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1 Google shares top $1,000 (BBC) Google shares have topped $1,000 for the first time, jumping 13.8% on Friday after the company reported better-than-expected earnings. Shares in the online giant have risen 42% since the start of 2013. Friday’s share price rise followed the company posting a 36% jump in net profits to $2.97bn for the July-to-September period on Thursday. “We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device,” Google’s chief Larry Page said in a conference call with analysts.
The strong earnings report also helped other online companies, with Facebook shares adding 4.4% to a new high of more than $55. Amazon rose 3.4%. Google’s market value is about $334bn, which is still well below Apple’s $461bn. Google was floated in August 2004 at $85 a share, giving the company a market value at the time of $23bn.
In February, the company launched a service to help advertisers market through a mix of smartphones, tablets and desktop computers. And analysts believe there is still significant potential to generate revenues from its video-streaming website YouTube. YouTube-branded video-ads surged more than 75% in the quarter from a year earlier, with 40% of traffic now coming from mobile devices.
2 Saudi Arabia declines UN Security Council seat (Dawn) Saudi Arabia on Friday declined a seat on the UN Security Council, citing “double standards” that made it hard for the world body to end conflict and wars. This was the first time the Arab country had won such a seat in a new show of determination to make its voice heard, joining Chad, Chile, Lithuania and Nigeria in taking places on the key body.
All five countries stood unopposed in an election by the 193 member UN General Assembly. They would replace Azerbaijan, Guatemala, Morocco, Pakistan and Togo on the 15-nation council on January 1. The country was due to replace Pakistan on the Security Council. Saudi Arabia, despite its oil power and standing in the Muslim world, has never competed for a place on the United Nations’ most powerful body which has a key role pronouncing on conflicts such as that in Syria.
The conservative kingdom has several times expressed alarm at what it considers international inaction over Syria. It has been a major backer of the rebels fighting President Bashar al-Assad. The Saudi government also remains a fierce critic of Israel. Five countries have permanent seats on the Security Council — the United States, Britain, France, Russia and China. The other 10 seats are awarded for two year periods by the General Assembly, which holds a vote every year for five of the seats.
3 India’s closed shop (The Wall Street Journal) Wal-Martlast week announced it would close its retail outlets in India and part ways with local partner Bharti Enterprises. The American company says it can’t make a profit due to a government requirement that 30% of inventory be sourced from local channels, a rule that doesn’t apply to Indian firms. Wal-Mart’s exit means not a single multinational is taking advantage of India’s decision last year to allow foreign retailers to own 51% of joint ventures.
This outcome is frustrating because the political battle to crack open the retail business to foreign competition has been so bruising. Prime Minister Manmohan Singh first proposed to let foreign multi-brand retailers own 51% stakes in joint ventures in 2011. Protectionists in the opposition Bharatiya Janata Party and Communist Party of India mounted a strong attack, and Mr. Singh’s ruling Congress Party backed down in early 2012. Later in 2012, Parliament passed a law permitting foreign investors to hold a majority stake in supermarkets. Yet the reform was weighed down with onerous requirements. In addition to the 30% local sourcing requirement, foreign firms are allowed in only if they invest at least $100 million, with 50% of that going to back-end infrastructure such as storage and warehouses. Foreign retailers can only enter cities with populations of more than one million, and local governments can veto any proposed store.
Modern distribution chains would do wonders for a country with dismal farm-to-table transportation. An estimated 40% of food in India rots or is siphoned off by corrupt hands before reaching consumers. Finance Minister P. Chidambaram has adopted a sour grapes attitude, calling the world’s largest retailer a “speck” in India’s market. “If Wal-Mart is still not satisfied, so be it,” he says.
With elections early next year, Indian politicians are unlikely to fight for more liberalization of the retail trade anytime soon. Investors are left to wonder how much more bad economic news it will take before Delhi gets serious about reform.