CAIRO, Egypt (AP) – Mohamed el-Kashashy has the kind of business experience that could help drive Egypt’s economy. During six years working in brand management and marketing, he has led focus groups in Nigeria and cut business deals in Iran.Until recently, however, el-Kashashy, like many other talented Egyptians, was sitting in an office in Dubai — a flesh and blood example of the ‘brain drain’ to booming Gulf economies that has afflicted Egypt for so many years.This year, however, el-Kashashy, 28, took a small step toward reversing the trend. Attracted by the recent growth of certain sectors of the Egyptian economy, he moved back home to take a job with an international media company in Cairo.’Egypt is on the verge of an economic boom,’ el-Kashashy said.He is not alone in his optimism.Heba el-Gabaly, a Harvard Business School graduate who worked for McKinsey & Co. in Dubai, also recently returned to Egypt to work for a financial services firm and rear her children closer to friends and family.She said four of her 10 close Egyptian friends in Dubai also decided to come home — mostly to jobs in financial services, consulting or telecommunications.’The whole region is growing, and Egyptian businesses, especially financial services, are able to tap into the entire region,’ said el-Gabaly.Although exact numbers are not tracked, the return of a trickle of well-trained Egyptians is a significant development for a country that ranks second to last among the world’s emerging economies in keeping talented people from leaving, according to a 2006 report by the World Economic Forum.Their return represents a small vote of confidence in Egypt’s economic future and could provide local businesses with the skills necessary to take operations to the next level. That, in turn, could set the stage for sustained growth in a country where lack of opportunity helps fuel extremism.Dr. Nihal el-Megharbel, a senior economist with the Egyptian Center for Economic Studies, said recent gross domestic product growth near 7 percent has indeed expanded opportunities for well-educated Egyptians — who used to rely on places like Dubai for higher salaries and standards of living.But she stressed that most of Egypt’s people have seen no benefit at all from the trend, and continue to look to Saudi Arabia, the United Arab Emirates and other countries as their only economic hope.’It will take some time for the trickle-down effect,’ she said.Nearly three million Egyptians are believed to be living and working abroad, and remittances sent home every year are among the highest in the world, totaling more than $3 billion in 2006, according to the World Bank.Reham Mansour, director of the career development office at Cairo University, said many students not educated at elite Egyptian institutions like the American University in Cairo still struggle to find jobs at home.Many of them view Dubai, the business center of the Persian Gulf and home to about 80,000 Egyptians, as the most attractive alternative.’If you give them the same opportunities, they would want to work here. But if you give them a better job, bigger salary, they would travel to Dubai,’ she said.Prospects for well-paying jobs in Egypt are best in telecommunications, financial services and consulting. Many other sectors are less dynamic. And unofficial estimates put the country’s unemployment rate at 15 to 25 percent, roughly twice the official rate.Nevertheless, a growing number of well-educated young Egyptians believe the economic reforms undertaken by the current government have significantly improved the country’s business environment.The pace of reform increased markedly with the arrival of Prime Minister Ahmed Nazif in July 2004. Since then, the government has reduced income tax rates and customs duties and has begun the difficult process of reforming the banking sector by restructuring non-performing loans and privatizing state banks.With the help of high oil prices and a surge in tourism revenue, those reforms have pushed the economy to ever-higher levels of GDP growth, reaching 6.8 percent in the fiscal year that ended in June 2006 and 7.1 percent during fiscal 2007.The government estimates that Egypt’s economy needs to grow by at least 6 percent a year to create enough jobs for the 600,000 people who enter the labor market every year.Motazmagdy Negmeldin, a Cairo University engineering student, said most of his friends still dream of going to Dubai, Europe or the United States to earn higher salaries.But with the economy growing, Negmeldin said he does not plan to leave.’Together, we can make something of this country,’ he said.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Bush warns of ‘holocaust’ if Iran gets nukes
RENO (Thomson Financial) – US President George W Bush warned today that letting Iran acquire atomic weapons risked putting the Middle East ‘under the shadow of a nuclear holocaust.’
