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BRICS nations fail to launch new bank

Mar 282013
 

Leaders from the so-called BRICS group of emerging nations have failed to launch a much-anticipated new development bank to rival Western-dominated institutions like the World Bank.

After holding talks in the South African port city of Durban on Wednesday, leaders from Brazil, Russia, India, China and host South Africa agreed in principle to create a joint infrastructure lender but said further talks were necessary to finalise the plan.

“We are satisfied that the establishment of a new development bank is feasible,” said host President Jacob Zuma, in remarks that hint at little progress beyond an agreement reached in the Indian capital, New Delhi, a year ago.

“We have decided to enter formal negotiations to establish a BRICS-led new development bank,” he added.

Officially leaders had been expected to consider the bank’s establishment, but South Africa and others had hoped to formally launch a $50bn infrastructure fund at the two-day summit.

The mooted bank is seen as a way of gaining influence on the world stage, countering Europe’s dragging economic crisis and addressing the $4.5tn in infrastructure spending the BRICS are estimated to need over the next five years.

Instead of a $50bn fund BRICS leaders agreed only that the initial capital contribution would be “substantial and sufficient for the bank to be effective”.

Sticking points

Key sticking points included how projects would be distributed and where the bank would be based, diplomats said.

Al Jazeera’s Tania Page, reporting from Durban. said all of the BRICS members say they want to establish the development bank, but they have disagreements over fundamental details.

“First of all, China wants it in China, and President Zuma wants it in South Africa,” she said.

“Another problem would be dealing with exactly how much each country would invest in it and how much control each would have over it.”

Russian envoy to Africa Mikhail Margelov told AFP news agency his country had pushed for an incremental approach to establishing the bank.

“We believe in a step by step way of doing business,” he said, “we better talk about projects and then we talk about needed amounts of money.”

The next BRICS summit will be in Brazil in 2014, but the leaders will meet in Russia on the margins of the G20 in September.

Ethiopians mourn leader’s death

Aug 222012
 

The body of Meles Zenawi, the late Ethiopian prime minister, has returned to Addis Ababa, with thousands of mourners gathering on the streets to pay their respects.

Meles, 57, died in a Belgian hospital just before midnight on Monday after contracting an infection, authorities said.

A military band played as the coffin, draped in an Ethiopian flag, was taken on Wednesday from the Ethiopian Airlines flight, a ceremony also attended by political, military and religious leaders as well as diplomats.

His wife Azeb Mesfin, dressed in black, was seen leaving the plane.

Hailemariam Desalegn, the deputy prime minister, 47, who has also been foreign minister since 2010, will take over interim power, Bereket Simon, government spokesman, said.

“Under the Ethiopian constitution the deputy prime minister will take the oath of office before parliament,” he said.

He expected the parliamentarians to convene “as soon as possible”.

Bereket said “everything is stable” in the country.

Lying in state

The coffin was taken to the prime minister’s official residence at the national palace where Meles’ body will lie in state until the funeral, according to national television which broadcast live footage from Addis Ababa streets as the coffin passed slowly.

Al Jazeera’s Mohammed Adow, reporting from the capital, said: “As thousands turned out to mourn their late leader, traffic was heavily congested between the international airport and the premier’s residency, the palace, where the body is supposed to lie in state.”A state of national mourning has been declared in the country although no set date has been fixed for the funeral. It is also not known whether Meles will be buried in the capital or in his home town in the Tigray region of northern Ethiopia.”

Meles was a former rebel who ruled with an iron fist for more than two decades.

He came to power in 1991 after toppling the regime of Mengistu Haile Mariam, set Ethiopia on a path of rapid growth and played a key role in mediating regional conflicts.

However, he also drew criticism for cracking down on opponents and curtailing human rights.

World leaders offered high praise for Meles. Barack Obama, the US president, said Meles deserved “recognition for his lifelong contribution to Ethiopia’s development, particularly his unyielding commitment to Ethiopia’s poor”.

He said Meles had earned his own personal admiration “for his desire to lift millions of Ethiopians out of poverty” through his efforts to improve food security following a meeting at the G8 in May.

International tributes

Hillary Clinton, the US secretary of state, said she was “saddened” by Meles’ death and expressed confidence “that Ethiopia will peacefully navigate the political transition according to its constitution”.

