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Gordon Brown has promised the economy will return to growth by the
turn of the year, in his first reaction to news that the UK is still
in recession. His podcast was released on the Number 10 website a day
after official figures showed the economy was still shrinking. The
prime minister accepted times were tough but said the battle to stop
"a second Great Depression" was being won. But the Tories said the
recovery was set to be "feeble" and the UK was lagging behind other
leading countries. In his message, Mr Brown pledged to take action
against excessive bank bonuses and end "sharp practices" by credit
card operators. The prime minister said they should stop raising
interest rates on existing debts without explanation and issuing
unsolicited credit card cheques. BBC political correspondent Gary
O'Donoghue said there were no details of how the issue would be
tackled ahead of an expected announcement on Tuesday. Previously
ministers have suggested banning credit card cheques. Wall Street
Crash Mr Brown said: "We are announcing measures to make the credit
and store card companies clean up their act to get you a fairer deal.
"Sharp practices by lenders - such as hiking interest rates on
existing debts without explanation, sending out unsolicited credit
card cheques and raising credit card limits without being asked -
these sharp practices should end." " It would be suicidal to put
recovery at risk by suddenly cutting off the funding and investment
that is supporting young people, families and businesses " Gordon
Brown The podcast was released on the 80 th anniversary of the Wall
Street Crash and came after news that the UK economy shrank by 0.4 %
in the third quarter of 2009 - making the recession the longest since
records began. "My pledge to you is to make reform of the financial
sector a reality and to see Britain's economy return to growth by the
turn of the year," Mr Brown said. He said it would be "suicidal" to
start cutting spending, as the Conservatives have suggested.
"Although there are signs that confidence is beginning to return in
some areas, we need to be cautious," he said. "Now, more than ever,
is the time for steady and clear policies. That is why it would be
suicidal to put recovery at risk by suddenly cutting off the funding
and investment that is supporting young people, families and
businesses through the most challenging times in a generation." He
also insisted the fight to prevent "a second Great Depression" was
being won as a result of international co-operation. 'Feeble
recovery' Shadow Business Secretary Ken Clarke said he could not say
when the UK would come out of recession but that the prospects for
growth in 2010 were not encouraging. "Sooner or later we are going
to start getting a very feeble recovery but it is going to be feeble
and fragile," he told Sky News. "We are worse affected than pretty
well anybody else in the Western world, for some perfectly practical
reasons, part of which is the colossal scale of the public debt."
Substantial measures were needed to get banks lending again and to
help young people find work, Mr Clarke added, but he said he feared
nothing would happen before the next election as the government was
"inactive" and Mr Brown "burnt-out".
US home sales unexpectedly higher
Sales of previously-owned US homes unexpectedly surged last month to
the highest level in more than two years. The National Association of
Realtors said sales rose 9.4 % to an annual rate of 5.57 million
last month, up from a rate of 5.09 million in August. Analysts had
been expecting a rise in the seasonally adjusted annual rate to 5.35
million in September. The average sale price dropped 8.5 % from a
year ago to $174 , 900 (£106 ,937) , the smallest annual drop in 13
months. 'Temporary dip' Some will see the data as more evidence of a
US housing recovery. However, much of the gain was attributed to a
tax credit that is due to expire on 1 December. "Much of the momentum
is from people responding to the first-time buyer tax credit, which
is freeing many sellers to make a trade and buy another home," said
the association's chief economist Lawrence Yun. "We are hopeful the
tax credit will be extended and possibly expanded to more buyers, at
least through the middle of next year." If the tax credit is not
extended, then house sales may fall, analysts said. "If the credit is
allowed to expire, home sales will probably dip temporarily in the
following months," said Brian Wesbury at First Trust Portfolios.
"However, the underlying trend will be upward over the next couple of
years as potential homebuyers no longer need to fear widespread deep
national home price declines. "
the highest level in more than two years. The National Association of
Realtors said sales rose 9.4 % to an annual rate of 5.57 million
last month, up from a rate of 5.09 million in August. Analysts had
been expecting a rise in the seasonally adjusted annual rate to 5.35
million in September. The average sale price dropped 8.5 % from a
year ago to $174 , 900 (£106 ,937) , the smallest annual drop in 13
months. 'Temporary dip' Some will see the data as more evidence of a
US housing recovery. However, much of the gain was attributed to a
tax credit that is due to expire on 1 December. "Much of the momentum
is from people responding to the first-time buyer tax credit, which
is freeing many sellers to make a trade and buy another home," said
the association's chief economist Lawrence Yun. "We are hopeful the
tax credit will be extended and possibly expanded to more buyers, at
least through the middle of next year." If the tax credit is not
extended, then house sales may fall, analysts said. "If the credit is
allowed to expire, home sales will probably dip temporarily in the
following months," said Brian Wesbury at First Trust Portfolios.
"However, the underlying trend will be upward over the next couple of
years as potential homebuyers no longer need to fear widespread deep
national home price declines. "
Oil price rises above $81 level
The price of oil has risen above $81 a barrel, a new high for the
year, as hopes rise that the global economic recovery is picking up
pace. US light crude rose to $81.43 a barrel, before slipping back
to $80.50. London Brent also climbed before dropping back to $78.82
a barrel. The price was boosted by figures released on Thursday
showing China's economic growth had accelerated. But a strengthening
dollar caused the price to fall in afternoon trading. The price of oil
has risen in recent weeks, largely on the back of strong company
results in the US which have fuelled optimism for the global economic
recovery. But there are concerns that sentiment, rather than
fundamentals, is driving the oil price, and that once these
fundamentals re- establish themselves, the price may fall. These
include spare capacity, stock piles of oil and weak demand among
industrialised nations.
year, as hopes rise that the global economic recovery is picking up
pace. US light crude rose to $81.43 a barrel, before slipping back
to $80.50. London Brent also climbed before dropping back to $78.82
a barrel. The price was boosted by figures released on Thursday
showing China's economic growth had accelerated. But a strengthening
dollar caused the price to fall in afternoon trading. The price of oil
has risen in recent weeks, largely on the back of strong company
results in the US which have fuelled optimism for the global economic
recovery. But there are concerns that sentiment, rather than
fundamentals, is driving the oil price, and that once these
fundamentals re- establish themselves, the price may fall. These
include spare capacity, stock piles of oil and weak demand among
industrialised nations.
