Oil falls ahead of Opec meeting

Opec ministers will gather in Cairo on Saturday, as oil prices remained below $55 a barrel amid fears that global demand is set to fall further.

US light, sweet crude ended down a cent at $54.43 a barrel on Friday. In London Brent was up 20 cents at $53.49.

Ministers from Iran and Qatar dampened expectations that a cut in production would be announced this weekend.

Opec member Venezuela favours a cut in output of a million barrels a day to try to boost prices.

The Iranian Oil minister, Gholam Hossein Nozari said a cut may be announced at the Opec meeting in Algeria on 17 December.

"Here we will prepare some data and maybe the final decision will be in Algeria," he said.

His view was backed up by the Qatari energy minister, Abdullah al-Attiyah.

Added Kuwaiti Oil Minister Mohammed al-Olaim said:"I don't think a decision will be taken at the meeting in Cairo. A decision could be taken at the meeting in Algeria."

Balancing demand

Falls in demand in the US, the world's top energy consumer, and other industrialised countries, have helped drive prices down from a record peak of more than $147 a barrel.

Opec, which accounts for 40% of global oil production, cut output by 1.5 million barrels a day last month, but the move failed to stop prices from declining.

While cartel members have not ruled out making another output cut, some say the impact of the existing cuts still have to be felt.

"Combined with weakening non-Opec supplies, the projected...output curtailment suggests that the oil market could actually tighten moving into 2009," Barclays Capital said in a research note.

Russian rates up as rouble falls

Russia's central bank increased its key interest rate to 13% from 12% in an attempt to help stop currency losses.

The rouble headed for its largest weekly fall in five years, and has fallen approximately 1.9% this week.

For the second time this week, Bank Rossii, the country's central bank, widened the rouble's trading band by about 1% or 30 kopeks.

Russia's has spent $148bn (£96.4bn) of its foreign currency reserves since August to stop a fall of the rouble.

The central banks aims to keep the rouble stable against a two-currency basket that is made up of 55% US dollars and 45% euros. Against the dollar, it is down 16% since August.

Steady Devaluation

The current situation for the rouble is not as dire as it was back in 1998 when the currency lost over 70% of its value against the dollar.

Russia finds itself in the position of hiking rates to stop investors fleeing the currency when the large majority of countries around the world are cutting them to deal with the global financial crisis.

Many observers see the central bank finally allowing the currency to head towards a steady devaluation by widening the trading bands this week.

Russia's currency had soared on the back of high oil prices, the country's leading export, and it has been hard-hit by the fall in oil prices.

Russia's main benchmark oil, Ural crude, has been trading consistently below $50 a barrel this week and in late afternoon trading was at $48.61.

RBI extends time period for concessional credit to exporters

The Reserve Bank on Friday extended the time period for credit facilities given to various sectors including exporters to help them tide over credit crunch and battle the economic slowdown.

In view of the difficulties being faced by exporters on account of the weakening of external demand, RBI decided to extend the period of concessional pre-shipment credit from 90 days to 180 days.



The facility would come into effect from 1st December, RBI release in Mumbai said on Friday.



At present, exporters receive concessional credit at 2.5 per cent below the benchmark prime lending rate (BPLR) for pre-shipment activities.



The decision was taken after a review meeting convened by RBI Governor D Subbarao with select public and private sector banks.



In addition, the RBI has also clarified that the refinance facility for the mutual funds, NBFCs and housing finance companies would be available "for renewal/rollover, on maturity of existing facility."



The apex bank has been providing liquidity support to the NBFCs HFCs and MFs through refinance route to help them tide over the credit crunch.



It further said the refinance facility under the Liquidity Adjustment Facility (LAF) has been extended to 30th June, 2009.



This facility helps the banks to borrow one per cent of the deposits at the repo rate from the central bank.



Besides, the Forex swap facility to the banks for meeting overseas funding requirement in dollars has been extended to 30th June.



Under this facility, the central bank provides forex liquidity to public and private sector banks through forex swap of tenors up to three months.

Drug firms 'block cheap medicine'

Drug companies are blocking or delaying the entry of cheaper generic medicines into the EU, pushing up medicine bills, the European Commission has said.

Their actions cost EU healthcare providers 3bn euros ($3.9bn; £2.5bn) in savings between 2000 and 2007, it said.

