Wealthy Indians eye austerity image

Bureaucrats are flying economy class instead of business, and some
top politicians even take the train instead of travelling by plane.
This is an austerity drive, Indian style. To combat rising costs and
the financial slowdown, the country's ruling party has ordered its
members to cut costs. The drive started at the top with Sonia Gandhi,
the president of the governing Congress party, using a commercial
airliner to fly to a party rally in Mumbai. Foreign Minister SM
Krishna and his deputy Shashi Tharoor, who were living in five star
hotels, were asked to move into government guest houses. Spending cut
This drive to cut expenses has been launched to keep the ruling party
more in synch with the economic difficulties caused by the severe
drought in the country. India is suffering its worst drought since
1972 and that directly affects the agriculture sector, which is the
country's largest employer. Now this need to be seen as austere is
catching on among urban Indians. Take Chitrata Sarkar, 38 , a
lecturer from Delhi. This time of the year is normally when she
spends the most. The 10- day-long Durga Pooja is the biggest festival
of the year for her family. Usually that means the Sarkar family
buying innumerable gifts, not just for themselves, but for members
of the extended family, friends and neighbours as well. Admiring their
new possessions, Chitarata and her mother sit in their living room
surrounded by bags of new clothes, jewellery, bags, shoes and other
accessories. But this is less than half of what would normally be
bought, Chitrata says. "I normally buy a new saree for every day of
the festival," she says. "People look at you to see whether you are
wearing new clothes and new jewellery, there is so much peer
pressure, but this year has been different. "This year I tried to
curtail my purchases so I have got half the number." Subtle purchases
In an upmarket hotel in central Delhi, the government-run Metals and
Mineral Trading Corporation organises a sale of gold ornaments every
year. Different states of India bring their traditional designs of
necklaces, bracelets and any other form of gold that can be given as
gifts. Sales of gold jewellery are traditionally at their peak this
time a year. In recent years, people would crowd around the stalls,
hoping to get the best deals, but this time the sale has been less
popular. Traditionally, more than 95 % of gold bought in India is in
the form of jewellery. But at his year's sale, it seems many were
instead looking to buy gold in the form of coins and bars or
biscuits. Government worker Mukesh Tyagi, 55 , is one of them. He and
his wife have come to buy a $3 ,500 gold bar weighing 100 grams. "My
wife normally buys gold bangles or designer chains, but this year we
want something more subtle," he says as his wife picks up their
precious purchase, which is smaller than a bar of soap. "We don't
want to show our neighbours and friends that we are spending in times
of a financial slowdown around the world. "This is so tiny that we'll
just keep it in our safe as an investment. She'll just wear her old
jewellery for the festival this year." Hidden wealth But although many
families are buying less gold, there is plenty stashed away in many
homes. " The cost may actually be the same, but the look is
definitely more subtle " Bridal wear designer Ritu Kumar According
to one estimate, Indian family vaults have almost 15 ,000 tonnes of
gold locked away, a volume comparable to the stockpile held by the US
Federal Reserve. The fact that there are still plenty of people with
plenty of money out there is clear for anyone operating in India's
often lucrative wedding industry. Nobody seems willing to cut
spending related to marriages, according to chocolatier Geetanjali
Achhra who runs Cocoa World, a wedding chocolate specialist. "Indians
cannot hold back," she says. "During weddings they don't like to save
at all, they only spend, spend and spend." Echoing her sentiments is
Radha Talwar, who is organising her son's wedding. She says she plans
to spend extensively on cocktails and multiple parties, as well as on
flights and hotels for all her guests. "I want to give my guests the
best time of their lives," she says. "I won't hold back on anything.
I have saved and put aside money for this occasion so there is no
question of cutting back." Superficial restraint So wedding budgets
remain large, yet fashion has changed to reflect the nation's new
mood. Bridal wear designer Ritu Kumar says people have cut back on
bright colours and bling. "Most of my clients want simpler-looking
outfits over something which is bright and has a lot of shiny stones
in it," she says. "The cost may actually be the same, but the look is
definitely more subtle and not in-your-face expensive. "The community
in general is fairly conservative when it comes to weddings. Over the
last couple of years, the conspicuousness in society had pushed
bridal fashion to something flashy and over the top , but we are now
going back to classics." Back with the Sarkar family, the women from
the neighbourhood gather to make sweets. Rolling little balls of
coconut and cream in sugar, they are piling up sweets by the hundreds
for the whole community. Despite the rising commodity costs, the
sweets are one thing that have not been scaled down. This time many
seem to have switched from conspicuous consumption to conspicuous
cutbacks. Beyond the facade, it is increasingly clear that among the
wealthy, the restraint is skin deep.

