NEWS,14.07.2013

Kenya raises price of petrol, diesel

Kenya's energy regulator raised retail prices for petrol and diesel on Sunday due to rising global oil prices and a weaker local currency, while decreasing the price of kerosene.

Fuel prices have a big impact on the rate of inflation in the east African economy. The rate rose to 4.91% in June from 4.05% a month earlier.

The economy heavily depends on diesel for transport, power generation and agriculture. Kerosene is used in many households for lighting and cooking.

The Energy Regulatory Commission (ERC) reviews domestic energy prices every month, with adjustments made depending on fluctuations in international energy prices and foreign exchange fluctuations.

The cost of importing super petrol and diesel in June rose, while that of kerosene fell, while at the same time the Kenyan shilling weakened to 85.65 per dollar from 84.30 per dollar in the previous month the ERC said in a statement.

The regulator raised the maximum price of a litre of super petrol in Nairobi by 1.34 shillings to 109.52 shillings, and increased the price of diesel by 3.70 shillings to 102.86 shillings per litre.

The price of kerosene will fall by 2.03 shillings to 79.49 shillings, the commission said.

The new prices will take effect on July 15, and will be in force for a month.

Hollande rules out shale gas exploration

French President Francois Hollande ruled out exploration for shale gas during his presidency on Sunday, dousing hopes that a ban on hydraulic fracturing could be reviewed following a legal challenge by a US firm.
France's top court said this week it will examine the challenge to the ban by Schuepbach Energy, which held two exploration permits that were cancelled when the law was passed in 2011.
Industry Minister Arnaud Montebourg stirred debate when he suggested creating a state-backed company to examine exploration techniques. But he was promptly overruled by Prime Minister Jean-Marc Ayrault.
"As long as I am president, there will be no exploration for shale gas in France," Hollande told France 2 TV in a live interview after Bastille Day celebrations.
The International Energy Agency has named France as a European country with some of the most plentiful underground reserves of shale gas.
But Hollande's government, which comprises members of the Greens Party, has kept in place the 2011 ban and said it should remain in effect due to concerns that hydraulic fracturing can pollute underground water sources.
Scheupbach Energy challenged the ban in the local court of Cergy-Pontoise near Paris, which forwarded the case to France's highest administrative court, which then passed it on to the Constitutional Council.
"The debate on shale gas has gone on for too long," Hollande said.

EU to probe German energy law - report

The European Union plans an investigation into Germany's renewable energy law due to concerns that exemptions for some firms from charges levied on power users breaches competition rules, a German magazine reported on Sunday.
Without citing sources, Der Spiegel weekly said lawyers in Brussels had looked at the law which provides a framework for Germany's push to renewable energy, and that Commissioner Joaquin Almunia had concluded it may breach EU rules.
The Commission would open proceedings on Wednesday, it said.
The officials criticised exemptions made for energy intensive companies in Germany, reported the magazine, adding this may lead to companies having to pay millions of euros in back payments.
A spokesman for the Commission declined to comment on the report.
The EU said in March it would investigating power grid charge exemptions which have been granted to big steel, chemicals, glass, cement and building materials companies.
Chancellor Angela Merkel has set out ambitious goals for Germany to wean itself off fossil fuels, phase out nuclear power and switch to renewable energy sources but it is costly.
Households are paying for subsidies to renewable energy producers and have been hit by sharp increases in the last few years. Yet fears that German industry will become uncompetitive if it has to pay too much for energy has led to exemptions from these charges for many firms.
The debate about the cost of the energy transition and energy prices could become an issue in the September election.
Merkel has said she intends to rein in renewable subsidies and reduce the costs of the green revolution on consumers if she is re-elected in September.

