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EXCHANGE RATES Commercial Bank of <strong>Kuwait</strong> US Dollar/KD .2740000 .2860000 GB Pound/KD .4500000 .4610000 Euro .3600000 .3720000 Swiss francs .2970000 .3070000 Canadian Dollar .2840000 .2940000 Australian DLR .2900000 .2990000 Indian rupees .0040000 .0058500 Sri Lanka Rupee .0020000 .0035000 UAE dirhams .0760680 .07678320 Bahraini dinars .7411030 .7485520 Jordanian dinar .3870000 .4100000 Saudi riyals .0720000 .0780000 Omani riyals .7265200 .7338210 Egyptian pounds .0430000 .0510000 CUSTOMER TRANSFER RATES US Dollar/KD .2802000 .2823000 GB Pound/KD .4543300 .4577350 Euro .3627190 .3654370 Swiss francs .2998070 .3020540 Canadian dollars .2862540 .2884000 Danish Kroner .0486530 .0490170 Swedish Kroner .0425670 .0428860 Australian dlr .2919960 .2941850 Hong Kong dlr .0361410 .0364120 Singapore dlr .2283800 .2300920 Japanese yen .0035900 .0036170 Indian Rs/KD .0000000 .0053310 Sri Lanka rupee .0000000 .0021600 Pakistan rupee .0000000 .0029970 Bangladesh taka .0000000 .0034730 UAE dirhams .0763180 .0768900 Bahraini dinars .7435230 .7491040 Jordanian dinar .0000000 .3992930 Saudi Riyal/KD .0747400 .0753000 Omani riyals .7280760 .7335330 Philippine Peso .0000000 .0068070 BUSINESS Hamas halves Israeli fruit imports to Gaza GAZA: The Hamas government has barred much of Gaza’s fruit imports from Israel, citing a need to cultivate local Palestinian agriculture and for “resistance” against the Jewish state. The ban is opposed by Gazan produce traders who fear a squeeze on supplies and price hikes in the poor coastal enclave, which has a largely black market economy and lacks viable trade with Egypt, its other neighbour. Local growers however said the move would help them. With the exception of bananas and apples, Gaza is no longer admitting fruit from Israel, the Agriculture Ministry said yesterday. The ban affects at least seven kinds of fruit and, in terms of sales, constitutes around a 50 percent cut in imports whose 2011 value the ministry put at $26 million. Tahseen Al-Saqqa, the ministry’s director of marketing, said the move was in part a response to what he described as Israel’s refusal to allow the export, through its border with Gaza, of staple Palestinian BANGKOK: A man checks his mobile phone (lower right) as he walks on a footbridge yesterday. The Thai economy is experiencing a solid growth after suffering a doubledigit contraction in the wake of the kingdom’s worst floods in decades at the end of 2011. — AP Iran opens forex centre to support sagging rial DUBAI: Iran launched a fresh bid yesterday to stabilise its falling currency, opening a foreign exchange centre that provides government-subsidised US dollars to import some goods as the country struggles with Western economic sanctions. The rial’s street value has tumbled by more than half in the last year because of US and European sanctions against Iran’s oil and banking sectors, which have cast doubt on the central bank’s ability to defend its currency. Iranians have rushed to informal money changers to convert their savings into hard currencies, driving down the rial’s open-market value. This has raised the price of imported goods, contributing to double-digit inflation. The new foreign exchange centre allows importers of goods including truck tyres, construction equipment and synthetic fibres to buy dollars at a rate 2 percent cheaper than the street rate at any given time. The government plans to use revenues from petrochemical sales and 14.5 percent of its oil revenues to provide dollars for the centre, central bank governor Mahmoud Bahmani said on Sunday, according to the newspaper Aftab. He did not give an absolute figure for the amount of dollars to be supplied. “With the distribution of currency in this centre, the exchange rate in the market will go down, because some of <strong>Kuwait</strong> Bahrain Intl Exchange Co. Currency Rate per 1000 (Tran) US Dollar 280.900 Pak Rupees 2.968 the demand (for dollars) will be met in this centre and the pressure of demand will be removed,” Bahmani was quoted as saying. The dollar sold for 24,040 rials at the centre yesterday, the Iranian Students’ News Agency said, compared to about 24,600 on the open market at around the same time, according to currencytracking website Mesghal. The foreign exchange centre is the latest in a series of plans floated by the government in the last three months to address a burgeoning currency crisis, for which legislative foes of President Mahmoud Ahmadinejad have blamed his administration. The government maintains an official “reference” rate of 12,260 rials to the dollar, but only a limited amount of foreign exchange is available at this rate. Iran’s oil sales, its chief source of hard currency, have plummeted this year as a result of the sanctions, and legislators accused the central bank earlier this month of not injecting enough