DHAKA stocks continue gaining

Increased trading activities pushed the Dhaka market up for the
fourth day, with all the key indices finished positive. The total
turnover of Tk 711.22 crore marked a 45.7 percent rise yesterday,
compared to the previous day's turnover. "The jump in turnover meant
that investors were very active in trading and they were switching
from one stock to another," said Fazlur Rahman, head of Investment
Banking Division of AB Bank. He said investors' active participation
is a good sign for a healthy and vibrant market. The benchmark index
of Dhaka Stock Exchange, DSE General Index, rose by 11.84 points, or
0.38 percent to 3 ,086.9. The market reached a peak of 3 ,095 points
in the first 30 minutes of trading. Then it remained relatively
stable around that mark for the next 120 minutes, before dropping
about seven points towards the end of the session. The broader DSE
All Share Price Index gained 11. 06 points, or 0.42 points to 2 ,
594.41. Most non-banking financial institutions and mutual funds
gained, while most banks lost. Pharmaceuticals, insurance, cement and
tannery sectors finished positive. Fuel and power sector however
lost. Advancers beat losers 160 to 79. A total of 4 ,21 , 70 ,817
shares and mutual fund units were traded on the premier bourse.
Summit Alliance Port topped the turnover leaders with 1 ,24 ,250
units worth Tk 28.04 crore being traded on the DSE. Renwick
Jajneswar, which increased by 13.69 percent, was the largest gainer.
Monno Jute Stafflers, which declined by 3.77 percent, was the
biggest loser. Chittagong stocks also marked a rise. The CSE
Selective Categories Index gained 40.67 points, or 0.6 percent to 6
,780. The CSE All Share Price Index increased by 27.25 points, or
0.25 percent to 10 , 657.37. A total of 62 ,18 ,190 shares and
mutual fund units worth Tk 66.28 crore changed hands on the
Chittagong Stock Exchange. Of the traded securities, 106 advanced,
66 declined and three remained unchanged. The biggest gainer Samata
Leather Complex advanced by 16.50 percent. Aramit was the largest
loser that declined by 9.16 percent. Marico Bangladesh topped the
turnover leaders with 88 ,000 shares worth Tk 3.48 crore being
traded on the port city bourse.

Green revolution in rural Nepal

Nepalese villager Khinu Darai used to have to walk about five
kilometres (three miles) every day to collect firewood so she could
cook meals for her family. Then two years ago, she bought a biogas
plant under a government scheme to encourage villagers to convert to
greener energy -- an event the 30- year-old mother of three says
transformed her life. "Biogas is a blessing for my family. These days
I don't have to go into the jungle to collect wood, " she told AFP
outside her simple mud-brick home in the southern village of
Badrahani. "It is clean and safe, and we are healthier now as we are
not breathing in smoke all the time." In all, 82 households in
Badrahani have bought biogas plants at heavily subsidised rates under
the scheme, which is funded by the Dutch and German governments.
Biogas is a mixture of methane and carbon dioxide produced by feeding
cow dung, human waste and water into an airtight underground tank
known as digester and allowing it to decompose. Environmentalists say
biogas has huge potential in Nepal, where nearly 80 percent of the
population of 27 million live in rural areas with no electricity,
leaving them dependent on firewood for cooking and heating. This
means they live in smoke-filled houses, causing respiratory problems,
particularly for young children, while the destruction of forests is
also a major cause for concern. Badrahani is situated on the edge of
the Chitwan National Park, home to endangered species including the
Royal Bengal tiger and one- horned rhino, whose habitat is threatened
by villagers chopping down trees for firewood. "Biogas has brought a
green energy revolution to the country," said Prakash Lamichhane,
head of research at the Biogas Sector Partnership ( BSP), the
government agency in charge of installing the plants. "We have the
capacity to build 1.9 million biogas plants, but we have achieved
just 11 percent of our target so far. We still have a long way to
go. " Over the past two decades, BSP has installed around 210 ,000
biogas plants at a cost of around 350 dollars each, with the
government covering a third of the price. BSP says each plant reduces
the country's already low carbon emissions by around 4.7 tonnes a
year. "We are helping to reduce greenhouse gas emissions by 987 ,000
tonnes every year. It is helping us combat climate change," said
Lamichhane, chief of the research department. The biogas project has
won plaudits as a rare environmental success in a country with one of
the world's most polluted capital cities. But BSP research and
development officer Mahaboob Siddiki said it had not always proved
easy to convert villagers. "Because the gas is produced from cow dung
and human waste, villagers thought it was impure, and that it would
be shameful to cook food using it," said Siddiki, who has worked on
the project since it began 26 years ago. "Several times, we were
chased away from some of the villages, but we never gave up," he
said, calling the technology a "win-win situation" for villagers and
the environment. It is a view shared by Bibhimaya Tamang, a 45-
year-old farmer from Badrahani who uses slurry -- a by-product of
biogas -- to fertilize her crops, giving her higher yields and more
income from the vegetables the family grows. "Staying in a
smoke-filled kitchen for hours was painful. It hurt my eyes and I
used to cough a lot while cooking," she told AFP. "Using biogas has
been so much better." Sameer Thapa, coordinator of Nepal's
Alternative Energy Promotion Centre (AEPC), said the country made 600
,000 dollars in 2007 by trading a million tonnes of carbon emission
reductions from biogas plants. "We have huge potential to benefit from
carbon trading as we lessen the use of firewood, which releases
carbon dioxide into the atmosphere," said Thapa. "Around 80 ,000
biogas plants are in the process of getting approval for carbon
trading by next year." Thapa said the proceeds would be used to
install more plants, enabling the government to increase its carbon
trading capacity further. "Many developing countries in Asia and
Africa have used our expertise to promote biogas, and many others
are asking for our help," said the BSP's Lamichhane. "Nepal has
always been known as the land of mountains. Now, developing countries
are calling us the land of biogas."

