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A LIBYAN fighter prepares an anti-aircraft machine gun at a check point near the key city of Ajdabiya yesterday as government forces have encircled the town. — AFP Protest a crime in Egypt CAIRO — The Egyptian interim cabinet headed by Essam Sharaf approved yesterday a law criminalising strikes and protests with penalties of up to one year's imprisonment, state media reported. The law allows for those participating in any protest which "disrupts private or public work" to be imprisoned for one year or fined up to 500,000 Egyptian pounds ($84,000). The law, which is subject to approval of the Supreme Council of the Armed Forces, is to stay in effect for as long as the country remains in a state of emergency, state-run website Egynews reported. The new law has already been blasted by activists, who say the military is trying to prevent people from demonstrating against emergency law and the abuse of protesters. Egypt's military, in charge of the country since former president Hosni Mubarak's ouster last month, has been condemned by rights groups for its use of violence against protesters and torture of detainees in recent weeks. A gag order has also been placed on Egyptian media, which has done very little reporting of the military's transgressions. The cabinet also agreed on a separate law yesterday which creates an initial framework for the formation of new political parties. According to the framework, a judiciary committee would be created to oversee the formation of political parties and ensure they abide by legal regulations, such as the ban on parties based on religion. — dpa DERAA, Syria — Syrian forces killed six people yesterday in the southern city of Deraa, site of unprecedented protests, residents said. Those killed included Ali Ghassab al Mahamid, a doctor from a prominent Deraa family, said the residents, declining to be named. An official Syrian statement said: "Outside parties are transmitting lies about the situation in Deraa", blaming what it described as armed gangs for the violence. The statement said doctor Mahamid, killed in an ambulance that had arrived at the scene to rescue the injured, was "assaulted by an armed gang". "Security forces confronted the armed gang near the Omari mosque, shooting several of its members and arresting others. A member of the security forces was killed," the statement said. It said the armed gang "stocked weapons and ammunition in the mosque and kidnapped children and used them as human shields". State television showed guns, grenades and ammunition it said were found in the mosque, but activists claimed the protest was peaceful and there had been no weapons. The attack brought to 10 the number of civilians killed during six days of demonstrations for THE brother of Mohamed Bouazizi, the fruit vendor whose self-immolation in December last sparked a popular revolt, Salem, his mother Manoubia and his sister Leila meet with UN Secretary-General Ban Ki-Moon yesterday in Tunis. The UN chief arrived in Tunisia to meet the country’s transitional authorities. — AFP SANAA — Yemen's president offered to hold elections and step down by the end of the year yesterday in a bid to appease mounting demands for his resignation, but opposition groups showed no sign of easing up on eforts to force him out. President Ali Abdullah Saleh had earlier said he would not seek a new term in 2013. Since then he has made greater concessions and yesterday offered constitutional change and elections to replace parliament and the head of state this year. "At this historic moment Yemen needs wisdom to avoid slipping into violence ... that would destroy gains and leave the country facing a dangerous fate," Saleh said in a letter passed to opposition groups in a bid to reconcile differences. Opposition groups, which had earlier called for rallies in the capital Sanaa tomorrow to force Saleh from power, said they were studying the offer. The letter, also sent to army commander Ali Mohsen, who has declared support for the protesters, contained a proposal to hold a referendum on a new constitution, then a parliamentary election followed by a presidential poll before the end of 2011. It is unclear who might follow Saleh. Defections including generals, tribal leaders, diplomats and ministers, gained momentum after forces opened fire on protesters on Friday last, causing the deaths of 52 people. Saleh sacked his cabinet and declared a state of emergency — which parliament rubber stamped yesterday for a 30day period. But the bloodshed has lent protests a new severity. Yesterday, protesters carried placards saying "No to emergency rule!" Some had begun selling T-shirts saying "I am a future martyr". 