Japan in surprise economy boost

Industrial output in Japan rose in March for the first time in six months, according to government figures.

Production rose by 1.6% in March compared with February, after months of dramatic decline.

The larger-than-expected increase is being seen as a sign that the country's plunge in production and exports may be nearing an end.

The world's second biggest economy has been hit hard by the global downturn, sliding into a sharp recession.

These are grim times for Japan's economy but the latest figures from the government show a small improvement.

But the new figures are a sign that the strategy of Japan's manufacturers - to mothball production lines, reduce shifts and lay off staff - may be working.

With stockpiles of unsold goods diminishing some factories are starting to come back to life.

Japan has been hit badly by the downturn because worldwide demand has collapsed for its cars and electronics.

The increase follows figures earlier this month showing that exports have also risen slightly, although shipments are still running at just over half the levels of a year ago.

A government survey of manufacturers showed they expect industrial production to continue to rise, by 4.3% during April and by 6.1% in May.

Chrysler approaches key deadline

Chrysler is just hours away from a deadline that could force it to file for bankruptcy protection.

Continuing efforts to restructure the business focus on persuading its main lenders to write off its debts, but reports say these talks have stalled.

Chrysler is also continuing discussions to form an alliance with Fiat, another key demand of the US government.

President Barack Obama said Chrysler could emerge stronger afterwards if a bankruptcy filing proved necessary.

"It would be a very quick type of bankruptcy and they could continue operating and emerge on the other side in a much stronger position," he said.

Government assistance

The US government has told the carmaker it would be given a further $6bn (£4bn) of vital state loans if the restructuring is completed by 30 April. So far Chrysler has managed to persuade its main union to back the restructuring and agree a cost-cutting deal.

The sticking point remains whether the carmaker can persuade its main lenders to accept $2bn in cash in exchange for writing off all of Chrysler's $6.9bn secured debt.

The company, the smallest of the US "Big Three" carmakers after General Motors (GM) and Ford, secured a $4bn loan from the US government in January, and has since gained $500m more.

GM has also received multi-billion government loans. While Ford has yet to require any money, the government has agreed to give it financial support, should it be needed.

All three firms have seen sales slump in their home market as the recession has intensified.

Rupee bounces back by 47 paise vs dollar

The Indian rupee on Wednesday bounced back by 47 paise to close at 50.04/05 against the dollar, in the midst of firm equity markets and a weak US currency overseas.

Fresh capital outflows amid dollar selling by foreign banks also helped the rupee recovery.



At the Interbank Foreign Exchange (Forex) market, the local currency resumed higher at 50.26/28 a dollar and moved up further to settle the day at 50.04/05, a rise of 0.93 per cent over its previous close of 50.51/52 per dollar.



It moved in a range of 50.04 and 50.30. In the last two sessions, the rupee had dropped by 71 paise or 1.43 per cent.



A sharp recovery in the Indian equity markets mainly helped the rupee rise.



The dollar's weakness against its major rivals also boosted rupee sentiment, a forex dealer said, adding that foreign banks were seen selling dollars on expectations of further fall in the American currency.

GM to cut a further 21,000 jobs

General Motors (GM) is to cut a further 21,000 US jobs this year and phase out its Pontiac brand, as it aims to meet a 1 June deadline to revamp its business.

GM has to complete its restructuring by that date to gain the extra multi-billion dollar government loans it needs to avoid bankruptcy protection.

The firm also said it hoped to halve its debts by persuading bondholders to swap $27bn (£19bn) of bonds for shares.

GM also wants the government to swap half its current loans for a 50% stake.

The government has so far given GM $15.4bn in loans.

Falling sales

GM said it also wants its main union, the United Auto Workers, to accept shares in the firm in exchange for cancelling 50% of the $20bn the firm must pay into a union-run healthcare trust. The carmaker said it would phase out the Pontiac brand by the end of the year in order to focus on four brands in the US - Chevrolet, Cadillac, Buick and GMC.

GM also said it would reduce the number of its US dealerships.

After all the proposed changes, existing GM shareholders would own only 1% of the firm.

GM has already cut 10,000 US jobs this year, announced in February. Following the completion of the latest 21,000 reductions, its American workforce will be reduced to 40,000.

'New path'

Like US rivals Ford and Chrysler, GM has seen sales fall sharply in its core home market in recent years, a decline that has intensified as the recession has continued.

The White House's car industry taskforce said it welcomed GM's latest announcements, but added that the government had yet to make a decision regarding the carmaker's proposal that it exchange half the current loans for a 50% stake in the firm.

"The interim plan that GM laid out in this filing reflects the work GM has done since 30 March to chart a new path to financial viability," it said in a statement.

"We will continue to work with GM's management as it refines and finalises this plan and with all of GM's stakeholders to help GM restructure consistent with the president's commitment to a strong, vibrant American auto industry."

Japan expects slump in economy

Japan says it expects its economy to shrink by 3.3% over the coming year - the country's worst slump in at least half a century.

The news comes as the government prepares to present a 15.4 trillion yen ($159bn; £109bn) economic stimulus plan to parliament.

The projected downturn for the 2009 fiscal year would be the worst since Tokyo began measuring growth in 1955.

It follows an estimated decline of 3.1% in 2008, the government said.

Finance Minister Kaoru Yosano said the world's second biggest economy remained vulnerable to fresh turmoil overseas.

"Exports have plunged much harder than our expectation," he said.

Government estimates of the decline have been revised radically downward, in what officials described as quickly changing conditions.

"The global economic crisis and economic downturn is increasing in severity, and Japan's export market is rapidly shrinking," the Cabinet Office said in a statement.

Microsoft suffers first sales dip

Microsoft has said sales in the first three months of 2009 fell 6% from the previous year - its first quarterly drop in 23 years as a public company.

The world's largest software maker said profit dropped by 32% to $2.98bn (£2bn). Sales slipped to $13.65bn.

Microsoft makes most of its profit selling the Windows operating system and business software such as Office.

However demand has been hit by falling sales of personal computers as consumers and businesses trim spending.

Microsoft chief executive Steve Ballmer told the BBC World Service that its results had been "impacted" by the downturn in the world economy.

He also admitted the company would have had less total sales "than we would have had before the downturn". We expect the weakness to continue through at least the next quarter," said the firm's chief financial officer, Chris Liddell.

Microsoft - which became a public company in 1986 - has been looking at ways of cutting costs.

In January, it said it would cut up to 5,000 jobs over the next 18 months, including 1,400 immediately.

Oil prices lower in Asian trade

Oil prices were lower in Asian trade on Friday, below USD 50 a barrel, after posting modest overnight gains, with the economic downturn remaining a concern for investors.

New York's main futures contract, light sweet crude for June, fell 32 cents to USD 49.30 a barrel, while Brent North Sea crude for delivery in June was down 43 cents to USD 49.68.

Analysts said the market will remain volatile as countries worldwide seek a way out of the economic slump, which has weakened energy demand and pulled down oil prices.

