17/05/2013 World Business Report


17/05/2013

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the US and in France. -- he has won. Time now for the money news with

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Dell profits collapse has smartphones and tablets continue to

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batter the PC industry. Plus, Nagy ships in search of cargo.

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Aiken target -- a cargo giant counts the cost of slumping global

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trade. A very warm welcome to World

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Business Report. Also coming up: South Africa's currency hits a

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four-year low and it fears of the return of last year's labour unrest.

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More evidence late on Thursday that the personal computer industry is

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in steep decline. The first quarter of this use of the biggest slump in

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PC sales since records began. Now, PC giant Dell has revealed that its

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profits all but collapsed in the last three months. It says its

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profits plunged 79% in the three months to the beginning of May.

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That was way worse even than Wall Street was expecting. Dell did see

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a rise in revenue from providing services to business and, what it

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calls enterprise solutions. That is the area that the founder is now

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pinning his hopes. The news from Dell is a clear

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reflection of just how dire the personal computing industry really

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is. Reporting days earlier than expected, tells us profits jumped -

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- dropped by nearly 80% as PC sales continue to. These results come at

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an interesting time. Delays in the midst of a takeover battle. On the

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one hand we have its founder and CEO Michael Dell. On the other we

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have its largest shareholder. In the light of changing desires of

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consumers, Michael Dell wants to take the company private and

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changed it from a PC maker to a full service IT company oath or

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possibly Seth. The largest shareholder still believes the

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company is better off remaining public. These results are

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disappointing and it may have an impact on the future of a company

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that 20 years ago dominated the PC market.

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His labour unrest in South Africa's minds about to erupt again? A union

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leader says workers will walk out today over plans to cut up to 6,000

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jobs. Earlier this week a rival company was hit by a two-day strike

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as the industry prepares for wage negotiations that have been called.

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Mining companies are cutting back in the face of falling commodity

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prices. They are also facing rising union militancy and it work and go

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about rising income inequality. More than 50 people were killed

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last year in violence in South Africa's mining communities. Fears

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of a return to the unrest have pushed the country's currency to a

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As we were saying, this comes in at mining firms across South Africa.

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What is it doing to the industry? The big concern for markets and

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investors is how long lasting this might be. No-one is expecting the

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scale of what we saw last year won widespread disruption and that we

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saw negative mining group over a number of quarters. We are coming

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up to that crucial wage negotiation Tyne. Many minds are already

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experiencing considerable losses. It is not an environment where they

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can afford to see their costs, of which Labour contributes Sydney

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Fingal, rising. -- significantly. Talking about the cost of platinum,

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expectations of another year of constrained supply, does that mean

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global demand for the metal might outstrip supply, which would be the

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second year in a row? In terms of supply, given the outlook we see

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for the mines in South Africa especially, one would expect for

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that to provide some support to prices. The problem with the plight

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no market is that when it comes to demand, weakness in the European

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economy means we are not seen the kind of strength and demand that

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would be needed to achieve a sustained price rise just yet.

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does all of this mean for South Africa as a whole? Credit rating

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agencies perhaps reviewing the cost of businesses investing in the

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country and the currency having been pushed to a new low. It is an

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additional concern. If we look at the performance of the South

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African economy, that has been weak. In real terms, the value added in

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mining and manufacturing is no higher than it was in 20 -- 2008.

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South Africa's struggle to recover from the crisis and the concern is

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if we see more disruption to mining, more of these output chocks, we're

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not going to see a much healthier growth rate this year either. That

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has been reflected in the weakness of the currency.

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We will have to see whether this strike does take place.

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Some mixed results from China's most popular social network. We get

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the details from our correspondent in Singapore. What would you have

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won this for us? It is the owner of China's largest social network.

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They have reported a first-quarter loss that narrowed as margins

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improved. Unexpectedly they also what is helping its shares in

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after-hours trade. Well above 4% at the moment. However, the last

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narrowed to $13.2 million from $13.7 million. It is listed in New

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York and has a very large user base. It often puts the microscope on

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corrupt Chinese officials and as a result of this it has had tried --

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tighter government restrictions on the social network. It has

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struggled with rising costs and figuring out how to make money from

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This beast behind me, none other than Marco Polo, at 400 metres long

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and capable of carrying 190,000 tonnes of cargo. It is the largest

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container ship in the world. At least it was until the end of last

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year. Its owner is about to take delivery of 20 even bigger ones as

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part of a global battle for dominance with its rivals.

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Unfortunately, since they order these mega ships, trade between

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Asia and Europe has slumped significantly and the company is

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set to report a steep fall in profits.

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Size matters to the shipping country -- company. Built in Korea

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and wider than a motorway, it is the first of 20 such ships in the

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making. On board there is room for 2000 more big boxes than on the

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market power. The company is leading what amounts to an industry

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arms race, going large for fuel and operational savings to give them a

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profitable edge on Asia to Europe routes. Unfortunately for the

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company, Chinese and other competitors are also ordering 100

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or more similar made the vessels. Industry watchers say it placed its

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order in busier, more profitable times. The ships are the future,

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but only if you can fill them. Everybody thought that they would

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get bigger ships and they are much more economical to run if you fill

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them up. People attending to discard smaller ships. These new

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vessels are designed to steam slowly. They are therefore much

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more productive in terms of fuel consumption. There is definitely an

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overcapacity in the market. There is probably no better than here in

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the UK on the Essex coast, where they are readying these deep-water

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dock sides to handle up to six of these fast vessels. Then there will

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be off to do all the handling and logistics nearer to the capital.

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The theory is that those operators who do not have these economies of

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scale may suffer as a result. is changing because of the world

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economy over the last few years is a need to take costs out of the

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supply chain. The shipping lines sight of their ships to get better

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economies of scale. There is a huge amount of cost him cargo shipping.

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Is what London Gateway is going to get right. So now operators like

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must somehow have to find the cargoes to feel these new ships and

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try and resist cutting harder rates. But a late -- the payload of just

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one vessel would fill all of Times Square in New York.

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Asian markets are certainly thin in Friday trade due to a lot of

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markets actually being closed for the holidays, including Hong Kong

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