Business News: Skype to Refund Paying Customers After Service Outage

Business News: Skype to Refund Paying Customers After Service Outage

Skype to Refund Paying Customers After Service Outage

Posted: 23 Dec 2010 06:28 PM PST

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By Joseph Galante

(Adds number of users online in second paragraph.)

Dec. 23 (Bloomberg) -- Skype Technologies SA, the largest provider of international calls, will offer refunds to paying customers who haven’t been able to use its service because of an outage that lasted more than 30 hours.

About 20 million users, representing 90 percent of the traffic the company would normally expect, are now able to make calls, Chief Executive Officer Tony Bates said today in a blog posting, after an outage yesterday rendered the service unavailable to almost all global users.

Year-end holidays are Skype’s heaviest traffic period, Bates said in an interview this week. The disruption adds to challenges facing Skype as it tries to persuade companies to pay for calling and establish premium services, such as group video conversations, in the run-up to an initial public offering.

“We now know what caused a number of clients to actually crash,” Bates said in a video on the company’s blog. “We’ve been able to mitigate that crash risk and isolate that.”

He didn’t say what caused the crash and said the company had ruled out a malicious attack.

Skype will give pre-pay and pay-as-you-go users 30 minutes of free calling, and active subscribers will get a week’s extra subscription, the company said.

Skype has more than 560 million users. Of those, only 1.4 percent pay for the service, according to a regulatory filing. The Luxembourg-based company started as a way for consumers to chat for free.

What’s Working

Audio and video calls as well as instant-messaging capabilities are now working, the company said. Some features, such as group video calling, are still unavailable.

Rival service OoVoo LLC said it received 100,000 new registrations yesterday, double its previous record for peak usage. The New York-based company attributed the peak to defecting Skype users, Matt Houser, a spokesman for the company, said in an e-mail.

Skype said it will do a full post-mortem of the cause of the outage. It is using servers that normally support offline instant messaging and multiparty video calls to get its main products online, Bates said.

The company accounts for about 12 percent of international calling, according to the Washington-based research firm Telegeography.

EBay Inc., which bought Skype in 2005, sold most of its stake last year for about $2 billion to a group led by Menlo Park, California-based private-equity firm Silver Lake.

--With assistance from Mark Lee in Hong Kong. Editors: Elizabeth Wollman, Tom Giles, Stephen West.

To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

Qatar Index Climbs Most in Two Weeks on Oil, Growth Prospects

Posted: 26 Dec 2010 05:12 AM PST

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By Dana El Baltaji and Claudia Maedler

Dec. 26 (Bloomberg) -- Qatar’s benchmark stock index rose the most in more than two weeks as oil prices boosted Industries Qatar QSC and on speculation spending for the 2022 World Cup will spur economic growth.

Industries Qatar, the second-biggest petrochemicals maker in the Middle East, climbed the most in almost four months. Masraf Al Rayan, the country’s second-largest lender complying with Islamic law, advanced 2.1 percent. The QE Index rose 1.3 percent, the most since Dec. 8, to 8,737.39 at the 12:30 p.m. close in Doha. The gauge has rallied 26 percent in 2010, headed for the biggest yearly gain since 2007. Teva Pharmaceutical Industries Ltd. led Israeli shares higher.

Crude oil increased to the highest level in more than two years as confidence among U.S. consumers advanced to a six-month high, signaling that fuel demand will increase in the biggest oil-consuming country. Oil rose $1.03 to $91.51 a barrel on the New York Mercantile Exchange on Dec. 23, the highest settlement since October 2008. Prices are up 15 percent this year.

“The stellar performance of oil so far has thoroughly justified the rally in industrials,” Amro Halwani, a trader at Shuaa Capital PSC in Riyadh said in an e-mailed statement today. “Qatar banking statistics continue to impress, driven by a powerful public sector dynamo especially following the 2022 World Cup bid, which instilled further confidence into the market.”

Spending

The $81 billion Qatari economy will expand 16 percent this year, the world’s fastest-growing, from 8.6 percent in 2009, the International Monetary Fund said in its World Economic Outlook report in October. Moody’s Investors Service estimates Qatar will spend about $57 billion over the next decade for infrastructure developments related to the World Cup. The QE Index has gained 6.8 percent since Dec. 2 when the country was awarded the right to host the tournament.