UK interest rates remain on hold

The Bank of England's rate-setting committee has kept UK interest
rates on hold at 0.5 % for the seventh successive month, as widely
expected. The Bank also said it would continue with its programme of
pumping £175 bn into the economy, which it said would likely take
another month to complete. Interest rates remain on hold as data
continues to show that any UK economic recovery remains patchy.
Figures out later this month could show that the UK has exited
recession. 'No risks' The Bank added that it would keep the scale of
its programme of expanding the amount of money in the economy, a
policy known as quantitative easing (QE), "under review". " Where
there is uncertainty is about what happens next month, when the
committee has a new set of inflation report forecasts and the Bank
of England will have met the current QE target " Philip Shaw, UK
economist at Investec Back in August it announced that the funds in
the scheme would be raised to the current £175 bn level from £125 bn.
Analysts were in agreement that the key issue was now whether QE does
end next next month, or whether the Bank's Monetary Policy Committee
announces after its October meeting that it will be extended. "It is
as yet early days in gauging the effect of the QE programme so far,
but companies are still facing serious constraints in their financing,
so the Bank must take no risks in ending the programme prematurely,"
said CBI chief economic adviser Ian McCafferty. Philip Shaw, UK
economist at Investec, said the Bank's latest rates decision was
"highly predictable". "Where there is uncertainty is about what
happens next month, when the committee has a new set of inflation
report forecasts and the Bank of England will have met the current QE
target." Weak industrial output Many commentators have said that the
economy probably expanded during the July-to-September period, citing
rising house prices and a big rise in car sales - despite the later
being helped by the government's scrappage scheme. However, official
figures showed earlier this month that UK industrial output fell
unexpectedly in August, declining 2.5 % from July. This prompted the
National Institute of Economic and Social Research think tank to
predict that the UK economy failed to grow in the third quarter. The
official figures will be released by the Office for National
Statistics on 23 October. The economy contracted 0.6 % between April
and June, following a 2.4 % decline from January to March.

Kuwait agrees $2.7 bn power deal

US industrial conglomerate General Electric and South Korea's Hyundai
Heavy Industries have signed a $2.7 bn (£1.6 bn) power plant deal
with Kuwait. The partners plan to complete the 2 ,000 megawatt
plant, located in the northern town of Subbiya, by 2012 , although it
will start producing power in 2011. The plant will comprise six gas
turbines and six steam turbines. Kuwait has ambitious plans to boost
substantially its power supply in the coming years. "It is an
important step in our plans to boost power capacity to meet
continuing demand, which is projected to grow at about 8 % a year,"
said Kuwait's Minister of Electricity and Water Badr al-Shuraian.

Google hits back at book critics

Google co-founder Sergey Brin has hit out at critics of the company's
plans to create what could be the world's largest virtual library.
Writing in the New York Times, Mr Brin said he wanted to "dispel some
myths" surrounding the project. He said the plan would make millions
of "out-of- print" books available to the public online. Those against
the idea fear it would give Google a monopoly over access to the
world's information. "In reality, nothing in this agreement precludes
any other company or organisation from pursuing their own similar
effort," he wrote. "The agreement limits consumer choice in out-of-
print books about as much as it limits consumer choice in unicorns.
"Today, if you want to access a typical out-of- print book, you have
only one choice — fly to one of a handful of leading libraries in the
country and hope to find it in the stacks." 'No deal' Google Books -
formerly known as Google print - was first launched in 2004. It aims
to scan millions of the world's books and make them available - and
searchable - online. However, in 2005 the Authors Guild of America
and Association of American Publishers sued Google over "massive
copyright infringement". Google countered that its project represented
" fair use". " Many of us are objecting because we have been working
together for years on the mass scanning of out-of-print books... and
Google's 'settlement' could hurt our efforts " Brewster Khale,
Internet Archive The search giant settled the lawsuit in 2008. In
that deal, Google agreed to pay $125 m (£76 m) to create a Book
Rights Registry, where authors and publishers could register works
and receive compensation. Authors and publishers would get 70 % from
the sale of these books with Google keeping the remaining 30 %.
Google would also be given the right to digitise orphan works, titles
where the authors cannot be found. There are thought to be around
five million of these works. A decision on whether the deal could go
through was originally scheduled for early October. But, after an
outpouring of criticism - from governments, technology companies,
privacy advocates and consumer watchdogs - as well as formal
objections from the US Department of Justice, the presiding Judge
sent the deal back to the drawing board. "Many of us are objecting
because we have been working together for years on the mass scanning
of out-of-print books - and have worked to get books online for far
longer than Google - and Google's 'settlement' could hurt our
efforts," wrote Brewster Khale of the Internet Archive in a blog
post earlier this week. The Internet Archive has a competing project,
which aims to offer a free digital library. It scans around 1000
books a day. "A major part of our efforts have concentrated on
changing the law so everyone would benefit." On Wednesday, the judge
said the hearing on the reworked settlement would begin on 9
November. 'History lesson' Mr Brin addressed three major criticisms in
his column in the New York Times about the terms of the Book Rights
Registry, the quality of the scans Google would offer and concerns
about competition. Whilst he admitted in the short term Google would
effectively dominate the market, he said ultimately other projects
would benefit from the firm's work. "If Google Books is successful,
others will follow," he wrote. "They will have an easier path: this
agreement creates a books rights registry that will encourage rights
holders to come forward and will provide a convenient way for other
projects to obtain permissions. "While new projects will not
immediately have the same rights to orphan works, the agreement will
be a beacon of compromise in case of a similar lawsuit." He also
argued that the firm was safeguarding the world's cultural heritage.
"The famous library at Alexandria burned three times, in 48 BC, AD
273 and AD 640 , as did the Library of Congress, where a fire in
1851 destroyed two-thirds of the collection," he wrote. "I hope such
destruction never happens again, but history would suggest
otherwise."

