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Sunday, 18 August 2024
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European Business News (EBN), 97-08-12European Business News (EBN) Directory - Previous Article - Next ArticleFrom: The European Business News Server at <http://www.ebn.co.uk/>Page last updated Tue, August 12 5:19 PM CETCONTENTS
[01] German annual inflation accelerates to 1.9%, highest since June 1995German inflation rose to 1.9% year-on-year in July, its highest rate since June 1995, the Federal Statistics Office said.The month-on-month rise in the consumer price index was 0.5%, the highest since January 1997. In June, the increases were 1.7% and 0.2% respectively. The increase is slightly above market expectations. Analysts surveyed by Dow Jones on average expected a 0.3% month-on-month rise and a 1.6% rise on the year. The figures back up a warning made last week by Bundesbank chief economist Otmar Issing that German price developments were moving 'in the wrong direction'. Issing's remarks may have been a hint that the central bank could begin to nudge interest rates higher to combat inflation and the weak mark. However, the six-month annualized inflation rate of 1.7% is below the 2% pace the Bundesbank considers the highest tolerable level of inflation and the bank subsequently left the repo rate unchanged. Consumer prices in western Germany were up 0.4% from June and 1.7% from July 1996, the office said. The annual figure is a revision from a preliminary report of a 1.8% year-on-year rise. In eastern Germany, consumer prices rose 0.7% on the month and were up 2.4% on the year, it said. One of the main causes for the price increase was a 77% increase in medical prescripton costs, after the government increased the portion of prescription charges paid by individuals on July 1, the office said. Without that, German consumer prices would only have risen 0.3% on the month, it noted. The reform of the automobile tax also triggered a 6.2% rise in the automobile tax, the office said. [02] UK inflation hits two-year highUK annual retail price inflation rose to 3.3% in July from 2.9% in June, while the underlying RPIX rate rose to 3.0% from 2.7%.The overall retail price index was unchanged in July from June and the RPIX fell 0.2%, the Office for National Statistics said. The RPIX rate excludes mortgage interest payments. Retail inflation was stronger in July than the median forecasts from a Dow Jones survey. These were that the RPI would fall 0.1% on the month and rise 3.2% on the year. The RPIX was forecast to rise 2.9% in July from a year earlier. The UK target for RPIX inflation is 2.5% and the Bank of England is charged with setting interest rates to achieve that rate. The increase in the all-items 12-month rate was largely due to rises in housing and motoring costs and a further upward effect from seasonal food prices. A small upward effect on the 12-month rate came from charges for leisure services, which was offset by a small downward effect from fuel and light charges. The retail price index stood in July at its highest level since September 1995 while the underlying index was at its highest since January 1997. [03] French consumer prices edge down in July, but gain 1% on yearConsumer prices fell 0.2% in France in July to leave year-on-year inflation steady at 1.0%, according to provisional monthly figures released by the national statistics institute INSEE.Prices have risen 0.5% since the start of 1997, INSEE said, noting that discount sales at retailers had led to a fall in prices in July for shoes and clothing, and to a lesser extent for other manufactured goods. It said food prices rose 0.3% in July as a fall of 0.1% in fresh produce prices was more than compensated by rises in meat and coffee prices. Prices of manufactured goods in July fell 0.1% from June and fell 0.6% from a year ago. Energy prices in July fell 0.6% from June, although they were up 1.6% from July 1996. Public services prices rose 0.9% from June and were up 3.4% compared with last July. Financial markets keep a passive watch on consumer prices as they remain well within the Bank of France's guideline of 2%, as it has been doing month after month for a considerable time now. [04] De Beers profit jumps 13% in first halfSouth Africa's De Beers Consolidated Mines, the world's largest producer and marketer of diamonds, reported a 13% increase in net profit to $775 million in the fiscal first half ended June 30, compared with $683 million a year earlier.De Beers said the profit performance was affected by an exceptional $75 million gain from the disposal of its interest in South African mining conglomerate, less an unspecified provision made in anticipation of the sale of its holding on Lonrho, a British mining and industrial combine. The diamond producer said profit growth was dragged down by a 49% jump in taxes to $156 million from $105 million previously. The group's earnings before accounting for profits from associated companies rose 5.2% to $507 million in the six months to June 30, from $482 million during the same period in 1996. The combined diamond account of De Beers Consolidated and its Swiss-based international arm, De Beers Centenary, stood at $510 million compared with $447 million during the previous year, the company said. [05] Henkel profit gains 10% in first halfHenkel posted a 10% rise in pre-tax profit to 438 million Deutche marks ($235 million) and a 22% rise in sales in the first half of 1997.The German speciality chemcals group predicted sales and earnings would develop at least as well in the second half. Henkel said that, based on its first-half performance, it expects earnings and sales in the second half to develop 'at least as