High-speed rail from London to Birmingham is still in debate

Many people believe that high speed rail should be initiated whereas many people think that this would waste the investment and not benefit the country. Also after severe winter season, the roads have been damaged and millions have to be spent by the councils to fix them.

High-speed rail consultation initiated by the Government

The government has started its consultation on the proposal to start a rail line from London to Birmingham. This new train would reduce the travelling time by almost 30 minutes. The government officials have claimed that the project would start in 2015 if the proposal has been approved. However, the opponents do not agree to start this high speed rail because they feel that it would waste £17 billion and instead of this project, the government should update the exiting West Coast mainline as that would be a better option.

From the time, the project has been proposed by government it has become a controversy as many people residing along the route have claimed that it would damage the environment.

According to Philip Hammond who is the Transport Secretary, this high speed line (HS2) would improve the UK economy by £44bn. According to Mr. Hammond, "HS2 will be a piece of national infrastructure which will bring benefits to Britain as a whole. Of course we will do everything we can to mitigate the impacts on areas like the Chilterns but projects like this have to be decided on the basis of the national interest and the overall net benefits it will bring to Britain."

There are several business leaders in UK who want this project to continue and some of the important names like CBI director-general John Cridland and former British Airways chief executive Willie Walsh are in favour of this project. However, Lizzie Williams the chairman of Stop HS2 group has described this plan as a waste of taxpayer’s money.

Millions spent to repair potholes in England

Millions have been spent by councils in England to repair the potholes after two severe winters, though many people have said that councils do not have an adequate amount of money to fix them.

According to the Warwickshire county council the estimated cost to repair the roads would be around £25 million to £30 million. On the other hand, Kent County Council said that they have to spend at least £250 million on roads to fix them.

British TV’s ban on product placement has now lifted

Now in UK, paid for references to promote a product or service is now allowed for the first time as the ban has been lifted. This would allow companies to promote their brands to be seen on British TV.  However, some leaders and the Church of England are against this change because they feel that it would damage trust in broadcasters.

To advertise any product or service, the telecom regulators have said that the placement of the product should be editorially justified and it should not be overly prominent. Also it was further added by the telecom regulators that this would not be permitted in news, current affairs programmes and in children’s programmes. Plus, alcoholic drinks and food with high amount of salt, sugar and fat would not be allowed as well.

Many big companies like Coca Cola and Apple pays millions of dollars to TV programmes and films to place their product name or logo to promote their brand. This is very common in countries like USA. The time when European Union removed this ban, many people raised concerns whether this should be allowed or not.

Oil Prices Pushed Down

February 25th 2010 proved to bring a relief for the world as oil prices were pushed down by an optimistic swing in the mood. Here is a summary of some of the major happenings of the business world on 25th February 2010:

Retreat in oil prices

An ease in oil price pressures occurred after the prices reached their two year record high on Thursday. The sharp gains were observed because of the rising unrest in Libya however high optimism about crude producers’ ability to counteract any deficiency in supply caused by Libya led to a decline in the prices.

After almost crossing the $120 mark, Brent crude was brought back to $112.65 per barrel whereas US crude was traded at $97.49 per barrel, a visible decrease from the $100 that it had reached on Thursday.

It was reported that statements made by Saudi Arabia and International Energy Agency (IEA) helped trigger the optimistic mood.

High food & fuel costs slow down deflation in Japan

Japanese deflation saw a deceleration as food and fuel costs rose in January. Consumer prices fell at a yearly rate of 0.6% if the fuel and food costs were excluded. Deflation continues to be a problem since the Japanese economy is still in its early stages of recovery.

Richard Jerram of Macquarie Group said that “The headline numbers are being distorted by commodity prices,"

"The underlying trend is not particularly encouraging...In general it shows deflation is moderating, but not going away."

Quite a few analysts believe that Japan’s central bank, the Bank of Japan, will not change its monetary policy anytime soon. According to the expectations, the interest rates will remain on a hold.

According to a forecast made by the Bank of Japan, the economy is expected to pick up pace later on in 2011 which will help in ending the present and long lasting deflation period.