Industries Qatar, which accounts for 12 percent of the QE’s weighting, jumped 4.5 percent, the most since Sept. 5, to 141 riyals. Masraf rose to 19.2 riyals.

Israel’s benchmark index gained 0.1 percent at 1:30 p.m. in Tel Aviv. Teva advanced 2.7 percent, the most since Dec. 9, to 187.4 shekels. The shares of the world’s largest maker of generic drugs were lifted by speculation failure by the company to win U.S. approval for a new formulation of its multiple sclerosis drug Copaxone means it will be more difficult for competitors to enter the market.

Emaar Falls

Israeli government bonds fell, with the yield on the benchmark 10-year Mimshal Shiklit bond due January 2020 rising two basis points to 4.68 percent. The yield on the notes has fallen 56 basis points this year. The shekel, which has gained 5.6 percent versus the dollar so far this year, was little changed at 3.5905 per dollar on Dec. 24.

Dubai’s DFM General Index lost 0.7 percent, the most since Dec. 15. Emaar Properties PJSC, the company with the biggest weighting in the emirate’s benchmark stock gauge, lost 1.4 percent to 3.42 dirhams. Dubai Financial Market PJSC, the only Gulf Arab stock market to sell shares to the public, cut the maximum weighting of a company in the DFM General Index to 20 percent. Emaar has a weighting of 25 percent, according to data compiled by Bloomberg.

Abu Dhabi’s gauge decreased less than 0.1 percent, Saudi Arabia’s Tadawul All Share Index lost 0.1 percent. Bahrain’s measure gained 1.2 percent and the Kuwait SE Price Index rose 0.4 percent. The Bloomberg GCC 200 Index of companies in the region increased 0.3 percent. Egypt’s benchmark index lost 0.2 percent. Oman’s market was closed for a holiday.

--With reporting by David Wainer in Tel Aviv and Zahraa Alkhalisi in Dubai. Editor: Dick Schumacher.

To contact the reporter on this story: Dana El Baltaji in Dubai at delbaltaji@bloomberg.net Claudia Maedler at cmaedler@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

Toshiba to Sell Chip Plant to Sony, Work With Samsung

Posted: 26 Dec 2010 05:01 AM PST

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By Pavel Alpeyev and Jun Yang

(Updates with analyst’s comment in fourth paragraph.)

Dec. 24 (Bloomberg) -- Toshiba Corp., Japan’s biggest chipmaker, plans to sell a semiconductor factory to Sony Corp. and outsource some output to bigger rival Samsung Electronics Co. as it tries to improve profitability at the chip business.

Sony will buy Toshiba’s plant in Nagasaki, western Japan, which makes the Cell graphics chips used in PlayStation 3 video game consoles, the two companies said in a joint statement today, without disclosing financial details. Toshiba is also in talks to shift more production of its non-memory products to other chip manufacturers, including Samsung, said Hiroki Yamazaki, a spokesman for the Tokyo-based company.

Toshiba shares rose to the highest level in three weeks in Tokyo today. The company, which will shut a plant this month to phase out low-end chips, can cut costs and improve efficiency by selling the factory and teaming up with other manufacturers, said Takeo Miyamoto, a Tokyo-based analyst at Deutsche Bank AG.

“It’s about cutting expenses,” he said in a phone interview. “The factory they’re selling back to Sony, it wasn’t profitable or efficient for them.”

Shares Gain

Toshiba’s shares rose 0.7 percent to 441 yen at the 3 p.m. close of trading, the highest level since Dec. 6.

The company will continue to produce some system LSI chips, whose functions range from processing images for television screens to crunching data, it said.

Samsung, Asia’s biggest maker of chips, will manufacture wafers for Toshiba using its 40-nanometer technology, the Suwon, South Korea-based company said in a statement today. Sales of products that Samsung manufactures for other companies may account for about 15 percent to 20 percent of its current system LSI semiconductor sales, Seo Won Seok, a Seoul-based analyst at NH Investment & Securities Co., said.

In June, Samsung said it will invest $3.6 billion to expand capacity at its 12-inch chip plant in Austin, Texas. The new facilities, which will be in full operation by late 2011, will be used to make LSI chips, Bill Cryer, a Samsung spokesman, said on June 9.

Breaking Even

Toshiba’s chip division broke even in 2009 after incurring a 280 billion yen ($3.4 billion) operating loss in the previous year. System LSI chips will account for 30 percent of the 1.2 trillion yen in sales Toshiba forecasts from its chip business this year, according to the company.

