The Star Online: Business
The Star Online: Business |
- Asian markets sluggish after past week rally
- Row erupts over measure that could aid Berlusconi
- Oil climbs above US$97 per barrel
| Asian markets sluggish after past week rally Posted: 05 Jul 2011 07:15 PM PDT Published: Wednesday July 6, 2011 MYT 10:08:00 AM |
| Row erupts over measure that could aid Berlusconi Posted: 05 Jul 2011 05:46 PM PDT MILAN: Premier Silvio Berlusconi on Tuesday hastily withdrew a controversial measure buried in Italy's 47 billion ($68 billion) austerity plan that would have allowed his family investment company to avoid paying a heavy fine, at least temporarily. Opposition politicians and magistrates had expressed outrage at the measure, which was meant to keep companies from having to pay especially high fines as long as appeals were pending. If passed, the measure would have allowed Fininvest, the holding company for Berlusconi's family assets, to at least delay paying a 750 million ($1.09 billion) fine it was given two years ago for alleged corruption in the takeover of publishing house Mondadori in the 1990s. Despite withdrawing the measure, Berlusconi defended it as not only "just but necessary." The payment of "enormous sums" with appeals still pending could create financial difficulties for companies or individuals, without any guarantee that the money would be returned if the award was modified at a later stage, he said. "The opposition promoted a new crusade against this measure thinking that, among the thousands of potential beneficiaries, it could also apply to a company within my group," Berlsuconi said. The premier complained that the amount Fininvest had been ordered to pay exceeds the value of its share of Mondadori. He expressed certainty that the award would be overturned on appeal. A decision is expected this week. The existence of the measure was reported in Italian newspapers Tuesday, and came to light during a review of the austerity package by the Italian president's office. The Finance Ministry had no immediate comment, though it canceled a presentation of the austerity plan on Tuesday, while President Giorgio Napolitano told reporters that he would not comment on the package until the review was complete. Berlusconi ally Foreign Minister Franco Frattini said the measure was general and not aimed at protecting anyone in particular. "If I understand correctly, it is a general measure," Frattini was quoted by the news agency LaPresse as saying, adding that it didn't receive much attention in the Cabinet. The government approved the austerity measures last week to show financial markets and the European Union that it is serious about balancing its budget. It must be approved by Parliament. The three-year-plan aims to bring the government's budget deficit of 3.9 percent this year to near-balance by 2014. It includes new taxes on financial transactions, tax breaks for young entrepreneurs, extending a public sector hiring freeze and cutting ministries' budgets, as well as measures to fight tax evasion. Opposition politicians said the measure benefiting Berlusconi's family violated the wishes of voters, who demonstrated in last month's referendum that they think the premier does not deserve special treatment. Voters overwhelmingly killed a law that partially shielded Berlusconi and other top officials from prosecution while in office. Shares of Berlusconi's Mediaset media company, controlled by Fininvest, were down 1.6 percent to 3.25 in Milan. - AP Latest business news from AP-Wire Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
| Oil climbs above US$97 per barrel Posted: 05 Jul 2011 05:43 PM PDT NEW YORK: Some major investment banks are still betting that oil prices will rise next year despite an emergency injection of crude on world markets from the U.S. and other countries. Benchmark crude rose as high as $97.48 per barrel Tuesday after Barclays Capital raised its price forecast for 2012. And Goldman Sachs said the International Energy Agency's decision at the end of June to release 60 million barrels of oil from its reserves won't cool off prices as much as originally thought. Independent oil analysts say prices still could head lower this year. But some think IEA's announcement speaks volumes about its expectations for world oil supplies. "I think it's an admission from them that Saudi Arabia might not be able to produce enough oil on its own" to meet increased world demand, analyst Stephen Schork said. Benchmark West Texas Intermediate crude on Tuesday was up $1.82 at $96.76 per barrel in afternoon trading on the New York Mercantile Exchange. In London Brent crude, which is used to price many international oil varieties, added $2.48 to $113.92 per barrel on the ICE Futures exchange. Barclays increased its 2012 forecast for Brent crude by $10 to $115 per barrel on Tuesday, saying prices will rise as global oil demand increases. Barclays sees China, India, Saudi Arabia and Brazil as the main sources for demand growth. Goldman Sachs also pointed out late last week that IEA will actually release only about two-thirds of what was originally promised. Goldman analyst David Greely said about one-third of the 60 million barrels will come from limiting the amount that countries are required to keep in emergency supplies. Since the oil industry tends to keep much more on hand than what's required, Greely said that the new limits will have an "almost negligible impact on oil prices." Greely said prices probably won't fall as much as he'd expected following the IEA announcement. He revised his "near-term" Brent crude price forecast from $117 to a range of $109 to $111 per barrel, and his 2012 Brent forecast from $130 to a range of $125 to $127 per barrel. Also on Tuesday the government said factory orders rose, as businesses ordered more airplanes, autos, and oil drilling equipment in May. The Commerce Department report suggested that supply disruptions from Japan's earthquake and tsunami in March are easing. Meanwhile, U.S. gasoline pump prices hit $3.562 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has dropped 42.3 cents from three-year highs set in early May, but it's still 83.8 cents higher than the same time last year. In other Nymex trading for August contracts, heating oil rose 4 cents to $2.9688 per gallon and gasoline futures gained 2 cents at $2.9904 per gallon. Natural gas picked up 4 cents at $4.374 per 1,000 cubic feet. - AP Latest business news from AP-Wire Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
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