Chinese telecom equipment maker welcomes formal investigation by US

After a US security panel rejected the takeover bid of American computer company 3Leaf systems by Chinese telecom company Huawei, the company said that it is open to a formal investigation by US authorities in an open letter on its website.

Concerns over the company’s military links have originated for the reason that its founder Ren Zhengfei is an ex-Chinese army office.

The company has denied having any ties with the Chinese government and military.

"Over the past 10 years, as we have been investing in the US, we have encountered a number of misperceptions" said the company in its letter.

Huawei bought 3Leaf for $2m in May 2010 however a review by the Committee of Foreign Investment in the USA said that the deal should not proceed.

Korea puts an $887,000 fine on Deutsche Bank

One of the largest fines by Korea’s stock exchange, KRX, was levied on Deutsche Bank for manipulation in the country’s stock market.

South Korean regulators have claimed that the staff of the bank plotted to force down the value of the stock index in order to profit illegally from it.

Deutsche Bank was banned by Financial Services Commission (FSC) from trading certain derivatives and securities. 

The bank stated that it was “disappointed” with the findings of the FSC.

Oil prices continue to increase with talks about succession of Steve Jobs

24th February 24, 2011 continues to see oil prices increasing with a mixed trend in overall business throughout the globe. Following are some of the major business happenings throughout the world:

ASIA WITNESS’S A NEW HIGH IN OIL PRICES

With the looming probability of the Middle East revolutionary movement affecting bigger oil suppliers, prices continue to climb amongst the Libya unrest.

Prices per barrel in Asia have hit their highest level in two and a half years with Brent crude rising by more than 2% to $113 per barrel whereas US light crude rose by approximately 1% taking the price per barrel to $99.19.

The skyrocketing oil prices made an impact on the Asian stock markets with trading reported to be mixed. A declining trend was observed in some of the major stock markets of Asia with Nikkei 225 index (Japan) going down by 0.9%, KOSPI (South Korea) declining by 0.7% and Singaporean, Australian and Indian markets also reporting a decline.

1 million barrels per production have been shut down according to an estimate made by Barclays Capital.

SUCCESSION PLANS AT APPLE

With Steve Jobs on his third medical leave, a proposal at the annual shareholder meeting was made by the Central Laborers Fund(CLF) as to who would succeed Steve Jobs.

The proposal was made by Jennifer O’Dell on behalf of the fund. The CLF represents 500,000 construction workers in the US and Canada.

Ms O’Dell while talking to BBC News said that they should have a realistic approach towards the matter of succession and have a plan.

Mr. Jobs revealed that he was diagnosed with pancreatic cancer in 2004. He took a medical leave for a liver transplant in 2009. Investors have been concerned about the company’s future since then since Mr. Job is seen as one of the primal factors to the success of Apple.

Ms O’Dell plans to re-file her proposal next year stating that “"If the company doesn't want out reach out to us and have a real discussion about this issue we will refile it again next year”. CLF has as many as 11,500 Apple shares worth $4m.

ANNUAL LOSS REPORTED BY RBS

A £1.13 billion loss was reported for the year of 2010. The loss is much bigger than what had been expected by analysts though as compared to the £3.6 billion loss made by the bank in 2009, and a £24.3 billion loss recorded in 2008, this loss can be looked upon as an improvement.

After bailing out the Royal Bank of Scotland in 2008, the government took over 84% stakes in the bank, becoming a major stakeholder.

The bank reported a profit of £12 million in the last quarter of 2010. Compared to the loss of £765 million incurred in the final quarter of 2009, a vast improvement in the financial performance of the bank can be noted.

8% DECLINE IN CASH BONUSES AT WALL STREET

New York State Comptroller Thomas DiNapoli reported that the 8% decline had taken cash bonuses for Wall Street bankers to an average of $128,530.

"Cash bonuses are down, but that's not an indicator of a weakness on Wall Street," stated Mr. DiNapoli. The facts and figures point to a 6% growth in overall compensation including stock awards.

