UPDATE----------MARCH 23, 2010 TUESDAY
BANGLADESH
EXCLUSIVE
Low-priced Chinese mobiles take on known brands
Sales of low-priced Chinese origin mobiles marked a high growth in recent times in Bangladesh challenging the domination of leading global mobile brands, experts and traders said.
Brand giants such as Nokia, Samsung, LG, Siemens, Sagem and Sony Eriksson which dominated the market even two years ago are now facing challenges these days from lesser known brands such as Symphony, Maximus, Sprint, Digital and I-Max.
‘Most of such non-brand Chinese sets account for about 60 per cent of the monthly sales volume,’ the Bangladesh Mobile Phone Businessmens’ Association president, Nizam Uddin Ziku, said.
He told New Age customers, especially low-end users, were showing less interest in known brands which sell for double the prices of Chinese origin sets but have less features.
Users also feel comfortable as importers give a year’s warranty for such Chinese sets, said an official of the Siemens Bangladesh, which started marketing Maximus two years ago.
On an average at least a million new mobiles are sold in Bangladesh every month as the Bangladesh Telecommunications Regulatory Commission statistics show the number of new connections increased to 53.83 million till January from 50.51 million in November 2009.
Market operators have said traders have sold mobiles worth Tk 300 crore each month in the recent past.
They said official dealers had almost stopped selling brands such as Motorola, Siemens, Sagem and Sony Eriksson in the local market.
Many of them have rather started marketing low-priced Chinese origin sets to stay competitive against market leaders Nokia and Samsung, they said.
Rageebul Kabir, managing director of the CMPL Nokia, a major distributor of Nokia brand in Bangladesh, said in July 2009 that import of a large quantity of non-brand Chinese mobile had posed worries for traders of mobiles of reputed brands.
There are around 300 mobile importers in Bangladesh, according to statistics available with the telecoms regulatory commission. But only 30 to 40 businessmen are active. Almost all mobile imports are from China.
The mobile phone businessmen’s association president said, ‘All mobiles come from China but we supply sets for low prices.’
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NEWS
Cabinet rejects proposal for tax on share trade profit
The cabinet on Monday rejected an Internal Resources Division proposal for imposition of income tax on the amount of profit generated from share trading and an increase in annual fees for beneficiary owners’ accounts.
At the weekly meeting of the cabinet, the IRD, a division of the finance ministry, placed the proposal for amending the Income Tax Ordinance 1984 to realize income tax at the source for renewal of the beneficiary owners’ accounts by which individual and institutional investors are doing share trading.
The division also sought approval from the cabinet, headed by Prime Minister, Sheikh Hasina, for increase in renewal fees for BO accounts to Tk 1,000 from Tk 300.
‘The cabinet has rejected the IRD proposal for amending Income Tax Ordinance 1984 to impose tax at source for renewal of the beneficiary owners’ accounts,’ the PM’s press secretary, Abul Kalam Azad, told reporters after the meeting at the secretariat.
Currently, the account holders do not need to pay tax to operate their accounts and are enjoying exemption from tax on profit generated by share trading.
The IRD proposed the formulation of a new guideline for beneficiary owners’ accounts with three per cent income tax on profit ranging from Tk 7, 00,000 to Tk 10, 00,000, and five per cent on profit exceeding Tk 10, 00,000, said officials.
Officials of the finance ministry said that they also wanted to increase BO account renewal fees to restrict the number of accounts, which has been swelling in recent times.
The new rules would have affected some 2.2 million account holders engaged in share trading in the stock exchanges of Dhaka and Chittagong. The government has also provided an opportunity for investment of undisclosed money in the share market after paying 10 per cent income tax.
The Securities and Exchange Commission, the stock market’s watchdog, has urged the investors, especially retail traders, to be ‘careful about investment’ after record-breaking rallies became daily occurrences in the share market in the past several months.
Some 1, 70,000 accounts were opened in February, the second highest number after 1, 91,000 accounts opened in October 2007.
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Nitol plans Nano plant in Bangladesh
Brand new car may cost customers Tk 3 lakh
Nitol Motors, a local assembling company which sells automobiles manufactured by India’s Tata Motors, is now planning to make and market a Bangladeshi version of Nano, Tata’s much-hyped brand affordable to the lower middle class Indians.
The chairman of Nitol Motors, Abdul Matlub Ahmad, claims that the Nano cars can be made in his planned pant in Bangladesh and the customer-level price of each car will not exceed Tk 3 lakh.
If a deal is struck between Tata and Nitol, the small car manufacturing plant would be set up in Chittagong or Khulna in view of the proximity of the site to seaport, he told New Age on Monday.
The Nitol chairman is scheduled to have a ‘crucial’ meeting in this regard with the managing director of Tata Motors, PM Telang, in Dhaka on March 25.
However, the objective of Telang’s visit is to expand the company’s business in Bangladesh, especially enhancing capacity of Tata’s commercial vehicles assembling unit in Jessore and setting up a new plant in Kishoreganj for assembling Tata’s ACE series of mini trucks, said Matlub.
‘It is my dream to manufacture made-in Bangladesh cars and export them to different countries after meeting domestic demand,’ the Nitol chief said adding that he would be negotiating a deal with the Tata Motors to set up the plant. He mentioned that almost 60 per cent of Nano components would be made in the planned Bangladesh plant under the supervision of Tata Motors.
Bangladeshi customers showed interests in Nano showcased in the India Trade Fair in Dhaka in the past month. ‘But the price of each piece of imported Nano, including one hundred per cent duty, would stand at nearly Tk 6 lakh,’ Matlub pointed out.
He gave his estimate that a unit requires annual production of at least 50,000 cars for its business viability. ‘We see the prospect of selling 10,000 Nano cars a year while the rest can be exported,’ he added.
According to the businessman, northeast Indian states and West Bengal can the convenient export destinations and Nano cars can also be shipped to Europe or Africa.
Nano is a rear-engine four-passenger car which Tata launched in the Indian market in March 2009. It was a pledge by Tata group chairman Ratan N Tata to provide each of common Indians with a car at a price of Rs 100,000.
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FBCCI to elect 28 directors June 17
The Federation of Bangladesh Chambers of Commerce and Industries will elect 28 directors of its 44-member board through direct votes on June 17, according to the election board of the apex trade body.
The board declared election schedules on Monday.
As per the schedules, primary voter list of the trade body will be published on April 25 and the final version of the list will be published on May 5. Last day for submission of nomination papers by candidates is May 10. Primary list of the candidates will be published on May 20 and the list of valid nominations will be published on May 27.
The final list of candidates will be published on June 1, after providing time to candidates for withdrawing nominations.
According to the newly amended rules, 28 directors-14 from association group and 14 from chamber group- to the 44 strong FBCCI board will be elected through polls.
Sixteen of the directors will be automatically elected, equally from chamber and association groups – a provision that the present government has decided to continue in spite of demand for direct elections in all posts.
Within 48 hours of the elections, both elected and nominated directors will together elect the next president and two vice presidents for the next two years, say the current rules.
The government has meantime extended till June 30 the tenure of the present executive committee, headed by its president Annisul Huq, which was set to expire on March 24.
Some 2,000 general body members of 275 affiliated associations of the FBCCI will vote for electing 14 directors while 400 members of 70 affiliated chambers will elect the same number of directors.
Among eight unelected directors from the chamber group, one each director will be nominated by six divisional chambers, the Metropolitan Chamber of Commerce and Industry and the Bangladesh Chamber of Industries.
In the association group, one each director post will go to leading associations — BGMEA, BTMA, BKMEA, BJMA, BAPA, BFFEA, BAB and BIA, according to the amended rules.
In line with a rotation system, the president of the FBCCI this year will be elected from the association group and the first vice-president from the chamber group.
The current FBCCI board of directors is comprised of 38 representatives including 24 directors elected through direct voting polls.
The commerce ministry, which regulates the trade bodies, decided to raise the number of unelected directors to 16 from 14. The Annual General Meeting of the FBCCI a week ago opposed the indirect elections of a significant number of directors but the ministry did not pay heed to such criticism.
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Economic coordination council meeting Wednesday
The government’s top policymaking body on monetary and exchange rate affairs is set to explore strategies for containing inflation and keep the exchange rate of taka at a reasonable level.
The Coordination Council of Monetary Policy and Exchange Rate for Macroeconomic Framework, headed by the finance minister AMA Muhith, will sit for its fifth meeting on Wednesday to discuss the issues at a time when Bangladesh is coming out from the current global recession, said finance ministry sources.
‘The council meeting will decide strategies for implementing the monetary policy announced by the Bangladesh Bank and harmonizing it with government’s fiscal policy,’ said a senior official of the finance ministry on Monday.
He said the meeting would also examine the country’s current balance of payments situation and discuss macroeconomic situation and inflation under a three–year mid-term macroeconomic framework.
