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Sovereign wealth funds are cushioning oil- dependent Gulf economies
against the financial crisis, but observers warn that some
governments have raided them for current spending and many
investments have shrunk in value. The four main funds are Abu Dhabi
Investment Authority (ADIA), Kuwait Investment Authority (KIA), Qatar
Investment Authority (QIA) and the Saudi foreign assets managed by
the Saudi Arabian Monetary Agency (SAMA). "They put the Gulf
countries in a comfortable position to deal with the (global economic)
crisis," said economist Eckart Woertz, from the Dubai-based Gulf
Research Centre. According to UN figures released last month, the
four funds' aggregate value fell only slightly during last year's
financial meltdown as new cash injections offset most of the fall in
the capital value of investments. The UN's World Investment Report
2009 said the funds' estimated combined value eased slightly to
1.115 trillion dollars at the end of last year from 1.165 trillion
a year earlier. Capital losses last year reached 350 billion dollars
or more than 35 percent of total value, according to UN calculations,
but the report said government injections of 300 billion dollars
largely counteracted the fall. In any case, the impact of the capital
losses on the economies concerned appears to be minimal. "These are
long term funds that stay offshore on international markets. Mostly
they do not have an immediate asset liability in the short term and
are rather meant to be spent many years from now when oil revenues
will decline," said Woertz. The Gulf SWFs have never officially
disclosed the size of their assets nor losses and the funds' exact
value remains unclear, especially that of ADIA, which some reports put
at near 800 billion dollars before the crisis. "The size of ADIA was
overstated, sometimes by as much as 100 percent," said a paper
published by the US-based Council on Foreign Relations (CFR) in
January 2009 , valuing ADIA at 453 billion dollars as of December
2007. ADIA's fortune is reckoned to have shrunk to 328 billion
dollars by December 2008 , according to the UN report. Kuwait's fund
meanwhile is estimated to have dropped from 262 billion to 228
billion dollars in 2008 , while Qatar's fund slumped from 65
billion to 58 billion dollars, the UN said. These funds' heavy
losses were largely offset by substantial inflows, however. Analysts
said the funds' exposure to the fall in global equities was the main
factor in the losses. "Many of the same factors that worked in its
(ADIA's) favour from 2004 to 2007 -- a high allocation to equities,
emerging market, and private equity -- worked against it in 2008 ,"
said the CFR paper. SAMA stood out as it reaped the benefits of its
conservative investment policy, which led to it concentrate its
foreign assets in fixed income instruments such as US bonds. SAMA's
foreign assets are estimated to have increased from 385 billion
dollars at the end of 2007 to 501 billion dollars in December 2008
, according to UN estimates. Saudi finance ministry figures,
meanwhile, show the kingdom's net foreign assets peaking at 443.2
billion dollars in November 2008. "The three main funds, apart from
SAMA... which have inflated their coffers during the oil boom, have
taken huge risks. The share of equities in these funds became higher
than bonds," said Kuwaiti economist Jassem al- Saadoon. He scolded
some of these funds for " politically-motivated" moves to invest in
struggling Western financial institutions in the midst of the crisis.
"The countries owning these funds made a mistake in wanting to prove
to the world that they were responsible states... But they have not
taken the right decisions," he said. "I believe that this has
deepened their losses even after the recovery in global stock
markets," Saadoon added, citing investments in Merrill Lynch by KIA,
and in Citigroup by ADIA and KIA. Woertz highlighted another negative
factor for the funds. "The financial crisis and lower oil prices
have necessitated withdrawals... for funding government investment in
infrastructure," the economist said. Saudi Arabia in particular
appears to be tapping into its foreign assets to cover its budget
deficit, according to a report by Saudi financial firm Jadwa
Investment. Saadoon criticised governments' use of Gulf SWFs for
current expenditure instead of treating them as savings for the
future. "These are, metaphorically speaking, retirement funds for the
nations," he said. He lamented what he called a lack of a "strong
commitment to keep them as funds for the future." However, whether or
not the funds' investments recover in line with global stock
markets, the recovery in oil prices should reduce governments' need
to dip into the funds to finance spending. "Above 50 dollars oil
(per barrel), most of the GCC (Gulf Cooperation Council) budgets will
be balanced in 2009 ," Woertz said.
Yeafesh seeks German investment in IT sector
Yeafesh Osman yesterday called upon the German entrepreneurs to
invest in information technology (IT) sector in Bangladesh. He sought
the investment when German Ambassador Holger Michael called on him at
his secretariat office, said an official release. During the meeting,
they expressed satisfaction over the existing bilateral relations
between Bangladesh and Germany and hoped that the relations would
further strengthen in future. The state minister apprised the German
envoy of various steps taken by the government to implement the
government's plan for developing a digital Bangladesh. The envoy gave
assured the minister of German investments in the information
technology sector. Joint Secretary of Science and Information
Comm-unication Technology Ministry MM Niazuddin was present during
the meeting, among others.