‘Iran’s active pursuit of technology that could lead to nuclear weapons threatens to put a region already known for instability and violence under the shadow of a nuclear holocaust,’ he told a veterans group here.
Bush’s speech to the American Legion aimed to convince a war-weary US public that the war in Iraq was the central front in the fight against what he described as the Sunni Muslim extremism of the Al-Qaeda terrorist network and the Shiite extremism fuelled by Iran.
‘Iran’s actions threaten the security of nations everywhere, and the United States is rallying friends and allies to isolate Iran’s regime to impose economic sanctions. We will confront this danger before it is too late,’ he said.
Tehran denies seeking nuclear weapons and says that its atomic programme means to provide civilian power.
tf.TFN-Europe_newsdesk@thomson.com
slj
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Lagardere Active acquires online advertising co ID Regie
PARIS (Thomson Financial) – Lagardere Active said it has acquired the French online advertising company ID Regie for an undisclosed sum, in a bid to strengthen the position of its Lagardere Publicite unit in the internet market.
The group said ID Regie sells advertising space for over 30 websites including Price Minister, Alapage, LDLC and Top Achat, and in 2006 doubled its gross operating profit to 1.1 mln eur.
At end-2006, the company employed a total of 11 staff, Lagardere Active said.
vicky.buffery@thomson.com
vb/lam
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Metals – Nickel sinks to 11-month low amid rising fears of global credit crunch
LONDON (Thomson Financial) – Nickel sank to its cheapest price since last September while aluminium hit a ten-month low amid rising fears of a global credit crunch and as overbearing risk aversion continued to weigh on sentiment.
Another equity rout today sparked a bout of risk aversion, also seen in other risky assets this morning with precious metals, oil and gas all down too.
‘We expect this environment to result in further volatility for base metals prices, with day-to-day direction taken from the financial markets, which are looking weak again,’ said Barclays Capital analysts. ‘Weakness in the financial markets is a downside risk to base metals and prices could fall further in the short term.’
Nickel shed almost 5 pct, and is now down more than 50 pct since striking an historic high of 51,800 usd just three months ago.
By 9.42 am, nickel for three-month delivery had dipped to 25,350 usd against 26,500 usd at the close yesterday.
Nickel earlier hit an intraday low of 25,150 usd.
Demand destruction with prices at sky high levels earlier this year, higher supply and lower usage by stainless steel manufacturers who had relied on the metal knocked the price, while recent broader economic woes have exacerbated the grey metal’s fall.
Aluminium, meanwhile, sank to a ten-month low of 2,500 usd earlier.
Elsewhere, copper, often seen as the base metal board leader, was also engulfed by risk aversion while a daily report from the LME earlier saying inventory rose 3,300 tonnes to 119,350 tonnes exacerbated the red metal’s fall.
‘Copper looks on track to test support towards 7,000 usd. Supply disruptions and robust demand side influences are taking a back seat for now and further short selling or long liquidation is likely,’ said JP Morgan analyst Michael Jansen.
Copper was down nearly 4 pct at 7,039 usd against 7,315 at the close yesterday.
Among other metals, lead slid to 2,875 usd from 2,955 usd.
Zinc eased to 3,135 usd from 3,230 usd, and aluminium dropped to 2,497 usd from 2,543 usd. Tin, the only metal to post a modest gain, rose to 13,950 usd from 13,850 usd.
anealla.safdar@thomson.com
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Malaysia’s PM confirms Volkswagen conducting due diligence on Proton
KUALA LUMPUR (Thomson Financial) – German car maker Volkswagen AG is conducting due diligence on Malaysian national car maker Proton Holdings Bhd as part of negotiations for a possible strategic alliance, Prime Minister Abdullah Ahmad Badawi confirmed for the first time.
He told Agence France-Presse late Wednesday it is important for Proton to be ‘comfortable’ with its potential partner.