World financial crisis 'not over'

The US economist widely credited with having predicted the financial
crisis has warned we are already "planting the seeds of the next
crisis". Nouriel Roubini told the BBC that he is concerned about the
growing gap between the "bubbly and frothy" stock markets and the
real economy. Over the last six months, the Dow Jones Industrial
Average has risen about 45 %. But Mr Roubini says he sees an economy
where consumers are "shopped out" and "debt burdened". 'Crisis not
over' Based on the run up in share prices in recent months, investors
appear to be betting that good times are around the corner. A view not
shared by Mr Roubini. "The crisis is not yet over," the New York
University professor said. " I think that there is a growing gap
between what is the asset prices and the real economy Nouriel
Roubini "I see an economy where the consumers are shopped out, debt
burdened, they have to cut back consumption and save more. "The
financial system is damaged... and for the corporate sector I don't
see a lot of capital spending because there is a glut of capacity."
Mr Roubini believes US house prices have further to fall, straining
America's fragile recovery. 'Frothy markets' Property prices have
already declined sharply. According to the National Association of
Realtors, the national median has dropped almost 13 % from a year ago
to $177 , 700 (£110 ,100). Many believe the crises in the residential
market could spread to the commercial real estate market causing more
headaches for the banks. So where does the "froth" in the markets come
from? Mr Roubini - like many other economists - believes it is
engineered by the Federal Reserve and the government which has been
pumping cash into the economy to dampen the pain of the recession.
"There is a wall of liquidity chasing assets," he said. "But I think
that there is a growing gap between what is the asset prices and the
real economy." Although he thinks there will be a correction, he
believes some of the mistakes of the past can be avoided if reforms
are implemented .

Citi management review questioned

The US Federal Deposit Insurance Corp is questioning the positive
conclusions given to Citigroup Inc's (C.N) management team in a
government-mandated review in the aftermath of the financial crisis,
the Wall Street Journal said, citing people familiar with the
situation. The report said some FDIC officials were questioning
the rigor of the report, based partly on interviews of Citi's
executives who rated the effectiveness of their colleagues. The
FDIC did not immediately reply to a Reuters email seeking comment
that was sent outside regular US business hours. While the
findings still are being reviewed, the skeptical reaction could cause
the FDIC to give the report little weight during the next regulatory
assessment of the New York firm's management. Management skill is
one of the factors used by regulators to determine financial-health
ratings of US banks. Such ratings help determine whether banks will
be kept on an unusually tight regulatory leash. The review had
positive conclusions about Citi's top management but was less
favorable about two key members of Chief Executive Vikram Pandit's
team—Vice Chairman Lewis Kaden and Chief Administrative Officer Don
Callahan, a person familiar with the matter told Reuters on
Wednesday. The FDIC required the bank to hire an outside firm to
perform its review and the board selected consultant Egon Zehnder
International. FDIC Chairman Sheila Bair has been a prominent
critic of Citigroup's business practices and governance. The
announcement last week that Bank of America Corp (BAC.N) Chief
Executive Ken Lewis was on the way out heightened speculation that
Pandit could suffer the same fate.

Obama defends new consumer agency

US President Barack Obama has launched a staunch defence of his
proposed new agency to protect the interests of the American
consumer. Mr Obama said it was more important than ever to have a
new consumer watchdog, and accused vested interests of trying to
scupper reform. He accused the US Chamber of Commerce of trying to
"kill" plans for the Consumer Financial Protection Agency. The
president was talking on the day he received the Nobel Peace Prize.
More protection His administration has proposed a number of
regulatory reforms designed to prevent another financial crisis. One
of them is to create a new consumer agency to regulate products such
as credit cards and mortgages. It would also force banks to offer
low-risk, standard versions of these products. "Predictably, a lot of
banks and big financial firms don't like the idea of a consumer
agency very much," Mr Obama said. "They're doing what they always do
- using every bit of influence to maintain the status quo that has
maximised their profits at the expense of American consumers. "In
fact, the US Chamber of Commerce is spending millions on an ad
campaign to kill it." But the president said he would not back down
from his plans for reform. He said the new agency was needed to
protect US consumers from "ridiculously confusing contracts" used by
financial institutions. "We have already seen and lived the
consequences of what happens when there is too little accountability
on Wall Street and too little protection on Main Street, and I will
not allow this country to go back there," he said. The White House
also wants to give the central bank, the Federal Reserve, new powers
over big financial firms, including the ability to seize banks whose
collapse could threaten the economy.