An open criticism was made on Wall Street bankers in 2009, when news about a 17% increase in cash bonuses for bankers was made public. It must be noted here that 2009 was marked with financial troubles for institutions with many bailed out by taxpayers. 

Japan Report Trade Deficit and Sales of Wal-Mart Declining in USA

Another important day where strong economies like Japan reported trade deficit and oil crisis still continues to impact major businesses across the world. Summary of the major events are as follows:

JAPAN SURPRISES THE WORLD BY REPORTING A TRADE DEFICIT

Ministry of Finance data showed that weaker exports, as compared to Japan’s past records, to major markets has led to the first trade deficit in Japan in almost two years.

A stronger yen has reduced export demands with China overriding Japan to take the spot of the world’s second largest economy. The trade deficit was recorded to be 471.42 billion yen in January however with a 1.4% rise in exports; growth was expected to near 7% as per expectations of analysts.

Yoshimasa Maruyama from Itochu Corporation in Tokyo was of the opinion that despite of the exports quantity being weaker than expected, there is no denying that “the economy is emerging from a lull”. He anticipates that though slowly, exports will surely rise in the approaching months but the pace of economic growth would be slower than what was estimated earlier. 

LIBYA SITUATION PUSHES CRUDE OIL PRICES TO RECORDBREAKING LEVELS

Libyan leader Col Muammar Gaddafi’s refusal to quit combined with growing anti-government protests and unrest in the country; there have been concerns over the situation disrupting global oil supplies. This has consequentially led to skyrocketing oil prices marking their highest levels yet since October 2008.

Andy Lebow, a trader at MF Global in New York said that “The major underlying fear in the market is that these protests spread in the region to even larger producers like Saudi Arabia," The price for Brent crude has reached up to $106.23 per barrel. Analysts expressed their concerns that even a little hint of problems will send prices shooting upward.

VIETNAM STEPS UP TO FIGHT AGAINST RISING INFLATION

The State Bank of Vietnam has raised its reverse repo rate from 11% to 12% in efforts to counter inflation. Only a week earlier, the main interest rate had also been pushed up two percentage points to 11%. The country had also devalued it’s currency by 8.5% earlier this month. The State Bank is anticipating that this move will strengthen the Dong, Vietnam’s currency, and help in slowing down inflation. The rate of inflation was observed to be crossing the 12% mark in January.  

SLUMP IN PROFITS AT BARNES & NOBLE    

A decline in profits along with suspension in dividend payments has been announced by the largest bookseller in the United States. As compared to its performance in the previous year, a drop of 25% in net profits was observed for the three months ending of in January. The net profits were reported at $60.6 million. An 11% fall in shares was also observed after the results had been announced.

The bookseller continues with investing heavily in its Nook electronic book reader whereas the announcement of not making any sales or profits forecasts for the current quarter has also been made by the company.

WAL-MART ANNOUNCES DECLINE IN SALES IN THE U.S FOR THE CONSECUTIVE SEVENTH QUARTER

Wal-Mart continues to lose customers to cheaper rivals with continuing decline reported in sales for the seventh quarter in the United States. Strong profit figures were reported due to a boost in international sales and cost reduction. International sales were also benefited by exchange rate movements. However the company has lost customers to “dollar” stores in its home base, the United States. A 60% contribution was made by the US to the total sales of $419 billion by the Wal-Mart group.

GBPEUR/GBPUSD

The Pound weakened against the Euro yesterday, but rallied versus the U.S Dollar, after Bank of England policy maker Matin Weale said that the MPC should raise interest rates to curb inflation. Weale joined Andrew Sentance in voting to increase borrowing costs from the current record low of 0.5%, as UK inflation surged to 3.7% in December, the tenth month in a row that consumer prices have been above the government's upper limit of 3%.

In a newspaper report yesterday, Weale was quoted as saying there is a "powerful case" for a "modest rise" in interest rates in the UK. Significantly, Weale maintains this view, even after the UK economy sank into negative growth in the preliminary estimate for the fourth quarter, and his comments will spur speculation that the BoE will consider raising rates before the end of the year.....

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