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It also points the way for more rapid rate rises by both the ECB and the US Federal Reserve, it emerged yesterday. And Japanese rates are expected to remain cheap by international standards, eurozone rates expected to rise to at least 3pc this year and US rates expected to hit 5pc by mid-year. Scrapped Senior central bankers gathered yesterday to review the global economy days after Japan scrapped a five-year-old zero-interest rate stance in a move expected to affect financial markets worldwide. Entering the meeting, Bank of Japan Governor Toshihiko Fukui said markets had accepted the long-awaited policy switch calmly, and he attempted to ease concerns that the central bank would tighten monetary policy quickly as the economy picked up steam. "It is too early to talk about raising rates," Fukui told reporters. "We have to carefully watch the development of the economy, the yen and prices." Fukui spoke on the sidelines of regular meetings on the global economy hosted by the G10 group of central banks at the Bank for International Settlements (BIS). Key bankers from Asia and emerging markets' economies plus the International Monetary Fund are also at the meetings, chaired by European Central Bank governor Jean-Claude Trichet. The BOJ ended its super-loose monetary policy of flooding the banking system with excess cash last week and returned to a conventional interest rate regime, but said it would keep short-term rates near zero. The move means that the BOJ, the US Federal Reserve and the ECB - the world's top three central banks - now are in tightening mode. "The market is digesting this (G3 tightening) in a stable manner," Fukui said. A flood of global economic data is pointing to robust growth and potential inflationary pressures, prompting the world's leading central banks to tighten policies that were put in place to ensure a recovery. US jobs and industrial indicators are pointing upward, helping to keep the dollar strong despite a yawning trade gap. Japan's recovery appears to be gaining ground and the eurozone's pickup has gained momentum in recent months. But market participants remain on tenterhooks as investors consider unwinding carry trades, where they borrowed yen for free and invested in higher-yielding instruments in emerging markets like Brazil. Brazil's real weakened nearly 3pc last week amid fears higher global interest rates will drain investment in countries such as Brazil, and the currencies of countries such as Iceland and New Zealand - which had been boosted by carry trades - have also suffered. The Irish Independent also reports that C&C IS to roll out its Magners cider brand across Britain following its highly successful launch in London and Scotland. The nationwide introduction of the brand - known as Bulmers in Ireland - begins this month in both the on and off-trade. It will be backed by its first nationwide advertising campaign in Britain. Sales of cider in the country are up 10pc year-on-year and Magners is credited with much of this category's revival. Recent figures from Nielsen for the month of November revealed that Magners is the fastest growing LAD (long alcoholic drinks) brand. The company launched the Magners pint bottle into the on-trade in London and the south-east last year with very positive results. The drink launched in Scotland in 2003 and Magners now accounts for 43pc of all on-trade cider sales. In Ireland, Bulmers has just launched its new 'Spring' advertising campaign. Maurice Breen of Bulmers said: "This new commercial builds on the success of our previous campaigns to merge the fresh natural images of the orchard at spring time with the refreshment of Bulmers Original Cider."
The site has a current value of some €40 million on Greencore's books and it would be worth many multiples of that sum if a new Local Area Plan was approved for the area. Greencore's contacts with the council are being managed at a very high level in the company. News of the approach to the council comes as the group claims the rights to most of a €145 million EU compensation package for the reform of the sugar industry. While Greencore would profit on the double if the Carlow site was rezoned and it won the share of the EU package that it claims, the Irish Farmers' Association has claimed that it should receive the bulk of the compensation. Others, including Irish Sugar pensioners and sugar beet contractors, are also claiming the right to compensation. Greencore's spokesman said that the group's focus was on the "remediation" of the factory and the resolution of environmental issues. "There is no application to Carlow County Council." However, a spokeswoman for Carlow County Council indicated that the group's contacts with the council went beyond discussion of the remediation process. "The council confirms that it had been asked by Greencore to consider the making of a Local Area Plan in respect of the area," she said. "The council's focus at this point in time is on the remediation of the lands. Greencore have made preliminary approaches to Carlow County Council in relation to remediation and the council understands that investigations are being undertaken by Greencore in relation to the environmental and engineering issues arising." The request to make a new Local Area Plan comes less than