The country’s budget surplus was Tk 946 crore in July–December 2009, compared to Tk 6,129 crore deficits during similar period of the previous year, according to the half year budget implementation report.
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SOUTH ASIA
Coca-Cola hit by pollution claim in India
Coca-Cola contaminated water and polluted the environment at a south Indian bottling plant and should pay $47 million in compensation, local authorities said on Monday.
The government in Communist-run Kerala state said it had accepted the findings of a panel that investigated the soft drinks giant and recommended a fine of 2.16 billion rupees.
Coca-Cola denied all the allegations.
The state panel said that the Palakkad bottling factory, which was closed in 2005 after protests from activists and residents, damaged the local environment by polluting groundwater and dumping solid waste.
‘Several studies were conducted and they revealed that the Coca-Cola plant has contaminated the water and soil of the area. So the company must pay for it,’ NK Premachandran, the state minister for water, told AFP.
Coca-Cola dismissed the panel’s findings, saying that any claim must be taken to the courts.
It said numerous investigations by the state government and others had cleared the company of any wrong-doing.
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BANGLADESH
DSE elects 4 new directors
Four directors, including incumbent president Rakibur Rahman and former president Ahmed Iqbal Hasan, were elected to the Dhaka Stock Exchange on Sunday.
The two other elected directors are Khwaja Ghulam Rasul and Sharif Ataur Rahman, said a DSE press release.
Rakibur Rahman of Midway Securities bagged the highest number of 178 votes out of 210 valid votes. Khwaja Ghulam Rasul of Khwaja Equity Services got 155, Ahmed Iqbal Hasan of Ahmed Iqbal Hasan Securities 128 and Sharif Ataur Rahman of SAR Securities 104.
Of 228 votes, 213 were cast in the elections held on Sunday. The election commission cancelled 3 ballots.
Among the four others, who also vied for directorship Abdul Haque of Royal Green Securities got 98 votes, Ahmad Rashid Lali of Rashid Investment Services 82 votes, Dastagir Md Adil of Adil Securities 62 votes and Ghulam Quader of GQ Securities 33 votes.
The DSE polls commission chairman, AKM Rafiqul Islam, named the winners.
The newly elected directors and eight existing directors will elect a president, a senior vice-president and a vice-president on March 27 for one year.
The DSE board comprises 25 members, of whom 12 are elected, 12 nominated and one ex-officio.
According to DSE regulations, four directors retire every year and four replace them through direct voting.
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WORLD ECONOMY
Turkey optimistic about economic recovery
Recovery in the crisis-hit Turkish economy is expected to be stronger than initially projected given recent improvement in economic activity; a senior Turkish official was quoted as saying Sunday.
‘In our 2010 mid-term programme, we envisaged a growth of 3.5 per cent. But as of today, the figure is projected... between 3.7 and 5.5 per cent,’ said Deputy Prime Minister Ali Babacan, who holds the economy portfolio, Anatolia news agency reported.
Babacan said annual contraction in gross domestic product last year was also expected to be smaller than the six per cent projection.
‘Recovery in the past three months shows that... the Turkish economy has contracted less than six percent, below the expectations,’ he said.
The global crisis has plunged Turkey’s once-booming economy into recession, causing GDP to contract by 8.4 per cent in the first nine months of 2009.
The fourth-quarter figures will be released on March 31, Babacan said.
‘We will come to the pre-crisis level at the end of 2011. But even this pace of recovery is faster than the world average,’ he said.
The minister however stressed that unemployment remained a major challenge given the country’s growing population, adding that reducing the jobless rate to fewer than 10 per cent by the end of 2011 appeared ‘difficult’.
Turkey’s unemployment rate stood at 13.5 per cent in the three months to the end of January, according to latest official data.
In 2009 the rate rose to 14 per cent, up three percentage points from the previous year.
Earlier this month, Ankara said it had called off loan talks with the International Monetary Fund because of ‘Turkey’s outlook as a country that is able to stand on its own feet economically.’
The decision ended nearly two years of negotiations on a stand-by deal dogged by disagreement on key issues.
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SOUTH ASIA
India’s Tata Motors invests in Myanmar
India’s largest vehicle maker Tata Motors said on Monday it signed a contract with Myanmar Automobile and Diesel Industries to set up a heavy truck plant in the military-ruled country.
The new plant would be set up at Magwe, nearly 480 kilometres (300 miles) from Yangon, and will be operational in the last quarter of the financial year ending March 2011, it said in a statement.
Myanmar, which has been ruled by the military since 1962, is under economic sanctions by the United States and Europe because of its human rights record and long-running detention of pro-democracy leader Aung San Suu Kyi.
But the impact of the sanctions has been weakened as neighbors such as China, India and Thailand invest billions of dollars, particularly in its oil and gas industry.
Tata Motors, which owns the formerly British brands Jaguar and LandRover, said the plant would have a capacity of 1,000 vehicles per year, which could be expanded to 5,000 vehicles.
No financial details were given, but the plant will be funded by a line of credit from the government of India.
Myanmar’s military government held talks with an Indian delegation on March 1 in its remote capital Naypyidaw.
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WORLD ECONOMY
Toyota shareholders sue over fallen stock price
Toyota shareholders incensed over a sudden drop in the Japanese automaker’s stock price are heading to court with lawsuits claiming company executives deliberately misled investors and the public about the depth of accelerator problems in millions of its vehicles.
At least three proposed class-action lawsuits filed by Toyota investors say the company gave false initial assurances that the sudden acceleration problem was a simple matter of floor mats trapping gas pedals, helping prop up the stock price.
The shareholder cases are part of an avalanche of potentially costly lawsuits against Toyota Motor Corp over the acceleration issue, including those filed by crash victims and their families and those brought by Toyota owners contending their vehicles are worth far less because of the recalls.
The investor lawsuits say Toyota spread misleading information through press releases, conference calls with stock analysts and TV interviews to assure stockholders and the public that the accelerator problem was easily fixed or might be the driver’s fault.
Instead, the lawsuits contend, top Toyota executives have known for nearly a decade that faulty electronic throttle controls caused vehicles to sometimes careen wildly out of control but covered it up to protect the company’s reputation for safety — and its stock price. The company has not issued any recalls involving flaws in the electronic throttles and has repeatedly denied they are the problem.
US-listed shares rose from just over $75 on October 5, the day of the floor mat recall, to above $90 on January 21, when Toyota announced another recall — over gas pedals it says can stick in certain conditions.
After that, the stock price fell, dropping 16 per cent as of early March. Shares have since rebounded somewhat, closing Thursday on the New York Stock Exchange at $79.34, but some investors say the recovery did not prevent them from losing potentially millions of dollars as the stock was dropping.
Since the sticky pedal recall in late January, Toyota’s total US market capitalization has fallen 13 per cent to $135.87 billion. In trading on the Tokyo Stock Exchange, Toyota shares also have lost nearly 17 per cent of their value since January 21. That’s wiped out about 2.27 trillion yen ($25.1 billion) of the company’s market capitalization there.
Toyota declined comment because the cases are pending in court. The company has repeatedly denied its electronic throttle controls are to blame for sudden acceleration.
In the lawsuits, the shareholders are asking a judge to certify a ‘class’ of plaintiffs that would represent all Toyota shareholders in the US who held company stock on specific dates. If Toyota is found liable, damages could easily run into the hundreds of millions or even billions of dollars.
The shareholder lawsuits are pending in federal court in California, the location of Toyota’s North American headquarters.
In one of the lawsuits, Toyota stockholder Harry Stackhouse of Richboro, Pa, contends the company ‘misled investors by failing to disclose that there was a major design defect in Toyota’s acceleration system, which could cause unintended acceleration.’
‘This drop removed the inflation from Toyota’s securities prices, causing real economic loss to investors who had purchased securities,’ said Stackhouse, who said he bought 40 shares in late 2009 just as the accelerator problems became more widely known.
Stackhouse and the others filing suit — shareholders from Ohio and Tennessee_ did not return several telephone calls seeking comment. All three investors filed sworn statements that they did not buy the shares as an excuse to sue the company.
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Thailand plays down unrest impact on FDI
Thailand’s finance minister on Monday said anti-government protests had not deterred foreign investors in the country, but said its tumultuous politics was ‘impossible to understand’.
‘Broadly speaking, we’re not seeing any signs yet that investors are staying away because of the political situation,’ Korn Chatikavanij told reporters at an Asian investment conference in Hong Kong.
‘The main issue... is that we manage it in a civilized manner within the rules of law and under democratic principles,’ he said.
‘On the government side, we intend to fully adhere to that and deal with the issues being raised.’
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Germany to introduce bank levy
The German government plans to introduce a levy on banks to ensure that they pay for the costs of any future crises.
Volker Kauder, the parliamentary leader of Chancellor Angela Merkel’s conservative bloc, told ZDF television Monday that her governing coalition has agreed in principle on the plan.