‘And as soon as that is confirmed, then I believe we must tie up the deal as quickly as possible,’ he said.
He gave no other details of the possible tie-up.
If the alliance is pushed through, it is expected to give Proton a boost in efforts to reclaim its top spot in the local car market.
Abdullah said Proton’s launch Wednesday of the Persona, a replacement model for the 14-year-old- Wira, had ‘nothing to do’ with the timing of Volkswagen’s ‘due diligence’ study.
‘But it does prove to everyone in the world that Proton is still capable of coming (up) with an excellent and superb product,’ he said on the sidelines of an awards ceremony.
‘We are confident that Persona is the product that will put Proton back in the map and as the leader in the Malaysian market.’
Proton recently reported bigger-than-expected net losses of 591.36 million ringgit for the year to March 2007.
afp/jg
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Sir Philip Green rejects Sunday Times allegations over sweatshop labour
LONDON (Thomson Financial) – Sir Philip Green, the billionaire retailer, has rejected allegations made by The Sunday Times that clothes sold in his Topshop to Miss Selfridge Arcadia empire were made by sweatshop labour in Mauritian factories.
The newspaper had claimed that workers from Sri Lanka, India and Bangladesh were being paid less than 5 stg a day for working shifts of up to 12 hours.
In a statement, Green said he ‘personally undertook’ to investigate the have ry serious allegations’.
‘Having investigated, I provided yesterday to the newspaper a copy of Arcadia’s most recently completed independent audit report undertaken a few months ago together with a further audit report from another [unnamed] major retailer dated July 2007. Both these reports found the factories generally compliant with relevant Codes of Practice,’ he said.
He also provided a document from another unnamed major international retailer confirming that its most recent audit report undertaken under the Ethical Trading Initiative (ETI) was satisfactory.
He said letters from Compagnie Mauricienne de Textile (CMT) and Star Knitwear, the two factories mentioned in the Sunday Times article, were also provided confirming that they have complied with the Arcadia code of conduct and that they both pay their workforce above the rates set down by the Mauritian government under the 2007 law.
Green is awaiting the Sunday Times’ response.
tf.TFN-Europe_newsdesk@thomson.com
jdd
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Tele2 wants to sell German unit, has begun sale process – sources
FRANKFURT (Thomson Financial) – Tele2 AB wants to sell its German unit and has already started the sale process, Thomson Financial News’s German partner dpa-AFX reported, citing industry sources.
The company declined to comment.
Tele2 is in the process of divesting a number of European subsidiaries. It has agreed to sell subsidiaries in Hungary and France and has initiated the sale of its units in Italy and Portugal.
frederik.richter@thomson.com
dpa/fr1/mog/cm2
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Nelnet will pay original settlement, too
OMAHA, Neb. (AP) – Student loan company Nelnet Inc. will pay the original $1 million settlement it reached with Attorney General Jon Bruning in addition to a larger sum announced last week, Bruning said Friday.Bruning had absolved Nelnet of making the payment after the Lincoln-based company agreed to pay $2 million and quit offering some services to universities as part of a settlement with the New York state attorney general’s office.Bruning, a Republican who is running for U.S. Senate, said Friday’s action eliminates the ability of his political foes to create the perception of a conflict of interest. Bruning has received $16,000 in contributions from executives of Nelnet and affiliated companies.’If there has been a misunderstanding by anyone about the nature of the state’s agreement with Nelnet, I want to fix that,’ Bruning said Friday.He said he approached Nelnet and they agreed to pay the $1 million, which will go toward student loan assistance programs in Nebraska.Nelnet President Jeff Noordhoek said Friday that the money is going to a good cause, and that Nelnet has led the student loan industry in an effort to improve transparency.New York Attorney General Andrew Cuomo is investigating conflicts of interest in the industry and has reached settlements with 11 other lenders, including Citibank, Sallie Mae, JP Morgan Chase and Bank of America.Fines paid by the companies will be used to educate students about financial aid.Nelnet announced plans last month to end agreements with 110 alumni groups by mid-August and stop paying the groups for using member lists. It also will no longer answer financial aid questions on behalf of universities.In April, Nelnet acknowledged what it called have ry small’ mistakes in some dealings with colleges. The company paid $4,800 to Western Illinois University for referring students to the company for private loans and gave two financial aid officers at an unidentified school in Albany, N.Y., plane tickets to travel to New York City for a ‘theater event,’ the Nebraska attorney general’s office said.According to the agreement Nelnet signed, the company also gave school employees tickets to sporting and entertainment events and paid for them to travel to marketing events. The New York City theater trip was only one example of this.Nelnet also reimbursed university employees for taking trips to the company’s service centers in Denver, Indianapolis, Jacksonville, Fla., and in Lincoln.Nelnet says it serves students in 50 states, has about 3,500 employees and $26.2 billion in net student loan assets.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Metals – Copper falls as huge stocks gain shows less Chinese demand UPDATE
LONDON (Thomson Financial) – Copper prices dropped after a massive rise in stockpiles of the red metal at the Gwangyang warehouse in South Korea, indicating a decline in demand from China.
