Libyan Violence Stifles Demand for Bonds, as Well as Stocks

By DANNY KING Posted 6:30 PM 02/23/11 Economy, Investing

Violence in Libya stifled demand for U.S. 10-year bonds Wednesday, pushing prices down 22 cents per $100 invested.

The yield on the 10-year Treasury, which moves in the opposite direction of price, rose to 3.49% Wednesday from 3.46% Tuesday after falling from 3.62% a week ago.

The declining bond prices come amid widespread violence between military forces and anti-government protesters in the Libyan capital, Tripoli. Nearly 300 people have been killed in the uprising so far, according to the New York-based Human Rights Watch.

The tensions in Libya caused investors to shy away from stocks, as well as the Treasurys, while oil prices briefly exceeded $100 a barrel on the news.

Meanwhile, the Dow Jones Industrial Average (INDU) lost 107 points, or 0.9%, to close at 12,106 Wednesday. The blue-chip index was had declined as m 149 points in midday trading before paring its loss.

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Earnings Preview: GM Expected to Post First Annual Profit Since 2004

It's been a real American rags-to-riches story: With the help of a government bailout, automaker General Motors (GM) -- which descended into bankruptcy during a harrowing 2009 -- racked up solid profits in the first three quarters of 2010 and once again went public in November.

On Thursday, investors and taxpayers will get the latest snapshot of GM's health when the company reports earnings for the fourth quarter and full year. Analysts expect the carmaker to post its first full-year profit since 2004, raking in $5.3 billion, according to estimates compiled by Thomson One Analytics.

On a per-share basis, GM's full-year earnings are expected to reach $2.87 a share, according to a consensus estimate of 14 analysts compiled by Zacks.com. Those anticipated results compare to a loss of $4.3 billion during the second half of 2010, following GM's emergence from its controversial government-backed bankruptcy.

This week's earnings report will provide evidence that the plan worked, Aaron Bragman, an analyst with IHS Automotive, told the Detroit Free Press. GM has done quite well under the program, which has been shepherded along by new management team, Bragman said. "First and foremost, this has to be run like a profitable business."

New Model Costs Will Weigh on Results

GM has sought to keep expectations low for the quarter, which ended in December, after earning $4.2 billion in the first nine months of the year. It has warned that fourth-quarter results will be "significantly lower" than those recorded in previous quarters.

The automaker has cited costs related to the introduction of new models, including the compact Chevrolet Cruze and Volt plug-in hybrid as well as increased engineering expenses, for the anticipated lower earnings. GM also expects to take a $700 million charge to buy back preferred shares held by the U.S. Treasury.

The company said it expects to record positive earnings before charges related to interest and taxes, but it didn't say if it anticipates a net profit in the fourth quarter. Wall Street expects GM to report earnings of 47 cents a share on revenue of $34 billion.

After fellow automaker Ford Motor (F) missed analysts' fourth-quarter estimates last month, investors have been concerned that GM may disappoint, too. That may send its shares, which have traded in a narrow range since rejoining the stock market last fall, tumbling.

Growth and Challenges

GM ended Tuesday's trading down about 2% to $35.77 a share, as stocks on Wall Street lost ground overall on worries of higher oil prices and civil unrest in oil-rich Libya.

Growth prospects for GM are strongest in China, where it sold more cars last year than it did in the U.S., and in its U.S. truck operations, according to Trefis. The equity-forecasting firm has set a price target of $45 a share on GM stock, which is about 25% higher than its current share price.

Still, GM still faces challenges in streamlining its European Opel and Vauxhall operations to bring them back into profitability. To that end, the company is seeking to reduce plant capacity and labor costs, cut jobs and increase efficiency.

View all Articles » David Schepp has covered business news for more than a decade at news organizations such as Dow Jones, BBC News and Gannett. His beats have included technology, biotechnology, health care and workplace. He lives in New York's Hudson Valley.

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Zuma launches new mining company

27 February 2011 Last updated at 14:11 GMT There has been a debate within the ruling ANC party over mine nationalisation South African President Jacob Zuma has launched a state-owned mining company, called the African Exploration Mining and Finance Corporation (AEMFC).

However the move is likely to cause concern amongst international investors, who may view it as a step towards the nationalisation of South Africa's mining industry.

Mining is one of South Africa's most important economic sectors.

Mr Zuma said the body would bring all state mining interests into its remit.

"The role of the state cannot merely be confined to that of a regulator. The state must actively participate in the mining industry to ensure that our national interest is protected and advanced," Mr Zuma said.

"Government policy on minerals and mining does not make provision for the nationalization of mining assets, but it does not prevent the state from participating actively in mining, competing with other companies," he said.

Small step?

Recently South African mining minister Susan Shabangu moved to reassure investors when she said the nationalisation of mines was "not the option."

However there has been a debate within the ruling African National Congress party as to whether the country's mining industry should be fully nationalised.

The South African Communist Party also supports the nationalisation of mining.

"What is worrying for mining investors is, where does it go from here?" said Alison Turner, an analyst with Panmure Gordon.

"Is this just a small step to a much broader transfer... to state ownership?" she added.

South Africa is a a leading producer of precious metals such as gold and platinum as well as a major supplier of coal.

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Taiwan to lift China's tech limit

28 February 2011 Last updated at 04:55 GMT Taiwan's technology companies are amongst the biggest in the world. Taiwan is set to ease restrictions on investments from China, a move that could see significant funds injected into its technology sector.

Chinese companies will be allowed to buy a stake of as much as 10% in Taiwanese technology companies, according to a proposal by the Ministry of Economic Affairs.

Investors will also be allowed to hold a 50% stake in new joint ventures.

Taiwan has been keen to protect its market-leading tech firms from rivals.

Protection measures

In 2009, Taiwan opened up 100 sectors to greater Chinese investment.

However, most of those sectors, such as automobiles and plastics, were considered less sensitive than the technology industry.

Taiwan has been very cautious about protecting its chip and liquid-crystal-display manufacturing sector.

It is seen as having a technological edge over many of its Chinese rivals, and there were fears about the ability of its companies to protect their intellectual property rights.

Taiwanese companies, such as TSMC, UMC and Foxconn, are amongst the largest contract chip and electronics makers in the world.

Safe-guarding intellectual property rights is key to their continued success, analysts said.

Win-win

While Taiwan's high-tech sector has been driving growth in its export-dependent economy, falling prices have started to hurt the industry's profits.

As a result many of Taiwan's manufacturers are now looking for fresh funding to upgrade technology in a bid to reduce their manufacturing costs.

The change in investment policy may help them meet this funding need and allow them to tap up Chinese investors for the cash.

Analysts expect the change to be announced in the next few days.

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India prepares for 2011 budget

28 February 2011 Last updated at 00:11 GMT By Neil Heathcote Editor, India Business Report What would families like from the budget?

It's 20 years since Prime Minister Manmohan Singh, then finance minister, unveiled the budget that launched India's opening up to the global economy.

That budget also paved the way for India's current heady growth.

However inflation is now becoming a problem - food prices have been rising rapidly - and India's reform programme appears to be drifting

Will the 2011 budget mark a return to form?

Petrol prices have gone up on an almost monthly basis since the government decided to deregulate them last year. Those at the bottom of the economic ladder are hardest hit.

Food prices are still over 11%.

The problem for the government is that much of the inflation comes from factors beyond its control.

To tackle rising prices, the Reserve Bank of India has increased interest rates. That in turn has spooked investors, who worry that the country's soaring growth may slow. The prime minister says he's still aiming for 10% growth this year.

But foreign direct investment has tumbled - down 22% in 2010 over the previous year.

And so far, higher rates show little sign of taming rising prices.

Creating growth

So what can the government do in the current budget?

President Pratibha Patil opened the latest session of parliament last week and flagged up the government's interest in tackling inflation, creating jobs and fighting corruption.

It knows that there are plenty of bottlenecks in the system, which prevent the economy reaching that target of double-digit growth.

"I think the economy has been growing despite the lack of reforms," says Crisil chief economist Dharmakirti Joshi.

"But you can't take growth for granted. It's fairly well understood that infrastructure bottlenecks etc, they're really holding the economy back."

Many of India's roads are congested, and the railways need more investment.

The government wants to spend $1 trillion over the next five years upgrading infrastructure, which has been overloaded by the economy's rapid growth. It's hoping that the private sector will come up with much of the money.

However if the financial sector is to furnish those funds, further change is necessary to help it develop.

Politically unpopular

Reforms of banking and the insurance sector have been languishing on the back burner; they might now get the go-ahead.

Retail reform, too, has long been talked about. Foreign supermarket chains have the expertise to modernise the shipment of food from farms to shops. That could bring down prices.

But it remains politically unpopular with the country's thousands of small shopkeepers. Several states go to the polls later this year, making the government acutely aware of voters' concerns.

It may decide to increase the aid it gives to poor rural farmers.

The government also wants to encourage industry to create jobs for migrant labourers. Only by industrialising faster can the country achieve its ambitions for growth.