Wind of austerity chills turbine industry

Wearing face masks and wielding sanders, two workers smooth the surface of a massive fan for a wind turbine at the Gamesa factory in Aoiz, a town in Navarre, northern Spain.
But in hard times, it will be winds in Finland, not Spain, that make the finished product spin.
Last year, the plant delivered a wind turbine park to Malaga in southern Spain and another to Burgos, in the north, said factory manager Javier Trapiella.
"Now we don't produce for Spain," he added.
"It has all stopped."
For green energy producers, Spain has changed from a paradise with generous public support to a markedly less agreeable home.
Prime Minister Mariano Rajoy's conservative government is imposing an austerity regime to plug an accumulated energy sector deficit of €26bn ($34bn).
On Friday, the horizon darkened further with the approval of reforms cutting annual state aid for renewable energies by more than €1bn.
The change is enough to place at risk huge strides in the Spanish wind energy industry.
Spain ranks as number four globally in terms of installed wind energy but has dropped to seventh place in terms of new projects, according to the Global Wind Energy Council.
"For Spain, wind energy has really been an energy revolution. In 20 years we have gone from producing zero kilowatts to producing 20% of national demand today," said Heikki Willstedt Mesa, director of energy policy at the Spanish Wind Energy Association.
In the fourth largest economy of the eurozone, wind is often the main source of electricity.
"Unfortunately, since 2009 the government has slowed the development of wind energy in Spain with various regulatory measures," he said.
Cuts in state aid of 35%, removing subsidies for new turbines since the start of 2013, and then the latest changes announced on Friday: the sector has been hit hard and manufacturers are the first to feel the pain.
In February, French group Alstom closed two factories in Spain and laid off 373 employees.
"The economic crisis and the absence of a stable regulatory framework have slowed domestic demand," the group said, stressing the lack of activity in its Spanish sites.
Spain's Gamesa, which is among the industry's world leaders, gave the same reasons as it laid off 606 of its 4,800 staff in Spain and closed two blade factories in recent months.
Gamesa notably pointed to the "regulatory uncertainty" , the persistent economic crisis and financial problems in the sector, especially in southern Europe.
Making a wind turbine is almost a work of craftsmanship, said Gamesa's Trapiella. "You need good hands," he said. The fibreglass and carbon fibre blades measure 62.5 metres (205 feet) and weigh 15 tonnes each.
When finished they will leave by truck overnight for the port of Bilbao to be shipped by sea to Finland. About 40 blades are scheduled for delivery by February.
"If 90% of our sales were in Spain 10 years ago, it is the exact opposite today with 90% of sales coming from abroad," said Jose Antonio Cortajarena, Gamesa's corporate managing director.
"We are in more than 50 countries," he said, citing Mexico, Brazil and India as key markets.
"Even if our corporate headquarters are in Spain, the risk, our dependance on the Spanish market, is limited."
The Spanish Wind Energy Association is not so reassured.
"We have destroyed 25 jobs a day in the wind energy sector since the start of the year and the industry is on the borderline, it cannot take any more cuts," it said.
The industry has already suffered heavily.
"Of the 43 000 jobs we had in the wind industry in 2009, there are only 23 000 left, said Sergio de Otto, secretary general of the business group Fundacion Renovables (Renewables Foundation).

Snowden could cause 'more damage'

US intelligence leaker Edward Snowden on Sunday marked three weeks stuck in an airport transit lounge since he arrived in Russia, as a supporter warned the fugitive possessed even more secrets that could damage the US government.

Snowden, wanted by the United States for revealing sensational details of its surveillance operations, flew into Russia from Hong Kong on 23 June and has languished ever since in the transit zone in Moscow's Sheremetyevo airport.

Breaking cover for the first time since he arrived, Snowden told a group of activists on Friday that he was applying for asylum in Russia until he could travel on to Latin America.

But Russian officials have yet to confirm receiving such an application which, if approved, would risk further straining Russia's already tense relations with the United States.

Meanwhile, the journalist first who published Snowden's revelations based on the sweeping US surveillance programmes said he possesses data that could prove far more "damaging" to the US government.

Glenn Greenwald told Argentina's La Nacion paper that Snowden, aged 30, had chosen not to release this information.

Damaging information

Russian President Vladimir Putin had said last week that Snowden could claim asylum in Russia only if he stopped harming US interests, a remark that prompted the fugitive to withdraw a previous application for asylum in Russia.

"Snowden has enough information to cause more damage to the US government in a minute alone than anyone else has ever had in the history of the United States," Greenwald told the paper.

