US shoppers in VAT confusion

Shoppers are facing the last day of the lower rate of VAT, although many retailers have said they will not increase prices on 1 January. VAT is set to return to 17.5 % in the new year after being reduced to 15 % on 1 December 2008. The government cut VAT in an attempt to boost spending in the recession. But several retailers have said that they will delay passing on the higher rate, while others say they will absorb the cost of the increase. The Centre for Economics and Business Research ( CEBR) estimates that the 13- month tax cut helped boost consumer spending by £6.8 bn, although the British Retail Consortium (BRC) says it has had a "very limited effect". However, the CEBR warned that the first few months of 2010 could be tough for retailers, as spending may be affected by the increase in VAT and rising inflation. Fake freeze? Supermarket giants Tesco, Sainsbury's and Asda have all said that they will delay passing on the increased rate on thousands of products. But Tesco has been accused of raising prices ahead of the tax rise. A report in the Daily Mail claims that Tesco, Boots and Morrisons have all increased the prices of certain items in recent weeks. Tesco told the newspaper its price changes had " no link whatsoever" to the VAT increase, while Boots said it benchmarked its prices against other retailers. Morrisons, which has not claimed that it would freeze VAT, said prices vary throughout the year "reflecting costs and promotional changes". Absorbing costs Meanwhile, Argos and John Lewis both say they will not raise prices until the end of January. Arcadia Group, which owns Topshop, Dorothy Perkins and BHS, has said it will absorb the cost of the increase in all of its stores. But Marks and Spencer will raise prices on all general merchandise from 1 January and on food items on which the tax is paid from 11 January. Shoppers will not notice a difference on price tags, though, as the retailer never displayed the VAT reduction on tags, instead giving customers a 2.5 % discount at the till.

US votes for china steel

A US trade commission has agreed plans to impose tariffs on imports of Chinese-made steel pipes. The US's International Trade Commission voted unanimously in favour of the tariffs, designed to offset Chinese government subsidies. Duties ranging between 10 % and 15 % are now set to be imposed. The move is the latest in a string of recent trade disputes between China and the US, who accuse China of using unfair subsidies and price practices. In November, the US imposed a 35 % import duty on Chinese tyres, arguing that large numbers entering the US market was having a disruptive effect. The latest decision clears the way for the Commerce Department to impose the tariffs on steel piping as originally outlined in November. Steel piping is big business in the US, which imported $2.74 bn of steel pipe from China last year. The pipes are used in oil wells, and have seen increased demand on the back of rising oil prices.

Apple win ipod hearing

A US appeals court has ruled in favour of Apple in a lawsuit claiming that the iPod was could be responsible for hearing loss. The judge upheld a 2008 ruling, saying "the plaintiffs simply do not plead facts showing that hearing loss from iPod use is actual or imminent". He also noted that Apple issues a warning with each of the music players. The two claimants said the iPod was defective because users can listen to it at the unsafe level of 115 decibels. Apple has sold more than 220 million iPods since its launch in 2001. "The plaintiffs do not allege the iPods failed to do anything they were designed to do nor do they allege that they, or any others, have suffered or are substantially certain to suffer inevitable hearing loss or other injury from iPod use," Senior Judge David Thompson wrote in a statement. He added: "At most, the plaintiffs plead a potential risk of hearing loss not to themselves, but to other unidentified iPod users."

Russian firm listed in Hongkong

The Russian aluminium firm Rusal plans to raise as much as $2.6 bn from its public listing in Hong Kong. It is the first Russian company to be listed on the exchange. Trading is expected to begin on 27 January. Rusal will sell 1.6 bn shares at a price between 9. 1 Hong Kong dollars ($1.20 ; 73 pence) and 12.5 Hong Kong dollars. The firm is banned from selling shares to retail investors. Any wealthy individuals who want to invest must buy at least 1 m Hong Kong dollars' worth. The sale has been delayed twice because of concerns about the company's $14.9 bn debt. "Given the high debt of Rusal and oversupply in the aluminium sector, it is not attractive to investors based on fundamental analysis," said Steven Leung, director of institutional sales at UOB-Kay Hian. Rusal is controlled by the billionaire Oleg Deripaska. The company said in a statement that it intended to use the money raised from the listing to pay down its debt.