The International Monetary Fund on Wednesday forecast a severe global contraction this year, sharply downgrading its already bleak outlook from earlier in the year.

It projected the global economy would shrink 1.3 percent in 2009, saying the financial crisis was proving more entrenched than expected.

Ford loss smaller than expected

Carmaker Ford has reported better-than-expected results for the first quarter of 2009 and says it does not intend to take government aid.

While it still reported a loss for the quarter, of $1.4bn (£0.96bn), this was better than analysts had forecast.

The news sent Ford's shares up more than 16% in early trading.

Carmakers across the world have been struggling to cope with a massive slump in demand for cars as consumers hold back on making expensive purchases.

Two of Ford's biggest rivals, General Motors and Chrysler, have taken billions of dollars in US government aid and still face bankruptcy.

The latest results show that Ford has $21.3bn in cash and reiterate that, "based on current planning assumptions, it does not expect to seek a bridge loan from the US government".

World Bank to invest USD 45 bln in infrastructure

The World Bank said on Friday that it would invest USD 45 billion in infrastructure over the next three years to lay a foundation for a "rapid recovery" from the global economic crisis.

Robert Zoellick, president of the 185-nation development lender, said in a statement that the investments "can provide the platform for job creation, sustainable economic growth and overcoming poverty, and help jump-start a recovery from the crisis."


The World Bank said a new Infrastructure Recovery and Assets Platform (INFRA) will provide USD 45 billion in infrastructure lending over the next three years, an increase of USD 15 billion over the three years preceding the crisis.


The bank also announced an increase in its support for agriculture to USD 12 billion over the next two years, from USD four billion in 2008, "to help ensure vital food security."


"Increases over this two-year period include a near doubling in agricultural support to Africa from USD 450 million to USD 800 million, and to Latin America from USD 250 million to USD 400 million, while supporting more than USD one billion in new projects in agriculture and rural development in South Asia," it said.

Gloomy report hits Toyota shares

Toyota, the world's biggest car maker, is considering making cuts to its full time Japanese workforce for the first time since 1950, it has been reported.

Its comes as domestic production is set to fall below three million vehicles for the first time in three decades, said the Yomiuri newspaper in Japan.

Toyota's shares fell 3.9% to 3,720 yen ($37.87;£26) in Tokyo after the report.

The firm said it had yet to forecast its sales and production data for the current financial year.

Toyota has already cut production in the US, Canada, Mexico and the UK.

Strong yen

The firm has been introducing a range of measures - including pay cuts, voluntary redundancies, bonus cuts and shorter hours - to reduce costs.

It has already said it would post the first group-wide annual operating loss in its 70-year history, when its results are announced on 8 May.

Car companies are cutting back as a global slowdown reduces demand, and Toyota has been particularly hit by falling US sales.

Toyota expects to incur a net loss of 350bn yen ($3.6bn; £2.47bn) for the fiscal year ended March 2009.

The carmaker made a record 1.72 trillion yen profit in the previous financial year, but like other Japanese exporters it has been hit by a strong yen which has diluted its earnings overseas.

Toyota's global production for February were down 49.6% on a year earlier to 434,179 vehicles.

Meanwhile, domestic output for the month fell 56.4% on the year before to 207,743 vehicles.

Sensex falls by over 81 points

In volatile trading, the Bombay Stock Exchange benchmark Sensex on Tuesday fell by over 81 points in tandem with weak global trends but the central bank's reduction of key interest rates averted a major fall.

The Sensex, which touched an intra-day high of 11,068.82, dipped to a low of 10,764.08 points before ending with a loss of 81.39 points at 10,898.11.


Similarly, the 50-share National Stock Exchange index Nifty fell by 11.80 points at 3,365.30 after moving between 3,414.70 and 3,309.35 points.


Initial gains were wiped off after the Asian stock markets recorded heavy losses on renewed concerns over global economic weaknesses.


The day's losses were narrowed because of funds buying in stocks of interest rate-sensitive realty and fast-moving consumer goods after the Reserve Bank of India cut key interest rates to create liquidity in the market.


Selective buying by foreign funds in healthcare and teck stocks arrested the falling trend.


The major contributors to the weakening market were shares in banking, auto, capital goods, metal, IT, consumer durables, power, PSUs and refineries.

Debt overshadows US bank's profit

Concerns about debt levels at Bank of America have overshadowed its better than expected profits for the first three months of 2009.

The US's largest bank set aside $13.4bn (£9.2bn) to cover credit losses, from the fourth quarter's $8.5bn.

Its shares sank 24% and the news dragged other banking stocks lower.

This was despite net income soaring to $4.2bn in the first three months of 2009 from $1.2bn a year earlier, beating analysts expectations.

Its results were inflated by its purchases of Merrill Lynch, which added $3.7bn in net income, and Countrywide, which boosted its mortgage arm. Analysts said investors were looking beyond the bank's profit to the continuing concerns about the impact of the financial crisis on the banking system.

This sentiment pulled the Dow Jones index lower, with a knock-on effect on European markets.

Mexico granted $47bn IMF credit

The International Monetary Fund has formally approved a $47bn (£32bn) line of credit for Mexico.

It is the first country to get the credit under a new fast track scheme designed to help developing nations cope with the global economic crisis.

Several Eastern European countries are also seeking similar credit lines.

Mexico has said it does not intend to use the money, but applied for it as a precaution in the event of further deterioration in global markets.

Mexico, which sells 80% of its exports to the United States, has been hit hard by the global recession.

Industrial output last month fell by over 13%, the sharpest decline in 14 years.

The Mexican peso has also been on a generally downward path, falling around 20% against the dollar during the last year.

Applying for an IMF loan was once seen as a sign of desperation for developing countries.

News that the lender of last resort was stepping in would often be the final blow to their struggling economies.

But the Mexican government and the IMF are keen to stress that that there is no stigma attached to this particular type of loan, which is designed to support countries seen as strong economic performers during the global credit crisis.

Since President Felipe Calderon publicly announced his country was requesting the credit just before the G20 summit in London earlier this month, the peso and the Mexican stock market have strengthened.

India to grow at over 7 pc in the current fiscal: PMEAC

Prime Minister's Economic Advisory Council (PMEAC) said that it expects the country's economy to grow at over seven per cent in the current fiscal as it has already started showing signs of recovery.

"Seven per cent plus is what my 2009-10 overall forecast is...I think it has already started recovering in my own assessment," PMEAC Chairman Suresh Tendulkar told on the sidelines of a conference on broadband in New Delhi on Friday.


He further said it expects rebound in the economy after September as the worst was over.


"I have been maintaining that the worst is already over, (I expect) good recovery after September," Tendulkar added.


Asked if the contracting industrial production worried him, he said the revised industrial production numbers were higher than the provisional ones, so it did not bother him much.


Despite three stimulus packages announced by the government, the Indian economy grew by 5.3 per cent in the third quarter of the last fiscal, its lowest rate in over five years, against a whopping 8.9 per cent a year ago.


In the first nine months of last fiscal, the economy grew by 6.9 per cent.