Europe backs down on piracy plans
The European Parliament has given the green light for member states
to cut persistent file-sharers off from the net. It has dropped an
amendment to its Telcoms Package which would have made it hard for
countries to cut off pirates without court authority. It follows
pressure from countries keen to adopt tough anti-piracy laws. The
French government has just approved plans which could see pirates
removed from the net for up to a year. The UK's file-sharing policy
is also likely to include a clause about disconnecting persistent
offenders. An amendment to the European Parliament's forthcoming
telecoms legislation was designed to protect citizens against being
automatically cut off from the net. Amendment 138 read: "Any such
measures liable to restrict those fundamental rights or freedoms may
only be taken in exceptional circumstances...and shall be subject to
adequate procedural safeguards in conformity with the European
Convention for the Protection of Human Rights.. including effective
judicial protection and due process. " Dropping it effectively means
that individual countries would be able to ask internet service
providers to remove users deemed to be persistent pirates without
needing a prior court order. Persistent problem " Without compelling
services piracy will not be beaten " Mark Mulligan, Forrester
Research There has been much debate around Europe as to whether
internet access is a fundamental right. The European Parliament has
already adopted a provision stating that internet access is "
critical for the practical exercise of a wide array of fundamental
rights". UK prime minister Gordon Brown has said that people are as
entitled to internet access as to gas, water and electricity. At the
same time Business Secretary Peter Mandelson has moved to toughen up
anti- piracy legislation to include the ability to remove persistent
file-sharers from the net. According to figures from analyst firm
Forrester, 14 % of European internet users engage in illegal
file-sharing. Legislation may not be the answer, thinks Forrester
analyst Mark Mulligan. "Piracy will not be solved by legislation
alone. Without compelling services piracy will not be beaten," he
said. There have been a flurry of announcements about legitimate
services in recent months, including Sky's SkyTunes service and
tie-ups between the likes of internet service provider
CarphoneWarehouse and music service Napster. New methods Peer-to-peer
networks are likely to be the main targets of any anti-piracy
legislation. At network level, internet service providers are able,
if asked, to identify the particular machines from which music or
other content is being illegally downloaded. But non-network piracy
methods, including using instant messaging, e-mail, music blogs,
bluetooth and iPod ripping, are on the rise. It is likely that
legislation will be too slow to catch pirates, thinks Mr Mulligan.
"Technology just moves quicker. Already we are seeing around 20
different alternatives to peer-to-peer piracy," he said. This week
France's constitutional court approved its revised anti-piracy plans.
The proposed legislation operates under a " three strikes" system. A
new state agency would first send illegal file-sharers a warning
e-mail, then a letter and finally cut off their connection if they
were caught a third time. Under the revised law, a judge must rule on
the issue of whether to disconnect users. The UK's policy on
file-sharing is due to be revealed next month.
to cut persistent file-sharers off from the net. It has dropped an
amendment to its Telcoms Package which would have made it hard for
countries to cut off pirates without court authority. It follows
pressure from countries keen to adopt tough anti-piracy laws. The
French government has just approved plans which could see pirates
removed from the net for up to a year. The UK's file-sharing policy
is also likely to include a clause about disconnecting persistent
offenders. An amendment to the European Parliament's forthcoming
telecoms legislation was designed to protect citizens against being
automatically cut off from the net. Amendment 138 read: "Any such
measures liable to restrict those fundamental rights or freedoms may
only be taken in exceptional circumstances...and shall be subject to
adequate procedural safeguards in conformity with the European
Convention for the Protection of Human Rights.. including effective
judicial protection and due process. " Dropping it effectively means
that individual countries would be able to ask internet service
providers to remove users deemed to be persistent pirates without
needing a prior court order. Persistent problem " Without compelling
services piracy will not be beaten " Mark Mulligan, Forrester
Research There has been much debate around Europe as to whether
internet access is a fundamental right. The European Parliament has
already adopted a provision stating that internet access is "
critical for the practical exercise of a wide array of fundamental
rights". UK prime minister Gordon Brown has said that people are as
entitled to internet access as to gas, water and electricity. At the
same time Business Secretary Peter Mandelson has moved to toughen up
anti- piracy legislation to include the ability to remove persistent
file-sharers from the net. According to figures from analyst firm
Forrester, 14 % of European internet users engage in illegal
file-sharing. Legislation may not be the answer, thinks Forrester
analyst Mark Mulligan. "Piracy will not be solved by legislation
alone. Without compelling services piracy will not be beaten," he
said. There have been a flurry of announcements about legitimate
services in recent months, including Sky's SkyTunes service and
tie-ups between the likes of internet service provider
CarphoneWarehouse and music service Napster. New methods Peer-to-peer
networks are likely to be the main targets of any anti-piracy
legislation. At network level, internet service providers are able,
if asked, to identify the particular machines from which music or
other content is being illegally downloaded. But non-network piracy
methods, including using instant messaging, e-mail, music blogs,
bluetooth and iPod ripping, are on the rise. It is likely that
legislation will be too slow to catch pirates, thinks Mr Mulligan.