Merkel faces reform test

The new coalition of German Chancellor Angela Merkel will likely
boost Europe's top economy but analysts questioned Monday how far she
will pursue crucial but contentious reforms. The German Association
of Chambers of Commerce and Industry (DIHK) called her victory in
Sunday's election "a clear vote for courageous reform." Its president
Hans Heinrich Driftmann said corporate tax cuts should now be "high
on the agenda." The Federation of German Wholesale and Foreign Trade
called for "simplified taxes, less bureaucracy and more
entrepreneurial freedom. " But analysts wondered how far the
conservative Merkel would go in making painful reforms after she
stressed the need to "maintain a balance between those who create
jobs and workers." During her first campaign, Merkel had called for
major changes to Germany's economic system. It provides generous
social benefits and its heavy reliance on exports left it exposed
during the global economic downturn. "Over the last four years her
position has become quite blurred" while she governed with the
centre-left Social Democrats in a cumbersome "grand coalition,"
Goldman Sachs economist Dirk Schumacher told AFP. "Where does she
actually stand" now on the issue of restructuring the German social
economic model, he asked. The new government faces a mountain of
serious challenges, including rising unemployment and a huge public
deficit that stems from efforts to buffer Germans from the worst of
the international crisis. At the same time, Merkel's new coalition
partners, the business-friendly Free Democrats ( FDP), have gained in
strength and will push for multi-billion-euro (dollar) tax cuts and a
simpler tax code. "The new government must therefore manage a tricky
balancing act between fiscal consolidation and implementing new
strategies for supporting growth," UniCredit economist Alexander Koch
wrote. Business daily Handelsblatt said FDP leader Guido Westerwelle
"should demonstrate the courage of new thinking and demand a super
ministry of economy and finance -- and then lead it himself." But
Commerzbank chief economist Joerg Kraemer noted that "scepticism of
the Germans against capitalism has risen significantly," despite the
FDP's strong showing. "This makes a general shift in economic policy
quite unlikely," he said. The country's crumbling demographic base
could eventually force Germans to retire later, and education reform
is needed to help disadvantaged youths gain full access to the jobs
market. "Otherwise you'll have a growing percentage of the population
who are just dependent on government transfers and who won't be able
to get a job," Schumacher warned. The jobless rate has been largely
held in check by state-subsidised shorter working hours but is still
expected to climb from its present level of 8.3 percent. "The silver
bullet would be a lower tax and social security burden in order to
avoid another round of stagnating real income," Koch wrote. But he
agreed that "the fiscal leeway in the next few years is slim," since
Germany expects to breach EU deficit rules until 2013 at the
earliest. Bank of America Merrill Lynch European economist Holger
Schmieding therefore anticipated "some tax cuts, spending restraint
and modest structural reforms to strengthen the incentives to work,
invest and create jobs." The Sueddeutsche Zeitung daily said Merkel's
inner drive for change was not lost however, and quoted her as saying
recently that " Germany is in a global competition and can take
nothing for granted." She warned Germans again Sunday: "We have a lot
of work ahead of us." Schumacher concluded that "if that's the
genuine Merkel, then we'll see some kind of more pronounced reforms"
in the next few years.