For whole of 2008-09, the advance estimates of Central Statistical Organisation (CSO) pegged the economic growth at 7.1 per cent, which seems a tough task in the wake of dismal industrial growth numbers.



On account of slackening demand hitting Indian trade more than anticipated, PMEAC lowered the country's growth estimate to 6.5-7 per cent from the earlier estimate of 7.1 per cent for 2008-09.


To boost the economy, the government came out with three stimulus packages in the month of December, January and in the interim budget, providing incentives to various sectors.


The Reserve Bank also took monetary easing measures by infusing more than Rs 4 lakh crore since October.


However, industrial growth turned negative in October, December and in January.


Besides, exports declined for the fifth consecutive month in February after it had a good run in the first half of 2008-09, growing by over 30 per cent.


The orders got cancelled and exporters found it difficult to get new bookings, thereafter, with demands slackening overseas due to global financial crisis.


As a result, from October onward, exports have been on a decline, with export in February falling by 21.7 per cent, the lowest in 13 years.

World's largest airline, Delta closes Indian call centers

America's Delta Airlines, the world's largest airline, has announced to close down its Indian call centers, a major setback to India's flourishing call centers which provide employment to thousands of youths across the country.

Airlines officials said the decision is driven by poor customer feedback.

Delta's call in India was handled by a call center of Wipro Ltd.

Media reports said Richard Anderson, the airline's chief executive, told employees in a recorded message on Thursday night that Delta had stopped forwarding calls to India in the first quarter and would be bringing the function back in-house in the US.

"The customer acceptance of call centers in foreign countries is low and our customers were not shy about letting us have that feedback," Anderson said.

A Delta spokesman, was quoted as saying in the media that the airlines has hired about 4,500 call-center workers in the US after it ended its current outsourcing operations in India.

However, Delta's call centers in Jamaica and South Africa would continue, the spokesman said.

In February, the United Airlines too had announced to end its 165 overseas call center jobs. After the merger of the North West Airlines, Delta is now the world's largest carrier.

It had sent its call centers to India in 2002 to save money, which at that time was estimated to be about USD 25 million a year. (BJ-18/04)

Citigroup results beat forecasts

Citigroup has reported its first quarterly net profit in nearly two years, the latest US bank to see an improvement in its performance.

It made a profit of $1.6bn (£1.1bn) compared with a loss of $5.1bn a year earlier. Revenues rose 99% to $24.8bn.

However, once dividend payments to preferred shareholders were taken into account, it suffered a near-$1bn loss.

Shares in Citigroup initially rose, before falling into negative territory, closing 9% lower at $3.65 in New York.

The news, together with better than expected results from conglomerate General Electric, boosted markets as Wall Street's winning streak extended to a sixth week.

Among banks, shares in Bank of America, due to post its quarterly results on Monday, gained 2.5%.

"We had our best overall quarter since the second quarter of 2007," chief executive Vikram Pandit said.

'Tentative hopes'

Citigroup made a pre-arranged $2.7bn dividend payment to preferred shareholders, and said it had made a $7.3bn credit loss from bad loans.

However, it gained from an accounting rule that allowed the bank to post a one-time gain of $2.5bn. The bank also said it had seen an improvement in trading activity and it had cut costs.

Citi's results came hot on the heels of positive earnings reports from Wells Fargo, Goldman Sachs and JP Morgan.

"Of course the fact that all of these have had such a strong first quarter has led to some tentative hopes that perhaps the banking sector crisis is bottoming," said Richard Hunter, head of UK equities at Hargreaves Lansdown.

Challenges remain

Although Citi reported a profit, its losses in credit cards and consumer loans both increased sharply, the BBC's Karen Nye in New York pointed out.

"Even the strongest banks have admitted to a few weak spots," she added.

Citigroup has received $45bn in government aid from the Troubled Asset Relief Program (Tarp).

The bank has also cut the size of its workforce to 309,000 people from 374,000 at its peak.

"It was slightly better than anticipated, but we probably underestimated how much government support would be a wind at their back," said Michael Holland, founder of Holland & Co.

But Citi's problems are not over yet, he added.

"There's no doubt the challenges are still enormous for Citigroup."

Oil prices rise in Asian trade

Oil prices rose in Asian trade on Thursday, buoyed by Wall Street's overnight rally, analysts said.

New York's main futures contract, light sweet crude for delivery in May, gained 97 cents to USD 50.22 a barrel. Brent North Sea crude for June delivery rose 89 cents to USD 53.33.



Oil prices are being lifted by Wall Street's rally as investors ignore the bigger-than-expected rise in US crude

stocks which is seen as an indicator of weak demand, analysts said.



"I think it's a bit of a follow-up effect from a rally in Wall Street," said Jason Feer, Asia Pacific vice president of energy market analysts Argus Media in Singapore.



The US Department of Energy said on Wednesday that crude stocks surged 5.6 million barrels in the week ending 10th April to 366.7 million barrels, the highest level since September 1990.



Crude inventories are now 16.5 per cent higher than at the same stage last year.



The Organisation of the Petroleum Exporting Countries (OPEC) cut its estimate for world crude demand again, arguing that a "devastating contraction" in consumption would keep prices under pressure in the months ahead.



"In the coming months, the market is expected to remain under pressure from uncertainties in the economic outlook, demand deterioration and the substantial overhang in supply," OPEC said Wednesday in its latest monthly report.

Pound rises to three-month high

Sterling rose above $1.50 on Wednesday, its highest level against the dollar since mid-January, as a UK housing survey raised hopes of a recovery.

It also rose against the euro, hitting a six-week high of 1.1372 euros.

Sterling received a boost after a survey of chartered surveyors suggested that interest from home-buyers had started to gain "real momentum".

The pound rose as high as $1.5037, but later fell back below the $1.50 mark to trade at $1.4986 in afternoon trading.

Sterling touched its lowest levels in 24 years in mid-January, nearing $1.35 as the depth of the UK's recession became clear.

A survey from the Royal Institution of Chartered Surveyors (Rics) found that new inquiries in the housing market had increased for the fifth consecutive month in March.

However, the study also found that surveyors had sold on average fewer than 10 homes each over the past three months.

"The strong Rics survey overnight has boosted sterling," Lee Ferridge, a currency strategist at State Street, told the Reuters news agency.

"It is higher than it was 12 months ago and people are seeing tentative signs of green shoots in the UK housing market," he added.

Swiss bank UBS to cut 8,700 jobs

Switzerland's biggest bank, UBS, has said it will seek to cut costs by shedding 8,700 jobs by next year.

The news came as the bank announced it had lost about 2bn Swiss francs ($1.75bn; £1.2bn) in the first three months of 2009.

UBS has been one of the biggest banks hit by exposure to the sub-prime loans crisis in the US and ensuing turmoil.

"Unfortunately I am not able, as yet, to offer you any good news," said chief executive Oswald Gruebel.

Later on Wednesday, the Swiss President told the BBC that the former UBS management had taken too many risks, but that he was confident the new team would restore the bank's reputation as the backbone of Swiss financing.

