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Budapest shares lower in thin trade; emerging markets could suffer risk aversion

News

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13 June 2007

BUDAPEST (Thomson Financial) – Budapest shares edged lower in thin morning trade, tracking developments in major markets, as equity investors remain cautious over rising US bond yields.

Local analysts added that riskier emerging market stocks may be among the biggest losers if global equities see a downward correction.

At 11.48 am, the leading BUX index was down 0.1 pct at 26,263.55. By midday trading volume was about one tenth of the daily average.

Blue chips were mixed with MOL and Magyar Telekom edging higher.

MOL was up 0.51 pct at 24,525 forints, trading erratically as oil prices eased ahead of weekly data on US energy stocks.

OTP Bank dipped 0.43 pct to 9,260 forints, after falling 1.1 pct in the last session, bringing the index down with it.

FHB, the state-controlled mortgage bank, edged up slightly, climbing 0.70 pct to 2,300 forints as speculation over a possible buyer for the government’s stake rumble on.

Elsewhere, pharmaceuticals were down, as Richter dropped 0.92 pct to 36,165 forints, and its smaller sector peer Egis dipped 0.05 pct to 21,250 forints.

Richter CEO Erik Bogsch said in an interview that government regulatory changes have cost the industry 25 bln forints so far this year.

Magyar Telekom ticked up 0.11 pct to 950 forints as analysts said that announcements yesterday concerning further integration steps will have little impact on the share price as the most significant measures were already know.

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EU says member states must do more to cut deficits during recovery

News

Sam Allcock

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13 June 2007

0

BRUSSELS (Thomson Financial) – The European Commission said it is of the ‘utmost importance’ that national governments in the EU use the current economic recovery to improve their public finances, and added that the preventative element of the stability and growth pact needs to be ‘more effective’.

‘Although the budgetary situation has improved remarkably in the last few years, it is quite clear that most member states need to improve their track record in implementing their budgetary targets,’ said Joaquin Almunia, Economic and Monetary Affairs Commissioner.

The commission said in its report that whilst the corrective part of the stability and growth pact — which enables the commission to fine member states who fail to comply with its requirements — is working, the preventative part ‘is not functioning as well’.

It has therefore set out proposals to change the way governments formulate and apply budgetary strategies over the medium term, and has also called for strengthening of surveillance and coordination of economic and budgetary policies at a European level.

‘The main thrust of the first set of proposals is to broaden the scope of the EU’s fiscal surveillance,’ said the commission, adding that fiscal surveillance should be put into a broader economic perspective, and focus more on internal and external imbalances that may pose a risk to fiscal and economic stability.

It added that there is ‘considerable scope’ for strengthening the link between national budgets and the targets presented at the EU level.

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Alcan signs multi-year supply contract for Airbus A350, A380 models

News

Sam Allcock

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13 June 2007

0

LONDON (Thomson Financial) – Canadian aluminium producer Alcan Inc said it has has signed a new long-term agreement to supply aircraft constructor Airbus with products for the full range of Airbus’ programs, including the A380 and the new A350 XWB planes.

No financial details were disclosed.

Alcan will also supply Airbus’ parent company, the European aerospace and defence group EADS, with aluminium-based products for its range of aerospace applications, the company said.

‘This agreement underscores Alcan’s position as the largest supplier of aluminium products to Airbus and the importance of the aerospace market segment to Alcan’s strong business portfolio,’ said Christel Bories, President and Chief Executive Officer of Alcan’s Engineered Products division.

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US denies link to Venezuela protests

News

Sam Allcock

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12 June 2007

0

CARACAS, Venezuela (AP) – The U.S. ambassador to Venezuela on Tuesday rejected allegations by President Hugo Chavez that Washington was behind recent protests over a government measure that forced an opposition TV station off the air.

Chavez and other officials have leveled numerous accusations against the U.S. government in recent weeks, including allegations that Washington was involved in the broadcast of ‘subliminal’ television messages calling for the Venezuelan president’s assassination.

The U.S. government ‘is not supporting, participating in, pushing for or subliminally urging any of the people that march,’ U.S. Ambassador William Brownfield told Union Radio.

University students have led a series of recent street demonstrations protesting the president’s decision not to renew Radio Caracas Television’s broadcast license, which expired May 27.