Kauder said coalition leaders agreed that ‘banks cannot in future gamble at the taxpayer’s expense’ and that ‘provisions must be made so that they — if it gets difficult — pay for things themselves.’
Kauder gave no details on the size of the resulting fund but said it would run into the billions of euros.
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ASIA
Oil prices dip in Asia
Oil prices dipped to near $80 a barrel in Asian trade Monday, extending last week’s losses which were caused by gains in the US dollar.
New York’s main contract, light sweet crude for April delivery was down 50 cents to $80.18 a barrel.
London’s Brent North Sea crude for May delivery shed 39 cents to $79.49 a barrel.
‘The market’s downward movement today is likely due to the fallout from the market’s sentiment on Friday,’ said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.
The oil market Friday took a hit from a stronger greenback which sent the New York contract slumping $1.52, briefly dropping below the psychological barrier of $80 per barrel.
A stronger US unit makes dollar-denominated crude more expensive for buyers using weaker currencies and so tends to dampen oil demand and prices. Prices fell sharply last week as investors sought the safe-haven greenback on uncertainty over international assistance for debt-plagued Greece.
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WORLD ECONOMY
World stocks hit by Greek debt, India rate hike
World stock markets retreated Monday following Wall Street’s sell-off on Friday and amid ongoing concerns about Greece’s debt crisis ahead of a key meeting of EU leaders later this week.
European markets followed their Asian counterparts lower with the FTSE 100 index of leading British shares down 55.36 points, or 1 per cent, at 5,594.76. Germany’s DAX fell 49.73 points, or 0.8 per cent, to 5,932.70 while the CAC-40 in France was 37 points,
or 0.9 per cent, lower at 3,888.44.
Wall Street was poised for further losses after closing down Friday for the first time in nine days — Dow futures were down 61 points, or 0.6 per cent, at 10,626, while the broader Standard & Poor’s 500 futures fell 8.5 points, or 0.7 per cent, to 1,147.80.
‘Some kind of adjustment — especially given concern over mounting debt in developed economies — was always looking imminent,’ said Anthony Grech, market strategist at IG Index.
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EU presidency wants Greek aid decision at summit
The Spanish presidency of the European Union said on Monday it would push the bloc to agree on financial aid for Greece at a summit this week, despite reservations from EU powerhouse Germany.
‘The Spanish presidency will work towards that,’ Spanish foreign minister Miguel Angel Moratinos told reporters before a meeting with his EU counterparts in Brussels.
‘It is an important moment for the future of the EU and the euro,’ he said ahead of the two-day summit which starts Thursday.
‘We will make every effort to give this trust, this solidarity that I think (Greece) deserves thanks to the measures that the government of (George) Papandreou has already taken,’ Moratinos said.
Greek Prime Minister Papandreou has urged EU leaders to agree on financial help for his heavily indebted country during the summit and warned that his government might be forced to turn to the International Monetary Fund instead.
European Commission Chief Jose Manuel Barroso urged EU leaders on Friday to approve soon the creation of a financial aid mechanism for Greece to use if necessary, warning: ‘We cannot prolong any further the current situation.’
He stepped up that effort in new comments on Monday, telling German daily Handelsblatt that ‘we need a decision at this summit so that we know how we are going to manage (the Greek crisis).
‘Otherwise, deep uncertainty threatens to drag on for some time.
‘We can’t keep going this way; we risk endangering the stability of the eurozone and feeding speculation (on markets).’
Merkel said on Sunday that ‘raising false expectations’ ahead of Thursday and Friday’s gathering of EU leaders in Brussels would cause ‘turbulence’ on markets.
The German government’s reluctance to approve any aid to Greece reflects widespread unease among taxpayers, with a Financial Times poll showing on Monday that 61 per cent of Germans oppose the idea of a bailout.
Greece, buried under a debt of 300 billion euros, has approved austerity measures to slash a runaway public deficit that is close to 13 per cent of national - more than four times the limit allowed by the eurozone.
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Climate change could slow Southeast Asia growth by 7pc: IMF
Southeast Asian economic growth could slow this century by almost seven per cent a year unless action is taken against climate change, a senior IMF official said Monday.
‘If nothing is done, Southeast Asia could lose the equivalent of 6.75 per cent of GDP each year by the end of this century. That’s more than twice the estimated global average,’ John Lipsky, first deputy managing director of the International Monetary Fund, told a conference in Hanoi.
He said climate change is ‘one of the greatest long-term risks facing the developing world’ and Southeast Asia is particularly vulnerable because of its long populated coastlines and its reliance on agriculture, natural resources and forestry.
‘The incipient effects of climate change already are notable: exacerbating water shortages, threatening food security and increasing health risks,’ Lipsky said.
He was speaking to an international gathering of policymakers, diplomats, analysts and non-governmental groups discussing post-crisis growth and poverty reduction in Asia’s developing countries.
In January, IMF managing director Dominique Strauss-Kahn said the agency is planning a 100-billion-dollar fund to help countries mitigate the effects of climate change.
Among its aims, the IMF seeks to reduce poverty, foster global monetary cooperation and secure financial stability.
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Rio employees’ China trial opens, guilty plea reported
Four employees of mining giant Rio Tinto stood trial in China on Monday, while the company’s chief executive said in Beijing that Rio remained committed to working with the key Asian customer.
Australian national Stern Hu and three Chinese employees of Rio faced prosecutors in the court in Shanghai, China’s financial hub, all accused of taking bribes and violating commercial secrets.
Hu pleaded guilty to taking bribes worth some 6 million yuan ($879,000), Bloomberg reported, citing Tao Wuping, the lawyer for another defendant.
The case has highlighted the risks of doing business in a country with a huge market but close ties between the ruling Communist Party, police and courts.
While the trial got underway in a concrete building near an elevated highway in Shanghai, Rio chief executive Tom Albanese signaled to an audience in the Chinese capital that he did not want to jeopardize business ties with China, the world’s biggest consumer of iron ore.
‘This issue is obviously of great concern to us,’ Albanese told a forum of officials and executives, referring to the case.
‘I can only say we respectfully await the outcome of the Chinese legal process,’ he told the forum, held in an exclusive state guesthouse.
Albanese said ‘we remain committed to strengthening our relationship with China, not just because you are our biggest customer, but because we see long-term business advantages for both of us.’
Foreign reporters were not allowed to attend the forum, and Rio emailed copies of Albanese’s speech. A Chinese web cast of it did not include his comments on the trial.
The four employees from Rio’s iron ore team, including Hu, were detained last summer at the height of fraught negotiations over 2009 ore prices, creating a furore over China’s opaque state secrets laws.
Chinese media last summer accused the four of seeking information about Chinese mines and steel mills, which many firms consider legitimate market information.
Rio has said that its employees did nothing wrong.
Shanghai is likely to want the case over quickly, before its much ballyhooed 2010 World Expo opens in Shanghai in May.
Foreign reporters were not allowed to attend the trial.
China has excluded Australian diplomats from observing the part of the trial concerning commercial secrets, drawing protests from Canberra, which says they have the right to be present for the whole trial, scheduled to last three days.
Before entering the court, Australia’s consul-general in Shanghai, Tom Connor, told a crush of reporters he would make a statement after the day’s proceedings.
A Chinese researcher in a think-tank run by the nation’s ministry of commerce said there was a strong case against the Rio employees and warned Australia to keep a distance.
‘The Australian government and public need to calmly and rationally consider this question: should the government waste such a large amount of political and financial resources to pay the bill for certain companies’ immature and even illegal ways?’ the researcher, Mei Xinyu, wrote in the Chinese-language Shanghai Securities News.
‘What Rio Tinto and Stern Hu did would be utterly taboo in any host country,’ wrote Mei.
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Germany’s Merkel caught in Greek crisis crossfire
Germany came under European pressure on Monday to drop its resistance to a Greek financial rescue plan, but a poll showed that a large majority of Germans oppose any bailout.
Chancellor Angela Merkel got support for maintaining a hard line from a Financial Times poll that showed 61 per cent of Germans opposed aid for Greece and almost one-third thought Athens should leave the 16-nation eurozone.
But the head of the European commission and the Spanish presidency of the European Union called on bloc leaders to agree on an aid scheme for Greece during a two-day summit this week.
The Greek debt crisis has shaken the euro and as the eurozone’s richest member, Germany is being pressed to commit to an aid plan for Athens, which has officially only asked for help to fend off financial speculators.
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BA strike enters 3rd day
British Airways and the union representing its cabin crew are no closer to resolving a dispute over pay and conditions as a strike enters its third — and busiest — day.
Monday’s operations at the airline are expected to be under more strain as there are far more flights packed in to normal scheduling.
The Unite union and BA both claim victory over the walkout that has caused the airline to cancel over half its 1,950 flights normally scheduled over the period. Unite disputes BA’s claim that a substantial number of workers crossed the picket line.