UBS has recently replaced both its chairman and chief executive.

Weak exports hit China's growth

Annual growth in China's gross domestic product (GDP) slowed in the first quarter of 2009 to 6.1%, the National Bureau of Statistics has announced.

This is the weakest growth since quarterly records began in 1992, but some analysts see signs of a recovery.

Growth was 6.8% in the last quarter of 2008, but the first quarter GDP figure dropped as exports fell 17% in March.

China's government has said it is determined to achieve annual growth of 8%, and to expand its domestic demand.

"There's little the Chinese government can do to help key markets for Chinese products in the US and Europe recover," said the BBC's Chris Hogg in Shanghai.

"That's why it's focussing on trying to stimulate domestic demand."

There has been a recognition among Chinese state officials that too sharp an economic slowdown could lead to growing unemployment and may fuel social unrest.

'Pressure'

Announcing the GDP figure, the National Bureau of Statistics (NBS) said that export demand had dropped sharply, cutting into company profits, reducing government revenues and raising unemployment.

"The national economy is confronted with the pressure of a slowdown," an NBS statement said.

China experienced double-digit growth from 2003 to 2007, and recorded 9% growth in 2008.

Analysts said the first-quarter drop in growth was in line with expectations.

But other data offered by the government suggested a tentative recovery may already be under way.

Industrial output expanded 5.1% in the first quarter. It was up 8.3% year-on-year in March, against 3.8% in January and February.

Fixed asset investment on items such as new factories and equipment was up 28.6% in March from 26.5% in February.

Spending on property development grew by 4.1% in the first quarter, and retail sales remained strong with a 14.7% growth during March.

'Surge in investment'

"Most of the indicators are better than earlier market expectations, although the annual GDP growth in the first quarter is a historical low," said Xing Zhqiang, analyst at China International Capital Corporation in Beijing.

"We expect that the most difficult time for China's economy has passed, as the surge in investment has partly offset the negative impact from declining exports."

China has started to implement a 4 trillion yuan ($585bn, £390bn) stimulus package to counter the impact of the global slowdown, and this package has been seen as helping to spur lending in the first three months of the year.

"The overall national economy showed positive changes, with better performance than expected," the NBS said.

It said that urban per-capita incomes were up 11.2% from a year earlier in real terms and that rural per-capita incomes were up 8.6%.

The consumer price index (CPI), China's main gauge of inflation, fell 0.6% in the first quarter of 2009 from a year earlier, according to the bureau.

China offers funds to boost Asean

China has unveiled plans to establish a $10bn (£6.8bn) investment fund for south-east Asian countries.

It has also offered credit of $15bn to the Association of South-East Asian Nations, or Asean.

Chinese Prime Minister Wen Jiabao had planned to announce the fund at the cancelled Asean summit this weekend.

Asean was set up in 1967 in part to counter influence from communist China but has since become a vehicle for close ties.

The collapse of the Asean summit, scheduled in Pattaya, Thailand, this weekend, delayed the conclusion of a key investment agreement between China and the economic bloc.

That deal is intended to create the world's largest free trade area, covering nearly two-billion people.

China funds

China's Foreign Minister, Yang Jiechi, announced the new funding plans in Beijing to a gathering of envoys from the 10 members of Asean - Indonesia, Singapore, Malaysia, Thailand, the Philippines, Brunei, Burma, Laos, Cambodia and Vietnam.

The $10bn investment fund was designed for cooperation on infrastructure construction, energy and resources, information and communications, China's state news agency Xinhua quoted Mr Yang as saying.

Over the next three to five years, China planned to offer $15bn in credit, including loans with preferential terms of $1.7bn in aid for cooperation projects.

China also planned to offer 270 million yuan ($39.7m) in special aid to Cambodia, Laos and Myanmar to meet urgent needs, inject $5m into the China-Asean Cooperation Fund, and donate $900,000 to the cooperation fund of Asean Plus-3, the side grouping of Asean plus China, Japan and the South Korea.

Oil prices slide in Asian trade

Oil prices eased in Asian trade on Monday as traders took profits from last week's strong finish before the start of the Easter holiday weekend, analysts said.

New York's main futures contract, light sweet crude for May delivery, shed 46 cents to USD 51.78 a barrel.

Brent North Sea crude for delivery in May fell 11 cents to USD 53.95. The contract for May delivery will expire Wednesday.


Oil and stock markets were closed Friday for the Easter weekend holiday.

"After a strong finish, we now see a bit of profit-taking. After all, it remains uncertain whether we have reached a bottom on the fundamentals of oil," said Victor Shum, senior principal of energy consultants Purvin and Gertz in Singapore.


Crude oil prices were boosted Thursday by a strong Wall Street rally ahead of the Easter holidays due to US banking giant Wells Fargo's projection of a "record" three-billion- dollar profit in the first quarter, which sent shares of major banks soaring.



The rally might carry forward to this week, when earnings reports of other banks are due to be released, added Shum.


"If the (earnings reports) are like Wells Fargo's, that will continue to provide some positive news for the oil market," he said.

UK moves towards car scrap scheme

The government is likely to introduce an incentive scheme for car owners to scrap old vehicles in exchange for new ones

The move would probably involve a payment of £2,000 to trade in cars that are a certain number of years old.

The controversial plans are designed to boost demand for new cars and help struggling carmakers who are suffering during the recession.

A similar scheme in Germany has seen demand for new cars rise dramatically.

France and Italy have also introduced so-called car scrappage schemes to boost their beleaguered car industries.

Details of the UK scheme are likely to be announced in the Chancellor's budget on 22 April
"A scrappage scheme will provide the incentive needed and the evidence is clear that schemes already implemented across Europe do work to increase demand," said Paul Everitt at the Society of Motor Manufacturers and Traders (SMMT).

Sensex tests 11,000 in longest winning streak in 18 months

The BSE benchmark Sensex, in its longest winning streak in over 18 months, on Monday tested the 11,000 level on aggressive buying by funds on the optimism that govt stimulus packages might help revive global economies.

The Sensex, which regained the six-month high level of 11,000 points during the day, ended with a gain of 163.36 points, or 1.51 percent, at 10,967.22. It moved between 11,069.54 and 10,800.84 points.

The index rose over 14 percent in the last seven trading sessions, and is set for its longest run of gains since 3rd October 2007, when a succession of gains for 11 days ended.

The 50-share National Stock Exchange index Nifty rose by 40.55 points, or 1.21 percent, to 3,382.60. It moved between 3,417.80 and 3,334.15 points during the day.

Marketmen said firming trends overseas continued to support trading sentiment in domestic markets. They said Japan doubled stimulus spending and Chinese lending made a record jump.

The MSCI Asia Pacific Index rose 0.4 percent to 88.34, the highest since 12th January.

Trading sentiment turned bullish after Satyam Computer shot up 3.61 percent to Rs 48.85, after touching a high of Rs 54, ahead of the announcement of the highest bidder for a 51 percent stake in the firm on Monday.