"Technology just moves quicker. Already we are seeing around 20
different alternatives to peer-to-peer piracy," he said. This week
France's constitutional court approved its revised anti-piracy plans.
The proposed legislation operates under a " three strikes" system. A
new state agency would first send illegal file-sharers a warning
e-mail, then a letter and finally cut off their connection if they
were caught a third time. Under the revised law, a judge must rule on
the issue of whether to disconnect users. The UK's policy on
file-sharing is due to be revealed next month.
Record recession for UK economy
The UK economy unexpectedly contracted by 0.4 % between July and
September, according to official figures, meaning the country is still
in recession. It is the first time UK gross domestic product (GDP) has
contracted for six consecutive quarters, since quarterly figures were
first recorded in 1955. But the figures could still be revised up or
down at a later date, because this figure is only the first estimate.
GDP measures the total amount of goods and services produced by a
country. The pound fell sharply after the figures were released,
reflecting the fact that many observers had expected the UK to have
grown during the quarter. It was down 1.7 % against the dollar, at $1.
6323 , and down 1.9 % against the euro, at 1. 0859 euros. Quarterly
growth of 0.2 % had been expected in the figures from the Office for
National Statistics (ONS), although expectations had been tempered by
recent figures showing no growth in retail sales in September, and a
2. 5 % decline in industrial output in August. ANALYSIS Hugh Pym, BBC
chief economics correspondent There's no disguising how grim these
figures are. Almost every City analyst expected there to be positive
growth in the third quarter. Instead it was negative. That means the
recession in the UK is the longest since modern records began in the
1950 s. Germany, France and Japan have all come out of recession
technically and the UK hasn't. The decline has continued. And the
markets didn't really like the look of that. The foreign exchange
markets have been selling the pound. There's every indication that
it's going to be a long hard slog for quite some time to come as the
British economy tries to turn itself round. The unexpected decline in
the services sector was the key factor behind the drop, with the
distribution, catering and hotels sector performing particularly
badly. The UK economy's reliance on the service sector, and financial
services in particular, may be the reason why it is still in recession
when partners such as France and Germany exited in the second quarter
of this year. The economy contracted 5.2 % compared with the same
period last year, which was marginally better than the record figure
of 5. 5 % in the previous three months. It has now contracted 5.9 %
from its peak before the recession began. The worse-than-expected GDP
figures are likely to make the Bank of England consider extending its
policy of quantitative easing. Quantitative easing is the central
bank's policy of printing money and using it to buy bonds from banks
and other companies to help stimulate the economy. 'Awful' The £175 bn
already announced for the quantitative easing programme will have been
spent by next month, so the third quarter GDP number will be important
in deciding whether to extend it. Indeed, at the Bank's current rate
of spending, it is expected to have spent the whole £175 bn in the
next week. As the next Monetary Policy Committee ( MPC) meeting, at
which quantitative easing decisions are taken, is not until 4
November, that would leave it with a week with no extra cash to pump
into the economy. The figures were "awful with no positive news"
according to James Knightley at ING. "This clearly suggests that the
likelihood of an expansion in quantitative easing by £50 bn or so over
the next quarter is rising, although [it] is not a foregone
conclusion." Former MPC member Professor David Blanchflower said the
negative GDP figures should not have been a surprise. "There's been
very little sign among firms that things were very much better," he
told the BBC. "The public seems to have some more confidence - they
seem to have believed the talk about green shoots, but actually the
data haven't really looked that way at all." Intervention needed " The
bottom line is that we should take this as very much a first draft of
UK economic history - but clearly a disappointing one " Stephanie
Flanders, Economics editor Analysts said it is worrying that the
decline has continued despite the stimulus measures that the
government and the Bank of England have introduced. "Continued
intervention - including help for businesses to access finance, and
incentives to promote investment - is still needed," said David Kern,
chief economist at the British Chambers of Commerce. "Above all else,
business confidence must be nurtured to ensure that recovery is not
further delayed." 'Deeply disappointing' Chancellor Alistair Darling
said he had never expected to see growth before the end of 2009. "Our
job is to support the economy as we come through towards recovery," he
said. "[Growth] will come - I'm confident about that - and I'm
confident that businesses and people generally will begin to see a
difference, but it will take time." Shadow chancellor George Osborne
described the figures as "deeply, deeply disappointing". "There are
many millions of people who will be deeply concerned to see that
Britain is still in recession six months after France and Germany came
out of recession," he told the BBC. "It destroys the myth that Britain
was better prepared." Liberal Democrat Treasury spokesman Vince Cable
said the figures were "a cold blast of realism". "We've had a lot of
talk recently based on a booming stock exchange and prices of luxury
houses in London that somehow this problem was at an end, and it
isn't," he said. One of the measures expected to be a particular help
in the final quarter of the year is the change in VAT. The rate of VAT
is due to return to 17.5 % from 15 % at the beginning of January and
consumers are expected to step up their purchasing ahead of that
increase.
September, according to official figures, meaning the country is still
in recession. It is the first time UK gross domestic product (GDP) has
contracted for six consecutive quarters, since quarterly figures were
first recorded in 1955. But the figures could still be revised up or
down at a later date, because this figure is only the first estimate.
GDP measures the total amount of goods and services produced by a
country. The pound fell sharply after the figures were released,
reflecting the fact that many observers had expected the UK to have
grown during the quarter. It was down 1.7 % against the dollar, at $1.
