Plague in Madagascar has killed 40 people out of 119 cases -WHO

GNN Health & Fitness News - An outbreak of the plague has killed 40 people out of 119 confirmed cases in Madagascar since late August and there is a risk of the disease spreading rapidly in the capital, the World Health Organization (WHO) said on Friday.

So far two cases and one death have been recorded in the capital Antananarivo but those figures could climb quickly due to "the city's high population density and the weakness of the healthcare system", the WHO warned.

"The situation is further complicated by the high level of resistance to deltamethrin (an insecticide used to control fleas) that has been observed in the country," it added.


Plague, a bacterial disease, is mainly spread from one rodent to another by fleas. Humans bitten by an infected flea usually develop a bubonic form of plague, which swells the lymph node and can be treated with antibiotics, the WHO said.

If the bacteria reach the lungs, the patient develops pneumonia (pneumonic plague), which is transmissible from person to person through infected droplets spread by coughing. It is "one of the most deadly infectious diseases" and can kill people within 24 hours. Two percent of the cases reported in Madagascar so far have been pneumonic, it added.

The first known case of the plague was a man from Soamahatamana village in the district of Tsiroanomandidy, identified on Aug. 31. He died on Sept. 3 and authorities notified the WHO of the outbreak on Nov. 4, the agency said.

The WHO said it did not recommend any trade or travel restrictions based on the information available about the outbreak.

The last previously known outbreak of the plague was in Peru in August 2010, according to the WHO.

(GNN, Reuters, Aip)(Reporting by Stephanie Nebehay; Editing by Janet Lawrence and Hugh Lawson)

China cuts interest rates to spur growth, ease debt pressure

GNN Economic News - China cut interest rates unexpectedly on Friday, stepping up efforts to support the world's second-biggest economy as it heads toward its slowest expansion in nearly a quarter of a century, saddled under a mountain of debt.

But the central bank, keen to show it was not back-tracking on economic reforms, twinned the move with a slight liberalization of the rates banks pay to borrowers in a bid to ensure millions of savers do not see their incomes hit.

Beijing's first rate cut in more than two years comes as factory growth stalls and the property market, long a pillar of growth, is weak, dragging on broader activity and curbing demand for everything from furniture to cement and steel.

Many companies have also been struggling with debt, as slowing sales crimp their ability to pay back loans racked up in a nationwide frenzy of borrowing from 2008-2010 when Beijing used economic stimulus to offset the effects of the global financial crisis.

"It will obviously reduce financing pressures for bank borrowers. Typically those are larger companies, state-owned companies, so they're the main beneficiaries of this," said Mark Williams, chief Asia economist at Capital Economics in London.

The People's Bank of China (PBOC) said it was cutting one-year benchmark lending rates by 40 basis points to 5.6 percent. It lowered one-year benchmark deposit rates by 25 basis points to 2.75 percent. The changes take effect from Saturday.

European shares and other growth-sensitive commodities all leapt as China's move to cut rates gave markets a welcome lift after a week where data has shown its giant economy faltering.

While the move acknowledged the risks to growth and marks a stepped-up effort to ensure the economy stays on track even as it is expected to slow to a 24-year low of 7.4 percent this year, the central bank took pains to signal that it was not simply moving toward a looser monetary stance.

In a break with earlier practice, it issued a long statement accompanying the announcement explaining the rationale for the policy step, which included giving banks more leeway in setting their own interest rates for depositors and borrowers.

"The problem of difficult financing, costly financing remains glaring in the real economy," the PBOC said, adding that it was especially keen to help smaller firms gain access to credit.

For one-year deposits, banks may now pay depositors 1.2 times the benchmark level, up from 1.1 times previously. It also scrapped limits on interest rates for long-term deposits of five years, and simplified its system of benchmark rates for loans.

LIMITING THE IMPACT

"They are cutting rates and liberalizing rates at the same time so that the stimulus won't be so damaging," said Li Huiyong, an economist at Shenyin and Wanguo Securities.