Larsen and Toubro and Tech Mahindra, which bid for a controlling stake in Satyam, fell ahead of the announcement. L&T fell 0.59 per cent to Rs 824 while Tech Mahindra gained 13.71 per cent to Rs 359.45.

The metal sector index gained the most, by 5.49 per cent to 7,174.92, as barring one, all the 14 sectoral stocks ended with hefty gains on fund buying backed by reports of a firming trend in base metal prices in overseas markets.

Brokers said an improvement in global economies would boost infrastructure, which includes steel and cement, and spur investor demand for higher yielding commodities.

The banking index was the second-best performer, rising 5.07 per cent to 5,301.15, as 16 stocks in the segment rose on all-round buying while two closed lower.

ICICI Bank climbed 4.49 per cent to Rs 415.55, HDFC Bank by 4.84 per cent to Rs 1,096.70 and State Bank of India by 6.80 per cent to Rs 1,217.90.



The realty sector rose by 4.14 per cent to 2,125.76 after shares of DLF Ltd, Parsvnath, Shobha Developers and Indiabull Realestate recorded handsome gains.

The PSU sector index rose by 3.16 per cent to 5,876.29, auto index by 2.73 per cent to 3,384.74, capital goods index by 1.64 per cent to 7,492.30, power index by 1.63 per cent to 2,059.28, healthcare index by 1.49 per cent to 2,978.05, oil and gas index by 1.32 per cent to 8,083.22 and teck index by 0.01 per cent to 2,031.36.

However, consumer durables, IT and FMCG fell on profit selling by funds.

Tech Mahindra emerges highest bidder to acquire Satyam

Ending the three-month ordeal of about 50,000 employees, Tech Mahindra on Monday emerged as a top bidder with an offer of Rs 58 a share for a 31 per cent stake in beleaguered Satyam Computer, beating a strong rival L&T.

Tech Mahindra would acquire the stake in an all-cash deal, followed by an open offer for a 20 per cent stake to take management control of the company.



No immediate comment could be obtained from either Tech Mahindra or L&T.



After evaluating the bids, the government-appointed board of Satyam Computer on Monday announced that "its Board of Directors has selected Venturbay Consultants Private Limited, a subsidiary controlled by Tech Mahindra Limited as the highest bidder to acquire a controlling stake in the Company, subject to the approval of the Hon'ble Company Law Board."



The Company was administered by a new Board appointed pursuant to the orders of the CLB dated 9th January 2009.



The process to select a strategic investor has reached this significant stage within three months of the new Board s first meeting.



"On behalf of all Satyamites and their families, we congratulate Tech Mahindra on being the highest bidder. The selection of the highest bidder, in a fair, open and transparent process, signals a new stage for the Company in its progress towards stabilization and growth," Satyam said in an announcement.

2,100 Infosys employees face axe

With companies keen on maximum utilisation of employees and low tolerance to poor performance in the backdrop of global economic turmoil, nearly 2,100 employees in software firm Infosys have faced the axe.

"Some of these employees have been asked to go while some have left on their own," V Balakrishnan, CFO of the city-headquartered Nasdaq-listed company, said on Saturday.


Prior to asking the employees to leave, they were put on a performance improvement course and those who showed no improvement were asked to leave while some others quit, he said.


"Tolerance to poor performance is very low given the current economic scenario," said Infosys CEO Kris Gopalakrishnan.


Usually, the employees who showed poor performance were given some more time to improve themselves, but this time there had been no such consideration, he said.


Both the officials said the sacking was part of the annual routine, which usually formed five per cent of the total number of employees but this time it was much lower.


Some of the employees had been "outplaced", Kris said, which refers to the firm hiring the services of placement agencies to help the employees to get placements in other firms.


Infosys has a workforce of 1,05,000, including trainees.

Microsoft ties up with HCL to outsource jobs to India

Computer giant Microsoft has signed a USD 170-million five-year contract with India's HCL for outsourcing work for its online business productivity suite.

HCL will provide 600 employees to support the contract and nearly 250 workers have already begun work on the project.Microsoft has not said whether this contract is to replace any existing agreement it has in India, or if this deal is an expansion of its current outsourcing scope.

Despite the recent job cuts, Microsoft has been expanding its online services business.Also, has recently announced plans to make its Business Productivity Online Suite, a software-as-a-service offering, available for trial and purchase in 19 countries

Japan PM unveils $150bn stimulus

Japan has formally unveiled its record $150bn (£105bn) stimulus package as it seeks to revive its flagging economy.

Prime Minister Taro Aso said the plan - worth about 3% of its gross domestic product - aimed to protect livelihoods and to foster future growth.

The 15.4 trillion yen package includes measures to boost fuel-efficient vehicles and consumer electronics.

Japan's economy has been battered by a collapse in exports and is facing its deepest recession since World War II.

Japan's ruling coalition plans to put the stimulus package before parliament by the end of the month.

'Opportunity'

"We are implementing a resolute policy in the form of economic crisis measures in order to protect the livelihoods of the people," Mr Aso told a news conference.

"The first of our objectives is to prevent the economy from falling through the floor. Another objective is to give a sense of security to the people," he said.

This is the government's third stimulus plan in the past year. It comes on top of 12tn yen of spending in earlier packages, as well as tax breaks and cash handouts.

It also creates a financial safety net for temporary workers, boost struggling firms and support regional economies.

Mr Aso said the new steps would be partially funded by issuing new government bonds.

Japan has been worst-hit among advanced nations by the global economic downturn.

Its exports have halved amid an unprecedented collapse in worldwide demand for the cars and electronic gadgets the country produces.

The government has a long-term goal to shift the economy's focus from exports to domestic sectors poised for major growth.

It wants to be a world leader in energy efficient technology and to bolster care for its huge and growing elderly population.

The aim is to create as many as two million jobs in the next three years.

Shares higher

On Thursday, shares in Tokyo gained as details of the stimulus plan emerged.

Japan's benchmark Nikkei 225 index closed at a three-month high, rising 3.74% to finish at 8,916.06.

Shares in carmakers and solar power-related firms gained.

"This may contribute to GDP for a year," said Masamichi Adachi, an economist at JP Morgan. "The consequences over the longer term are negative as we are piling up more of a fiscal burden. Bond issuance will go up from here on."

The package came out as figures showed Japan's machinery orders unexpectedly rose in February thanks to gains in the services sector.

Obama sees 'hope' for US economy

US President Barack Obama has said he sees "glimmers of hope" in the economy, but warned that the system remained under "severe strain".

Speaking after a meeting with his top economic advisers, he said there was still "a lot of work to do".

Mr Obama promised more action on the economy in the coming weeks.

He said he and his team had discussed the stability of the financial system, the housing market and plans to help banks clear their books of bad assets.

'A lot of hardship'

Mr Obama was speaking after a meeting at the White House with top strategists including Treasury Secretary Timothy Geithner and Federal Reserve chief Ben Bernanke.

He told journalists afterwards: "We're starting to see progress.