Dollar falls on doubts about role in world trade
The dollar fell in Asia Tuesday, hit by the prospect US interest
rates will stay low for some time and a media report that Gulf
states are planning to stop using the greenback for oil transactions.
The dollar dropped to 88.86 yen in Tokyo afternoon trade, down from
89.51 yen in New York late Monday. The euro rose to 1.4743 dollars
from 1.4648 while edging down to 131. 02 yen from 131.12.
Britain's Independent newspaper reported on its website Tuesday that
Gulf countries have held secret meetings with officials outside the
region to discuss dropping the dollar for oil trade. The countries
would instead use a basket of currencies, including the yen, the
paper said, citing Gulf Arab and Chinese banking sources in Hong
Kong. The report increased recent negative sentiment toward the
dollar, dealers said. "The timing made it easier to sell the dollar on
the news," Yuzo Sakai, manager at brokerage Tokyo Forex & Ueda
Harlow, told Dow Jones Newswires. "There has been similar talk before
but this comes as concern over the dollar's place in the world is
increasing," Sakai said.
rates will stay low for some time and a media report that Gulf
states are planning to stop using the greenback for oil transactions.
The dollar dropped to 88.86 yen in Tokyo afternoon trade, down from
89.51 yen in New York late Monday. The euro rose to 1.4743 dollars
from 1.4648 while edging down to 131. 02 yen from 131.12.
Britain's Independent newspaper reported on its website Tuesday that
Gulf countries have held secret meetings with officials outside the
region to discuss dropping the dollar for oil trade. The countries
would instead use a basket of currencies, including the yen, the
paper said, citing Gulf Arab and Chinese banking sources in Hong
Kong. The report increased recent negative sentiment toward the
dollar, dealers said. "The timing made it easier to sell the dollar on
the news," Yuzo Sakai, manager at brokerage Tokyo Forex & Ueda
Harlow, told Dow Jones Newswires. "There has been similar talk before
but this comes as concern over the dollar's place in the world is
increasing," Sakai said.
Financial crisis IMF, WB map road to recovery
from the global economic crisis at the annual meetings of the IMF
and World Bank here on Tuesday, with a plea to include the poor. With
emerging markets playing a leading role in the return to growth,
finance ministers and central bank governors from 186 hammered out a
strategy for sustainable growth and reform of the global financial
system at the heart of the crisis. International Monetary Fund chief
Dominique Strauss-Kahn called for global economic cooperation that
would build on efforts by the Group of 20 ( which have averted the
collapse of the world economy. "We seem to have pulled back from the
brink, and even if as we all know it is much too early to declare
victory, we have at least stepped onto the road of recovery," the IMF
managing director said. Strauss Kahn said that cooperation must
extend beyond the G20 emerging countries to the forum of the IMF,
urging the 186 opportunity to shape the post-crisis world." The
membership includes "low-income countries, home to billions who still
live in poverty, who remain economically marginalised. Their voices
too must be heard," he said. The finance chiefs were also to tackle
reform of the voting power in the two institutions to better reflect
the growing weight of the emerging market and developing countries in
the global economy. The delegates are to consider a shift of power
of at least 5.0 represented countries to under-represented countries
in the IMF, and a similar transfer of at least 3.0 "This will
enhance our legitimacy," Strauss- Kahn said. World Bank president
Robert Zoellick urged members to go beyond the reform already
supported to give developing countries at least 47 institution, and
raise it to 50 "The international system needs a World Bank Group
that represents the international economic realities of the 21
recognizes the role and responsibility of growing stakeholders, and
provides a larger voice for Africa." The IMF has given out tens of
billions of dollars (euros) of credit in recent months to prop up
faltering economies around the world and the World Bank has stepped
up its lending for 2009 Many are now looking to the Washington- based
sibling institutions to help bolster a tentative recovery and
mitigate the painful social effects of the crisis, including rising
unemployment and poverty. Some 13 meetings of finance ministers,
central bankers and academics from the member states. A major
protest against the institutions was also expected to be held on
Tuesday and extra police and security guards have been deployed
around Istanbul, Turkey's biggest city and commercial capital.
Conferences leading up to the meetings began last Thursday with a
Turkish journalist throwing a shoe at Strauss-Kahn in protest
against IMF policies. Reflecting economic fears, finance chiefs have
sounded a cautious note. "There are many risks out there. These
include growing unemployment lines, rising protectionism and
still-large output gaps," Zoellick said on the eve of the talks. "The
global economy could still suffer a setback, not least in 2010 plan
to withdraw much of their economic stimulus and debt rollovers could
be combined with a rise in interest rates," he said. Strauss-Kahn
said: "There is no way to say the crisis is over when we still have
this big rise in unemployment in front of us."