"In today's world, you have to be fairly competitive," says Joshi.

"If you want to promote your manufacturing sector without physical infrastructure, without some of these labour reforms, it'll be very hard to compete with other economies."

Unprecedented wealth

But economists are divided over whether they government has lost its appetite for reforms that may be politically unpopular.

Structural changes are needed to lay the foundations of the next phase of India's growth. In the meantime, its industries are booming, unprecedented wealth is being created and millions of people are being lifted out of poverty.

The cities are teaming with luxury stores, new restaurants and coffees shops for the growing middle classes.

Those unpopular reforms, the government may decide, can always wait for another day.

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New Irish leader in bailout vow

27 February 2011 Last updated at 21:21 GMT Ireland's new leader, Fine Gael's Enda Kenny, has said the country is on "brink of fundamental change"

Ireland's incoming leader has promised to work to renegotiate the country's crippling 85bn euro bail-out next week.

Enda Kenny of Fine Gael said he would fight for a cheaper loan deal from the International Monetary Fund and Europe.

His party is now the largest in the 31st Irish parliament, the Dail.

Counting is continuing in four remaining constituencies, with 13 seats in the new Dail (parliament) still to be filled.

A recount in Wicklow has been adjourned until Monday.

Meanwhile, Sinn Fein has won 13 seats so far in the Irish general election, a gain of eight on its representation in the last Dail.

Fine Gael, Labour and Sinn Fein have all won record numbers of seats but FG's rivals Fianna Fail suffered a crushing defeat. Mr Kenny said it was "a democratic revolution at the ballot box".

Votes are still being counted but Fine Gael is expected to be the largest party in the Republic's parliament, without having an overall majority.

Final numbers for the Dail parliament will not be decided until late on Sunday.

Mr Kenny plans to start fighting for a cheaper loan deal on 4 March when the European People's Party, to which Fine Gael is affiliated, meets in Helsinki. He will follow that up at the European Council in Brussels the following week.New Irish leader in bailout vow

Mr Kenny said the IMF/EU bail-out was "a bad deal for Ireland and a bad deal for Europe".

"We are not going to cry the poor mouth, other than to say the reality of this challenge is too much. I don't want to talk about difficulties, I look for co-operation, consensus and support across Europe," he said.

"We want to restore our pride at home and abroad. Our country is back in business."

Continue reading the main story Mark Simpson BBC Ireland correspondent

Dublin is buzzing with speculation about a visit to Ireland by US President Barack Obama at the end of May.

The possible trip is likely to be discussed next month when Mr Kenny goes to Washington for the annual St Patrick's Day celebrations at the White House.

President Obama has distant Irish roots in the village of Moneygall in County Offaly.

If the president does go to Ireland, it may not be the only high-profile visit to Dublin this year.

The Queen may visit the Irish Republic for the first time, in a sign of how Anglo-Irish relations have been transformed by the peace process.

The incoming taoiseach also pledged to probe deep into the heart of the Irish banking crisis which has left the taxpayer saddled with crippling debts which some analysts believe could ultimately cost closer to 200bn euros.

"We do need to find exactly what went wrong here, who benefited from this and where decisions were made," he said.

"This is bridging the gap between government and people - that chasm there was very bad for democracy."

Meanwhile, Mr Kenny is weighing up options for a new government with his centre-right party Fine Gael on course to form a coalition with Labour, or a collection of independents if the numbers stack up.

He launched a fierce attack on the outgoing government, led by Fianna Fail, over its poor communications and lack of openness.

"I give you my guarantee that the incoming government is not going to leave the people in the dark about what is happening whether it is good or whether it is bad," he said.

Mr Kenny, who secured the biggest single vote in the country in his Mayo constituency, said he wanted a quick resolution to talks on a new government.

Fine Gael is on course for 75 plus Dail seats, just a handful shy of majority single party government in the 166 strong Dail.

Fianna Fail leader Micheal Martin put on a brave face and said he believed that Fine Gael had managed to secure support from floating voters.

"There's a soft vote there for Fine Gael and Labour, just as there was for us for years," he said.

The party's biggest casualty was Mary Coughlan, the outgoing deputy prime minister, who was punished by voters in Donegal South-West as they opted to support an independent candidate in her own backyard.

Hers was one of several dynasties brought to a dramatic end.

"It's been a very difficult day for all of my colleagues, many of whom have lost their seats," she said.

Other big names to suffer included ministers Mary Hanafin, Barry Andrews and Conor Lenihan, himself from a powerful Fianna Fail family and brother of the outgoing finance minister Brian Lenihan who narrowly retained his own seat.

The Haughey name will also be absent from the Dail for the first time in 54 years after Fianna Fail's Sean Haughey lost his seat.

The Greens - former coalition partners - were wiped out. None of their TDs - two of whom held Cabinet posts up until a few weeks ago - were brought back to the Dail.

Leader John Gormley had always faced a tough battle in Dublin South East and blamed his failure on being in a government which made savage cuts.

"We have suffered a major defeat, but the party will regroup, we will continue. We're a party with a set of beliefs and values and a vision for the future. We have great people here. We're going to rebuild this party," he said.

Labour had one of its best ever performances with the prospect of supporting a coalition.

"That is the most likely outcome, there's no doubt about that," leader Eamon Gilmore said.

Fianna Fail have paid the political price for the EU/IMF bail-out

Sinn Fein has more than doubled its seats in the Dail with party president Gerry Adams topping the poll in Louth after giving up his Westminster seat for West Belfast.

Mr Adams said his party was on course for major gains: "I think the votes across the state show a significant amount of people support the position we have taken up."

Their success in the Republic of Ireland was extended with seats right around the border including two TDs in Donegal.

Further left wing appeal came from the United Left Alliance - a loose collection of the Socialist Party and the self-styled People Before Profit.

It will take two days to complete the official count.

Many parts of the country saw a big increase in turnout on the 67% recorded in the last general election in 2007.

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Made in America

27 February 2011 Last updated at 17:41 GMT By Jorn Madslien Business reporter, BBC News, Geneva motor show Is it a Dodge or is it a Fiat? The Journey will be redesigned and renamed Freemont in mainland Europe Fiat Auto will use this week's Geneva motor show to showcase a string of European versions of cars made by its alliance partner Chrysler.

The cars should complement the carmaker's current line-up of Fiat, Lancia and Alfa Romeo models, the company says.

Fiat will unveil a reversioned Dodge Journey, a seven-seater people carrier that has been slightly modified to suit European drivers.

Stiffer suspension and a redesigned interior are among the changes that mean the Fiat Freemont is not simply a Dodge with an Italian label on the bonnet, the company's top brass say.

"We are not rebadging," chief executive Sergio Marchionne insists. "We are utilising our brand names to spread the products globally."

Continue reading the main story

We'll need to be very disciplined in bringing brands across the world”

End Quote Sergio Marchionne Chief executive, Fiat Auto and Chrysler Bigger portfolio As chief executive of both Fiat and Chrysler, Mr Marchionne is busy bringing the two alliance partners together.

"This year is a transition year for Fiat," he says.

He believes the combination of Fiat, which also owns Lancia and Alfa Romeo as well as stakes in Ferrari and Maserati, with Chrysler and its Jeep and Dodge brands enables both to offer a broader portfolio of cars to the market.

For instance, a small 4x4 rooted in Jeep's history, replacing the Compass and the Patriot, will also be made available as an Alfa Romeo, and it will be built at Fiat's factory in Turin.

Chrysler and Lancia The Chrysler 300 will be called Lancia Thema in mainland Europe

"We've also merged the Chrysler and Lancia brands into one brand in Europe," Mr Marchionne explains, suggesting that the two marques have got "a significant amount of shared DNA".

"It was a necessary merger due to the limits each had," he says.

However, while Lancias will be sold in mainland Europe - the Lancia Thema will be on display at the Geneva show - the UK will be sold Chrysler models. Its version of the Lancia Thema will be the Chrysler 300.

The logic behind the decision to differentiate between the two markets may not be immediately clear, but Mr Marchionne is eager to explain.

"The Lancia brand has long, historic roots in Europe," he reasons, whereas "we're already in the UK with Chrysler".

Disciplined brand strategy

Such reasoning may be met with a sceptical public that has already shown increasing reluctance to buy cars made by either group.

In Europe, brands owned by Fiat suffered a 17% drop in sales during 2010. Chrysler fared even worse as its sales fell 26.8%. By comparison, there was a 4.9% contraction overall in Europe during the year.

The worry for Mr Marchionne must be that rather than help sales recover, his attempts to cross-sell products from two very different car companies could erode what is left of brand loyalties toward the marques.

"We'll need to be very disciplined in bringing brands across the world," he acknowledges.

Industrial relations

If done in the right way, Mr Marchionne's plan to keep on modifying cars for different markets could be a recipe for success, though high and consistent quality would be a prerequisite for this.

This, in turn, would require the companies' workforces to adapt and to work flexibly, Mr Marchionne believes.