6 REGION OMAN DAILY <strong>Observer</strong> THURSDAY, MARCH 24, 2011 Gunfire and claims in Libya TRIPOLI — Western warplanes silenced artillery and tanks besieging the opposition-held town of Misrata yesterday after an American admiral warned that the Libyan leader's armour was now in the cross-hairs. The Western powers are struggling to agree on a coherent command structure including Nato after Washington said it wanted to hand over leadership of the campaign in the coming days. While four nights of Western airstrikes hit Libyan air defences and an armoured column in the east, government tanks had kept up their shelling of Misrata in the west this week. At least two explosions were heard in the Libyan capital Tripoli before dawn yesterday. "We will not surrender," Libyan leader Moammar Gaddafi told supporters at his Tripoli compound, which came under attack in 1986 from the US Reagan administration and once again in the current round of air raids. There were no reports of civilian casualties, said Rear Admiral Gerard Hueber, a top US military officer involved in enforcing the no-fly zone. But neither had Libyan forces pulled back from Misrata, he said. "There have been no reports of civilian casualties. Our mission here is to protect the civilian populace and we choose our targets and plan our actions with that as a top priority," he told reporters by phone from the command ship USS Mount Whitney in the Mediterranean. Prior to the Misrata strikes, US Rear Syria sees more violence Saleh offers elections this year "As sure as the sun is in the sky, he will go," said protester Suleiman Abdullah, 28. Long seen by many as the strongman holding the fractious tribal country together, Saleh is raising the spectre of civil war and disintegration if he is forced out in what he says would be a coup. Defections among the ruling elite have reached senior military commanders, including General Ali Mohsen, commander of the northwest military zone and Saleh's kinsman from the powerful Al Ahmar clan. Security sources said Saleh had beefed up his personal security for fear of an assassination attempt or a coup by his widening circle of opponents. Protesters, however, are divided over what they think of Ali Mohsen who was popularly regarded as the second most powerful man in the country before he abandoned Saleh. Some protesters have displayed the general's picture on their tents in the protest encampment in Sanaa, but opposition leaders regard his motives with suspicion and few would want him to have a role in any future transitional government. Some from the north resent his role in suppressing their recent rebellions. "We see Ali Mohsen's joining us as a corruption of the revolution. The revolution is not against an individual but against a system," said Abdullah Hussein al Dailami, 33, from Saada in the north. He said Mohsen had been Saleh's accomplice. Opponents complain that Yemen under Saleh has failed to meet the basic needs of the country's 23 million people. Unemployment is around 35 per cent and 50 per cent for young people. Oil wealth is dwindling and water is running out. — Reuters political freedom and an end to corruption in the country of 20 million. The demonstrators have been calling for reform. An official statement said yesterday that President Bashar al Assad had sacked Deraa governor Faisal Kalthoum. But a main demand of the protesters is an end to what they term repression by the secret police. France urged Damascus to carry out political reforms without delay and respect its commitment to human rights. It also called for an investigation into the recent deaths in Deraa, the release of those detained in demonstrations and said "excessive force" had to stop. The protesters, who erected tents in the mosque's grounds, said earlier they were going to remain at the site until their demands were met. On Tuesday, Vice-President Farouq al Shara said Assad was committed to "continue the path of reform and modernisation in Syria", Lebanon's al-Manar television reported. Authorities arrested a leading campaigner who had supported the protesters, the Syrian Observatory for Human Rights said on Tuesday. It said Loay Hussein, a political prisoner from 1984 to 1991, was taken from his home near Damascus. — Reuters Algerian police clash with rioters in housing row ALGIERS — Police in Algeria's capital used tear gas yesterday to disperse a crowd of young men who threw stones and petrol bombs to try to stop bulldozers demolishing dozens of illegally-built homes. Rioting over housing is fairly common in Algeria but yesterday's clashes were unusually violent and took place at a time when Algerian authorities are wary of any sign of contagion from the unrest elsewhere in the Arab world. At least five police officers were injured in the rioting, during which rioters also set fire to a car and threw bricks down on police from nearby rooftops, said a Reuters journalist at the scene. The clashes, in the Oued Koriche suburb of Algiers, began when local officials ordered the demolition of more than 30 houses built on publicly-owned land without a permit. Police in protective gear formed a shield around bulldozers which moved in to demolish the