Emirates gets three awards

Emirates airline recently received three awards at the London and
Hong Kong editions of the Business Traveller Awards, 2009. Readers
of the monthly magazine, Business Traveller UK edition, voted in
favour of Emirates, giving it the 'Best First Class' and the ' Best
Middle Eastern Airline' trophies at a awards function in London.
A week later in Hong Kong Emirates received ' Best Middle East/African
Airline' award from Business Traveller Asia-Pacific. Business
Traveller has ten editions worldwide and is read by corporate
travelers, business travel managers and travel agents. Richard
Vaughan, divisional senior vice- president of commercial operations
Worldwide said, 'We are thrilled to receive these endorsements from
Business Traveller Awards as these are widely recognised as the
industry's benchmark for excellence.'

Hong Kong eyes stronger China tie to survive

Hong Kong's survival as a major financial hub lies in capitalising on
its links with the booming Chinese mainland and diversifying its own
economy, the city's chief executive said Wednesday. In particular,
the city can play a key role in Beijing's plans to promote the yuan
as an international currency, Donald Tsang said in his annual policy
address. He downplayed concerns that China's promotion of Shanghai
as a global trade centre threatened Hong Kong's traditional role as
an international gateway to the Chinese economy, saying the two
would work together. 'As the (yuan) moves towards
internationalisation, the mainland needs a highly open global
financial centre that is fully aligned with the world financial
markets to serve as its platform for foreign financial activities,'
Tsang said. 'Hong Kong can fit this role by making the best of
our advantages.' China has recently raised the issue of the US
dollar's status as the global reserve currency, taking advantage of
the recent financial crisis to promote international use of its own
unit. Tsang's speech outlined an array of initiatives aimed at
adjusting to the competition and opportunities presented by China's
growing global importance. He also sought to allay fears about a
property bubble raised recently by new record prices for luxury
apartments in Hong Kong, saying the government might consider
boosting land supply. His plans to promote the city as a
'bridgehead for mainland enterprises to go international' included
strengthening services in areas such as stock market listing, bond
issuance and financial hedging. Addressing concerns Hong Kong
would lag Shanghai in financial development, Tsang said the two
cities should work together. 'I believe that Hong Kong can work in
collaboration with Shanghai and leverage our respective strengths to
contribute to the development of financial services in the
mainland,' he said. Shanghai's plans to promote itself as a major
hub for the two areas that Hong Kong has typically dominated—finance
and shipping— have put pressure on Hong Kong to develop other
businesses such as education, medicine and the creative and
environmental industries. China has said it will allow foreign
companies to sell shares on Shanghai's stock exchange for the first
time as part of a target to become a financial hub by 2020. Shanghai
is also aiming to become a full-service world-class shipping centre
by the same year. Economists said Tsang was right to focus on an
advantage Hong Kong has over Shanghai—its proximity to the Pearl
River Delta, a major regional economy and manufacturing base for
China. 'Traditionally Hong Kong has been used for regional
financial flows but this middle-man role will be eroded when Shanghai
becomes fully open,' said Kelvin Lau, regional economist at Standard
Chartered Bank. 'It needs to change from facilitating to serving a
much larger domestic market in the wider Pearl River Delta region.'
Tsang also pledged to 'foster economic cooperation with Taiwan' as
Hong Kong adapts to warmer cross-strait ties, which could hurt the
southern city's position as an intermediary between the two. On
the issue of rising real estate prices in Hong Kong, Tsang said the
government would closely monitor the situation in order to prevent
any potential market bubbles forming. Hong Kong's luxury
residential property market has jumped about 39.5 per cent so far
this year while the mass-market segment has risen 20 per cent,
according to real estate firm Savills. Tsang said the government
would when necessary 'fine-tune the land supply arrangements...with
a view to quickening the pace of bringing readily available
residential sites to the market'. It would also closely monitor
data on property transactions, negative equities, and mortgage
loans, to ensure that there was no sudden steep price fall, he added.
Critics were disappointed that Tsang's fifth policy address placed
less emphasis than last year's speech on helping the city's poorest.
More than 10 political and welfare groups protested outside the
Legislative Council before Tsang arrived to deliver his address,
calling for universal suffrage, a minimum wage and subsidies for the
poor and elderly. Tsang's speech was briefly interrupted by
lawmaker 'Long Hair' Leung Kwok-hung and two other members of the
League of Social Democrats waving placards and questioning whether
the address had anything new to offer.

Bank of Japan holds super-low rates steady

Japan's central bank said Wednesday the world's number two economy
has begun to recover, but it kept markets guessing on when it will
wind down emergency measures aimed at fighting the credit crunch.
Recovery hopes also got a boost from a report showing that Japan's
consumer confidence rose for a ninth straight month, hitting the
highest level in almost two years, the government said. The
government's consumer confidence index increased 0.4 points in
September from the previous month, to 40.5 — the highest since
October 2007. Deflationary pressures also appeared to ease as
wholesale prices rose 0.1 per cent in September from the previous
month. Japan's economy 'has started to pick up,' the Bank of Japan
said as it left its key interest rate on hold at 0.1 per cent, as
widely expected. It gave no indication of whether it would extend
its scheme, due to expire at the end of the year, to buy corporate
debt. BoJ governor Masaaki Shirakawa said a decision would be made
at the next meeting on October 30. 'The BoJ will keep supporting
the economy by maintaining an extremely loose monetary policy with
the current super-low interest rate,' he said. The situation
facing small companies 'remains severe' despite an overall
improvement in corporate financing, he told a news conference.
Analysts expect some of the BoJ's extraordinary steps to be wound
down soon as the worst of the credit crunch appears to have passed
and the economy returned to positive growth in April-June, exiting a
year-long recession. 'The Bank will follow through with plans to
terminate commercial paper and bond purchasing operations at end
December,' predicted Barclays Capital economist Kyohei Morita.
'These operations, which were extended once from a deadline of
end-September, have continued to go sharply undersubscribed in
recent months.' The Bank was more optimistic about the outlook
than it was last month, when it had said Asia's biggest economy was
'showing signs of recovery.' But even so analysts said an interest
rate rise looks unlikely anytime soon in Japan, where borrowing
costs have been kept very low for years to support a sluggish
economy. 'We believe the BoJ will hold the policy rate unchanged
at 0.1 per cent (for the) rest of 2009 and much of 2010,' said Calyon
economist Susumu Kato. The Bank will be anxious not to repeat its
blunder of August 2000, when it raised interest rates too soon and
was later forced to reverse the decision as the economy started to
worsen again. Japan's Financial Services Minister Shizuka Kamei
has accused the BoJ of 'talking in its sleep' with its remarks
suggesting that the emergency measures may be withdrawn. But
Shirakawa said that the BoJ had been assured by the new centre-left
government that it would respect the central bank's independence.