Mr Marchionne is ambitious both in his vision and in his risk taking

"There are large differences between how [the US and Italy] function and how they resolve issues," he says.

In the US, "the majority of auto workers are represented by the UAW, so the dialogue is between two parties", he says.

By contrast, in Italy, where Fiat has most of its factories, Mr Marchionne has to deal with several different unions.

Having found this difficult in the past, Mr Marchionne has recently been using Fiat's stake in Chrysler as a lever in his talks with the unions, tempting workers with massive investment in Fiat plants if they were to agree to new terms and conditions while simultaneously threatening to redirect investment away from Italy if they did not.

"The great thing about the Fiat-Chrysler alliance is that we have plants everywhere," he said last month, ahead of talks with the unions.

Mr Marchionne has clashed with some of Fiat's workers

And earlier this month he was questioned by Italian politicians who wanted a firmer commitment to retaining a strong Fiat in Italy.

"It's not only true that Fiat saved Chrysler but also that Chrysler is determining for the group's future," he told a parliamentary hearing on 15 February.

However, he also stressed that "Fiat is a part of this country. It has no intention of leaving Italy".

Risky strategy

The risks resulting from Mr Marchionne's strategy are many, however.

Falling out with the unions and politicians in Italy could alienate Italian customers.

Offering rebuilt American cars could dilute the company's quintessentially Italian image.

And bringing two companies with inherently different corporate and human cultures closer together could easily go wrong.

But if it works, the flamboyant Italian will find himself in charge of one of the global automotive industry's biggest companies.

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Foreign force

27 February 2011 Last updated at 17:41 GMT By Konstantin Rozhnov Business reporter, BBC News Russia has eased some rules to attract migrant workers to its Far East Acknowledging the seriousness of its demographic problems, Russia has decided to spend more than 1.5 trillion roubles ($52bn; £32bn) over the next four years to try and solve at least some of them.

Russian Prime Minister Vladimir Putin said earlier this month that his government's aim for the next few years was to stabilise Russia's population at the level of 143 million people.

He wants to increase both life expectancy and the birth rate, and plans to implement a competent migration policy, although he did not specify what exactly the 1.5tn roubles would be spent on.

The government's move is a "reply in absentia" to a Standard & Poor's report which said that Russia's population could decline to 116 million by 2050 from 140 million in 2010 without further government reforms.

"We forecast a rise in debt levels to 585% of GDP by 2050, due to the associated increase in general government deficits," states the report, published earlier this month.

"In our view, Russia's ageing population will likely place substantial pressure on economic growth performance and public finances."

Experts agree that labour migration should be one of the main means of solving demographic problems in Russia.

But, as anywhere in the world, labour migration alone cannot be the answer, says Dmitry Valentey, project development and liaison coordinator at the Russian office of the International Organization for Migration.

Global average

According to Russian official statistics, more than two million work permits were issued to foreigners in 2009.

The figure for the first nine months of 2010 stood at less than one million permits, or 59% of the government's annual quota.

Continue reading the main story

Russia Business Report is a television programme for BBC World News. Every month we take a look at the latest trends in the Russian economy and business world.

Watch the next programme on Saturday, 26 March at 0330 GMT and 1830 GMT and on Sunday, 27 March at 1130 GMT and 1830 GMT.

But Elena Tyuryukanova, director of the Centre for Migration Studies, estimates that in reality there could be up to 5 million labour migrants working in Russia now.

She says that for labour migration alone to offset Russia's population decline, net annual inflow of migrants workers should reach some 1 million.

"It is impossible, not least because there is nowhere you could find so many labour migrants [willing to go to Russia]," says Ms Tyuryukanova.

Besides, she believes, the Russian society is not ready for a rapid influx of migrants, even if it is required for economic reasons.

Migrants currently represent about 3-5% of the country's workforce.

This is broadly in line with the global average, but less than in some European countries, such as Germany, Belgium and the UK.

Face of migration

Many of Russia's migrant workers are low-skilled and arrive from neighbouring states in the former USSR.

Before the crisis, over 40% of them were employed in the construction industry.

The sector was badly hit by the downturn and only recently has it slowly started coming back to life.

This could explain the sharp drop in the number of work permits issued last year.

But the Russian government has made some steps towards changing the face of the country's labour migration.

"In 2010, significant changes in migration legislation were introduced, namely, easing procedures for highly-skilled professionals and introducing a special type of work permit for labour migrants from visa-free countries to work in households," says Mr Valentey.

"At present, these categories of workers are exempt from the quota system."

Regulations were also eased to attract specialists to huge construction and regeneration projects, such as the 2012 Asia-Pacific Economic Co-operation (Apec) summit in Russia's Far East or the Winter Olympics in Sochi.

Public opinion

Of all labour migrants coming to Russia, only about a quarter of them remain permanently in the country.

Also, most of Russia's migrant workers send money home, and as a result, only 10% of them bring their families with them, says Ms Tyuryukanova.

"[Working and living] conditions are tough for many labour migrants in Russia," she adds.

Mr Valentey believes that lessons learnt from multiculturalism policies in Germany, France and other European countries could now provide a good starting point for Russia in terms of developing its own effective migrant integration policy.

"At the same time, Russia has its own rich history of building Russian and Soviet state identity, and some of the best practices can undoubtedly be utilised," he says.

But despite a very low level of competition between locals and migrant workers, Russian public opinion does not really favour labour migration.

With the country entering a long election period, the government will be unwilling to change its migration policy dramatically.

But Ms Tyuryukanova believes that things will have to change.

"The realities of life will make the government pay much more attention to the question of labour migration," she says.

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UK product placement ban lifted

28 February 2011 Last updated at 01:57 GMT Advertisers in the US pay millions of dollars to place their products in films and TV programmes A ban on product placement has been lifted, allowing advertisers to pay for their goods to be seen on British TV.

Paid-for references to products and services are now permitted for the first time in shows produced in the UK, including soaps and one-off dramas.

The first product will be a Nescafe coffee machine on ITV1's This Morning.

The Church of England and doctors' leaders have opposed the move, saying it could damage trust in broadcasters and promote unhealthy lifestyles.

Under Ofcom regulations, broadcasters must inform viewers by displaying the letter 'P' for three seconds at the start and end of a programme that contains product placement.

The telecoms regulator has said any placement must be editorially justified and not unduly prominent.

It will not be allowed in news, current affairs or children's programmes - or for alcoholic drinks and foods high in salt, sugar and fat.

Continue reading the main story No paid product placements on BBC, children's, news, current affairs, consumer affairs and religious programmesBanned products include gambling services; food and drink high in salt, fat and sugar; tobacco; medicines; alcohol; baby milk; weapons; and escort servicesAnd it will continue to be banned for BBC shows.

In the United States, advertisers such as Coca-Cola and Apple pay millions of dollars to place their products in films and TV programmes.

When the European Union lifted its ban on such payments, there was heated debate over whether it should be allowed in productions made in the UK.

Commercial broadcasters and independent producers argued it would help pay for programmes.

But Church leaders were among those who said it could damage trust and promote unhealthy lifestyles.

The last Labour government eventually gave the go-ahead, but only after setting out strict limitations.

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Japan's output up for third month

28 February 2011 Last updated at 02:59 GMT Demand for large passenger cars contributed to increase in factory output Japan's industrial production has risen for the third successive month in January, underlining optimism that the economy is recovering.

Factory output was up 2.4% from the previous month in January, compared with a 3.3% gain in December, the Trade Ministry said.

It was driven by demand for transport equipment, machinery and metals.

Japan was overtaken as the world's second-largest economy recently and has been trying to boost growth.

Analysts said that January's output figure was slightly weaker than many of them had expected.

However, they said the figures still pointed to improving conditions for growth and output.

"Data overall confirmed a steady improvement in production given that output is expected to increase in February and March," said Yasuo Yamamoto of Mizhuo Research.

This view was backed up by a Trade Ministry survey which showed that manufacturers now expect factory output to increase by 0.1% in February and 1.9% in March.

Uncertain future

Despite the positive outlook, analysts warn that Japan's recovery is still fragile and could be derailed by external, as well as internal, factors.

The most recent issue facing the global economy is the unrest in the Middle East and the subsequent spike in oil prices. Food prices have also been climbing in previous months.

"Rises in commodity prices are a big risk factor," says Tatsushi Shikano of Mitsubishi UFJ Morgan Stanley Securities.

Mr Shikano added that should commodity prices continue to rise then that may boost the cost of raw materials, hurting both manufacturers and consumers.

Japan's economic recovery has been largely driven by the export sector and an improving global economic environment.

However, analysts said that oil prices may crimp economic growth both globally and in Japan.

"If oil prices go up $20 more than they were before the recent unrest in the Middle East and Africa, it could push down Japan's gross domestic product for next fiscal year by 0.3 percentage point," Mr Shikano added.