houses, but they came under attack from about 100 young men. After a few hours all the illegal buildings were knocked down and the confrontation ended. In the Algerian capital, a city perched on hills sloping down to the Mediterranean Sea, the buildings are packed tightly together and there is fierce competition for living space. — Reuters Admiral Peg Klein said warplanes, which had been suppressing Libya's air defences, would now be sent out to attack Gaddafi's tanks. "Some of those cities still have tanks advancing on them to attack the Libyan people," said Klein, commander of the expeditionary strike group aboard the USS Kearsarge off Libya. British Air Vice Marshal Greg Bagwell said yesterday at a base in Italy that Western forces had destroyed Libya's air force and were flying with impunity across its air space, attacking ground troops. In the east of the state, disorganised rebels fighting against government forces have failed to capitalise on the air strikes and have been pinned down outside Ajdabiyah, 150 km west of Benghazi. Rebels were clashing with the army inside Ajdabiyah, rebel fighters said yesterday, and residents were fleeing. Fighters said some groups had made covert forays into the town through the desert but that tanks at the town entrance had kept their main force at bay. "We went into Ajdabiyah yesterday (Tuesday) at 2 pm. It's not Ajdabiyah any more," said rebel fighter Faraj Ali, in his machinegun-mounted truck. A family leaving Ajdabiyah said a fraction of the residents remained. Missiles landed near rebel positions yesterday and shelling in previous days killed a number of rebel fighters. Fighter Ali despaired of what he saw as inertia by the leadership in Benghazi and called for more help from the West. "The National Libyan Council aren't MANAMA — Bahrain has suspended flights to and from Lebanon a day after it warned its nationals not to travel there following declarations of support by the group Hizbullah for unrest in Bahrain. Bahrain's state-run Gulf Air also said in a statement on its website that all flights to Iran and Iraq had been suspended until March 31, without giving a reason. "This decision was taken after the irresponsible comments and stances from Lebanon against Bahrain, its people and leaders," state-owned Bahrain news agency cited a statement from the Civil Aviation Affairs department as saying. Flights by Gulf Air and Bahrain Air to and from Lebanon have been suspended indefinitely, it added. Twenty senior Lebanese businessmen based in Bahrain met yesterday to discuss their response after Lebanese residents in Bahrain complained of being turned away at the airport on their return from holidays or business trips. Lebanese expatriates said they would lodge an official request for help with their embassy on Saturday. They are also preparing a statement that will condemn outside interference in Bahrain and distance the community from comments by Hizbullah leader Sayyed Hassan Nasrallah. On Tuesday, Bahrain's Foreign Ministry warned Bahrainis not to travel to Lebanon for their own safety and said the ban was due to threats and interference. Nasrallah criticised states the people to ask for anything to be frank. If it weren't for the West, Gaddafi's forces would be in Benghazi," Ali said. French Foreign Minister Alain Juppe said Nato would take on a coordination role in the Libya intervention and a contact group would be formed, made up of representatives of coalition countries, African Union, Arab League and EU countries, which will be in charge of strategic planning. The group is to meet in London next Tuesday, Britain said. The US, Britain and France agreed on Tuesday that the alliance should play a key operational role, but the assent of all 28 Nato states is needed and they have been split over whether it should also exercise political control. Meanwhile, Nato nations offered an armada of ships and submarines to enforce an arms embargo as the West moved to settle a row over who should run the entire Libya campaign. Six nations agreed to contribute up to 16 vessels in the Mediterranean, with Turkey offering five warships and a submarine despite its reservations about the military action. In the meantime, the 28-nation alliance appeared to move closer to deciding Nato's place in a no-fly zone that has been enforced by an international coalition led by the United States, France and Britain. France wants political authority to rest in the hands of a committee made up of countries taking part in the campaign, including Arab states, while leaving planning and operational military duties to Nato. — AFP AN injured man, who later died of his wounds, is rushed into the emergency room of a hospital in Daraa, 100 kms south of the capital Damascus yesterday. — AFP Bahrain suspends some flights for backing Bahrain's rulers, who called in troops from Saudi Arabia to help them quell protests. Bahrain's stern action which saw it ban protests and impose martial law, has stunned demonstrators and angered Iran. Bahrain has withdrawn its top diplomats from Iran in protest at the Islamic Republic's criticism of its actions. Bahrain also said yesterday it had reduced curfew times by two hours to try to bring life back to normality in the island kingdom that has been gripped by its worst unrest in years. Last week, Bahrain imposed a 12-hour curfew on large swathes of Manama. The curfew now runs from 10 pm to 4 am from Seef Mall through the financial district to the diplomatic area. — Reuters YEMENI Members of Parliament raise their hands to vote on a state of emergency declared by the president in Sanaa yesterday. — AFP