6323 , and down 1.9 % against the euro, at 1. 0859 euros. Quarterly
growth of 0.2 % had been expected in the figures from the Office for
National Statistics (ONS), although expectations had been tempered by
recent figures showing no growth in retail sales in September, and a
2. 5 % decline in industrial output in August. ANALYSIS Hugh Pym, BBC
chief economics correspondent There's no disguising how grim these
figures are. Almost every City analyst expected there to be positive
growth in the third quarter. Instead it was negative. That means the
recession in the UK is the longest since modern records began in the
1950 s. Germany, France and Japan have all come out of recession
technically and the UK hasn't. The decline has continued. And the
markets didn't really like the look of that. The foreign exchange
markets have been selling the pound. There's every indication that
it's going to be a long hard slog for quite some time to come as the
British economy tries to turn itself round. The unexpected decline in
the services sector was the key factor behind the drop, with the
distribution, catering and hotels sector performing particularly
badly. The UK economy's reliance on the service sector, and financial
services in particular, may be the reason why it is still in recession
when partners such as France and Germany exited in the second quarter
of this year. The economy contracted 5.2 % compared with the same
period last year, which was marginally better than the record figure
of 5. 5 % in the previous three months. It has now contracted 5.9 %
from its peak before the recession began. The worse-than-expected GDP
figures are likely to make the Bank of England consider extending its
policy of quantitative easing. Quantitative easing is the central
bank's policy of printing money and using it to buy bonds from banks
and other companies to help stimulate the economy. 'Awful' The £175 bn
already announced for the quantitative easing programme will have been
spent by next month, so the third quarter GDP number will be important
in deciding whether to extend it. Indeed, at the Bank's current rate
of spending, it is expected to have spent the whole £175 bn in the
next week. As the next Monetary Policy Committee ( MPC) meeting, at
which quantitative easing decisions are taken, is not until 4
November, that would leave it with a week with no extra cash to pump
into the economy. The figures were "awful with no positive news"
according to James Knightley at ING. "This clearly suggests that the
likelihood of an expansion in quantitative easing by £50 bn or so over
the next quarter is rising, although [it] is not a foregone
conclusion." Former MPC member Professor David Blanchflower said the
negative GDP figures should not have been a surprise. "There's been
very little sign among firms that things were very much better," he
told the BBC. "The public seems to have some more confidence - they
seem to have believed the talk about green shoots, but actually the
data haven't really looked that way at all." Intervention needed " The
bottom line is that we should take this as very much a first draft of
UK economic history - but clearly a disappointing one " Stephanie
Flanders, Economics editor Analysts said it is worrying that the
decline has continued despite the stimulus measures that the
government and the Bank of England have introduced. "Continued
intervention - including help for businesses to access finance, and
incentives to promote investment - is still needed," said David Kern,
chief economist at the British Chambers of Commerce. "Above all else,
business confidence must be nurtured to ensure that recovery is not
further delayed." 'Deeply disappointing' Chancellor Alistair Darling
said he had never expected to see growth before the end of 2009. "Our
job is to support the economy as we come through towards recovery," he
said. "[Growth] will come - I'm confident about that - and I'm
confident that businesses and people generally will begin to see a
difference, but it will take time." Shadow chancellor George Osborne
described the figures as "deeply, deeply disappointing". "There are
many millions of people who will be deeply concerned to see that
Britain is still in recession six months after France and Germany came
out of recession," he told the BBC. "It destroys the myth that Britain
was better prepared." Liberal Democrat Treasury spokesman Vince Cable
said the figures were "a cold blast of realism". "We've had a lot of
talk recently based on a booming stock exchange and prices of luxury
houses in London that somehow this problem was at an end, and it
isn't," he said. One of the measures expected to be a particular help
in the final quarter of the year is the change in VAT. The rate of VAT
is due to return to 17.5 % from 15 % at the beginning of January and
consumers are expected to step up their purchasing ahead of that
increase.
Maruti profit jumps 93pc
India's largest carmaker Maruti Suzuki reported Saturday that its quarterly profit had soared 93 per cent, against the backdrop of a reviving domestic economy. Maruti, majority owned by Japan's Suzuki Motor Corp, reported net profit of 5.7 billion rupees (123 million dollars) in the second financial quarter to September 30. Net sales jumped 47 per cent to 70.5 billion rupees. The car manufacturer attributed the rise to government stimulus measures aimed at reviving a slowing economy that have put more money in the hands of India's increasingly affluent middle class consumers. 'Demand has been driven by government stimulus,' the company said in a statement. It also attributed the rise in sales to aggressive monetary easing by India's central bank that has made consumer loan costs cheaper.
Bangladesh Bank housing refinancing scheme to get more fund
Bangladesh Bank housing refinance scheme, a popular housing project, is going to get Tk 200 crore in fresh fund, as its entire amount of Tk 500 crore has almost exhausted. 'It's a good project. We're going to inject Tk 200 crore into the project … it' ll continue,' Bangladesh Bank governor Atiur Rahman told the agency. The fresh fund is being pumped into the project amid increasing demand for the housing loan by the middle class. The central bank launched the refinancing scheme initially with Tk 300 crore for housing loan in fiscal 2007-08. Later, the fund was increased to Tk 500 crore. Under the refinancing scheme, borrowers are entitled to receive loan up to Tk 20 lakh at 9 per cent interest for a period of 20 years. 'This is a wonderful project for the low-income group people to have homes of their own,' said a Bangladesh Bank official preferring anonymity. He said BBHRS has had a tremendous response from the middle-class people as they want to have small-size affordable homes. Out of the total Tk 500 crore allocated by the government for the BBHRS, the central bank refinanced fund to the tune of Tk 350 crore till July last at an interest of 5 per cent to the financial and banking institutions, according to official sources. The entire amount of Tk 500 crore has exhausted as the financial and banking institutions are taking about Tk 45 crore to Tk 50 crore a month to disburse loan to buyers of flats of maximum size of 1250 sq ft. A senior official of a financial institution said the Bangladesh Bank should continue the scheme with bigger fund of at least Tk 1000 crore as it has multiplier effects on the economy through backward and forward linkage industries to the real estate sector like cement, iron and steel, bricks, electrical equipment, tiles, fittings, ceramic and manufacturing industries. 'The growth of middle-class housing has increased significantly due to the availability of BBHRS fund at a reasonable cost,' he said. 'The demand for home loan is increasing each year and is currently about Tk 1500 crore, which shows an increase of over 20 per cent each year.'
