Asian markets move higher

Increased confidence that the US and Chinese governments will continue with
their loose economic policies, as well as a weaker yen, helped push Asia's
stocks higher on Thursday. TOKYO: Up 0.72 percent. The benchmark Nikkei-225
index rose 69.78 points to 9 ,792. 94. HONG KONG: Up 2.96 percent. The Hang
Seng Index closed up 569.53 points at 19 , 817.70. SYDNEY: Down 0.11
percent. The S&P/ASX200 closed down 4.4 points at 4 ,064.1. Weakness in the
banking sector outweighed gains in resources stocks, dealers said. SHANGHAI:
Up 0.97 percent. The Shanghai Composite Index, which covers A and B shares,
climbed 31.88 points to 3 , 328.49. TAIPEI: Flat. The weighted index fell
4.44 points, or 0.06 percent, to 6 , 980.88. The slight fall ended seven
consecutive sessions of gains. SEOUL: Up 0.16 percent. The KOSPI added 2.45
points to end at 1 , 496.49. It was the index's eight consecutive gain, the
longest winning streak since June 2007. SINGAPORE: Up 1.39 percent higher.
The Straits Times Index rose 34.07 points to 2 , 484.90. JAKARTA: Up 1.65
percent. The Jakarta Composite Index added 35.1 points to end at 2 , 160.71.
KUALA LUMPUR: Up 0.30 percent. The Kuala Lumpur Composite Index gained 3.45
points to 1 , 152.15. Infrastructure group Gamuda added 2.70 percent but
Public Bank lost 1.0 percent to 10.20 ringgit. BANGKOK: Up 2.34 percent. The
Stock Exchange of Thailand rose 13.97 points to close at 612.19. The index
was lifted on strong buying in the energy sector as investors predicted a
rise in global oil prices, an analyst said. MANILA: Flat. The composite
index was down 0.38 points, or 0.01 percent, to finish at 2 , 612.00.
WELLINGTON: Up 0.63 percent. The NZX-50 rose 18.19 points to 2 , 918.63. The
market witnessed its eighth straight gain due to rising optimism. Auckland
International Airport rose three cents to 1.64 dollars. Air New Zealand rose
three cents to 98 cents. MUMBAI: Up 2.61 percent. The 30- share Sensex rose
387.92 points to 15 , 231.04.

Sonali Bank launches online banking

Sonali Bank has launched online and SMS banking services for its
customers. The customers of the bank will now be able to perform their
banking transactions from one branch to another more easily, a news
release said. For SMS banking service, the customers will be able
to obtain some instant information like account balance, interest
rate, account statement, currency rate and others. Beximco Computers
has provided technical support by giving software to Sonali Bank.
The services were launched at a ceremony held at Sheraton Hotel on
Tuesday. Sonali Bank chief executive officer and managing director SA
Chowdhury was present as chief guest in the ceremony while Beximco
Computers Limited general manager Abu Zafar Khan, Bangladesh Online
Limited chief operating officer Syed Samiul Wadood, Sayeeful Islam,
Software Shop Limited Wireless managing director were present as
special guests.

Bad loans, high interest may foil BB’s policy goals: CPD

The monetary policy will not hit its targets if the Bangladesh Bank
fails to help the scheduled banks to recover the defaulted loans,
invest excess liquidities in productive ventures and lower interest
rates, warned the Centre for Policy Dialogue. The CPD also pointed
out that Bangladesh Bank's half-yearly monetary policy overlooks
important issues like bad loans, policy guidelines to encourage
industrial term loans, narrowing of interest rate spread and
integrating microfinance operations. 'The large amount of
non-performing assets has emerged as a source of worry for the
financial sector, which may frustrate the efforts to lessen
inflationary pressure,' the CPD's distinguished fellow, Debapriya
Bhattacharya, told a press briefing on ' Recent monetary policy
statement of Bangladesh Bank (July 2009): an analytical commentary' at
its office on Thursday. According to the BB's statistics, excess
liquidity of the scheduled banks stood higher at Tk 27,716.99 crore at
the end of April 2009 as against Tk 12, 988.58 crore in June 2008,
recording a 113.4 per cent growth. The latest statistics of interest
rate spread — the gap between deposit and lending rates — is also not
encouraging, as the spread remained as high as 5.5 per cent in May
compared with 4.8 per cent at the end of fiscal year 2008-09.
Debapriya appreciated the re- emergence of the forgotten issue of
defaulted loans with the finance minister informing the parliament of
the extent of the bad assets of banks. The prime minister has asked
the finance minister to prepare a report on the defaulters who used
political connections to protect themselves, he added. 'But one
expects to see that the renewed initiative is followed by effective
policy measures,' said Debapriya, regretting that the central bank's
monetary policy missed the vital issue. He appreciated the monetary
policy stance for stimulating investment and economic growth, and
creating employment. 'The monetary policy is consistent with the
economic demands,' he added. He, however, said the central bank is
capable of making dynamic adjustments to its monetary policy in the
course of its implementation in the current fiscal year. He also
recommended formation of a high-powered committee to deal effectively
with the bad debt overhang, infuse more competition in the financial
sector and ensure availability of loans for the private sector from
external sources. He warned that inflation would emerge as a
challenge by the end of the year or early next year as global oil
prices have started increasing although prices of other essentials
like rice and soybean oil have remained somewhat stable. Debapriya
said the country's economy might face a difficult situation if the
increased public borrowings do not go to sectors which create
employment opportunities. He said the credit demands from the
public and private sectors could be met from the huge liquidity in the
banking system. He also pointed out that the budget dependence on
bank borrowing would be increased further if foreign aid and revenue
earnings fall short of the targets and development expenditure does
not decrease. He expressed concern about achieving the agriculture
growth target due to natural disasters as a drought- like situation is
already affecting the present aman crop. 'The central bank should
use the monetary policy as a complementary factor to the fiscal policy
to support agriculture production against the backdrop of the
situation,' he suggested.