Tokyo assures Dhaka of setting up silos
Bangladesh of assisting in setting up a new silo and a warehouse
with a capacity of over one lakh tonnes of food grains in the
northern part in the country. The assurance came when the newly
appointed Japanese ambassador to Bangladesh, Shino Tsuka, paid a
courtesy call on Food and Disaster Manag-ement Minister Dr Abdur
Razzaque at his secretariat office here. Razzaque described Japan as
one of the largest development partners of Bangladesh and said the
country has long been supporting Bangladesh in various sectors
including the recent issue of climate change. There is enough
production of food grains in the country every year, but the staple
food cannot be stocked due to dearth of adequate warehouses.
"Bangladesh has become one of the victims of consecutive disasters
due to climate change," the minister said, mentioning the
government's disaster management programme to reduce post-disaster
loss. The Japanese envoy replied that Japan also faces same problems
like Bangladesh. Food Secretary M Moklesur Rahman was present during
the meeting.
Gold price hits record high on 'plan' to ditch dollar
The price of gold struck an all-time high at 1 , 038.65 dollars an
ounce here on Tuesday as the dollar fell on a reported plan by Gulf
states to stop using the greenback for oil trading. Gold reached the
level in late afternoon trade on the London Bullion Market, beating
the previous record high of 1 , 032.70 dollars an ounce struck in
March, 2008. "Gold prices hit an all-time high as the dollar
weakens," said Barclays Capital precious metals analyst Suki Cooper.
"The dollar weakness appears to be related to ... (reported) secret
talks about oil being priced in a basket of currencies including gold
rather than the dollar, which has added to concerns about the future
role of the dollar in international financial markets." The dollar's
future as the world's top currency was thrown into doubt on Tuesday as
a report said Arab states had launched secret moves with China and
Russia to stop using the greenback for oil trading. Arab states have
launched steps with China, Russia, Japan and France to stop using the
dollar for oil trades, British daily The Independent reported on
Tuesday, but the report was denied by Kuwait and Qatar and
reportedly by other nations. The United Nations meanwhile on Tuesday
called for a new global reserve currency to end dollar supremacy,
which has allowed the United States the "privilege" of building a
huge trade deficit. The Independent's Middle East correspondent
Robert Fisk wrote in his paper: "In the most profound financial
change in recent Middle East history, Gulf Arabs are planning --
along with China, Russia, Japan and France -- to end dollar dealings
for oil." They would instead switch "to a basket of currencies
including the Japanese yen and Chinese yuan, the euro, gold and a
new, unified currency planned for nations in the Gulf Co-operation
Council (GCC), including Saudi Arabia, Abu Dhabi, Kuwait and Qatar,"
added Fisk. Gold, viewed as a safe-haven investment, has won back
favour in recent months as the global economy struggles out of its
worst slump in decades. The run-up in gold has been largely driven by
weakness in the dollar, which makes dollar- priced commodities
cheaper for holders of stronger currencies, boosting demand.
ounce here on Tuesday as the dollar fell on a reported plan by Gulf
states to stop using the greenback for oil trading. Gold reached the
level in late afternoon trade on the London Bullion Market, beating
the previous record high of 1 , 032.70 dollars an ounce struck in
March, 2008. "Gold prices hit an all-time high as the dollar
weakens," said Barclays Capital precious metals analyst Suki Cooper.
"The dollar weakness appears to be related to ... (reported) secret
talks about oil being priced in a basket of currencies including gold
rather than the dollar, which has added to concerns about the future
role of the dollar in international financial markets." The dollar's
future as the world's top currency was thrown into doubt on Tuesday as
a report said Arab states had launched secret moves with China and
Russia to stop using the greenback for oil trading. Arab states have
launched steps with China, Russia, Japan and France to stop using the
dollar for oil trades, British daily The Independent reported on
Tuesday, but the report was denied by Kuwait and Qatar and
reportedly by other nations. The United Nations meanwhile on Tuesday
called for a new global reserve currency to end dollar supremacy,
which has allowed the United States the "privilege" of building a
huge trade deficit. The Independent's Middle East correspondent
Robert Fisk wrote in his paper: "In the most profound financial
change in recent Middle East history, Gulf Arabs are planning --
along with China, Russia, Japan and France -- to end dollar dealings
for oil." They would instead switch "to a basket of currencies
including the Japanese yen and Chinese yuan, the euro, gold and a
new, unified currency planned for nations in the Gulf Co-operation
Council (GCC), including Saudi Arabia, Abu Dhabi, Kuwait and Qatar,"
added Fisk. Gold, viewed as a safe-haven investment, has won back
favour in recent months as the global economy struggles out of its
worst slump in decades. The run-up in gold has been largely driven by
weakness in the dollar, which makes dollar- priced commodities
cheaper for holders of stronger currencies, boosting demand.
Zem Jute Mills closed for indefinite period
was closed for indefinite period following labour unrest yesterday.
This is the largest jute mill in the northern part of the country.
The mill authorities said they were forced to close the mill as all
workers went for strike in the morning without prior announcement.
