Forex Investment

(Updates with quotes from press conference)

BUDAPEST (Thomson Financial) - The Hungarian National Bank (MNB) kept the base rate unchanged at 8.00 pct this afternoon.

The decision was in line with the forecasts of most analysts.

The market is expecting the central bank to cut the base rate to 7.00 pct by the end of the year.

“CPI showed a decline in core inflation in March, which is a positive sign from the point of disinflation, but perishable goods and processed foods grew more than expected in March. To establish the temporary nature of this rise, further information is needed,” said MNB president Andras Simor.

Regarding better-than-expected wage data last Thursday, Simor said although there had been a decrease in February, the rate of wage growth in the private sector is still high.

Simor added there had been a proposal to cut the base rate by 0.25 pct, but this had received only one vote.

edward.krudy@thomson.com

ek1/amb/ek1/jag

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GOOGLE announced overnight that its online video-sharing service would shift focus to search and leave the video sharing to websites such as recently acquired YouTube.

Google’s purchase of Internet superstar YouTube in November for $2.13 billion worth of stock came as an admission that its Google Video service was floundering.

Google Video would concentrate on being a comprehensive index of video available for viewing online and feature thumbnail image links to YouTube offerings, according to Google vice president Salar Kamangar.

“Google Video will become even more comprehensive as it evolves into a service where you can search for the world’s online video content, irrespective of where it may be hosted,” Mr Kamangar wrote in company weblog.

“YouTube, meanwhile, excels at being a leading content destination with a dynamic community of users who create, watch and share videos worldwide.”

Mr Kamangar emphasised that Google intends to put its resources and ad revenue-generating prowess to work for YouTube while leaving it free to operate independently.

OTTAWA—Menu Foods Income Fund insisted Thursday that it will survive the fallout from a huge recall of contaminated pet food that is expected to cost at least C$45 million ($42 million), as more customers cancel orders and lawsuits mount.

Executives said they were confident that a bigger line of credit will help see the company through the recall, expanded several times and dubbed one of the largest in North American history.

Menu Foods has recalled at least 60 million packages of pet food after reports of 14 animal deaths. It said the foods contained contaminated imported from .

“Menu’s been in business and at various sizes and at different scales for 35 years and the intent will be that we will continue to be around,” Chief Executive Paul Henderson said on a conference call to discuss first-quarter results.

He pointed to a recently-increased bank facility, to US$50 million from US$30 million. The company also has a facility for US$85 million in senior secured notes.

Menu Foods also expects to once again begin shipping many of the recalled pet food brands in the second quarter and into the third quarter.

“All of those things essentially will see us, in my opinion, through the recall,” Henderson said.

Cormark Securities analyst Aleem Israel agreed, saying Menu Foods has survived hard times in the past. He cited problems in 2005 when rising costs led the company to breach its bank covenants.

“He’s (Henderson) been in the situation where his back was against the wall,” he said from Toronto. “They were very good at managing their way out of that.”

But it won’t be easy for Menu Foods to find its footing again.

The C$45 million recall cost excludes the impact of lower sales and any lawsuits exceeding the company’s insurance. Menu Foods now faces nearly 90 lawsuits in North America, Henderson said.

The company also said it expects to borrow more money because of the recall at higher interest rates under an amended credit agreement.

“Both of these changes are expected to increase the fund’s financial expenses going forward,” the company said in a statement. Company executives were unable Thursday to estimate the impact of higher interest costs.

In its first-quarter, Menu Foods posted a net loss of C$17.51 million, or 91.8 Canadian cents a unit, compared to profit of C$1.3 million, or 73 Canadian cents a unit, in the prior-year period. Sales slumped to C$64.5 million, from C$93.9 million.

No distributions were declared during the quarter and the board will not consider resuming them “for the foreseeable future”.

The company said it expects second-quarter sales and operating results will be “adversely affected” by the recall.

Israel said he is not concerned by small customers who have canceled orders because the biggest customers need Menu Foods’ capacity.

Menu Food units dipped 12 Canadian cents to C$4.01 on the Toronto Stock Exchange Thursday.

THE University of St Andrews is investigating complaints that the performance of a teenage composer’s symphony was drowned out by a disco run by an exclusive womens club.

Charlotte Harding, 18, had travelled from Yorkshire with her family to hear the university’s symphony orchestra perform Voyage: A Concerto for Soprano Saxophone, which she wrote while at school.

But the thrilling prospect of hearing her piece played in the 1,000-seat Younger Hall, the main concert venue in St Andrews, was spoilt when a disco beat broke into the music.

The noise pollution came from an event run by the Lumsden Club, an “elite ladies” society that prides itself on social and charity parties, which was staging a noisy fund-raiser nearby.

The university is now reviewing what happened and the way events are scheduled, after a letter of complaint from the concert’s organisers.