"But that's not his goal," said Greenwald.

Russia was still waiting on Sunday for the promised request for asylum from Snowden, who had said that application would be made on Friday. It was not clear whether the hold-up was simply due to the weekend.

The head of Russia's Federal Migration Service (FMS) Konstantin Romodanovsky said on Saturday that "there is for the moment no application from E Snowden". If one was made, it would be examined "according to normal legal procedures", he added.

"For the moment, we do not know anything" about an asylum application, Kremlin spokesperson Dmitry Peskov told the Interfax news agency.

Human rights in the transit lounge

The United States wants the former National Security Agency (NSA) contractor returned to them to face trial over the leaks. Moscow has so far rejected that demand, saying it has no extradition treaty with Washington.

Washington has reacted sharply to the possibility that Moscow might offer Snowden a safe harbour.

"We would urge the Russian government to afford human rights organisations the ability to do their work in Russia throughout Russia, not just at the Moscow transit lounge," White House spokesperson Jay Carney said.

"Providing a propaganda platform for Mr Snowden runs counter to the Russian government's previous declarations of Russia's neutrality," he added.

US President Barack Obama spoke to Putin by telephone on Friday on issues including the Snowden affair, the Kremlin and White House both said, but no further details were forthcoming.

The United States has already rebuked China for allowing Snowden to leave for Russia from Hong Kong.

Asylum offers from the left

At his meeting with activists, Snowden vowed he did not want to harm the United States but it was not clear however whether this meant he was prepared to stop leaking intelligence in order to stay in Russia.

The leftist governments in Venezuela, Bolivia and Nicaragua have all offered Snowden asylum, but Snowden said that Western governments would prevent him from travelling to the region.

A summit of the Latin American Mercosur trade bloc issued a statement on Friday reaffirming the right to asylum and rejecting "any attempt at pressure, harassment or criminalisation by a state or third parties".

The bloc, meeting in the Uruguayan capital Montevideo, denounced four European countries that denied airspace to a plane carrying Bolivian President Evo Morales back from Moscow earlier this month.

They apparently suspected that Snowden was on board.

Mercosur leaders said they would recall their ambassadors from Spain, France, Italy and Portugal for consultations in protest at the incident.

In a statement, they rejected "any attempt at pressure, harassment or criminalisation by a state or third parties" in response to a decision to grant asylum.

Flight attendants praised for heroism

Before Asiana Flight 214 crash-landed in San Francisco, the last time the Korean airlines' flight attendants made news it was over an effort by their union earlier this year to get the dress code updated so female attendants could wear trousers.