About 2600 workers stopped work and went out of the mill demanding
action against four officials for their repressive activities. The
workers Saturday lodged a written allegation against four officials
with the deputy commissioner accusing them of repressing female
workers and officials and employees and disregarding salary
structure. In 2003 , the mill started its operation with two units
comprising 296 looms. It fetches Tk70-80 crore from exports of jute
bags and yarns per year.
German business team due next month
November to explore business and investment opportunities. The
delegation will have meetings with different trade bodies, high
government officials and private sector entrepreneurs during their
stay here. German businessmen disclosed the schedule at a meeting
between Frankfurt Chamber of Commerce and Industry and Federation of
Bangladesh Chambers of Commerce and Industry (FBCCI) in Frankfurt
recently. At the meeting with Frankfurt chamber, FBCCI leaders
invited potential German entrepreneurs to invest in some sectors of
Bangladesh, which include power, IT industry, apparels and
pharmaceuticals, said a FBCCI press release. A 42- member FBCCI team,
led by its Director Kamaluddin Ahmed, is now visiting Germany on
their European business tour. The team will also visit France,
Switzerland and Italy. It will have business meetings with the trade
bodies of the three countries during their visit.
Belonia port to pay off in 2 years Say analysts
Bangladesh and India borders -- but they have to wait another two
years for full advantage. "At least one a half years are needed to
develop infrastructure facilities at Belonia land port in Feni," said
KAM Haroon, chairman of Bangladesh Land Port Authority (BLPA).
Acquisition of 15 acres of land for the port is yet to be made, he
said. On Sunday, Bangladesh formally upgraded Belonia LC (Land
Customs) Station to a full- fledged land port. This is the 14 th land
port, of which 13 are with India. The other side of Belonia is
Muhurighat in Tripura state of India. Earlier, only passengers could
use the station, now businesses, both export and import could be done
through it, the BLPA chief said. Ministers, diplomats and businessmen
from both the countries are however upbeat on a significant increase
in bilateral business through the newly opened port. Commerce
Minister of Tripura Jitendra Chaudhury, who attended the inaugural
ceremony, hoped the newly opened port would help boost bilateral trade
between Bangladesh and Tripura. Present trade between Bangladesh and
the Indian state is worth of Tk 90 crore, which may reach Tk 200
crore by year-end thanks to Belonia port, said Chaudhury. He said
Tripura needs construction materials, seafood, cosmetics, ceramics
and other consumer products from Bangladesh, while Tripura can
export coal, rubber, stones and other primary agro products. Shipping
Minister of Bangladesh Shahjahan Khan inaugurated the land port as
chief guest, while Indian High Commissioner in Dhaka Pinak Ranjan
Chakravarty and President of Tripura Chamber of Commerce and Industry
ML Debnath spoke as special guests. The Indian envoy said his office
would do its best to issue hassle-free business visas in the
quickest possible time. "There is a good demand for Bangladeshi
products in the whole north-eastern seven states because of the
rising costs and time to bring those from mainland India," Dr
Rahamatullah, a regional connectivity expert told The Daily Star
yesterday. With the opening of the Belonia port, Bangladeshi goods
could now easily reach the southern part of Tripura, he noted. "The
new land port will help us reach Tripura and other north-eastern
states easily," said Iftekhar Uddin Farhad, managing director of
FARR Ceramics that exports ceramic products to India. Abdul Matlub
Ahmed, president of India- Bangladesh Chamber of Commerce and
Industry (IBCCI), said the new land port will boost business for the
units in the Feni- Noakhali-Comilla industrial belt.
DSE says no to low-cap companies
paid-up capital below Tk 50 crore, an initiative meant to curb
price manipulation about low-cap companies. Besides, a company will
have to go for initial public offering (IPO) with minimum shares
equivalent to 25 percent of its paid-up capital to get approval for
listing on the bourse. Also, the DSE decided against any allocation
for private placement. The DSE authorities took the decisions
yesterday at a meeting, presided over by its President Rakibur
Rahman. "If a company's IPO size is small -- meaning a small number
of shares to trade -- it is easy to manipulate prices from the
beginning of the company's trading," Rahman told The Daily Star
after the meeting. Some investors pack the shares into their
portfolios, creating an artificial crisis in the market -- a practice
that distorts the prices, Rahman said. Earlier, it was seen that the
prices of low-cap companies soared on their debuts, although their
fundamentals did not back up the rise in prices. "If a company's
paid-up capital is larger and thus the IPO size, it will not be easy
to manipulate the share prices anymore," the DSE president said.
Rahman said an end to private placement would ensure more
participation of general investors in an IPO. A private placement,
practiced by new issuer companies currently, is a funding round of
securities that are sold without an IPO, usually to chosen private
investors. DSE's decisions however will have to be approved by the
market regulator, Securities and Exchange Commission.