Recent data showed bank lending tumbled in October and money supply growth cooled, raising fears of a sharper economic slowdown and prompting calls for more stimulus measures, including cutting interest rates.

But many analysts had expected the central bank to hold off on cutting interest rates for now, as authorities have opted instead for measures like more fiscal spending.

The jury is still out on how much the rate cut will actually prompt more lending. The PBOC uses other levers such as reserve requirement ratios to limit the amount of cash banks have on hand to lend out.

However, even simply reducing the debt burden on companies will ease the pressure on many, which could help avert one of the biggest potential risks to the economy - that of bad loans leading to a debt crisis.

While the asymmetrical cut in interest rates - the fall in the lending rate is more than that in the deposit rate - will shave banks' net interest margins, many of the country's lenders appear to be in a position to weather that challenge.

Net interest income after loan-loss provisions at Agricultural Bank of China (601288.SS) (1288.HK), China Construction Bank (601939.SS) (0939.HK) and Industrial and Commercial Bank of China (601398.SS) (1398.HK) grew by 12 percent or more during the first nine months of the year, compared with a year earlier.

China's rate move comes after the Bank of Japan sprang a surprise on Oct. 31 by dramatically increasing the pace of its money creation, while European Central Bank President Mario Draghi shifted gear on Friday and threw the door wide open to quantitative easing in the euro zone.

"There is definitely more concern around about the state of the global economy than there was a few months ago, you see that not just when you talk about Europe," British finance minister George Osborne told an audience of business leaders in London on Friday.

(This version of the story was refiled to fix wording in second paragraph)

(GNN, Reuters, Aip)(Additional reporting by Jake Spring and Matthew Miller; Editing by Jacqueline Wong, Kim Coghill and Mike Collett-White)

Concerns about state of global economy have increased: UK's Osborne

GNN London - Stagnation in the euro zone, recession in Japan and geopolitical crises have increased concerns about the state of the global economy, British finance minister George Osborne said on Friday.

Osborne said economic performance in the euro zone was a cause of "real worry and concern", particularly in Britain whose main export markets are in the bloc.

"There is definitely more concern around about the state of the global economy than there was a few months ago, you see that not just when you talk about Europe," he told an audience of business leaders in London.

"Japan has gone into recession and there are all the geopolitical risks out there."

Earlier this week, British Prime Minister David Cameron said "red warning lights" were flashing over the state of the global economy. Britain's opposition Labour party said he was "making excuses" for a slowdown in Britain's growth rate ahead of national elections in May.

Speaking at the same event as Osborne, Italian Economy Minister Pier Carlo Padoan said he was confident that monetary policy was being used to do "whatever it can" in the euro area to support the recovery and move the inflation rate towards its target.

Padoan said progressive integration within the European Union had been a key driver of growth and jobs over the last decade and plans for a capital markets union would help continue this.

The EU's new financial services chief has said he wants to create an integrated market for raising money through bonds, shares and other financial instruments over the next five years and will set out his plans by the middle of next year.

Channelling more money into small companies is seen as crucial for Europe's efforts to boost its fragile economy because small and medium-sized enterprises provide two out of every three private-sector jobs in the EU.

"What we need to do is to take decisive action towards further integration of capital markets which are an essential instrument for growth," Padoan said.

Osborne said there had been "a marked improvement" in financial and credit conditions in Britain but more needed to be done, particularly for small and medium-sized businesses. Europe as a whole was still too dependent on bank credit as source of finance for businesses, he said.

"There is a real opportunity," he said of plans for capital market union. "Let's not turn this into a bureaucratic exercise or an empire-building exercise in the European Union, let's turn it into a growth-promoting exercise to support the expansion of businesses."

(GNN, Reuters, Aip)(Editing by Stephen Addison)

Aviva in $8.8 billion deal to buy Friends Life after pensions shake-up

GNN London - British insurer Aviva (AV.L) said on Friday it had agreed terms on a possible deal to buy rival Friends Life (FLG.L) for 5.6 billion pounds ($8.8 billion) as British pension reforms put pressure on insurance companies to find new business.