Critics argue Chavez — a close ally of Cuban leader Fidel Castro — is trying to muzzle his opponents by turning the signal previously used by RCTV over to a state-funded public broadcasting station.

Chavez, who has defends the move as a means of democratizing the airwaves, claims that Washington is behind the protests and has called student protesters ‘pawns’ of the U.S. government.

Suspected suicide blast rocks Kenyan capital UPDATE

World

ABC Staff

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11 June 2007

0

NAIROBI (Thomson Financial) – The Kenyan capital was rocked today by a bomb blast thought to be the work of a suicide bomber who blew himself up while clutching a copy of the Koran, injuring dozens of people.
‘It was a bomb explosion and body parts have been thrown apart,’ policeman Gabriel Omondi told AFP after the blast in front of the crowded City Gate restaurant on Moi Avenue, one of Nairobi’s main streets.
‘I can confirm one dead. He is a suspected suicide bomber,’ Moses Muchoki, an official from the Kenyan Red Cross, told AFP.
An AFP correspondent saw shredded papers from a Koran strewn at the explosion site.
‘The attack carries the hallmark of a suicide bomber, but we are investigating. We are suspecting that the dead was the bomber,’ said a top police official, who requested to remain unnamed.
Anti-terrorism police arrived at the explosion site to investigate as security officers cordoned off the area from thousands of onlookers and rescue workers and ambulances scrambled to make it through the snarled traffic.
The country’s main Kenyatta National Hospital said it had received dozens of wounded from the blast.
‘We have received at least 31 people with varying degrees of injuries,’ said Herman Wabomba, the hospital’s spokesman. ‘Six of them need urgent surgery.’
Police Commissioner Major General Hussein Ali confirmed that one person had been killed and about six others wounded, but refused to immediately confirm it was a suicide blast.
‘An incident has occurred, but at this particular stage we do not have very much to say,’ Ali told a press conference at the scene.
‘The incident is being investigated,’ Ali said.
Witnesses described the force of the blast, which ripped through the busy main street as people made their way to work in the morning.
‘It was a huge explosion that occurred as I was headed to office, I suspect it was a bomb,’ said one Paul Mwangi.
‘It was around 8.00 am (0500 GMT) when I heard an explosion… and people came here in tattered clothes,’ Gedion Mutua, a security guard in the nearby Ambassador Hotel, told AFP.
Kenya has been on alert since January when the government said suspected Islamist fighters, accused of links to extremist groups, had fled fighting in Somalia.
East Africa has seen several Al-Qaeda-linked terrorist attacks in recent years, including the near-simultaneous bombings of the US embassies in Kenya and Tanzania in August 1998, killing a total of 224 people and injuring some 5,000.
Al-Qaeda-affiliated attackers bombed an Israeli-owned resort hotel near Mombassa in November 2002, killing 15 civilians and three presumed suicide bombers, and unsuccessfully attempted to shoot down an Israeli airliner there on the same day.
In January, the United States warned its citizens in Kenya of possible reprisals by terrorist groups after Somalia’s Islamists were ousted.
‘Due to possible reprisals by terrorist organisations, American citizens are advised to remain vigilant, avoid demonstrations or large gatherings, and to be cautious when frequenting prominent public places and landmarks,’ its embassy said in a message released in January.
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Buffalo food fest orders healthier items