Exports upbeat, a little
July, amid a growth target of 13 percent set for the current fiscal
year. The country earned $1.4 billion in August, posting a 0.71
percent growth compared to the same period last fiscal year,
according to provisional statistics of the government's Export
Promotion Bureau (EPB). Though the growth is trifling, government
officials termed it a sign of resilience of the country's export
sector against the backdrop of a 19.4 percent nosedive of Indian
exports in August. "It's significant that we could post a positive
growth in August though many countries have marked sharp decline in
export earnings," said an EPB official preferring not to be named. He
also expected that it would be possible to hit the current fiscal
year's export target since the global economy is now showing a sign
of recovery, which would create new demands in the international
market. The government has set a $17.59 billion export target for the
current fiscal year, with a 13 percent growth rate compared to the
previous year's income of $15.8 billion. However, the combined export
earnings for the months of July and August show a 3.37 percent fall
in earnings compared to the same period last year. During the
two-month period the export sector fetched $2.8 billion, while the
amount was $2.9 billon last year, according to EPB. In July the
country earned $1.44 billion, which was a 6.80 percent slip
compared to the same period last year when $1.54 billion rolled in
through overseas shipment. "Export earnings in July came as a big fall
because earnings had shown a whopping 71 percent growth in the same
month of previous fiscal year," said the EPB official. He said full
disbursement of the government stimulus package, which is under way,
would revamp the export sector.
DGEN hits all-time high
in history at 3 ,215. 79 points yesterday, as the market was on a
steady gaining streak for a third day. Operators said a gradual
increase in investors' confidence helped the market set the new
record. "As subscription of the largest-ever initial public offering,
Grameenphone IPO, is going on, the market is on the rise. It proves
that the strength of the market is increasing and confidence of the
existing and new investors is on an upward climb," DSE President
Rakibur Rahman said. He said it was predicted earlier that the
market would experience a downward trend during the Grameenphone IPO
subscription period. "But instead, the market is going up that
proves it is ready to absorb big issues like Grameenphone," said
Rahman, also the managing director of Midway Securities. The
government should now offload its stakes in different entities like
hotel, motel, telecom companies and airlines, he said. The government
should also raise funds for financing big power plants and
infrastructure projects. The benchmark DSE General Index (DGEN) went
up by 28.08 points, or 0.88 percent, yesterday. Earlier, the index
hit an all time high when it closed at 3 , 207.89 points on June 1
last year. The DSE introduced the general index on November 27 , 2001
with a base of 817.62 points. The index, which excludes 'Z'
category companies, is calculated on the basis of individual stock
price movement under 'A', 'B' , 'G' and 'N' categories. Previously,
there was only one index that included all securities of the stock
exchange. Starting with a base of 350 points, the index rose as
high as 3 , 648.75 points on November 5 , 1996 , when the market
witnessed a 'bubble and bust'. The broader DSE All Share Price Index
was reintroduced on March 28 , 2005 , and the DSE- 20 was introduced
on January 1 , 2001. The advancers beat losers 133 to 105 yesterday
with four securities remaining unchanged. A total of 4 ,90 ,38 ,259
shares and mutual fund units worth Tk 924.12 crore were traded on
the DSE. Jamuna Oil topped the list of turnover leaders with 11 ,43
,500 shares worth Tk 38.91 crore being traded on the premier
bourse. Reckitt Benckiser (BD) was the largest gainer of the day with
a 14.78 percent rise, while Alpha Tobacco was the biggest loser,
declining by 17.2 percent. Chittagong stocks also posted rise
yesterday. The CSE Selective Categories Index gained 36.49 points,
or 0.52 percent, to reach 6 , 935.74. The CSE All Share Price Index
increased by 77.09 points, or 0.7 percent, to reach 10 , 071.58. A
total of 74 ,33 ,540 shares and mutual fund units worth Tk 92.92
crore changed hands on the Chittagong Stock Exchange. Of the traded
securities, 94 advanced, 75 declined and one remained unchanged.
Geithner warns of 'possible hazards' facing economy
hazards" still facing the global economy in an interview published
in the Italian daily Il Sole 24 Ore on Tuesday. "There are many
possible hazards that lie ahead of us. The most dangerous? That
people feel too good too soon. Remember the problems that we had a
year ago," Geithner was quoted as saying. Europe has been quietly
pressing the United States to encourage a strengthening of the
greenback against the euro, and Geithner reiterated his position that
Washington "was in favour of a strong dollar." "This will give us
some direct responsibilities. We have to work hard to maintain
confidence, and the Federal Reserve must defend price stability," he
added. Geithner also forecast "changes" in major economies following
the global financial crisis.
Chinese recovery is not stable, says finance minister
keep a fiscal stimulus in place for now, Chinese Finance Minister
Xie Xuren said on Tuesday. "We are seeing more positive signs and an
upward trend in the Chinese economy. However, we are also soberly
aware that the economic rebound is yet to be stable, firm, and
balanced," Xuren said in a statement. "China will continue with the
proactive fiscal policy and moderately eased monetary policy, further
implement and improve the policy package, and ensure the achievement
of our social and economic development goals," he added. The
statement was presented at the annual meetings of the International
Monetary Fund and World Bank in Istanbul. The IMF last week lifted
its growth forecast for China's economy this year to 8.5 percent,
saying it was helping to drive Asia's recovery from the global
economic crisis. But the IMF also warned that rapid credit growth in
China risked creating asset bubbles and bad loans which could derail
the Chinese revival.