"If we stick with it, if we don't flinch in the face of some difficulties, then I feel absolutely convinced that we are going to get this economy back on track."

The president cited increases in loans to small businesses, tax-cut cheques going out and new investments in infrastructure and energy projects as signs of hope for the economy.

But he added a note of caution, saying that the measures taken had to "translate into economic growth and jobs and rising income for the American people."

"And right now we're still seeing a lot of job losses, a lot of hardship, people finding themselves in some very difficult situations," he said.

"We still have a lot of work to do, and over the next several weeks you'll be seeing additional actions by the administration."

Oil jumps on strong share prices

The price of oil has risen sharply after big rises in US stock markets fuelled cautious optimism about the global economic outlook.

The price of US light crude rose $2.74, or 5.5%, to $52.12 a barrel. London Brent oil climbed $2.50 to $54.09.

The price rises were sparked by a sharp rally on Wall Street, where shares jumped by 2.9%, and by better than expected sales by leading US retailers.

Light trading in oil in the run up to Easter contributed to the sharp rise.

'Economic hope'

"A lot of little things are giving investors hope that maybe the economy has seen the worst," said Andrew Lebow at MF Global.

One of the biggest banks in the US, Wells Fargo, announced on Thursday that it expected to report record profits of $3bn (£2bn) for the first quarter of this year.

This drove shares on Wall Street higher.

Also on Thursday, The International Council of Shopping Centers (ICSC) announced that retail sales in March had fallen by 2.1% compared with a year earlier, less than many analysts had expected.

"People are buying oil when they see signs of economic hope," said Phil Lynn at Alaron Trading.

Banks drive US stocks up sharply

Big gains in banking stocks have pushed Wall Street sharply higher after one of the biggest banks in the US said it would make record profits this quarter.

Wells Fargo announced on Thursday it would make a profit of $3bn (£2bn) in the first three months of 2009.

The news sparked a significant bounce in financial stocks, led by Bank of America, which jumped 35%, and Wells Fargo itself, which climbed 32%.

As a result, the Dow Jones index rose 246 points, or 3.1%, to 8083.4.

'Record profits'

Other financial stocks also climbed sharply.

American Express closed up 19.8%, JP Morgan Chase climbed 19.4% and Citigroup gained 12.6%.

European markets also closed up, with the UK's FTSE 100 index rising 1.5%, Germany's Dax gaining 3.1% and France's Cac 40 climbing 1.8%.

The surge on Wall Street was largely down to the Wells Fargo announcement.

"The fact that Wells Fargo can have record profits despite the troubles facing the banking system tells you something. It's very good news," said Rick Campagna at 300 North Capital.

The troubles of the banking sector are seen as one of the root causes of the global economic downturn.

'Outstanding franchise'

Governments all over the world are focusing efforts to stimulate their economies on banks, primarily by trying to get them to start lending again.

Some banks have been nationalised, while governments have taken large stakes in others.

Investors were, therefore, delighted to hear that one of the biggest banks in the US is on course to record profitability.

Wells Fargo said it expected revenue of $20bn for the first quarter of this year, translating into "another quarter of double-digit revenue growth" of 16%.

Part of the strong performance was due to the bank's acquisition of Wachovia, which was the fourth-largest US bank, after it almost collapsed last year.

"Wachovia's outstanding franchise has proven to be everything we thought it would," Wells Fargo said.

Markets were also buoyed by better than expected March sales figures from some of the biggest retailers in the US.

The pressure is now on other banks to post strong results.

"I'm not sure everyone will be as successful, but we'd like to hope that the success will spill over," said Ted Aronson at Aronson-Johnson-Ortiz.

Some banks report results next week and, if they are weak, markets could fall back.

German government in Hypo offer

The German government has launched a takeover offer for troubled lender Hypo Real Estate (HRE).

The government's bank rescue fund said it was offering shareholders 1.39 euros per share, 15.8% higher than its last closing price of 1.20 euros.

But US investor JC Flowers, who has a 25% stake in HRE, has said he wants to remain a shareholder.

The rescue fund said if HRE became insolvent, there would be "substantial consequences" for financial markets.

Mr Flowers has previously signalled that he will not accept an offer below three euros a share.

A spokesman for the investor said: "There is still a clear preference to remain a shareholder and thus to be treated exactly the same as other shareholders that had to go under [Germany's bank] rescue shield."

Big losses

HRE has been Germany's highest-profile casualty of the financial crisis.

Last month, the German government moved to take an 8.7% stake in the firm, buying 60m euros ($67m; £54m) worth of new shares. The bank said at the time that the move was "a prerequisite for the intended recapitalisation of Hypo Real Estate" that the government "gain full control".

HRE reported a net loss of 5.46bn euros for 2008. So far, the government has provided it with loan guarantees of about 87bn euros.

The offer price values the shares the government does not already own at 290m euros.

Shares in HRE rose 15% in early trade.

Sensex remains up for the sixth day in a row

In volatile trading, the Bombay Stock Exchange benchmark Sensex on Thursday rose for the sixth straight day, the longest winning steak of the year on news of inflation easing and firming global cues.

The Sensex, which notched gains of nearly 12 per cent in the last five sessions, advanced by 0.57 per cent, or 61.52 points at 10,803.86.

During the day, it moved between 10,932.12 and 10,655.96 points.

However, the 50-share National Stock Exchange index Nifty, after touching a six-month high level of 3,400, fell to close with a loss of 0.90 points at 3,342.05.

While the market received support from firming overseas stock markets, the inflation rate falling to 0.26 per cent from 0.31 was a major booster.

Realty stocks were major gainers on agressive buying by funds on expectations of interest rate cuts by banks, leading to more home sales.

The realty sector index surged by 5.42 per cent to 2,041.33.

Commodity producers tracked gains in metal prices, while banking and financial company shares rose on expectations of a fresh stimulus move by the US.

The metal index rose by 3.72 per cent to 6,801.56, followed by the banking index, by 2.64 per cent to 5,045.27.

Trading in the metal sector picked up after the index of six metals rose 0.7 per cent on the London Metal Exchange, its second day of gains.

Wells Fargo expects record profit

US bank Wells Fargo has surprised investors by bucking the recession, saying it expects a record net profit.

The bank said profit will be $3bn in the first quarter, thanks to better-than-expected results at newly-acquired lender Wachovia.

Wells Fargo bought Wachovia, which was the fourth-largest US bank, after it almost collapsed last year.

"Wachovia's outstanding franchise has proven to be everything we thought it would," the bank said.

Wachovia merger

The bank said it expected revenue of $20bn for the quarter, translating into "another quarter of double-digit revenue growth" of 16%.

Banking giant Citigroup had initially tried to block the merger between Wachovia and Wells Fargo.

But the US Federal Reserve approved Wells Fargo's $12bn takeover after its all-stock offer.

Wells Fargo's results are set to include $372m in dividend payments to the US Treasury, which took a stake in many banks in exchange for a cash injection.

US financier Warren Buffett has a stake in Wells Fargo through his holding company, Berkshire Hathaway, which has lost its top credit rating from Moody's.