US retail in sharpest 2009 fall

US retail sales fell in September by the largest amount in 2009 ,
driven by car sales plummeting at the end of the country's scrappage
scheme. The Commerce Department said sales slid 1.5 %, not as bad as
expected, but the biggest drop since December last year. Car sales
dropped by 10.4 % but when vehicles were stripped out, retail sales
actually rose by 0. 5 %, better than the 0.2 % which had been
forecast. Consumer spending makes up more than two thirds of US
economic activity. A late Labor Day holiday helped retailers last
month because consumers purchased some items in September that they
would normally have bought in August, analysts said. 'Expected' The
1.5 % drop in September's retail sales followed a 2.2 % rise in
August, which was revised down from an earlier estimate of 2.7 %. That
came as demand for new cars surged in August as buyers took advantage
of the final month of the government's incentives of up to $4 ,500
to trade in old models for more fuel- efficient cars. The Commerce
Department figures showed that sales in furniture stores jumped 1.4
%, reflecting the rebound in the housing industry. Meanwhile, sales
at general merchandise stores such as Wal- Mart and Target, rose 0.9
%. "Certainly the numbers were better than expected," said Scott
Brown, chief economist at Raymond James Associates. "You did see a
big drop in vehicle sales as cash for clunkers expired, which was in
line with expectations."

Bailout to keep Air India flying

The Indian government has agreed to help keep the ailing national
carrier, Air India, flying with an injection of more than £689 m
($1.1 bn). The large financial aid package would be paid out in
phases, Aviation Minister Praful Patel said. In return the airline
must agree to restructure the company. It will have to boost its
revenues with cost cuts that total £407 m ($650 m) spread over the
next two years, the minister added. The airline reported a loss of
$875 m in the fiscal year ending in March. Wage cut concerns Hundreds
of Air India pilots went on strike in September to protest against
management plans to cut pay incentives. The strike was called off when
Mr Patel said the grievances would be dealt with. Possible wage
cuts, he said, were only one aspect of cost reduction. Mr Patel said
he met representatives of Air India staff unions to discuss
cost-cutting avenues. "The unions were very understanding and are
aware of the problems," he said in a news conference. Air India
employees were willing to cooperate with management to "forge a way
out of the current crisis", he said. The airline has already showed
signs of recovery, Mr Patel said, with air traffic showing an upward
trend in the last month.

Collapsed Enron scandal under scan again

The Supreme Court agreed Tuesday to reopen one of the biggest
corporate scandals in US history by hearing the appeal of former
Enron chief executive officer Jeffrey Skilling.    Skilling, who is
currently serving a 24-year prison sentence and has doggedly insisted
he did nothing to defraud investors, reportedly broke down in tears
when he heard the news.     'Jeff is overwhelmed with joy,' lawyer
Daniel Petrocelli told the Houston Chronicle.    Enron's spectacular
2001 collapse, the largest corporate bankruptcy in history at the
time with more than 40 billion dollars in outstanding debt, came to
epitomise corporate greed in the heady days of the Internet boom.
Skilling and Enron Founder Kenneth Lay hid company losses and hyped
the stock's value while selling their own shares on the sly as the
massive energy empire crumbled.    Thousands of people lost their jobs
and life savings when Enron collapsed. The ensuing scandal
undermined faith in corporate America and led to a massive stock
market sell-off.    Followed by other mega scandals — the collapse of
WorldCom, excesses at Tyco — Enron led to significant regulatory
changes.    The case was also one of the most complex involving
corporate crime in US legal history and represented a high-profile
test for the government's crackdown on corporate wrongdoing.    Lay
died of heart failure in July 2006 before he could be sentenced and
his conviction on 10 counts of fraud, conspiracy and banking
violations was thrown out because his death prevented him from
appealing the verdict.    Skilling, who became the poster child for
corporate malfeasance, appealed his May 2006 conviction by
challenging the federal law that punishes executives who fail to
provide 'honest services.'    His lawyers argued that the statute is
'vague and unenforceable' and does not require proof that the
accused received a personal gain from the alleged fraud.     'The
government instead alleged that Skilling took assertedly
inappropriate measures to maintain or improve Enron's stock price, in
violation of his fiduciary duties of 'honesty,' ' candor,' 'loyalty'
and 'honest services,'' his lawyers argued in court filings.    The
Supreme Court agreed in May to review the conviction of newspaper
tycoon Conrad Black based on his appeal of the same honest services
statutes that prosecutors have increasingly used to crack down on
executives and government officials.    The former Enron chief also
appealed on the basis that he did not receive a fair trial.
'Skilling was pronounced guilty throughout Houston long before
trial,' his lawyers argued in court documents, noting that 'the
seismic effect of Enron's collapse on Houston (was) frequently
compared by residents to the September 11 attacks.'    Media coverage
included 'blistering daily attacks on the executives — principally
Skilling and Lay — deemed responsible for Enron's demise,' they
lamented.     'Skilling and Lay were compared to Al-Qaeda, Hitler,
Satan, child molesters, rapists, embezzlers and terrorists,' they
wrote, arguing that the jury pool was 'biased' and their request for a
change of venue should have been approved.    They further argued
that the 'honest services' statues under which Skilling was
prosecuted are ' vague and unenforceable.'     'The government told
the jury that this case was 'not about what caused the bankruptcy of
Enron or even about greed,' the lawyers wrote.