Europe to prolong Chinese shoe-trade war

Penalty taxes on Chinese and Vietnamese shoe imports into Europe
should be extended by another 15 months, EU Trade Commissioner
Catherine Ashton will urge member states, a source said Thursday.
Anti-dumping duties on footwear, essentially fines for exporting
goods below production cost, were first applied in October 2006 and
have so far cost manufacturers with operations in those countries
hundreds of millions of euros. The news came on the day Chinese
Vice President Xi Jinping held talks with commission chief Jose
Manuel Barroso, at which the issue was to take prominence alongside
funding the international effort to combat global warming.
EU-China trade has exploded in recent years, making the EU the top
destination worldwide for exports of Chinese goods while China is
Europe's biggest trade partner after the United States. The EU
anti-dumping measures involve import duties of 16.5 per cent on
Chinese shoes with leather uppers and 10 per cent on the same kind
of shoes from Vietnam. Other Chinese export sectors, including
steel cables, industrial chemicals and metal fasteners, have been
similarly targeted. The European Footwear Alliance, which includes
global giants Adidas and Timberland among some 2,000 footwear
members, says companies have shelled out more than 800 million euros
(1.2 billion dollars) in these taxes. The measures have been a
source of conflict between member states. The main vote faultline has
run between Europe's economically liberal north, hostile in principle
to anti-dumping measures, and the more protectionist south,
sympathetic to the views of EU producers. Brussels decided a year
ago to maintain the anti-dumping measures on Chinese shoes to give
it time to re-evaluate the market situation.

Mideast powerhouses agree to boost trade

Saudi Arabia and Syria agreed to promote trade and investment between
the two regional powerhouses, as Saudi King Abdullah wrapped up a
visit to Syria, state news SANA reported. Syria Finance Minister
Mohammed al-Hussein and his Saudi counterpart, Ibrahim Assaf, said
the volume of trade, now only two billion dollars (1. 4 billion euros)
a year, will 'begin growing in the coming days,' SANA said. 'We
have decided to remove the difficulties hindering commercial
exchanges, notably the taxes recently imposed by Syria on products
exported to Saudi Arabia,' such as olive oil and ceramics, Hussein
was quoted as saying. For his part, Assaf spoke of King Abdullah's
visit, his first since acceding to the throne in 2005, as 'very
important for strengthening economic relations' between the two
countries. On Wednesday, the king and Assad agreed to ' remove the
obstacles' to closer ties between the two powerhouses long at odds.
The two leaders underlined their 'commitment to pursue coordination
and consultations at all levels on matters that interest both
peoples,' SANA said, and want to 'remove the obstacles that have
hindered their relations.' Ties between Damascus and Riyadh
deteriorated in the wake of the 2003 invasion of Iraq over Saudi
support for the United States. Relations soured further after the
assassination in 2005 of ex-Lebanese premier Rafiq Hariri. Hariri,
who also held Saudi nationality, was close to the monarchy in the
oil-rich Gulf state and had extensive business interests in the
kingdom. There were widespread suspicions that Syria was behind
the killing, something Damascus has consistently denied. The son
of the slain premier, himself chosen to form a new government after
winning elections in June, has so far failed because of continuing
differences with the Syrian- and Iranian-backed opposition, led by
Shiite party Hezbollah. But there has been widespread speculation
in Lebanon that Abdullah's visit could spell a breakthrough on that
front. Riyadh has also been at odds with Damascus over its warm
relations with Saudi Arabia's rival Iran and its support for
Hezbollah. In early July, Riyadh named a new ambassador to Syria
after leaving the post vacant for a year, and a visit by Abdullah has
been in the works since that time, Saudi officials say. The
rapprochement comes at the same time as a cautious warming takes
place between Damascus and Saudi ally Washington under President
Barack Obama.