dollars into the market, thereby contributing to a fresh fall in the rial. The foreign exchange centre appears to have replaced a previous plan to establish a currency trading market, a proposal that was fiercely criticised by the private sector, which said the scheme would simply introduce yet another rate for the rial and bring more chaos to the economy. — Reuters fruit like grapes and guavas. “The Palestinian farmer is suffering because all doors to export have been closed,” Saqqa said. The charge was denied by Israel, which limits traffic in and out of Gaza and whose dealings with Palestinians there are often circuitous given long-running hostilities with Islamist Hamas. “I know of no request to export agriculture products from Gaza that has been refused,” said Guy Inbar, spokesman for the division in Israel’s Defence Ministry which liaises with the Palestinian territories. Price of war Gaza fruit importer Jaber Al-Shanty said the Hamas government ban was “irresponsible and unrealistic” as it overlooked the losses to hundreds of Palestinians whose livelihood depends on marketing the fruit. “The local product is not nearly enough” to offset the shortfall, he said. “What do we have in large quanti- Indian Rupees 5.190 Sri Lankan Rupees 2.130 Bangladesh Taka 3.427 Philippines Peso 6.770 UAE Dirhams 76.580 Saudi Riyals 75.065 Bahraini Dinars 746.800 Egyptian Pounds 46.125 Pound Sterling 461.800 Indonesian Rupiah 2.990 Yemeni Riyal 1.550 Euro 373.700 Canadian Dollars 294.200 Nepali rupee 3.200 Al Mulla Exchange Currency Transfer Rate (Per 1000) US Dollar 280.900 Euro 367.100 Pound Sterling 458.250 Canadian Dollar 290.100 Japanese Yen 3.650 Indian Rupee 5.247 Egyptian Pound 46.119 Sri Lankan Rupee 2.138 Bangladesh Taka 3.438 Philippines Peso 6.740 Pakistan Rupee 2.980 Bahraini Dinar 747.900 UAE Dirham 76.500 Saudi Riyal 74.950 *Rates are subject to change UAE Exchange Centre WLL COUNTRY SELL DRAFT SELL CASH Australian Dollar 297.03 297.000 Canadian Dollar 291.30 290.500 Swiss Franc 305.15 305.000 Euro 366.43 366.000 US Dollar 281.00 282.000 Sterling Pound 458.65 459.000 Japanese Yen 3.68 3.690 LONDON: Gold prices eased nearly 1 percent yesterday, pulling back from the previous session’s 6-1/2 month high, as the dollar rose and assets seen as higher risk, like stocks, the euro and other commodities like crude oil retreated. The metal remained underpinned however, by expectations for longer-term price strength, after central banks including the Federal Reserve and European Central Bank announced fresh rounds of monetary policy easing earlier this month. Spot gold was down 0.7 percent at $1,760.00 an ounce at 1219 GMT, while US gold futures for December delivery were down $15.30 an ounce at $1,762.70. On Friday gold hit a peak of $1,787.20, its highest since Feb 29. The Fed this month launched a third round of quantitative easing - printing money to buy bonds - under which it will purchase $40 billion a month in mortgage-backed debt until the outlook for the labour market improves substantially. Further monetary easing is likely to maintain pressure on long-term interest rates, keeping the opportunity cost of holding gold at rock bottom, and to undermine the dollar, boost liquidity, and stoke fears over inflation further down the line. However, a stronger dollar and caution among investors over the uncertain outlook for Europe has put the brakes on gold. “Part of the issue is the lack of obvious catalysts in the near term to take gold prices higher,” Deutsche Bank analyst Daniel Brebner said. “We have some continuing risk issues in Europe, US manufacturing data continues to be for the most part disappointing, and ties, other than guava?” Shanty said he and other importers had made advance payments to Israeli suppliers that would now be difficult to claim back. Hikmat Abu Al-Qombuz, another importer, predicted spiralling fruit prices - which Gaza, most of whose 1.6 million Palestinians depend on aid, can ill afford. Gaza dates and guava grower Ibrahim Al-Shaer, 52, said the move would help farmers by raising prices. But he admitted some imports from Israel remained vital. “Israeli fruits compete with our produce in the market and they push down the prices. The government should allow imports at a reasonable level so the prices of our fruits do not go down sharply,” Shaer said as he stood in his field in Mawasi in southern Gaza. Since the import ban went into effect on Friday, the price of peaches has doubled to eight Israeli shekels ($2) a kilo, while dates were selling at 11 shekels ($2.81) a kilo, up from 7 shekels. Bangladesh Taka 3.440 3.560 Indian Rupee 5.071 5.450 Sri Lankan Rupee 2.147 2.290 Nepali Rupee 3.313 3.530 Pakistani Rupee 2.976 3.150 UAE Dirhams 76.57 77.250 Bahraini Dinar 748.21 748.000 Egyptian Pound 46.18 47.650 Jordanian Dinar 400.33 398.100 Omani Riyal 731.33 735.000 Qatari Riyal 77.60 78.000 Saudi Riyal 75.14 75.500 Dollarco