Copper price rise high

The price of copper has reached a 16- month high with strike action looming at two copper mines in Chile. Copper on the London Metal Exchange traded above $7 ,300 a tonne on Wednesday - its highest level since September 2008. Investors expect demand for the metal to be strong in the new year. There are also concerns that strike action at the two mines owned by Chile's Codelco - the world's largest copper producer - could affect supply. Expectations of higher demand will add to the long rally in copper prices seen in 2009 , analysts said. Copper is now on course for an annual rise of about 140 % - its biggest in more than 30 years. Strike fears Strike action at the giant Chuquicamata and Mina Sur mines in Chile is due to begin on 4 January, though analysts are not expecting prolonged disruption. Workers are calling for pay increases, prompted by the rise in global copper prices. The Chuquicamata mine alone produces around 4 % of the world's copper, according to RBC Capital Markets, and is expected to produce 565 , 000 tonnes of copper this year.

Chinese central bank chief think 2010 is the key

China's central bank governor has called 2010 a key year in China's fight to overcome the financial crisis. The head of the People's Bank of China, Zhou Xiaochuan, said in a message to employees that its credit policy next year would be a relaxed one. China is, in fact, one of the countries least affected by the global financial crisis, analysts point out. Its own economy grew by about 9 % last year, as many other key world economies were in recession. They are still expected to struggle to make growth, whereas China says it will grow by 8 % this year. That has been its target for some years - and one that it has consistently overshot. Rate rises The bank would also offer financial support to areas of the economy that promote the expansion of domestic demand, help the agricultural sector and help China move towards sustainable development, Mr Zhou said. Interest rate rises are a possible part of the Bank's strategy in 2010 , but possibly not until the second half of the year. The only major economy whose growth is forecast to come close to China's is India. The International Monetary Fund predicts it will grow by 6.4 %. The US is expected to expand by 1.5 %.

Former chief of HSBC honoured in UK

The former chief executive of HSBC Dyfrig John has received the only high profile honour for banking in the New Year Honours. Mr John, who retired in March, is appointed CBE for services to the financial services industry. Other business figures honoured include bra entrepreneur Michelle Mone and River Cafe restaurant founders Rose Gray and Ruth Rogers. The awards come at the end of another difficult year in the banking sector. Banks have spent much of 2009 slowly recovering from the global financial crisis that engulfed them in the autumn of 2008. Mr John's honour comes at the end of a 38- year career in banking which began when he joined Midland Bank in 1971 as a management trainee. He then went on to help modernise HSBC's branch network before taking on the chief executive role, spanning the UK and Europe. On his departure from HSBC in March, the bank's chairman Stephen Green described Mr John's contribution to the business as "immeasurable". In previous years several members of the banking elite have received honours for their services to the industry, including Sir Fred Goodwin, the former chief executive of Royal Bank of Scotland, and Sir Victor Blank, the former chairman of Lloyds. 'Incredibly overwhelming' Other business figures honoured this year include Michelle Mone, the designer of the Ultimo bra range, who becomes an OBE. After coming up with the unique bra design in the 1990 s, she went on to build her own business empire in women's underwear. Ms Mone said she was "absolutely thrilled, honoured and delighted" to receive the honour. "It's incredibly overwhelming and makes it all worth it," she said. Rose Gray and Ruth Rogers, who co-founded the Michelin-starred River Cafe restaurant in London, have also been honoured.

Bangladeshi Mutual Trust Bank will give green energy loan

Mutual Trust Bank Limited launched 'MTB green energy loan' at a ceremony at the corporate head office of the bank in Dhaka on Tuesday. MTB chairman Samson H Chowdhury handed over the first loan sanction letter to Resource Development Foundation executive director Golam Mostafa at the ceremony, said a news release. MTB founding chairman Syed Manzur Elahi, managing director and chief executive officer Anis A Khan, and SME banking head Mohammad Iqbal, among others, were also present on the occasion. Under the loan scheme, MTB will grant loans to the customers wishing to set up solar photovoltaic system for household and irrigation, solar PV assembly plants, bio-gas plants, effluent treatment plants or any other feasible renewable energy generation plants.