Since crisis, Australia first advanced economy to lift rates
interest rates since the global financial crisis and promised more
rises to come, boldly declaring the risk of recession over. The
central bank announced a rise of 25 basis points to 3.25 percent,
lifting rates off a 49- year low after an aggressive round of cuts
credited with helping fight off the worst global downturn since the
Great Depression. "That basis for such a low interest rate setting
has now passed, however," Reserve Bank of Australia (RBA) governor
Glenn Stevens said in a statement. "With growth likely to be close to
trend over the year ahead, inflation close to target and the risk of
serious economic contraction in Australia now having passed, the
Board's view is that it is now prudent to begin gradually lessening
the stimulus provided by monetary policy." Australia is the only
major Western nation to avoid a recession in the worldwide slump and
posted growth of 0.6 percent in the three months to June -- the best
in the developed world. The RBA had slashed the rate from 7.25
percent last September to 3.0 percent in April, the lowest since
1960 , while the government unveiled a massive 70 billion dollar
(61.4 billion US) stimulus to keep the economy turning.
Telenor, Russia's Altimo form new mobile operator
Monday the creation of a new mobile operator, ending a protracted
feud over control of a leading Russian mobile operator. Telenor and
Altimo, a unit of a conglomerate controlled by billionaire Mikhail
Fridman, will combine their common assets in Vimpelcom and Kyivstar
to create a new mobile operator, in a deal that means "resolution of
all outstanding disputes" between the two firms, the companies said.
"We have turned a five-year struggle into an exciting venture for the
future," Jon Fredrik Baksaas, president and chief executive of
Telenor Group, said in the statement. The merger puts an end to a
bitter corporate feud that had for a half a decade festered between
Telenor and Alfa Group over control of Vimpelcom, Russia's
second-biggest mobile operator. Altimo and Telenor have now agreed to
suspend all their ongoing legal proceedings and will move to withdraw
or settle them before the deal is completed by mid-2010 , the
companies said. Baksaas was one of a handful of executives who met
with Prime Minister Vladimir Putin over lunch last week, the same day
the powerful premier called on foreign investors to commit to
Russia.
Oil rises
World oil prices firmed on Tuesday as traders continued to evaluate
the pace of recovery in the US economy, the world's biggest energy
user, analysts said. New York's main contract, light sweet crude for
November delivery gained 87 cents to 71. 28 dollars a barrel. Brent
North Sea crude for November delivery rose 84 cents to 68.88
dollars a barrel.
the pace of recovery in the US economy, the world's biggest energy
user, analysts said. New York's main contract, light sweet crude for
November delivery gained 87 cents to 71. 28 dollars a barrel. Brent
North Sea crude for November delivery rose 84 cents to 68.88
dollars a barrel.
Asian stocks higher
Asian markets rebounded Tuesday after encouraging US data rallied
Wall Street and boosted recovery optimism following last week's
gloomy jobs figures in the world's biggest economy. Tokyo was up 0.18
percent and Hong Kong added 1.87 percent as New York's jump helped
soothe investor jitters. Shanghai was closed for a public holiday.
TOKYO: Up 0.18 percent. The Nikkei-225 added 17.31 points to 9 ,
691.80. HONG KONG: Up 1.87 percent. The Hang Seng Index finished
382.46 points higher at 20 ,811. 53. Blue-chip developers led gains
after the Hong Kong government said the city's property transactions
in September jumped 96 percent from a year earlier. SYDNEY: Up 0.40
percent. The SP/ASX200 gained 18.3 points to close at 4 ,591.6. The
market gave up most of its early advances after the RBA's rate rise.
SEOUL: Down 0.53 percent. The KOSPI lost 8. 46 points at 1 , 598.44.
Carmakers lost ground on concerns that the won's continued
appreciation may reduce their profit margin. Hyundai Motor fell 1.0
percent to 102 ,000 won and Kia Motors lost 0. 3 percent to 16 ,850
won. TAIPEI: Up 1.32 percent. The weighted index rose 98.07 points
to 7 , 536.05. SINGAPORE: Up 1.09 percent. The blue-chip Straits
Times Index rose 28.16 points to 2 ,611. 89. Singapore Airlines rose
12 cents to 13.24 , Singapore Telecommunications fell five cents to
3.12 and Keppel Corp was five cents firmer at 7.81. BANGKOK: Up 1.80
percent. The Stock Exchange of Thailand gained 12.92 points to
close at 731.39. KUALA LUMPUR: Down 0.31 percent. The Kuala Lumpur
Composite Index lost 3.72 points to 1 , 212.73. JAKARTA: Up 1.92
percent. The Jakarta Composite Index gained 47.73 points to 2 ,528.