News

ABC Staff

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11 June 2007

0

BUFFALO, N.Y. (AP) – For the first time in its 23-year history, the Taste of Buffalo, a foodie free-for-all attracting tens of thousands, is ordering restaurants to offer healthier options.
At least one item on each vendor’s menu must meet standards on fat, salt and cholesterol.
That means diners at the July 7-8 event will see mango sorbet and smoked chicken sandwiches among the hot fudge sundaes and bleu cheese burgers, a low-fat cookie there with the cheesecake.
But will they bite?
‘It’ll be interesting to see,’ said Ania Gurnari, whose family-owned bakery, E.M. Chrusciki, has offered its sugar-coated ‘angel wings’ and other pastries at the festival for more than 20 years.
Her father came up with a chewy spice cookie to meet the new healthy mandate, using applesauce to make it moist and sweet.
‘We are going to be serving New York-style cheesecake, there’s nothing fat-free about that,’ Gurnari laughed. ‘So having that side by side, we’ll see what choices people make.’
The idea is not to force tasters to shun their favorites, organizers say, but to give them a chance to try healthy dishes that might be just as good.
‘What a great opportunity … to recognize that a lot of people currently have a perception that healthy food has to taste bad,’ said Dr. Michael Cropp, president and chief executive of Independent Health. The health insurance company’s community outreach foundation worked with festival organizers to develop the new rules.
‘We thought, as a first step, if we can have all these restaurants demonstrate how they can provide a healthy option that tastes great, we are going to change people’s perceptions,’ Cropp said.
No one even noticed when Rita Sabharwal altered her chicken curry and rice dish two years ago to make it healthier, substituting more tomatoes for some of the oil.
‘We sold out anyway,’ said Sabharwal of Tandoori’s Royal Indian Cuisine. This year, Sabharwal has created a vegetarian dish of chickpeas and spinach, keeping an eye on oil content.
Each restaurant had to submit a healthy recipe that was analyzed by a computer program. No more than 30 percent of calories could come from fat and less than 10 percent from saturated fat. There were also sodium and cholesterol restrictions.
While some, like Tandoori’s, created brand new dishes, others tweaked existing ones. Louie’s Hot Dogs simply switched out the crushed tomatoes from its Sloppy Louie Burger with a lower-salt version to meet the guidelines.
Among other offerings will be a vegetable croissant, baked spring rolls and Cajun boiled crawfish.
Even at Chrusciki’s bakery, customers are looking for less guilty pleasures.
‘People ask for fat-free, sugar-free everything these days,’ Gurnari said. ‘Sometimes we look at them like, `OK, wrong place.’ But now, at least we can say we have this healthy choice item.’
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Thomson Financial Europe AM at a glance share guide: Stocks crash, dollar gains

News

Sam Allcock

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8 June 2007

0

LONDON (Thomson Financial) – US SUMMARY: Stocks continue sharp fall as bond yields rise; oil up on supply worries

Index Change Pct change

*DJIA 13266.73 -198.94 -1.48

*Nasdaq 2541.38 -45.80 -1.77

*S&P; 500 1490.72 -26.66 -1.76

Dow Future 13261.00 -200.00 -1.49 (2014 GMT)

Nasdaq Future 1883.25 +0.75 +0.04 (0324 GMT)

S&P; Future 1489.30 -27.10 -1.79 (2018 GMT)

eur-usd 1.3432 -0.0074

Nymex crude

for July 66.93 usd +97 cents

10 yr US

treasury 5.13 pct +0.16 pct

* yesterday’s close

STOCKS: Wall Street fell further on Thursday, as rising bond yields dented hopes of an interest rate cut later in the year, while retail sales for the year came in mixed — improving wholesale figures accompanied by concerns that rising

gas prices would cut into consumer spending.

The Commerce Department said inventories among US wholesalers rose 0.03 pct in April to a seasonally adjusted 394.54 bln usd after increasing a revised 0.4 pct in March. The March increase had been pegged at 0.3 pct. A dip in

applications for unemployment benefits last week — falling by 1,000 applications to 309,000 — indicates a healthy labour market, thus also making a rate cut seem less likely.

FOREX: The US dollar rose against other major currencies Thursday as rising bond yields dashed hopes of an interest rate cut. Higher interest rates can bolster a currency by making investments denominated in it more attractive.

The euro — which was already down after the European Central Bank raised its benchmark interest rate but sent moderate signals on its future course — dropped further. The pound sank to 1.9771 usd from 1.9928 after the

Bank of England held its key interest rate steady. The dollar strengthened to 121.11 Japanese yen from 121.01 yen.

In other trading, the dollar bought 1.0620 cad, up from 1.0588, and 1.2248 sfr, rising from 1.2163.

BONDS: US Treasury prices fell, as inflation shows no sign of abating thus dampening chances of a rate hike, sending the yield on the benchmark 10-year note over 5 pct for the first time since August.

If the yield reaches 5.25 pct, a five-year high, it would match the Federal Reserve’s current benchmark interest rate — signalling that the market is, in a sense, beating the central bank in hiking rates to curb inflation. The Fed has kept rates

on hold since last summer, after about two years of gradual increases.