Toshiba also said today it will consolidate production of analog and imaging chips at its plant in Oita, on the southwestern island of Kyushu, and in Iwata, northern Japan.

Sony will buy back the Nagasaki facility for about 50 billion yen to double its monthly production capacity of the sensors, used in digital cameras and smartphones, to about 40,000 units, the Nikkei newspaper reported yesterday. Sony sold the plant in Nagasaki prefecture to Toshiba in 2008.

--With assistance from Mikako Nakajima in Tokyo and Adam Le in Osaka. Editors: Anand Krishnamoorthy, Chua Kong Ho.

To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net; Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

BlackRock Blames Loan Crisis for Clean-Energy Outflow

Posted: 26 Dec 2010 05:01 AM PST

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By Ben Sills

(Adds Vestas, Lipper comment beginning 17th paragraph.)

Dec. 24 (Bloomberg) -- Renewable-energy funds suffered record outflows this year, reversing their direction from 2009, as money managers including BlackRock Inc. said the credit crunch dimmed the outlook for solar and wind power projects.

Investors pulled 931 million euros ($1.2 billion) in the first 10 months, already eclipsing the full-year withdrawals in 2008 when the global financial crisis spooked investors, according to data compiled by Lipper Inc. Last year clean-energy funds captured 1.3 billion euros of new money, Lipper said.

Tighter loan terms for clean-power projects, greater competition from Chinese manufacturers and reduced subsidies from European governments hammered some of the stocks that had been favorites of fund managers before 2010, such as Vestas Wind Systems A/S, the world’s largest wind-turbine maker. Funds that held oil and gas companies were gainers, a separate survey said.

“The new-energy market and related stocks were significantly impacted by the credit crisis,” Robin Batchelor, manager of the $2.9 billion BlackRock New Energy Fund, said in an e-mail. Reduced demand for energy and “the fact that governments were perceived to have many new worries on their agenda combined to create a difficult environment,” he said. New York-based BlackRock is the world’s largest money manager.

Conventional energy stocks saw the biggest increase in holdings and were the largest bets for funds, according to a Bank of America Merrill Lynch survey of 209 money managers controlling $569 billion, conducted Dec. 3 to Dec. 9.

Environmental Funds

The clean-energy sell-off is a blow to policymakers in the U.S., Japan and the European Union who pledged last year in Copenhagen to ramp up investment as they channel $100 billion a year in climate aid to developing nations by 2020.

The withdrawal extended to environmental funds, which had net withdrawals of 373 million euros, also a record, according to Lipper, a unit of New York-based Thomson Reuters Corp.

At BlackRock, whose clean-tech fund is one of the world’s largest, assets dropped to $2.9 billion on Oct. 31 from $3.8 billion 12 months earlier, and the fund’s value fell 8 percent. That suggests clients pulled about 560 million euros, or 15 percent of assets, according to Bloomberg calculations.

A BlackRock spokeswoman didn’t immediately comment on the calculation. Batchelor declined to comment on outflows.

Climate negotiators meeting in Cancun, Mexico, this month agreed to limit global warming to 2 degrees Celsius (3.6 degrees Fahrenheit) without reaching a deal on how to achieve it. Current pledges by individual nations will lead to 4 degrees of warming by 2100, according to Climate Interactive scientists who model warming scenarios.

Best, Worst Performers

“There was positive progress, but without the urgency or on the scale needed to meet the 2-degree goal,” said Peter Sweatman, chief executive officer of Climate Strategy & Partners, a Madrid-based consulting firm. “The warning lights are flashing red.”

The worst performing environmental or clean energy fund in the Lipper database that tracks returns of individual pools was Azemos Asset Management AG’s Hornet Renewable Energy Fund II, which lost 24 percent in the 12 months to Sept. 30 investing in stocks such as SMA Solar Technology AG and Meyer Burger Technology AG. The top performer was the Jupiter Environmental Income Fund, managed by Christopher Watt, which gained 18 percent. Watt didn’t immediately respond to phone and e-mail requests for comment.

183 Funds Tracked

This year’s sell-off reduced the total cash invested by 183 renewable-power and environmental funds Lipper tracks to 12.1 billion euros from 13.4 billion euros at the end of last year.