Now, with half of the 12-person cabin crew having suffered injuries in the accident and the remaining attendants receiving praise for displaying heroism during the emergency evacuation, the focus has shifted from their uniform looks to their heroic actions.
In the 6 July crash three members of the crew were ejected from the planes sheared off tail section while still strapped in their seats. Those who were able, meanwhile, oversaw the emergency evacuation of nearly 300 passengers using knives to slash seatbelts, slinging axes to free two colleagues trapped by malfunctioning slides, fighting flames and bringing out frightened children.
'Muscle memory'
"I wasn't really thinking, but my body started carrying out the steps needed for an evacuation," head attendant Lee Yoon-hye, 40, said during a news conference on Sunday night before federal safety investigators instructed the airlines not to let the crew discuss the accident.
"I was only thinking about rescuing the next passenger."
Such conduct has given a measure of pride to members of a profession who often are recognised only for their appearance and customer service skills.
"In the face of tremendous adversity and obstacles, they did their job and evacuated an entire wide-bodied aircraft in a very short period of time," said Veda Shook, international president of the Association of Flight Attendants and an Alaska Airlines flight attendant.
"It's such a shining reflection, not just of the crew, but of the importance of flight attendants in their roles as first responders," Shook said.
Along with training in first aid and firefighting, flight attendants every year are required to practice the moves needed to get passengers off a plane in 90 seconds or less, Shook said.
They go through timed trials, practicing skills that include shouting over pandemonium and engine noise, communicating with people frozen in fear and opening jammed doors and windows, she said. The goal is to make performing these tasks automatic.
"We have the muscle memory," Shook said.
It's a significant departure from the days when flight attendants were always women and known as stewardesses or air hostesses. In that era decades ago, members of the cabin crew weren't expected to play much of a role in emergencies.
Laura Brentlinger, who spent 31 years as a United Airlines flight attendant, recalled having no idea how much danger everyone was in during one of her first emergency landings in 1972. She didn't realise the severity of the situation until it was over and she saw the pilot's face.
"In those days, it was like pat you on the head, just go back and keep the people nice and smile. That's how far we've come, thank the Lord," Brentlinger said. "We were just little Barbie dolls back there."
Roles expanded
The role of flight attendants in the US expanded significantly in 1989 after Air Ontario Flight 1363 crashed after taking off in Canada. An investigation revealed that a flight attendant had seen ice on a wing but did not speak up, assuming the pilots knew and would not welcome the information from her.
Since then, FAA rules have required that cabin crew members be incorporated into the communications system known as "crew resource management" that empowers all airline personnel to voice concerns to the cockpit even if it means challenging senior pilots.
The philosophy also authorises flight attendants to order emergency evacuations.
Hearing that the pilots of Asiana Flight 214 told the flight attendants to delay an evacuation for 90 seconds after the crash landing in San Francisco, giving the order only after a flight attendant spotted flames outside, made Brentlinger wonder whether Asiana Airline's attendants have the same authority.
"I'm sure they have a very different hierarchy and can't do anything without the pilot's permission," she said. "There is no doubt in my mind I would have evacuated that aircraft immediately."
'After the dust settles'
Brentlinger said her heart aches when she thinks about what Asiana's flight attendants are going through now and are likely to go through in the months to come.
She was aboard a 747 that lost a cargo door at 6 600 metres, sucking nine passengers to their deaths over the Pacific Ocean in 1989.
After the disaster aboard United Flight 811, Brentlinger said she suffered severe post-traumatic stress disorder and was unable to get back on a plane for more than four years.
Handling the emergency itself was "the easiest part of the whole process... because you train for it and you just do it", she said.
She went on to say that "after the dust settles, so to speak" and one tries to get on with life, "it's horrific, at least it was for me".
The Flight 214 cabin crew consisted of 11 women and one man, ranging in age from 21 to 42, according to the airline.
Spokesperson Lee Hyomin said Asiana is not sharing information on emergency training hours of its flight attendants because the National Transportation Safety Board asked it not to share any information related to the accident while it's being investigated.
Rigorous training
Jean Carmela Lim, 32, a Sydney-based travel consultant, spent a year working as an Asiana flight attendant eight years ago and posted pictures from her experience on her travel blog, Holy Smithereens, this week. She recalls her weeks-long safety training as rigorous.
"We needed to be able to swim while dragging another human - dead weight - in one hand, and hoist ourselves and the dead weight onto the safety raft," Lim said.
The appearance standards were almost as demanding. Lim, who was 23 when she applied for the job, initially was told she was too old. During the interview, she was required to wear a short skirt without stockings.
Flight attendant school included sessions on hair, makeup and comportment. During flights, the cabin manager inspected the attendants to make sure they were wearing the right colour of nail polish and had their aprons properly ironed.
Lim said that appearance is important, but seeing pictures of Flight 214's attendants outside the burned-out aircraft in skirts made her hope their union prevails on the pants issue.
"If there's evidence that wearing a skirt will enable you to save more lives than wearing pants, then by all means keep them in skirts," she said. "If I'm trapped in a burning aircraft , I doubt I'll notice if the cabin crew saving me had lipstick on her teeth or had a tuft of hair out of place."

