Japan Airlines 'to go bankrupt'

Japan Airlines (JAL), Asia's biggest air carrier, is due to file for bankruptcy protection, reports say. JAL - which has $16.5 bn (£10 bn) of debts - is expected to make the move after a board meeting later on Tuesday. JAL shares fell to an all-time low on Monday, valuing the firm at just $150 m - roughly the price of a new jumbo jet. Japan's government says flights will continue as normal as JAL begins restructuring under the supervision of a state-backed turnaround organisation. A third of JAL's workforce - more than 15 ,000 people - are expected to lose their jobs, the BBC's Roland Buerk in Tokyo says. Banks will have to write off unsecured debt and JAL will receive an injection of taxpayers' money, our correspondent adds. While the turnaround plan backed by the government will see the airline continue to fly, investors in the company are likely to lose most of their money. Along with other major global airlines, JAL has been hit hard by falling passenger numbers during the global downturn.

Bangladesh will earn $1b for India

Bangladesh stands to earn one billion US dollars in transit fee if it allows free movement of Indian goods through its territory, views the Federation of Indian Chambers of Commerce and Industry. This, says a study by the trade body, will help reduce trade imbalance between the two countries. It further pointed out if goods from northeast and other parts of India were to pass through Bangladesh, it would fetch considerable transit revenue for Bangladesh besides cut in transportation time and cost for Indian goods. The study also asks Bangladesh to identify new products for exports to Indian market and diversify its export, particularly in non- traditional sectors. A detailed analysis of India-Bangladesh trade shows that while India's exports to Bangladesh is fairly diversified including agricultural commodities, manufactured items and heavy and medium machineries, Bangladesh's exports to India is confined to primary and resource-based products, the FICCI study finds. Asking Bangladesh to widen its manufacturing base, the study stresses the need for increasing productivity in all sectors of that country through research and development and transfer of technology and market-based effective pricing system. It suggests huge investment in increasing the productivity of Bangladesh's industrial sector and building its technical and technological capacity. The recent signing of the bilateral investment protection and promotion agreement would lead to greater Indian investment in Bangladesh and greater imports to India, says the study. To attract more investment from India, FICCI recommends single window clearance for investment proposals, setting up an industrial park for India outside Export Processing Zone with all infrastructure facilities, upgradation of tax holiday system and augmenting availability of power. Pointing to Bangladesh's severe infrastructural bottlenecks relating to power, ports, gas and telecommunication, the study says that it significantly pushes up the cost of production, impede productivity growth and affect export competitiveness. Another problem highlighted by FICCI about India-Bangladesh trade enhancement is that banks in northeast India ask for 100-140 percent L/C margin in case of import. Sometimes, this content depends upon the type of products to be imported and the discretion of the bank official concerned. This problem is most prevalent in Tripura, which has better prospects for cross border trade with Bangladesh, the study says adding that this "rigid condition of depositing the entire or more value of the imported items certainly discourages the prospective importers to initiate import through land customs stations despite having substantial price competitiveness". Indian banks lack direct correspondence arrangements with banks in Bangladesh and banking infrastructure in the northeastern region (NEI) of India for international and border trade is quite inadequate, says the study. At present, the correspondence relationship of banks functional in the NEI are restricted to and maintained by the bank branches in Kolkata and this tremendously hampers the bilateral trade between Bangladesh and NEI as all state capitals are 1080-1680 kilometres away from Kolkata. This huge distance as well as physical communication bottlenecks of the region make it very difficult for the exporters of both Bangladesh and northeast India to get the L/C in time, says the study, adding that sometimes it takes 20-40 days to reach an L/ C to the hand of the exporters of both the sides after its opening.

Singapore export rise

Singapore's main exports surged strongly in December from a year ago on rising external demand, the government said Monday, strengthening expectations of a rebound for the economy this year. Non-oil domestic exports (NODX) climbed 26.1 percent year-on-year, lifted by robust shipments of electronics and pharmaceuticals, the government's trade promotion body International Enterprise (IE) Singapore said. On a seasonally adjusted month-on-month basis, NODX was up 1.7 percent, it said. Electronics exports such as semiconductors rose 25.2 percent year-on-year, reversing the 6.1 percent decline in November, while pharmaceuticals jumped 75.7 percent. IE Singapore said shipments to the country's top 10 export markets, except Japan, increased.

Asian economy faces golden opportunity

Asian financial institutions face a "golden opportunity" after the global slump left their Western counterparts struggling, the deputy head of Singapore's sovereign wealth fund said in Taipei Monday. Tony Tan, deputy chairman of the Government of Singapore Investment Corporation (GIC) said Asian firms were in much better shape to play a major role on the region's expansion over the next several years. "Asian financial institutions and markets have been given a golden opportunity," he told a forum in the Taiwan capital, according to the text of his speech. "The globalised Western banking system, hampered by capital constraints and re- regulation, will likely not be able to intermediate the massive capital demand needed to finance Asian growth." "This leaves the playing field unusually open for Asian financial institutions and markets, particularly for the next few years."