Foreign banks agree FSA pay rules

Major overseas banks operating in London have agreed to implement
rules on remuneration, the Treasury has said. In August, the
Financial Services Authority published a code on bankers' pay, due to
take effect from January. Last month, the five biggest banks in the
UK agreed to accept the rules on pay, and they have now been followed
by eleven foreign banks. There must be "national and international
consistency" on the issue of pay, the banks said in a statement. The
FSA rules say that bonuses should not be guaranteed for more than a
year, and that senior employees should have their bonuses spread
over three years. However, there are no enforced caps on bonuses. Last
month, G20 leaders agreed to introduce rules on pay, and it is down
to individual countries to implement them. The banks that have signed
up include US banks Merrill Lynch, Bank of America, Citigroup,
Goldman Sachs, JP Morgan and Morgan Stanley. The others are: Credit
Suisse, Nomura, UBS, BNP Paribas, Deutsche Bank and Société Générale.
On Thursday, Goldman Sachs is expected to report large profits,
leaving it with a bonus pot of about $20 bn (£12.5 bn) - the biggest
in the company's history.

Growth in UK unemployment slows

The latest official UK unemployment figure has risen once again, but
the rate of increase has slowed. Unemployment increased 88 ,000 to
2.47 million in the three months to August, from the three months
to May. The jobless rate rose to 7.9 % from 7.6 %. The rise in the
number of unemployed was the lowest since July 2008 , said the Office
for National Statistics. The number of people claiming unemployment
benefit grew in September by 20 ,800 to 1.63 million. While the
number of people claiming the benefit is now the highest since 1997 ,
the rise compared with the previous month was the least since May
2008. 'Fragile recovery' Other key points from the latest official
figures revealed that: ANALYSIS By Martin Shankleman, BBC employment
correspondent Within the blizzard of statistics a clearer picture is
starting to emerge, that the outlook for UK unemployment - while bad
- may not be as dire as feared. Significantly the number of people
who claimed Jobseeker's Allowance in September showed the smallest
rise in 16 months. The level of vacancies, an important measure of
the labour market, seems to be stabilising. The government is hoping
that the raft of reforms in recent years has changed the dynamic of
the labour market, making it much more responsive to any improvement
in the economic outlook. So whereas in the past, unemployment
continued to soar, long after the recovery has started, perhaps this
time, things could be different. • The number of young unemployed
people - those aged between 16 and 24 - continued to rise, to 946
,000 in the three months to August • Men remain the most affected by
unemployment, with the number of males without work rising by 76 ,000
to 1.53 million in the three months to August • The number of women
unemployed totalled 935 ,000 , up 12 ,000 • There has been a sharp
increase in the number of women working part-time, up 79 ,000 for
the three months ending in August 2009 to a total figure of 5 ,732
,000. Nearly 10 % of these women say they are working part-time
because they can't find a full-time job • Average earnings excluding
bonuses rose by just 1.9 % in the three months to August from a year
earlier, the lowest figure on record. 'Fragile recovery' "Although
unemployment isn't as high today as many feared it would be at the
time of the Budget, it remains a serious problem, which is why we
must keep increasing support and advice to get people back into jobs,"
said Work and Pensions Secretary Yvette Cooper. Paul Kenny, general
secretary of the GMB union said the latest figures showed "some
tentative signs of a very fragile recovery in the economy". Investec
chief economist Philip Shaw said the numbers were "more encouraging
than we had hoped". "It does suggest that the pace of deterioration
in the jobs market is easing quite sharply which is encouraging for
the outlook for a sustainable recovery," he said. The latest
unemployment data comes a week before the Office for National
Statistics (ONS) releases its first estimate for how the UK economy
performed between July and September. Despite some signs of economic
improvement, analysts remain unsure as to whether the economy will
post growth and therefore exit recession. If the economy contracts
again, it will be the first time that the UK has endured six
successive quarters without economic expansion.

Bloomberg to buy BusinessWeek

Bloomberg LP is buying BusinessWeek magazine in a deal that brings
together a financial news service specialising in rapid-fire updates
with a print publication struggling to adapt to the Internet's
information whirlwind. Terms of the sale announced Tuesday were not
disclosed. Citing unnamed people privy to the negotiations,
BusinessWeek pegged the acquisition price at $2 million to $5
million in cash. Bloomberg also would be responsible for paying
other costs, such as severance pay to any of the roughly 400
BusinessWeek employees who might be laid off, the magazine's Web site
reported. Bloomberg LP, a privately held company started by New York
Mayor Michael Bloomberg, expects to take control of BusinessWeek by
the end of the year. That ends BusinessWeek's 80- year run as part
of McGraw-Hill Cos., which also owns the Standard & Poor's credit
rating agency. New York-based McGraw-Hill put BusinessWeek on the
auction block in July, apparently fed up with the losses that have
been mounting at the magazine as its advertising revenue plunged. The
acquisition represents one of Bloomberg's boldest and riskiest
attempts to extend its audience beyond its main mode of
communication the roughly 300 ,000 electronic terminals that it has
set up in the offices of money managers, traders, bankers and other
financial services professionals around the world. "BusinessWeek helps
better serve our customers by reaching into the corporate suite and
corridors of power in government, where news that affects markets and
business is made by CEOs, CFOs, deal lawyers, bankers and government
officials who typically are not terminal customers," said Daniel L.
Doctoroff, Bloomberg's president. Like many print publications,
BusinessWeek has been reeling from a one-two punch: the longest U.S.
recession since World War II and a massive shift in media consumption
that has driven more advertising online, where prices are generally
much lower than in print. BusinessWeek also has been trying to figure
out how a weekly magazine can remain relevant at a time when
financial and corporate news is plastered all over the Web around the
clock. As part of its coping mechanism, BusinessWeek has sharpened
its focus on its corporate audience and trimmed its coverage of
general-interest topics, such as sports and culture. Bloomberg didn't
immediately discuss how it might reshape the magazine's coverage or
how its takeover will affect the publication's staff. It appears
those decisions will left to Norman Pearlstine, a former managing
editor for The Wall Street Journal and Time Inc.'s former editor-
in-chief. Currently Bloomberg's chief content officer, Pearlstine
will become BusinessWeek's chairman. "It's kind of an old fashioned
idea but I still very much believe that a rich and smart weekly can
find an audience in this space," Pearlstine said in an interview.
Although Bloomberg spent weeks poring over BusinessWeek's books and
operations, Pearlstine said he still hasn't had time to talk to the
magazine's editors to get a better idea on what to do next. "The
first thing I want to do is sit down with them and try to learn from
them," he said. Pearlstine described BusinessWeek's current top
editor, Stephen Adler, as an old friend. The two men worked together
for several years while they were both still at The Wall Street
Journal. With a circulation of about 921 ,000 , BusinessWeek has been
doing a better job retaining subscribers than advertisers. The total
number of advertising pages sold by the magazine has plummeted from a
peak of 6 ,000 in 2000 to fewer than 1 ,900 last year, according to
the Publishers Information Bureau. The ad decline has deepened this
year with the volume falling another 37 percent through June. The
deterioration is expected to saddle the magazine with about $40
million in losses for the second consecutive year, including office
rent and other overhead, according to internal figures cited by
BusinessWeek. Despite BusinessWeek's woes, the magazine attracted
interest from several private equity firms and other media investors,
including Bruce Wasserstein, the owner of New York magazine, and Joe
Mansueto, the owner of two business publications, Fast Company and
Inc. The other bidders were reported by BusinessWeek. Other
struggling magazines haven't even had a chance to turn around under
new owners. Just last week, Conde Nast Publications decided to close
Gourmet magazine, ending a 68- year run to the dismay of food
connoisseurs. Earlier in the year, Conde Nast pulled the plug on a
BusinessWeek rival, Portfolio magazine. Besides distributing stories
generated from Bloomberg's staff of 2 ,200 reporters, editors and
photographers, Bloomberg terminals also display a wide range of
market and economic data that help shape investment decisions. The
service is the main reason Michael Bloomberg ranks among America's
richest people, with a fortune of $17.5 billion, according to Forbes
magazine estimates. This is the second deal announced this month that
gives Bloomberg a new springboard to reach a wider audience. It is
also joining forces with The Washington Post in a partnership that
will put Bloomberg stories in the Post's print edition and Web site
and include a jointly operated news service targeting other
newspapers.