NEWS,15.01.2013

Global economy enjoys sweeter sentiment

Global investors have entered 2013 in buoyant but not yet exuberant mood‚ according to the BofA Merrill Lynch Fund Manager Survey for January.The new year sees asset allocators assigning more funds to equities than at any time since February 2011‚ while their confidence in the world’s economic outlook has reached its most positive level since April 2010.Investors’ appetite for risk in their portfolios is now at its highest in nine years‚ while an increasing number judge equities as undervalued – particularly in Europe. Moreover‚ investors have reduced cash holdings to 3.8% from 4.2% in December.This marks the most positive reading of this measure of willingness to hold riskier investment assets since April 2011‚ though it has not reached levels that would represent a contrarian sell signal.Participants’ perception of the US fiscal crisis as the biggest “tail risk” for asset markets has calmed (down nearly 20% points in two months)‚ though it remains their largest concern. Views of China remain very positive‚ with a net 63% still anticipating a stronger economy this year‚ but one in seven sees a Chinese hard landing as their number one risk.Investors’ bullishness reflects a growing confidence in economic recovery. A net 59% now expect the global economy to strengthen this year‚ compared to a net 40% a month ago. This marks the panel’s most positive outlook since April 2010. An increasing proportion of respondents expect inflation to pick up as well.“Following the resolution of the US fiscal cliff‚ sentiment has surged. Half of investors now tell us that they would sell government bonds to buy higher-beta stocks‚ which is consistent with increasing growth and inflation expectations‚ and with our call for a ‘Great Rotation’ to start in 2013‚” said Michael Hartnett‚ chief investment strategist at BofA Merrill Lynch Global Research. “While the survey reveals pockets of exuberance‚ undemanding valuations in Europe should underpin equities unless earnings growth fails to materialize‚” added John Bilton‚ European investment strategist.49% of respondents now expect government bonds to be sold to fund purchases of higher beta equities and sustain the “risk on” rally. Last month‚ in contrast‚ only 37% saw the instrument as the likeliest source while 28% expected this to be reduction of cash balances (now 22%) and 19% expected defensive equities (now 15%).In this environment‚ the perception of Italy as a substantial “tail risk” for Europe has declined sharply. Only 17% of the panel now views the country as the biggest threat to the European story‚ compared to 26% in December. Assessments of the threats from France and Spain have worsened from last month‚ however‚ up to 34% and 29%‚ respectively.The panel has shifted its stance on financial stocks strongly‚ moving to its first net overweight in global bank names since February 2007 following a 15% move versus last month. Nevertheless‚ banks are still perceived as the global equity market’s most undervalued sector. The existing overweight in insurance has also been extended‚ particularly in Europe‚ and now stands its highest level since January 2007.In contrast‚ appetite for telecoms stocks has fallen to a net 25% underweight. This marks the sector’s lowest weighting from asset allocators since December 2005. While still in positive territory‚ pharmaceuticals have declined to a net 11% overweight. Their fall from a net 24% last month is January’s largest sectoral move.The perception that consumer staples companies are the most overvalued has also accelerated month-on-month.The new Japanese government’s policies continue to improve the country’s outlook. Its growth composite indicator now stands at a striking reading of 96.Against this background‚ global fund managers are turning more positive. A net 3% are now overweight Japanese equities‚ a sharp reversal of last month’s net 20% underweight. The proportion of investors viewing Japan as the most undervalued market increased this month as well‚ while a growing number see it as having the most favourable outlook for corporate profits.