OAB sponsors Palestinian Products Exhibition Page 10 IN BRIEF Nokia says talks over job cuts soon HELSINKI — The world’s leading mobile phone maker Nokia said yesterday negotiations with unions over upcoming job cuts would begin at the end of April. “We don’t have an exact starting date, but we are planning to begin talks at the end of April, and then we will of course talk about the numbers,” company spokesman Tomi Kuuppelomaeki said. Nokia has not yet said how many of its 16,000 developers worldwide it will let go as part of a new corporate strategy to phase out development of its smartphone platform Symbian. On February 11, chief executive Stephen Elop announced the company would begin adopting Microsoft’s smartphone platform instead, resulting in “substantial” job losses. Hammerson buys six UK properties LONDON — Anglo- French mall owner Hammerson has bought six British retail assets for £208 million ($341 million), equivalent to a yield of 7 per cent, from St Martins Property Investments. Including transaction costs, the deal totalled £221 million, Hammerson said yesterday, adding it had also bought the remaining 75 per cent interest in the Central Retail Park, Falkirk, for £69 million including costs. “There is scope for Hammerson to create value through the rejuvenation of the principal assets (Centrale, Monument Mall and Elliott’s Field) via development and asset management initiatives,” Hammerson said. Hochtief in good shape after 2010 BERLIN — The biggest German construction company, Hochtief, reported solid 2010 results yesterday, confirmed its medium-term targets and repeated that it would sell two subsidiaries. Hochtief’s net profit gained 50 per cent to 288 million euros ($408 million), and pre-tax profit was 27 per cent higher at 757 million euros. Orders were up by 32 per cent at almost 30 billion euros meanwhile, after the group diversified into the industrial services sector, with most of its work now outside Germany. Ericsson to cut 450 Swedish jobs STOCKHOLM — Sweden’s mobile network giant Ericsson said yesterday it would cut 450 Swedish sales and administrative jobs as part of the adjustment of its operations in the country. “Ericsson is informing its employees today on an adjustment of its activities which imply a reduction of about 400 jobs in Stockholm and around 50 jobs in Gothenburg within sales and administration,” the company said in a statement. The company said the cuts were necessary following a new structure put in place in 2010 and according to which “certain competences within sales and administration moved closer to clients.” Al Mazyona draw winners MARKING 20 years of fulfilling dreams, BankMuscat conducted its monthly and weekly Al Mazyona savings scheme draw in MBD branch in the presence of a large turnout of customers. Hamed Amour al Jabri, a pilot picked the lucky winner of RO 20,000. Page 9 TOKYO — Japan’s largest banks are in talks to provide up to $25 billion in emergency loans to Tokyo Electric Power to shore up its finances and rebuild its power network following a disaster at one of its nuclear plants. Tokyo Electric, Asia’s largest utility, is waging a desperate battle to cool reactors at its Fukushima-Daiichi power plant which were crippled by the powerful earthquake and tsunami on March 11 and have leaked radiation. The disaster knocked out about 20 per cent of Tokyo Electric’s operating thermal and nuclear generation, forcing it to implement rolling blackouts set to last months until it can secure alternative sources of power. Highlighting the uncertainty over its financial prospects, the company — known for its rich and steady dividends — said yesterday that it was now not sure what its annual dividend would be, erasing its prior forecast for a payout of 60 yen per share. Sumitomo Mitsui Financial Group the utility’s main lend- BRUSSELS — With crisis-hit Portugal on the verge of government collapse and a cry for financial help, European leaders face an uphill task at a summit meant to seal defences against a year-long debt crisis. Leaders from the 27 European Union states lock horns today and tomorrow in Brussels, amid divisions over military action in Libya and nuclear safety after Japan’s quake and tsunami severely damaged a reactor. Once again, though, the euro debt crisis is set to consume