Exchange Co. Ltd Rate for Transfer Selling Rate US Dollar 281.350 Canadian Dollar 288.170 Sterling Pound 457.640 Euro 365.405 Swiss Frank 301.475 Bahrain Dinar 744.865 UAE Dirhams 76.580 Qatari Riyals 77.225 Saudi Riyals 74.990 Jordanian Dinar 396.605 Egyptian Pound 46.197 Sri Lankan Rupees 2.143 Indian Rupees 5.284 Pakistani Rupees 2.972 Bangladesh Taka 3.438 Philippines Pesso 6.744 Cyprus pound 690.150 Japanese Yen 4.600 Thai Bhat 9.215 Syrian Pound 4.365 Nepalese Rupees 3.385 Malaysian Ringgit 91.705 Chinese growth continues to be a real risk as well in the near term.” “So there are a number of low growth concerns which could underpin the dollar, and keep gold somewhat moribund near term.” “But I do think we will likely see over the next quarter or so greater policy action both in Europe and China to support growth within those regions,” he added. “The likelihood is for further accommodative monetary policy in both regions, and that could keep the gold price moving higher. We think we will see $2,000-plus gold prices in the first half of next year.” European shares and the euro followed a broad range of riskier assets lower yesterday as investors refocused attention from central bank stimulus schemes to weak economic fundamentals and the euro zone’s yet-to-beresolved debt crisis. Brent crude fell below $110 a barrel, dragged down by a firm dollar and worries over weak global growth after disappointing German data, while copper hit a one-week low. Holdings of gold-backed exchange-traded funds tracked by Reuters rose by nearly 330,000 ounces on Friday to 73.748 million ounces, climbing back towards last week’s record high at 73.681 million ounces. The bulk of inflows were seen into the world’s largest gold ETF, New York’s SPDR Gold Trust. ETFs, which issue securities backed by physical metal, have proved a popular way to invest in gold in recent years. Meanwhile, demand in major consumer India picked up, as a drop in local gold prices to a three-week low yesterday prompted a wave Bahrain Exchange Company COUNTRY SELL CASH SELL DRAFT Australian dollar 296.900 295.400 Bahraini dinar 748.490 748.490 Bangladeshi taka 3.680 3.434 TUESDAY, SEPTEMBER 25, 2012 Saqqa said the Hamas government would crack down on any Gazans deemed to be gouging fruit prices, and urged Palestinians to view the hardship through the prism of their struggle against Israel. “We are people under blockade and we should have the culture of resistance,” he said. “Why should someone have all kinds of fruits on his table?” Hamas won a Palestinian ballot in 2006, and had an uneasy alliance with the Western-backed rival Palestinian faction Fatah until they fought a brief civil war in Gaza a year later. Under Hamas rule since, Gaza has suffered an often grinding embargo by Israel and Egypt, alleviated by goods smuggled in through tunnels from the Egyptian Sinai. Israel, which fought a three-week war with Gaza in 2008-2009, eased overland travel restrictions in mid- 2010. Hamas has urged Egypt to open up its border with Gaza since Islamists swept to power in Cairo this year but the call has not been met. — Reuters Gold retreats from 6-1/2 month high as dollar firms Monetary easing measures support gold near highs Canadian dollar 291.300 289.800 Cyprus pound 552.800 Czek koruna 45.900 Danish krone 49.900 Deutsche Mark 167.800 231.200 Egyptian pound 48.080 46.183 Euro Cash 368.700 367.200 Hongkong dollar 36.970 36.820 Indian rupees 5.390 5.280 Indonesia 0.032 0.031 Iranian tuman 0.161 Iraqi dinar 0.235 Japanese yen 3.700 Jordanian dinar 398.850 398.810 Lebanese pound 0.190 0.189 Malaysian ringgit 94.100 94.100 Morocco dirham 45.300 Nepalese Rupees 4.330 3.320 New Zealand dollar 235.700 234.200 Nigeria 1.823 Norwegian krone 50.300 Omani Riyal 731.070 730.890 Pakistani rupees 3.070 2.979 Philippine peso 7.000 6.764 Qatari riyal 77.850 77.420 Saudi riyal 75.150 75.150 Singapore dollar 231.180 231.180 South Africa 36.340 36.340 Sri Lankan rupees 2.681 2.144 Sterling pound 460.300 458.300 Swedish krona 43.800 Swiss franc 304.600 303.100 Syrian pound 4.300 4.300 Thai bhat 9.470 9.300 Tunisian dollar 198.263 UAE dirham 76.740 76.640 U.S. dollars 281.800 281.400 Yemeni Riyal 1.350 10 Tola 1,872.350 of buying, while an upcoming week-long holiday in China has generated some physical gold buying interest. “Buying interest is much higher than last week, mostly because the rupee has appreciated substantially,” one Mumbai-based dealer said, adding that physical demand might be sustained if prices - at 31,281 rupees per 10 grams earlier yesterday - held below 32,000 rupees. Among other precious metals, silver was down 1.8 percent at $33.79 an ounce. The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, recovered from last week’s 5-1/2 month low at 50.9 to 51.9 yesterday, after silver underperformed the yellow metal late last week. Technical analysts at ScotiaMocatta, who study past price