The union is due to strike again from Saturday for four days if the dispute is not resolved. BA has warned knock-on effects from this walkout will carry on throughout this week.
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UPDATE----------MARCH 22, 2010 MONDAY
BANGLADESH
NEWS
Govt plans to raise BO account fees
Cabinet likely to make a decision today
The government has planned to raise annual fees for beneficiary owners’ account for share market trading to Tk 1,000 from the existing Tk 300, aiming to increase country’s non-tax revenue, official sources said.
The finance ministry is schedule to place a proposal for raising the BO accounts’ annual fees before the weekly cabinet meeting today, they said.
Officials said that amendments to the Income Tax Ordinance 1984 would be needed to increase the annual fees.
Currently the number of BO accounts, through which investors take part in trading, is around 22 lakh but most of the accounts are used only to participate in the initial public offerings.
‘We have sent the proposal to raise the BO accounts fees for increasing non-tax revenue. Besides, there is an unnecessary rush for opening the BO accounts by people in recent times,’ said a senior official of the finance ministry.
The official also said they wanted to restrict the use of the OB accounts.
The government in 2008 amended guidelines for opening BO accounts making mandatory submission of bank certificate or a photocopy of national identity card and applicant’s photo with signature.
Stock market analyst Moin Al Kashem told New Age that it will be discouraging for the small investors if the government increases the annual fees of the BO accounts.
‘Small investors who participate in the initial public offerings will the pain of increased fees,’ he added.
Moin said fees for the BO accounts in western countries are costlier than Bangladesh, but the western countries are providing various types of facilities to their stock businessmen.
‘Government has always taken discouraging initiative for the country’s share market investors and as a result there will be negative impacts on the country’s stock markets,’ he said.
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Purchase body Okays 4 more peaker bids
Nine plants to generate 620MW in 15 months
The cabinet committee on public purchase on Sunday approved a Power Division proposal to award two companies contracts for the installation of four peaking power plants with a total generation capacity of 270MW.
The committee, headed by the finance minister, Abdul Maal Abdul Muhith, approved the selection of a consortium of Energypac for the award of turn-key contracts for the installation of three power plants.
The consortium was selected by the Power Development Board to set up the Shantahar 50MW plant at a cost of Tk 368.11 crore, Katakhali 50MW at Tk 350 crore and Gopalganj 100MW at Tk 693.81 crore.
The Hyundai Corporation was selected for the Bera 70MW plant at a cost of Tk 484.68crore.
The furnace oil-run power plants are expected to go into operation after the selected companies would sign agreements with the power board.
The purchase committee in February approved the selection of bidders for five other peaking plants with a total capacity of 350MW.
The power board in 2009 invited tenders for the installation job of 10 peaker with a total capacity of 830MW. A tender for a 200MW plant at Ghorashal was scrapped.
The government has undertaken the projects complete its implementation by the end of 2011 to address the present generation shortage.
A meeting of the executive committee of the National Economic Council on March 16 approved the projects, allocating funds to the tune of Tk 7,203 crore from the state exchequer.
Of the total project cost, Tk 7,085 crore will be provided by the government while Tk 118 crore will be provided by the power board.
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BB asks banks to submit action plan on SME loan disbursement
The Bangladesh Bank on Sunday asked all commercial banks to submit soon their action plan to the central on disbursement of Tk 24000 crore in SME loan.
A meeting between the central bank and the managing directors of the country’s private banks Sunday identified 60 SMEs to provide them with adequate fund to flourish, reported Bangladesh Sangbad Sangstha.
Briefing newsmen on the outcome of the meeting held at his office, BB governor Atiur Rahman said like agriculture credit, all the banks agreed to lend SMEs to a bigger extend.
Small and Medium Enterprises (SMEs) will get Tk 24,000 crore in loan by this year.
All the commercial banks will disburse the loan under their own action plans. Bangladesh Bank (BB) will supervise the loan disbursement through a three-tire monitoring cell.
‘The banks will soon submit their action plan to the central bank under which they will disburse the loan to SMEs by this year’, the governor said.
He did not give any details about the rate of interest, repayment’s conditions and eligibility.
Official sources said the details about the interest rate and other conditions would be made available after getting the action plan from the respective banks.
Atiur said the banks have been suggested to disburse the loan on cluster basis, considering regional track record and prospect.
For instance, he said some areas in the northern part of the country are well- known for building motor vehicles’ body; some areas are famous for producing motor parts and other stuffs.
He said the banks would consider the trend and strength of the local SMEs to offer them the credit on cluster basis.
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EXCLUSIVE
Bangladesh too cheap for comfort for leading brands
The process of outsourcing production by Western companies is all about finding cheap labour to cut costs. But in Bangladesh, some retail groups are finding the wages too low for comfort.
As Chinese labour prices increase, Western giants such as Wal-Mart and H&M are increasingly shifting production to factories in Bangladesh- where some have found themselves on the same side as the unions in an unusual alliance.
The South Asian country of 144 million suffers chronic power outages and poor infrastructure but is one of the cheapest manufacturing destinations on Earth, largely because factory worker wages are set at just $25 a month.
Conditions on the factory floor are cramped and frequent accidents such as a fire last month that killed 21 people at a factory producing knitwear for H&M, worry image-savvy Western companies.
For the first time, they are now speaking out.
‘It’s absolutely unacceptable that minimum wages are just $25,’ the Dhaka-based head of a top Western store, speaking on condition of anonymity, told AFP.
‘We pay enough to factory owners, but we don’t think that the benefits trickle down to workers or are being spent on improving conditions,’ he added.
In January, buyers including Wal-Mart, H&M, French giant Carrefour and Levi Strauss wrote to the prime minister saying that ‘below the poverty line wages...contributed to unrest’ among workers and should be addressed.
Current minimum wages ‘do not meet the basic needs of the workers and their families,’ the letter said, adding that the government should set up a review board to reassess the minimum wage.
‘The increased cost of living during 2008 and 2009 has contributed to the unrest among workers in the garment sector as wages have not been regularly revised,’ the letter added.
Bangladesh’s 4,500 garment factories are the country’s largest employers-providing jobs to 2.5 million people or 40 per cent of the nation’s industrial workforce.
Last year the country was one of the world’s top three garment exporters, with shipments up 10 per cent to 12.3 billion dollars-around 80 per cent of the country’s total exports.
‘But workers are as poor as ever. You can’t buy food with $25 a month, let alone pay rent,’ said Mosherefa Mishu, a middle-aged woman who heads the country’s best known union, the Garment Workers Unity Forum.
For Mishu, a ‘vicious cycle’ of greedy factory owners, Western buyers and a government keen only to see export figures growth has ‘trapped thousands of workers in poverty.’
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NEWS
Oil tankers threaten strike
Oil tanker owners have threatened suspension of operations from March 24 if the government does not cancel a plan to procure additional vessels.
At present there are 81 coastal ships used for transporting oil across the country from seaports.
‘As the use of petroleum has plummeted by around 35 per cent in recent years, due to an increase in CNG (compressed natural gas) the companies cannot run more than two trips a day at present,’ the Oil Tanker Owners Association president, TM Giasuddin, told a press briefing on Sunday.
Many oil tankers already face huge losses everyday as they do not get enough trips in a day but have to keep up for costly maintenance of the ships, he said.
Under these circumstances, an ‘influential quarter’ of the government is planning to add another 30/40 ships, alleged Gias.
‘If the ships are brought in … the whole industry will be in crisis,’ he added.
The association’s senior vice-president, Habibul Alam, said they would sit with the government before March 24 to reach an understanding.
‘If the talks fail we will stop operations from March 24 midnight,’ he said.
The association sought a prompt decision by the government to avoid unrest in the sector.
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SOUTH ASIA
Bharti wraps up $8.3b in financing for Zain
India’s largest telecommunications operator, Bharti Airtel Ltd., has finalised $8.3 billion in financing needed for its proposed acquisition of the Africa assets of Kuwait’s Zain, Bharti said Sunday.
‘The financing was oversubscribed, with major international banks committing to underwrite the total amount,’ Bharti said in a statement.
Zain accepted a $10.7 billion offer from Bharti Airtel in February to sell most of its Africa businesses as it refocuses on its home market in the Middle East.
The deal includes $1.7 billion of Zain debt, plus $8.3 billion to be paid by Bharti upfront and $700 million one year from now, said a person familiar with the negotiations who spoke on condition of anonymity because he was not authorized to speak to media.
A consortium of international banks, led by Standard Chartered Bank, Barclays and the State Bank of India will provide $7.5 million in loans, Bharti said.
ANZ, BNP Paribas, Bank of America Merrill Lynch, Credit Agricole CIB, HSBC, Singapore’s DBS Group, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. also participated in the underwriting, it said.