two months after Greencore chief executive David Dilger referred to the site's development potential with stock market investors in New York. Mr Dilger said at a conference organised by Davy Stockbrokers that the property could attract multiples of its €40 million valuation if sold. Local sources said Greencore was examining the possibility of securing mixed-use zoning for the site, which would clear the way for residential and commercial developments. The group has engaged Arup consultants to advise it on the plans, they said. But while Greencore would need the support of county councillors in Carlow to secure rezoning, one Fianna Fáil councillor said yesterday that no approach had been made to elected representatives on the council. Mr PJ Kavanagh, who is a farmer and beet grower, said he was prepared to support a rezoning application, but only if Greencore withdrew its claim for EU compensation. "The first I heard of Greencore being in contact with the council was at last Monday's meeting when the manager informed us that he had been in discussion with members of the board of Greencore," he said. The Irish Times also reports that the prospect of an initial public offering of Aer Lingus shares this summer or autumn appears to have moved a step closer after the Taoiseach Bertie Ahern said there would be no change to the Government's policy of privatising the State airline. However, Mr Ahern gave no indication on the likely timing of a sale. As SIPTU members in the airline begin a ballot this week for industrial action in the event of changes being imposed in the airline's ownership without agreement, Mr Ahern went on the offensive to describe the privatisation policy as settled. We've gone on with the Aer Lingus decision; the decision is made now, it's not going to be reversed," he said in an interview with The Sunday Business Post. Considerable doubt has surrounded the Taoiseach's willingness to go ahead with privatisation in advance of the next general election, which much take place by May 2007. Despite that, senior Government sources said yesterday that Minister for Transport Martin Cullen will "within weeks" seek a Cabinet decision on the timing and method of a sale. With most Ministers leaving Ireland for a series of St Patrick's meetings abroad, the earliest opportunity for such a decision will come next week. It was unclear last night whether a decision then was likely. Those with knowledge of the process say that a stock market flotation is the most likely sale option, although there is still some debate around whether the airline should go the market in June or September. While the airline moved in the last 10 days to appoint the management team that will take it through its sale, a potential solution to the multi-million-euro shortfall in the company's pension plan has emerged. According to Government sources, the likely solution to the pension issue will embrace the setting aside of some €200 million of the flotation proceeds to establish a back-up fund that could be drawn upon if there was not enough money in the existing scheme to meet pension obligations to retired staff. In this scenario, the pension fund trustees would have the power to decide whether and when money should be drawn from the new fund. To protect the airline's valuable landing slots at Heathrow airport in London, the Government is likely to retain a minority stake in the airline of a little above 25 per cent while changing its articles of association to ensure that no slots can be sold without the consent of more than 75 per cent of shareholders. The Irish Examiner reports that GARDAÍ have asked the Director of Public Prosecutions to examine the legality of a pyramid scheme into which millions of euro has been invested. Investors in the Liberty scheme require at least €5,000 to take part. They must also introduce two others to the scheme. They are offered an eight-fold return on their investment.
Wolfgang Schüssel, Austrian chancellor and host of next week's Brussels summit, called on fellow heads of government to back a compromise text and put the "nightmare" of the services directive behind them. He said a diluted version of the draft law approved by the European parliament was "absolutely a good text" and provided the best basis for an agreement. The new version of the law removed the "country of origin" principle that allowed companies to offer services under home state legislation, on wages and other employment conditions. It remains controversial and could be one of several flash points at the summit. New member states in eastern Europe are angry at what they see as attempts by western European countries to keep out their workers. Liberal member states in the west, including the Nordic countries, Britain and the Netherlands, have also championed a more robust law to deregulate a sector that accounts for 70 per cent of the EU economy. But yesterday Jan Peter Balkenende, Dutch prime minister, told a gathering of mainly centre-right politicians in the Austrian alps the time had come to compromise "otherwise there is a risk of no agreement". Mr Schüssel used the informal meeting at the exclusive winter sports resort of Lech to prepare the ground for the Brussels summit, which risks being a forum for the bitter battle between liberals and protectionists in the EU. France, Poland and