moves for clues as to the future direction of prices, said they expect the ratio to continue falling. “While the ratio has been consolidating the past week, the larger trend remains bearish, with an initial target at the March low of 47.67,” it said. Spot platinum was down 1.7 percent at $1,608.99 an ounce, while spot palladium was down 4.4 percent at $639.47 an ounce, on track for its biggest one-day drop since early March. Some of the premium attached to platinum group metals by labour unrest in South Africa has dissipated, analysts said. Industrial unrest in major platinum producer South Africa has simmered down during a national holiday in the republic, after weeks of sometimes violent protest killed 45 and sent the metal to multimonth highs. Tensions remain elevated, however. — Reuters Britons’ inflation fears rise again LONDON: Britons’ worries about inflation grew this month, though their view of their future finances was the least pessimistic in 2- 1/2 years, a survey showed yesterday. The Markit Household Finance Index (HFI) dipped to 38.4 in September from August’s 20-month high of 38.9, indicating that consumers’ finances worsened over the month as the index was well below the 50 mark that would mark no change. The latest reading was still one of the highest in the past two years, and households reported a reduced squeeze on their savings and cash available to spend, survey compiler Markit said. “September’s survey suggests that the gradual easing of pressure on real incomes so far in 2012 continues to support household finances,” said Markit economist Tim Moore. Forty percent of those surveyed anticipated a worsening in their finances in the next 12 months, while 29 percent expected an improvement - making it the least downbeat financial outlook since March 2010. “However, households appear to have become more concerned about the inflation outlook, with cost of living expectations rising sharply since August,” Moore said. Around three-quarters of the survey respondents noted that their costs of living had increased since August and the monthon-month rise in the index measuring inflation perceptions was the greatest since January 2011. The index for inflation expectations posted the strongest month-on-month rise since November 2010, hitting the highest level since May. Britons have cut back spending as high inflation, tax increases and slow wage rises have put the tightest squeeze on incomes for more than 30 years, keeping consumer morale low. The Bank of England and the government are hoping that lower inflation will ease the pressure and enable households to spend more. Inflation has fallen from the high of 5.2 percent last year to 2.5 percent in August, but higher oil and commodity prices have stoked fresh inflation concerns. Some central bankers have voiced doubts about whether more monetary stimulus in form of government bond purchases might be appropriate once the current round is completed in November. — Reuters GOLD TRAVELLER’S CHEQUE Sterling Pound 458.300 US Dollar 281.400
FREEPORT: Protest signs hang on the fence outside a camp set up by Sensata Technologies workers in Freeport, Illinois. —AFP Workers beg Romney to stop Bain outsourcing FREEPORT: Being told to train his replacement was humiliating and surreal, but Tom Gaulrapp said the worst part was when the plant’s US flag was taken down before the Chinese engineers arrived. Gaulrapp decided it was time to take a stand against outsourcing and the man he blames for the loss of his job: Republican White House hopeful Mitt Romney, who founded the private equity firm that owns the Freeport, Illinois auto parts plant. Romney’s ties to Bain Capital have burdened the Republican nominee’s hopes of winning the November 6 election as Democrats unfavorably paint him as a corporate raider who pioneered the outsourcing of US jobs to countries with lower labor costs. Romney denies the charge, but his claim to be a man who could revive the economy and boost the prospects of American workers rings hollow here. Gaulrapp thinks it would only take a phone call from the candidate who’s vowed to create 12 million jobs in the United States to save the 170 jobs at Sensata Technologies that are about to leave this already economically depressed town of 26,000. “What we’d like is a miracle,” Gaulrapp, who has worked at the plant for 33 years, said with a sigh that acknowledged how unlikely it is that his wish will be granted. “We’d like Mitt Romney to come to Freeport, see what this is doing to this community, and contact his friends that run Bain Capital and say ‘this is absolutely the wrong thing to do’ and save our jobs.” The Romney campaign declined to comment on the situation at Sensata, but a spokeswoman contacted by AFP noted that the former Massachusetts governor retired from Bain in 1999 and his investments there are controlled by a blind trust, effectively nullifying his