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Warning on early pensions access

27 February 2011 Last updated at 11:06 GMT It's thought that 7 million people don't save enough for their retirement Plans to let people take money out of their pensions in their 30s could increase dependency on the state, according to one industry group.

The National Association of Pension Funds (NAPF), which represents 1,200 schemes, says the proposals could leave people short of funds in retirement.

The government is keen to consider the idea of early access, to encourage more people to save for their pensions.

Ministers will examine the results of a consultation before making a decision.

'A huge upheaval'

At the moment only those who are older than 55 can access their savings with a company pension scheme. The government thinks people should be able to access them in their 30s.

The Chief Executive of the NAPF, Joanne Segars, warns that letting people dip into their pensions would be "a huge upheaval for pensions funds, for really very little benefit."

"There is little evidence to show that giving people early access would either increase the amount people save, or get them saving in the first place", she says. "We think this could be very, very confusing for individuals."

Continue reading the main story

People feel... that by putting money into a pension that money is confiscated from them, because they can't get it back until they are in their 50s”

End Quote Dr Ros Altmann Saga group The Association thinks that taking out a small amount could leave a large hole in final pensions, leaving people reliant on the state. It also warns that more complex administration could drive up the cost of having a pension.

The government says it is committed to encouraging saving, and wants to give individuals the maximum flexibility and responsibility to save for retirement.

In a statement it said: "Early access is an idea the government is keen to consider. An informal consultation closed on Friday and the government will now make a decision on whether to develop more detailed proposals in the light of the responses received."

The Director General of the Saga group, Dr Ros Altmann, thinks the proposed change is an "absolutely excellent idea".

"The problem we have at the moment is people feel, certainly if you are in your 20s and 30s, that by putting money into a pension that money is confiscated from them, because they can't get it back until they are in their 50s."

She said: "There are lots of people at the moment who have got tens of thousands of pounds in a pension fund who are having their houses repossessed, because they can't get the money."

The Department for Work and Pensions estimates that around 7 million working age people are currently not saving enough for their retirement.

View the original article here

Discounter Groupon opens in China

28 February 2011 Last updated at 05:27 GMT A number of local sites offering similar discounts as Groupon have sprung up in the past year Daily-discount website Groupon has started operations in China, taking its electronic-commerce platform to the world's largest internet market.

The site will be called GaoPeng.com in China and is a partnership between Groupon and Chinese internet giant Tencent.

US-based Groupon offers discounts online to about 50 million users.

Analysts say Groupon could face tough competition from Chinese companies offering similar services.

"Discounts will always be popular but the question is, will Groupon be more popular then the other websites?" said Paul Wuh of Samsung Securities.

"There are many entrenched companies already offering this product," Mr Wuh added.

Email offers

Tabao, China's largest electronic-commerce website, is one such company.

It launched a group-buying website last year.

Groupon's Chinese operation, GaoPeng.com, will send out daily emails offering discounts at shops in China.

To start with the service will only be available in Beijing and Shanghai. The plan is to then expand the service to other cities.

The website is open from Monday for user registrations, and will begin sending out deals in March.

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Geneva car show aims for recovery

27 February 2011 Last updated at 17:26 GMT By Jorn Madslien Business reporter, BBC News, Geneva motor show The cars are the stars as the press conferences get underway at the Geneva motor show High-powered cars from Lamborghini, Ferrari and Aston Martin are expected to steal the limelight as the Geneva motor show gets underway this week.

But industry watchers will look to less flamboyant models from, say, Hyundai, Ford or Fiat for hints at who will shape Europe's automotive landscape.

Some 170 world and European premieres will be unveiled at the show, which opens for the public on 3 March.

The cars will enter a crowded European market where profit margins are tight.

The European market declined further in January after sales fell 4.9% in 2010 to less than 14 million cars, amid widespread concerns about unemployment and economic hardship.

On top of that, carmakers that gained from last year's scrappage schemes - under which governments paid people to trade in old cars for new ones - should expect to see somewhat weaker sales during the first half of this year when compared with the same period a year ago, according to Hyundai Motor Europe's chief operating officer, Allan Rushforth.

But the motor industry should see improvements in Europe during the second half of the year, he predicted.

Pure power Some 170 cars never seen before in Europe will be unveiled at the show

Ferrari's FF will be among the eye-catching performance models on display at the show.

The first 4x4 unveiled by the Italian supercar maker is also its "most powerful, versatile four-seater", the company said.

Aston Martin is also gunning for performance with its new V8 Vantage S, an upgraded version of existing Vantage models.

And Lamborghini is expected to unveil a car named Aventador, said to be faster and lighter than the car it replaces.

Mainstream hybrid and electric cars

Porsche, meanwhile, will go down a somewhat greener lane with a petrol-electric hybrid version of its four-seater Panamera, said to emit just 159g/km of CO2.

The low emissions result largely from technology that turns off the engine while driving if no power is required.

Porsche's emissions performance is beaten by a Range Rover concept, however, said to emit no more than 89g/km of CO2.

The Range Rover is noteworthy because it is a hybrid with a diesel rather than a petrol engine.

For years, all carmakers said that combining diesel with electricity would be too expensive. Now it could soon become mainstream as ever more manufacturers are eyeing such solutions.

A similar trend is seen on the electric motoring front, where more carmakers who used to dismiss it as a fad are getting ready to launch electric cars of their own.

Toyota's tiny iQ and Honda's Jazz will be on show from the early adopters of hybrids.

Corporate scrutiny

On the corporate front, all eyes will be on Fiat, who is using the show to unveil a number of European versions of cars made by its US alliance partner, Chrysler.

General Motors' efforts to sort out its struggling European division, Opel, and its UK sister-marque, Vauxhall, will also be on most industry watchers' radar.

New models from Hyundai and its alliance partner, Kia, will attract attention after the two Korean carmakers' combined sales last year outstripped their Japanese rival Toyota.

Volkswagen Group's aim to become the world's largest carmaker by 2018 will be bolstered further by a string of new models from its marques Audi, Skoda and Volkswagen.

While BMW will wow the show-goers with technology that connects cars with the world around them, making the automobile a "fully integrated part of the networked world".

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Insurance pricing to change soon?

26 February 2011 Last updated at 00:29 GMT By Catherine Burns Business reporter, BBC News Car insurance prices may fall for men but rise for women The European Court of Justice is considering banning insurance companies from using gender to decide how much of a risk customers are.

If it does happen, it would mean young men would eventually see their premiums go down, and young women would end up paying extra.

But the AA is warning that, at least in the short-term, the confusion could lead to higher prices all round.

At the minute, young women pay less because they are seen as safer drivers.

Statistics show men in their late teens and early 20s are more likely to speed, to be involved in drink driving accidents, and to claim on their policies.

Higher premiums

The cost of car insurance is already rising across the board.

Last year, policies went up by an average of 33%.

It was even steeper for young drivers who saw a 58% increase.

So now, a woman under 22 is looking at paying an average of £1682 a year.

For a man of the same age, it's another thousand pounds on top of that, £2750.

Cheaper for men?

The gaps tends to narrow to just a few pounds around the age of 30.

The court in Luxembourg is due to rule on this on March 1st.

The Association of British Insurers (ABI) says a ban on gender pricing would hit young female drivers hardest.

Their premiums could rise by an average of 25%, but it could be as much as 50% in some cases.

Young men could eventually see their policies go down by around 10%.

"Not fair"

Ebeneezer Bolatiwa, a 21-year old student, says the idea of such a change is "brilliant."

"The insurance policies now are too expensive, so I think this will benefit us," he says.

"Just because I'm a male, I don't see why I should pay more."

However his friend, 22-year old Charlotte Griffiths, is less impressed.

"It's not fair really, because men have more accidents than women, which is why their price is higher in the first place, so there's no reason why we should pay more," she says.

'Not good news'

There is still uncertainty about how any possible change would affect drivers like Ebeneezer and Charlotte.

Car insurance prices may be pushed higher warns Simon Douglas of the AA

If this goes ahead, it would be like asking the insurance industry to rip up the rule book.

There is talk of a three-year transition period, but companies are worried about the possibility the Court will order them to introduce unisex policies immediately.

The AA's director of insurance, Simon Douglas says while not certain, it is very likely that gender-based pricing will be outlawed.

"In the short term, we don't think this is good news at all for anyone," he says.

"If they can't use [gender] they [insurers] are going to take on more risk.

"As a consequence, they're going to put up their prices to mitigate that risk," he warns.

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Inside Microsoft

27 February 2011 Last updated at 18:19 GMT By Rory Cellan-Jones Technology correspondent, BBC News, Seattle Rory Cellan-Jones's avatar interviews Microsoft executive Reena Kawal's avatar

If you spent $9bn a year on research and development and employed 900 of the world's top computer scientists to come up with new ideas, what would you expect in return?

More than a new way of playing video games, a cynic might say.

But Microsoft - a company that may well spend more on R&D than any other business - believes its strategy is paying off, and the proof is the XBox Kinect system.