Spain are accused by liberals of trying to block foreign take-overs of energy companies and banks in the name of "economic nationalism"; Germany and Italy are among countries in the opposite camp taking up the cudgels against protectionism. The Austrian chancellor wants the summit to focus on economic reform and is determined the event should not conclude with the usual bland communiqué setting out soon-to-be-forgotten promises. He said on Sunday that he wanted each country to highlight "one or two" key reform plans for the coming 12 months, which would be subject to monitoring and comment by other EU members the following year. "We really want to bring substance to these commitments,"?he?said.?"We can .?.?.?learn from each other." But the plan is contentious, with some member states reluctant to lay their reform programmes open to EU criticism. "We hope we can persuade colleagues this is the right way forward," said one Austrian official. The problems facing Mr Schüssel highlight the gap between the rhetoric in some national capitals about greater EU economic co-ordination and the political reality of putting the idea into practice. The summit will also discuss ways to help small companies. Anders Fogh Rasmussen, Danish prime minister, suggested one-stop-shops to cut the red tape associated with starting a new business. The FT also reports that Dominique de Villepin will this week face one of the toughest tests of his 10 months as France's prime minister as he tries to quell the growing protest against recent labour reforms that saw police storm the historic Sorbonne University in Paris at the weekend. Plummeting in the opinion polls and facing criticism from members of his own UMP party over his tentative reforms, Mr de Villepin appeared on national tele-vision last night to defend his strategy for cutting France's crippling unemployment rate. Describing himself as a "man of action", he said his most controversial reform, the First Employment Contract, would be applied in coming weeks, but offered concessions on the initiative that allows employers to fire young workers at any time within two years. The prime minister said he was ready to discuss new guarantees to the contracts after talks with "social partners". He said he would propose extra payments to young people whose contracts were ended, to help them retrain. He believes the contract will give employers the confidence to create jobs by making dismissal easier and cheaper. But protesters fear the contract increases the precarious situation of young jobseekers, whose unemployment rate is some 23 per cent. It is more than double that in France's largely immigrant suburbs. Mr de Villepin's efforts to win over public opinion in his battle against unemployment come as students and trade unions plan a packed week of protests. Students have called for action tomorrow and on Thursday, while France's unions plan to rally members for a national protest on Saturday. Union leaders say momentum against the reforms is growing. Meanwhile, Nicolas Sar-kozy, Mr de Villepin's number two and main rival for the 2007 presidential elections, returned early from a trip to the Antilles to deal with the protests. Like Mr de Villepin, the interior minister will be aware that the weekend scenes of police storming the 17th-century Sorbonne building and throwing teargas grenades into the faculty's halls to evict some 200 students are likely to erode the government's popularity even further. The New York Times reports that media companies are still hungry and asks iss there much left for them to consume that they'll find satisfying? NBC Universal's $600 million acquisition of iVillage, an early Internet company catering to women, highlights the continuing interest by media companies in adding new Web sites to reach and connect with consumers, hobbyists, parents, investors, car buyers, Scrabble players and virtually every other niche audience. To that end, digital-era media companies like Yahoo and Google, as well as traditional media companies, including those with deep roots in television and print, continue to scour the Internet for emerging content and technology companies. But the pickings of obvious acquisition candidates, while hardly exhausted, are slimming, according to financiers, entrepreneurs and industry analysts who follow the sector.
That leaves the media companies trying to figure out — as they did with far less discipline during the dot-com boom — which of the emerging generation of Web sites have lasting business models or, at least, can continue to build traffic. "There was a point last year where we thought the midlevel Internet deals were over," said Rafat Ali, editor of paidContent.org, a site that follows the business of digital media, referring to acquisitions valued at several hundred million dollars. But the iVillage deal last week "means that some of the midsize properties are still in play." Mr. Ali said media companies would also like to acquire smaller companies — up-and-coming content sites that might cost tens of millions — but that there were few proven sites left to buy. A lot of smaller "good sites have gone," he said. Media companies "are looking at the new sites coming out of Silicon Valley" to determine what to buy next. Media companies appear to be focusing their acquisition interest on sites that