Nepal business to china

China pledged to bolster aid and trade to Nepal on Wednesday, state media said, one day after Nepal's prime minister said his government would not tolerate anti-China protests in the Himalayan nation. Beijing 'will provide necessary support and assistance to the Nepalese side in hydropower construction, infrastructure development, health, education, human resources development and other fields,' Xinhua news agency said. China also pledged tariff reductions and other assistance, the report said, citing a joint government statement issued during the ongoing visit of Nepalese prime minister Madhav Kumar Nepal. The Nepalese leader's visit to China is his first since he took office in May. The prime minister on Wednesday met with president Hu Jintao, the last of his major official meetings before heading home to Kathmandu. 'The Nepalese government... believes that Taiwan and Tibet are inalienable parts of the Chinese territory,' Nepal told prime minister Wen Jiabao Tuesday in comments reported on Chinese state television. Nepal 'will not allow any forces to use Nepalese territory to engage in anti-China activities', he said. The Himalayan nation is home to around 20, 000 exiled Tibetans, who began arriving in large numbers in 1959 after their spiritual leader the Dalai Lama fled Tibet following a failed uprising against the Chinese. In recent months the exiles say their lives have become increasingly difficult as Nepal— reportedly under heavy pressure from Beijing— has sought to restrict their activities. Nepalese authorities have arrested dozens of Tibetan exiles who tried to hold anti-China protests over the situation in Tibet.

Bangladeshi manpower export down

The number of Bangladeshi nationals going abroad with jobs has declined significantly in 2009 with the little signs the trend will reverse next year, according to sources in the sector. About 4.5 lakh people secured overseas jobs in 2009 compared to their number at 8.75 lakh in 2008 and 8.32 lakh in 2007, showed statistics available with the expatriates' welfare and overseas employment ministry. The fall in export of manpower may not affect immediately earning from remittances but it is likely to decelerate in medium and long terms unless new markets are opened and the old ones consolidated, said recruiting agents. The decline in manpower export has been attributed to the impact of global recession which slowed down job-creating activities in many countries that used to hire overseas migrant workers. Moreover, sources in the manpower sector blamed the government's diplomatic failure in persuading the Middle East countries to recruit Bangladeshi workers – both old and new – in large numbers. Foreign policy expert Akmal Hussain stressed the need for undertaking vigorous diplomatic efforts to promote the country's s economic interests by approaching the leaders of the countries of present and potential destinations of Bangladeshi workers. 'We have not seen meaningful initiatives during the present government in its Middle East diplomacy that could have brought us certain favour in terms of sending more Bangladeshi people with jobs,' said Hussain, a professor of International Relations at Dhaka University. A source in the Bangladesh Association of International Recruiting Agents said that the Awami League-led government should have used Jatiya Party chairman HM Ershad, its ally, as an emissary to convince the Middle East governments to look at Bangladesh positively. However, the overseas employment ministry hopes that Bangladeshi workers would be able to secure jobs in 'newly opened' markets such as Romania, Libya, Austria, Algeria, Azerbaijan, Botswana, Iraq, Angola and South Africa. The ministry, in its report-card prepared to mark the one-year of the government, listed some domestic steps to support overseas jobseekers, ease the recruitment process and also provide incentives to remittance earners. 'We expect the government to create opportunities for recruiting agents to serve the people. We can work for increasing the number of workers if there is scope for negotiating with overseas employers,' said Kazi Mohammad Mofizur Rahman, secretary general of the apex body of recruiting agents. He expressed the hope that the inflow of remittances might not be affected significantly because of resilience of Bangladeshi workers to adversities to retain jobs and send money in times of crisis. 'But what may be the cause for concern for us is the employment situation. Any slump in manpower export today will further worsen the unemployment problem in the country,' the BAIRA leader said. In 2009, another year of international financial crisis that affected development activities, including construction, Bangladesh is expected to receive about $10 billion, as against $9.5 billion earned from remittances in 2008. In its quarterly economic update, the Asian Development Bank pointed out that growth rate of remittances dropped significantly to 34.4 per cent during the July-November period of 2009 compared to 33.6 per cent during the corresponding period of 2008. 'The growth of remittances is expected to moderate further in the months ahead as the growth of new migrants slows,' the Manila- based financial institution forecasts.