Ban Ki-moon, UN secretary-general, praised his “exceptional leadership”.

David Cameron, UK prime minister, hailed Meles as “an inspirational spokesman for Africa”.

Binyamin Netanyahu, Israeli prime minister, called Meles “a true friend” of Israel and “presented his condolences to the Ethiopian people”, his office said.

“Zenawi was loved in his country. He was also a true friend of Israel.

During his mandate, Ethiopia became one of Israel’s closest friends,” he said.

Meles, a key Western ally in a region home to al-Qaeda-linked groups, had not been seen in public since the G20 summit in Mexico in June.

Meles was regularly singled out as one of the continent’s worst human rights predators, and Amnesty International, the UK-based rights watchdog, called on the country’s new leaders to end his government’s “ever-increasing repression”.

Human rights abuse

Human Rights Watch called for the next administration to repeal a much-criticised 2009 anti-terrorism law, under which several opposition figures and journalists, including two Swedes, have been jailed for lengthy terms.

Diplomats and analysts in Addis Ababa say it is unclear how the government has been run since Meles was reported to have been admitted to hospital in June.

Ethiopia faces several internal threats, including the rebel Ogaden National Liberation Front, fighting for greater autonomy in the southeastern ethnic Somali region. The group said it hoped Meles’ death “may usher (in) a new era of stability and peace”.

Meles was credited with Ethiopia’s economic boom in the past decade, with growth shooting from 3.8 per cent in the 1990s to 10 per cent in 2010.

On paper, his government fostered a policy of ethnic federalism, devolving significant powers to regional, ethnically based authorities, but central control remains firmly in the hands of the ruling party.

His death also leaves a major power gap in the Horn of Africa.

Ethiopian troops invaded Somalia for a second time last year after a US-backed invasion in 2006 and Ethiopia is supporting the fight against Somalia’s al-Qaeda-linked al-Shabab.

Al-Shabab has said it is celebrating the “uplifting news”.

Meles’s death could also potentially see changes in the relationship with Eritrea, which gained independence from Ethiopia in 1993 before the two drifted into a bitter 1998-2000 border war in which tens of thousands died.

Eritrea has so far made no comment on his death.

Gold hits record highs

Oct 142009
 

gold-hasGold hit record highs on Wednesday as the US dollar extended losses to a 14-month low against a basket of currencies on growing optimism
about the global economy. Spot gold rose as high as $1,069.45 per ounce. Gold has rallied about 13 per cent since the start of September and has gained 22 per cent this year.

Most-active December gold futures rose to a high of $1,071.10 as of 0320 GMT. They stood at $1,065.0 on the COMEX division of the New York Mercantile Exchange.

Previous highs were touched only a day before. “Gold’s still on a strong momentum but I think market players will be cautious about entering into the gold market now,” said Adrian Koh, an analyst at Phillip Futures in Singapore.

“The key is still the dollar’s movement and if it continues to head lower then there’s more room for gold to make new highs,” he said.

The dollar index fell below 75.700 to its lowest since August 2008, while the euro climbed to a fresh 14-month high of $1.4888 as investors bet on higher-yielding currencies and commodities on growing optimism about the global economy.

Asian stocks were generally higher but traders were cautiously awaiting earnings reports from key US companies later in the week for clues to the state of the economy.

More gold scrap entered the physical market on Tuesday as bullion hovered near all-time highs, while last-minute purchases by Indian consumers ahead of the festivals kept premiums steady in Asia.

Some have expressed concern about the weakness of physical demand, which together with investment demand has been a major pillar driving gold prices higher over the past few years.

Paul Walker, chief executive at metals consultancy GFMS, cast doubt on the sustainability of current levels of gold prices.

“My concern is that this market is becoming increasingly unidimensional,” Walker said at a seminar in Tokyo on Tuesday. “One pillar, jewellery demand, has become eroded.”

Reflecting a cautious investor stance, the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,109.314 tonnes as of Oct. 13, unchanged from the previous business day.

But the world’s largest silver-backed exchange-traded fund, iShares Silver Trust, said its bullion holdings rose 18.35 tonnes or 0.2 per cent from the previous day to 8,612.57 tonnes on Tuesday.