G20 officials will meet next month

Senior financial officials from the Group of 20 economies will meet in South Korea next month to discuss spurring the global recovery, officials said Monday. Vice finance ministers and deputy central bank governors will meet from February 27-28 in the city of Incheon west of Seoul, the ministry of strategy and finance said. It will be the first meeting of the G20 major economies in South Korea, which will host the group's summit in November. "How to accelerate the global economic rebound and how to manage the global economic system after the crisis will be among the top agenda items to be discussed at the February meeting," a ministry official told Yonhap news agency. South Korea will also host a meeting of G20 finance ministers on June 4-5 , just before a separate G20 summit in Canada. The International Monetary Fund and South Korea said last week they would jointly host in Seoul another high-level international conference on Asia in July. The July 12-13 forum will be held "to examine Asia's economic dynamism and evolving role in international policy-making", they said in a joint statement.

Economy faces 'painful' refocus

The UK economy faces a decade of "painful readjustment" as it refocuses from debt-led consumer spending to increased exports, a study has warned. That is the conclusion of the latest quarterly report from the Ernst & Young Item Club economic forecasting group. "After a decade of relying on the domestic consumer, firms have to start chasing overseas customers," said Peter Spencer, its chief economic adviser. The Item Club warns UK economic growth will struggle to hit 1 % this year. 'Very challenging' "The consumer is completely cashed out - with consumer spending likely to increase by just 0.4 % this year," said Professor Spencer. " The UK's only hope of significant [economic] growth is a rebound in overseas exports and income - as well as inward investment Professor Peter Spencer, Item Club chief economic advisor "[Economic] growth is almost totally dependent on a sustained upturn in the world economy, and upon the energy and enterprise of UK exporters of our prized goods and services." He added that this need for the economy to refocus from the domestic consumer to increased global trade was going to be "very challenging". To help drive exports, Prof Spencer said the UK needs to focus on China "where we have an exceptionally low market share compared to our leading competitors", and other Asian countries. However, on a positive note, the Item Club sees exports starting to pick up in 2011 , when it predicts they will grow by 9 %, rising to 10 % in 2012. 'Difficult short term' Despite official figures later this month expected to show that the UK exited recession between October and December, the Item Club warns that this was driven by a combination of temporary measures. It said these one-off factors were firms restocking, the success of the government's car scrappage scheme driving exports, and increased consumer spending before VAT returned to 17.5 % from 15 % on 1 January.

Swiss Re sells assets to Buffett

Swiss reinsurance giant Swiss Re has sold a section of its US business to Berkshire Hathaway, the investment vehicle of billionaire Warren Buffett. Swiss Re has sold part of its US life insurance unit to Berkshire for 1.3 bn Swiss francs ($1. 27 bn; £778 m). The company said the sale frees up capital that it can invest more profitably elsewhere. Mr Buffett already has a stake in Swiss Re among his many high profile investments. Swiss Re said the deal would take effect retroactively on 1 October. Reinsurance companies sell back up cover to other insurers, as a means for them to spread their risk.

China online revenue rise

Online revenue generated in China surged by more than 30 % to 74.3 bn yuan ($10.9 bn, £6. 7 bn) in 2009 , a research firm has said. iResearch predicts that online earnings in China from advertising, games, shopping and other activities will surge 51 % to 112.3 bn yuan this year. Separately, a report said that Google has begun talking to China about not filtering content on its search engine. It refused to confirm this, saying it "won't be giving a running commentary". "We've said already that we will be taking a new approach in China," a Google spokesman in London said. "We will be discussing with the Chinese authorities the basis on which we could operate an unfiltered search engine within the law, if at all." Chinese dilemma On 12 January, the company said in its blog that Chinese human rights campaigners using its Gmail service had been hacked. It said it would hold talks with the Chinese government to stop censoring its search engine, and would leave the country if an agreement could not be reached. China has said that foreign internet firms are welcome to do business there "according to the law". Google currently holds about one-third of the Chinese search market, far behind Chinese rival Baidu, which has more than 60 %. China has more internet users - about 380 million - than any other country and is a lucrative market. When Google launched google.cn in 2006 , it agreed to censor some search results - such as the 1989 Tiananmen Square protests, Tibetan independence or Falun Gong - as required by the Chinese government. The Chinese business magazine Caijing reported that Google has already moved some of its Beijing-based employees to Hong Kong.

Renault will make new Clio model

French carmaker Renault has said its new Clio model will be built in both France and Turkey, calming fears that production would move outside France. The announcement came after French President Nicolas Sarkozy put pressure on the firm to keep building the model at its Flins factory outside Paris. Mr Sarkozy had said he had not pumped government money into carmakers for them to move production abroad. The French state has a 15 % shareholding in Renault. Government loans Renault chief Carlos Ghosn also said the Flins factory would be used to build a new electric car. "Renault is a French company, a socially responsible citizen... This is one reason we decided to produce [the electric car] in the Flins plant," he said. The fourth generation Clio is due to go into production in 2013. Last year, the French government lent French carmakers billions of euros to help them cope with falling sales during the economic downturn. The loans were conditional on the carmakers keeping jobs in France. Questions have been raised by the EU Competition Commissioner Neelie Kroes about whether these conditions restrict carmakers' ability to move their operations. "The French government could still feel the ire of the EU Competition Commission for its actions as it will be questioned [on Monday]," said Ian Fletcher, auto analyst at IHS Global Insight.

