Business leaders warn of Christmas sales meltdown

Business leaders warned of a Christmas sales meltdown today after a bigger than expected fall in high street sales in the first half of November.

A 46 per cent balance of retailers said sales were below a year ago, while 40 per cent predicted worse to come next month, the CBI business group's distributive trades survey found.

The gloom caps a week which has seen Woolworths and MFI crash into administration and disappointing updates from other big names such as Currys' owner DSG International.

Andy Clarke, chairman of the CBI's distributive trades panel, said: "Christmas is going to be extremely tough this year, with retailers having to work harder than ever to keep the tills ringing."

The CBI's survey was carried out between October 28 and November 12 - although the Bank of England slashed interest rates by 1.5 per cent to 3 per cent on 6 November.

Chancellor Alistair Darling also attempted to kick-start high street spending with a temporary VAT cut worth £12.5 billion this week.

Mr Clarke said the added pressure of changing millions of prices to reflect the cut would be an "unwelcome and costly burden" on the sector.

"Lower petrol prices and recent cuts in interest rates should help put a little more into people's pockets, as will the VAT cut, but only if retailers pass it on before Christmas," he added.

The CBI said those retailers linked to a plunging housing market continued to suffer but there was also a sharp decline in sales volumes among grocers - ending two years of continuous growth.

The bleak retailing environment has prompted a 57% balance of firms to cut investment plans - the worst result in the survey's 25-year history.

IHS Global Insight economist Howard Archer said the figures "added to the litany of bad news" from the high street and forecast the Bank of England could slash interest rates again by as much as 1% at its meeting next week.

"We suspect that there will be a lot more discounting, special promotions and flash sales right up to Christmas to try and get hard-pressed consumers to spend.

"It is also likely that there will be some extremely attractive bargains in the New Year sales," he said.

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Business (November 2008)

Burma’s vital garment industry is suffering factory closures and layoffs due to a sharp drop in orders as a result of the global financial crisis. “Orders for new consignments have reduced, and we will see a serious impact by the middle of December,” said Myint Soe, the chairman of the Myanmar Garment Manufacturers Association. The fall in orders could lead to workers being dismissed and the closure of some production facilities. About 30 percent of Burma’s garment exports go to Japan, another 30 percent to the EU and the rest to Latin America, Turkey and South Africa. The industry suffered a setback early this year when South Africa’s largest clothing retailer canceled orders, citing the military crackdown on anti-government protests in September 2007. That ban led to the closure of about 35 factories in Burma. About 100 garment factories remain, employing from 80,000 to 100,000 workers, compared to more than 270 factories before 2003, when the US imposed economic sanctions. Burma earned US $282 million from garment exports in the 2007-08 fiscal year.

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Saudis reject push to politicise OPEC

KING Abdullah of Saudi Arabia said OPEC shouldn't make oil a source of conflict, contradicting Venezuelan President Hugo Chavez who wants the oil exporter group to become an active "political agent".

"Oil is an energy for building and prosperity; it shouldn't become a means of conflict," King Abdullah said at the start of the organisation's heads of state summit in Riyadh on Saturday. "Those who want OPEC to become an organisation of monopoly and exploitation ignore the truth."

Saudi Arabia is the world's largest oil supplier.

The Organisation of Petroleum Exporting Countries, provider of more than 40% of the world's oil, is holding its third heads of state summit since it was founded in 1960.

Saudi Foreign Minister Prince Saud Al-Faisal voiced disagreement with a push by Iran and Venezuela to debate the pricing of oil in currencies other than the US dollar.

"OPEC was born as a geopolitical force and not only as a technical or economic one in the '60s," Mr Chavez said, speaking before King Abdullah. "We should continue to strengthen OPEC, but beyond that, OPEC should set itself up as an active political agent."

The contrasting view on the organisation's role in the world came a day after the disagreement between Venezuelan Oil Minister Rafael Ramirez and the Saudi Foreign Minister over whether to move away from the US dollar was accidentally broadcast on live television.

Mr Chavez said in his speech at the weekend that he was confident OPEC would do what it could to keep oil prices at a "fair" level, adding that if Iran was invaded, prices could easily rise to $US200 a barrel.

Crude oil for December delivery rose $US1.67 to $US95.10 a barrel in New York on Friday.

"The current price of oil, if we take into consideration inflation, is less than what it was in the early 1980s," King Abdullah said. High taxes in consuming nations were hurting consumers more than the producers, he said.

The last OPEC heads of state summit was in 2000 in Venezuela and was hosted by Mr Chavez, who was sworn in as President a year earlier. Iran and Venezuela both have tense political relations with the US.

Ibrahim Ibrahim, an executive at Qatar Petroleum, said that while Venezuela had helped OPEC become a stronger organisation over the years, "there is no need for OPEC to be a political force now. It just has to ensure that the oil market is stable."

Algeria's Oil Minister, Chakib Khelil, said he would urge Russia, the second-biggest oil supplier, to join OPEC when he became president of the organisation.