Man Utd parent company makes loss

Debt repayments at Manchester United have caused parent firm Red Football Joint Venture to make a £44.8m ($65.6m) pre-tax loss for the year to June 2008.

It covers the 2007/08 season, when United won the Premier League and Champions League, and takes the Red Football's debt from £604m to £649.4m.

Red Football Joint Venture was set up when the Glazer family borrowed heavily to buy the club for £790m in 2005.

Group turnover for the year was £256.2m, an English club record.

It was up from £210m the year before, and operating profit was up £5m on the previous year.

'Global brand'

The football club enjoyed a successful 2007/08 - with television revenues made from the improved Premier league deal and Champions League final run, sell-out games at the 75,000 capacity at Old Trafford, and all its other commercial revenues. "The turnover is spectacular, which is what you would expect from a season when they won the Premier League and Champions League," said Harry Philp, financial analyst at Hermes Sports Partners.

Match day revenues were up from 92.6m to £101.5m, while media income was up by close to 50%, from £61.5m to £90.7m. Meanwhile, the club's commercial operations generated £64m.

"The company continues to explore new commercial opportunities within the United Kingdom and overseas to further leverage the Manchester United brand," it said in a statement.

The club said it had four elements to increase its financial growth; maintaining playing success, treating fans as customers, leveraging the global brand, and developing club media rights.

Manchester United also made a profit of £21.8m on player transfers.

Oil higher in Asian trade, trading above USD 50

Oil prices were higher in Asian trade on Thursday, pushed up by a smaller-than-expected rise in US crude reserves, analysts said.

New York's main contract, light sweet crude for May delivery gained 70 cents to USD 50.08.

Brent North Sea crude for May delivery advanced 59 cents to USD 52.18.

Prices received a mild boost from the latest US energy report released yesterday, which showed the country's crude stocks increased by a smaller margin than the industry had forecast, analysts said.

The weekly Department of Energy report showed crude reserves rose by 1.6 million barrels in the week ending 3rd April 3, lower than the gain of 1.9 million barrels that analysts polled by Dow Jones Newswires had predicted.

"The increase in US crude oil inventories was less than some had feared," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

Oil prices are down significantly from record peaks of above USD 147 reached in July last year, pulled down by worries about the global crisis, but Algeria's energy minister had an upbeat outlook.

"The global economy is starting to pick up, especially in the United States," Algeria's energy minister Chakib Khelil said on Wednesday.

Google addresses newspaper woes

The majority of newspapers should be online, says Google boss Eric Schmidt, amid criticism it should share some of the millions it makes from newslinks.

Media owner Rupert Murdoch has questioned if aggregators like Google should pay to use content.

The Associated Press is to sue to protect its content at a time when the industry is losing readers to the web.

"I would encourage everybody to think in terms of what your reader wants," Mr Schmidt told newspaper bosses.

"These are ultimately consumer businesses and if you [annoy] enough of them, you will not have any more," he warned the Newspaper Association of America's (NAA) annual conference in San Diego.

While he praised the way newspapers initially embraced the internet, Mr Schmidt said they had since dropped the ball allowing the likes of Google to take over content distribution.

"There wasn't an act after that. You guys did a superb job, and the act after that is a harder question."

"Fair use"

In a question and answer session at the end of his keynote address, suggestions that Google and the internet were eroding the intellectual property rights of newspapers was downplayed by Mr Schmidt."From our perspective, there is always a tension around fair use - and fair use is a balance of interest in favour of the consumer."

Industry analyst Ken Doctor of Outsell told the BBC this was the wrong way to look at the argument over how Google profits from newspaper content.

"The real question is, 'Is it fair for news companies to produce all this content for Google and for Google to keep the lion's share of revenue?'

"What we should be focusing on is 'fair share'." said Mr Doctor.

In a blog post, the search engine giant claimed it did provide a financial kickback for newspapers through online advertising.

"We drive traffic and provide advertising in support of all business models - whether news sources choose to host the articles with us or on their own websites," wrote Alexander Macgillvray, Google's associate general counsel for products and intellectual property.

"Users like me are sent from different Google sites to newspaper websites at a rate of more than a billion clicks per month."

Techmeme, which is an aggregator of technology news, agreed that the value of what they did was in driving traffic back to the original publisher of a story.

Much-awaited booking for Tata's Nano starts today

The much-awaited bookings for Tata Motors's Rs one-lakh car Nano opens on Thursday across the country for a limited period of 17 days.

It is understood that Tata Motors itself has sold over 75,000 booking forms from its 218 outlets across the country, although the forms are available at over 30,000 locations across 1,000 cities at company dealerships, branches of State Bank of India and other preferred financiers, and outlets of Westside, Croma, World of Titan and Tata Indicom.

When contacted, a company spokesperson said 'response is progressively increasing everyday', but declined to divulge details.

In a statement the company said it has joined hands with 18 banks and financial institutions to help customers with the booking process and to provide retail finance facilities.

The booking amount ranges between Rs 2,850 and Rs 4,110 among different banks.

While the interest rates on the loan amount would vary between 9 per cent and 14.25 per cent, customers would have to spend Rs 3,468-Rs 4,431 as insurance premium, the company said.

Those, who do not want to avail the financing facility, can book the car directly by paying an amount between Rs 95,000 and Rs 1.4 lakh depending upon the version of Nano.

The company said deliveries would be in a phased manner and within 60 days of the closure of bookings on 25th April, it would process and announce the allotment of 1,00,000 cars in the first phase of deliveries, through a computerised random selection procedure.

Nano, touted as the world's cheapest car, would be available at Rs 1.23 lakh-Rs 1.72 lakh (ex-showroom, Delhi).

Oil prices edge up in Asian trade

Oil prices edged up in early Asian trade on Tuesday, with the market continuing to be volatile, dealers said.

New York's main futures contract, light sweet crude for May delivery, rose four cents to USD 51.09 a barrel.



Brent North Sea crude for May gained six cents to 52.30.



"The oil market seems to be linking itself to the equities market... some lead strengthening seems to be pushing the (oil) market up," said David Johnson, an oil analyst with Macquarie Securities in Hong Kong.



But prices dropped more than a dollar on Tuesday, and some analysts cautioned that trade would remain volatile in the face of the global slowdown and softer demand.



"Traders are certainly realising that we are not out of the woods on the demand side, and that perhaps the optimism that was shown over the last few days was a little bit

premature," said Bart Melek of BMO Capital Markets.



The worldwide slump has cut energy demand, with prices far off their record peaks above 147 dollars last July.

RBS to cut a further 9,000 jobs

The Royal Bank of Scotland is to shed a further 9,000 jobs, half of them in the UK.

BBC Scotland understands the losses are to be in its back office operations.

These include document processing, information technology, procurement and bank property - a division known as Group Manufacturing.

The company would not say where the job losses would have most impact within the UK. It has already announced 2,700 job losses in Britain this year.

