Sat, Feb 25, 2012 - Page 10 News List

World News Quick Take

Agencies

GERMANY

GDP contracted 0.2% in Q4

Germany’s economy contracted by 0.2 percent in the fourth quarter on sagging exports and private consumption, data showed yesterday, but analysts said they expected Europe’s growth engine to pick up steam again this year. Investments, particularly in construction, were a bright spot. The seasonally adjusted data from the Statistics Office confirmed an earlier flash estimate and showed trade and private consumption subtracting 0.3 and 0.1 percentage points respectively from GDP. Exports in particular dropped 0.8 percent in the fourth quarter after growing 2.6 percent in the previous quarter. Economists put this down to weaker demand from the eurozone, which is mired in a sovereign debt crisis. “The economy was driven into the red by the decline in exports, but this was weaker than expected,” Berenberg Bank’s Christian Schulz said.

INSURANCE

AIG has record Q4 earnings

American International Group Inc (AIG), the bailed-out insurer, cited a return to “sustainable operating profit” as it booked a tax benefit that fueled record fourth-quarter earnings. AIG’s biggest unit, property-casualty insurer Chartis, and its plane-leasing business swung to operating profits in the period, the New York-based company said in a statement yesterday as it posted a net income of US$19.8 billion. The insurer is projecting that it will generate enough profit to use tax assets, tied to prior losses, that can limit future payments to the government. Shares rose above US$30 in extended trading yesterday, surpassing the average price at which the government would need to sell a majority stake to recoup its investment. The stock has closed below the break-even price on the New York Stock Exchange every day since late July. AIG’s after-tax operating income was US$1.56 billion in the fourth quarter, compared with a loss of US$2.21 billion a year earlier, according to the statement.

COMMODITIES

Oil rises on economy, Iran

Oil prices were higher in Asian trade yesterday, supported by buoyant economic data from the US and Germany, as well as concerns over Iran’s nuclear program, analysts said. New York’s main contract, West Texas Intermediate light sweet crude for April delivery, rose US$0.72 to US$108.55, while Brent North Sea crude for April gained US$0.37 to US$123.99 in the afternoon. “The level oil prices have risen to this week is quite unexpected,” said Ken Hasegawa, energy desk manager at Newedge brokerage in Japan. Positive economic news from the US and Germany, as well as “the continuing tension in Iran, are factors supporting oil prices,” he said.

EMPLOYMENT

US unemployment steady

New US claims for unemployment benefits were unchanged last week, holding at the lowest level since the early days of the 2007-2009 recession and giving a fresh sign the battered labor market was healing. Workers filed 351,000 initial claims for state unemployment benefits, the US Department of Labor said on Thursday. “It’s broadly in line with recent US data showing a gradually improving economic backdrop,” said Omer Esiner, a market analyst at Commonwealth Foreign Exchange in Washington. The last two weekly readings have been the lowest since March 2008. With weekly claims nearing levels last seen before the recession that began in December 2007, economists said employers might be close to ending a long cycle of heavy layoffs, laying the ground for more hiring.

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