Copper prices have been underpinned by continued demand from the world’s largest consumer of the metal, as the base metals complex has been rocked recently by fears of a global economic slowdown in the wake of the US sub-prime crisis.
‘The great shining light for copper has been continued demand out in the Far East,’ said Sucden broker Steve Hardcastle. ‘Against the macro picture of the last few days, if China is temporarily not buying at these prices we are going to see support being stripped away.’
Copper inventories in London Metals Exchange (LME) monitored warehouses increased by a huge 8,675 tonnes to 114,275 tonnes, with the vast majority of those gains coming from Gwangyang.
At 11.38 am, LME copper for three-month delivery was trading down at 7,575 usd a tonne against 7,750 usd at the close yesterday.
Copper had risen slightly in Asian trade after the US Federal Reserve said the US economy would probably ride out the sub-prime mortgage defaults that have been weighing on equity markets and trader sentiment worldwide.
However, with the Fed holding interest rates at 5.25 pct, the dollar strengthened slightly making base metal prices higher for holders of other currencies.
‘Metal had been a touch weak ahead of daily LME stock data for no obvious reason, although a slightly firmer US dollar may have played a role,’ said UBS analyst John Reade.
Copper prices are supported by continuing strikes in Central America, with workers at three Grupo Mexico SAB mines vowing to continue their strike, despite having it deemed illegal by the Ministry of Labor.
In other metals, tin consolidated back to 16,500 usd a tonne against 16,755 usd, having hit an all-time high of 17,050 yesterday.
Lead eased to 3,100 usd a tonne against 3,146 usd. Lead production at Ivernia’s Magellan mine in Australia is still shut in on environmental grounds, while the strike at Exarro’s Rosh Pinah plant continues for now.
Nickel fell to 28,200 usd a tonne versus 28,900 usd at the close yesterday, following a 1,152 tonne increase in LME monitored stockpiles.
Zinc edged lower to 3,365 usd versus 3,380 usd, while aluminium slipped to 2,639 usd versus 2,664 usd at the close yesterday.
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Air Force’s F-22 Raptor meets criticism
ANCHORAGE, Alaska (AP) – The U.S. Air Force’s most technologically advanced and expensive fighter jet, the F-22 Raptor, is designed to be a stealthy killer capable of downing bogies at supersonic speeds.
But critics say the changing nature of warfare in the age of terrorism, combined with the unparalleled superiority of U.S. air power, make the Cold War-era conceived Raptor an overpriced luxury.
‘The real issue is, who are we going to fly the F-22 against?’ asked military aviation author and lecturer James P. Stevenson. ‘I don’t think al-Qaida is going to shrink back into their caves because there are F-22s flying overhead rather than F-16s.’
Elmendorf Air Force Base is getting the first of 40 Raptors this week, making it the first base outside of the contiguous U.S. to house them. When their arrival is complete at the end of 2008, the base will be home to more than a fifth of the Air Force’s Raptors.