Asian infrastructure development stressed

The Federation of Bangladesh Chambers of Commerce and Industry
(FBCCI) at an international conference sought regional cooperation,
technical assistance and financial support for developing
infrastructure facilities in Asian regions. Abul Kashem Ahmed, first
vice president of FBCCI, presented a keynote paper on "Role of
private sector to promote diversification of production and growth:
The case of Bangladesh" at the conference in New Delhi recently. The
conference on "Quality of Growth: Approaches to Inclusive Growth in
Asian Societies" organised by GTZ German Technical Cooperation, was
attended by about 300 delegates from the Asian region. Scholars and
economists from UK, USA, World Bank, Asian Development Bank and GTZ
also took part in the conference assisted by Planning Commission of
India and the Economic Cooperation and Development of Germany. Ahmed
presentation focused on private sector's contribution in
diversification of agricultural products, and private sector's role
in diversifying manufacturing products. He apprised the conference of
a congenial investment environment in Bangladesh. Market survey and
research and development will be the key components for
diversification of products to meet the local demand and compete in
the global market, he said. Free trade agreement can be a useful
instrument for export diversification, he told the conference.

Currency

Local Market FX Local inter-bank FX market was actively trading
today. There was ample liquidity in the market and the USD/BDT rate
traded in similar range to the previous working day. Money Market
Money market was active on Tuesday. The market was liquid; and the
majority of deals traded around 5-6 %. Call money rates eased off
today, as the liquidity pressure has reduced after te end of the
holiday shopping period. International Market The dollar edged up
against the yen on Tuesday in a corrective move after steep gains the
previous day as Japan's finance minister backtracked over its
tolerance of a stronger yen. But the rebound was seen limited as
markets still saw room for the yen to rise.

Taiwan may ease controls on high-tech investment in China

Taiwan is close to easing curbs on local firms investing in high-tech
companies in China, the island's economics minister said Tuesday, in
a sign of improving ties despite recent spats with the mainland. The
long-standing controls on investment in China are now under
government review and could be relaxed before the end of 2009 , Shih
Yen-hsiang told parliament. "The discussions will not take a long
time. We expect there will be a conclusion before year's end," he
said in response to a question from a lawmaker. The lifting of
restrictions referred to by Shih would apply to high-tech industries
in particular, said Huang Hsien-lin, an economics ministry official.
The Commercial Times earlier Tuesday also reported plans by the
ministry to allow Chinese investors to buy stakes in Taiwanese flat
panel and microchip makers. Calls for easing controls on high-tech
investment in the mainland have been mounting among local industry
players as they claim their competitors from South Korea and Japan
have been stepping up activity there.

Strike forces Air India to suspend ticket sales

Air India said on Tuesday that about half of its international
flights had been cancelled due to a strike by pilots and announced a
suspension of new bookings. Nine out of 21 international flights and
37 out of 177 domestic flights were scrapped, spokesman Jitender
Bhargava said, after pilots in three major cities called in sick for
the fourth day after talks to end the dispute broke down. "We have
stopped taking bookings temporarily till mid-October," Bhargava told
AFP. "This is to make sure inconvenience to passengers is avoided
and we have surety of flights operating." Overnight talks between the
company and the non-unionised senior pilots, who are protesting a
slash in performance-based incentive pay, failed to make headway with
about 180 pilots reporting sick on Tuesday, Bhargava said. An
earlier statement by Air India said the pilots' refusal to accept
bonus cuts was "unacceptable" and that "all options are being kept
open." But chairman and managing director Arvind Jadhav told
reporters there was no chance of a lockout and urged pilots who had
called in sick to "come back quickly and restore normalcy for the
benefit of the passengers."

Britain on course to exit deep recession

The deep recession in Britain is easing, official data showed on
Tuesday, boosting hopes that the nation will soon join other major
economies in returning to growth before the end of 2009. British
output contracted 0.6 percent in the second quarter compared with
activity in the first three months of 2009 , better than the
previous estimate of minus 0.7 percent, the Office for National
Statistics (ONS) said. Gross domestic product shrank 5.5 percent
between April and June compared with GDP in the second quarter of
2008. The 12- month figure, unchanged from the previous estimate made
in August, marked the biggest drop since records began in 1955.
"Today's data offers further indications that we are likely to see
growth in the third quarter" and an end to Britain's deep recession,
said Charles Davis, an economist at independent consultants, the
centre for economics and business research (cebr). IHS Global Insight
analyst Howard Archer commented: "Matters have moved on appreciably
since the second quarter with the key question being has the economy
returned to growth in the third quarter? "We suspect that it has, and
are looking for expansion of around 0.3 percent quarter-on-
quarter."