Japan seeks investment ease

It takes a long time to get a business visa to come to Bangladesh.
The same is the case for opening a bank account or an office here. An
investor needs to get permission from 8-9 different government
offices. All these impediments coupled with infrastructure problem
discourage increased Japanese investment in Bangladesh, a press
briefing was told yesterday. "We expect a big boost in Japanese
investment in future. But investors of the country face some problems
here. We will lobby the government for a solution," said Annisul Huq,
president of the Federation of Bangladesh Chambers of Commerce and
Industry (FBCCI), at the press meet. The press briefing was organised
at Sonargaon hotel to share the outcome of the 15 th meeting of
Japan-Bangladesh Joint Committee for Commercial and Economic
Cooperation. Japanese Ambassador to Bangladesh Tamotsu Shinotsuka and
Chairman of the joint committee Toshihito Tamba were also present at
the briefing. At the meeting, participants discussed increased
investment and enhancement of bilateral trade relations between the
two countries. Bangladeshi entrepreneurs, especially knitwear makers,
demanded easing the rules of origin to increase exports to Japan. In
fiscal 2008-09 Bangladesh exported goods worth $ 202.60 million to
Japan against the import of $1 , 015.38 million. "We want Japan's
support at the upcoming WTO ministerial to avail of duty- and
quota-free access to the developed markets," said the FBCCI
president. "Many of the problems can be solved if a trade agreement
is signed between the two countries," he said. Toshihito Tamba urged
the government and ministries concerned to take steps to remove the
hurdles faced by the Japanese investors.

Steps underway to tap more labour markets Prime Minister tells Baira

Prime Minister Sheikh Hasina said the government is taking necessary
measures to explore more labour markets in many countries, including
Saudi Arabia, Kuwait, Libya and Malaysia. She spoke of the move when
a delegation of Bangladesh Association of International Recruiting
Agencies (Baira), led by its President Golam Mustafa met her at her
office yesterday. The Prime Minister asked the recruiting agencies
and all other responsible authorities to take maximum care of the
Bangladeshis working abroad and the ones seeking overseas jobs. She
further asked them to be highest caring about the job facilities and
other safeties of the female Bangladeshi workers abroad. The premier
laid emphasis on identifying the areas of jobs of the particular
countries and making Bangladeshis skilled in the job-specific
sectors. "Skilled human resources can be created in the fields of
nursing, catering and even for domestic jobs," she told manpower
exporters. Besides, Bangladeshi doctors, engineers and IT
professionals have a good demand in the world markets, the Prime
Minister said. The Baira placed a 33- point demand to the Prime
Minister. Their demands include urgent diplomatic initiatives to send
manpower to Saudi Arabia, Malaysia, Libya, Iraq, Kuwait and South
Korea, modifying recruiting agencies' behaviour and license code of
conduct 2002 , facilitating the recruiting agencies with Foreign
Exchange and FC Pass Book, electing CIP from the recruiting agencies,
Tk 500 crore cash incentives for the workers who returned home
losing jobs for economic recession, immediate intervention to make
the National Skill Development Council functional.

Single-day turnover sets new benchmark on DSE

The single-day turnover on the premier bourse crossed Tk 1 ,200
crore level yesterday, setting a new milestone in Bangladesh capital
market history. Benchmark index of the Dhaka Stock Exchange also hit
a new high at 3 , 296.03 points. The previous high was 3 ,280
points on Tuesday. Experts say the liquidity glut caused by
increasing investor participation pulled up the turnover, which
touched Tk 1 , 149.71 crore on July 2 this year, the previous
highest. "Huge number of new investors, including individuals and
institutions are entering into the market that resulted in a
liquidity glut in the market," Sheikh Mortuza Ahmed, head of
merchant banking division at Prime Bank. He said some scrips are
getting overvalued with injection of new funds, and the market will
see a correction in share prices in the coming days. The market
regulator, Securities and Exchange Commission, said the current
market trends are under its close lens. "The new investors should
follow the fundamental base investment. They should avoid any rumour-
based investment," said Anwarul Kabir Bhuiyan, executive director of
SEC. The broader DSE All Share Price Index rose by 12. 26 points, or
0.44 percent to 2762.53. Losers however beat advancers 119 to 117
with five securities remained unchanged. A total of 7 , 18 ,60 ,022
shares and mutual fund units worth Tk 1 , 201.05 crore were traded on
the prime bourse. Bextex topped the turnover leaders, with 1 ,07 , 84
,000 shares worth Tk 82.07 crore being traded on the prime bourse.
BD Welding was the largest gainer that increased 14.75 percent, while
BLTC was the top loser that declined 7.85 percent. Chittagong stocks
however closed almost flat yesterday. The CSE Selective Categories
Index rose 2.79 points, or 0.03 percent to 7 , 156.49. The CSE All
Share Price Index increased 10.72 points, or 0.09 percent to 11 ,
391.91. A total of 98 ,29 ,459 shares worth Tk 116.03 crore changed
hands on the Chittagong Stock Exchange. Of the traded securities, 81
advanced, 85 declined and seven remained unchanged. Bextex topped
the turnover leaders on the port city bourse with 18 ,92 ,800 shares
worth Tk 14.31 crore being traded. BD Welding, which advanced 17.49
percent, was the largest gainer on the CSE. Saiham Textile Mills,
which declined 10.73 percent, was the biggest loser.