BB chief urges banks to have own 5-year plan

Bangladesh Bank governor Atiur Rahman on Thursday urged the banks to
prepare their own five- year plan for the growth of the sector. 'We have
already planned to introduce a five-year strategy and all banks should
prepare their own five-year plan,' he said while inaugurating a three-day
Bank and Non- Bank Financial Institutions Fair-09 at Sheraton Hotel in
Dhaka. He said, 'A five-yean plan will tell us where we will stand after
the period.' The BB chief urged the banks and NBFIs to work hard to earn
greater customer confidence and consolidate their financial bases. He
said the concept of public private partnership could not be successful
without the help of the banks and other financial institutions. The BB
governor also urged the banks and the NBFIs to expand the purview of their
corporate social responsibility. 'Banks and other financial institutions
should consider streaming CSR funds into productive sectors like
agriculture and small and medium enterprises,' he said. Atiur also
emphasised on rationalising the service charges of various banks in the
country and displaying the service charges on their web sites for the
benefit of the people. On the fair, he said such expositions could
solve information asymmetry problem and build confidence among the
consumers. Association of Bankers, Bangladesh chairman Kazi Mahmud
Sattar, and Bangladesh Insurance Association chairman AKM Rafiqul Islam,
among others, also spoke at the function chaired by Sheraton Hotel general
manager Trevor MacDonald. Twenty-five banks and NBFIs are showcasing
and offering their products and services in the fair.

ADB presses Bangladesh for regional integration

The Asian Development Bank president has suggested Bangladesh forge a
better cooperation with its neighbours India and Nepal in transport and
energy sectors. "Regional integration on transport and power will
substantially benefit the South Asian countries, especially Bangladesh,"
Haruhiko Kuroda told a press conference at Sonargaon Hotel in the capital
yesterday. The Manila-based ADB boss, arrived in Dhaka yesterday on his
maiden two- day visit, also viewed that a regional power grid could be
popular among the nations. Kuroda sees no significant progress in
cooperation among the South Asian nations, although the lending agency
has long been pushing for it. "Many discussions were held, but so far very
few investment projects have been implemented in the region," observed the
ADB chief. However, he hopes for a change in future. Pointing to the
benefit of regional integration, Kuroda, also a renowned Japanese
economist, said, "China, Vietnam, Laos, Cambodia and Myanmar have
implemented many regional projects on transport, energy, communication and
water management and become benefited." South Asian countries are the least
integrated in today's highly globalised world. Intra-regional trade is
less than 5 percent despite inking of South Asia Free Trade Agreements
(Safta) by eight nations Afghanistan, Bangladesh, Bhutan, India, th ze
Maldives, Nepal, Pakistan and Sri Lanka. Kuroda also dwelt on the ongoing
global recession and its impacts on Bangladesh, governance and corruption
issues. Also, the recovery trends he focused. "Bangladesh is not so much
affected compared to East Asian nations because it is not so globalised,"
said the ADB chief. He however said a second round effect is already felt
by Bangladesh with a decline in export growth. Kuroda felt that the
country's exports would not fall like what has happened with electronics
and automobiles. He hoped Bangladesh's economic growth would be 5 to 6
percent this year despite crisis. "If the recovery does not take place in
the second half, then it poses challenges for Bangladesh," he predicted.
On the recovery trend, he said Asian giants like China and India are
already showing recovery. Emerging Asian economies also indicate positive
trend. "But G7 economies are still contracting," he said. Kuroda said ADB
is ready to assist the smaller economies that need emergency assistance to
face recession. The ADB has already announced that it would increase its
annual average assistance to Bangladesh from $600 million to $800 million
for the next three years. Meanwhile, Bangladesh's finance minister has
sought additional $500 million this year to face the recession fallout.
The Manila-based multilateral lending agency has formed a $3 billion
counter-cyclical Support Facility, to face the immediate adverse crisis
fallout and help sustain long-term economic growth. But the ADB has
increased interest rate by 200 basis points for the facility, which the
ADB president legitimated saying it is an emergency support. "The interest
rate is still lower than many development lending agencies, including the
IMF," he added. On Bangladesh's anti corruption measures, Kuroda said he
assumed the present government would continue to strengthen governance and
reduce corruption.