Oil dips

Oil prices fell slightly on Tuesday amid tensions between key crude
exporter Iran and the West over the Islamic republic's atomic
programme. New York's main contract, light sweet crude for delivery
in November, slipped 14 cents to 66.70 dollars a barrel. London's
Brent North Sea crude for November lost 13 cents to 65.41 dollars a
barrel.

Russia cuts key interest rate

Russia's central bank will cut its main refinancing rate by half a
point to 10.0 percent, it said in a statement Tuesday, in its latest
bid to stimulate the country's economy. The bank's directors "decided
to lower the Central Bank's refinancing rate by 0.5 points to 10.0
percent, starting on September 30 ," it said. The decision was
motivated by "the need for additional stimulation of economic
activity," it added.

Finnish recession to deepen to 7.2 pc in 2009

Finland's economy will contract by 7.2 percent in 2009 and will
experience zero growth in 2010 , the central bank said in a forecast
published on Tuesday. The Nordic country has experienced the worst
recession in the eurozone, shrinking by a record 9.4 percent in the
second quarter on a 12- month comparison, according to official
statistics. But the central bank said it expected Finland's economy
to recover in 2011 , returning to growth of 1.6 percent. In its
previous forecast in March, the central bank foresaw a recession of
5.0 percent this year and 1.1 percent in 2010 , before recovering
with growth of 1.5 percent in 2011. Finland's export-heavy economy
has been floored by a plunge in demand for its products. The
country's domestic market is limited. Exports represented nearly half
of gross domestic product last year but only 35 percent in the
second quarter of this year.

BANGLADESHI govt favours power tariff hike

Prime Minister's Adviser for Energy Towfique-e- Elahi Chowdhury has
suggested that power tariff be hiked in order to ensure its efficient
use. " Such a hike is necessary to make it sure that power and
energy are used efficiently," he told a roundtable in Dhaka
yesterday. Energy and Power Magazine organised the roundtable on
Policy, Pricing and Subsidy for Sustainable Energy at the Cirdap
auditorium. State Minister for Power, Energy and Mineral Resources
Enamul Haque, his predecessor AKM Mosharraf Hossain and former
president of the Federation of Chambers of Commerce and Industry
Abdul Awal Mintoo took part in the discussion among others. The
keynote paper was presented by Professor Ijaz Hossain of the
Department of Chemical Engineering at Bangladesh University of
Engineering and Technology. Towfique-e-Elahi Chowdhury said the
government is planning to explore gas both in offshore and onshore
areas to meet the growing demand of power and energy. He, however,
stressed efficient usage of power by consumers so that everybody can
be brought under the coverage of electricity. Chowdhury said the
government will prioritise the supply of power to rural areas. In
his speech Enamul Haque said although the government wants to raise
power and gas prices, it did not fix the methodologies yet in this
connection. Pointing to some bad impacts of power tariff hike, Haque
admitted that a large section of people in rural areas are still out
of power coverage. "But, the government wants ensure quality service
to consumers through raising power and energy tariff," he said. The
former state minister for power also advocated such tariff hike. He
said since the state-owned company is not well-equipped to explore
gas right this moment, foreign companies should continue the job of
exploration. He said coal exploration is very essential now to improve
the power situation. "The government should also increase the CNG
price as the price of such energy is too low in comparison with
petroleum products," Mosharrf Hossain said. Mukhlesur Rahman, acting
chairman of Bangladesh Energy Regulatory Commission ( BERC), said
subsidising is not a good solution to the power situation. Abdul Awal
Mintoo said if the government wants 1 percent more economic growth it
needs 2.50 percent growth in electricity production. He said the
government should not increase power and energy tariff unjustifiably.
Editor of the Energy and Power Magazine Mollah Amzad Hossain
moderated the roundtable.