Gold’s rally pulled other precious metals higher on Tuesday. Silver rose above $18 an ounce for the first time since July 2008, to $18.01. Silver was at $17.86 on Wednesday. Platinum hit a 13-month high of $1,361.50 on Tuesday and stood at $1,356.50 on Wednesday.
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Infosys Technologies post a net profit of Rs 1,540 crore

Oct 092009
 

images1An improved economic climate and slow easing of pricing pressure saw India’s second largest software exporter Infosys Technologies post a net profit of Rs 1,540 crore for quarter-ended September 30, 2009, registering a year-on-year growth of 7.5 percent.

The software bellwether had registered a net profit of Rs 1,432 crore in the second quarter of the previous fiscal.

The company reported income of Rs 5,585 crore from software services, products and business process management for the quarter under consideration as against Rs 5418 crore last fiscal,an icrease of 3.1 percent year-on-year.

Earnings per share increased to Rs 26.86 from Rs 25.02 in the corresponding quarter in the previous year, a year-on-year growth of 7.5 percent, the company said while announcing its quarterly financial results here today.

Infosys declared an interim dividend of Rs 10 per share which is 200 percent on par value of Rs five pershare (same as last year).The firm witnessed a 0.9 percent growth in net profit in second quarter of FY10 over the first quarter of the same fiscal while it saw a 2.1 percent growth in income.

The company’s outlook for quarter-ending December 31, 2009 was expected to be in the range of Rs 5,429 crore and Rs 5,476 crore, year-on-year decline of 6.2 percent to 5.4 percent. For fiscal year ending March 31, 2009, the income is expected to be in the range of Rs 21,961 crore and Rs 22,055 crore, year-on-year growth of 1.2 percent to 1.7 percent.

“In the second quarter,the business climate has improved”, said S Gopalkrishnan, CEO and Managing Director.

“The pricing environment seems to have stabilized.There is increasing traction for our system integration services due to Mergers and Acquisitions, especially in the Financial Services Segment”, said S D Shibulal, COO, “but Clients continue to be cautious and conservative while taking decisions”.

He said the company’s business model had proved ”too strong and resilient” and strategy to focus on strengths had paid off. It had been able to sustain ”our margins”, and was hopeful of “emerging stronger when the economy improves”.

“We are sharpening focus on Research and Development, IP-based solutions, and new engagement models that offer flexible pricing and greater operational control and efficiency to clients”, he said.

The company reported cash and cash equivalents of Rs 13,796 crore as on September 30, 2009 as against Rs 8,858 crore as on September 30, 2008.

“The global currency continues to be extremely volatile, even though we have seen some stability in the rupee agaisnt the US dollar this quarter”, said V Balakrishnan, CFO.

Infosys continued to focus on high quality growth with superior margins.”Our balance sheets have been further strengthened with cash and cash equivalents reaching USD 2.8 billion,
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Wall Street resumes rises

Sep 232009
 

usstock US shares climbed Tuesday to fresh 2009 highs on economic recovery optimism and company earnings prospects as the Federal Reserve’s
policymakers met to review steps aimed at restoring growth.

The Dow Jones Industrial Average rose 51.01 points (0.52 percent) to 9,829.87 in final trades.

The tech-heavy Nasdaq composite rose 8.26 points (0.39 percent) to 2,146.30 while the broad-market Standard & Poor’s 500 index added 7.00 points (0.66 percent) to 1,071.66.

“Wall Street appears to have shaken off Monday’s blues in favor of a more upbeat outlook on the economy,” said Joseph Hargett of Schaeffer’s Investment Research.

The added confidence, he said, had pressured the US dollar lower, pushing greenback-priced commodities such as oil and gold higher.

“The dollar’s continued weakness is boosting commodity prices that are denominated in the US currency, helping the major markets rebound from yesterday’s modest declines,” analysts at Charles Schwab & Co said in a note to clients.

The greenback fell to a one-year low against the euro to below the 1.48 level Tuesday as many investors sold the safe-haven dollar to put their money in relatively risky stock and other investments on the back of growing economic optimism, dealers said.

Upbeat company earnings reports also helped lift sentiment in early Wall Street action, they said.

The two-day Federal Open Market Committee meeting began in Washington Tuesday and a summit of the Group of 20 developing and developed nations convenes in the US city of Pittsburgh, Pennsylvania, on Thursday.