links to the firm. Romney’s campaign recently set up a website-business.mittromney.comdefending his record at Bain and the “thousands” of jobs he saved or created by “fixing companies that were broken and giving new companies a shot at success.” “A Taste of the Romney Economy” But the situation in Freeport is a classic example of how what’s best for a company is not always what’s best for American workers, said Freeport Mayor George Gaulrapp, who is no relation to Tom. “You can’t keep sending your jobs offshore and still have a middle class,” said the mayor. Plant worker Pam Lampros, 53, is worried she’s going to lose her home so investors like Romney can make a bigger profit. “It just hurts after so many years of hard work and dedication,” said Lampros, a 34-year veteran at the non-unionized plant who had hoped to retire from Seaport delay highlights shaky Vietnam economy HANOI: All that remains of a plan by Vietnam to build a major deep-water port is 114 exposed pilings trailing into the South China Sea and a barge full of rusty machinery. Foreign investors stayed away from the $3.6 billion project and the indebted stateowned company overseeing it bungled the job. Earlier this month, the government accused the company of “financial incompetence” and suspended the project. The prospects for ever reviving it are dim. The abandoned port in Southern Vietnam stands as a symbol of the inefficiency of the country’s Communist rulers, and the need to reform a massive web of state-owned enterprises weighing down a once-booming economy. Critics say it also shows how provincial governments and stateowned companies are allowed to pursue expensive, misguided and often corruption-laced infrastructure projects that result in riches for the few, but not economic growth that would benefit the country of 87 million people. The government is asking foreign and domestic investors to bankroll its flagship Van Phong port now that the there. “It’s for corporate greed, more or less.” Sensata, which is majority-owned by Bain Capital, purchased the automotive sensors unit from Honeywell for $140 million in cash in January 2011. With annual revenues of $130 million and valuable patents, the unit was a good buy. But with 75 percent of the revenue generated in Asia, it made sense to ship production to Sensata’s facilities in China, the Netherlands-based company said. “It’s better to be closer to one’s customers,” Sensata spokesman Jacob Sayer told AFP, citing transportation and other logistical advantages. Sayer acknowledged that the decision to shift production to China is “an unfortunately event” for Freeport and said he understands why it could be “difficult” for the workers to train their replacements. He has no idea why-or if-the US flag was removed before the Chinese engineers and technicians arrived. “We didn’t request it. I can tell you that,” Sayer said, adding that the company has been leasing the facility from Honeywell and has no involvement in grounds maintenance. The workers have had nearly two years to prepare for the plant closure. Some have found new jobs and those who remained were given retention bonuses to help keep operations going until the last pieces of equipment are shipped elsewhere. They got riled up in June when Romney visited nearby Janesville, Wisconsin and talked about how jobs were his top priority-at the same time they were being told to train their Chinese replacements. After months of pursuing Romney’s campaign with protests and petitions, the Sensata workers set up camp in the fairgrounds across the road from the plant on September 12 in hopes of drawing more attention to their cause. In a nod to both the “Hoovervilles” of unemployed workers that sprung up during the Great Depression and the Occupy Wall Street movement, about a dozen people have since been sleeping in tents staked into the cold, hard ground. Mark Schreck, 36, a registered Republican, even brought his children a couple of times. “This isn’t a Republican issue or a Democrat issue, this is an American issue,” he said, noting it is the second time his job has been outsourced to China, despite both operations being profitable-just not profitable enough. “We’re in trouble. I’m not that old and when I grew up American industry and technology was huge. My folks and my uncles all worked in good jobs and retired from them,” Schreck said as he sat by a smoking campfire on the windy fairgrounds. “It’s hard to grasp how bleak it is out there. I’ve been looking for work since last January and I’m not finding any.” —AFP Vietnam National Shipping Lines, or Vinalines, is out of the picture. But analysts say that’s unlikely because the project, which was slated to have 37 wharves, isn’t near any important manufacturing bases in the region and was impractical from the start. A better option, they said, would be developing road and rail around ports in greater Ho Chi Minh City and also