good as the first six months.' The group also said it expects full-year 1997 pretax profit to be above 1996 figures. Henkel said recent acquisitions contributed 13% to its first- half sales. Domestic sales including exports rose 2% in the first half of 1997, while sales in Henkel's foreign units were rose 32% from the same period a year ago, the company said. Henkel said its first-half 1997 pretax profit doesn't include 1.3 billion marks in earnings from the sale of its 39.1% stake in German chemicals, precious metals and pharmaceuticals group Degussa. Henkel said it plans to use the proceeds from this sale for financing its acquisition of Loctite and to enhance its core activities. [06] BHW Holding drops plans for stake in PostbankFinancial services group BHW Holding has cancelled plans to take a stake in Deutsche Postbank when the latter is privatized.Postbank said it regretted the decision. 'A promising partnership with BHW could have developed,' said a company spokesman. The spokesman said Postbank had not yet decided on a partner in the mortgage finance sector and that the Wuestenrot group was the only remaining candidate at present. BHW said new plans presented by the Bonn-based Postbank regarding their future co-operation were unacceptable because the plans wouldn't have allowed BHW a proper profile in selling its products via Postbank outlets. 'Weighing the opportunities and risks in the context of the returns that BHW targets, a stake is no longer appropriate or in the interest of shareholders, now that the conditions have been changed by Bonn,' BHW said in a statement. In a mandatory statement, the group also said it had sold its remaining stake in DSL Holding, a state-controlled bank, as it no longer fufilled any strategic function. BHW last week said it had reduced its DSL stake to around 10.5% from 20.69%. [07] S-E-Banken posts 7.5% rise in first half profitS-E-Banken posted a 7.5% rise in its six-months operating profit to 2.86 billion kronor ($356.8 million) from 2.66 billion a year earlier.The Swedish bank group's operating profit failed to match market expectations set at around 3.05 billion kronor. 'This improvement is primarily due to declining lending losses. Total income is growing in spite of the continued pressure on margins,' said Jacob Wallenberg, president and group chief executive, in a statement. The bank said lending losses plummeted by 70% to 250 million crowns ($31.2 million), and the lending loss level dropped to 0.18% from 0.67% a year earlier. Doubtful claims fell 20% to 4.81 billion crowns. S-E-Banken's net interest rate income grew to 4.28 billion kronor, from 3.46 billion kronor, as the gap between the long- and the short-term bond yields was wider during the first six months of 1997 than in the corresponding year-earlier period. Meanwhile S-E-Banken's return on equity fell to 18.9% from 19.1% the first six months of 1996. [08] Smith&Nephew interim profit drops 11.75%UK Health care concern Smith & Nephew blamed the adverse effects of sterling's rise against other currencies for a dip in first half sales and a sharp drop of 11.75% to £81 million ($128 million) in interim pretax profit.Removing the effects of currency and the costs related to the launch of Dermagraft, a treatment that acts as an artificial skin graft process and is scheduled for launch in 1998, the company said underlying profit rose 3%. It noted that a recovery in the US business from market pressures in 1996 was offset by a slowdown in the group's major European markets. Europe, the company noted, is suffering from restraints on national healthcare budgets as countries prepare for monetary union. Chief Executive Chris O'Donnell said sterling is expected to have a similar impact on second half results. He also said the company is looking for acquisitions to bolster existing product lines, but declined to name specific targets. [09] BOC posts flat pre-tax profit for the nine monthsUK chemicals and industrial gases concern BOC Group said pretax profit in the nine months ended June 30 was flat at £325.4 million ($520.6 million).Danny Rosenkranz, chief executive, said the company's results were again hit by the the strong pound, which reduced the value of foreign-denominated earnings. Results from the company's gases and health care businesses were most affected by the stronger currency. Rosencranz noted that, excluding currency movements, pretax profit actually rose 6% during the nine month period, sales were up 5% and earnings a share gained 7%. On the company's trading performance, Rosencranz said the gases business continued to perform strongly, posting a 10% profit gain and 9% rise in sales, at constant exchange rates. 'Some, but not all, of these gains were eroded in the reported figures upon translation at less favourable exchange rates,' he said. [10] Spain defends its approval of Telefonica's stake in Antena 3Spain's Development Ministry said its decision to allow former telecommunications monopoly Telefonica de Espana to buy 25% of television company Antena 3 was made with 'complete respect for the law.'The government was responding to local press reports that it had approved the deal before it was even signed. The ministry also said that any company wishing to buy shares in a Spanish public-service TV provider - like Antena 3 - is legally bound to get the official go-ahead before the agreement can be signed. 