Pension providers are rushing to reinvent themselves after the government in March unexpectedly removed obligations for people to buy an annuity, or income for life, at retirement, sharply cutting annuity sales.

Aviva's all-share offer of 0.74 shares for every Friends Life share implies a 15 percent premium to the closing price on Friday. The board of Friends has indicated it will recommend the offer, which equates to 399 pence per Friends share, the companies said in a statement.

The deal would strengthen Aviva's balance sheet and reduce its leverage, as well as boosting its assets under management, it said.

Brokerage Panmure Gordon & Co downgraded Aviva following the announcement.

"Whilst there will be some cost synergies and it could accelerate Aviva's dividend paying capability it is also at odds with management's previous comments about Aviva being too UK-centric," Panmure analyst Barrie Cornes wrote in a research note.

The brokerage cut its target price to 505 pence per share from 585p previously and downgraded its recommendation to "Hold" from "Buy".

Mark Wilson, former boss at Asian rival AIA (1299.HK), joined Aviva as chief executive two years ago and has pushed a restructuring agenda across the group, selling off businesses, cutting costs and improving profitability.

Created in 2008 by entrepreneur Clive Cowdery as Resolution, Friends Life was known for buying up closed books of business from other insurers and using its scale to make cost savings in managing them as they gradually expire, or "run off", rather than writing new business itself.

Friends Life has a stronger presence in the growing "bulk annuity" market, in which insurers take on the risk of part or all of a company's pension scheme.

"The transaction would...more than double Aviva’s corporate pension assets under administration and create new opportunities," the statement said.

Friends Life posted a 7 percent drop in operating profit in the first half, while Aviva saw a 4 percent rise.

The two companies combined would have a stock market valuation at Friday's London market close of around 20.5 billion pounds.

Under the terms of the offer, Friends Life shareholders would own around 26 percent of the combined group. They would also receive an amount in cash equal to any Friends Life final dividend for the 2014 financial year.

Friends Life shares are down 2 percent this year, while Aviva has gained 20 percent.

(GNN, Reuters, Aip)(Additional reporting by Kate Holton; editing by Jason Neely)

Related articles

• Insurance companies Aviva and Friends Life set to merge (itv.com)
• Aviva Agrees To Possible $8.8 Billion Deal To Buy Friends Life (businessinsider.com)
• Aviva agrees to possible 5.6 bln stg deal to buy Friends Life (dailymail.co.uk)
• Aviva Agrees £5bn Deal To Buy Friends Life (news.sky.com)

Lockheed sees buyer for hybrid cargo airship in 2015

GNN - Lockheed Martin Corp (LMT.N) expects to reach an agreement next year with a launch customer for a giant new hybrid airship that would revolutionize the way oil and mining companies haul equipment to the Arctic and other remote areas without roads.

The initial version of the airship, filled mostly with helium, would carry 20 tons of cargo, but could easily be scaled to roughly the size of a football field with 500 tons of capacity, Robert Boyd, an engineer with Lockheed's Skunk Works R&D house, told Reuters in a rare media visit to the sprawling facility some 60 miles from Los Angeles.

Boyd, who started working on airships in 1991, said he was optimistic about finding an initial customer for the manned prototype airship, also known as P-791, next year, nearly a decade after the airship's first flight in 2006.

"We're months away, not days, not years," Boyd told Reuters. "By 2015, we'll be out there on the development track ... By 2018, we should see these in operation."

Lockheed is the Pentagon's No. 1 supplier, but it is targeting a commercial market for the slow-moving airships that have four hovercraft-like landing pads and can set down on nearly any flat surface, including sand, snow and even water.

"It's not the most sexy of airplanes, but it does its job," Boyd said.

Initial buyers would likely include small airlines or other firms that ship cargo to remote areas for oil, gas or mining companies, he said. He said the aircraft were also very safe because they are filled with helium, which does not burn.