BB moves on merchant banking Commercial banks directed to set up subsidiaries

Bangladesh Bank has directed commercial banks to form separate
subsidiaries to operate any merchant banking. The move is meant to
uphold the interest of depositors, Bangladesh Bank said in a circular
to commercial banks yesterday. "The subsidiary companies to be formed
under a bank for merchant banking must follow rules and regulations
issued by the Securities and Exchange Commission," the central bank
said. "A bank will have to take permission from Bangladesh Bank to
set up a subsidiary company for merchant banking," the circular
added. The subsidiary company will not be allowed to purchase in its
own portfolio or in customer accounts any share of a listed company
where the directors of the subsidiary or its parent company or their
family members are involved. According to the circular, the banks --
already in merchant banking -- will have to turn their units into
subsidiaries by January 2010. Prime Bank, AB Bank, EXIM Bank, Trust
Bank, Janata Bank, Southeast Bank and Standard Bank have merchant
banking wings. Besides, Sonali Bank and Agrani Bank have merchant
banking licences. A subsidiary will have to attach its own financial
report in the annual financial statement of its parent company. If a
subsidiary company seeks to purchase more than 15 percent shares in
any company with loans from its parent bank, it will have to take
approval from Bangladesh Bank. The Bangladesh Bank circular said many
banks in merchant banking are violating rules under the Banking
Companies Act. The law says that no commercial bank can hold shares
whose value exceeds 30 percent of its paid-up capital. But some
banks are not following this rule. Bangladesh Bank has advised the
banks to properly follow the rule. Some banks have been accused of
getting involved in irregularities, which were later discovered by
the central bank in its investigations. A Bangladesh Bank official
said the central bank had issued a policy guideline.

Ford adds 4.5 m vehicles to defective switch recall

Ford Motor Co said Tuesday it will add 4.5 million older-model
vehicles to the long list of those recalled because a defective
cruise control switch could cause a fire. The latest voluntary action
pushes Ford's total recall due to faulty switches to 14.3 million
registered vehicles over 10 years, capping the company's largest
cumulative recall in history involving a single problem. The recall
covers 1.1 million Ford Windstar minivans that had a small risk of
fire due to internal leaking from the switches. Ford said in a letter
to federal regulators that it found a small number of reported fires
linked to the problem during an internal investigation that began
last year, but did not specify how many.

South Korea's jobless rate falls to nine-month low

South Korea's unemployment rate fell to its lowest level in nine
months in September amid signs its economy is recovering fast,
official data showed Wednesday. The rate was 3.4 percent last month,
down from 3.7 percent the previous month, the National Statistical
Office said. The number of employed people surged to 23.8 million in
September, up 71 ,000 from a year earlier, it said. Asia's
fourth-largest economy has rebounded quickly, growing 2.3 percent in
the second quarter from three months earlier thanks to the impact of
stimulus packages. But Tine Olsen, an economist with Moody's
Economy.com, cautioned there could be some signs of weakness in South
Korea's labour market, citing a cut in manufacturing and mining jobs
in August and September. "Lower employment in these industries could
reduce workers' willingness to spend and the demand for services,"
Olsen said in a commentary.

Malaysia's economy to shrink 3.3 pc in 2009 : Think tank

Malaysia's economy is showing signs of a slow recovery, a leading
think tank said Wednesday as it raised its 2009 forecast to a 3.3
percent contraction from 4.2 percent tipped earlier. However, the
Malaysian Institute of Economic Research (MIER) said Southeast Asia's
third- largest economy may need a third stimulus package worth 8.0
billion ringgit (2.4 billion dollars) next year to spur the recovery
process. The MIER also upgraded its 2010 growth forecast to a 3.7
percent expansion from 2.8 percent forecast in July, in anticipation
of a modest economic recovery worldwide. "There are glimmer signs
that the global downturn has stabilised somewhat, but the recovery
is expected to be sluggish and uneven," the influential institute
said in a report. "Malaysia may not regain more strength until the
global economy is back on track, which is going to be at a
disappointingly slow pace," it added.

Asia leading world out of downturn: Bush

Former US president George W. Bush praised Asian economies Wednesday
for leading the global economy out of its slump, while warning
against a rise in trade protectionism. "One thing I am certain of is
that the Asian economies are leading the world out of the economic
duress. That's an amazing statement to make," Bush said in a keynote
speech to the World Knowledge Forum in Seoul. China, South Korea,
Singapore, Hong Kong, Taiwan, Japan and Thailand were performing
well thanks to clever stimulus policies, he said. "The Asian economies
are going to be a powerful engine for growth for the future," Bush
said. "I'm optimistic that things are getting better." But he
cautioned against a rise in protectionism. "In times of economic
difficulties... people tend to want to throw up walls and barriers to
trade. I'm deeply concerned about protectionism," he said. "I
believe strongly that the best way to not only encourage growth but
deal with global poverty is free trade." Bush repeated his support
for US free trade accords with South Korea and Panama, which were
both signed under his leadership but have yet to be ratified by
Congress.