U.S. investment slumped this year amid investor doubt about government energy policy, while the sovereign debt crisis has limited prospects for economic growth in Europe. Governments in Germany, Spain and Italy cut subsidies for photovoltaic panels.

The industry is “exhausted,” said Thiemo Lang, manager of the SAM Group Holding AG’s 510 million-euro Smart Energy Fund. “There are price pressures, there are worries about reductions in incentives and there are worries about new production capacity that will lead to oversupply.”

Lang’s Luxembourg-based fund, whose share price fell 6.6 percent in the first 10 months, has attracted new investments of more than 70 million euros this year.

Vestas, which soared four-fold in Danish trading in the two years through June 2008, lost 46 percent this year through yesterday to 178.80 kroner. The WilderHill New Energy Global Innovation Index fell 15 percent in the period.

“Performance is always going to be key,” said Ed Moisson, head of U.K. and cross-border research at Lipper. “If your performance isn’t there, people aren’t going to buy the fund.”

Lipper’s parent company Thomson Reuters competes with Bloomberg LP.

--Editors: Todd White, Randall Hackley

To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Asian Stocks Decline for First Time in Four Days on Metals, Yen

Posted: 26 Dec 2010 05:00 AM PST

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By Shani Raja

Dec. 24 (Bloomberg) -- Asian stocks declined, driving the benchmark index to its first drop in four days, as lower metal prices dragged down mining companies and Japanese exporters fell after the yen gained yesterday, when Tokyo markets were closed.

BHP Billiton Ltd., the world’s No. 1 mining company, lost 0.9 percent in Sydney. Nissan Motor Co., a Japanese carmaker that earns about 75 percent of its sales overseas, retreated 1.3 percent in Tokyo. Advantest Corp., the world’s biggest maker of chip-testing equipment, dropped 1.8 percent in Tokyo after revising a takeover offer. Hyundai Merchant Marine Co. plunged 5.7 percent in Seoul after selling new shares at a discount.

“The market seems to be taking a bit of breather today after a pretty strong month,” said Matt Riordan, who helps manage about $7 billion in Sydney at Paradice Investment Management Pty. “The economic data has been looking pretty reasonable and there’s nothing data-wise or news-wise that’s particularly negative. There’s probably a bit of profit taking going on at the end of the calendar year.”

The MSCI Asia Pacific Index fell 0.2 percent to 135.25 as of 7:36 p.m. in Tokyo, with more than two stocks declining for each that advanced. The gauge is set for a 5 percent gain this month as reports showed U.S. gross domestic product expanded faster than estimated and the country’s retail sales increased last week, bolstering confidence in a global economic recovery.

Indexes Retreat

Japan’s Nikkei 225 Stock Average dropped 0.7 percent after being closed yesterday for a holiday. Australia’s S&P/ASX 200 Index decreased 0.5 percent. South Korea’s Kospi Index dipped 0.4 percent. Hong Kong’s Hang Seng Index lost 0.3 percent, led by Chinese automakers on concern government curbs will car sales. China’s Shanghai Composite Index fell 0.7 percent.

Markets in Australia, Hong Kong and Singapore shut early for Christmas Eve.

The MSCI Asia Pacific Index advanced 13 percent this year through yesterday on speculation that growth in corporate profits will weather Europe’s debt crisis, Chinese steps to curb property-price inflation and concern about the pace of the U.S. economic rebound. That matches the gain by the Standard & Poor’s 500 Index in the U.S. and beats the 11 percent increase by the Stoxx Europe 600 Index.

The Asian benchmark plunged 43 percent in 2008 and rebounded 34 percent last year, its biggest gain since 2003.

Stocks in the MSCI index were valued at 14.8 times estimated earnings on average at yesterday’s close, compared with 14.7 times for the S&P 500 and 12.5 times for the Stoxx 600.

Metal Prices, Currency

Material-related and consumer companies dropped the most today among the 10 industry groups in the MSCI Asia Pacific Index. BHP Billiton fell 0.9 percent to A$46.04 in Sydney. Rio Tinto Group, the world’s third-biggest mining company, declined 1 percent to A$86.36.

Copper futures for March delivery fell 0.4 percent yesterday in New York. The London Metal Exchange Index of six metals including copper and aluminum slipped 0.8 percent yesterday, dropping for a second consecutive day.