It added that drug firms used legal action and multiple patents to stop rivals getting to market.

Drug firms said the "perfectly lawful" measures were justified to protect investment in research and development.

Market access

Generic drug companies - which sell cheaper versions of drugs once the patent has expired - have long complained that it is difficult to get their drugs to market in Europe.

The Commission said that innovators filed multiple applications to stop generic drugs getting to market - in one case, there were 1,300 patents for a single drug.

The report found that owners of original drugs often intervened in national approval procedures for generic medicines.

There were nearly 700 cases of reported patent litigation and more than 200 settlements between brand name drug companies and generic companies.

More than 10% of these settlements limited the entry of the generic drug to the market.

Fine threat

"Market entry of generic companies and the development of new and more affordable medicines is sometimes blocked or delayed, at significant cost to healthcare systems, consumers and taxpayers," said Competition Commissioner Neelie Kroes.

"It is still early days but the Commission will not hesitate to open antitrust cases against companies where there are indications that the antitrust rules may have been breached," she added.

The Commission could impose large fines on drug companies if they have engaged in unfair practices.

In 2005, AstraZeneca was fined 60m euros for blocking cheaper rivals to Losec, its heartburn and ulcer pill.

Pressure mounts

Drug firms use "perfectly lawful practices - such as patent portfolios, patent litigation and the release of improved medicines," the European Federation of Pharmaceutical Industries and Associations (EFPIA) said.

"These [practices] are essential for innovators to protect their huge investment in R&D [research and development]," it said, adding that the 17% of turnover industry spent on R&D exceeds any other sector in Europe.

The EFPIA - which said the Commission's report missed the opportunity to tackle the real issues facing the industry - called for a more competitive market for generic drugs, pointing out that Europeans pay more for generic drugs than US citizens.

In response to claims that the delayed or blocked sale of generic drugs was pushing up healthcare costs, the EFPIA said: "A single member state, the Netherlands, achieved greater savings - up to 400m euros - in one year, on only 33 medicines, simply by promoting greater price competition between generics."

The Commission report increases the pressure on the global pharmaceuticals industry.

Barack Obama, the US President-elect, is also expected to try to cut costs as part of the reform of healthcare coverage in the US.

Markets overcome terror strike, week ends in the green

Showing greater resilience, Indian bourses concluded the terror-struck week on a positive note as key indices bounced back from their three-year lows after the US proposed fresh rescue plans for the financial sector as well as the country's 7.6 per cent GDP growth in the second quarter.

The bounce at mid-week was triggered by growing optimism that many governments, including India, would follow a rate-cut by China and fresh steps by the US to heal the ailing financial markets and stem the economy from longer recession.



After closing at a three-year low of 8,695.53 on Tuesday, the Bombay Stock Exchange 30-share barometer recovered smartly and ended the week at 9,092.72, a net rise of 177.51 points or 1.99 per cent, over last weekend's close.



The broader 50-share Nifty of the National Stock Exchange also gained 61.65 points, or 2.29 per cent, to end the week at 2,755.10 from its previous weekend's close.



The US government unveiled a fresh rescue package of USD 800 billion with a view to augment consumer loans after a multi-billion-dollar bailout package to troubled banking giant Citigroup.



The latest package was in addition to the USD 700-billion rescue plan, which was cleared after several rounds of intense debate in the US Congress.



Analysts said the American government's new steps and China's fresh rate-cut during the week raised anticipation of another set of monetary measures by the Reserve Bank at home.



The markets, however, withstood a violent terror strike on the country's commercial capital Mumbai, forcing the authorities to keep bourses shut for a day on Thursday.



This resulted in postponement of the expiry of the Futures and Options to Friday, 28th November.



The Indian economy notched a reasonable growth rate of 7.6 percent in the second quarter of the current fiscal.



IT sector was the biggest gainer of the week. As a result, the BSE IT index spurted by 101.39 points or 4.13 per cent to conclude the week at 2,558.94 from its last weekend's close.



Small-cap and mid-cap shares, however, registered widespread losses, holding the market breadth into negative.



The capital goods and realty sectors also remained under pressure largely due to the global slowdown.



The broad-based BSE-100 Index also advanced by 72.42 points or 1.60 per cent to end the week at 4,600.45 from its last weekend's close of 4,528.03.