China exports in recovery

China's exports fell at the slowest pace in nine months in September,
customs data showed Wednesday, indicating demand for Chinese goods
was improving and helping the government sustain the recovery. The
better-than-expected data -- which sent stocks up in Shanghai -- was
positive for the world's third-largest economy and may help give the
government impetus to next year start unwinding massive stimulus
measures, said analysts. Exports fell 15.2 percent to 115.9 billion
dollars on-year in September, customs authorities said. It was the
best result since exports fell by 2.8 percent in December as the
global crisis began to set in. In the first nine months of 2009 , the
trade surplus stood at 135.5 billion dollars, down 26 percent
compared with the same period a year ago, the General Administration
of Customs said in a statement on its website. "Today's export
numbers are encouraging and in line with recent PMI (Purchasing
Managers Index) survey data showing improved export orders," said
Brian Jackson, a Hong Kong-based senior strategist at the Royal Bank
of Canada. "Some of the recent US data also point to stronger demand
for China's exports in the months ahead." Jackson said improving
demand for Chinese goods would give the government confidence to start
reining in massive stimulus measures from next year. "Chinese growth
this year has been heavily reliant on government-directed investment,
which is why senior officials have continued to characterise the
recovery as not broadly based or firmly established," Jackson said.
"Stronger external demand will provide an alternative source of
support for growth and provide scope for Beijing to start tightening
policy gradually from early 2010. " China unveiled a
four-trillion-yuan (585- billion- dollar) stimulus package last
November aimed at propping up the export-dependent economy as demand
for Chinese goods plunged amid the deepening global financial crisis.
The massive government-backed investment in infrastructure projects,
combined with very low interest rates, appears to be bearing fruit.
China has said it was on track to achieve its target of eight percent
growth in 2009 after the economy expanded by 6.1 percent in the
first quarter and 7.9 percent in the second quarter. Before the
crisis struck, the country had experienced double-digit annual growth
from 2003 to 2007 and again in the first two quarters of last
year. Su Chang, an economist at Beijing research firm CEB Monitor
Group, said he expected exports in the current quarter to fall by
less than 10 percent compared with the more than 20 percent decline
posted in the third quarter. "(The recovery in foreign demand) would
be sustainable -- at least it can sustain for several quarters," Su
said. But Su noted that the trade figures were helped by the fact
there were more working days in September this year than in 2008 due
to the timing of the National Day holiday. Imports slipped 3.5
percent to 103 billion dollars in September -- the slowest pace of
decline since imports began to fall in November last year. Exports
fell a seasonally adjusted 20.1 percent in September on-year and
imports dropped 11.4 percent. Moody's Economy.com associate economist
Nikhilesh Bhattacharyya said the pick up in imports was being driven
by stockpiling. "Commodity stockpiling appears to have been the major
factor behind the improvement in imports, reflected by a record
amount of iron ore imports during September," Bhattacharyya said.

Local airlines falling off the skies

Foreign carriers have captured nearly two thirds of the Tk 3 ,000
crore Bangladesh aviation market as local airlines, especially Biman,
suffer capacity constraints, industry analysts said. The dominance is
an indicator that huge forex is drained out of Bangladesh. Much of
the money could have been saved if Bangladesh had paid enough
attention to strengthening the capacity of the state-owned carrier.
Biman's market share hovers around 30 percent in passenger haul,
down from more than 40 percent in 2001 , despite air travel growth by
the year due to the regular outflow of Bangladeshi migrants. Foreign
carriers largely account for market growth as new entrants debuted
operations and existing carriers increased flight frequencies and
enhanced products and services to catch up with an increased traffic
flow in recent years. "The reason behind the growth is that foreign
carriers are able to present tailored services to the needs of their
clients," said K Ashraful Kabir, country manager of UAE's national
carrier Etihad Airways that began flights from Bangladesh in 2006.
"Along with enhancing our products, we offer connections to our
guests' desired destinations through our own network or the
international network," he said. Onward connections, better services
and diversified products have mainly helped foreign carriers secure
much of the share in the Bangladeshi aviation market. Foreign carrier
traffic surged 47 percent to 23.32 lakh passengers in 2008 , compared
to 2005 , out of Zia International Airport, according to Civil
Aviation Authority, Bangladesh (CAB) data. By contrast, traffic to
Biman grew 11 percent in the same period. Total traffic from ZIA
surged 43 percent to 37.48 lakh passengers in 2008 , compared to
2005. "It is true that the Bangladeshi aviation market has grown. But
our capacity has not increased as much; rather it has declined over
time. That's why we are losing our market share," Muhammad Zakiul
Islam, managing director and chief executive of Biman. Since 2005 ,
the airline's fleet size narrowed to below 10 aircraft from 14 ,
which forced the national carrier to suspend flights on 10 routes
and cut frequencies to several destinations. The carrier now flies to
16 destinations, down from 26 in 2005. On the other hand, foreign
airliners increased flight frequencies by offering increased onward
destinations to Bangladeshi travellers. The latest offer was made by
Kuwait Airways, which announced a plan to operate two flights a week
from Chittagong. Early this year, Emirates added three more flights a
week to take the total weekly number to 17. The Dubai-based carrier
had earlier said it would operate 21 flights a week from Bangladesh
in "near future". New entrants have also made a mark in the
Bangladeshi skies. In the last three years, at least seven carriers
began operations from Bangladesh, with three new names this year
alone. China Southern Airlines was the latest to begin flights from
Bangladesh, followed by Kingfisher Airlines and budget carrier Air
Asia X. Biman officials said such an increase in frequencies and
foreign carrier operations and subsequent cuts in Biman's operations
led to the rise in foreign carrier market share. Government decisions
on several past occasions to increase traffic rights of foreign
carriers have also made contributions. Officials said such decisions
were not always taken by considering the basic traffic flow between
the two countries, but by looking at the onward connections that the
carriers have to offer. Insiders said Biman is also hurt by technical
glitches and irregular schedules because of an aging fleet -- the
average age of the fleet is 25 years, with the youngest aircraft, A
310-300 , being 15 years old. "Passengers have also lost confidence
on us as we cannot always provide aircraft for scheduled flights,"
said the Biman CEO. On how to regain a market share, Kazi Wahidul
Alam, editor of an aviation and tourism fortnightly The Bangladesh
Monitor, suggested: " Biman will have to bring in new aircraft to
expand capacity." To infuse dynamism into Biman, the government
turned the carrier into a public limited company in July 2007. The
carrier had later sealed a deal to acquire 10 aircraft from Boeing,
which is expected to start delivery in 2011. In the meantime, Biman
planned to lease seven aircraft to operate flights on existing routes
as well as resume flights on some suspended destinations, such as
New York. "We will be able to recover lost market share once we have
aircraft," said the Biman chief. But Alam said it is a must for Biman
to restructure its management to compete with global carriers.