Nissan lost 1.3 percent to 785 yen in Tokyo. Mazda Motor Corp., with about 24 percent of sales in North America and 17 percent in Europe, sank 2.5 percent to 239 yen.

The dollar depreciated to as low as 82.86 against the yen yesterday in New York, the weakest level since Dec. 14. The euro slid to as low as 108.46 against the Japanese currency yesterday, near the lowest level this month. That cuts the value of overseas income at Japanese companies when converted into their home currency.

‘Lock in Profits’

“The stronger yen will likely lead investors to sell shares to lock in profits,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.

Advantest dropped 1.8 percent to 1,853 yen after Verigy Ltd., a maker of testing equipment for semiconductor manufacturers, said Advantest raised its takeover offer by 23 percent. Advantest said it amended its offer, without providing details.

In Seoul, Hyundai Merchant Marine plunged 5.7 percent to 37,150 won. Hyundai Elevator Co. agreed to buy 1.8 million new shares in the shipping line for 32,000 won each, according to a regulatory filing.

Dongfeng Motor Group Co., the Chinese partner of Nissan, tumbled 7.9 percent to HK$13.08 in Hong Kong. Geely Automobile Holdings Ltd., whose parent bought Volvo Cars, lost 6 percent to HK$3.43. The city of Beijing introduced measures including limiting the number of new passenger vehicles in the Chinese capital to ease congested roads.

--With assistance Jonathan Burgos in Singapore and Akiko Ikeda and Norie Kuboyama in Tokyo. Nicolas Johnson, Linus Chua.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.

To contact the editor responsible for this story: Nicolas Johnson at nicojohnson@bloomberg.net.

Trichet Exit Looms as Crisis Keeps ECB Rate at 1%: Euro Credit

Posted: 26 Dec 2010 05:00 AM PST

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By Jana Randow and Simon Kennedy

Dec. 25 (Bloomberg) -- European Central Bank President Jean-Claude Trichet will step down next October with the euro area still needing record-low interest rates, say the economists who accurately predicted the region’s monetary policy this year.

The Frankfurt-based central bank will keep its key interest rate unchanged throughout 2011 amid low inflation, moderate growth and persisting fallout from the sovereign-debt crisis, said 12 of 17 economists in a Bloomberg News survey. The sample was taken among forecasters who correctly anticipated in January that the ECB’s benchmark would stay this year at 1 percent.

The new year approaches with Trichet celebrating his 68th birthday this week after leading Europe’s response to the turmoil, which at one point threatened to destroy the single currency and has already engulfed Greece and Ireland. Even after those nations received international bailouts, the cost of insuring Greek debt yesterday rose to its highest in a month and investors speculate that Portugal may be next to require aid. The euro has fallen 8 percent against the dollar in 2010.

“The ECB will be patient, cautious and prudent,” said Cedric Thellier, an economist at Natixis in Paris. “Growth will be not very dynamic and inflation will undershoot the ECB’s target.”

The 17 economists questioned this month participated in a similar survey of 61 forecasters in January on the outlook for ECB policy in 2010. The median forecast then was the benchmark would be at 1.5 percent now with Deutsche Bank AG and Bank of America Merrill Lynch analysts among those predicting 2 percent.

Buying Bonds

The ECB cut its rate to 1 percent in May 2009 to fight the worst recession in its history. A year later the central bank began buying government bonds for the first time to ease credit- market tensions as investors focused on outsized budget deficits. As recently as this month, the ECB was forced to delay a further withdrawal of unlimited liquidity support to euro-area banks.

Portugal’s credit rating was downgraded on Dec. 23 by Fitch Ratings to A+ from AA-. The company said in a separate report the same day that the euro area faces a “systemic” crisis.

The ECB this month forecast growth will slow in 2011 to about 1.4 percent from this year’s 1.7 percent, while inflation will advance to 1.8 percent from 1.6 percent. That’s still under the bank’s target of just below 2 percent. The region will expand in size in January as Estonia becomes its 17th member.

Recession Prospects

David Owen, chief economist at Jefferies International Ltd. in London, said the ECB’s numbers imply the “weakest growth on record.” Carl Weinberg, chief economist at High Frequency Economics Ltd. in Valhalla, New York, predicts the economy will “lapse into a deep recession, squeezed by a credit crunch and plagued by multiple bank failures.” Both forecasters expect no change in the main interest rate next year.