Group Manufacturing is the biggest single part of the troubled financial giant, employing a total of 45,000 people worldwide at a cost of £1.2bn last year. Of those staff, 27,000 work in Britain, so within the division, the job cuts represent one job in five.

'Minimise' redundancies

The UK hub of Group Manufacturing is in Edinburgh - where the group is also headquartered - with other significant employment centres, including NatWest, in London, Manchester and Bristol. The decisions on where jobs will be go is to be worked out at a more local level with staff unions. While the aim is to avoid compulsory redundancies, the company wants unions to be flexible on where people work and where they are re-deployed.

The international hubs of the Group Manufacturing division include about 4,000 employees in Greenwich, Connecticut, covering North America. The same number work in that division covering continental Europe from Amsterdam. A further 10,000 are employed in a combined Asian operation based out of Hong Kong, Singapore and Mumbai in India.

Facing a loss for last year of £24.1bn, and propped up by a huge injection of government capital, RBS is under pressure to ensure it recovers within a target of between three and five years.

It is likely the announcement will be the largest single tranche of job losses as the company seeks £2.5bn of cuts in its cost base over the next two years. The whole company employs more than 170,000 people, of whom 106,000 work in the UK.

It has already announced 2,700 job losses in Britain this year, from its UK corporate division. Since the start of the credit crunch, it has announced the shedding of about 15,000 jobs worldwide, including the Group Manufacturing announcement.

The bank has stressed that the 9,000 staff being lost from Group Manufacturing will not all be under pressure to leave. Indeed, it has agreed with British and Europe-wide unions that it will try to minimise compulsory redundancies.

A bank spokesman said the intention was to re-deploy staff into areas of the bank that are expanding, with 650 new jobs already identified.

The bank also reckons on turnover of its staff of about 10%, even in the recession. Over two years, that number of departures from the Group Manufacturing division could come close to the total number of job reductions being sought. In addition, there is a voluntary redundancy scheme, and contract staffing will be cut back.

The reasons being given for the cutback include a downturn in the amount of business coming through RBS. There is also an extensive programme for automating its processes, with more customers using online banking, and new software that should speed and open up the process for loan applications.

Even before it ran into severe financial difficulties, RBS intended to lower its staffing as part of the integration of the Netherlands-based bank, ABN Amro, which it bought nearly two years ago, and which has since been seen as a key reason for RBS's downfall.

Customer concern

Much of RBS's Asian assets are up for sale, as it sheds about a fifth of its balance sheet seen as non-core. It is reported that those interested in buying are Standard Chartered, HSBC, and ANZ, the Australia and New Zealand bank. Without those assets, there is less reason to maintain 'manufacture' on the current scale.

Stephen Hester, chief executive of RBS, said: "We have set a new strategy for RBS to restore the bank to standalone strength as soon as practicable. From this we want the government to be able to realise value from its investment in RBS.

"To do so we need to cut our costs, as in all businesses, given the current recession. Unfortunately that means taking difficult decisions about jobs as well as taking many other cost reduction actions.

"We want to be as open and transparent as possible and are announcing these plans at the earliest possible opportunity so that our employees can prepare for the future."

A source at RBS commented: "We don't need as many people as we did when we were earning £10bn a year. Just about every customer of ours is now laying people off. Banks that are really healthy are laying people off.

"Our customers are saying to us: 'I hope you don't have anybody working in there that you don't need'. It's really important that we are as lean as we can be."

Job shedding has also been affecting financial firms that do not face the severe difficulties on RBS's balance sheet. In the past two weeks, HSBC has moved to shed as many as 3,000 jobs, according to union calculations, or 1,200 according to the bank. Aviva, the insurance company including Norwich Union, announced last week it is to reduce its workforce by 1,700.

Intel works with GE on healthcare

General Electric and chip maker Intel have joined forces to develop hi-tech health care products that will allow patients to be treated at home.

The two firms plan to invest $250m in the project over the next five years.

Intel is best known as the world's largest chip maker but it has been working hard over the past few years to grow a new business in health care.

GE already has a sizable business selling health care products to hospitals and insurance companies.

Neither company has been immune to the effects of the global economic downturn but they were confident that this could become a multi billion dollar business.

At the launch event in New York, Jeff Immelt, GE's chief executive told the BBC he had high hopes for the project.

"Neither Intel nor GE does anything to create small businesses," Mr Immelt said.

"We do things to create big businesses."

Cutting costs

The Intel Health Guide, a special computer which allows doctors to remotely monitor, diagnose and consult with patients at home.

The technology could save hundreds of people from making repeated trips into hospital and could lower costs

"Something like 80% of the spending today in the health care system is on chronic care patients," Paul Otellini, Intel's chief executive said.

"This has the potential to take that down dramatically because a day at home costs a heck of a lot less than a day in the hospital."

As populations age in the US and in other countries, the two companies believe the market for using this kind of technology to manage chronic diseases could grow from $3bn a year to $7.7bn by 2012.

In the UK, the National Health Service in West Lothian is already piloting Intel's Personal Health System.

The deal comes as the Obama administration in the US has made improving the efficiency and lowering the cost of health care a major priority.

To achieve this, companies will have to play their part.

"I think business has an obligation when they have technology and new ideas and new market opportunities to step up," said Mr Otellini.

"Government also has an obligation - sometimes as the payer or the regulator - to be aware of what technology can do," he added.

Switzerland experiences deflation

Switzerland is experiencing deflation according to official figures.

Consumer prices in March were down 0.4% from a year ago, the Federal Statistics Office said, a 50-year low.

The country has been close to deflation all year, with inflation having fallen from a peak of 3.1% in July 2008. The rate was 0.2% in February.

The Swiss National Bank predicts that inflation will average -0.5% this year and remain close to zero throughout 2010 and 2011.

The deflation was blamed on energy, rent and transport costs all falling as a result of lower oil prices.

The year-on-year price fall for March was the biggest since December 1959, when consumer prices fell 0.6%.

"We forecast that CPI would fall into negative territory, but it is a bit surprising how sharp the fall was in March," said Alessandro Bee, an economist at Sarasin.

"It's predominantly due to the impact of lower oil prices."

The Swiss government is forecasting that the economy will shrink by 2.2% this year.

Oil slips below USD 52 after surging overnight

Oil slipped below USD 52 a barrel on Friday in Asia after surging overnight on investor optimism crude demand will soon rebound if the US recession has bottomed.

Benchmark crude for May delivery fell 72 cents to USD 51.92 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract rose USD 4.25 on Thursday to settle at USD 52.64.



Oil prices have bolted from below USD 35 a barrel six weeks ago, riding a wave of improving investor sentiment that the worst of the US recession may be over.



Crude prices have mirrored a surge in stock markets, with the Dow Jones industrial average up more than 20 per cent during the last month.



"At this point, it's more momentum than fundamentals," said Gerard Rigby, energy analyst with Fuel First Consulting in Sydney. "People are expecting oil to jump over the next 12 to 24 months."



Investors brushed off evidence this week that US crude inventories are at a 16-year high.