Chinese farmers income record high

The average annual income of Chinese farmers hit a record 5,000 yuan ($732) this year as increased demand for migrant workers saw more money sent back to rural areas, state media reported Monday. The per capita net income of farmers rose more than six per cent in 2009 from a year ago, Xinhua news agency said, citing a statement issued by the central government's annual conference on rural policies. The increase was partly driven by a recovery in demand for migrant workers, the report said, as factories and construction companies started hiring again in response to improved economic conditions. Nearly 20 million migrant workers lost their jobs at the start of the year as factories closed or slashed production in response to plummeting export orders from key markets in Europe and the United States. But the government has said that 96 per cent of those people had found new jobs in the cities by September. China has about 225 million migrant workers, according to official figures. Higher incomes in rural areas created ' important conditions' for boosting domestic consumption, Xinhua said, as Beijing seeks ways to reduce its reliance on foreign exports to drive economic growth. In a sign of the growing importance of rural consumption to China's overall recovery, the government said earlier this month that it would continue to subsidise the cost of home appliances for farmers next year.

Fu-Wang Ceramic announce 10pc stock dividend

Fu-Wang Ceramic Industry Ltd held its extra ordinary general meeting and the 14th annual general meeting at the National Shooting Complex at Gulshan in Dhaka on Sunday. Fu-Wang Ceramic managing director Khaled N Kabir presided over the meetings, said a news release. Director Kaiful Wara and independent director Narayan Roy, along with a good number of shareholders, were present in the meetings. Company secretary Sanchita Karmaker conducted the meetings. In the EGM, the shareholders approved rights share at the rate of 1:2 (one right share for every two shares) at Tk 125 each (including premium Tk 25 each share) on paid up capital ( after consideration of 10 per cent stock dividend for the year 2008-2009) subject to approval of the Securities and Exchange Commission. In the AGM, shareholders of the company approved 10 per cent stock dividend and audited statements for the year 2008-2009.

Bangladesh overtaken India in apparel exports

Bangladesh has overtaken India in apparel exports this year as for the first nine months, its exports stood at $2.66 billion, ahead of India's $2.27 billion. In 2008, both the countries were at the same level [$10.9 billion] with each having three per cent of global apparel exports, the premier economic English daily 'Business Standard' in a front-paged story on Monday reported. It said India's export volume is down 80 per cent this year for two reasons: one, the global economic downturn and increasing competition from Bangladesh, Vietnam and Sri Lanka. During the downturn, buyers looked for cheaper deals and Indian exporters were unable to compete on costs due to rising raw material and power costs. The second reason: many domestic are setting up units and offices in Bangladesh to avail the benefits of duty-free access. Prominent among those who have set up units in that country are House of Pearl Fashion [two units] and Raymond [one unit]. 'Bangladesh has a cost edge of 9-29 per cent across various products. The country has duty- free access to European markets and labour is cheap. It is more profitable to export from Bangladesh, than from India.' the Business Standard quoted Sudhir Dhingra, managing director of Orient Craft Exports, as saying. Deepak Seth, chairman of the House of Pearl Fashions, said the company's units in Bangladesh had been operating 'efficiently and profitably'. The company would double its capacities for T- shirts and woven tops/bottoms in Dhaka in the next financial year. Seth said labour costs in Bangladesh were 50 per cent of that in India and there was no duty on imports to EU, Australia and Canada. 'The Bangladesh government's huge priority to the sector is another big draw.' House of Pearls has units in Indonesia and Vietnam as well. Orient Craft was planning a unit in Bangladesh a year ago but dropped the idea due to changed focus of business. 'There are no difficulties in setting up a unit in Bangladesh and we considered setting up a base there. However, we are focusing more on domestic markets now,' said Dhingra. Analysts and textile experts said it was not common for Indian companies to set up units in Bangladesh. 'There are distinct advantages of setting up units in Bangladesh but only a few big players have done it. Smaller players will not venture into setting up units in other countries,' Prakash Agarwal, vice-president of consulting firm Technopak told the newspaper. DK Nair, secretary general of the Confederation of Indian Textile Industry, said some of the Indian companies had set up garment manufacturing units in Bangladesh, but it didn't mean much.