Barua says BSTI modernisation continues

Industries Minister Dilip Barua said modernisation of Bangladesh
Standards and Testing Institution (BSTI) is going to turn it into a
well-equipped international standard organisation. Once the BSTI, the
lone state-run watchdog agency for monitoring food items and
manufacturing products, is made an effective organisation by
equipping it with modern apparatuses, it will help expedite the
export process. The minister was speaking at a discussion on
`Tackling Climate Change through Standards', organised by the BSTI on
the occasion of the International Standard Day at its seminar room
in Dhaka yesterday.

WFP starts hunger relief campaign with KFC, Pizza Hut

KFC and Pizza Hut yesterday launched the World Hunger Relief Campaign
in association with the World Food Programme in Dhaka. John Aylieff,
WFP representative in Bangladesh, and Akku Chowdhury, executive
director of Transcom Foods Ltd, inaugurated the month-long campaign
to raise awareness on hunger and poverty and help schoolchildren by
providing education and food. Transcom Foods Ltd is the franchisee of
KFC and Pizza Hut in Bangladesh. KFC and Pizza Hut, restaurants under
the Yum! International brand, arranged the campaign, which will run
from October 14 to November 13 for the third time in Bangladesh.
Aylieff said the campaign would highlight the food crisis to the
public and private sectors. There are around 7.5 million starving
people in Bangladesh. In collaboration with the government, WFP will
provide vitamin and mineral fortified biscuits for around 60 ,000
students in 4 ,000 schools around the country. Yum! and WFP will run
the programme internationally in 112 countries through 35 ,000
restaurants under the Yum! International brand.

Sheltech fair kicks off today

Sheltech (Pvt) Ltd, a real estate company, begins a five-day
promotional housing fair on at its office in Dhaka today. The company
will come up with different discount offers to sell off their
products during the fair styled "Sheltech Housing Fair-09 ", Toufiq M
Seraj, managing director, told a press conference at its office at
Panthapath in the capital yesterday. It will offer up to Tk 5 lakh
discount against each flat and 10-15 percent discount on plots.
"Sheltech is always sincere to offer flats to customers at low
price," Seraj said. The fair will remain open from 10 am to 7 pm
every day without any entry fee. The Sheltech MD said his company now
goes ahead with around 50 projects to build 1 ,200 apartments.
Around 2 ,000 apartments have so far been handed over to customers
since its inception in 1988 , he added. Seraj suggested that the
government come forward to address the issues like exorbitant prices
of construction materials and land, which he blamed for the present
high rate of flats. Mushfiqur Rahman Khan, head of marketing of
Sheltech, and Sharif Hossain Bhuiyan, head of operations, were also
present at the press meet.

HRG teams up with Travelscene

Hogg Robinson Group (HRG), an international corporate travel services
company, appointment Travelscene Ltd as its new partner in Bangladesh
yesterday. "The Middle East West Asia is still a popular market to
do business and is well placed to emerge from the current downturn,"
said David Radcliffe, chief executive of HRG. "HRG has a strong
presence in this region and having Travelscene as our new partner in
Bangladesh will further add value and expertise to our clients'
corporate travel management needs," he said. Established in 1845 ,
HRG operates from its headquarters in Basingstoke, Hampshire, UK, and
its client base spans industry sectors, including automotive, banking
and finance, manufacturing, media and entertainment, oil and gas,
pharmaceutical and telecommunications. HRG's interests include owned
or controlled corporate travel service operations in 25 key growth
markets throughout North America, Europe and Asia Pacific, which are
supported by a network of contracted partners in nearly 120
countries. Travelscene, established in 1986 , operates from SANARC
Complex, Tejgaon, and it has been a regular winner in the regional
performance awards held by major airlines. "We are looking forward to
working with HRG and its extensive portfolio of valued clients.
HRG's dominance in the corporate travel arena coupled with our
extensive expertise, professional staff and knowledge of Bangladesh
makes for a perfect partnership," said Sadeque Chowdhury, managing
director of Travelscene.

Afghan team in town to study investment climate

A six-member delegation from the Afghanistan Investment Climate Fund
(AICF), also known as Harakat, has visited Bangladesh with an aim to
learn from the local experiences of investment climate reforms here.
"As the Bangladesh Investment Climate Fund ( BICF) has effectively
been running programmes to support and improve the investment climate
of the country for the last two and a half years, we have come here
to learn from the experiences in Bangladesh," Suleman Fatimie, CEO
of Harakat, told The Daily Star. BICF is managed in partnership with
the UK Department for International Development ( DFID) and European
Commission. He said the delegation visited the Dhaka Export
Processing Zone (EPZ) and the Small and Medium Enterprise (SME)
Foundation. The team plans to meet several stakeholders to gain
insight from them. "Bangladesh has so far been doing a brilliant job
in improving the investment climate. We are impressed by the
e-registration system for businesses, which we hope to replicate in
our country," said Fatimie at a meeting. Harakat, an Afghan word that
stands for movement forward, was established in 2008 and run by an
Afghan board of prominent business people. The organisation is
working to encourage more private sector investment and to
reconstruct the war-hit country for the last three decades. "Harakat
aims to ease business in Afghanistan, support investment and achieve
economic growth. So we want to learn from countries like Bangladesh
and then replicate the ideas in our own country," he said. "To
achieve this, we provide grant funds to the government for activities
that reduce the barriers to doing effective business in
Afghanistan," said Fatimie. "The most common barriers for Afghanistan
are issues like complicated government rules and procedures,
corruption, bureaucracy and insufficient skills." Currently, Harakat
has a fund of $50 million, provided by DFID, to finance projects
aimed at promoting the business environment throughout Afghanistan.
"We aim to build this into a $100 million fund by attracting
additional donor and private sector funding," added the Harakat
chief. Tamim Samee, a board member of Harakat, and Laura Watson,
programme manager of BICF, were also present.