Pick your avatar

On a visit to the company's headquarters, I had a chance to see some of the projects that Microsoft scientists at its laboratories in Redmond, in Beijing and in Cambridge, England, believe will change the way we see computers.

And the striking thing about what Microsoft's research chief Craig Mundie picked to show off to a group of technology journalists was that almost all of them involved Kinect.

The system which turns a player's body into a games controller was developed with the help of seven different research groups at the company's three main labs, some working on voice recognition, others on motion sensors and a range of other technologies.

Now they are looking at what Kinect could do next.

This photo-realistic avatar is designed to be able to be put into a game or social network

We saw a system which would allow two people to see different images on the same screen, their eyes tracked by the Kinect camera.

Other scientists showed off ways that the camera could capture objects and people in 3D, which might have applications in future telepresence systems.

And there was plenty of work on avatars, for use in either games or in video-conferencing. Two Chinese researchers demonstrated a photo-realistic talking head - type in some text and he'll say anything you want, blinking and moving almost like a real person.

Craig Mundie says the success of Kinect, which racked up 8m sales in its first 60 days, is proof that the sheer scale of Microsoft's R&D strategy is paying off.

"Microsoft is at a point where many of the things that we've been researching for twenty years are starting to add up and produce solutions," he says. "You can't rely on two guys in a garage to make all the changes, some of these things require a huge amount of technology and a lot of scale."

Microsoft's Craig Mundie: "We have produced consistent business results, and new technology in many ways"

'Holy war in search'

But Microsoft desperately needed a hit from its research labs.

Ever since Bill Gates decided 20 years ago that the company would spend big bucks on trying to see into the future, there have been ideas aplenty but few stand out products. A decade ago, for instance, Gates was showing off tablet computers - but it took Apple and its iPad to make them mainstream.

Peter Lee, who runs the Redmond lab, says the research operation has a wide remit, from dealing with instant fixes to current products to blue-sky thinking.

Professor Lee, who joined Microsoft last year after a distinguished academic career and a spell at the US defence agency DARPA, insists the labs are having an impact on a daily basis.

He cites the contribution to what he describes as the "holy war in search", the battle between Google and Microsoft's Bing.

"Hour by hour we have a large group of researchers actively involved in Bing, constantly adding new research advances into the product."

But he thinks the long-term research is equally important.

"Some call it navel-gazing, we call it pushing back the frontiers of human knowledge," he says with a smile, predicting that his lab will one day win a Nobel prize.

Natural user interfaces

His boss Craig Mundie is Microsoft's big thinker, charting the path of its future research. His current obsession is what he calls natural user interfaces, new ways of interacting with computers, of which Kinect is one example.

There is, he says, a shift about to happen from the old graphical user interface to a trend where "the computer is more like us - it sees, it listens, it speaks, it understands, it even seeks to do things on our behalf."

It is an intriguing vision, but here's a sobering fact. All these clever ideas, smart people, and major investment have not stopped Microsoft from being overtaken in the last year in terms of market value by Apple, which seems to focus on the customer experience now, rather than five years down the line.

Rory Cellan-Jones shakes hands remotely, using a 3D projection

Big, sleepy, and dull, I suggested to Mr Mundie, is how many people now perceive Microsoft.

"We don't feel big and sleepy or dull," he responded, "but if people perceive us that way I think looking at the stuff that Kinect brings should change that view."

And he insists that firms that do not have the patience to spend on long-term research will lose out in the end.

"I don't think any company is going to prevail over a long period of time in giving good business returns, if they aren't making these kind of investments. They'll come and go in a generation if they don't have the staying power that's produced by having real mastery of the underlying technologies."

Microsoft, which still generates huge revenues from its core products, Windows and Office, can well afford to keep spending on its blue-sky thinking. But having made such a big bet on science, it will be hoping that the coming years will produce more Kinects, and fewer tablet PCs.

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Qatar expresses UK bank interest

23 February 2011 Last updated at 13:39 GMT Qatar already has a stake in Barclays but will it invest in RBS or Lloyds? Qatar has expressed an interest in investing in the part-nationalised Royal Bank of Scotland and Lloyds Banking Group.

"About any investment in the state or partially-state owned banks, we are very open for any investment in the UK," Prime Minister Sheikh Hamad bin Jassim said.

The UK government plans to sell its 83% stake in RBS and 43% holding in Lloyds.

Qatar invested heavily in Barclays in the wake of the financial crisis.

And last year the Qatari royal family's investment company bought Harrod's for a reported £1.5bn, while the Qatar Investment Authority owns about a quarter of retailer Sainsbury's.

After meeting UK Prime Minister David Cameron, the Qatari prime minister expressed interest in doing more deals with UK companies.

Sheikh Hamad bin Jassim said he had "discussed some ideas" with Mr Cameron, who was visiting Qatar on Wednesday as part of a Middle East tour.

"Our team has been engaged and we will continue to discuss investment in the UK," he added.

The government's stakes in the part-nationalised banks, which also include Northern Rock and Bradford & Bingley are managed by UKFI.

UKFI declined to comment on the suggestion of interest from Qatar.

However it has previously said that no sale was likely until RBS and Lloyds had seen some share price stability and until the government's Independent Commission on Banking (ICB) was published.

Last month, the head of UKFI warned that if the ICB recommended a break-up of British banks, this would damage taxpayers' returns from their stakes - worth about £67bn at the time of investment.

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Sri Lanka urges finance overhaul

25 February 2011 Last updated at 16:08 GMT By Saroj Pathirana BBC Sinhala Service Economies, not just institutions are deemed too big to fail, President Rajapaksa said. The president of Sri Lanka has called for a new financial order to prevent future world financial crises.

President Mahinda Rajapaksa said the industry had been mainly focusing on regulating institutions since the 2008 downturn.

But he said the emphasis needed to move to managing economies that had a global impact.

President Rajapaksa singled out the US as needing to act with more global responsibility.

He accused Washington of injecting "massive quantities of new money" which would have a "massive negative impact on the world".

'Double standards'

Addressing a regional summit of bank governors in Colombo, Mr Rajapaksa said the world had learned individual and common lessons from the crisis which had shaken the very foundations of the global financial structure.

There was therefore a need for a new financial order, and a model that would better equip the world to face similar crises in the future, he added.

President Rajapaksa commended financial communities for deciding to regulate and supervise the financial institutions which were considered "too big to fail".

Continue reading the main story

It is also necessary for the worldwide financial community to focus upon the management of economies that have a global impact, and therefore have become 'too big to fail'”

End Quote Mahinda Rajapaksa Sri Lanka president But he added that "by the same token, it is also necessary for the worldwide financial community to focus upon the management of economies that have a global impact, and therefore have become 'too big to fail'."

Opening the South East Asian Central Bank Governors' (SEACEN) Conference, the Sri Lankan president said "double standards, the obvious policy contradictions and inconsistencies, the stubbornness of large economies to face realities and attempts to politicise multi-lateral financial organizations" had been the main causes of the global economic crisis.

Pointing to the US as an example, Mr Rajapaksa called upon "globally influential economies" to act in a "globally responsible manner" without putting their partners in danger.

"Many economic analysts have pointed out how the world has been anxiously watching while massive quantities of new money were injected by [the] USA into their economy, and through such infusion, into the entire world," he said.

"It is widely expected that such infusion, while possibly stimulating growth and employment within the issuing nation, would have a massive negative impact on the rest of the world in time to come."

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India Commonwealth Games men held

23 February 2011 Last updated at 17:02 GMT The Games were a success for India, despite the corruption allegations India's top investigating agency has arrested two senior Commonwealth Games officials suspected of corruption.

Organising committee Secretary General Lalit Bhanot and another top official, VK Verma, are accused of financial irregularities linked to the Games.

These are the most high-profile arrests in the ongoing investigation into allegations of corruption over last year's showpiece event in Delhi.

Both men deny the allegations. They will appear in court on Thursday.

The row over corruption at the Games is one of a series of graft scandals that has rocked India in recent months.

Former Telecoms Minister Andimuthu Raja resigned at the end of last year amid allegations that he had undersold mobile phone licences.

Lalit Bhanot was second-in-command to the Game's chief, Suresh Kalmadi, who is also being investigated.

'Absolutely wrong'

A spokesman for India's Central Bureau of Investigation (CBI) said that Mr Bhanot and Mr Verma are accused of inflating costs while procuring timers and scoring equipment from a Swiss manufacturer, Swiss Timing, allegedly costing the government nearly $24m (£15m).

Swiss Timing has rejected all accusations against it. Its director general, Christophe Berthaud, said that they were "absolutely wrong".

The BBC's Sanjoy Majumder in Delhi says that the Commonwealth Games were a huge success for India but were marred by allegations of financial mismanagement and cost overruns.

Last month several international companies claimed they were owed millions of dollars in unpaid bills and threatened to take legal action.

Mr Bhanot was in the news last October, when concerns prior to the start of the Games were raised about filthy, unfinished housing at the athletes' village.