14. MANILA: Up 2.30 percent. The composite index gained 64.98 points
to 2 , 884.46. WELLINGTON: Up 0.41 percent. The NZX-50 closed 12.83
points higher at 3 , 151.55. Contact Energy rose 10 cents to 5.90
and Fletcher Building added seven cents to 8.40 , although Telecom
dropped three cents to 2.58 dollars. MUMBAI: Up 0.55 percent. The
30- share Sensex rose 92.13 points to 16 , 958.54.
Wall Street and boosted recovery optimism following last week's
gloomy jobs figures in the world's biggest economy. Tokyo was up 0.18
percent and Hong Kong added 1.87 percent as New York's jump helped
soothe investor jitters. Shanghai was closed for a public holiday.
TOKYO: Up 0.18 percent. The Nikkei-225 added 17.31 points to 9 ,
691.80. HONG KONG: Up 1.87 percent. The Hang Seng Index finished
382.46 points higher at 20 ,811. 53. Blue-chip developers led gains
after the Hong Kong government said the city's property transactions
in September jumped 96 percent from a year earlier. SYDNEY: Up 0.40
percent. The SP/ASX200 gained 18.3 points to close at 4 ,591.6. The
market gave up most of its early advances after the RBA's rate rise.
SEOUL: Down 0.53 percent. The KOSPI lost 8. 46 points at 1 , 598.44.
Carmakers lost ground on concerns that the won's continued
appreciation may reduce their profit margin. Hyundai Motor fell 1.0
percent to 102 ,000 won and Kia Motors lost 0. 3 percent to 16 ,850
won. TAIPEI: Up 1.32 percent. The weighted index rose 98.07 points
to 7 , 536.05. SINGAPORE: Up 1.09 percent. The blue-chip Straits
Times Index rose 28.16 points to 2 ,611. 89. Singapore Airlines rose
12 cents to 13.24 , Singapore Telecommunications fell five cents to
3.12 and Keppel Corp was five cents firmer at 7.81. BANGKOK: Up 1.80
percent. The Stock Exchange of Thailand gained 12.92 points to
close at 731.39. KUALA LUMPUR: Down 0.31 percent. The Kuala Lumpur
Composite Index lost 3.72 points to 1 , 212.73. JAKARTA: Up 1.92
percent. The Jakarta Composite Index gained 47.73 points to 2 ,528.
14. MANILA: Up 2.30 percent. The composite index gained 64.98 points
to 2 , 884.46. WELLINGTON: Up 0.41 percent. The NZX-50 closed 12.83
points higher at 3 , 151.55. Contact Energy rose 10 cents to 5.90
and Fletcher Building added seven cents to 8.40 , although Telecom
dropped three cents to 2.58 dollars. MUMBAI: Up 0.55 percent. The
30- share Sensex rose 92.13 points to 16 , 958.54.
Emirates' special package offer
special package to Dubai on the occasion of Gitex 2009 , the largest
ICT exhibition of the region, says a press release. The exhibition
will kick off at Dubai International Conventional Exhibition Centre
from October 18 to 20. The package starts at $1035 per person,
which includes Economy class airfare (Dhaka- Dubai-Dhaka), landside
assistance on arrival in Dubai, private car return transfer, four
nights accommodation on a twin share basis, room tax and service
charges, added the release. "IT is a fast growing sector in
Bangladesh and Gitex is an ideal place for Bangladeshi companies to
promote their software," said Hanif Zakaria, area manager for
Bangladesh of Emirates. Emirates, also the official carrier of Gitex
2009 , operates 17 flights a week to the Middle East, Europe and
North Atlantic destinations.
Societe Generale to raise $4.8 b
billion euros (7.1 billion dollars) in capital to pay back state aid
it received to help it through the financial crisis. The French
government had provided Societe Generale with 3.4 billion euros,
part of nearly 20 billion euros loaned to French banks with
interest to keep lending from drying up after the September 2008
meltdown. The capital increase will also "enable Societe Generale to
seize potential external growth opportunities," the bank said in a
statement. Societe Generale also said it was entering into
negotiations with Franco-Belgian bank Dexia with the aim of
purchasing Dexia's 20 percent stake in Credit du Nord.
IMF loans could worsen crisis, says think tank
countries, an independent think tank said on Tuesday in a report
which the IMF dismissed as "seriously misleading." The Centre for
Economic and Policy Research (CEPR) said that the IMF was promoting
spending cuts that could exacerbate the economic downturn in 31 out
of the 41 countries with current IMF loan agreements. "More than a
decade after the Asian economic crisis brought world attention to
major IMF policy mistakes, the IMF is still making similar mistakes
in many countries," Mark Weisbrot, an economist at CEPR, said in a
statement. "The IMF supports fiscal stimulus and expansionary
policies in the rich countries, but has a much different attitude
toward low-and-middle income countries," he said.