cater to niches but that have the potential for broad appeal. High on their shopping list are community networking Web sites like Myspace.com, which the News Corporation bought last year for $580 million. Also of interest are sites that allow people to play casual interactive games; store, send, manipulate and print photos; build and store blogs; and research and shop for big-ticket items like cars. Also eliciting interest are "next generation" Web sites, like those focused on allowing people to search the universe of blogs more effectively. The media companies' interest has to do with the continuing shift in the ways Americans consume entertainment and shop. Just as the advent of cable television carved up a once-concentrated block of network TV viewers, so has the Internet — with its literally millions of Web sites — created highly fragmented niche audiences. For big companies, the key is to build or buy Web sites that attract those niche audiences, but in substantial numbers. For a Web site to pique the interest of mass-market advertisers, it needs to have at least a million unique visitors a month; to be considered a major takeover candidate, it needs to have five million unique visitors, said Sharon Wienbar, a managing director with BA Venture Partners, a Silicon Valley venture firm that invests in Internet content companies. In the case of iVillage, the company had 13.4 million unique visitors from the United States in February 2006, though that was down from 16.6 million in the same period a year ago, according to comScore Media Metrix, which measures Web traffic. When the media companies guess right, the payoff has been growing, said Mark Pincus, chairman of Tribe Networks, which operates a social networking site. Mr. Pincus said the prices that advertisers were paying to reach large, specific audiences had been increasing, and looked as if they would continue to do so. Mr. Pincus noted that to reach a narrowly defined audience, the cost for having an advertisement seen 1,000 times, an advertising industry standard measure, was $20 to $50. An example, he said, would be visitors to a major portal's finance page. He said that to reach broader audiences with specific interests — like the people who visit a job search site — ads command $4 to $10 per thousand impressions, a "huge jump" from $1 or $2 just two years ago. To reach general audiences, like the masses who use Myspace.com on a regular basis, he said the price has jumped to $1 or $2 per thousand impressions, from pennies. Mr. Pincus's site, Tribe.net, has been among the privately held social networking properties sometimes mentioned as acquisition candidates. Others in the category that are eliciting interest include Xanga.com, a community of online diaries that had 7.2 million visitors in February, comScore said, as well as Facebook.com and Hi5.com. In December 2005, Yahoo bought Del.icio.us, a company that makes software for bloggers and writers of online diaries, but did not disclose terms of the deal. Perhaps the site most discussed and analyzed as a potential major takeover is Cnet Networks, the operator of News.com, a site focusing on business and technology news. The price tag for Cnet, which is publicly traded, with a market value of around $2 billion, would be $2.5 billion to $3 billion, said Mark May, an analyst for Needham & Company who covers Internet services and digital media. Cnet is "too expensive" to be a ready takeover candidate, Mr. May said. Other analysts said that Cnet had prompted much debate among major media companies, which had been unable to determine how lucrative the Cnet audience could become. And in contrast with a public company like Cnet, putting a value on a privately held Internet company is even less of a science. While bigger companies are priced on a multiple of their revenue (based on comparable companies), smaller companies are based simply on what the market will bear, said Ms. Wienbar of BA Venture Partners. "There's no magic in valuing a prerevenue company," she said. "It's what somebody is willing to pay." Ms. Wienbar said that the founders of many of the smallest content companies — those with less than $10 million in capital — appeared to be looking at acquisition, not a public offering, as a primary exit strategy. Mr. May said public companies that might attract interest from major media companies included WebMD, a health information site with a market capitalization of about $2.2 billion; Bankrate.com, a financial news and information site whose stock is worth around $560 million; and Hollywood Media, a $160 million company that operates MovieTickets.com, a ticket-purchase site. ( Autobytel, a public automobile research and advertising site, hired bankers to look for an acquirer, but in recent weeks changed its mind and decided to go it alone, Ms. Wienbar said). Industry analysts said another midsize company that had generated interest was PlanetOut.com, which has a market capitalization of about $170 million. The site caters to gay and lesbian interests and had 727,000 visitors from the United States in February, comScore reported. There is also TheKnot.com, a wedding site that had 1.9 million visitors from the United States in February and has a market capitalization of $350 million. Mr. Ali of paidContent.org said another potential takeover candidate was