"Everyone has a different standard of cleanliness," he told reporters, adding that the rooms at the village "are clean according to you and me, but they [foreigners] have some other standard of cleanliness".

Last month the sports ministry sacked Mr Bhanot and Mr Kalmadi from the organising committee to enable police to conduct "impartial and unhindered investigations".

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The price of love

23 February 2011 Last updated at 00:02 GMT By Shanaz Musafer Business reporter, BBC News Introduction agencies may be attractive for older people who don't want to put their picture online "I felt I was paying for a first class-service and that is what I got: privacy, successful introductions, kindness and efficiency."

So says "Susan" of the thousands of pounds she spent signing up to The County Register introduction agency.

The fact that Susan does not wish to be identified by her real name demonstrates how highly she values her privacy.

And that to her was one of the main attractions of the County Register.

Susan is 63 years old. She had read about the agency several years ago, not long after her husband had died.

Then in 2003, when she felt she was ready to meet somebody new, she decided to take the plunge and contacted the agency.

Continue reading the main story

There's been a huge social change in this country that doesn't allow people to meet each other in the way they used to”

End Quote Heather Heber Percy The County Register Interview process Introduction agencies do pretty much what they say on the tin - they introduce people to potential partners to whom they think they are well suited.

Discretion is the name of the game. Your picture won't be plastered on a website for anyone to see: instead, your name will be added to the agency's private database.

They interview all clients before taking them on, asking them about their expectations and sometimes even visiting their home.

People who approach them are nearly always looking for a long-term relationship, so they are asked questions such as "Where do you see yourself in three years' time?" and "Do you want children?"

Heather Heber Percy, founder of the County Register, says people's expectations are high. "They are relying on you to find someone who's going to change their life."

Often clients who work long hours come to her, seeking help.

"There's been a huge social change in this country that doesn't allow people to meet each other in the way they used to."

Not for everybody

But acceptance is not guaranteed.

Some agencies warn people from the outset that they may not be accepted

Gray & Farrar, one of the most exclusive agencies, openly states that "only the most eligible single people are accepted" and acknowledges that "we are certainly not right for everybody".

While Karen Mooney, founder of the Sara Eden agency, says: "If people have unrealistic expectations, we don't take them on. It doesn't matter how much money you throw at us, we can't wave a magic wand."

But turning someone away is a delicate process, she says, particularly if you are dealing with someone who has been bereaved.

"Often people people come to us who are widowed - probably more men than women - and often they haven't thought about grieving."

Premium services

If you are accepted though, the agency will then pre-select potential dates for you.

And the more you are willing to pay, the more bespoke the service.

For instance, a higher premium may get you your own personal matchmaker and priority introductions to new members, or the agency may even place personal adverts on your behalf if necessary and then screen the respondents.

The kind of money we are talking about is much more than you would associate with an online dating site.

Some dating websites are completely free to use. For the more popular ones like mysinglefriend.com or match.com, subscriptions start in the region of £22 to £32 a month, but get lower if you sign up for a longer period.

By contrast, services on offer at the County Register range in price from £2,000 for 12 months' membership to £10,000 for 18 months' membership.

At some other agencies, £10,000 is just the starting level.

'Hoping for a Bentley' Heather Heber Percy launched her introduction agency 27 years ago

Susan paid about £7,500 for a year's subscription when she joined the County Register in 2003.

She met someone whom she went out with for a period of time, but the relationship later ended. A couple of years later, she rejoined the agency and has since met somebody new, with whom she "is in the first stages of something".

She admits that if the fees had taken up a large chunk of her savings, she would have thought twice about subscribing, but she was lucky enough to be in a financial position where she could afford it.

"I suppose one hopes one is buying a Bentley and not a second-hand car with 100,000 miles on it!" she says.

"Yes, it's expensive, but Heather [Heber Percy] provides a service. I thought it was probably worth it paying for the quality of the service and the security of privacy."

She adds that it worked for her - someone a bit older, who has never wanted to go to a bar to meet someone and who didn't want to put her picture online.

"I think it's good for anyone of my age if they don't want to go through life on the internet."

Matchmaking costs People are willing to pay thousands of pounds in their search for love

The fees themselves have to cover a variety of costs, which are enormous, according to Heather Heber Percy.

"We have just placed four adverts for a client and the costs for those four ads will be around £1,000," she says.

"Then when someone comes back, I have to travel and interview them on her behalf. Then you create a profile for them and you present the details to the client."

She also has to pay for six full-time staff (who cover 2,500 clients between them), the costs of running two offices, plus the costs of travel all over the country.

In fact, for her most expensive service, the £10,000 fee would actually leave her with a loss if a client were to require all the introductions and advertisements on offer.

But she prices it like that as "a conscious effort to try and keep it at a reasonable cost".

And ideally, she will introduce two people who "click" relatively early on in their subscription, so they don't need to use up their full quota of introductions.

She is passionate about the business she started 27 years ago. Back then, the agency charged a mere £30 for a year's membership, guaranteeing six introductions in that time.

"This is genuinely about wanting to help people, making sure you take on clients you can help and trying to keep the costs down. We're not a company who makes a huge profit," she says. (She's right - in 2009, the County Register made a profit of just £17,500.)

Karen Mooney says the recession made people think about their personal needs

But she concedes that not all agencies may share her motives.

"One of the difficulties in this industry is people start up, thinking they can run an introduction agency, and then when the going gets tough, they disappear with people's money," she says.

She also chairs the Association of British Introduction Agencies (ABIA), which strives to maintain a code of practice for introduction agencies.

Dating sites' influence

Karen Mooney from Sara Eden says that interest in the industry has grown 10-fold since she started her agency in 1988.

She admits that the start of the recession had an impact on business, as people were panicking about losing their jobs. But then things turned around.

"Once we got into the swing of the recession, it was actually good for business," she says. "People thought more about their needs as a person rather than monetary needs."

Continue reading the main story 52% of men and 48% of women have used the internet to find a date59% of single men and 46% of single women say they intend to use the internet to meet someone49% of men and 36% of women say they would not curb their dating spending in a tight economy

Source: ABIA/Google

Nor has the rise of dating sites such as match.com as a cheaper alternative had a wholly negative impact.

She admits that it has taken away the bottom end of the market, creating a clear divide.

But it has also "brought dating into people's homes and now people are more willing to go into an agency", she says.

Heather Heber Percy, meanwhile, says that for all the people who meet someone on a dating website, there are many who don't.

Many of her clients, she says, are people who have tried online dating and found it was not for them.

And she is confident that introduction agencies have a secure future.

"However it changes on the internet, there will always be that niche market for personal services for people who are willing to work that little bit harder to meet someone."

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Saks sees profit after sales lift

23 February 2011 Last updated at 16:20 GMT Saks results suggest luxury shoppers are beginning to spend again US department store chain Saks has reported a profit for the fourth quarter of 2010 after it managed to sell more luxury goods at full price.

Saks reported a net income of $25m (£15.3m) against a loss of $4.6m last year, with same-store sales up 8.4%.

Sales had been hit during the economic downturn when shoppers were less inclined to buy luxury goods.

Saks reported a net income of $47.8m for the year, up from a loss of $57.9m in 2009.

"2010 was a year of good progress for Saks. We returned to prudently and profitably growing the business while making investments for the longer term," said chief executive Stephen Sadove in a statement.

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Aberdeen FC stadium plan approved

23 February 2011 Last updated at 21:59 GMT The new stadium would be able to hold about 21,000 fans A new football stadium for Aberdeen FC has been approved by councillors, subject to approval by Scottish ministers.

The Dons have been given permission to build the £40m stadium, capable of holding about 21,000 fans, at Loirston Loch in the south of Aberdeen.

The council decision will now be called in by Scottish ministers, who will scrutinise the plan.

Planners had previously recommended approval for the stadium.

Councillors heard a report saying the stadium would be an iconic landmark and an important gateway to Aberdeen.

The stadium plans include a gym, a club shop, museum and cafe, and the whole facility would be lit at night by a red glow.

The planning application followed a public consultation.

Councillors rejected 140 objections from local communities and groups concerned about the environmental impact of the stadium.

Aberdeen FC intends to sell its current home at Pittodrie near the beach for housing.

Meanwhile, councillors approved a third bridge over the River Don. This will also be called in.

The meeting was used to pay tribute to the late Ron Clark

They earlier paid tribute to long-serving Aberdeen councillor Ron Clark, who died at the weekend.

Mr Clark, the Lib Dem representative for Dyce, Bucksburn and Danestone, had been in public service for more than 30 years.

Lord Provost Peter Stephen and the leaders of each political party each paid tribute to Mr Clark.

Members also held a minute's silence before the meeting got under way.

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Cup to stay in NZ - rugby chief

People walk through the centre of Chirstchurch after the 6.3 magnitude quake
Rugby New Zealand 2011 boss Martin Snedden says all World Cup matches will take place in the country, despite Tuesday's earthquake in Christchurch.

Since the quake, 75 people are known to have died in New Zealand's second city and more than 300 are missing.