Factories short of workers in Xmas run-up
the global crisis as they struggle to meet Christmas orders for
Barbie dolls, iPods and designer jeans, say analysts and observers.
The surge in demand has caused a labour shortage in some parts of the
country as factories ramp up production, but does not necessarily
mean that China's key export sector is on the mend, they said. "The
shortage is primarily due to a short-term misalignment of demand and
supply due to a sudden upswing in demand probably fuelled by the
arrival of Christmas orders," Ren Xianfang, a Beijing-based economist
at IHS Global Insight, told AFP. "The high-level labour intensity of
most of the export-oriented manufacturing industries means that
either the reduction or increase of new orders will cause quite big
swings in labour demand, which explains the sudden job losses and
just as sudden resurgence of demand." Nearly 20 million migrant
workers lost their jobs at the start of the year as factories closed
or slashed production in response to plummeting export orders from
key markets in Europe and the United States. While the government
says 96 percent of those people have found new jobs in the cities,
the still-weak export sector suggests many of them have gone into the
construction industry or stayed home where economic conditions are
improving thanks to massive government spending, analysts said. "The
country's interior provinces have benefited from fiscal stimulus
projects and stronger local economies," said Ben Simpfendorfer, a
Hong Kong-based economist at the Royal Bank of Scotland. "The logic
for travelling thousands of kilometres to a neighbouring province is
thus less compelling." In southern Guangdong province, China's
manufacturing hub, factories are facing a " serious" labour shortage
amid the flood of Christmas orders, said Xu Jiang, manager at the
Hui'an Human Resources Service Centre in Dongguan city. "Demand for
workers is rising but many migrant workers did not come back from
home (after being laid off)," Xu told AFP. "Some simply will not come
back here after finding a job at home." Many migrant workers were
choosing to stay home to take advantage of improved conditions
created by the government's four- trillion-yuan (585- billion-dollar)
stimulus package, unveiled last year, Xu said. The workforce shortage
has forced factories in Wenzhou, in eastern Zhejiang province, to
offer free meals, air-conditioned dormitories and extra holidays to
entice migrant staff, state media reported. Wang Ouxiang, deputy
secretary of the Employment Service Centre in Wenzhou, said there
were 150 ,000 job vacancies in the city. "Factories in the city are
thirsty for labourers," Wang said. Pressure on factory owners was
more intense than usual this year, Simpfendorfer said. Foreign
retailers had delayed placing Christmas orders until September due to
the uncertain economic outlook and were demanding shorter delivery
times so they could keep inventory levels low, he explained. "Orders
have been bunched into a single month -- they usually start coming in
as early as July," he said. "The labour shortages are not necessarily
a sign of a fast recovering export sector, and while export orders
have strengthened, they may yet relapse."
Sluggish fund for women entrepreneurs irks BANGLADESH bank
under the central bank refinance scheme has been disbursed since May
2007. The fiasco has surprised Bangladesh Bank ( BB) officials, who
had identified the low accessibility of bank credit as a major
problem for the women intending to start business, or its expansion.
"It is a matter of regret that the fund is not being used properly,"
said Nazrul Huda, BB's deputy governor. However, another BB official
contradicted it, pointing out a rise in fund disbursement this year
compared to such disbursement in previous two years. In May 2007 , a
Tk 15 crore BB refinance scheme was introduced, which was raised to
Tk 105 crore later. Under the scheme, banks and non-bank financial
institutions (NBFIs) are eligible to avail of the facility at 5
percent interest and lend to entrepreneurs at 10 percent interest.
As on September 30 , less than Tk 22 crore has been disbursed under
the scheme. Several women entrepreneurs say they have no clear idea
of such BB fund. They also spell out that they feel shaky about bank
loans. Selima Ahmed, president of Bangladesh Women Chamber of
Commerce, blamed banks' lax attitude and profit mongering and poor
capacity of women entrepreneurs for low disbursement of loan from the
fund. "Women entrepreneurs outside Dhaka need finance badly. But bank
officials there know little about the fund," claimed Selima, who has
a decade-long working experience in this arena. The banks concerned
should come forward to get their branches outside the capital well-
informed of the BB fund for women entrepreneurs, she added. "Banks
also prefer lending from their own scheme to utilising the BB fund,"
she said. Nahida Sharmin, a successful woman entrepreneur, said she
takes the least interest in bank borrowing. "Several banks offered me
Tk 10 lakh loan at 10 percent interest rate after I won a major SME
award earlier this year. But I refused to take the loan fearing that
I won't be able to repay the instalment," said Sharmin, owner of
SHAILPIK, a fashion and design house located in Dhanmondi. Now
Sharmin, a fine arts graduate, thinks of taking Tk 3 lakh bank loans
for business expansion. Work orders from a foreign country have
prompted her to go for bank loan, she said. Still, hidden costs and
charges a bank imposes during loan disbursement frighten her.
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