US could lose gold-chip rating

The United States could lose its top credit rating from a leading agency for the second time if there is a delay in raising the country's debt ceiling, Fitch Ratings warned Tuesday.Congress has to increase the country's debt limit, which effectively rules how much debt the US can have, by March 1 or face a potential default.There are fears that the debate will descend into the sort of squabbling and political brinkmanship that marked the last effort to raise the ceiling in the summer of 2011. The US Treasury Department warned then that it had nearly reached a point where it would be unable "to meet our commitments securely".Standard & Poor's was so concerned by the dysfunctional nature of the 2011 debate that it stripped the US of its triple A rating for the first time in the country's history. Like Fitch, Moody's has a negative view on the US outlook."The pressure on the US rating, if anything, is increasing," said David Riley, managing director of Fitch Ratings' global sovereigns division. "We thought the 2011 crisis was a one-off event ... if we have a repeat we will place the US rating under review."Fitch already has a negative outlook on the US as the country's debt burden has risen to around 100% of its gross domestic product, and has said it will make a decision on the rating this year, regardless of how the debt ceiling discussions pan out. The US government reached its statutory debt limit of nearly $16.4 trillion at the end of 2012 but has engineered extraordinary measures that should see it through February.Riley's comments come just two weeks after US lawmakers agreed a budget deal with the White House that avoided the so-called fiscal cliff of automatic tax increases and spending cuts that many economists thought could plunge the US economy, the world's largest, back into recession. Relief that a deal was cobbled together, albeit at the final hour, is one of the reasons why sentiment in the financial markets has been buoyant in the first trading days of the new year. Many stock indexes around the world are trading at multi-year highs."The fiscal cliff bullet was dodged .... (but it's) a short-term patch," said Riley.Riley warned that the different arms of the US government still have a number of issues to address. As well as increasing the debt ceiling, they have to agree to spending cuts that were delayed as part of the fiscal cliff agreement and back measures to avoid a government shutdown, potentially in March.Though short-term fixes are more likely than not, Riley said the US political environment is not as good as it should be for a country holding the gold-chip AAA rating. The past few years, Riley said, have been marked by "self-inflicted crises" between deadlines.The major reason behind the lack of swift action in the US is that the Democrats control the White House and the Senate, while the Republicans have a solid majority in the House of Representatives. Both sides have differing visions of the role of the state in society and often varying political objectives.Despite his cautious tone on the rating, Riley said the US has a number of huge advantages and that getting the country's public finances into shape will not require the same level of austerity that many countries in Europe have had to enact over the past few years, partly because the US economy is growing at a steady rate.Other factors that support the US's AAA rating are the country's economic dynamism, lower financial sector risks, the rule of law as well as the global benchmark status of the country's bonds and the dollar, Fitch says.However it says these "fundamental credit strengths are being eroded by the large, albeit steadily declining, structural budget deficit and high and rising public debt".

US debt ceiling hike critical

Federal Reserve Chairperson Ben Bernanke on Monday urged US lawmakers to lift the country's borrowing limit to avoid a potentially disastrous debt default, warning that the economy was still at risk from political gridlock over the deficit. Likening Congress to a family arguing that it can improve its credit rating by deciding not to pay its credit card bill, Bernanke said that raising the legal borrowing limit was not the same as authorising new government spending. "It's very, very important that Congress takes the necessary action to raise the debt ceiling to avoid a situation where our government doesn't pay its bills," he told an event sponsored by the University of Michigan. The US Treasury says the country bumped into its borrowing limit on December 31, and it is now employing special measures to enable the government to meet its financial obligations. US leaders did agree at the beginning of January to extend tax cuts for all American families earning less than $450 000 a year to avoid a portion of a "fiscal cliff" of policies that Bernanke had warned would likely tip the economy into recession. But lawmakers must still navigate the debt limit as well as thrash out a deal over drastic automatic spending cuts that were postponed until March 1."We're not out of the woods because we are approaching a number of other fiscal critical watersheds coming up," Bernanke warned on Monday.The Fed last month opted to keep buying $85bn worth of Treasury bonds and mortgage-backed securities a month until it saw a significant improvement in the labor market outlook, in an aggressive bid to push down borrowing costs and spur hiring.It has held interest rates at nearly zero since December 2008 and has said it will keep them at this ultra-low level until unemployment reaches 6.5%, provided that inflation does not look likely to breach a threshold of 2.5%. US unemployment in December remained at a lofty 7.8%.The president of the San Francisco Federal Reserve Bank, John Williams, said earlier on Monday that he expected the central bank's bond buying would be needed "well into the second half of 2013." Minutes from the Fed's December 11-12 policy meeting released earlier this month showed several policy makers favored ending the bond purchases well before the end of this year, while a few officials thought the purchases would be warranted until the end of 2013.A third policy-maker who spoke on Monday, Dennis Lockhart, president of the Atlanta Federal Reserve Bank, stressed that the open-ended, or meeting-to-meeting nature, of the Fed's commitment to buy assets did not mean the policy would continue indefinitely. "'Open ended' does not mean 'without bound.' The program is not 'QE Infinity,'" he told the Rotary Club of Atlanta.