"Any assessment [of Christchurch] by us must wait while the rescue efforts take priority," said Snedden.

He added: "Rest assured, the rugby World Cup will proceed and all matches will be in New Zealand."

With the World Cup due to start on 9 September, reports suggested some games could be moved to Australia.

Snedden, a former international cricketer and chief executive of New Zealand Cricket, added: "There has been speculation that this tragedy puts the entire event in jeopardy or that matches will relocate to Australia. That is not the case."

The quake was Christchurch's second major tremor in five months and is already New Zealand's deadliest natural disaster in 80 years.

If we can host the rugby World Cup as we intend in Christchurch I would like to do that
John Key - New Zealand Prime Minister

England's Pool B match against Argentina on 10 September is scheduled to be the first match played at Christchurch's Lancaster Park Stadium during the World Cup, which ends on 23 October.

Although there have been no reports of damage to the stadium, which is due to host seven matches, tremors have left roads buckled and buildings toppled across the city damaging the infrastructure required to host World Cup events.

Snedden said his World Cup organising committee will be evaluating Christchurch's ability to stage matches.

"It is too early to talk in any detail about implications for the tournament in Christchurch," added Snedden.

"The next step will involve our organisation leading a thorough process of assessing the city's ability to host the seven matches scheduled to take place there.

"This will involve an assessment of all the key World Cup infrastructure of the city including the stadium, hotels, training facilities and the transport network.

"A detailed evaluation of this nature will take place as soon as is reasonably possible. We are mindful of the pressure the people of Christchurch are under right now and do not want to place any more demands on them.

"Christchurch is a proud rugby city with a rich rugby heritage and we know the tournament means a lot to fans there.

"We are hopeful a clearer picture will emerge in the coming days to allow us to make the right decisions."

Meanwhile, New Zealand Prime Minister John Key says he hopes Christchurch can still host matches in the showpiece tournament.

"If we can host the rugby World Cup as we intend in Christchurch I would like to do that," he said.

"It's some way into the future but it's a very important city to New Zealand. It would be a demonstration Christchurch is back up on its feet.

"One of the issues might be accommodation; there has been substantial damage to hotels."

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Russia 'needs to fight inflation'

24 February 2011 Last updated at 06:53 GMT Russia needs to take additional measures to halt inflation, Finance Minister Alexey Kudrin tells the BBC.

Russia needs to take additional measures to halt inflation, Finance Minister Alexey Kudrin has said.

He told the BBC that the government had abandoned import duties to allow free access of food into Russia and was selling grain from the state fund.

Mr Kudrin said that while it was for the central bank to decide whether to increase interest rates, it was "high time" for additional measures.

Prices in Russia rose 8.8% over the last year and 2.4% in January alone.

The country's food prices skyrocketed after last summer's severe drought which destroyed most of the harvest, and food import prices shot up as well.

Mr Kudrin told the BBC's Russia Business Report that the government's initial inflation target for 2011 stood at 7%.

Continue reading the main story

Russia Business Report is a television programme for BBC World News. Every month we take a look at the latest trends in the Russian economy and business world.

Watch the next programme on Saturday, 26 February at 0330 GMT and 1830 GMT and on Sunday, 27 February at 1130 GMT and 1830 GMT.

"It may be hard to achieve but I count on the fact that especially food prices will stabilise after the harvest in the second half of the year," he said.

Election year

The minister said he did not expect a big increase in spending, despite 2011 being an election year.

"The budget for this year has already been set but there may be some adjustment in the course of the year depending on the inflation rate," Mr Kudrin said.

"I think we could provide some aid for the low income population if inflation rate rises."

He admitted he was under "strong" pressure to increase spending to please the voters.

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Economy shrinks more than thought

25 February 2011 Last updated at 14:55 GMT Bad winter weather is blamed for the bulk of the UK economy's contraction at the end of 2010 The UK economy shrank by more than previously thought during the last three months of 2010, revised figures show.

Gross domestic product (GDP) slipped by 0.6% in the period, according to fresh data from the Office for National Statistics (ONS).

Its initial estimate had suggested the economy had contracted by 0.5% - with heavy snow blamed for the slump.

However the ONS said that the revision was not a dramatic one.

"It's not that much of a shock, this is a very small revision," the organisation's chief economist Joe Grice told BBC News.

"The snow effect we think is still 0.5%. On the basis of that, the economy is still flattish at minus 0.1%. The overall picture is still a flattish underlying economy in the fourth quarter."

The latest US GDP figures for the same period were also released on Friday and also revised down, from growth of 0.8% to 0.7%.

The pound fell slightly after the UK figures were released, to trade at $1.607, down 0.5 of a cent. Against the euro, the pound was unchanged at 1.17 euros.

Weak construction Continue reading the main story

It wasn't a bad dream. The recovery really did stall in the final three months of 2010, and it wasn't only the weather. That is the most important conclusion to be drawn from today's second round of GDP estimates for the fourth quarter”

End Quote Stephanie Flanders Economics editor, BBC News The ONS statement said that production industries, which include manufacturing and mining, had grown slower than previously estimated.

The service sector had also contracted by more than first thought, by 0.7% rather than 0.5%, the ONS said.

But the slump in construction had not been as bad, with the output of the industry declining by 2.5% rather than 3.3%.

GDP figures for a particular quarter are produced first as a so-called "flash" estimate, and are later revised at least twice as more detailed information is collated.

Shadow chancellor, Ed Balls, said the latest figures were "disappointing".

"Of course, we should always treat one quarter's figures with caution, but it is not cautious for the Treasury to plough on regardless," he added, accusing Chancellor George Osborne of "being complacent now in refusing to accept that his choice to cut too deep and too fast is holding back our economy and putting jobs at risk".

Continue reading the main story

In the UK, firms have been more reluctant to lay off workers, perhaps fearing it will be hard to find the employees they need when the recovery really gets going. ”

End Quote Robert Gardner Chief economist, Nationwide However Chief Secretary to the Treasury, Danny Alexander, said he expected the economy to recover.

"Of course, as we have said before these figures are disappointing. We have got to deal with the fact that we have inherited an enormous budget deficit - the previous government maxed out the nation's credit card.

"But we have also got to do what we can to support the economic recovery. The early survey data suggests that the economy is able to bounce back and we are going to continue to do everything we can to support that."

One small business lobby group, the Federation of Small Businesses (FSB), said the weak figures meant the government should do more to help.

"We need to see the government use next month's Budget to provide economic stability," said FSB chairman John Walker.

"The government does have tools at hand to help boost the confidence of small firms, such as extending the National Insurance holiday to existing businesses that take on new staff and keeping to its manifesto promise and introducing a fuel duty stabiliser."

Negative contribution Joe Grice, chief economist at the ONS: It is 'a very small downward revision'

The BBC's economics editor Stephanie Flanders cautioned against reading too much into the revision.

But she added that there was some "bad news" in the figures, especially the 2.5% decline in investment, which is considered an indicator of future business activity.

She added that net trade, once again, had made a negative contribution to the recovery - with exports growing 2.3%, but imports up 3%.

ING economist James Knightley said he expected the economy's poor performance to continue.

"The detail shows that government spending was the only positive growth driver. This is fairly worrying given we know about the wave of fiscal austerity that is now starting to hit the UK economy, meaning that we will soon be starting to see negative figures for this component."

Change of heart

Meanwhile Vicky Redwood, an economist at Capital Economics, said figures showing a worsening economics performance may cause a change of heart among those previously in favour of raising rates.

"The slight downward revision might give the more hawkishly inclined members of the MPC reason to pause for thought," she said.

Documents released on Wednesday showed three of the Bank of England's policymakers voted for a rate rise at their last meeting, with the remaining six Monetary Policy Committee (MPC) members voting to keep rates at historic 0.5% lows.

The minutes from the MPC's last meeting stressed that recoveries from recession were rarely smooth, so more weakness would not be unusual.

But it also said growth could pick up in the first quarter if the level of activity returned to normal after the snow, helped along by postponed expenditure.

They also indicated that those who had been against a rise in interest rates this month would consider changing their minds if GDP figures for the first three months of 2011 suggested the economy had picked up.

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Oil and food slow Japan deflation

25 February 2011 Last updated at 02:26 GMT The Bank of Japan forecasts the economy will come out of a lull later this year Japanese deflation has slowed in January buoyed by high food and fuel costs.

Consumer prices fell 0.2% in January from December, the statistical office said. Prices were unchanged from a year earlier.

However, analysts said deflation was still a problem, adding the economy was still in the early stages of recovery.

When fuel and food costs are excluded, consumer prices fell at an annual rate of 0.6%.

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

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

Staying the course

As a result, many analysts say they do not foresee the Bank of Japan (BOJ) changing its monetary policy any time soon, and expect it to keep interest rates on hold.

The BOJ cut interest rates to almost zero last year.

It has said it will keep them at that level until consumer price growth returns, and the rate of inflation nears 1%.