The Fed is widely expected to leave unchanged its near-zero base interest rate but may make minor changes to the array of liquidity programs to keep credit flowing as the economy struggles to emerge from recession.

G20 leaders are expected to discuss ways to unwind their unprecedented support to fight the global economic crisis although they remain cautious for fear of jeopardizing a return to growth.
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Asian stocks rise,

Sep 102009
 

industrial Asian stocks rose on Thursday as hopes for global economic recovery prompted investors to shift into riskier assets, while oil found
support above $71 a barrel following OPEC’s decision to keep output steady.

The investor shift kept the U.S. dollar on the defensive. It hit its weakest value in almost a year on Wednesday and was holding just above that level on Thursday.

As South Korea and New Zealand kept interest rates at record lows, Asian share markets were underpinned by a 0.5 percent gain in the Dow Jones industrial average and the Federal Reserve’s Beige Book survey, which showed the U.S. economy was stabilising although many key sectors remained weak.

That buoyed sentiment in Japan where the Nikkei index gained 1.4 percent even though machinery orders’ data pointed to weak capital spending in the world’s No. 2 economy.

The MSCI index of Asia Pacific stocks traded outside Japan firmed 0.8 by late morning.

South Korea’s KOSPI index increased 1.4 percent, helped by shipping and shipbuilding companies. Hanjin Shipping and Hyundai Heavy Industries rose 4.3 percent and 3.7 percent respectively after a rise in the Baltic Dry Index, a key freight indicator.

The Korean won and Korean September treasury-bond futures fell sharply after the Bank of Korea said it would maintain its current easy monetary stance. However, its comments reinforced market expectations it would be one of the first country’s globally to start raising rates, possibly before the end of the year.

“The BOK is probably among the most hawkish banks in the world right now and it might be one of the first central banks to hike interest rates,” said Frederic Neumann, Asia economist at HSBC in Hong Kong.

“There is always a risk of being the first mover because it has immediate exchange rate implications. I think to some degree that constrains the ability to hike early and aggressively.”
n Australia, a sharp fall in employment in August put pressure on the Aussie dollar but share prices edged up 0.5 percent with energy stocks Woodside Petroleum and Santos gaining 1 percent off the back of firm oil prices.

Oil was quoted at $71.88 a barrel, up more than 40 cents from Wednesday’s closing level. It reached as high as $72.52 after OPEC agreed in Vienna to maintain current output and after the American Petroleum Institute reported a sharp fall in crude stocks.

Growing confidence the worst is over for the global economy continued to push investors into riskier assets, keeping the U.S. dollar under pressure. It dropped to its lowest level in nearly a year on Wednesday against a basket of currencies and was holding just above those levels on Thursday.

Gold prices are benefiting from dollar weakness. Spot gold was trading at $991.7 per ounce by 0247 GMT, after topping $1,000 on Wednesday.

New Zealand kept interest rates at a record low 2.5 percent but indicated it was less inclined to cut again.

However, the kiwi dollar fell after Governor Alan Bollard told Reuters that the currency, which hit a one-year high on Wednesday, was overvalued and that markets were premature in pricing in higher rates from early 2010.

China’s Shanghai index fell 1 percent. Recent volatility in China’s shares has made fund managers cautious about buying, a Reuters poll shows.

Hong Kong’s Hang Seng Index took its cue from Wall Street, rather than China, and was up 1.4 percent.
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Rupee depreciates by 22 paise in early trade

Aug 112009
 

finance3The Indian rupee on Tuesday depreciated by 22 paise to 48.02 against the US dollar in early trade on expectations of more capital
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outflows and dollar demand from importers.

Dollar’s gains against other currencies too weighed on the Indian rupee.

At the Interbank Foreign Exchange (forex) market, the domestic currency turned somewhat weak and fell by 22 paise to 48.02 a dollar, over the previous close. The rupee had gained 3.50 paisa at 47.8050/8150 against the US currency in yesterday’s trade.

Forex dealers said hopes of more capital inflows by foreign funds as stock markets are ruling weak on monsoon concerns and firmness in dollar against other currencies led to the fall in the local unit.

The BSE Sensex had fallen by nearly 895 points in the past three straight sessions.
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