Risk looms over rallying oil market

Oil demand is rising from its knockdown in the global crisis, but
high uncertainty over economic recovery is steadying prices as bulls
and bears judge opposing trends, the IEA said on Friday. Demand
should grow at the end of this year and in 2010 as the global economy
rises after the crisis, but there is a wide range of risk in how the
groggy oil market will recover and the oil price is unlikely to rise
much. The IEA insisted in its monthly report: 'There is
considerable uncertainty as to the world's short- term economic
outlook.' In a 'bulls versus bears' battle, analysts and traders
were sparring over how to interpret the flow of information about
recovery of the global economy and forces at work in the depressed oil
market. In market talk, a 'bull' is one who charges ahead in a
belief that prices will rise, and a ' bear' is one who backs off,
believing they will be weak. Pointing to an oil price of about 75
dollars a barrel next year, from about 71 dollars now, the
International Energy Agency warned that immediate oil demand was 'in
the doldrums'. On futures prices, the report said that as the
recovery from the global economic crisis unfolds, oil traders have
increasingly looked to financial markets for signs of 'green shoots'
in the broader economy. But recently the link between oil prices
and broader financial markets 'has become more tenuous as weak
supply and demand fundamentals appear to be exerting more pressure
to the downside.' However, the rate at which demand was shrinking
was 'clearly falling' and demand in the fourth quarter would probably
show an increase over 12 months. Despite the turnaround from
depressed levels, oil demand in 2010, even after the expected '
rebound' will 'still remain below 2008 levels,' the report said.
The agency revised upwards its estimate for global oil demand this
year by a moderate amount of 200,000 barrels per day and for next
year by 350,000 barrels per day. The upgrading reflected revised
growth forecasts in a recent report by the International Monetary
Fund and also stronger data from Asia and the Americas. The IEA
now expects global oil demand to average 84.6 million barrels per day
this year, meaning annual contraction of 1.7 million barrels per day,
equivalent to a fall of 1.9 per cent from consumption last year.
Demand was expected to rise to 86.1 million barrels per day in 2010,
an annual increase of 1.4 mbd, marking a turnaround to an annual
increase of 1.7 per cent. But, on the other side of the
demand-supply scales, global oil supply in September rose by 310,000
barrels per day to 84.9 mbd, because output from non-OPEC countries
rose while production from OPEC countries remained constrained.
The IEA said supplies from the Organisation of Petroleum Exporting
Countries (OPEC) rose by 120,000 bpd to 28.93 mbd in September.
Excluding Iraq output, production from 11 OPEC members rose by 170,000
bpd to 26.42 mbd. But this was 1.58 mbd above OPEC's output target.
The IEA, pointing to quota-breaching by OPEC members, said that
overall they were now respecting quotas to the extent of 62 per cent
from 66 per cent in August. This meant that OPEC's spare capacity
was now 5.45 mbd. This, together with 'sluggish' demand, had tempered
the effects of tension over Iran's nuclear nuclear programme. Even
excluding Iranian production which was 3. 78 mbd in September, OPEC
had spare capacity of 5.23 mbd. On the global front, the IEA
warned that 'given continuing uncertainties about the path of
economic recovery' there was a downward risk which could bite deeply
into the latest demand estimates, cutting them by 100,000 barrels per
day in the second half of this year and 600,000 bpd next year. It
added that 'the crucial role of China in shaping future oil markets,'
was a fundamental factor. 'More significantly, demand among the
world's twelve largest oil consumers which collectively account for
about 70 per cent of the world total, is still contracting by two per
cent on a yearly basis; the modest demand surge in June appears to
have been short lived.'

Shell mulls revolutionary plant

Anglo-Dutch oil group Shell said Friday it was preparing a blueprint
for what could be the first floating liquefied natural gas plant—and
the world's biggest vessel—off Australia. If it goes ahead, the
move would have significant implications for the industry because it
could unlock 'stranded' gas reserves previously considered too costly
to develop because of their small size or distance from shore.
'We're in the front end engineering and design phase now,' a Shell
spokeswoman told AFP. 'Once that's complete it will then be decided
whether we go to the final investment decision.' Shell refused to
give a date when the giant facility, which would draw LNG from its
Prelude and Concerto gas assets in the Browse Basin off northwest
Western Australia, could be operational. But it said the floating
structure, which reportedly would cost 5.0 billion US dollars, would
be some 480 metres in length, 75 metres wide, and weigh about 600,000
metric tons. It would be 'significantly the largest vessel in the
world when it's constructed', Shell's executive director upstream
international Malcolm Brinded said Thursday. Although the
technology is commercially untested, the project would have the
capacity to produce about 3.5 million tonnes of LNG per year, as
well as liquefied petroleum gas over its 20-year lifespan. The
plant, in the shape of an enormous ship, would be towed to each spot
and temporarily anchored to the seabed. Reports said it would be
designed to withstand extreme weather such as a one-in-10,000-year
cyclone. Brinded said demand for LNG would probably rise as
rapidly industrialising Asian countries such as India and China
increasingly sought cleaner- burning fuels. 'Gas is an absolutely
key energy source as a bridge to a fully sustainable energy future,
and I think it will be a bridge that will last most of this century,'
he told reporters. The technology is particularly relevant for
Australia which is believed to have stranded gas reserves worth about
1.0 trillion Australian dollars (890 billion US). Western
Australia is the centre of Australia's booming LNG industry which
some analysts believe is on course to rival Qatar, the world's
biggest producer. LNG is natural gas that is chilled for shipping
as a liquid, then turned back into gas at its destination and
distributed by pipeline.

UK energy prices set to rise

The country's energy watchdog on Friday warned fuel bills could rise
by 60 per cent over six years due to unpredictability in supplies,
economic uncertainty and the implementation of environmental
controls. In a review of the country's energy market, Ofgem
calculated that an investment of up to £200 billion is needed to
ensure supplies while meeting green targets. The report states
that the phasing-out of older nuclear plants and the closure of coal
and oil plants due to European environmental legislation will lead to
increased dependency on the volatile foreign gas market.

