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Tue, Oct 14, 2008 - Page 10 News List

World Business Quick Take

AGENCIES

■ICELAND

PM accuses UK of ‘bullying’

Prime Minister Geir Haarde accused Britain in an interview yesterday of “bullying a small neighbour” over funds frozen in the online bank Icesave, and threatened to take legal action in response. Haarde told the Financial Times that London’s reaction to the collapse of the bank, including British Prime Minister Gordon Brown’s threat to sue Iceland to recover British savings, had made the island’s banking crisis worse. “The UK authorities have said they will sue us ... well both countries can sue if they see it fit. Going to court is one way of settling disputes in a civilized way,” Haarde told the newspaper. Brown’s government used anti-terrorist laws to freeze the assets of failing Icelandic banks in Britain as it attempted to protect the deposits of thousands of British savers and public bodies. But Haarde rejected suggestions his government had abandoned British savers, saying: “To claim we were running away from our obligations was unfounded and reacting in this way ... caused us more damage than was necessary.” He said London’s move to put part of Icelandic bank Kaupthing’s British operations into administration “led to the collapse” of the parent bank. He said he would support Kaupthing’s plans to sue the British government.

■ELECTRONICS

Royal Philips slows buyback

Royal Philips Electronics NV, Europe’s biggest television maker, said it will slow down its 5 billion euros (US$6.8 billion) share buyback after third-quarter sales fell short of analysts’ estimates. Philips will reduce the pace of purchases because of “the risks and opportunities presented by the deterioration of the economy and the financial market turbulence,” the Amsterdam-based company said in a statement yesterday. Third-quarter sales fell 2 percent to 6.33 billion euros, missing the median estimate from 12 analysts of 6.71 billion euros. Net income rose 7.9 percent on the sale of shares of Taiwan Semiconductor Manufacturing Co. Philips, led by chief executive officer Gerard Kleisterlee, said it’s “cautious on end-market demand” this quarter as the economy weakens further. Philips will increase some prices and accelerate expense-reduction projects across the company to protect margins at a cost of as much as 230 million euros in the fourth quarter. Philips said it has a “strong balance sheet” after completing 3.1 billion euros of the buyback since December. “The slowdown of the buyback is logical,” Wing-Yen Choi, an analyst at Theodoor Gilissen Bankiers NV in Amsterdam, wrote in a note. “In these markets you can buy back your shares, but apparently the stock can drop even further the next day.” Philips fell 2.4 percent to 15.41 euros at 10:30am in Amsterdam yesterday, as the Amsterdam Exchanges Index jumped 6.2 percent.

AVIATION

Jetstar expands routes

Australian budget carrier Jetstar Airways announced yesterday that it was expanding services on the highly competitive routes across the Tasman Sea to New Zealand. Jetstar, a low-cost subsidiary of Qantas Airways, said it would start daily flights on April 28 from Auckland to Sydney and the Queensland Gold Coast. Chief executive Bruce Buchanan said the flights would complement Qantas’ four daily Auckland-Sydney services, and he did not see the parent carrier scaling back its New Zealand routes. Jetstar already flies between Christchurch in New Zealand’s South Island and four Australian cities. Trans-Tasman services are also flown by Air New Zealand, the Virgin subsidiary Pacific Blue and Dubai-based Emirates

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