Developers see booming real estate sales in 2010
Bangladesh real estate sector has rebounded and is expected to achieve an impressive growth of 15 per cent in 2010 thanks to the government's supportive policy for helping recover the sector even amid global recession. To boost the sluggish business hit by global meltdown and political turmoil, developers have taken a move to set up a common digital market for plots and flats named as Realbazar by this year to attract the potential buyers globally. Tanvireerul Hoq Probal, president of Real Estate and Housing Association of Bangladesh, the apex body of the country's real estate developers, made the forecast immediately after a successful housing fair in New York last week. He said more than 14 thousands Bangladeshi people living in different states of the USA visited the 3-day REHAB housing fair held in New York last week. Developers sold plots and flats worth Taka 156 crore on spot and received order worth Taka 280 crore. `We did not expect such a booming business this year that has overshot our target. Last year, our sales were much lower than our target - only Taka 60 crore hit by global recession,' the REHAB president told the agency. He said that 47 developers took part in the fair this year. The REHAB president said global recession, political turmoil, higher prices of raw materials and irrational marketing activities due to absence of a common market place hit the sector during the last two years and put down its growth rate to nearly 5 per cent in 2009 from 10 per cent in 2006. During the last caretaker government, the real estate sector faced serious difficulties and suffered image problems and investors and buyers scared to buy plots or flats and kept their money in boxes, Probal said. 'But the situation has rebounded and buyers both at home and abroad are showing more interest in buying flats and plots under a democratic environment. If we can keep up this trend, the sector will attain 15 per cent growth next year,' he said. He said the present democratic government has formulated a pro- active policy for developers and a management policy friendly to buyers. Now any buyer can file case against any developer who violates contract. They should not be panicky after buying plots and flats. 'Now we need a common market place where buyers both at home and abroad will find all products in a single location. To solve the problem, the country's first real-time financial information service Dhakabiz.com has developed a digital market place for plots and flats named as RealBazar. We will soon start it', he said. The REHAB executive committee at its last meeting approved the idea of launching a digital market, Probal said. "Realbazar will be an all-time housing fair for Bangladeshi real estate products. Buyers both at home and abroad will be able to buy plots and flats in a single platform. This will push up our sales as well as our growth in 2010', he said. Based on a ground breaking software, the RealBazar will provide update information of real estate projects and facilitate online trading platform to buy or sell plots and flats online. Here buyers from anywhere will be able to buy any plots or flats without the help of middlemen," the REHAB president said.
Asia looks lead the world
Asian nations discussed plans at a major summit Saturday to 'lead the world' by boosting economic and political cooperation and possibly forming an EU-style community. The prime ministers of regional giants China and India also looked to foster unity on the sidelines of the summit in Thailand after months of trading barbs over long-standing territorial issues. But nuclear-armed North Korea and military-ruled Myanmar were also set to top the agenda in the royal beach resort of Hua Hin, underscoring the challenges still facing the region. The summit groups the 10-member Association of Southeast Asian Nations ( ASEAN) with regional partners China, Japan, South Korea, India, Australia and New Zealand. Japan's new Prime Minister Yukio Hatoyama said a proposed East Asian community involving all 16 countries should aspire to take a leading role as the region makes an early rebound from the global economic crisis. 'It would be meaningful for us to have the aspiration that East Asia is going to lead the world and with the various countries with different regimes cooperating with each other towards that perspective,' Hatoyama, who took office last month, told the Bangkok Post newspaper. He described Japan's alliance with the United States as the cornerstone of its foreign policy, but said the region should 'try to reduce as much as possible the gaps, the disparities that exist amongst the Asian countries'. China would 'doubtless' grow further, particularly economically, 'but I do not necessarily regard that as a threat,' Hatoyama said. Officials said separately that East Asian nations would carry out a feasibility study for a huge free trade zone covering ASEAN, China, Japan and South Korea and a larger group involving India, Australia and New Zealand. Increased integration has been a recurring theme of the meetings in Thailand, as the rapidly changing region seeks to capitalise on the fact that it has recovered more quickly from the recession than the West. ASEAN leaders have been discussing plans to create their own political and economic community by 2015. But cross-border spats have continued to dog the summit, with host nation Thailand dragged into a war of words with Cambodia and India and China seeking to resolve their differences. Chinese Premier Wen Jiabao and his Indian counterpart Manmohan Singh held 'productive' talks on the sidelines of the summit Saturday but did not discuss their spat over territorial issues, officials said. 'We have reached important consensus on promoting bilateral ties,' Wen was quoted as saying by the Chinese state news agency Xinhua as the talks opened. Beijing has voiced its opposition to a recent visit by Singh to Arunachal Pradesh, an Indian border state at the core of the dispute, and to a planned visit there next month by the Dalai Lama, the exiled Tibetan spiritual leader. Arunachal Pradesh and the Dalai Lama were not discussed at Saturday's meeting, an Indian delegation official said. The two nations fought a border war in 1962. Human rights issues have also marred the summit. A widely criticised rights body officially launched by ASEAN on Friday was due to have its first ever meeting on Saturday. The bloc was caught up in a row on Friday when leaders barred several activists from meeting them as previously arranged. Meanwhile Thailand and Cambodia remained at loggerheads over the fate of fugitive former Thai premier Thaksin Shinawatra, after Cambodian Prime Minister Hun Sen bizarrely offered him a job as his economic adviser. Around 18,000 troops and dozens of armoured vehicles have been deployed in Hua Hin after it was twice postponed by anti-government protests, with another 18,000 on standby or on duty in Bangkok. The leaders are expected to sign a host of agreements this weekend on economic and other issues including climate change, disaster management, communications and food security in the rapidly changing region.