Slack sales for mobile operators in August in BANGLADESH

Mobile phone operators added a mere 0.94 million customers to their
networks in August 2009 , as customers were awaiting new offers by
the operators in September. However, industry insiders said sales rose
significantly in September as a majority number of operators came
forward with new offers during mid Ramadan. According to Bangladesh
Telecommunication and Regulatory Commission (BTRC) statistics
released yesterday, the six mobile operators provided mobile phone
services to 48.91 million subscribers till August 2009. The total
number of mobile phone subscribers was 47.97 million in July. The
top mobile operator, Grameenphone, lost 0. 02 million customers in
August. The company's sales dropped, as it did not lower connection
charges, while some other operators cut connection rates from Tk 800
to below Tk 300. BTRC statistics show that the total number of
customers for Grameenphone dropped to 21.13 million in August from
21.15 million in July 2009. The number of subscribers for the
market's second largest operator, Banglalink, reached 11. 9 million
in August, up from 11.27 million in July. AKTEL crossed the 10
million subscriber mark in August, rising from 9.90 million in July.
Warid totalled 2.63 million customers, Citycell recorded 1.97
million and TeleTalk recorded 1.08 million in August 2009. Despite a
32 percent penetration rate for Bangladesh, there are debates over
how many people actually use the mobile phone. Zakiul Islam,
president of Association of Mobile Telecom Operators in Bangladesh,
said the telecom regulator should come forward with a unified
subscriber reporting format so that the actual number of users can be
seen.

Two BANGLADESHI bank raise authorised capital

State-owned Janata Bank and Investment Corporation of Bangladesh
(ICB) have increased their authorised capital. Authorised capital of
Janata Bank has been raised to Tk 2 ,000 crore from Tk 800 crore,
while ICB increased the amount to Tk 500 crore from Tk 100 crore.
Authorised capital is the maximum amount of share capital that a
company is authorised to issue to shareholders. Part of the
authorised capital can (and frequently does) remain unissued. The
rise in the bank's authorised capital was approved at an
extra-ordinary general meeting (EGM) in Dhaka yesterday, said a
statement. The EGM also approved rising the bank's paid-up capital to
Tk 125 crore through issuance of rights shares at Tk 100 each in
favour of the government. As per the annual report of the bank, it
made operating profit of Tk 700 crore and net profit of Tk 319
crore in 2008. Meanwhile, the finance ministry has approved the
enhancement of the ICB authorised capital, which came into effect
last Sunday. "With the increase in the authorised capital, the
corporation can expand its business activities, as it can raise
working capital up to Tk 500 crore through issuing rights shares,"
said a senior official of the ICB. The existing working or paid-up
capital of the ICB is Tk 50 crore. The official said the increase
was also needed for issuing rights shares, as a proposal for issuing
one rights share against one existing share is awaiting the finance
ministry's approval. The ICB has proposed offering each rights share
at Tk 100 , in addition of Tk 900 as premium. The increase also
creates opportunity for giving bonus shares as dividend, the official
added.

BANGLADESHI shipbuilders flourish on small vessel orders

Local shipbuilders are banking on the ongoing recession to carve
itself a position in the global market, as the demand for smaller
vessels has increased, shipbuilders and analysts said yesterday.
"Orders for small ships have gone up because of the global financial
crisis," said Sakhawat Hossain, managing director of Western Marine
Shipyard Ltd, an export-oriented shipbuilder. "Giant shipbuilders
cannot capitalise on this new market demand, as their projects will
prove to be unfeasible because of the high overhead costs they
bear," he said. He was speaking at the 'BFTI National Shipbuilding
Conference', organised by Bangladesh Foreign Trade Institute (BFTI)
at Sonargaon Hotel, where analysts and shipbuilders focused on
Bangladesh's potential to secure a position in the global
shipbuilding market. Shipping Minister Shajahan Khan, Head of
European Commission Delegation to Bangladesh Stefan Frowein and
Danish Ambassador Einar Hebogaard Jensen were present, while BFTI
Chief Executive Officer Prof MA Taslim chaired the event. Khan said
the government will facilitate the shipbuilding industry to allow it
to excel. Analysts observed that Bangladesh has the scope to emerge as
an export based shipbuilding nation within a decade because of
advantages like cheap labour, a presence of nearly 1 ,00 ,000
skilled and semiskilled workers and industry related educational and
training institutes. A long history of maritime activity and a
favourable geographical location also placed the country at a
favourable position, with about 200 shipyards and workshops to cater
to the domestic needs for water vessels. However, Bangladesh's
opportunity to emerge as a shipbuilding nation under global standards
was created in the last couple of years, as other traditional
shipbuilding nations showed little interests in making small ships.
Two leading local shipbuilders -- Ananda Shipyard and Slipways Ltd
and Western Marine Shipyard Ltd -- have bagged orders to make over
40 small vessels worth about $0.6 billion mainly from European
buyers. Including these two shipbuilders, according to analysts,
about 10 local shipyards are capable of making ships up to 10 ,000
DWT as per international standards. But capacity upgrades and
expansion are needed for a majority of them to compete in the global
arena with shipbuilders in other countries, such as Vietnam,
Indonesia and India. "By 2012, the world will need more than 10,000
vessels, mostly small to medium sized," said the Western Marine MD.
His remarks came at a time when some local shipyard operators took a
go-slow approach in expanding yard capacity to make ships of
international standards, as recession drastically cut demand for new
shipbuilding orders in 2009. "But this is of little relevance to the
Bangladeshi shipbuilding industry, as the market for certain sections
of small-ships and vessels of various types is unaffected by
recession," said Dr Abdullahel Bari, chairman of Ananda Shipyard,
which pioneered in winning orders to build ships for export. Prof
Khabirul Haque Chowdhury, head of the Depart-ment of Naval
Architecture and Marine Engineering of Bangla-desh University of
Engineering and Technology (BUET), said recession has caused a drop
in demand for large vessels. "Shipbuilding recession will have to
end. Orders will be activated, may be of different sizes," he said,
suggesting yards go for expansion and upgrades to win export orders.
Citing examples from South Korea, he said in the past recession, the
country expanded its capacity instead of reducing business scales. "
They succeeded," he said.