Adding to pressure on growth is the push to curb budget deficits to pacify investors. Portuguese 10-year bond yields rose by almost half a percentage point in the past two weeks. Those on similar Greek securities have returned to the 12 percent level they reached in May. The cost of insuring Greek debt climbed yesterday to 1,020, according to CMA prices for credit-default swaps.

Deficit Measures

Measures to restore order to budget deficits will amount to 1.3 percent of the euro zone’s gross domestic product in 2011, with Ireland and Portugal cutting back about 4 percent and Greece as much as 6 percent, according to Julian Callow, chief European economist at Barclays Capital. He also forecasts no rate change in 2011.

Analysts at UniCredit SpA, Royal Bank of Scotland Group Plc and Standard Chartered Plc are among five forecasters expecting the ECB to begin rate increases in the second half of 2011.

“The ECB will want to start re-establishing its anti- inflation credentials,” said Sarah Hewin, senior economist at Standard Chartered in London, whose forecast for a 1.75 percent rate was the highest of those surveyed. Jacques Cailloux, chief euro-area economist at RBS, expects an increase to 1.5 percent as strength in core economies such as Germany keep them “ring- fenced” from debt strains.

Surging bond yields prompted the ECB to step up bond purchases following Ireland’s aid package. The region’s central banks have bought 72.5 billion euros ($95 billion) of government debt since the bond program was announced in May. The ECB has also committed to aid banks with as much liquidity as needed through the first quarter for periods of up to three months.

Crisis Response

“The ECB made very clear that in their view the crisis needs to be resolved by governments,” said Ken Wattret, an economist at BNP Paribas SA in London and another forecaster who was right in 2010. “But governments aren’t very quick, so the ECB is going to feel continuously obliged to step in.”

Economists are divided over how long the ECB will take to return to its pre-crisis refinancing system of cash auctions. While Greet Vander Roost at KBC Asset Management in Brussels expects the exit to be finished by the end of the second quarter, Citigroup’s Michels says the ECB will keep supplying unlimited liquidity in weekly operations into 2012.

Michels’s scenario would turn responsibility for normalizing ECB monetary policy to the next president as Trichet’s central banking career comes to an end after almost two decades and eight years at the ECB. Who will replace him will be a subject of heated debate for leaders next year with Bundesbank President Axel Weber and Bank of Italy Governor Mario Draghi most often linked to the job.

“By next November it ought to be a lot clearer how the crisis is playing out,” said Callow of Barclays Capital. “The challenge for Trichet’s successor is to mold the euro area into a more cohesive economic and financial entity.”

--Editors: Craig Stirling, Tim Quinson

To contact the reporters on this story: Jana Randow in Frankfurt at jrandow@bloomberg.net; Simon Kennedy in London at skennedy4@bloomberg.net

To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net

Paris CDG Cuts Flights 35% on Antifreeze Shortage

Posted: 26 Dec 2010 04:59 AM PST

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By Blanche Gatt and Fabio Benedetti-Valentini

(Adds planned flight cuts for rest of the day from first paragraph.)

Dec. 24 (Bloomberg) -- Paris’s Charles de Gaulle airport, Europe’s second busiest, will cut flights by 35 percent for the rest of the day because of a shortage of antifreeze and forecasts for more bad weather.

The airport faces “problems in supply of antifreeze liquid for planes,” French DGAC civil-aviation authority said in an e- mailed statement. The airport had already reduced flights before 1 p.m. by 50 percent.

Major U.K. airports and Frankfurt were operating near- normal services after snowstorms and cold weather caused travel disruption across Europe in the lead-up to the Christmas holidays.

Air France has cancelled “many” short and medium-haul flights from Charles de Gaulle today, according to its website. Long-haul flights and services from Orly are unaffected, the airport said.

Heathrow, Gatwick, Glasgow and Edinburgh airports are all open, according to their websites. They all said that passengers should expect some knock-on delays and cancellations as a result of the recent weather conditions.

British Airways Plc, the U.K.’s biggest carrier, plans to fly all scheduled long-haul flights out of Heathrow today, and most inbound long-haul services, according to a statement on its website. The carrier is also hiring planes and putting larger aircraft on European routes to move more passengers, it said.

Eurostar ‘Near Normal’

The U.K. will likely experience “very cold” weather, with snowstorms mostly confined to the east and west coasts, according to a Met Office forecast.