He said climate change might boost demand with warmer conditions cutting the time that ice roads could be used.

The airships could help countries like Indonesia develop remote territories that lack ports, and could prove useful in providing relief supplies during natural disasters.

U.S. military officials had also expressed interest, he said, but would likely contract for cargo transportation services rather than buying the airships themselves.

Eventually, Lockheed could sell hundreds of the smaller airships and thousands of the larger ones, Boyd said.

He said the airships would likely cost tens of millions of dollars, making their cost comparable to what operators now pay to truck cargo via seasonal ice roads, but about five to 10 times cheaper than much cheaper than transport via helicopters.

(GNN, Reuters, Aip)(Reporting by Andrea Shalal; editing by Gunna Dickson)

Exclusive: With Baker Hughes, Halliburton cements leading North Dakota role

GNN - Halliburton Co's $35 billion takeover of Baker Hughes Inc will create an oilfield services powerhouse in North Dakota with more than half the cementing market and a leading position in fracking, according to data seen by Reuters.

The deal, announced on Monday, will help Halliburton better compete with global leader Schlumberger NV, as well as smaller peers Calfrac Well Services Ltd, Trican Well Service Ltd and other oilfield services companies in North Dakota, the second-largest oil producer in the United States.

The North Dakota market share projections for the combined company will be of keen interest to competitors and regulators. The deal faces stiff antitrust hurdles and likely will receive close scrutiny from regulators in the United States and European Union. Halliburton has said it would be willing to shed units that generate revenue of $7.5 billion to ensure the deal closes.

Even though oil production in the state's Bakken shale formation has grown exponentially in the past five years, more than 35,000 new wells are expected to come online in the state by 2030, highlighting the ongoing need for the services these companies provide.

"We will rule unconventionals now," one Halliburton manager in North Dakota told Reuters, speaking on the condition of anonymity.

In the Williston Basin, the oil-rich geologic formation holding much of North Dakota's Bakken and Three Forks shales, the combined company will control 53 percent of the market to line a new well with cement to prevent leaks, according to the data. The step is required by regulators and a key process to safeguard drinking water supplies.

The combined company will also control roughly 36 percent of the Williston Basin market for hydraulic fracturing - the process commonly known as 'fracking' where water and sand are blasted into a well at high pressure to extract oil. And roughly 35 percent of the market for directional drilling, the process to drill wells horizontally, will be held by the combined company, according to the data.

The Williston Basin market prowess in cementing and directional drilling would eclipse the united company's global share of those markets. Fracking market share in the basin would nearly match the new Halliburton, globally.

UNIFORM PRICING

Halliburton is very interested in Baker Hughes' artificial lift division, which makes products that help old wells boost their productivity, as well as its production chemicals unit, according to footnotes accompanying the data.

In a statement to Reuters, Halliburton said it is too early to discuss the status of the combined company. "It is important to remember that until the close of the transaction, Halliburton and Baker Hughes remain separate companies," Halliburton spokeswoman Emily Mir said.

It was not immediately clear what Schlumberger's market share is for various products and services in North Dakota, but the Halliburton-Baker Hughes tie-up gives the combined company clear dominance in most oilfield services performed in the state.

Schlumberger did not respond to a request for comment.

The deal could lead to higher prices for some oil producers. Baker Hughes historically has priced its services below Halliburton, and the deal will allow Halliburton to make pricing more uniform. Continental Resources Inc, for instance, uses a plethora of oilfield service companies for various well completion processes, often choosing the lowest bidder.

The deal also gives Halliburton access to Baker Hughes' extensive North Dakota real estate holdings, including a training center it built earlier this year. Halliburton currently trains employees at centers in Oklahoma and Colorado.