developing a deep-water port near the northern city of Hai Phong. A proposed large port near Hai Phong has spurred controversy lately over escalating costs and potential dredging problems. Vu Tu Thanh, Vietnam representative for the Washington-based US-ASEAN Business Council, said Vietnam has lost the reputation it enjoyed a few years ago for being among the most attractive destinations for investment in Asia. Would-be investors, he said, want the government to push through largescale economic reforms that will weed out the most inefficient state businesses. “There’s nothing inherently wrong about having state-owned enterprises involved in big, capitalintensive projects like ports,” said Thanh, whose advocacy group repre- 23 BUSINESS sents American companies in Southeast Asia. “The problem is: Do you have the right SOE there?” “The typical answer in Vietnam is: You don’t.” Vietnam has a coastline of 3,200 kilometers (1,988 miles) - longer than American’s west coast and a prime location on the South China Sea, which includes some of the world’s biggest shipping channels. But its lack of linked-up infrastructure puts its ports at a competitive disadvantage compared with long established global trade hubs such as Singapore, Shanghai and Hong Kong. As a result, manufacturers here are often forced to first send containers to those larger ports from where they are then shipped to Europe and North America. Businessmen and observers say the port sector is a good example of how political patronage and entrenched corruption are undermining the country’s development. Vietnam has about three dozen seaports and several high-quality terminals that welcome international shipping lines, but no major port with swift connections to efficient roads and rail. “All the coastal provinces want a deep-sea port,” said Nguyen Xuan Thanh, director of public policy programs at the US-funded Fulbright Economics Teaching Program in Ho Chi Minh City. “The central government needs political support from these provinces, so they don’t say no to these proposals.” “Everybody wants a piece of the action,” he said. In 2010, state-owned ship builder Vinashin came close to collapse with debts of $4.5 billion, leading to a sovereign credit rating downgrade and sounding the alarm on a major pressure point in Vietnam’s economy. Last month, police arrested two former senior executives at one of the country’s largest banks. The banking industry has run up massive bad debts in recent years, many of them made to state-owned companies. Vinalines has also come under scrutiny. In March, police arrested several of its executives and accused them of mismanagement in the purchase of a floating dock that resulted in losses of about $5 million. In May, government inspectors issued a TUESDAY, SEPTEMBER 25, 2012 German business mood worst since mid-2009 Economists warn of Q3 contraction BERLIN: German business sentiment dropped for a fifth straight month in September, raising fears of recession as companies struggled with what they said was the worst economic outlook since mid-2009. Germany’s relative resilience to the euro-zone debt crisis has been steadily fraying as its firms see falling demand for their products from European partners and signs of a slowdown in other markets. The European Central Bank’s plan for potentially unlimited government bond-buying has raised hopes on financial markets of an end to the most acute phase of the crisis, but that optimism has not spread to company boardrooms. The Munich-based Ifo institute’s monthly sentiment index reached its lowest since early 2010 and Ifo economist Klaus Wohlrabe told Reuters the outlook was the worst since May 2009. “Today’s Ifo index shows that German companies remain sceptical about the economic impact of (ECB president) Mario Draghi’s magic,” ING Bank economist Carsten Brzeski said. “Despite fears of a looming eurozone break-up clearly fading away, German businesses are downscaling their expectations. The German economy could see a contraction in the third quarter.” Ifo said its business climate index, based on a monthly survey of some 7,000 firms, fell to 101.4 in September from 102.3 in August, defying expectations for a slight rise to 102.5 in a Reuters poll of 45 economists. In its monthly report, the Bundesbank said the domestic economy was robust, but added it saw signs of “weaker dynamics” and “great uncertainty”. Foreign trade could be hit more strongly than before by developments in the euro area, the central bank added, also pointed to the labour market, where the rise in employment is slowing as companies become less willing to hire. Dutch business confidence also fell in September to -6.7 points from -4.6 in August, other data showed yesterday, adding to signs that the euro-zone’s stronger “core” economies are succumbing to the downturn. While they have not been punished by debt markets like much of the euro’s