OIL: Oil and gasoline prices rose on concerns US refineries aren’t producing enough to meet domestic demand. Gasoline futures for July inched up 0.23 cent to settle at 2.1927 usd a gallon on the New York Mercantile Exchange.

The US has experienced an unusually high number of refinery outages this spring. Reports Thursday of a partial shutdown at a 60,000 barrel-per-day Delek US Holdings Inc refinery in Texas, and that Suncor Energy Inc will shut part of a 246,000 bpd facility in Alberta for 50 days for maintenance, were the latest outages. On Tuesday, Valero Energy Corp said its gasoline production would be cut by a total of 65,000 bpd due to problems at two refineries.

GOLD: Gold prices fell in New York as the dollar strengthened, thus lessening the precious metal’s appeal as an alternative investment. August gold dropped 9.40 usd to settle at 665.20 usd an ounce on the Nymex while July silver fell 23.7 cents to close at 13.48 usd.

EVENTS:

April trade balance (1230 GMT)

Trade balance, 2006 annual revision (1230 GMT)

ASIA SUMMARY: Stocks tumble on Wall Street fall; oil eases on profit sales

Index Change Pct change

Nikkei 225 17750.20 -303.18 -1.68 (0343 GMT)

S&P;/ASX 200 6216.50 -94.60 -1.50 (0343 GMT)

Straits Times 3497.71 -48.62 -1.37 (0343 GMT)

Hang Seng 20479.83 -320.33 -1.54 (0344 GMT)

KLSE Composite 1352.48 -11.93 -0.87 (0329 GMT)

BSE Sensex 14051.33 -134.85 -0.95 (0430 GMT)

usd-yen 121.24 -0.04 -0.03 (Intra-day trade)

usd-sgd 1.5374 +0.0002 +0.01 (Intra-day trade)

usd-inr 40.90 +0.19 +0.47 (Intra-day trade)

10-year JGBs 1.895 pct +0.035 +1.88 (Intra-day trade)

Brent North Sea 71.06 usd -0.16 -0.22 (Intra-day trade)

crude for July

STOCKS: Asian markets slipped into the red tracking the fall on Wall Street. Tokyo, Hong Kong, Taipei and Manila shares ended the morning session lower, after Wall Street tumbled for the third straight session as rising US government bond yields further dashed hopes for a cut in interest rates. Jakarta share prices were sharply lower in early trade, in line with other markets in East Asia and the Wall Street decline.

BONDS: Japanese government bond prices ended the morning session weaker, tracking sharp declines in US Treasury bond prices overnight.

FOREX: The US dollar was up against the yen and euro in Sydney with currency markets reacting to the global equity market sell-off in the absence of key economic data. The sterling was the clear loser in overnight trade after the Bank of England maintained interest rates, with the euro retreating in step with the UK currency.

OIL: Prices fell in Asian trading hours as players took profits on the gains made overnight amid persistent concern about US gasoline supplies during the peak season for demand. At 0230 GMT, the New York Mercantile Exchange’s main contract, light sweet crude for delivery in July, was down 0.18 usd at 66.75 usd a barrel from 66.93 usd in late trading in the US overnight.

METALS: Gold steadied above 670 usd yesterday after dipping slightly the day before with analysts saying while the metal might remain in consolidation mode, it is still poised to trend higher longer term.

In other precious metals yesterday, silver was little changed at 13.68 usd against 13.67, platinum edged up to 1,297 usd against 1,289, while palladium was flat at 363 usd.

Copper was steady yesterday as strike threats in South America coupled with dwindling stock levels supported prices. Base metals weakened across the board in early afternoon trade yesterday, weighed down by nickel prices, which dropped to a 10-week low following the LME’s implementation of new trading rules that will effectively make more metal available to the market.