Bangladeshi govt want to reduce lentil price

The government has decided to import lentils from neighbouring Nepal to stabilize its price in the local market, said sources. 'The government of Nepal has decided sell red lentil to Bangladesh,' said a senior official of the commerce ministry, adding that the price is yet to be negotiated. 'We expect that its price will be reduced by Tk 20 to Tk 25 per kg from the current level when the Nepalese lentil reaches the market,' he added. Good-quality red lentil, which cost Tk 120 even a month back, is now selling at Tk 135 per kg in the local market. Besides, the government has also planned to import of 13 lakh tonnes of soybean and 12,500 tonnes of sugar from Malaysia and Brazil. Sources said the government of Nepal agreed to sell 14,750 tonnes of red lentil to Bangladesh only after persuasion. Nepal and India have banned pulse export due to low production of the crop. However, commerce minister Faruk Khan, at the WTO ministerial meeting, had a fruitful discussion with his Nepalese counterpart. Khan sought to procure 30,000 tonnes of red lentil, but the Nepalese commerce minister agreed to supply only 14,750 tonnes of pulse to the Trading Corporation of Bangladesh. Of the total quantity of 14,750 tonnes of red lentil, the Nepal Trading Corporation will supply 5,000 tonnes and 9,750 tonnes will be supplied by a private company named Salt Trading Ltd. The consignment from Nepal will reach the country by mid-January, and the Trading Corporation of Bangladesh will sell the item through its distributors, said a source at the TCB. A three-member team will go to Kathmandu on 5 January, 2010 to hammer out the final agreement, and the price is expected to be much lower than local rates. The team will lead by the joint secretary to the commerce ministry, Mustafa Mohiuddin. Uttam Kumar Deb, additional director of the Centre for Policy Dialogue, told New Age that the country has produced enough lentil to satisfy only one-third of the local demand, so its import is necessary to reduce its price in the local market.

Bangladeshi sugar market will volatile again

Local sugar market has become volatile again with millers raising prices following the fresh round of increases in the prices of the essential sweetener in international market. Wholesale price of sugar increased by Tk 120 per maund or more than Tk 3 each kilogram in just one-and-a-half week. Retailers have also started responding to wholesale market as, up by at least Tk 4 per kilogram in a week, sugar sold between Tk 52 and 56 on Tuesday. 'Wholesale sugar price is rising almost everyday—we are experiencing fresh volatility in the market,' said Mohammed Ali, a wholesaler at Maulvibazar, the hub of commodity wholesales in the capital. At Maulvibazar on Tuesday ready stock sugar sold each maund (37.3 kilogram) for up to Tk 1, 840, up by Tk 40 in four days and Tk 120 in ten days. Market sources said fresh increase in sugar price in the international market had forced the refiners to raise prices and make a windfall profit. Five private sector refiners, who rely on imported raw-sugar, are movers and shakers of in local market as production in state-owned sugar mills cannot even meet one tenth of the demand. According to a London Commodity Exchange report, increased by $100 per tonne in three weeks, sugar price closed at $ 695 on Thursday when market went to Christmas and New Year holiday Some wholesalers at Maulvibazar in Dhaka and Khatunganj in Chittagong however say despite international prices increased much, prices would not go up this time so sharply, as had happened during Ramadan. Traders say about significant stocks of imported refined sugar, procured by some importers some weeks back, would help to keep the market stable. 'The local market could have also been worsened much if the winter would not keep sugar demand dull,' a wholesaler told New Age. Wholesalers also say that the market should remain comparatively stable as state-owned sugar mills are in operations only in the crushing season (November to May) 'Although their production is very small but a government stock makes a psychological impact on the market,' said one wholesaler. Bangladesh's annual sugar consumption is estimated at 1.2 million tonnes but 15 state- owned crushing mills' current crushing season target is 101,000 tonnes against 75,000 tonnes the previous season. According to the daily market report of the Trading Corporation of Bangladesh, sugar per kilogram was being retailed between Tk 31 and Tk 34 on December 28, last year. Bangladesh's import-dependent sugar market faced a volatility in the middle of this year following a production shortfall in India, and as a result of higher prices in the international market. Costlier by Tk 20 in a month, retail sugar price had hit Tk 66 per kilogram in mid-September, even after the government, in mid-August, had imposed zero tariff on raw-sugar import. Later a government investigation claimed that some wholesalers had instigated such sharp rises in a short period by hoarding and trading the delivery orders [DO] at unduly higher prices.