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BANGLADESH
NEWS
Agriculture, technology fair begins
A three-day agriculture and technology fair was opened on Sunday aiming at spreading new technologies among farmers at Daulatpur in the city.
The fisheries and livestock and agriculture extension departments organised the fair at Metropolitan Agriculture Office premises.
Khulna city corporation mayor Talukder Abdul Khaleque opened the fair as chief guest.
Chaired by Khulna additional deputy Commissioner Satendra Kumar Sarkar, the inaugural ceremony was also addressed by Jessore regional AED additional director Md Bajlul Haque Mia, Professor Shafiur Rahman, district livestock officer Md Obaydul Karim, Khulna AED deputy director Makhan Lal Das and district fisheries officer Nityananda Das, among others.
The fair, which will end on Tuesday, will remain open from 8:00 am to 8:00 pm.
Different governmental and non-governmental organizations are displaying their goods and technologies at 25 stalls at the fair ground.
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Made-in Bangladesh fair in city in June
Bangladesh Chamber of Industries, a leading trade body, has organised an exhibition of a wide range of industrial products in the city in next June to promote ‘made-in Bangladesh’ items.
Amar Pannyo Amar Desh [my products, my country] Exhibition -2010 will be held at Bangabadhu International Conference Centre in June 10-12, the chamber announced on Sunday.
‘The made-in-Bangladesh fair has been designed to effectively showcase Bangladeshi products and improve public perception about our own products,’ Shahedul Islam Helal, president of the chamber, told a press briefing at its office.
The chamber, which groups manufacturers of a wide range of sectors, has been, for the past couple of years, carrying out the campaign styled ‘my products, my country’, he added.
The business leader pointed out that Bangladeshis industries were now in a critical juncture due to effects of the recent global recession. ‘Such fair help bring back entrepreneurs’ confidence and develop local brands.’
A total of 150 stalls and pavilions will be set up at the fair venue, said Abul Kalam Bhuiyan, a chamber leader. AK Azad, a former BCI president and chairman of Hameem Group, was also present at the briefing.
In organizing the fair, the Bangladesh chamber will receive cooperation from several government and non-government business development organizations including the Board of Investment, SME Foundation, FFCCI, BGMEA, BKMEA, BPGMEA, TOAB and BASIS.
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President for expansion of labour market in Thailand
President Zillur Rahman Sunday urged the newly appointed Bangladesh ambassador to Thailand Qazi Imtiaz Hossain to work for further expanding Bangladesh labour market in Thailand.
The president gave the directive when he called on him prior his departure for Thailand to take up his new assignment. During the call on, the president urged the ambassador to pay a more responsible role in increasing Thai investment in Bangladesh as well as further expansion of trade and commerce relations between the two countries.
‘There are many ways to work for the welfare of one’s own country,’ the president observed.
Qazi Imtiaz assured that he would do his level best in increasing the bilateral relations especially the trade and commerce cooperation between Bangladesh and Thailand. Secretaries concerned of the president’s office were present.
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WORLD ECONOMY
Gas the next fuel to fire Australia’s boom
First gold, then coal and iron ore. Now, a new bonanza is about to be unleashed from beneath down under: Australia’s got gas.
Projects being ramped up to tap huge undersea fields off the country’s northwest could quadruple Australia’s exports of liquefied natural gas in the next few years and turn it into what the country’s resources minister has called an ‘energy superpower.’
It will be the next stage of a long boom that has enriched Australia and made it a key supplier of the raw materials underpinning Asia’s development — from the girders in city skyscrapers to the fuel burned to light them.
‘We have what the world, and particularly the rapidly growing economies of Asia, want — iron ore, energy and minerals,’ said Colin Barnett, the premier of Western Australia state, which is at the heart of the new boom.
The mostly desert state has become known for a frontier atmosphere not unlike that of Australia’s 19th century gold rush, the country’s first mining boom that drew enough migrants to almost triple Australia’s population within a decade.
As a major source of the materials driving Asia’s economic surge, Australia has increasingly been drawn into the orbit of emerging giants China and India, spawning tensions and discord. There are also nagging worries over economic overheating and long-lasting environmental damage caused by its thriving resource industry.
Gas was discovered off Australia’s remote northwest coast in the 1970s. But its exploitation has lagged behind iron ore and coal that have been easier to get and more in demand.
Now, gas is gaining popularity as a cleaner-burning alternative to coal in power generation, with a fraction of the greenhouse gas emissions.
The biggest boost in the sector came last September, when Chevron and joint venture partners ExxonMobil and Royal Dutch Shell announced they would go ahead with the massive Gorgon project.
The venture will drill fields about 80 miles (130 kilometres) offshore to tap into an estimated 40 trillion cubic feet of gas, build pipelines and a liquefaction plant and port for about AU$43 billion ($41 billion) — roughly the size of Guatemala’s gross national product.
If that sounds big, the numbers stack up. The decision to proceed came on the heels of news that ExxonMobil Corp. had signed a 20-year deal worth about AU$50 billion to supply PetroChina Co. with LNG from its share of Gorgon. Similar deals for Gorgon gas worth another AU$70 billion were struck with power companies in Japan, South Korea and India.
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China key to global tourism growth in 2010: UNWTO official
A senior official with the United Nations World Tourism Organization said Saturday that China was expected to contribute a lot to global tourism recovery in 2010.
Taleb Rifai, the secretary general of the UNWTO, said global tourism experienced the most difficult year in 2009 with the global tourism revenue dropped by four per cent.
The UNWTO forecast the global tourism revenue in 2010 was expected to grow by 2-3 per cent and China would contribute a lot to the growth, he said.
He made the remarks at the opening ceremony of the 2010 Boao International Tourism Forum.
Global tourism was at a crucial recovery phase and it was necessary to pool wisdom worldwide and information to boost tourism growth, said Shao Qiwei, chairman of the National Tourism Administration of China.
The forum provided a rare chance for Hainan to learn from advanced experiences in its drive to grow into an international tourism island, said Wei Liucheng, secretary of the Hainan Provincial Committee of the Communist Party of China.
The forum held in Sanya has attracted about 2,000 people from worldwide tourist sectors to exchange their experiences in boosting tourism amid the global financial downturn.
Sponsors of the forum included Hainan Provincial government, the National Tourism Administration and the United Nations World Tourism Organization.
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SOUTH ASIA
Indian imports boost Dubai pearl trade
Trade of natural pearls in Dubai has grown over 10 times monetarily in recent years and exports to India and Australia last year have contributed to this leap, the Dubai Pearl Exchange has said.
This is in addition to re-exports to new markets
and diverse markets including Bahrain, Hong Kong, Japan, Lebanon and Switzerland.
DPE, which is a subsidiary of Dubai Multi Commodities Centre Authority and a pearl trading facility, announced Saturday that a total of 99.6 million dirhams worth of pearls were traded in Dubai in 2009.
The pearl trade rose from 95 million dirhams to 99.6 million dirhams last year, driven by a 30 per cent increase in imports, a considerable feat given the extremely tough economic conditions.
The trend towards high-quality pearls has increased significantly in Dubai, highlighting a shift in consumer preference towards exclusive pearls, it said. Pearl consumption in Dubai has also increased over the last year, reflected through lower exports than the previous year. This was driven by substantial growth in the natural pearls segment, where volumes increased by 50 per cent and values tripled.
‘Pearls are integral to the history of the region, and DMCCA is working towards revitalizing the traditional Arabian pearl trade that once thrived through the ports of the UAE,’ said Ahmed bin Sulayem, executive chairman of DMCCA.
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China to begin trial of 4 Rio Tinto employees
An Australian executive and three other employees of mining giant Rio Tinto face charges of stealing secrets and offering bribes in a Shanghai trial beginning Monday that is viewed as a barometer of China’s handling of foreign business.
China has warned against politicizing the case, which has been an irritant in relations with Australia. Australia has protested the plan to close court sessions involving the commercial secrets charges.
The trial comes at a time of friction with the US over China’s currency policies and doubts among some in the foreign business community over Beijing’s commitment to an open and fair business environment.
Australian citizen Stern Hu and three Chinese nationals were arrested nine months ago at a time when Rio Tinto was acting as lead negotiator for global iron ore suppliers in price talks with Chinese steel mills. Hu was Rio Tinto’s senior executive in China in charge of iron ore.
Few details of the allegations against the suspects have been made public, and the four Rio Tinto employees have not been allowed any public comment since their arrest. Lawyers contacted over the weekend, ahead of Monday’s trial, refused comment.
The Australian department of foreign affairs and trade issued a statement saying it was disappointed with the Chinese court’s decision not to allow its consular officials to attend sessions having to do with commercial secrets.
‘The Government’s disappointment with the decision has been registered with Chinese officials in Beijing and Canberra.
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India faces more rate hikes: analysts
India’s central bank looks set to tighten monetary policy further after raising interest rates for the first time in nearly two years as it bids to check spiraling inflation, economists say.