Japanese firms to develop small nuclear reactors
Japan's major nuclear reactor manufacturers have begun developing small nuclear power systems for both developed and emerging countries, a report said on Saturday. Toshiba Corp. is developing an ultra- compact reactor with an output of about 10,000 kilowatts and has started procedures for approval in the United States, the Nikkei business daily said. The new reactor, the Toshiba 4S, is designed to minimise the need for monitoring and maintenance, with an automatic shutdown function to ensure safety in case of problems, the newspaper said. Toshiba plans to market the reactor first in the United States, while foreseeing demand from emerging countries in Southeast Asia and Eastern Europe as well as in Africa, it said. Mitsubishi Heavy Industries Ltd. has separately completed the concept design for a pressurised-water reactor with a power output of around 350,000 kilowatts, the Nikkei said. Hitachi Ltd. also aims to develop a boiling-water reactor with a capacity of 400,000-600,000 kilowatts for use in Southeast Asia and other countries, it said. Demand for nuclear power stations has been growing around the world. A total of 151 were under construction or slated for construction in 27 countries as of the end of 2008, it said.
US bank failures top 100
The cascade of bank failures this year surpassed 100 on Friday, the most in nearly two decades. And the trouble in the banking system from bad loans and the recession goes even deeper than the number suggests. Dozens, perhaps hundreds, of other banks remain open even though they are as weak as many that have been shuttered. Regulators are seizing banks slowly and selectively — partly to avoid inciting panic and partly because buyers for bad banks are hard to find. Going slow buys time. An economic recovery could save some banks that would otherwise go under. But if the recovery is slow and smaller banks' finances get even worse, it could wind up costing even more. The bank failures, 106 in all, are the most in any year since 181 collapsed in 1992, at the end of the savings-and-loan crisis. On Friday, regulators took over three small Florida banks — Partners Bank and Hillcrest Bank Florida, both of Naples, and Flagship National Bank in Bradenton — along with American United Bank of Lawrenceville, Ga., Bank of Elmwood in Racine, Wis., Riverview Community Bank in Otsego, Minn., and First Dupage Bank in Westmont, Ill. When a bank fails, the Federal Deposit Insurance Corp. swoops in, usually on a Friday afternoon. It tries to sell off the bank's assets to buyers and cover its liabilities, primarily customer deposits. It taps the insurance fund to cover the rest. Bank failures have cost the FDIC's fund that insures deposits an estimated $25 billion this year and are expected to cost $100 billion through 2013. To replenish the fund, the agency wants banks to pay in advance $45 billion in premiums that would have been due over the next three years. The FDIC won't say how deep a hole its deposit insurance fund is in. It can tap a credit line from the Treasury of up to a half-trillion dollars to cover the gap. The list of banks in trouble is getting longer. At the end of June, the FDIC had flagged 416 as being at risk of failure, up from 305 at the end of March and 252 at the beginning of the year. Yet the pace of actual bank failures appears to be slowing. The FDIC seized 24 banks in July, 11 in September and 11 in October. If any bank poses an immediate danger to customers or the broader financial system, regulators close it immediately, bank supervisors said. The issue is murkier for troubled banks that might qualify to close but whose closings might still be postponed or even prevented. The FDIC's first priority, spokesman Andrew Gray said, is to maintain public confidence in the banking system. 'As evidenced by the stability of insured deposits throughout last year, this mission has been a success,' he said. He said public confidence isn't reason enough to delay a bank closing, because legally the decision to close rests with whoever chartered the bank — a state or federal agency. But more than a dozen experts, including current and former regulators, bankers and lawyers, say the FDIC's mission to maintain public confidence in the banking system contributes to the go-slow approach. 'The FDIC was set up to create confidence and prevent bank runs,' says Mark Williams, a former bank examiner for the Federal Reserve. Being too aggressive about bank closings 'can be counter to the mission.' Sarah Bloom Raskin, Maryland's top banking regulator, said: 'Technically it's the states who decide, but in reality it's the FDIC calling you to say' when the bank will be closed. Last fall, the financial turmoil was rooted in bad bets that the nation's biggest banks, like Citigroup Inc. and Bank of America Corp., had made on complicated, high-risk mortgage investments.
Kamalapur ICD timing hurts exporters
A ban on container movement in Dhaka during daytime and the office timing of Inland Container Depot (ICD) at Kamalapur in the capital may impact the country's export earnings badly, exporters said. Dhaka Metropolitan Police has stopped movement of containers during daytime -- between 8 am and 8 pm -- since October 15 except some for readymade garments. "We support the ban on container movement during daytime to reduce traffic congestion. But the ICD at Kamalapur must keep open its office after 8 pm for the sake of the exporters," said Mizanur Rahman, chairman of Meghna Group that exports bicycle worth nearly Tk 400 crore a year. As the Kamalapur ICD remains open until 8 pm, the exporters will get none at the ICD if they take their containers there after that time. The exporters have already brought the issue to the notice of the police and the Federation of Bangladesh Chambers of Commerce and Industry, the country's apex trade body. There have been talks for years on shifting the ICD at Kamalapur to Gazipur for better movement of import and export containers in the Dhaka-Chittagong transport corridor. Several years ago the government had also selected a place at Dhirasram in Gazipur for the depot. But no progress is seen yet despite the World Bank's intention to support developing an ICD outside Dhaka. Bangladesh earned over $15 billion from exports in fiscal 2008-09. Dhaka and Chittagong are the country's two major manufacturing zones of export items. Dhaka- based exporters use Kamalapur ICD for sending their goods to Chittagong Port. "We have special permission from the police for our containers," said Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association. "We were told two months ago that the police would allow increase of container movement in the city. A full ban on the container movement will certainly affect the country's exports," said Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association. Mizanur Rahman of Meghna Group, also the president of Bangladesh Bicycle and Parts Manufacturers Association, said the police are stopping their containers loaded with export items. Rahman said he wants the government to keep Kamalapur ICD open at least until 12 at night for the exporters. "Otherwise, we will be in serious trouble," he added. However, an official of Kamalapur ICD said they are yet to get any directive from the National Board of Revenue to keep the office open after 8 pm. Meanwhile, a World Bank official said the multilateral lender has started preparation for a proposed project to build an ICD at Dhirasram in Gazipur. The project is aimed at supporting the government to develop required infrastructure to achieve regionally competitive transport costs and more movement of import and export containers in the Dhaka-Chittagong transport corridor, the official said.