EVENTS:

Australia April housing finance

Japan April machinery orders

Japan May money supply

Japan May bank lending

Bank of Korea interest rate-setting meeting

Hong Kong’s Johnson Electric FY results

Hong Kong’s Link REIT FY results

Ta Yang Group starts trading in Hong Kong

Taiwan 364-day, 100 bln twd offer of certificates of deposit

Taiwan’s UMC May sales

Taiwan’s TSMC May sales

Indonesia’s Summarecon Agung EGM

Philippine March foreign direct investment

Philippine banks’ end-April bad loans

EUROPE SUMMARY: London shares close lower; base metals weaken across the board as nickel price dips to 10-wk low

Index Change Pct change

*FTSE 6505.10 -17.6 -0.26

*DAX 7618.61 -111.44 -1.44

*CAC 5890.49 -87.38 -1.46

UK10-year

Bond 90.28 -0.5

UK 30-year

Bond 92.26 -1.16

stg-usd 1.9858 -0.0066

eur-usd 1.3477 -0.0022

sfr-usd 1.2227 +0.0057

Brent crude

ICE (July) 71.40 usd +38 cents

* yesterday’s close

STOCKS: UK blue chips closed lower, as Wall Street remained weaker, with the UK construction sector down on concerns the Bank of England’s decision to keep its key repo rate unchanged at the six-year high of 5.5 pct has upped the risk of a further hike by the end of the year. Europe manufacturing and industrial data will remain in focus today while focus will also fall on Lloyds TSB Group PLC as the bank announces its trading performance. Meanwhile, no major corporates are scheduled to declare their results today.

BONDS: European government bonds tracked US Treasuries lower, after yields on both side of the Atlantic broke key levels, setting a bearish tone for the market. In the UK, gilts fell after the Bank of England kept its key repo rate unchanged.

FOREX: The euro continued to remain vulnerable ever since the European Central Bank’s raised rates Wednesday and failed to sound as hawkish as the markets were expecting. In the UK, the pound continued to slide after the Bank of England left interest rates unchanged. The decision was widely expected. Analysts don’t expect the pound to fall much further, even as interest rates are expected to go up in coming months.

METALS: Base metals weakened across the board in early afternoon trade yesterday, weighed down by nickel prices, which dropped to a 10-week low following the LME’s implementation of new trading rules that will effectively make more metal available to the market. Copper was trading at 7,406 usd against 7,420 at the close yesterday.

Among other metals, lead eased to 2,290 usd against 2,300, aluminium dropped to 2,740 usd from 2,743, and zinc dipped to 3,655 from 3,680. Tin was steady at 13,900 usd. Gold steadied above 670 usd after dipping slightly Wednesday. Oil rose on OPEC’s decision not to increase production quotas, which sparked supply fears. At 1712 BST (1612 GMT), benchmark Brent crude contracts for July delivery were up 38 cents at 71.40 usd per barrel.

EVENTS:

French prefab house sold to hotelier

News

Sam Allcock

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6 June 2007

0

NEW YORK (AP) – Prototype Maison Tropicale, a prefabricated house of bent steel and aluminum sheets, was sold at auction to hotelier Andre Balazs for $4.9 million.

Balazs, who owns Chateau Marmont in Los Angeles, The Mercer in New York and The Raleigh in Miami, placed the winning bid of $4,968,000 for the small 1951 house at an evening sale Tuesday at Christie’s auction.
The house had been brought to New York City in mid-May, reassembled and displayed near the Queensboro Bridge.

One of only three ever created by the French designer, the industrially produced Maison Tropicale was designed and manufactured for Brazzaville, West Africa. Christie’s described it as ‘one of the most striking and sophisticated of all his architectural achievements and is exemplary of his oeuvre.’

Its last owner, Eric Touchaleaume, a French antiques dealer, has said he plans to use the sale proceeds to finance a Prouve museum that will travel inside another Maison Tropicale.

The final price includes Christie’s commission.

Burger King to stay open late nationally

News

Sam Allcock

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6 June 2007

0

MIAMI (AP) – Burger King Corp. said Tuesday thousands of its restaurants in the United States and Canada will now be open until midnight or later every day, allowing it to challenge competitors McDonald’s and Wendy’s.

In May, about 60 percent of Burger King’s U.S. and Canadian restaurants were opening until midnight or later. But Tuesday’s national rollout allows the world’s second-largest hamburger chain to mount a full-fledged ad campaign touting the change.

The idea will be featured in a new advertising campaign featuring hip-hop music mogul Sean ‘Diddy’ Combs.