Eurostar Group Ltd., the operator of trains through the Channel Tunnel, said on its website that it’s planning to operate a “near normal” service. Only passengers with valid tickets for travel should go to the station, it said.

Fraport AG, operator of the Frankfurt airport, said on its website that the situation has “improved significantly,” allowing it to offer travelers normal pre-night check-in.

Deutsche Lufthansa AG, Germany’s biggest carrier, ran a regular schedule at Frankfurt yesterday, it said on its website. The carrier is running all scheduled flights, aside from a few weather-related exceptions.

--With assistance from Laurence Frost and Matthew Campbell in Paris and Chris Spillane in London. Editors: David Whitehouse, Stephen Taylor

To contact the reporter on this story: Blanche Gatt in London at bgatt@bloomberg.net; Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net.

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

South Africa to Join BRIC to Boost Emerging Markets

Posted: 26 Dec 2010 04:43 AM PST

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By Nasreen Seria

(Updates with South Africa’s membership in other global forums in 12th paragraph.)

Dec. 24 (Bloomberg) -- South Africa has been formally asked to join the BRIC group of major emerging markets, comprising Brazil, Russia, India and China, bolstering its position as Africa’s champion.

Chinese President Hu Jintao wrote a letter to his South African counterpart, Jacob Zuma, to inform him of the decision and inviting him to the BRIC’s third heads of state meeting in Beijing next year, Chinese Foreign Minister Yang Jiechi said in a statement on his ministry’s website today.

South Africa, which has a population of 49 million compared with China’s 1.36 billion, is betting on raising its clout on the world stage by joining BRIC, while strengthening political and trade ties within the bloc. The country accounts for about a third of gross domestic product in sub-Saharan Africa and will offer BRIC members improved access to 1 billion consumers on the continent and mineral resources including oil and platinum.

Joining the group is “the best Christmas present ever,” South Africa’s Minister of International Relations and Cooperation Maite Nkoana-Mashabane told a reporters in Pretoria today. “We will be a good gateway for the BRIC countries. While we may have a small population, we don’t just speak for South Africa, we speak for Africa as a whole.”

Zuma has made state visits to all of the BRIC nations since coming to power in May last year and the government has “lobbied very hard” to be included in the group, which will now be known as BRICS, Nkoana-Mashabane said.

‘Powerful Country’

Africa’s biggest economy is a “powerful country,” even though it’s small compared with the other BRIC nations, Alexei Vasiliev, Russian President Dmitry Medvedev’s envoy to Africa, said on Dec. 22.

South Africa has an economy of $286 billion, which is less than a quarter of that of Russia, the smallest of the BRIC nations. Its population is also dwarfed by India’s 1.2 billion, Brazil’s 191 million and Russia’s 142 million.

Goldman Sachs Group Inc. economist Jim O’Neill coined the BRIC term in 2001 to describe the four nations that he estimates will collectively equal the U.S. in economic size by 2020.

“South Africa’s economy is very small,” O’Neill, who is now chairman of Goldman Sachs Asset Management International, said in an interview from London today. “For South Africa to be treated as part of BRIC doesn’t make any sense to me. But South Africa as a representative of the African continent is a different story.”

‘Big Boys’

At their first summit in Russia in June last year, the BRIC heads of state called for emerging economies to have a greater voice in international financial institutions and for a more diversified global monetary system.

“South Africa as a country is small, but if we go there as a regional market, that’s a different story,” said Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, which provides research and corporate finance services on emerging markets. “For South Africa, it’s nice to be associated with the big boys.”

South Africa is the only African nation represented in the Group of 20, and will take up a two-year seat on the United Nations’ Security Council along with India and Brazil next year, resulting in all BRIC nations being represented on the council. The African nation is also part of a trilateral group with India and Brazil, known as IBSA, created in 2003 to coordinate action between the three emerging economies in global forums.

“We bring the most diversified and most advanced economy on the continent,” said Nkoana-Mashabane. “We may not be the same size, but we can open up opportunities for them and through that, we can complete our economic integration on the continent.

South Africa’s rand gained against the dollar to its strongest level since Jan. 15, 2008, trading at 6.7308 to the dollar as of 5:13 p.m. Johannesburg time.

--With assistance from Yidi Zhao in Beijing and Henry Meyer in Moscow. Editors: Philip Sanders, Heather Langan, Andrew Atkinson, Antony Sguazzin

To contact the reporter on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net.

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net.