Tiwan backs US dollar

Taiwan's central bank on Friday warned against currency market
speculation in a bid to prevent the US dollar from falling further
against the local unit. On its website, the central bank cited
comments supporting capital intervention by economist Joseph
Stiglitz, a move which dealers saw as a clear hint it did not want
the greenback to fall further. 'Be careful. You may be getting the
easy money, but it's overnight money. You don't build robust growth
based on easy money,' Stiglitz, a Nobel laureate, was quoted as
saying. Taiwan's trade-dependent economy saw exports drop 29.6 per
cent in the first nine months of the year from the same period last
year, and is keen to protect its competitiveness by keeping its
currency from strengthening too much. The Taiwanese central bank
also ran statements from the United Nations and the Group of Seven
finance ministers expressing similar warnings against speculative
activity in the exchange market. 'The central bank's move is a
strong warning that it doesn't want to see hot money impact the
market,' said a trader of a local bank who asked not to be named for
fear he might attract the central bank's attention. He said the
central bank tends first to see if words alone are enough to change
market behaviour, before resorting to actual intervention. 'The
US dollar stopped falling today. That means the warning was
effective. There was little sign of central bank intervention today,'
the trader said. 'But if foreign funds continue to flow in and
boost the local currency, I don't think the central bank will
tolerate it,' he added. The greenback closed at 32.240 Friday
against the Taiwan dollar, up from Thursday's close of 32.143.

Asian markets higher on upbeat economic outlook

Asian markets rose for a fourth day Friday, boosted by dealers'
confidence in the upcoming earnings season and an upbeat outlook on
the global economy. Tokyo rose 1.87 per cent and Seoul almost two
per cent while Taipei added 0.91 per cent. Hong Kong also edged up.
Shanghai stormed 4.76 per cent higher as it caught up on gains in
regional and other overseas markets following China's week-long
National Day holiday. Investors were cheered by data showing
initial claims for US jobless benefits in the week ended October 3
fell to a nine-month low of 521,000. Korea's central bank also gave
support as it froze its key interest rate at a record low 2.0 per
cent for the eighth straight month, saying the economy was showing
strength. Hopes for the third quarter earnings season came after
US aluminium giant Alcoa announced a surprise profit this week.
TOKYO: Up 1.87 per cent. The Nikkei-225 gained 183.92 points to
10,016.39. The index ended above the key 10,000-points level for
the first time in more than a week as hopes mounted for a recovery in
corporate earnings. HONG KONG: Flat. The Hang Seng Index edged
6.54 points higher at 21,499.44. SHANGHAI: Up 4.76 per cent. The
Shanghai Composite Index, which covers both A and B shares, was up
132.29 points to 2,911.72. But market watchers warned that
liquidity concerns may weigh on the market as 18 companies seeking
to list on China's new Growth Enterprise Market will open
subscriptions for their initial public offerings next week, traders
said. SEOUL: Up 1.94 per cent. The KOSPI gained 31. 33 points at
1,646.79. The central bank froze its key interest rate at a record
low 2.0 per cent for the eighth month, saying it expects economic
recovery to continue. TAIPEI: Up 0.91 per cent. The weighted index
rose 68.65 points to 7,571.96. SINGAPORE: Flat. The Straits Times
Index gained 1.56 points, or 0.06 per cent, to 2,652.51. The
government is due to release its preliminary estimates of economic
data for the third quarter and analysts expect gross domestic
product (GDP) to rise 0.5 per cent from a year ago. BANGKOK: Up
0.38 per cent. The Stock Exchange of Thailand gained 2.84 points to
close at 746.87. KUALA LUMPUR: Up 0.30 per cent. The Kuala Lumpur
Composite Index gained 3.73 points to 1, 233.82. Gaming group
Genting added 1.80 per cent to 7.33 ringgit and CIMB bank was up 0.80
per cent to 12.22. JAKARTA: Down 0.41 per cent. The Jakarta
Composite Index lost 10.11 points to 2,474.40. MANILA: Down 0.85
per cent. The composite index shed 25.24 points to 2,942.78.
MUMBAI: Down 1.19 per cent. The 30-share Sensex fell 200.88 points to
16,642.66.

No facebook in office work

More than half of US companies do not allow employees to visit social
networks such as Facebook, MySpace or Twitter while at work,
according to a new survey. Fifty-four per cent of the chief
information officers for 1,400 companies surveyed across the United
States said workers were 'prohibited completely' from visiting social
networks while on the job. Nineteen per cent said employees were
allowed to visit social networks 'for business purposes only' while
16 per cent said they allowed 'limited personal use.' Ten per cent
of those surveyed said there were no restrictions on visiting social
networks at work. The survey of 1,400 companies with at least 100
employees was released this week and was conducted by an independent
research firm for Robert Half Technology, a California-based
provider of information technology professionals. It has a margin of
error of plus or minus 2.6 per cent. Dave Willmer, executive
director of Robert Half Technology, said 'using social networking
sites may divert employees' attention away from more pressing
priorities, so it's understandable that some companies limit access.
'For some professions, however, these sites can be leveraged as
effective business tools, which may be why about one in five
companies allows their use for work-related purposes,' he said.