southern half, both Germany and the Netherlands have slashed public spending to secure the future of public finances. “The drop in Ifo business confidence is a potent reminder that the outlook for the German and euro-zone economies still hangs in the balance,” said Holger Schmieding, German economist at investment bank Berenberg. “Further policy steps to contain the euro crisis may be needed for the euro-zone to turn the corner.” Tough cuts While the German economy steamed ahead in the first three months of the year, saving the euro-zone from recession by growing 0.5 percent, it lost momentum in the second quarter, with growth slowing to 0.3 percent. Dragging on the Ifo index in September was a sharp decline in sentiment among manufacturers, although companies in retailing and wholesaling reported a slightly brighter mood. Last week’s ZEW survey also showed German analyst and investor morale picked up in September. Industrial group Bosch and steelmaker ThyssenKrupp , have announced plans to introduce “Kurzarbeit” or government-subsidised short-time work at German plants. The index would have fallen further had it not been for a ruling by Germany’s constitutional court on Sept 12 in favour of the ratification of Europe’s permanent bailout fund. Half of the responses in the survey came after the ruling. The Finance Ministry warned in its monthly report last Friday that data pointed to weaker growth in the remainder of the year. Many economists are now predicting a contraction for the third and possibly the fourth quarters. Another forward-looking indicator, the Purchasing Managers Index (PMI), last week showed Germany’s private sector shrank for a fifth month, and a separate index for the eurozone showed that the ECB’s bond-buying plan had so far failed to inspire any major improvement in business at ailing euro-zone companies. However, economist Gerd Hassel said he believed news of the ECB’s bond-buying plan had yet to fully sink in. “I’m optimistic that the Ifo climate index will rise again in the coming months,” he said. —Reuters Dreamliner brings jolt of excitement to flying TOKYO: As the Boeing 787 Dreamliner nosed upward into the clouds, the engines purred rather than roared. The recent All Nippon Airways domestic flight was anything but a routine route for many passengers. A year after ANA launched the world’s first 787 flights, Japanese travelers are still agog. Passengers craned necks to glimpse the big bird at Haneda Airport. And as they boarded, many whipped out digital cameras and iPhones and started shooting pictures like paparazzi setting upon Justin Bieber. In an era when flying is more about diminished expectations than adventure, airlines like ANA hope the technologically advanced midsize 787 will put some of the thrill back into the air at 35,000 feet. So far, it seems to be working. “Many, many people are excited,” ANA flight attendant Shoko Yoshimura said aboard the recent 787 flight from Tokyo to Fukuoka on the island of Kyushu. Silicon Valley travelers will get their chance to board the Dreamliner when ANA begins its five-day-a-week 787 route between Mineta San Jose (Calif) International and Tokyo’s Narita International airports on Jan 11. San Francisco International spokesman Michael McCarron said “two or three” carriers he declined to identify expect to start flying 787s out of that airport next year. But an Oakland (Calif) International Airport official who asked not to be identified said none of its carriers has indicated plans to use 787s in the near future. The 787’s high-ceiling cabin glows with pastel colors. Its spacious interior, increased cabin pressure and higher humidity are aimed at making crossthe-world journeys less taxing on bodies. And its fuel-sipping technology and ability to cover long distances allows airlines to tear up old business models that left smaller market airports like San Jose out of their flight paths. It hasn’t been profitable for airlines to try to fill larger aircraft - such as a 368-passenger Boeing 777-300 - flying into secondary airports. ANA is outfitting its long-haul 787 with only 46 business-class and 112 economy seats. “It gave us the opportunity to open up new markets - even secondary markets,” said Kohei Tsuji, ANA’s director of network planning. Once ANA gets more 787s delivered - it has so far received 13 of the initial order of 55 - the airline plans to expand its San Jose- Tokyo service to seven days a week, he said. ANA anticipates having 20 Dreamliners by the end of March. According to Bloomberg, ANA agreed Friday to buy 11 more Dreamliners for delivery beginning in 2018, bringing the total of ordered planes to 66. The plane has quickly become the envy of the industry. In a spring survey by ANA of 800 passengers who had flown its 787 between Tokyo and Frankfurt, Germany, 98 percent said they wanted another chance to fly the Dreamliner, no matter what airline’s logo