“We are looking in to the circumstances of the complaint, into all the circumstances of the events that evening,” a spokesman said.

Miss Harding wrote her saxophone concerto while at school as part of her A-levels. Her music teacher, Richard Ingham, a visiting lecturer at St Andrews, brought it to the attention of the university.

The Music Society Symphony Orchestra was brought on board, and the piece was included in a Sunday evening concert alongside works by Leonard Bernstein, Aaron Copland and Antonn Dvork.

Miss Harding’s mother Amanda said: “We travelled up from Yorkshire full of high hopes. We were in awe, as it was just so exciting and a once-in-a-lifetime experience for Charlotte. We were all just bursting with excitement.”

But as the concert got under way, so did a loud dance beat.

“It was all right when the orchestra played loudly but, during the quieter bits of music, you couldn’t hear anything but the disco,” said Mrs Harding.

“It was such a shame, as they had hoped to record it for Charlotte to keep but, obviously, the noise of the disco meant that just wasn’t possible.

“It was still a wonderful evening, but I would have to say the noise did detract and mar it,” she said.

Staff reportedly asked the Lumsden Club to turn down the music at their party in a marquee on the nearby lawns of St Salvator’s Hall, the residence where Prince William boarded when he was at the university.

The concert’s conductor blamed “disastrous scheduling”. She said: “I am extremely angry at the distress caused to the players in the orchestra, to Charlotte Harding and Richard Ingham, and to the students of the Lumsden Club running the charity fund-raising event, and members of the audience whose enjoyment of the concert was ruined.”

Founded in 2001, the women-only Lumsden Club promises a good time for good causes.

The club hosts Pimms Parties and Top Gun Nights, but also prides itself on supporting children’s and cancer charities.

It is named after Louisa Lumsden, the founder of St Leonard’s School and a suffragist, and described as “the first prominent female figure within the University of St Andrews”.

No-one from the club responded to requests for comment yesterday.

The club has up to 40 members. Each year it invites “nine outstanding first year ladies” to join. They can sign up for interviews at a drinks night.

The club’s website states: “We host fun social and charity events throughout the university calendar and make a difference within the community.”

The poster for a coming Top Gun Night features a sexy photo of Tom Cruise and the dress code is “Take My Breath Away”.

In the past six years, the club has raised money for charities including Maggie’s Cancer Relief, Kids in Need of Education and the Children’s Hospice Association Scotland.

BRUSSELS: EU to begin making case for Airbus before WTO

The European Union will counter U.S. claims at the World Trade Organization on Friday that government grants for Airbus to develop new planes are illegal, kicking off a legal fight that has been building for two and a half years.

EU officials, speaking on condition of anonymity because of the sensitivity of the issue, said the U.S. arguments were undermined by the health and bright prospects of Boeing, the American rival to Airbus. They will file their own allegations in March against U.S. subsidies to Boeing.

The WTO is due to issue its final report on the U.S. case against Airbus in October and the EU case against Boeing in April 2008, but the timetable may change because of the complexity of the issues. (Bloomberg, AP)

Pfizer to close 2 plants in Ireland to cut costs

DUBLIN:Pfizer, the world’s largest drug maker, said that it planned to sell two Irish manufacturing plants and shut down part of a third as part of a plan to reduce costs by as much as \1 billion, or $1.3 billion.

All production at Pfizer’s Loughbeg plant on the south coast and some production at the nearby Little Island facility would be phased out by 2009, the company, based in New York, said.

The Loughbeg and Little Island plants, employing 480 workers, will be sold as going concerns, Pfizer said. A third plant at Ringaskiddy, Cork, will be partially shut down this year and 65 jobs eliminated. Pfizer employs 2,300 in Ireland. (Bloomberg)

U.S. oil firms circle Yukos assets in Russia

MOSCOW:William Burns, the U.S. ambassador to Russia, and the chief executive of Gazprom, Alexei Miller, held talks regarding whether U.S. companies could buy the assets of the bankrupt oil company Yukos.

Miller and Burns met at the Moscow headquarters of Gazprom, the Russian natural gas export monopoly, to discuss the participation of U.S. companies in developing Russian oil fields, Gazprom said.(Bloomberg)

Northrop will make bid

WASHINGTON:Northrop Grumman said it would bid on a $40 billion U.S. Air Force contract to replace 179 refueling planes, expressing satisfaction that the military service had addressed the concerns it had raised.

The company hinted it might bow out of the competition and leave Boeing as the only bidder. Northrop sought language in the contract that would allow for planes with significant cargo space and thereby justify the higher price of its aircraft, compared with Boeing’s.

The program has been on hold for three years, after Boeing lost the contract amid an ethics scandal. (AP)

The European Court of Justice rejected an appeal by the French food maker Groupe Danone against a \42.4 million fine imposed by European Union regulators over the company’s alleged role in a Belgian beer cartel. (AP)