Burger King competes with No. 1 chain McDonald’s Corp., which offers 24-hour drivethrus at some restaurants, and No. 3 chain Wendy’s International Inc., which implemented extended hours years ago.

Extended hours apply to about 7,500 Burger King restaurants, but stores that can’t control their own hours — those in mall food courts, airports or universities, for example — may be exempted, Burger King spokesman Keva Silversmith said.

‘We are responding to demand by offering our customers the option to fuel up with their favorite Burger King menu items when they need us most,’ said Russ Klein, president of global marketing, strategy and innovation for Burger King.

Burger King has the potential to increase sales in stores open at least a year by up to 1 percent with the later hours, said Joseph Buckley, an analyst with Bear Stearns.

‘There is a definite opportunity for them there because Wendy’s and McDonald’s and others have been in the extended hours for really some time,’ Buckley said.

However, later hours could also mean more labor and utility costs.

The new television ad featuring Diddy began airing nationwide June 1. The campaign also includes new designs by Sean John, Diddy’s clothing label, and a paint scheme that will adorn the Burger King car during an upcoming NASCAR race.

Burger King operates more than 11,200 restaurants in the United States and abroad. About 90 percent are owned and operated by franchisees.

ND farmers share $2M from carbon credits

News

ABC Staff

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6 June 2007

0

BISMARCK, N.D. (AP) – Rancher Terry Ulrich will reap about $6,000 this week for helping protect the planet from global warming.
Ulrich is one of about 630 farmers and ranchers who are getting checks from the North Dakota Farmers Union for using no-till farming practices or growing grasses to limit the release of carbon dioxide from the ground.
‘It’s not a lot, but it’s enough to pay off a big chunk of my property taxes — and it benefits the land,’ he said.
The state Farmers Union on Monday announced $2 million in payments to North Dakota farmers and ranchers who enrolled acreage in the program, which began last year. They are the first in the nation to receive such payments.
The program pools carbon credits for sale on the Chicago Climate Exchange, a private agency that trades greenhouse gases and other pollutants just as other exchanges trade such commodities as crops and livestock.
Dale Enerson, the director of the carbon credit program for the North Dakota group as well as the National Farmers Union, said it has been expanded to 330,000 acres in 14 other states in the past year, with more than 600 farmers from those states signing up.
About $500,000 in carbon credits is traded daily on the Chicago Climate Exchange, representing some 125,000 metric tons of carbon dioxide, said Michael Walsh, the trading system’s senior vice president.
‘A half-million bucks a day is not the Board of Trade, but it’s a start,’ Walsh said. ‘We are doing 100 times that a day in Europe.’
North Dakota Farmers Union President Robert Carlson said about 650,000 tons of carbon dioxide was sequestered under the state program last year — about the equivalent of the carbon emissions from more than 130,000 cars.
Those carbon dioxide credits were sold in blocks earlier this year and fetched an average of about $3.70 cents a metric ton, Carlson said.
When soil is tilled with farm machinery, carbon is released from the soil into the atmosphere. No-till cultivation greatly reduces the amount of carbon released because it disturbs the soil only along a slit or hole into which seeds are planted.
No-till farming is being used on about 8 million of the 30 million acres of cropland in North Dakota, Enerson said. About 830,000 acres are enrolled under the state carbon credit program, Carlson said.
‘That’s only 10 percent of what’s potentially available in North Dakota, so we are only scratching the surface,’ Carlson said.
Gov. John Hoeven called the carbon credit program ‘timely and innovative.’
‘This is the kind of innovation that helps our farmers and ranchers,’ Hoeven said.
Walsh said the Chicago Climate Exchange has about 300 member organizations that have voluntarily agreed to reduce their carbon emissions. The members include corporations, cities and a few universities, which can buy carbon credits to help offset their emissions, he said.
Carbon dioxide credits are fetching about $30 a metric ton in Europe, where countries have agreed to reduce carbon dioxide emissions under the 1997 Kyoto Protocol. The United States refused to ratify the treaty and does not have a mandatory carbon dioxide emission cap.
Walsh, state officials and farmers believe the value of carbon credits in the United States will increase in time.
‘The value of carbon is going to go up,’ said Johnson, the state’s agriculture commissioner. ‘This is exactly the kind of future we should be envisioning and going after.’
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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