In a move that surprised experts, the Reserve Bank of India hiked short-term rates from record lows late Friday to battle near double-digit annual inflation amid fast-strengthening industrial output.
Expectations had been for a rate hike at the bank’s scheduled policy review on April 20 but the RBI said in a statement that inflation had ‘been a source of growing concern.’
The wholesale price index in Asia’s third-largest economy was 9.89 per cent in February, well above the central bank’s own estimate of 8.5 per cent by the end of the current financial year this month.
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WORLD ECONOMY
Crude oil prices dive in volatile trade
Oil prices sank heavily this week as traders tracked the dollar and Greek debt concerns, and shrugged off a widely-expected decision from the 12-nation OPEC cartel to maintain crude output levels.
Many other commodities were also dragged lower by stubborn concerns about Greece, and the stronger greenback, which makes dollar-priced raw materials more expensive for buyers using weaker currencies, and therefore hits demand.
‘Oil prices were getting their cue from the broader market as persistent concerns over Greece ... with the commodity complex suffering as well,’ said VTB Capital’s Andrey Kryuchenkov.
‘Otherwise, little changed in the world of oil with market participants still digesting the bullish weekly report on US fuel inventories report and OPEC’s decision to keep production levels unchanged on Wednesday.’
Anxiety over the fate of Greek finances deepened as the European Union groped for common ground on how to ensure that Greece will be able to borrow money on financial markets at rates similar to those paid by its partners.
Greek authorities have made it clear they are prepared to go to the International Monetary Fund for help, sending a further jolt through financial markets.
OPEC meanwhile left its output ceiling at 24.84 million barrels a day at a meeting in Vienna on Wednesday, citing uncertainty in the macroeconomic environment and global oil demand.
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China warns US against yuan sanctions
China warned Sunday it may retaliate if the United States imposes trade sanctions and other penalties over its exchange rate policy, state media reported.
‘We will not turn a blind eye,’ People’s Daily quoted commerce minister Chen Deming as saying in response to a US threat to impose sanctions on China if the US treasury department deems it to be a currency manipulator.
Chen also again denied the yuan was undervalued and accused the United States of ‘politicizing’ the currency issue.
His remarks at a closed-door economic forum in Beijing follow US lawmakers’ demand that US president Barack Obama label China a currency manipulator, a move that could trigger tough penalties.
Treasury secretary Timothy Geithner has to decide on the issue next month.
Beijing has effectively pegged the yuan to the US dollar since mid-2008, which critics say keeps the currency’s value artificially low, making its exports cheaper and thus more competitive on overseas markets.
China, the world’s biggest exporter, has repeatedly defended its exchange rate policy as necessary for the survival of Chinese manufacturers and supporting jobs growth in the economy.
Premier Wen Jiabao said last Sunday China would not be bullied into changing its exchange rate policy.
‘We are opposed to the practice of engaging in mutual finger-pointing among countries or taking strong measures to force other countries to appreciate their currencies,’ he told reporters at the end of China’s annual session of parliament.
Amid the growing trade tensions between China and the US, Beijing said Friday vice commerce minister Zhong Shan will visit Washington from March 24 to 26.
Zhong will meet US lawmakers and officials at the US commerce and treasury departments as well as at the US trade representative’s office.
‘This visit is an effort to consult and exchange views on the Sino-US trade balance, trade frictions and other concerned trade issues,’ a ministry statement said.
Criticism over its forex policy has risen as China’s trade surplus and foreign exchange reserves have skyrocketed.
In 2005, international pressure led China to adopt a managed float of the yuan, which led to a 21 per cent increase in its value against the dollar by 2008, when the global financial crisis struck.
Since then, China has effectively pegged the yuan to the dollar, a move that has helped its exporters weather the global crisis, but also triggered a fresh round of foreign pressure.
China said this month the exchange rate policy was temporary and would be withdrawn ‘sooner or later’ along with other stimulus measures.
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BA cabin crew strike for 2nd day
British Airways cabin crews walked off the job for a second day Sunday, upsetting travel plans for scores of customers, but the airline said its contingency plans were working well and more planes were taking off than expected.
The airline — locked in a bitter dispute with workers over a pay freeze and changing working conditions — said it was able to add several extra flights because many crew members ignored the three-day strike call.
‘Our contingency plans are continuing to work well on Sunday morning around the world,’ it said in a statement.
BA said all long-haul aircraft from overseas airports were able to arrive in London as planned on Sunday morning. The airline added there has been no evidence of strikes at any overseas airports directed at its flights.
Union leaders, however, dispute those claims. Unite, the union representing BA cabin crew, said scores of BA planes were grounded and that 10,000 members walked out on Saturday.
BA was able to avoid extended chaos because it leased planes and crew from rival carriers to take up some of the shortfall. About 1,100 flights out of the 1,950 BA flights scheduled to operate during the three-day walkout were expected to be cancelled.
The airline had said at the start of the strike that it could handle as many as 49,000 passengers a day on both Saturday and Sunday — compared to the average 75,000 for a normal weekend day in March.
The airline on Sunday declined to provide details of whether that goal was achieved or discuss the number of flights cancelled or delayed, but it said that it managed to reinstate more than a dozen of the cancelled flights — including those to Paris, Miami and Los Angeles.
The acrimonious dispute with its workers will be financially crippling for BA. Analysts estimated it could cost the airline more than the 63 million pounds ($95 million) that chief executive Willie Walsh is trying to save through the changes to workers’ pay and conditions.
BA argues that the disputed changes — including a pay freeze in 2010, a switch to part-time work for 3,000 staff and a reduction in cabin crew sizes from 15 to 14 on long-haul flights from Heathrow airport in London — are critical for its survival.
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World coffee exports dip
Global coffee exports declined 9.3 per cent to 28.4 million bags in the first four months of the 2009-10 coffee year ending September, while shipments from
India rose 32 per cent, the International Coffee Organisation has said.
Coffee exports from India, Asia’s third-biggest supplier, rose to 1.02 million bags during October-January period of the 2009-10 crop year against 0.77 million bags in the same period last year, it said. One bag contains 60 kg of coffee.
According to the ICO, world coffee exports declined to 28.4 million bags in the first four months of the current crop year from 31.3 million bags in the year-ago period.
A fall in the world’s total coffee exports was due to 29 per cent dip in shipments of the milds variety from Columbia, one of the world’s top three coffee producers, on low production for the second consecutive year, it said.
‘Furthermore, levels of opening stocks in exporting countries for this crop year are low, while supplies of quality coffee remain tight,’ ICO said. The data maintained by the ICO showed a sharp fall in shipments from the world’s top three leading coffee exporting countries — Brazil, Vietnam and Colombia.
The shipments from Brazil declined to 10.39 million bags during October-January of 2009-10 crop year against 11.58 million bags in the last one.
Vietnam’s coffee exports were down at 5.06 million bags against 5.74 million bags, while Colombia’s shipments stood at 2.47 million bags against 3.62 million bags last crop year.
However, coffee exports from Indonesia and India showed improvement with the former shipping 1.77 million bags against 1.74 million bags in the review period.
A domestic trade expert said India’s shipments are increasing on bigger crop and recovery in demand. Italy and Russia are the major export destination for Indian coffee.
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Europe waits on Germany as Greece deadline looms
The summit opens on Thursday, the subject isn’t even on the agenda and the markets have control of the political keys, even as Germany debates what to do about Greece.
As one experienced observer notes, it’s as if German chancellor Angela Merkel is busy planning what to do with the summer holidays, just as the family car is sliding off the edge of a cliff.
The leaders of the 27 European Union nations gather this week for a summit officially called to decide on a long-term strategy for competing with rival, emerging economies.
Despite the head of the body that manages the bloc’s day-to-day affairs, responsible for supervising Greek efforts to quit blowing the budget, pushing for early agreement, the EU’s serious powerbrokers are still caught in a conundrum.
Under intense pressure from peers, traders and his own counterparts, Merkel’s finance minister, Wolfgang Schaeuble, has made it known that Berlin could stomach bilateral, voluntary loans in an effort to close a deal among eurozone nations.
Brussels officials have been busy this weekend trying to drum up support, in an effort to head off Greek threats to call in the financial cavalry, the International Monetary Fund.
They want loans from the likes of Belgium, through Dexia bank, France and, yes, Germany, through regional money lenders that don’t need a federal constitutional court go-ahead to help.
European commission Chief Jose Manuel Barroso went out on a limb on Friday night to demand that Merkel, French president Nicolas Sarkozy and the rest reach a meaningful political agreement later this week.
There is time yet, but some pointed remarks from Merkel, essentially the EU’s boss, mean anyone looking for a rapid turnaround is likely to be disappointed.
‘I don’t believe that Greece has need for money at the moment, and the Greek government will confirm that,’ Merkel said on German radio on Sunday morning.