Microsoft sales fall
Consumers may be shopping for
computers again, but Microsoft
Corp. still needs businesses to
start doing the same.
Microsoft said Friday its
revenue kept falling and its net
income dropped 18 per cent in
the last quarter, partly because
of the hesitation of businesses,
which are more profitable for
Microsoft than consumers are.
Big cost cuts at Microsoft
made a difference, though,
helping the company deliver
earnings well above analysts'
expectations. Its stock surged
$1.29, nearly 5 per cent, to
$27.88 in afternoon trading.
Earlier in the day, the stock
reached a 52-week high of
$29.35.
But while the quarterly results
looked good to Wall Street, they
also showed how much Microsoft
is still wrestling with a PC
industry that remains much
weaker than a year ago. In the
past year the software maker
resorted to its first wide-scale
layoffs, and in July it said its
annual revenue had fallen for
the first time since the company
went public in 1986.
After skidding for six months,
computer shipments rose in the
July-September period. But
shoppers tended to buy
inexpensive laptops and even
smaller, cheaper netbooks, which
have older and less profitable
versions of Windows installed.
Many consumers also passed on
buying Microsoft's Office, the
package that includes Word,
Excel and Outlook, which
contributed to a 14 per cent
total decline in revenue in the
quarter.
Businesses watched their
spending even more closely. That
dragged down Windows results
because business-level versions
of the operating system are
more expensive. And companies
that have cut workers are
ordering fewer copies of Office
and other Microsoft software
commonly used at work. Revenue
and profit in the group that
makes Office sank even as
businesses spent more on newer
software such as Sharepoint.
Chris Liddell, Microsoft's chief
financial officer, said in a
conference call that businesses
could start replacing aging PCs
and servers starting in 2010,
'although it could be gradual and
occur over a couple of years.'
Other companies, especially
Intel Corp., have indicated they
expect things to improve faster,
in the current quarter.
Microsoft's earnings in the last
quarter dropped to $3.6 billion,
or 40 cents per share, though
that was much higher than the
analysts' estimate of 32 cents
per share in a Thomson Reuters
survey. In the same period last
year Microsoft earned $4.4
billion, or 48 cents per share.
Microsoft's bottom line was
hurt by a summer program in
which the company let people
buy a PC with the Windows Vista
operating system and later
install Windows 7 on the machine
for free. That meant Microsoft
counted only half of its Windows
sales in the period and will
report the rest as customers
upgrade to Windows 7, which
was released this week, through
January, when the offer expires.
If it had counted its deferred
Windows revenue, Microsoft's
earnings would have increased 8
per cent from last year.
Revenue sank to $12.9 billion,
though if Microsoft had counted
all the Windows sales, it would
have posted a smaller 4 per cent
drop in revenue, to $14.4 billion.
A big reason that Microsoft's
earnings would have increased, if
not for the Windows deferrals,
despite lower revenue is that
layoffs and other expense cuts
are paying off. Microsoft employs
4 per cent fewer people than a
year ago and has spent less on
marketing and outside
contractors, pushing operating
expenses down more than $600
million compared with a year ago.
Microsoft said expenses in the
current fiscal year, which ends in
June, could be as much as $400
million lower than previously
expected.
The company also lifted its
earnings per share by resuming
purchases of its own stock after
a six-month pause, spending
$1.45 billion in the quarter.
computers again, but Microsoft
Corp. still needs businesses to
start doing the same.
Microsoft said Friday its
revenue kept falling and its net
income dropped 18 per cent in
the last quarter, partly because
of the hesitation of businesses,
which are more profitable for
Microsoft than consumers are.
Big cost cuts at Microsoft
made a difference, though,
helping the company deliver
earnings well above analysts'
expectations. Its stock surged
$1.29, nearly 5 per cent, to
$27.88 in afternoon trading.
Earlier in the day, the stock
reached a 52-week high of
$29.35.
But while the quarterly results
looked good to Wall Street, they
also showed how much Microsoft
is still wrestling with a PC
industry that remains much
weaker than a year ago. In the
past year the software maker
resorted to its first wide-scale
layoffs, and in July it said its
annual revenue had fallen for
the first time since the company
went public in 1986.
After skidding for six months,
computer shipments rose in the
July-September period. But
shoppers tended to buy
inexpensive laptops and even
smaller, cheaper netbooks, which
have older and less profitable
versions of Windows installed.
Many consumers also passed on
buying Microsoft's Office, the
package that includes Word,
Excel and Outlook, which
contributed to a 14 per cent
total decline in revenue in the
quarter.
