document.writeln("

European Central Bank hikes short term rates after five years
Frankfurt: For the first time in five years the European Central Bank has raised short-term rates, nudging up its benchmark interest rate by a quarter point, to 2.25 percent.

But the bank's president, Jean-Claude Trichet signaled that the move, would not be the beginning of a cycle of interest rate increases like that undertaken by the Federal Reserve in the United States. This was by way of pacifying nervousness amongst political and business circles, who had warned with growing stridency in recent weeks that higher interest rates could stifle the Continent's still-fragile economic growth.

With unemployment in Germany dipping below 11 per cent in November, the central bank found it to be an opportune moment to act. The German Federation of Industries said the rate increase would not be harmful and might even serve as a warning to unions not to demand steep wage increases in contract negotiations.

The bank's incremental increase also strengthened European stocks and bonds, although the euro slipped against the dollar.

Taming inflation is the central bank's cardinal role; it aims to keep the inflation rate hovering just under 2 percent. To meet that goal, some economists said, a further rise in interest rates would seem almost inevitable.
Back to News Review index page  

European stocks at 2005 high
London: European shares advanced to an all time high for 2005 on Thursday after the first interest-rate hike on the Continent in five years. The markets interpreted comments from European Central Bank Jean-Claude Trichet to mean that there would only be a limited number of subsequent rate hikes.

The German DAX 30 index added 1.4 percent at 5,266, France's CAC 40 added 1.5 percent at 4,636 and the U.K.'s FTSE 100 gained 1.2 percent at 5,486. The pan-European Dow Jones Stoxx 600 added 1.6 percent at 304.31, its best close of the year.

The euro was just under US$1.17 after the ECB rate decision, the first increase in five years that was widely anticipated by the markets.
Back to News Review index page  

French mobile companies fined heavily for market collusion
Paris: Competition authorities slapped France's three mobile telecommunications operators with a heavy bill on Thursday charging them with a record fine for five years of market collusion.
The competition council ordered Orange, SFR and Bouygues Telecom to pay a cumulative 534 million euros (US$630mn) for what the council called "particularly serious" practices that had caused "great damage to the economy".

The council has directed France Telecom's Orange unit to pay 256 millions euros, (US$301 million), Vivendi Universal's SFR was fined euro220 million (US$259 million) and Bouygues' Bouygues Telecom was fined euro58 million (US$68 million).

In a 90-page ruling, the competition council found that the operators had between 1997 and 2003 exchanged confidential information regarding the number of new customers and cancellations. Between 2000 and 2002 they had fixed their respective shares of the market. Freed from serious competition among themselves, all three operators focused on offers that required a 24-month commitment, rather than on pre-paid cards that have developed rapidly elsewhere in Europe.
Back to News Review index page  

Knight Ridder solicits EoI for its assets
San Jose, USA: Market sources say that Knight Ridder Inc., under pressure from its biggest shareholders to sell itself, has begun soliciting preliminary bids from potential buyers for its assets.

The move does not necessarily mean a commitment to sell, for America's second-largest newspaper group and owner of The Inquirer and Philadelphia Daily News. The request for an "expression of interest" from bidders is only a preliminary step in a process to establish the level of interest in the marketplace.

Knight Ridder has been cutting costs and personnel in many of its markets, including recent cuts of 100 jobs in Philadelphia. Further cost-cutting would likely run into criticism from unions and community groups that such cutbacks would hurt the quality of the newspapers, and lead to further declines in circulation and advertising.

Last month, Knight Ridder's largest shareholder, Private Capital Management, of Naples, Fla., demanded the company sell itself, citing the poor performance of its stock. Since then, Knight Ridder has confirmed it is working with Goldman Sachs and Morgan Stanley to explore a variety of options.

As per market analysis, the cost of running Knight Ridder's newspapers and digital-media operations could be trimmed by as much as US$350mn under a "scorched-earth" reduction of 1,064, or 6 percent, of the company's 18,000 employees, the shutdown of the Daily News, and heavy cuts at corporate headquarters and Knight Ridder Digital.
Back to News Review index page  

RIM breathes again after patent ruling goes in its favour
Waerloo, Canada: Still recoiling from two recent setbacks in court, Research In Motion won a round in its long-running patent fight against NTP on Thursday when the U.S. Patent and Trademark Office rejected one of the claims by RIM's adversary.

Patent-holding firm NTP contends that it owns the patents for the technology that powers RIM's BlackBerry handheld devices, but the Patent Office recently received information that a Norwegian firm may have filed patents prior to NTP, according to various media sources. The ruling by the Patent Office is not final and NTP will have an opportunity to file a response.

The ruling came a day after a federal judge rejected Waterloo, RIM's request to approve a US$450mn settlement with NTP. At stake is RIM's right to operate in the United States. NTP has already won an injunction that would force RIM to halt its U.S.-based BlackBerry service. RIM has said that it could implement alternative methods to keep its service running.

RIM has asserted that the technology that enables BlackBerrys to forward e-mail automatically was not pilfered.
Back to News Review index page