TV industry lighting up

Brisk business at the TV industry's annual Riviera rendez-vous has
raised hopes of an end to entertainment recession, but caution
underpinned deals struck at this week's MIPCOM trade fair. 'It
seems the economic climate for broadcasting is picking up,' said
Christina Willoughby, who heads sales for Britain's leading
independent audiovisual distributor, DRG, or Digital Rights Group.
'The mood is buoyant and people are positive and more upbeat compared
with the Spring show,' she told AFP. There was also a higher
turnout of participants and programme buyers at the four-day show
that ended Thursday, said Laurine Garaude, of Reed MIDEM. But the
mood remained cautious, with buyers making conservative choices and
often opting for feel-good shows to cheer up viewers in tough times,
such as formats, family entertainment and comedy. Remakes of
successful classics such as 'The Prisoner' and proven dramas such as
Agatha Christie's 'Marple' or 'The Doc Martin' series also proved
popular. 'Sometimes you don't need to reinvent the wheel, there
are a lot of iconic shows about,' said Tobias de Graff, who heads
distribution at ITV Studios Global Entertainment, one of Europe' s
largest commercial TVs. 'Everything is ratings driven,' DRG's
Willoughby said. 'Everyone wants to see if it's worked, and where,
before committing.' Risk aversion combined with a taste for low-
cost productions meant formats were specially popular—with even
children's shows starting to be designed as formats that can be
adapted locally around the world. Format productions in the
2006-2008 period generated a whopping 9.3 billion euros, a 45 per
cent increase over 2002-2004, according to the Format Recognition and
Protection Association ( FRAPA). But a new trend is for formats
that address daily life rather than offer dream situations.
'Reality TV no longer promises the moon and the stars. Instead, it
addresses issues people are really concerned about and tries to come
up with solutions,' Bernard Villegas, director of consultantcy The
WIT, told AFP.

Postal service losing business

The number of letters handled by the government post offices
decreases by one crore a year— thanks to the fast-growing mobile
telephony and Internet services that became the quickest and easiest
mode of communication. As nations around the world observe the
World Postal Day on Friday, designated since 1874 to underline the
importance of mail service, many kept wondering whether it would
survive as an indispensible communication utility. Such fears
about a decaying postal service stem from the stunning development of
new communication technologies, particularly mobile telephony and
Internet—the wonderful information superhighways that are shaping
today's knowledge-based world of business and academia. Postal
department officials say they get fewer letters for dispatch these
days as people now hardly write letters to their near and dear ones.
Their landline telegraph and telephone systems seem to have become
redundant too. Bangladesh Post Office director general Mobasherur
Rahman told bdnews24.com that they now handle some 15 to 16 crore
letters a year. 'We used to handle 20 crore letters a year five
to six years ago and 24 crore letters 10 years ago,' he said. But
delivery of letters came down by about 10 crore in last 10 years, the
DG said. Rahman said the total number of letters decreased as the
number of personal letters came down. Most people these days
simply do not write letters; they would rather prefer to use mobile
phones and e-mail which are easy, cheap and convenient, he said.
Modern technologies like mobile phones and internet and the couriers
service which are easily available to people are blamed for the bad
days for the postal service. Though courier services cost a bit
higher, people prefer them as they ensure safe and quick dispatch of
letters, parcels and money. Over the years, the postal service has
become inefficient, slow and even corrupt, people who had bitter
experience in dealing with postal department complained. 'There is
no assurance that letters sent through post offices will reach the
address in time,' said Shamsul Huq, a retired government employee
who lives in a village in Savar, near Dhaka. 'In many cases, letters
sent through the post office were lost.' Telegram and telex
services also became redundant in this age of cellphone and internet
communication. And people prefer cellphones to landline telephones,
which is largely a state monopoly in Bangladesh, because they are
easier to get connection, efficient and above all, cheap.
Mahbubuddin Khokan, a member of parliament from Noakhali on Thursday
proposed in the House for reactivating two old post offices in his
constituency. Authorities are also expanding and diversifying the
services of postal department, introducing different kinds of
services, officials said. The postal department is now providing
services like transferring money through mobile phone, delivering
remittances sent by expatriates workers, handling passport
application forms and fees, depositing money in savings accounts,
releasing prize bonds in the market, selling revenue stamps and
payment of utility bills. The DG Post Office said they would soon
introduce cash cards the subscribers of which would be able to
withdraw money from post offices with ATM cards like the clients of
the commercial banks do. Courier services, though a bit costly,
have become popular over the years, lugging significant numbers of
letters and parcels from one place to other. Mobasherur Rahman
informed that as many as four to five crore letters are dispatched
through courier services a year. 'We are making efforts to bring
many changes in our service to compete with courier service... To
provide quick services and efficient we have started the process of
recruiting some 2,850 people,' he said. The DG said the number of
departmental post offices is over 1,600, rural or extra departmental
post offices are 8,000. The postal department employs as many as
17, 000 full-time staff and over 24,000 part-time workers. The
postal system was introduced during the rule of Kutubuddin Aibek
(1206-1210) from Delhi to Subah (province) of Bengal. Those early
postal services were run through fast galloping horsemen relaying the
mails to the remote corners. But Postal system was modernized
during the British period with the introduction of many services –
railway mail was introduced in 1864, money order in 1880, express
telegram in 1909 and air mail was introduced in 1933.