'It's a matter of getting prior authorization, not approving a completed operation,' the ministry said. Telefonica's July decision to buy a 25% stake in Antena 3 for an undisclosed sum - at the same time, assuming management control of the company - has come under repeated fire. According to a formal complaint to the European Union from rival group Canal Satellite, not only is the deal anti-competitive, it's an abuse of Telefonica's dominant position in Spain. And Canal Satellite - which had already spent millions of dollars on developing its own decoder system - also argued that the government is prejudiced in favour of Via Digital after Spain passed a law requiring all digital-TV operators to use the decoder system favoured by the Via Digital consortium. The European Union Commission declared the law was incompatible with the EU's directive on television transmission standards. Spain's Development Minister Rafael Arias Salgado has said the government has no intention of changing the law, adding that it protects consumers by guaranteeing they won't waste money on a decoder which becomes obsolete. [11] Corporate and Economic BriefsMore businesses started up in France in July 1997 compared with June, national statistics bureau Insee said. That rise comes from an increase in the number of businesses that changed hands or began business again following a bankruptcy, Insee said. The number of businesses starting up again after having been inactive was also on the rise. Actual new business creation was flat in July compared with June, Insee said. The overall index came in at 22.64 in July compared with 22.17 in June. That compares with a year-high for creation in March when the index was at 24.44. Areas with a rise in business creation included business, transportation, hotels, restaurants and the services industry.UK composite insurer General Accident said it could mount a bid for a general insurer worth up to £250 million ($400 million) in the Asia-Pacific region if the price was right, the company said. The profit figure for the latest six months was in line with a consensus forecast from analysts of £256 million to £266 million. The half-year dividend was increased by 9.6% to 12.5 pence a share from 11.4 pence a share in the same period last year, again in line with market expectations. 'We haven't forgotten our ambition stated in August 1995 to acquire a general insurance business in Asia- Pacific, but it has to be tested against strategic, financial and management sense,' Philip Twyman, GA's group executive director of finance told Dow Jones. UK insurance company Sedgwick Group said its half year pretax profit was £66.5 million up 4% from £64.1 million a year ago and against market predictions of £58.5 million. Sedgwick said that its first half results were 'encouraging' but that it took a £7.0 million hit from sterling's strength and was affected by weak insurance rates. The company said the interim results included a profit of £7.4 million from its Lloyds underwriting agency, this compared to only £0.4 million last year, when profit wasn't taken until the third quarter due to uncertainty relating to Lloyds' Reconstruction and Renewal plan. [12] World News BriefsAn armed group attacked a minibus that refused to stop at a road barricade, killing two people in the latest violence in Algeria, hospital sources said. In a separate attack, a bomb exploded in a train carrying passengers from the town of Boufarik to the Algerian capital, 35 kilometers (21 kilometers) to the north. No one claimed responsibility for either attack, but both resemble the kind carried out by the Armed Islamic Group, which has waged a five-year insurgency aimed at establishing an Islamic state in Algeria.Army personnel carriers and police helicopters joined efforts to rescue 112 employees stranded in two factories flooded by torrential rains in Turkey. After a night's work, rescuers brought out 80 people stranded in a soap factory, but 32 others in a neighboring shampoo factory were still stuck. Nobody was injured. A Philippine navy patrol has arrested 23 Chinese fishermen off a shoal claimed by Manila in the disputed Spratly Islands, a navy spokesman said. The arrest was the latest in a series of incidents between Manila and Beijing over territories in the South China Sea. Navy Lt. Cmdr. Salvador Cuba said the Chinese fishermen illegally entered Philippine territory aboard the fishing vessel Cheng Lun Yao and were apprehended July 31 by a naval patrol near Hasa Hasa Shoal, also known as Half Moon Shoal, off the western island province of Palawan. Cuba said the 23, all from Hong Kong, were turned over to the Palawan provincial committee on illegal entrants, which is investigating. Iran's new president named a 22-man cabinet, including two moderates whose selection would be opposed and possibly vetoed by hard-line rivals. President Mohammad Khatami sent a list of his nominees to Majlis, or parliament, where a legislator read out the names. The most controversial among them are an official who once advocated talks with the United States and another who would be expected to carry out Khatami's reforms of Iran's rigid religious code. Despite expectations, there were no women Cabinet ministers. But newspapers have reported that that a U.S.-educated woman, Massoumeh Ebtekar, would be appointed vice president for environmental affairs. A Cambodian military court has issued arrest warrants for deposed First Prime Minister Prince Norodom Ranariddh on national security and illegal weapons charges. Copies of the warrants, signed by military investigative judge Nou Chantha, were seen by The Associated Press. Second Prime Minister Hun Sen justified his July 5-6 ouster of Ranariddh by alleging he had endangered national security and illegally imported war weapons. His charges against Ranariddh are generally considered politically motivated. From the European Business News (EBN) Server at http://www.ebn.co.uk/European Business News (EBN) Directory - Previous Article - Next Article |
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