Tk 422 cr suggested for Khulna Newsprint relaunch

An experts committee on Khulna Newsprint Mills (KNM) has pointed out
that the mill needs at least Tk 422 crore in running capital to
purchase machinery and other equipment for its re- opening. The lone
state-run newsprint producing factory has remained closed for seven
years. The recommendations the committee put forward in its reports,
submitted to the Bangladesh Chemical Industries Corporation ( BCIC)
last month, also included reforms and renovation of the mill. This
body, a nine-member one with BCIC's Technical and Engineering
Director SM Hafizuddin and KNM Managing Director Khalilur Rahman as
its head and member-secretary, made a survey of the mill's latest
condition and ascertained what should be done to restore production.
It strongly opposed any divestment move and suggested ways and means
to make the mill a profitable one. The government body, formed May 28
last, took five months to report its findings to the BCIC chairman.
"We have also discussed the sources of raw materials for the mill,
proper marketing of its products at home and abroad and its cost
effectiveness," the expert committee's member- secretary told The
Daily Star. Khalilur Rahman said the committee also recommended a Tk
500 crore debt write-off for the mill. The government should go
tough on any influence on the mill management by its CBA leaders,
the experts further recommended.

Mobile users cross 50 m

More than a third of the country's 150 million population are now
under mobile phone coverage, as six cellphone operators' total
customers crossed the 50- million milestone in September to reach
50.4 million. Bangladesh Telecommunication Regulatory Commission
(BTRC) released the statistics yesterday. Experts termed the
achievement as a ' technology revolution' in the country with a
saturated mobile market. Voice communication through mobile telephony
started with CDMA (code division multiple access) technology
introduced by Pacific Bangladesh Telecom Ltd -- the owning company
of Citycell -- in 1993. The expensive communication device started to
become handy gradually after the introduction of GSM (Global System
for Mobile Communications) technology by Grameenphone and AKTEL in
1997. Banglalink and state-run TeleTalk launched their services in
2005 and Warid came as the latest entrant in 2007. BTRC data shows
that customer growth jumped by 44 percent to 45.09 million in
September 2008 from 31.42 million in the same month of 2007. However
the growth in September 2009 was 11 percent, as only 5.3 million
customers were added to the network during the month against 13.67
million in the same month a year ago. Oddvar Hesjedal, chief executive
officer of Grameenphone, said the 50- million mark is obviously a
major milestone for any country. "Mobile communication will be a major
driver for the Digital Bangladesh. The first 50 million has taken 15
years to reach; I feel that in the right business environment, the
next 50 million subscribers will happen much faster," he said.
However a real hurdle for such development is the SIM tax, which
makes new connections more expensive, he said. "Mobile technology has
brought a revolution here," said Zakiul Islam, president of
Association of Mobile Telecommunications Operators of Bangladesh.
"If some tax structure eases, the market will grow further," he said.

Currency rate

Local Market FX Local inter-bank FX market was active today. The
USD/BDT rate traded at a similar rate compared to the previous
working day, however there was liquidity pressure in the market.
Money Market Money market was active on Wednesday. The market was
liquid; and the majority of deals traded around 2.5 %. Rates are
taking their cue from the reverse repo rate. International Market
The dollar hit a 14- month low versus the euro and a currency basket
on Wednesday on the view that US interest rates will stay low, while
higher commodity prices reflected optimism about an improving global
economy, tarnishing the US currency's safe-haven appeal.

IBFB executive director takes over charge

Brigadier General (rtd) M Mofizur Rahman joined the International
Business Forum of Bangladesh ( IBFB) as executive director and an
advisor to the board of directors, says IBFB in a statement. Prior to
joining the IBFB, he was serving as the national project coordinator
of ITC (International Trade Centre) for an EU funded project BQSP for
export promotion and diversification of Bangladeshi products and
services. Rahman, a civil engineer and founder commandant of Military
Institute of Science and Technology, joined Concord Group after his
retirement from the Bangladesh Army in 2001.

Asian markets gain

Upbeat sentiment going into the third-quarter earnings season gave
Asian markets a boost on Wednesday as resources chips were lifted by
rising commodities prices. Hong Kong added 1.95 percent, Sydney rose
0.95 percent and Seoul 1.24 percent, while Taipei was 1.31 percent
up. Shanghai rose 1.17 percent, helped by customs data showing the
rate of decline in China's exports was at its slowest in nine months.
Crude rose further to around 74 dollars a barrel as the dollar
continued to struggle against other currencies, while gold surged
above 1 ,070 dollars an ounce for the first time. TOKYO: Down 0.16
percent. The Nikkei-225 index fell 16.35 points to 10 , 060.21.
Mazda Motor slid 6.4 percent to 220 yen. HONG KONG: Up 1.95
percent. The Hang Seng Index rose 419.12 points to 21 , 886.48.
SYDNEY: Up 0.95 percent. The S&P/ASX200 added 45.4 points to 4
,831.1. SHANGHAI: Up 1.17 percent. The Shanghai Composite Index,
which covers both A and B shares, rose 34.34 points to 2 , 970.53.
SEOUL: Up 1.24 percent. The KOSPI gained 20.16 points at 1 , 649.09.
TAIPEI: Up 1.31 percent. The weighted index rose 99.15 points to 7 ,
695.75. SINGAPORE: Up 1.50 percent. The Straits Times Index advanced
40.08 points to 2 , 708.48. BANGKOK: Down 2.04 percent. The Stock
Exchange of Thailand plunged 15.20 points to close at 731.47. KUALA
LUMPUR: Up 1.08 percent. The Kuala Lumpur Composite Index gained
13.33 points to 1 , 246.84. JAKARTA: Up 1.61 percent. The Jakarta
Composite Index gained 39.73 points to 2 , 511.72. MANILA: Flat. The
index edged up 0.61 points, or 0.02 percent, to 2 , 930.70. MUMBAI:
Up 1.2 percent. The 30- share Sensex index rose 204.44 points to a
17- month high of 17 , 231.11.

Oil breaches $75

The price of oil jumped Wednesday above 75 dollars per barrel,
hitting the highest level so far this year on the back of the tumbling
dollar, analysts said. New York's main contract, light sweet crude
for November delivery soared to 75.15 dollars per barrel, which was
last seen on October 20 , 2008. Brent North Sea crude for November
delivery advanced 69 cents to 73.09 dollars a barrel on Wednesday.