The BSE 200 Index and the Dollex-200 were quoted higher at 1,062.35 and 353.03 at the weekend compared to their last weekend's close of 1,048.86 and 348.62 respectively.



On the NSE, the S&P CNX Defty recovered smartly by 39.30 points or 2.11 per cent to finish the week at 1,905.30 from its previous weekend's close of 1,866.00.



The CNX Nifty Junior, however, was flat at 3,848.85 against 3,841.80 at the previous weekend.



However, the BSE small-cap index dropped by 86.15 points, or 2.54 per cent, to close the week at 3,304.61 and the BSE mid-cap index ended the week lower by 30.90 points, or 1.06

per cent, at 2,885.76.



The BSE Realty index tumbled by 84.41 points, or 5.13 per cent, to 1,561.01 at the weekend from its preceding weekend's close of 1,645.42

EU calls for aid to poor nations

The European Commission President Jose Manuel Barroso has called for a 'human rescue' package to help poor countries.

Speaking at the opening of a high-level UN conference on aid, Mr Barroso said it would be 'obscene' to neglect the human cost of the global slowdown.

The UN Conference on Financing for Development is meeting in Doha, Qatar to track progress on development aid.

There are fears that rich countries will cut back on development aid as a result of the looming recession.

Mr Barroso said that climate change, energy security and trade would add to the potential problems facing poor countries as result of the financial crisis.

The World Bank has said that developing countries are facing a 'perfect storm', with the convergence of slowing growth, a withdrawal of private capital, and higher interest rates on their debt.

The Bank says that growth in developing countries will fall by two percentage points to 4.5% next year, as the volume of global trade contracts for the first time since 1982.

But aid agencies have criticised the fact that neither the head of the World Bank or the IMF, or many other world leaders from rich countries, have come to the talks.

"The fact that so few world leaders have chosen to travel to Doha is a real cause for concern," said Ariane Arpa of Oxfam.

Promises, promises

Six years ago, rich countries pledged to double their aid efforts to ensure that the poor countries reach their millennium development goals of halving poverty by 2015.

But UN figures show that the developed countries have only committed $20bn of the $50bn they promised at the G8 summit in 2005, leaving them far short of the $130bn that will be needed if the millennium development goals are to be met.

World Bank president Robert Zoellick said he would accelerate the disbursement of $42bn it has available to support low-income (IDA) countries over the next three years.

But Christian Aid and ActionAid are concerned that the present financial crisis will be used by rich countries as an excuse to renege on aid commitments.

The mood of the meeting is likely to be in sharp contrast to the first Financing for Development summit in Monterrey, Mexico, in 2002, when President George W Bush unexpectedly promised to double US development aid.

Developing countries are also looking to play a bigger role in discussions designed to restructure the world financial system.

The G20, which met in Washington earlier in November, includes some major emerging market countries, but does not represent the very poorest nations.

Some developing countries and aid agencies would also like the meeting to tackle the issues of tax evasion by multinationals and capital flight.

Meanwhile, discussions will be taking place in Geneva about plans to re-launch the world trade talks, which stalled in the summer because of a dispute over farming tariff protection for poor countries.

WTO boss Pascal Lamy has said it is essential that world leaders show their commitment to developing country growth through aid and trade.

China's first home-made jet flies

China successfully flight tested its first home-grown commercial airliner.

The ARJ-21's maiden flight lasted one hour and the aircraft did not rise above 900 metres in altitude due to safety reasons.

The 90-seat jet flew out of a local Shanghai airport and its manufacturer expects it to fly distances up to 3,700km.

Each jet will cost $27m (£22.6m) and first deliveries are expected to take place within 18 months.

Secured Orders


The jet was normal and the flight was smooth

Zhao Peng, Pilot

The plane is being manufactured in Shanghai.

The Commercial Aircraft Corporation of China say they have secured over 200 orders and last month gained five firm orders from GE Commercial Aviation Services who have an option for a further 20 jets.

It's general manager Jin Zhuanglong said: "With less fuel consumption and longer flight hours, the ARJ-21 will reduce air fares by 8% to 10% for Chinese airlines, most of whom currently use large aircraft above 140 seats on short and medium routes."