Japan Airlines share down

Shares in the troubled carrier Japan Airlines ( JAL) have plunged to a record low of 5 yen (6 cents, 3 pence) ahead of an expected bankruptcy filing. The bankruptcy is part of a government bail- out that is likely to be announced on Tuesday, reports say. The company, which lost about $1.5 bn in the six months to September, is now worth just $150 m - less than the price of a new jumbo jet. The company's stock reached a high of 366 yen a share back in 2003. While the turnaround plan backed by the government will see the airline continue to fly, investors in the company are likely to lose most of their money. Along with other major global airlines, JAL has been hit hard by falling passenger numbers during the downturn and is struggling with debts of more than 1 tn yen.

Bahrain start a microfinance bank in Grameen Bank model

Family Bank, a microfinance bank licensed by the central bank of Bahrain, opened in Bahrain on Thursday, said a statement of Yunus Centre. Nobel Laureate Prof Muhammad Yunus and Chairman of the Board of Trustees of the Royal Charities Organisation Prince Shaikh Nasser bin Hamad Al Khalifa inaugurated the bank at a ceremony at the Gulf Hotel Convention Hall in Bahrain. The ceremony was held under the patronage of King Hamad bin Isa Al Khalifa. Minister for Social Development Dr Fatima Al Balooshi was also present. Family Bank will provide collateral-free microcredit to 4 ,500 borrowers within three years, following the Grameen Bank approach. Besides being a window for the Grameen model, the bank will also lend to individuals for investment in micro-enterprises and work as a wholesale fund to support nongovernmental organisations in providing microcredit in the kingdom. Grameen Trust, a member of the Grameen family of companies, has been working with the government of Bahrain to develop Family Bank since 2007. The initiative with a memorandum of understanding between the Ministry of Social Development and Grameen Trust, during Yunus' visit to the kingdom in February 2007. During that visit, the king gave the noble laureate the medal of the First Order of Merit, the highest honour of the Kingdom of Bahrain. In May 2007 , Grameen Trust conducted a feasibility study in Bahrain and developed a microcredit programme for the bank. Grameen Trust deputed the chief executive from Bangladesh, who will implement the flagship microcredit programme. The loan products of Family Bank will be offered in various tiers, with $125 for first- time microcredit borrowers. The bank's paid up capital is $31.25 million, while the authorised capital is $37.5 million. The social development ministry and the Royal Charity Organisation own 63 percent of Family Bank. The other shareholders of the bank are Ahli United Bank, Kuwait Finance House, Bank of Bahrain and Kuwait and Ithmaar Bank. Grameen Trust is an implementing partner and has a seat on the board of directors of the bank.

Airtel operate in Bangladesh in their own brand

Bharti Airtel is set to introduce its own brand in Bangladesh, targeting the youth and rural population in the six-operator mobile market. The brand will be named Airtel. The company, which has already acquired a 70 percent stake in Abu Dhabi Group's Warid Telecom, plans to localise its branding in Bangladesh, considering the cultural proximity. "Our plan is to satisfy customers first by offering affordable and quality services," said Monoj Kohli, chief executive officer ( CEO) and joint managing director of Bharti Airtel. "Bharti Airtel will meet customer expectation, which is yet to be met by others," said Kohli in a press meet at The Westin Dhaka. Sanjay Kapoor, deputy CEO of Bharti Airtel, disclosed some initial plans to boost the customer base in the existing Warid networks in Bangladesh, which has a mobile penetration rate of 32 percent. "We look to youth and rural customers," he said, referring to Bharti Airtel's success in India in adding rural customers into its 120 million customer-base. In India, the youth and rural segment accounts for around 60 percent of its customers. "We are not focusing on profitability initially. Rather, we want to satisfy customers," said Kapoor. "Bangladesh and India are similar in many ways. We are confident about doing something new with our cultural proximity." Earlier, Bharti Airtel said it would inject $300 million in initial investment to take over a 70 percent stake in Warid, the fourth largest mobile company in Bangladesh. The transition will be completed in the next three months, as per the deal. Warid will issue new shares at a nominal price to hand 70 percent of its stake to Airtel. Airtel also will bear all of Warid's debt to local banks and other organisations. Muneer Farooqui, chief executive officer ( CEO) of Warid Telecom Bangladesh, said Dhabi Group had decided to go for partnership as the group was facing a financial crisis because of the global economic meltdown. "We were not away from the global recession. That is why we sought partnership," he said. Warid made its Bangladesh debut as the sixth operator in May 2007. But the company did not perform well in attracting a significant customer base because of a poor branding strategy in comparison to other market players.