The fighter is capable of cruising faster than Mach 1.5 — more than one and a half times the speed of sound — without using its afterburner. It can perform tactical maneuvers at altitudes greater than 50,000 feet, far superior to current fighters. Its stealth capability means it can attack air and ground targets before they even know it’s there.
But that comes at a steep cost.
The basic sticker price is $135 million per plane. When research, development and testing costs are factored in, the cost balloons to more than $350 million each.
Initial plans called for buying 750 Raptors, but increasing costs have cut that number drastically. The Air Force now says it needs 381 of the planes but it may not have funding for more than 183. The planes are being built by Lockheed Martin, Boeing and United Technologies Corp.’s Pratt & Whitney unit.
The program has gotten bogged down by competing interests that want their products in the aircraft, said Pierre Sprey, a former systems analyst for the Defense Department and a designer of the F-16 and the A-10 Warthog. Combined with the Air Force wanting the Raptor to be a technological marvel packed with everything that would fit, that has resulted in poor planning and the program’s exorbitant cost, he said.
‘They made it so complicated and hopeless that it took forever,’ Sprey said. ‘It’s just disgraceful.’
Pursuing the stealth technology was simply a waste of time and money, he said, because it isn’t possible to completely cloak a fighter against long-wave or infrared radar.
Retired Air Force Col. Everest ‘Rich’ Riccioni, of the Pentagon’s advanced tactical fighter program, was one of the early planners for the Raptor prototype. Since its conception in 1981, it has morphed from a streamlined, surgical fighter into an overpriced and bloated technology showcase, he said.
‘When you design something with a lot of capability, it’s got to have a purpose,’ Riccioni said. ‘We don’t have an air superiority problem. The purpose isn’t there.’
When planning for the Raptor first began, it was intended to combat aerial Soviet Union threats. It has since evolved into a versatile fighter capable of striking ground targets and conducting information warfare as well.
But that evolution has cost the project, both politically and mechanically.
Earlier this year, six Raptors were participating in an inaugural flight between Hawaii and Kadena Air force Base in Okinawa, Japan, when several of them experienced computer glitches that crippled their navigation systems and hindered communications.
As a result, the Air Force had to repair 87 of the fighters that faced similar problems.
And in March 2004, the General Accounting Office, the nonpartisan investigative arm of Congress, said in a report the plane has had problems with its tail fins, canopy and computer software. It also said the Raptor’s avionics processors, developed in the 1980s, are obsolete, and replacing them will take years and cost hundreds of millions of dollars.
While the Air Force tries to work out the kinks in the fighter, a Congressional spending cap coupled with the jet’s rising costs has kept whittling away at the number of jets it can afford to buy.
But Air Force officials say cost notwithstanding, the Raptor is long overdue because the commonly used F-15 — first flown in 1972, the year Don McLean’s ‘American Pie’ was released — is an aging relic.
Lt. Col. Mike Shower, squadron commander for the first Elmendorf Raptors, said no enemy aircraft even comes close to the F-16. But that doesn’t mean the Air Force should maintain the status quo, he said.
‘Our old stuff is essentially on par,’ said Shower, who has piloted both the Raptor and the F-15. ‘There is a significant amount of threat out there, but the F-22 absolutely dominates when we fly.’
Raptors will replace a squadron of F-15s at Hickam Air Force Base in Hawaii beginning in 2011, and they will also replace F-117s that are based at Holloman Air Force Base in New Mexico.
Those upgrades are much-needed, said Loren Thompson, of the Virginia-based Lexington Institute think tank.
He said the Air Force’s F-15s are ‘falling apart’ and that, although the F-16 is still far superior to other fighters, maintaining a decisive technological edge is essential to deterring military threats the U.S. might face.
‘People are so preoccupied with terrorists that they aren’t thinking about fighter aircraft,’ he said. ‘But if we didn’t buy the F-22 we would have a reason to worry.’
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