One of the three pilots on board, Zhao Peng, said "The jet was normal and the flight was smooth."

The jet will face competition from international manufacturers such as Bombardier, Embraer, Airbus and Boeing.

Economy boost for Spain and Italy

Spain and Italy have announced plans worth billions of euros to kick-start their economies.

Italy approved an 80bn euro ($102bn;£66bn) emergency package that included tax breaks for poorer families, public works projects and mortgage relief.

Spain unveiled an 11bn euro plan aimed at creating 300,000 jobs.

The announcements are the latest in a series of attempts by EU governments to shore up their economies as the financial crisis bites.

Italian Prime Minister Silvio Berlusconi called on to Italians to keep on spending.

"We have helped citizens, the less well off, so that they can continue to consume," he said.

"The intensity and duration of the crisis depends on all of us."

Spain's Prime Minister, Jose Luis Rodriguez Zapatero, said the money will be mainly invested in infrastructure and public works.

Spain's unemployment reached 12.8% in October - the highest in the eurozone.

Construction crisis

The Spanish government said it would invest 0.8bn euros in the ailing car industry, which has been through a severe downturn and seen sales plummet 54.6% since the beginning of the year.

The construction industry has also been severely hit by the financial crisis, with property prices falling and companies slashing thousands of jobs.

The Spanish economy shrank by 0.2% in the third quarter, putting an end to 15 years of continuous growth.

The European Commission has demanded that each EU member must spend about 1.2% of Gross Domestic Product (GDP), or economic output, to fight the economic slowdown.

Spain's plan is worth 1.1% of its GDP.

Germany launched a similar 50bn euro package, while next week France is expected to unveil economic measures worth 20bn euros.

Opec discusses falling oil price

Opec ministers are meeting in Cairo to discuss the recent steep fall in the price of oil.

The price of a barrel of oil has tumbled to below $55 after peaking at a record $147 dollars in mid-July.

Cartel members have lost hundreds of billions of dollars as global demand for oil drops in the face of the economic downturn.

But ministers have dampened expectations that a cut in production would be announced this weekend.

Opec member Venezuela favours a cut in output of a million barrels a day to try to boost prices.

But several oil ministers have suggested an announcement at these informal talks in Cairo is unlikely and that a meeting in Algeria in December will be more important.

The Iranian Oil minister, Gholam Hossein Nozari, said a cut may be announced at the Opec meeting in Algeria on 17 December.

"Here we will prepare some data and maybe the final decision will be in Algeria," he said.

His view was backed up by the Qatari Energy Minister, Abdullah Attiyah, and the Saudi Oil Minister, Ali Naimi.

"This meeting is a preparatory meeting for a more resolved and firm decision in Algeria," Mr Naimi said on Saturday.

Balancing demand

Falls in demand in the US, the world's top energy consumer, and other industrialised countries, have helped drive prices down from a record peak of more than $147 a barrel.

Opec, which accounts for 40% of global oil production, cut output by 1.5 million barrels a day last month, but the move failed to stop prices from declining.

While cartel members have not ruled out making another output cut, some say the impact of the existing cuts still have to be felt.

"Combined with weakening non-Opec supplies, the projected...output curtailment suggests that the oil market could actually tighten moving into 2009," Barclays Capital said in a research note.

Wal-Mart worker dies in sale rush

A shop worker has died after being knocked to the ground by bargain-hunters who stormed into a superstore in New York's suburbs as it opened.

The 34-year-old man, along with several other workers and shoppers, was trampled in the rush at the Wal-Mart store in Valley Stream, Long Island.

US stores opened early and offered steep discounts on Friday.

The day after the Thanksgiving holiday is seen as the start of the Christmas shopping season.

It is regarded as an important test of how willing consumers are to spend.

Crowds of shoppers turned up at dawn at stores across the US to snare the best deals.

Wal-Mart, along with electronics retailer Best Buy and department stores Kohl's and Macy's, opened their doors at dawn.

Toys R Us offered up to 60% discounts from 0500 to 1000.

Several major retailers indicated that crowds were at least as large as last year's, but deep discounts are likely to hurt retailers' profit margins.

Many retailers have suffered as the US economy nosedives although value chains like Wal-Mart have fared better.

US retail sales recorded the biggest monthly decline since 1992 in October as consumers cut back on spending.