Businesses watched their
spending even more closely. That
dragged down Windows results
because business-level versions
of the operating system are
more expensive. And companies
that have cut workers are
ordering fewer copies of Office
and other Microsoft software
commonly used at work. Revenue
and profit in the group that
makes Office sank even as
businesses spent more on newer
software such as Sharepoint.
Chris Liddell, Microsoft's chief
financial officer, said in a
conference call that businesses
could start replacing aging PCs
and servers starting in 2010,
'although it could be gradual and
occur over a couple of years.'
Other companies, especially
Intel Corp., have indicated they
expect things to improve faster,
in the current quarter.
Microsoft's earnings in the last
quarter dropped to $3.6 billion,
or 40 cents per share, though
that was much higher than the
analysts' estimate of 32 cents
per share in a Thomson Reuters
survey. In the same period last
year Microsoft earned $4.4
billion, or 48 cents per share.
Microsoft's bottom line was
hurt by a summer program in
which the company let people
buy a PC with the Windows Vista
operating system and later
install Windows 7 on the machine
for free. That meant Microsoft
counted only half of its Windows
sales in the period and will
report the rest as customers
upgrade to Windows 7, which
was released this week, through
January, when the offer expires.
If it had counted its deferred
Windows revenue, Microsoft's
earnings would have increased 8
per cent from last year.
Revenue sank to $12.9 billion,
though if Microsoft had counted
all the Windows sales, it would
have posted a smaller 4 per cent
drop in revenue, to $14.4 billion.
A big reason that Microsoft's
earnings would have increased, if
not for the Windows deferrals,
despite lower revenue is that
layoffs and other expense cuts
are paying off. Microsoft employs
4 per cent fewer people than a
year ago and has spent less on
marketing and outside
contractors, pushing operating
expenses down more than $600
million compared with a year ago.
Microsoft said expenses in the
current fiscal year, which ends in
June, could be as much as $400
million lower than previously
expected.
The company also lifted its
earnings per share by resuming
purchases of its own stock after
a six-month pause, spending
$1.45 billion in the quarter.
Hong Kong tightenslendingon luxury homes
Hong Kong's government has
announced measures aimed at
cooling the property market as
low interest rates have spurred
a dramatic surge in prices and
fears of a possible bubble.
The Hong Kong Monetary
Authority said it had sent a
circular to banks on Friday telling
them to cut the amount they
lend to buyers of luxury homes
with immediate effect.
Loans on properties valued at
20 million dollars (2.6 million US)
or more would be capped at 60
per cent, down from 70 per
cent. For cheaper properties the
maximum loan would remain 70
per cent but would be capped at
12 million dollars.
The HKMA, Hong Kong's de
facto central bank, also
reminded banks to exercise
prudence when valuing
properties and calculating
borrowers' ability to repay loans.
'These are prudential
measures designed in the
interest of maintaining banking
stability, to enhance banks' risk
management on mortgage
lending to high-end residential
properties,' HKMA chief executive
Norman Chan said in a
statement.
Record-low interest rates
have helped drive up prices by
41 per cent in the luxury
property sector while the mass-
market segment has risen more
than 27 per cent, according to
property agencies and
consultants cited by the South
China Morning Post.
The government-owned Hong
Kong Mortgage Corporation
meanwhile announced that from
Saturday it would stop offering
insurance to property investors
and reduce its maximum
mortgage size from eight million
to six million and from 20 million
to 12 million under its mortgage
insurance schemes.
announced measures aimed at
cooling the property market as
low interest rates have spurred
a dramatic surge in prices and
fears of a possible bubble.
The Hong Kong Monetary
Authority said it had sent a
circular to banks on Friday telling
them to cut the amount they
lend to buyers of luxury homes
with immediate effect.
Loans on properties valued at
20 million dollars (2.6 million US)
or more would be capped at 60
per cent, down from 70 per
cent. For cheaper properties the
maximum loan would remain 70
per cent but would be capped at
12 million dollars.
The HKMA, Hong Kong's de
facto central bank, also
reminded banks to exercise
prudence when valuing
properties and calculating
borrowers' ability to repay loans.
'These are prudential
measures designed in the
interest of maintaining banking
stability, to enhance banks' risk
management on mortgage
lending to high-end residential
properties,' HKMA chief executive
Norman Chan said in a
statement.
Record-low interest rates
have helped drive up prices by
41 per cent in the luxury
property sector while the mass-
market segment has risen more
than 27 per cent, according to
property agencies and
consultants cited by the South
China Morning Post.
The government-owned Hong
Kong Mortgage Corporation
meanwhile announced that from
Saturday it would stop offering
insurance to property investors
and reduce its maximum
mortgage size from eight million
to six million and from 20 million
to 12 million under its mortgage
insurance schemes.
BTI holds apartment fair
Building Technology and Ideas Ltd
organised a day-long 'Apartment
Fair' at Uttara in Dhaka on
Friday as part of its promotional
campaign.
The fair was a part of the
company's promotional activities
and the company will arrange
such programme at different
areas of the Dhaka and
Chittagong cities, said a new
release.
The company distributed leaflets,
displayed banners and festoons,
and arranged personal
counselling for seven days
before the start of the fair to
create awareness among people.
The company kept an offer of
'mega price discount' for the
customer for spot booking at
the fair.
BTI has about 25 years of
experience in real estate sector.
organised a day-long 'Apartment
Fair' at Uttara in Dhaka on
Friday as part of its promotional
campaign.
The fair was a part of the
company's promotional activities
and the company will arrange
such programme at different
areas of the Dhaka and
Chittagong cities, said a new
release.
The company distributed leaflets,
displayed banners and festoons,
and arranged personal
counselling for seven days
before the start of the fair to
create awareness among people.
The company kept an offer of
'mega price discount' for the
customer for spot booking at
the fair.
BTI has about 25 years of
experience in real estate sector.
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