most of their energies — as a deadline for a definitive response to financial headaches collides with a fresh run on money markets over Portugal’s descent towards snap polls. A bailout demand from Lisbon, like Ireland or Greece beforehand, er, is expected to provide more than 500 billion yen in loans out of an emergency package that could total 2 trillion yen ($25 billion), sources with direct knowledge of the matter said. Mitsubishi UFJ Financial Group and Mizuho Financial Group are considering loans of 200-500 billion yen each. Sumitomo Trust and Banking and other major trust banks are also expected to offer funds, the sources said. The loans would be used to fix damaged plants and for other reconstruction efforts and may be extended to the utility as early as this month, according to the sources, who were not authorised to speak publicly about the matter. “Interesting, as one suspects that the government has implicitly guaranteed the survival of TEPCO as a regulated entity if all these institutions are willing to accept the risk,” said Penn Bowers, an analyst at CLSA Asia-Pacific Markets in Tokyo. “Given the amount of cash on the balance sheet, I am surprised at the urgency of Thursday, March 24, 2011 would come at the worst possible time. A credit rating downgrade drove the interest Portugal must pay on new borrowings over eight per cent on Tuesday. Nine billion euros ($12.9 billion) of debt must be repaid by June 15. Portugal’s parliament was set yesterday to reject Prime Minister Jose Socrates’ latest austerity plan, aimed at squeezing its public deficit to 4.6 per cent of GDP this year. The Socialist leader has said he will resign in that event. Belgian police expect some 20,000 anti-austerity protesters to snarl up EU HQ from early today. A Portugal bailout would need to come from a notional 440-billion emergency fund, the European Financial Stability Facility, but diplomats said that Finland is “not in talks but certainly the need to prevent a crisis of confidence could be seen as necessary to keep recovery efforts stable,” he said. Tokyo Electric, which provides power to about one-third of the Japanese population, had 432 billion yen in cash and a position” to strengthen the fund before April 17 elections. “Finland has excluded any increase of EFSF guarantees on Friday,” one said. Already tapped by Ireland, the amount the fund could actually lend, allowing for a required buffer to make it profitable, falls to around 200 billion. If Portugal sounded the alarm, the margin for others would narrow. And as the heat intensifies, German Chancellor Angela Merkel wants to re-negotiate capital injections into a permanent 500-billion European Stability Mechanism to replace the EFSF in 2013. Europe’s most powerful and populous economy, Germany was the biggest contributor to the Greek and Irish bailouts — a combined equivalents at the end of December and 7.5 trillion yen in outstanding debt, according to its financial statements. Of its $64 billion in outstanding bonds, the company is due to repay $4.8 billion this year, and another $5.6 billion in 2012, underscoring the Bank Sohar opens Bahla branch SHAIKH Musalam Mohamed Hamed al Wahshi, Deputy Wali of Wilayat Bahla officiated as the Chief Guest and formally inaugurated Bank Sohar’s branch at Bahla in the Dakhiliya Region. The inaugural ceremonies began with the Chief Guest cutting the ceremonial ribbon Page 9 importance of refinancing to meet its funding needs. Last week, credit ratings agency Standard & Poor’s cut its long-term and short-term ratings on TEPCO by one notch to “A+” and “A-1” respectively. Moody’s also cut the firm’s long-term rating by 200-billion-plus. Slovakia and Estonia also have problems with a “key” determining their contributions. After a vote in the European Parliament yesterday, leaders are to endorse an EU treaty change enabling the ESM’s creation, with an additional 200-billion buffer required. Meanwhile, a raging battle with Ireland, which wants eased terms on its bailout in line with those granted to Greece, will also resurface, with euro zone partners demanding Dublin first raise its low corporation tax levels. A new ‘Pact’ to support the euro, which sets out benchmarks for EU states across a wide gamut of indicators and has been deemed the “cornerstone” of the bloc’s future defences, is also stirring trouble. While diplomats said that Poland, Denmark, Lithuania, Latvia and Bulgaria would sign up, current EU chair Hungary announced on Tuesday it will not. The Czech Republic had already said no. France, Spain, Austria and Greece want the goal of a Financial Transactions Tax written in, which Germany, Italy and Denmark oppose. France, with an eye on the Irish row, wants reference to a need for “pragmatic tax co-ordination.” Even euro zone plans to deepen co-ordination of economic policies and create new sanctions to punish countries that exceed debt limits are not set in stone. Nervousness, volatility grip Asian