Shining gold saddens traders-Sayeda Akter

Gold prices increased for the seventh time in September since January
this year, sending a chill pang to local jewellers amid declining
local demand in the past few years due mainly to its price spiral.
The latest price hike came as the precious metal crossed a $1 ,000
mark in London bullion market recently. However the price is now
hovering around $990 per ounce in the international market. Now the
price of 22- carat gold stands at Tk 29 , 335 a bhori (11.66 grams)
in the local market, a rise from Tk 25 ,194 in January. At the same
time, 21- carat gold is selling at Tk 27 ,994 a bhori, rising from
Tk 23 ,000 , and 18- carat at Tk 24 ,786 from Tk 21 ,286 in January.
Gold jewellery sales dropped by more than 50 percent in the past
three years. The local consumption has declined to 10-12 tonnes a
year now from 45-50 tonnes five years back, and so the annual
turnover of the jewellers has also marked a fall. Presently, the
annual market size of gold jewellery is around Tk 3 ,000 crore, said
the industry people. Small gold jewellery makers and traders now
increasingly opt for producing silver jewellery, as demand for
alternatives, including silver and gold-plated jewellery, is growing
fast, said industry people. They said price hike in the international
market has impacted the local market. Industry insiders said as the
dollar has lost its previous strong foothold, the demand for gold,
now considered as a safe haven, is gradually increasing, and so is
its price. Anwar Hossain, president of Bangladesh Jewellery
Manufacturers and Exporters Association, said local makers are forced
to increase the prices of gold jewellery due to the growing price in
the international markets. "When gold price marks a rise in the global
market, all the member countries of World Gold Council have to
adjust the price, as we all have to buy gold from international
markets," Hossain said. "Apart from used gold, the main source of the
metal for locally made jewellery is the migrant workers, who are
allowed to bring 200 grams of gold each time they come to
Bangladesh." Migrant workers, mainly from the Middle East, and
travellers buy gold at international prices and sell for more in the
local market, which is another reason for the price hike, Hossain
said. "Also, we have to raise the price to safeguard the local
industry. If we do not increase the price of local gold, it may be
smuggled to neighboring countries, where the price is higher, "
explained the association chief. "Foreign traders will purchase gold
at lower prices from us and sell at higher rates in their own
countries," he said. However, Hossain said the price of gold
jewellery in Bangladesh is lower so far than that in the neighboring
countries. He said around 20 percent small manufacturers and traders
of the association have quit business and taken to making silver
jewellery. Simultaneously, consumers' purchasing capacity and the
number of buyers have been constantly declining because of increasing
prices. "The price of gold jewellery has risen beyond the reach of
the common people. Except for weddings, people, especially the middle
class, do not buy gold jewellery," said Setara Gujnavi, who recently
came to purchase jewellery at Baitul Mukarram market for her
daughter's wedding. "We are cautious about choosing jewellery
because we have to strike a balance between the amount of gold and
design," she said. "Other than weddings, we cannot even think of
buying gold jewellery as a gift item."