‘That’s why I advise against causing turbulence on the markets by raising false expectations about the European Council meeting this Thursday,’ she underlined.
Pressure from Greece, whose prime minister was in town last week, from fellow EU heavyweights like Barroso, and from markets, who had dragged down the euro and raised the bond yields representing the interest rates Greece needs to pay on critical borrowings, didn’t do much there.
The EU needs to act, but Merkel seems to think not just yet.
So what is this week’s summit going to achieve?
A deal on broad-brush strategy going forward to 2020? Even before the weekend, EU officials could show you the final conclusions on the issue behind the Spring summit- all that’s missing is a green light from leaders, almost all of whom will be long gone from their national political scene before the time to judge these pledges comes up.
Another on fighting climate change? Again, anyone following the summit in Brussels will, more than anything else, want to know if Europe is going to cough up real money of its own to stop Greece’s problems threatening the euro currency and its economy as a whole.
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China says trade deficit likely in March
China’s export-dependent economy is likely to experience a trade deficit in March, a senior government official warned Sunday, possibly signalling a slowdown in overseas shipments.
Commerce minister Chen Deming also defended the nation’s exchange rate policy, noting a stronger yuan by itself could not resolve global trade imbalances.
Chen’s remarks at the closed-door China Development Forum in the capital were published by the official Xinhua news agency and People’s Daily newspaper and come amid growing international pressure for the yuan to appreciate.
Analysts have warned of a temporary slump in exports this month, after manufacturers cranked up production before China’s Lunar New Year holiday in February to meet overseas orders for the Easter holiday in April.
China’s exports soared 45.7 per cent in February, their fastest pace in three years, continuing a rebound that started in December when exports grew 17.7 per cent and snapped a 13-month falling streak.
The nation’s trade surplus reached $7.61 billion in February, up 57.2 per cent year-on-year, while imports rose 44.7 per cent year-on-year to $86.9 billion.
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GM Daewoo to recall 58,000 vehicles in S Korea
GM Daewoo, the South Korean subsidiary of US car giant General Motors, Sunday recalled more than 58,000 vehicles because of defects, in the latest blow to Asia’s crisis-hit auto industry.
The recall affects vehicles sold in South Korea but will be expanded to include those sold abroad, according to GM Daewoo, the country’s third largest carmaker. It gave no immediate idea of the size of the foreign recall, or which countries would be affected.
‘GM Daewoo Auto and Technology has reported that it will recall 58,696 vehicles that it has made and sold in Winstrom, Lacetti Premiere and Damas models due to manufacturing defects,’ Seoul’s ministry of land, transport and maritime affairs said in a statement.
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UPDATE----------------MARCH 21, 2010 SUNDAY
Bangladesh
News
Four private companies to take $36m in foreign suppliers’ credit
Four local private companies have won the approval by the government for securing a total of $36.37 million of suppliers’ credit from three foreign companies to import machinery and equipments, official sources said.
The four local companies — Dutch-Bangla Pack Limited, Ever Smart Bangladesh Limited, Banglalion Communication Limited and RFL Plastic Limited — will also have to take services from the foreign companies in exchange of taking the suppliers’ credit, according to their contracts.
Supplier’s credit is an agreement between a supplier and a buyer whereby the supplier agrees to receive deferred payment and accepts payment in installments for the supplied goods.
The central bank’s scrutiny committee for supplier’s credit, at a meeting chaired by the Bangladesh Bank governor, Atiur Rahman, in the first week of March, gave its consent to the proposals from the four local companies to get the suppliers’ credit, the first time during the present government.
The Board of Investment also approved the proposals.
‘We have given our consent to the proposals for taking suppliers’ credit in exchange for importing machinery and equipments,’ a member of the scrutiny committee told New Age on Friday.
The committee gave the permission to the RFL Plastic Company giving condition that the company would take loan from Prime Bank offshore account, said the member.
Another member said they were assured that repayment of suppliers’ credit to be drawn from foreign companies would not affect the country’s foreign exchange reserve which stood at around d $10. billion.
The Dutch-Bangla Pack limited will get loan of $1.50 million from the Netherlands’ LC Packaging International for new machinery at 4 per cent interest rate annually plus the London’s inter-bank offered rate.
The LC Packaging loan, which will come through offshore unit of Prime Bank Limited, will be repaid in seven years and six months.
Ever Smart Bangladesh Limited will get foreign loan of $13.37 million from its equity holder of Singapore’s CPAT Private Limited through Citibank N.A. Motijheel branch to expand their operations.
The RFL Plastic Limited will borrow $15 million from offshore unit of the Prime Bank at a 3.5 per cent interest rate plus LIBOR. The fund will be used to set up a new factory.
Asked to explain the purchase of machinery and equipment worth $3.15 million from the local market, the company’s representative informed the committee that it would be easier and faster to implement the expansion project, meeting sources said.
Banglalion Communication Limited will get a loan of $6.58 million from Chinese company ZTE Corporation. That loan excludes engineering service charge of $0.41 million. The borrowing company will have to repay the supplier’s credit through their nominated AB Bank Limited, Gulshan Branch.
The amount of loan at $36.37 million is not a big deal, given the country’s foreign currency reserve, former finance adviser AB Mirza Azizul Islam told New Age.
‘It is often alleged that suppliers’ credits are over priced, resulting in more fund remitted through repayment of the credit,’ he viewed.
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NBR asked to settle 12,000 cases to realize tax
A parliamentary panel has asked the National Board of Revenue to immediately settle some 12,000 pending cases for realizing an outstanding tax amount of Tk 5,000 crore.
The parliamentary standing committee on the finance ministry at a meeting on Saturday gave the directive and suggested that the board should hire additional manpower, if needed, to settle the cases as ‘quickly as possible’.
The committee chairman, AFM Mustafa Kamal, who chaired the meeting, said that the revenue [Tk-5,000cr] remained unrealized as different parties filed lawsuits against government demands for tax of different types.
‘These cases have been pending for a long time,’ he said after the meeting held at the Sangsad Bhaban.
The government has fixed a target of earning Tk 61,000 crore revenue in the budget for the 2009-10 fiscal year, the meeting was told.
It expressed satisfaction at the revenue board’s performance in the first six months of the fiscal, saying that the board needed more steps to achieve the target at the end of the fiscal.
The meeting asked the government to reconstitute the income tax tribunal comprising manpower from judicial service and the government’s accounts department.
The standing committee also asked the authorities concerned to make easy the process of submitting income tax return by individuals so that the people are encouraged to pay tax.
The meeting suggested the finance ministry to take an initiative to bring the 1984 income tax ordinance in the parliament to make it compatible with the current situation.
Among others, committee members Ali Ashraf, AKM Maidul Islam, MA Mannan and Farida Rahman attended the meeting.
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World News
Thousands of BA flights cancelled as crew on strike
British Airways cancelled more than 1,000 flights after its cabin crew launched a three-day strike Saturday, wreaking havoc on the plans of tens of thousands of passengers just before the busy spring holiday season.
Hoping to keep as many passengers happy as possible, BA scrambled to rebook some on other services, chartered planes from rival airlines and drafted in volunteer crew. But it still had to scrap more than half of its 1,950 scheduled flights over the period.
Chief executive Willie Walsh issued a direct apology via YouTube for the walkout, the airlines first in almost 15 years, saying it was a ‘terrible day for BA.’
The strike — backed by some unions in the United States, Germany and Spain — also risked harm to Britain’s Labour government before a tough general election expected before June.
On Saturday morning at BA’s London Heathrow hub, the cavernous Terminal 5 was nearly deserted after some passengers had flown out early to avoid the strike or simply stayed away altogether. But delays were beginning to mount and passengers were warned that many long-haul flights would not have full meal services.
One man trying to get home to Sweden said he was already looking at a four-hour delay.
‘Our flight from Dallas arrived two hours late, and now we’re waiting to go to Stockholm — that flight is two hours late as well,’ said Bjorn Barka, a high school principal.
Michael Clements, a security director for a California-based company, was able to check in for his business trip to Amsterdam but was told it would be an hour before he could check in his heavy luggage. ‘Not enough people,’ he said with a shrug.
Charity worker Elizabeth Robb was told there would be no hot food on her flight to Dubai.
The Eurostar train service between London and continental Europe and Virgin’s rail services between London and Scotland were expected to be busy as passengers sought alternate routes.
BA also warned that the disruption would likely last several days beyond the three-day strike, because of a knock-on effect on flights that would carry through to the end of a second strike planned for March 27-30.
‘We’re in limbo land,’ said Susan Danby, a school worker from the northern English city of Hull. She is due to fly March 29 to Las Vegas with friends to celebrate their 50th birthdays. ‘This is our dream trip, we booked it last August and we’ve been planning it for years.’
‘We all want more money and better conditions, but people shouldn’t ruin other people’s holidays,’ Danby said.