The BOJ has forecast that the economy will pick up pace later this year, and that should help end the current, long-lasting period of deflation.

"Price declines are likely to narrow in line with the Bank of Japan's view," said Atsushi Matsumoto of Mizuho Research Institute.

"There are no immediate policy implications," he added.

Japan's main Nikkei 225 stock index was little changed in morning trading in Tokyo.

The Japanese yen was also little changed against the US dollar, trading at 81.94.

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Supply talk eases oil price surge

25 February 2011 Last updated at 22:38 GMT Continue reading the main story Oil prices have retreated from Thursday's multi-year highs amid optimism producers could offset a drop in supply caused by unrest in Libya.

Brent crude was trading at $112.33 a barrel, after almost breaking through the $120 mark earlier in the week.

US light crude was back at $98.26 a barrel having earlier surged past $100.

Reports suggest Saudi Arabia has increased its oil production by almost 10% to offset production shortages resulting from the unrest.

Global stock markets gained ground after the threat of rocketing oil prices receded.

Leading European markets Paris and Frankfurt maintained rallies into the afternoon, while London's FTSE 100 index also caught up after lunch after being suspended all morning because of a technical fault.

On Friday, Singapore's STI stock index and Hong Kong's Hang Seng saw increases of more than 1% while markets in South Korea, Japan and Taiwan also gained.

'Verbal finesse'

Analysts said that the mood had been helped by comments from Saudi Arabia and the International Energy Agency (IEA).

Saudi Arabia has said that it would step in to fill any shortfall in supply should it be needed now, or should the Libyan situation deteriorate.

Reuters news agency quoted an oil industry source saying that Saudi had increased production by 700,000 barrels a day to more than 9 million a day in total.

At the same time, the IEA said that Libyan production had been less affected than many observers had first forecast.

Recovery 'at risk'

However, IEA chief economist Dr Fatih Birol warned that even if oil prices return to their pre-crisis levels, they still remain dangerously high and could pose a risk to the global economy.

"Lets try to remember that before anything started to happen in the Middle East, in Egypt, the price was about $95 - not very low compared to current levels," he told BBC World Service.

"And if this turmoil calms down - and I hope it does, quickly - if the prices are still $90-95, there is still a significant risk they could derail the economic recovery."

He added that the events in Libya and elsewhere were only making the situation even more grave.

"We should start to understand that the age of cheap oil is over," he added.

'Fear factor'

Analysts said that the markets want to see crude supplies becoming available as and when they are needed.

Trying to predict the oil price when it is being driven by geopolitical events, rather than the fundamentals of supply and demand, is particularly difficult, analysts say.

"The fear factor in the market remains high, as the extent of contagion remains unknown," said Barclays Capital.

"The price correction, should the situation in the Middle East ease somewhat or in the event of Opec production increases, is likely to be quite sharp."

However, others argued that the drop in the price of oil seen on Thursday afternoon would be short lived.

"I think oil prices are going to trade higher, even with Saudi assurances," said Tom Kaan at Louis Capital Markets in Hong Kong.

"I think Opec wants to see higher oil prices."

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Japan sees surprise trade deficit

23 February 2011 Last updated at 03:33 GMT Despite the January slowdown, exports are still seen driving Japan's recovery Weaker exports to key markets gave Japan its first trade deficit in 22 months, Ministry of Finance data has shown.

The trade deficit was 471.42bn yen ($5.7bn; £3.52bn) in January, with exports up 1.4%. Analysts had expected export growth to be closer to 7%.

Japan has struggled to boost exports as a stronger yen dents demand.

It recently lost its position as the world's second-largest economy to China.

Changing scenario?

However, analysts said they expect exports to rebound.

That should help drive economic growth in Japan, albeit at a pace that is slower than many experts may have predicted.

"Exports were weaker than expected," said Yoshimasa Maruyama from Itochu Corporation in Tokyo. "But the overall trade data does not alter the scenario that the economy is emerging from a lull.

"Exports will pick up slowly in the coming months but the pace of the economic growth in the first quarter may not be as fast as previously projected," he said.

Regional demand Most economists blamed a slowdown in exports to Asia for the surprise deficit in January.

Shipments to the region rose 0.4% from a year earlier. That is much less than the 14.8% annual increase in December.

One of the main reasons for the slower growth was weaker demand from China, where the government is battling inflation and signs that its economy may be overheating.

In the past couple of months, interest rates have climbed, crimping consumer demand and spending power.

During January, shipments to China, which is Japan's largest trading partner, increased 1% from a year earlier. That is down from a 20.1% annual increase in December.

Tighter policy

"China has started to tighten policy to slow its economy and this shows in January," said Takahide Kiuchi from Nomura Securities in Tokyo.

"China stopped tax breaks on cars in December, which also had an impact."

However, Mr. Kiuchi added that exports were likely to pick up in coming months.

"The slowdown in Japan's export growth in January is temporary and exports could continue as final demand overseas is still strong and the inventory cycle suggests there is more demand," he said.

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Digital greetings

25 February 2011 Last updated at 00:03 GMT By Bobbie Johnson Technology reporter, BBC News The name's Bond: Today's super-spies don't need to rely on having their business cards to hand to give a girl their number. Industries may change and brand names may come and go, but at least one tradition in the business world has remained largely unchanged for hundreds of years.

The exchange of cards between two people who are meeting for the first time is a ritual that goes back as far as business itself.

For most of us, the handing over of contact details is an important moment - a clear signal that a connection has been made.

But as our lives turn increasingly digital, technology is attempting to provide a range of futuristic alternatives to the old-fashioned card.

Guess who I bumped into Ever since the arrival of electronic communication, people have been exploring new ways to share information with each other- from swapping email addresses to trading mobile phone numbers and, increasingly, connecting through an online social network.

A range of services have appeared to take advantage of this trend, including Bump Technologies, a two-year-old startup based in California's Silicon Valley. Its application, which users download to their phones, lets people trade contact details simply by tapping their handsets together.

It is an approach that has a number of advantages over the traditional paper card, says Bump's Sadie Bascom - particularly since nobody goes anywhere without their mobile these days.

"It's easy, always on your phone, and you never have to remember to grab a stack of physical cards or worry about them running out."

It also gives users the chance to add directly to somebody's address book - skipping the need to enter those details by hand or saving people the chore of rifling through piles of cards to find the details they are looking for.

"People's dependence on their mobile devices to help them manage their lives is increasing," she adds. "Why take a few minutes to type someone into our phone when you can bump and save their info in a matter of seconds?

Potential goldmine The Bump app lets you share details by tapping mobile phone handsets

Going digital has other advantages, too. Traders can include information that might be hard to fit on to a traditional business card, such as a portfolio or even a CV.

And for those who feel comfortable with the idea, forging a connection on Facebook or Twitter can prove a useful way to add personality to an otherwise sterile working relationship.

Given the explosive growth of the social websites over the past few years, some see this trend as a potential goldmine.

Investors including Sequoia - the venture capital group famous for backing Google, Oracle and PayPal - have pumped almost $20m into Bump, for example, in the hope that it can become a mainstream hit.

Meanwhile LinkedIn, the world's biggest business-centric social network, recently announced its plan to float on the stock market.

Analysts estimate that the launch will value the company, which lets people trade business contact information over the web, at around $175m.

Keeping it old school

While the trend to go completely digital might be growing, however, there is still a roaring trade in traditional cards. But even those are now getting a number of hi-tech overhauls.

Moo founder Richard Moross says a physical card conveys personality

Lower manufacturing costs mean that it is easier and cheaper than ever to make customised cards - leading some who want to stand out from the crowd to opt for innovative designs and materials such as aluminium and plastic that were previously too expensive to use.

London-based service Moo.com, meanwhile, has taken advantage of technology in a different way. Advanced digital printing techniques mean that Moo customers can use their own photographs to create a stack of hundreds of cards which each carry different, personalised images.

As a result the company, which now has customers worldwide and an office in the US, has built a strong following among creative professionals and technology-led businesses.

Richard Moross, Moo's founder and chief executive, says that this is because a physical card "conveys the card holder's personality through design".

"It's way more than just contact info," he says. "The more prevalent digital becomes, the more meaningful interacting is in the real world - analogue still rules at conferences and events. Using a digital business card can be a bit like talking on your phone at the dinner table."

Strict etiquette surrounds swapping meishi - or business cards - in Japan

Indeed, in some cultures, the role of the physical calling card is still hugely important.

While Americans might casually flip out a card from their wallet, for example, Japanese executives will carefully present their cards with both hands as a sign of respect.

But what is clear in almost every case, however, is that the advances in online networking mean the lines between professional and personal are becoming increasingly blurred.

The more information we share online through services like Facebook, Twitter and blogs, the bigger the idea of swapping contact details becomes - regardless of whether it's done physically or virtually.

"We have since seen a shift in the demographic as Bump gained popularity," says Sadie Bascom. "The majority of bumps now actually occur after 5pm, and our most used features are the photo sharing and messaging tools."

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