(GNN, Reuters, Aip)(Editing by Terry Wade and Muralikumar Anantharaman)

Toyota Lexus to recall some 2006-2011 models due to fuel leak

GNN - Toyota Motor Corp (7203.T) will recall 422,509 of its luxury brand Lexus vehicles in the United States because of a possible fuel leak that increases the risk of fire, U.S. regulators said on Friday.
The recall covers Lexus LS from model years 2007 to 2010, Lexus GS from 2006 to 2011 and Lexus IS from 2006 to 2011.

The National Highway Traffic Safety Administration said fuel might leak where the fuel pressure sensor is attached to the fuel delivery pipe. If a spark occurs, fire could start.

Toyota told the NHTSA that it was not aware of any fires or injuries caused by this condition.

Beginning next month, Toyota is to notify owners of various versions of the three models affected and tell them to bring their vehicles into dealerships for repair.

(GNN , Reuters, Aip)(Reporting by Bernie Woodall; Editing by Lisa Von Ahn)

VW unveils multi-billion auto investments through next five years

GNN - Volkswagen AG (VOWG_p.DE) is to invest 85.6 billion euros ($106 billion) in its automotive operations over the next five years to push foreign expansion, new models and technology to back its quest for global leadership.

Volkswagen said the bulk of the cash will flow into developing more efficient vehicles and production methods, taking its capital expenditure to between 6 and 7 percent of revenue in the period from 2015 to 2019, which analysts said amounts to a slight hike in investment spending.

Analysts at investment banking advisory firm Evercore ISI said, "As expected, VW's five-year capex planning has not become a victim of the company's efficiency program which is, among other things, aiming at 5 billion euros of efficiency gains at the VW brand by 2018."

 
Volkswagen shares rose 1 percent, to 176.10 euros at 1140 GMT, while the DAX .GDAXI blue chip index was trading up 2 percent.

Around 41.3 billion euros of the investment plan will go toward developing a range of sports utility vehicles, modernizing part of the light commercial vehicle portfolio and toward developing hybrid and electric drives.

At the same time, investments are also planned in new vehicles and successor models in almost all vehicle classes, which will be based on modular toolkit technology and related components, the company said in a statement.

Volkswagen Group Chief Executive Martin Winterkorn said the investment plan will help it become "the leading automotive group in both ecological and economic terms with the best and most sustainable products."

Around 23 billion euros will be spent on expanding capacity at its plant in Poland where it builds Crafter vans, and the new Audi plant in Mexico, as well as on paint shops and a production facility to make vehicle parts.

Poised to meet its annual sales target of 10 million vehicles four years early in 2014, Europe's largest carmaker has also sought to embark on an efficiency drive to save 5 billion euros across its multi-brand group which includes luxury division Audi and Czech carmaker Skoda.

But squeezing budgets appears to be tough as VW faces costly commitments to develop fuel-efficient powertrains to meet carbon dioxide emission targets, and to beef up its troubled operations in the United States while expanding in China, its biggest market.

Volkswagen's Chinese joint ventures will invest 22 billion euros in new production facilities and products by 2019, the company said.

(1 US dollar = 0.8049 euro)

(GNN, Reuters, Aip)(Reporting by Andreas Cremer, Jan Schwartz and Edward Taylor; Editing by Kirsti Knolle and Vincent Baby)

Volkswagen seeks savings of 10 billion euros: source

GNN - Volkswagen Group (VOWG_p.DE) is seeking cost savings of around 10 billion euros ($12.4 billion), a source told Media on Friday.

"For the group, efficiency measures could amount to around 10 billion euros," a Volkswagen source said on Friday.

The move underlines how Volkswagen is still seeking to glean greater efficiencies from its business, which has lagged in profitability when compared with some of its peers.

In July, Volkswagen Chief Executive Martin Winterkorn told employees he was looking for 5 billion euros worth of efficiency gains at its core passenger-car brand by 2017, to close the profit gap with rivals.


(Corrects to say targeted cost savings are group-wide not just at the auto division)

(1 US dollar = 0.8052 euro)

(GNN, Reuters, Aip)(Reporting by Jan Schwartz; Writing by Edward Taylor; Editing by Alexander Ratz and Kirsti Knolle)

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