain an industry leader in the US residential lending business," said Mr Mozilo.
The company's problems reflect an industry-wide slump in response to the housing crisis, says the BBC's Peter Bowes in Los Angeles.
Dozens of lenders have either cut back operations or left the industry altogether.
Delphi reaches settlement with GM
Friday, 7 September 2007
Delphi has reached agreements with its former parent company, General Motors (GM), which remove big hurdles to its emergence from bankruptcy protection.
The deal follows agreements on work and pay with the six labour unions at Delphi as well new investment deals.
Delphi has also filed a reorganisation plan with the bankruptcy court.
The US car parts manufacturer became a separate company in 1999 and has been under Chapter 11 bankruptcy protection for almost two years.
Talks with banks
Under the latest agreement, Delphi has agreed to pay GM $2,7bn (£1.3bn) to fund early retirement and buyout plans offered to hourly workers.
In turn, GM has agreed to reimburse Delphi for labour costs over $26 an hour at some of its plants.
Delphi says it is in talks with a consortium of banks and is confident of securing the $7bn it needs to emerge from bankruptcy protection.
Its reorganisation plan also includes a $2.5bn investment from a group led by Appaloosa Management.
US economy 'heading for slowdown'
Wednesday, 5 September 2007
The US economy will slow sharply in the second half of the year and the risk of it going into recession cannot be ruled out, the OECD has warned.
The 30-nation group of top economies said the global financial fallout from the current US sub-prime mortgage crisis would continue for some time.
But it said US consumers remained resilient while Europe was unlikely to be as badly affected as the US.
Uncertainty over the size of sub-prime losses has caused stock market turmoil.
Financial risk
The OECD said the contraction in the US housing market and the wider problems in the financial markets it has triggered would have a negative impact on the US economy.
It is now forecasting economic growth to fall to 2% in the third quarter and 1.5% in the fourth quarter from the 4% recorded between April and June.
"We are looking at a slowdown in the US economy which is quite significant," said the OECD's chief economist Jean-Philippe Cotis.
The OECD admitted the recent retrenchment in global credit markets, which has forced central banks in the US and Europe to pump billions into the banking system to enhance liquidity, had taken it by surprise.
"What we had not forecast was the extent of the spread of this financial risk beyond the boundaries of the US," Mr Cotis said.
The OECD said it expected sub-prime related turbulence to continue for some time and could not fully assess the likely impact of these problems on the wider financial system.
It would also not be drawn on whether this would tip the US economy into recession.
European picture
Previous slumps in the housing market have often led to recession, Mr Cotis said.
But he stressed that circumstances could be different this time around because of the continued strength of household spending in the US.
"So far consumption has remained resilient despite the contraction in real estate markets," Mr Cotis concluded.
"There may not be a pronounced recession despite this difficult period."
Turning to Europe, Mr Cotis said its leading economies were less vulnerable to a housing-led slowdown.
This was because their mortgage markets had fewer structural "imbalances" while inflationary pressures were generally lower.
As a result, the transatlantic economic impact of a US slowdown would not be as severe as that following the dotcom crisis at the start of the decade.
"We don't think there will be the same extent of contagion in Europe as in 2001," he said.