Russia's membership "would be very good for OPEC", Mr Khelil said in an interview on Saturday during the heads of state summit. Russia attends OPEC meetings as an observer nation.

Mr Khelil will become president on January 1.

Ecuador rejoined OPEC's ranks on Saturday after 15 years out of the organisation, boosting the organisation's clout as record oil prices increase the political and economic influence of its members.

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December, OPEC Production problems Disconnect

CAIRO Organization-State-The State Oil (OPEC) states will take a decision on cutting production at a meeting in Algeria, December 17, the future.

"This meeting is only as a preparation for the decision later in Algeria," said Saudi Arabian Petroleum Minister Ali al-Nuaimi in Cairo yesterday. Other OPEC members such as Iran, Kuwait, Qatar and Nigeria also expressed support to make the decision at a meeting in Oran, Algeria, December later. Libyan Oil Minister Shukri Ghanem said, meeting this time is only a consultation. "All options are open.

We think the decision will be taken immediately, "he said. According to him, currently all OPEC members should learn the problem of supply and demand of oil and increase persediaan.Namun problems, not including the possibility of cutting production to make decisions on these meetings. It disclosed Likewise Kuwait Oil Minister Mohammad al-Olaim. "I estimate we will not make a decision at this time, although the market has experienced a surplus of oil," he said.

About the amount of trimming production, there has not been a dominant figure from the OPEC meeting in Cairo. However, Saudi Arabia stated that the price of oil in the range of USD75 per barrel considered fair for producers. Saudi Arabia is the largest oil exporter and the main player in OPEC, which supply about 40% of the world's oil needs.

Meanwhile, Iraqi Minister of Petroleum Hussein al-Shahristani said, the price of oil in the range of USD80 per barrel price is reasonable. Therefore, Iraq will support measures to OPEC cutting oil production to a range of numbers tersebut.Adapun Venezuela Oil Minister Ramirez said OPEC should make a reduced production of at least 1 million barrels per day before the end of each year.

The Qatar Energy Minister Abdullah al-Attiyah berujar, oil prices are currently too low to support the investment industry oil industry to meet the needs in the future. "We can all live with the price of USD70 per barel.Dengan this price we can invest in the upstream sector, below that will be very difficult to increase capacity" he said.

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Northstar After Debt WOLD

JAKARTA- Northstar Pacific Partners Ltd. will take over the largest debt of PT Bumi Resources Tbk (BUMI) from Oddickson Finance SA worth USD575 million.

This step is part of the decision of the establishment of strategic partnership between the parent and Northstar BUMI business, PT Bakrie & Brothers Tbk (BNBR). Consistent agreement of all parties concerned on Friday (28/11) night, 35% purchase scheme BUMI shares worth USD1, 3 billion by Northstar changed to the establishment of strategic partners.

President Director BNBR Nalinkant A Rathod says, develop a debt will be compensated with a number of shares BUMI. "We can not yet say how the number karenamasihdidiskusikan between us (BNBR) and Northstar," he said. Finance Director BNBR Yuanita Rohali explains, the remaining debt to the Bakrie nine kreditornya currently reached USD1, 226 billion has been dilindungnilaikan (hedging) on the exchange rate Rp9.200 per dollar the United States (U.S.).

Oddickson debt to USD968 million was borrowed in the form of rupiah.Lalu, debt to JPMorgan of USD72 million, ICICI Bank USD105 million (both in the form of dollars), and a number of holders of the repo (repurchase agreement) worth of local USD81, 5 million (in rupiah ). Yuanita said, because domestic currency weakened sharply recently to a range Rp12.000 per U.S. dollar, the value of debt berdenominasi rupiah automatically participate recede.

"If the use of dollars, the value is fixed," he said. With the exchange rate Rp12.000 per USD, Oddickson into debt to USD742 million and local reposekitar USD65 juta.Para local repo is the holder of PT Recapital Securities, PT Aldira, PNM Investment Management, Sarijaya Securities, Mandiri Securities, Securities and Dinar. In a public display material, Bakrie said it has menjaminkan BUMI 3.74 billion shares, 4.76 billion shares of PT Energi Mega Persada Tbk, and 3.79 billion shares Tbk, PT Bakrieland Development debts to obtain from Oddickson.

Of the total ownership of Bakrie in BUMI as 6.79 billion shares, the majority or 55% of the shares was pawned to Oddickson. Northstar, further Yuanita, promised to help settle the debt Oddickson of USD575 million and the rest between USD160-170 million paid by the Bakrie assets. "The rest have been settled within the meaning of a Oddickson assets," he said. JPMorgan against it, continued, Bakrie has been committed debt financing from a new Ancora signed several days ago.

While for ICICI Bank, he has revealed there is one private equity fund that is ready to pay. "The small end of the year is completed and actually all be resolved this year," he said. Thus, Nalinkant words, all the problems of debt Bakrie has been completed. The completion of the formation of a strategic partner with the Northstar will dirampungkan before the end of this year.

Nalinkant not explain the problems likely changes in the management body BUMI with the influx of Northstar as a strategic partner. He only emphasized, the agreement is mutually beneficial both parties.

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