was on the plane. A quarter of them said they’d go out of their way to board the new aircraft again. “The 787 offers an emotional experience,” said Robert Herbst, an aviation industry consultant who operates AirlineFinancials.com. “That’s something passengers haven’t had for a very long time.” It offers perks that even those who sit in the back of the plane in economy can enjoy. Passengers stepping onto an ANA 787 are greeted by flight attendants standing in the chamber-like entrance with a high ceiling - creating a sense of airy space rather than the feeling of entering a cramped tube. “It’s a very beautiful plane and very comfortable to ride on,” said one passenger on the Tokyo-Fukuoka flight, who would only give his first name, Takahiro. He was particularly taken with the lavatory enhancements - toilets equipped with bidet spray options. Two bathrooms also have windows. “The bathrooms are especially wonderful,” the 29-year-old gushed. “The FUKUOKA: With rainbow lighting on the ceiling, passengers disembark from an ANA Airlines Boeing 787 Dreamliner. —MCT ceilings are high. You feel so much air. It feels good. And it’s environmentally kind.” Overhead bins are so high that steps are built into the base of seats so flight attendants can reach the compartments without the risk of falling onto passengers. The plane boasts one of the largest galleys in the sky. The plane doesn’t have shock absorbers to smooth out bumpy air and you still have to fasten your seat belt. But as the 787 lifts off, the rumble of engines is muffled. The twin engines are equipped with noise-reducing chevrons - jagged edges on the nozzles of the engines - that lower the sound of jet blasts by controlling how air passes through and around them. “It was quiet. I was surprised,” Gonzalo Guerri, a Chilean tourist visiting Fukuoka, said after he gathered his luggage from the 787 flight. He liked the aircraft’s overall ambience and new features, including the iPhone chargers built into seats. “It’s much more comfortable than other planes,” Guerri said. “And there are no blinds on the windows. You just push a button. It was pretty cool.” Indeed, the electronic shades are among the most talked-about attractions of the 787, whose windows are at least 20 percent larger than those on other jetliners. With a touch of a pillowy button, passengers can darken the windows like giant sunglasses that change hues _ soft sky blue to dark aqua. The e-shades, Boeing says, are a feature in specially designed windows embedded with a gel sandwiched between two thin sheets of plastic. When a very low voltage is applied to the gel, the windows change colors. Airlines around the world, which have ordered more than 800 of the new planes, view the 787 as an industry game-changer. Half of the plane is made of lightweight composites - highstrength fibers embedded in resin - allowing it to be 20 percent more fuelefficient than other jetliners. With the cost of jet fuel soaring some 300 to 400 percent in the past decade, airlines are desperate to get the new plane. Fuel accounts for 35 to 45 percent of an airline’s costs, consultant Herbst said. Boeing’s 747 - once called the Queen of the Skies - opened up long-haul travel for the masses in the 1970s by lowering per-seat costs. The fuel-guzzling four-engine behemoth, though, now weighs on airline profits. The new 787, Herbst added, “will have an economic impact that is greater than any other aircraft in modern history.” Even pilots are excited about the new plane, whose cockpit is equipped with a one-piece window that offers better views, ANA network planning director Tsuji said. It also comes with a dual heads-up display - or HUD - a sheet of glass mounted in front of pilots that allows them to simultaneously read flight instruments and scan the horizon. —MCT report saying the company had five defaulted loans worth $1.1 billion and had bought 73 foreign vessels, many of which had run up millions of dollars in losses. Earlier this month, Vinalines’ former head, Duong Chi Dung, was arrested in a neighboring country after an international manhunt. The problems at the banks and the state-owned enterprises have played a major role in Vietnam’s economy slowing from 7 percent growth in 2010 to just over 4 percent in the first half of this year. Foreign investment is also down amid inflation and the inability of the country to build the roads, electrical grid and bridges businesses need to prosper. “It’s very important that the government continues to put infrastructure very high on the agenda,” said Peter Smidt-Nielsen, general director for Vietnam and Cambodia at global shipping company Maersk Line. “If you have growing trade and you don’t do anything about the infrastructure, you’ll have more and more delays and congestion, and that all leads to added costs for exporters and importers,” he said. —AP
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