shares Page 10 Japan banks may lend $25 bn to nuclear operator UK sees slower growth, above-target inflation LONDON LONDON — Britain cut its economic growth forecast yesterday and said inflation would remain above target this year and next in a budget that stuck to ambitious deficitbusting goals. Seeking to support a faltering economy, Finance Minister George Osborne said corporation tax would be cut by two percentage points to 26 per cent from April, rather than by just the one point originally planned. A levy on banks would be increased to pay for it. Osborne cut his growth forecasts to 1.7 per cent in 2011, and 2.5 per cent in 2012, citing figures from the government’s independent fiscal watchdog. In November, growth was estimated to be 2.1 per cent this year and 2.6 per cent in 2012. Sterling fell to the day’s low versus the dollar in response to the new economic forecasts. The Conservative-Liberal Democrat coalition government is attempting to eliminate most of a deficit of 10 per cent of national output before the 2015 election, while also nurturing a fragile economy back to health. Public borrowing would fall less steeply over the next four years than previously hoped but the bulk of the budget deficit would still be eliminated by 2015, Osborne said. Policymakers at the Bank of England face a dilemma, with inflation running at more than double their 2 per cent target while the economy is still in a fragile state and needs the support of record low interest rates. BRITISH Chancellor of the Exchequer George Osborne poses with the ministerial budget box outside 11 Downing Street in London yesterday. — AFP Osborne said soaring oil prices meant inflation would remain between 4 and 5 per cent this year before dropping to 2.5 per cent next year. The economy unexpectedly shrank at the end of last year and, although it is seen bouncing back this year, the recovery faces headwinds from constrained credit, weak household finances, high oil prices and the prospect of tighter monetary policy. Minutes of this month’s Bank of England monetary policy meeting yesterday showed no more policymakers had joined the camp wanting to raise interest rates, with three out of nine MPC members backing a hike and the rest wanting to hold rates at a record low of 0.5 per cent. Markets have been bet- BLACK smoke rising from the third reactor building of the Tokyo Electric Power Company’s No 1 Fukushima nuclear power plant in the town of Okuma in Fukushima. — Reuters ting that the BoE could start to raise rates in the coming months, potentially creating a headache for a government banking on loose monetary policy to support the recovery while it slashes spending. Any delay will be a welcome relief for Osborne and his team. The coalition — which set four-year plan to cut public spending by about a fifth last year — has little cash to spend to ease the pain for struggling businesses and families. Labour, the unions and some economists argue the government is putting the recovery at risk by cutting the deficit so fast. The wisdom of the government’s harsh four-year spending review has also been brought into question for other reasons. — Reuters ENRC profit doubles on record output — Kazakh miner ENRC met forecasts with full-year underlying profit that more than doubled, on record production and demand recovery, and said the global economic outlook was still improving. “We remain positive on the group’s prospects for 2011, although the control of costs growth and the development of our assets in Africa will be important issues for management, as will be the continued near-term risk of commodity market volatility,” chief executive Felix Vulis said yesterday. Underlying 2010 earnings before interest, tax, depreciation and amortisation (EBIT- DA) jumped 118 per cent to $3.19 billion, on revenue up 72 per cent to $6.60 billion. ENRC has hired headhunters in its search for a new CEO, Vulis said. Vulis, who has a 12-month notice period, announced his resignation in February. Shares in the FTSE-100 miner were up 3.6 per cent at 1045 GMT, slightly outperforming a 2.1 per cent higher British mining index. ENRC would not comment on speculation a publicly listed Glencore could make a bid. It said it did not expect Glencore’s status, whether as a public or private company, to affect its aluminium distribution agreement with the world’s largest commodities trader. Cost pressures have been rising across the mining industry and ENRC said prices for materials, transportation, fuel and other inputs, as well as logistics, were expected to show significant increases in 2011. — Reuters LONDON — The Bank of England’s Monetary Policy Committee remained divided on whether to raise interest rates this month and appeared no closer to tightening policy than they were in February. Minutes to the BoE’s March 9-10 policy meeting, published yesterday, suggested the medium-term outlook had not changed, although the risks to inflation and growth had both