Intra-Asian trade seen key to growth

Asia must cut its 'over-reliance' on exports to developed countries
and increase trade with each other to return to growth rates strong
enough to reduce poverty, a top regional banker said Friday. As
consumers in developed nations slash their budgets, export-oriented
Asian economies are unlikely to the growth rates seen before last
year's economic crisis, Asian Development Bank president Haruhiko
Kuroda said here. 'The outward-oriented Asian growth model has
brought tremendous benefits to the region in the past and can continue
to do so in the future,' he said at an international conference.
'It would serve no one to turn inward and protectionism should be
avoided at all cost. But the concentration on G3 markets for final
product sales needs adjustment.' The G3 refers to the United
States, Europe and Japan, where 60 per cent of Asia's main export are
sent. Kuroda said the global economic crisis that started in the
United States last year 'exposed developing Asia's over-reliance on
extra-regional markets for both exports and capital flows.' The
region must hasten efforts to increase internal trade and stimulate
domestic consumption as key growth drivers. While Asia is
rebounding from the crisis faster than other regions, it was unlikely
for it to return to sustained strong growth unless key drivers are
'rebalanced' to give more weight to domestic stimulants, Kuroda said.
Otherwise, economic growth will not be strong and long enough to
make a dent on the large number of poor in the region, he added.
The Manila-based institution, whose aim is to reduce regional
poverty, said Asia's poor have been especially hard hit partly
because social safety nets to cushion the impact of the economic
slowdown have been inadequate.

Onion price rattles in BANGLADESHI market

The prices of onion and other spices increased shockingly in the past
week at city markets and many other parts in the country, surprising
many who could not find any reason for the sudden price rise.
Prices of edible oil and sugar, however, simmered off as supply of
the items increased from imports. Retailed between Tk 36 and Tk 40
per kilogram on Friday, Indian onion became costlier by at least Tk
12 in a week. Up by Tk 6 per kilogram, local variety of onions was
retailed between Tk 44 and Tk 50. Onion stared becoming costlier
from the end of the previous week with wholesale markets saw drastic
declines on its supply from India, the major source of the highly
consumed spice. 'As Indian exporters were unable to send adequate
consignments, an unusual supply shortage pushed onion prices up,'
said Sharifuzzaman, a Shyambazar trader. More than 150 trucks
loaded with Indian onion usually enter Shyamabar during a normal
supply period. But the number of trucks went down to 50 in the past
one week. Quoting onion importers, traders at Shyambazar, told New
Age that mid-September's heavy rains and flash floods damaged onion
stocks in the Southern Indian state of Tamil Nadu. During the off
harvest months, around two- thirds of onion demand in Bangladesh
market are meet by imported Indian onions. With more than half a
million tonnes annual import, Bangladesh remains the top buyer of
Indian onion. An importer affiliated with the Dhaka Metropolitan
Perishable Importers Association, informed New Age that Indian
authority on Tuesday revised minimum export price for Bangladesh-
bound onion consignments. They re- fixed the price upward to $355 per
tonne from previous $270. The National Agriculture Federation of
India, NAFED, a government-administered organisation, revises export
prices of agriculture commodities twice a month after reviewing local
production and demand situations. But this time MEP was revised
upward twice in the past week to discourage exports, fearing local
supply crunch and price hike of onion as floods in southern India
badly damaged onion stock. Besides onion, different varieties of
ginger also became costlier by Tk 10 over the week. The spice was
retailed between Tk 60 and Tk 90 per kilogram on Friday, Prices of
some other special spices increased sharply in the past week. Up
Tk 400 per kilogram, price of cardamom of different size and origins
reached soared to Tk 1, 800. Up by Tk 200 per kilogram, Alu Bukhara
was retailed between Tk 600 and Tk 700 on Friday at New Market in the
city. New Market traders said wholesale prices of cumin, clove,
peeper, raisin and some other spices were on increase for the past
few days. Markets sources said some importers are manipulating
prices of these spices. 'Importers are eyeing windfall profits on
their deliveries to retailers, who are preparing to make stocks for
Eid Ul Azha,' a New Market trader said. Retailed between Tk 68 and
Tk 72, non-packed palm oil became cheaper by Tk 4 in a week as
market sources said falling international prices pushed down
wholesale prices of cooking oils. Following increases in the
previous two weeks, rice prices found stable in the week. Market
sources said adequate supply of paddy in rural markets and optimistic
forecasts on the upcoming Aman harvest cooled down the uptrend.
Vegetables, fish, chicken and meats prices remained almost unchanged
in the week.