InfoSpace, an Internet and mobile search company, whose stock was worth $730 million. A potential acquirer of InfoSpace could be Google, according to one Internet industry analyst who was granted anonymity because he did not want to jeopardize his own sources of information. Media companies may also show interest in privately held casual gaming sites, like Bigfishgames.com, iWin.com, Oberongames.com and AtomEntertainment.com, Ms. Wienbar said. The sites are interesting to media companies, she said, because they "reach middle-aged women." Mr. Ali said another group eliciting interest was companies that make games for mobile phones, including Mforma, Glu Mobile and Digital Chocolate. Analysts said several popular photo sites include PhotoBucket.com and Smugmug.com. Early last year, Yahoo bought Flickr, a photo-sharing site, for an undisclosed sum. Some "next generation" search engines, like Technorati.com and Feedster.com, which focus on searching the blogging world, could be acquisition targets, said Konstantin Guericke, founder of LinkedIncom, a networking site for professionals based in Palo Alto, Calif. Mr. Guericke said that the major media companies would like, above all, to find ways of reaching the younger audience that is spending more and more time online, in increasingly engaged social activities. Explaining that group's appeal to advertisers, he said: "They're open to trying new things, and they have more time on their hands." The NYT also reports that cardiologists are re-evaluating how they prescribe Plavix, a popular heart medication, after a major clinical study found the drug may cause dangerous bleeding in patients who take it along with aspirin to ward off a first heart attack. Plavix, which helps prevent blood clots, is one of the world's top-selling drugs. The announcement of the results of the study, which will be published in The New England Journal of Medicine this week, created a buzz on Sunday at the annual meeting of the American College of Cardiology, one of the world's largest gatherings of cardiologists, partly because of the implications for patients, and partly because the results might have been disclosed to a financial analyst before their release on Sunday. A Bloomberg News article on Thursday about current studies of the drug, known generically as clopidogrel, quoted industry analysts as expecting the study to find that the drug was of no help in preventing a first heart attack among at-risk patients. That article was so concerning to the conference organizer, the American College of Cardiology, that it considered refusing to release the study to the public, said Amy Murphy, a spokeswoman for the organization. Whether the study results had been disclosed before Sunday or whether the financial analysts had merely predicted the outcome was unclear. But what was clear was that the study could have a significant impact on use of Plavix. It could also affect the drug's distributors, Sanofi-Aventis, a French drug manufacturer, and Bristol-Myers Squibb of New York. Plavix is Sanofi-Aventis's top-selling drug. In 2002, the American Heart Association and the American College of Cardiology issued a joint statement endorsing the short-term use of Plavix as part of the treatment regimen for patients who had been evaluated in the emergency room with a mild heart attack or who were at high risk of having a heart attack. Plavix seemed to work so well that many physicians began prescribing it, along with standard low-dose aspirin therapy, to patients who had risk factors for heart disease but who had never had a heart attack or stroke. "There's been an extrapolation of these data results to a larger and larger patient population," said Matthew Wolff, chief of cardiology at the University of Wisconsin, Madison. "This is being given to patients who cardiologists think in a very subjective way are at substantially increased risk without any formal guidance as to what substantially increased risk is." The trial results released Sunday studied use of Plavix in a population of more than 15,000 patients who fell into both groups, those who seemed to be well on their way to a heart attack or stroke and those who had already experienced a cardiovascular event like a stroke, heart attack or a blocked artery in a leg. In patients in the first category, Plavix offered no benefit over standard low-dose aspirin therapy, and it significantly increased the risk of internal bleeding, a complication that can be life threatening, the study found. When combined with aspirin, Plavix may offer a small benefit to the second category of patients, those who have already suffered a heart attack or stroke. But critics say even that benefit — a 1 percent reduction in the risk of heart attack, stroke or death from cardiovascular disease — may not be borne out after the study's data has been further parsed. "When the dust settles," Dr. Wolff said, "People are going to want to look at the magnitude of the overall benefit, which was relatively modest, and they're going to look at the cost of adding clopidogrel to aspirin in a world where there are a lot of drugs we can use to prevent disease." Plavix, which costs as much as $4 a pill, generated more than $6 billion last year in annual sales worldwide for Sanofi-Aventis and Bristol-Myers Squibb. © Copyright 2007 by Finfacts.com |