risen as a result of soaring oil prices. Sterling fell and UK share prices extended gains after the minutes, which some investors had expected to strike a more hawkish tone. “It doesn’t look as though the MPC is any closer towards deciding to push rates up in the near term,” said Philip Shaw, an economist at Investec. Data on Tuesday showed inflation surged to a 28-month Crisis-hit Portugal tips of iceberg as Euro leaders tackle debt woes BOTTOMLINE two notches to “A1.” The spread of Tokyo Electric’s bonds over Japanese government bonds expanded to about 100 basis points at their peak from 7 or 8 basis points before the quake, pushing them into oversold territory, a senior fund manager said. “The general perception of the market now is that the situation at Tokyo Electric’s Fukushima Daiichi plant is settling down gradually,” said Nobuto Yamazaki, the head of fixed income at asset manager Diam Co Ltd. At the six-reactor Fukushima-Daiichi plant, engineers are battling to cool the reactors to contain further contamination and avert a meltdown. But even if TEPCO is able to regain control of Fukushima-Daiichi, it faces lengthy repairs and inspections at other nuclear facilities and will have to burn more oil and gas to make up for the nuclear shortfall, eating away at its finances. In addition to the destroyed Fukushima-Daiichi plant, Tokyo Electric’s Fukushima- Daini plant is also out of ac- high of 4.4 per cent in February, a jump that pushed markets to price in a more than 50 per cent chance of a UK rate rise in May. The central bank said there was a “significant risk” inflation could exceed 5 per cent in the coming months. However, it also noted that consumer spending had “deteriorated sharply” and it was too early to tell how strongly the economy was recovering after a surprise contraction at the end of last year. The BoE said the recent rise in oil prices, fanned by tension in the Middle East and North Africa, had increased adverse risks to both inflation and growth. “The balance between the upside and downside risks to the medium-term inflation outlook had probably not shifted significantly over the month,” tion, along with some 18 per cent of the company’s thermal power capacity. Damage to plants, lines and networks in the most affected northeast of the country is expected to linger, raising the prospect of blackouts during the peak summer demand season. Tokyo Electric has said it would likely be able to secure 54 gigawatts of supply by summer, up from around 35 gigawatts now, as it restores some of the damaged thermal plants and brings on other plants that were mothballed or down for maintenance. When the company announced third-quarter results in January, it said that every one per cent fall in its nuclear power utility rate would trim its annual profit by 11 billion yen in the form of increased fossil fuel costs. CLSA’s Bowers says its fuel costs could rise by 700 billion yen in the financial year to March 2012 “given the change in fuel mix — the ability to pass this through will be the key long-term factor for funding.” — Reuters BoE no closer to raising rates policymakers concluded. BoE chief economist Spencer Dale and external MPC member Martin Weale both voted for a 25 basis point hike — as they did in February. Andrew Sentance, who has long been the committee’s most hawkish member, maintained his call for a 50 basis point rate rise. The remaining six members voted to keep rates on hold at 0.5 per cent, where they have stood since March 2009, and Adam Posen reiterated his lone call for an additional £50 billion of quantitative easing. There were differences even among those who voted to keep rates on hold. Some thought the risks from higher inflation expectations remained limited while others thought the risks had risen and the case for a rate rise had strengthened in recent months. — Reuters A TRADER works at the Egyptian Stock Exchange after its reopening, in Cairo yesterday. The Egyptian stock exchange’s broad index tumbled nearly 10 per cent yesterday after the bourse reopened following a seven-week closure caused by political turmoil. — Reuters Report on page 9 Britain has already secured exemptions to a scheme forcing states to submit national budgets to peer review. A staggering 2,000-plus amendments lodged by Euro MPs means it may be difficult to meet a June target-date for adoption of new economic governance legislation. Others want to focus on growthenhancing measures, as seen in a joint demand from Britain, the Netherlands, Sweden, Denmark, Finland, Estonia, Poland, Lithuania and Latvia. They want to remove market restrictions, accelerate free-trade deals with India, Canada, Japan, South American and Asian nations, and deepen economic integration with non-EU eastern European and southern Mediterranean neighbours. — AFP
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Pension benefits raised - Oman Daily Observer

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