As protesters were readying picket lines Saturday outside London’s Heathrow international airport, analysts estimated BA has already lost more than 25 million pounds (more than $37 million) because of cancelled tickets and contingency costs.
The two planned strikes combined could cost the airline more than the 63 million pounds ($95 million) that Walsh is trying to save through the disputed changes to workers’ pay and conditions.
BA’s pilots are not part of the strike, after their union resolved a separate dispute over pay with the airline.
US, German and Spanish unions have given some support for Unite’s action, but stopped short of pledges for coordinated activity that would disrupt BA’s ability to refuel and service the planes it is operating during the walkout.
The US International Brotherhood of Teamsters, which represents 40,000 aviation industry workers, urged travelers to find alternatives and said it was keeping its options ‘open.’ The US Association of Professional Flight Attendants also expressed support for BA.
‘Many of us have taken decisions not to pull extra flights or routes to help BA pick up the slack,’ said a pilot for a Chicago-based airline, who spoke on condition of anonymity for fear it could cause him repercussions with his job. ‘We don’t want to be seen as supporting scab labour.’
BA said it would handle as many as 49,000 passengers on both Saturday and Sunday. That compares with the average 75,000 for a normal weekend day in March.
At its Heathrow base, more than 60 per cent of long-haul flights will operate, but only 30 per cent of short-haul. At Gatwick, all long-haul flights and more than half short-haul flights will run as normal. London City flights, including flights to New York, are operating as normal.
Aside from hurting BA financially, the strike is also an unwelcome event for Britain’s governing Labour Party before the upcoming national elections.
Prime Minister Gordon Brown irritated Unite, a major political donor, by calling the union ‘deplorable’ and saying as late as Friday night that it should call off the strike.
Britain faces even more possible travel chaos in the run-up to the April 2-5 Easter break, as railway signal workers voted last week to join rail maintenance workers in a strike. The rail, maritime and transport union has not called dates for the walkout, but refused to rule out the long Easter weekend.
And over this weekend, engineering works on the London Underground were forcing closures between central London and Heathrow, though the Heathrow Express train service was operating as normal.
Opposition Conservative Party leader David Cameron criticized the stranglehold that unions such as Unite have over the Labour Party.
Cameron is seeking to evoke memories of the difficulties the Labour government, which receives millions of pounds (dollars) in donations from unions, had in the 1970s, culminating in the mass strikes that became known as Britain’s ‘winter of discontent’ and led to the election of Conservative leader Margaret Thatcher in 1979. Unite alone has donated 11 million pounds to the Labour Party in recent years.
‘Once again, under Gordon Brown the vested interests triumph and the people lose out,’ Cameron said Saturday. ‘This threatens the future of one of Britain’s greatest companies along with thousands of jobs.’
At a rally of hundreds of striking workers in Bedfont, north of London, Unite spokesman Steve Turner said BA ‘is effectively at war with very proud, very dedicated employees.’ In a symbol of the acrimonious nature of the dispute, some protesters wore masks depicting Walsh as Hitler.
Walsh said the disputed changes are critical to the airline’s survival — BA has been particularly hard hit by the global economic recession because of its heavy running costs and reliance on increasingly unpopular premium fares.
The airline on Friday offered a compromise on a proposed pay freeze this year, offering a three per cent rise next year and the year after and then an inflation-linked increase in 2013/14 capped at four per cent.
Unite argues it was not properly consulted on the changes, which also include a switch to part-time work for 3,000 staff and a reduction in cabin crew sizes from 15 to 14 on long-haul flights from Heathrow.
Any passengers with cancelled flights from Saturday through the end of the second planned strike on March 30 will be allowed to rebook on another BA flight within 355 days at no extra charge, but no refunds were being offered, the airline said.
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BANGLADESH
EXCLUSIVE
‘Country set to lose $2b RMG market, 3 lakh jobs’
The country is set to lose an opportunity to create 3 lakh jobs due to decline in readymade garment exports this fiscal, believes an apparel sector leader.
Bangladesh is likely to lose $2 billion or Tk 13,000 crore in export value compared to its market share last year, Anwar-Ul-Alam Chowdhury Parvez, a former president of Bangladesh Garment Manufacturers and Exporters Association, said analyzing the export trends.
Apparel exports dropped 13.82 per cent in knitwear and 16.13 per cent in woven garments in the six months of the fiscal, official statistics show.
‘A 16 per cent negative growth would mean a loss of 300,000 employments directly and a million jobs indirectly,’ he said during an interaction with a group of journalists in the city on Saturday.
The decline in garment exports has been attributed to Bangladesh’s loss of competitiveness in the international market plagued by global recession and complacence at the national level that Bangladesh’s exports would not be affected.
‘Bangladesh’s rivals such as China, India, Vietnam and Cambodia have attained a positive export growth. All these countries excepting Bangladesh have cut per unit price of garments to retain their market shares,’ Parvez noted.
In their bid to tackle the impacts of recession, China cut per unit price by 12.44 per cent, India 4.68 per cent, Vietnam 12.42 per cent and Cambodia 6.59 per cent between January and December 2008.
Bangladeshi exporters, who offered the lowest price so far, rather increased per unit price by 2.32 per cent. After the price readjustments, their comparative per unit price stands at $2.36 for Bangladesh, $2.45 for Cambodia, $2.68 for China, $3.07 for India and $2.91 for Vietnam.
‘Bangladeshi manufacturers could not reduce the price because they did not get the support that exporters of other countries are offered by their governments. Moreover, energy crisis has increased the cost of production,’ said the business leader.
He gave an estimate that the garment exporters would have slashed price by 2-3 per cent, had the government agreed to spend $210 million overall to support them.
The Bangladesh government, in its stimulus package for export sectors, announced support such as interest rate cut, loan rescheduling facilities and waiver of license fees on captive power plants.
Other countries either devalued their currencies or provided fiscal and financial support for exports to retain the market in the face of challenges of global recession, Parvez pointed out.
The finance minister, AMA Muhith, recently said the government would review the situation and consider if it would continue the stimulus package for export-oriented industries in the next fiscal.
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NEWS IN FOCUS
Tk 600cr fresh water shrimps exported to EU after ban withdrawal
Bangladesh has exported freshwater shrimps worth Tk 600 crore to destinations mostly European countries since January 10 after withdrawal of the `self-imposed ban’ on export of such items to the EU countries, said chief of Bangladesh Frozen Foods Exporters Association on Saturday.
The BFFEA is also set to earn Tk 4,500 crore by exporting freshwater shrimp if any problem does not arise, Musa Meah, president of the BFFEA told the Bangladesh Sangbad Sangstha.
Bangladesh exported freshwater shrimp (galda, also known as green tiger prawn) worth Tk 114 crore to different destinations excepting the EU during June to November, 2009 while it was Tk 246 crore during corresponding period in 2008.
Besides, export of shrimp (bagda) stood Tk 1,348 crore during June- November in 2009, a Tk 173 crore more than that of the same period of the previous year.
The country exported around 50,368 tonnes of shrimp (all categories) and earned Tk 2,774 crore last year while this year the government is expected to export 55,000 tonnes of shrimp.
Musa sought Tk 425 crore initial financial supports from the government to help shrimp farmers cope with the rise of raw materials’ price in the international market.
‘Shrimp production has been reduced due to price rise of raw materials in the international market, which led to lower shrimp production. Initially we need Tk 425 crore to increase the production,’ he told the news agency.
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Trade through Bhomra land port suspended
Trade with India through Bhomra land port remained suspended as Ghojadanga Truck Drivers’ Association enforced an indefinite strike on Saturday morning at the Ghojadanga land port in India.
The strike was announced following an alleged assault on an Indian truck driver Sirajul Islam by members of the BDR over parking of his truck on the main road at the port on March 19, said Bhomra clearing and forwarding association sources.
According to reports received from across the border, leaders of Ghojadanga Truck Drivers’ Association and Ghojadanga Truck Owners’ Association on Saturday held a meeting over the issue at Ghojadanga where the drivers’ association demanded punishment of the BDR men while the owners’ association considered the issue resolved through dialogue between the BDR and the truckers on the spot.
The truckcers enforced indefinite strike at about 11:00am at Ghojadanga to press home their demand, sources said.
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Thakurgaon Sugar Mills incurs Tk 16cr in losses
The production in Thakurgaon Sugar Mills increased this year reducing its loss by Tk 3.5
crore as compared to the last year.
Sources at the mills said this year the amount of loss came down to Tk 16 crore from last year’s Tk 19.52 crore. During the current season, other expenses of about Tk 70 lakh has also come down due to strict administrative measures.
Managing director of the Mills Rafiqul Islam said that in the current season the mills started production of sugar from December 25, 2009 and continued up to February 9, 2010. During the time, the mills produced 3,814 tonnes of sugar by crushing 57,438 tonnes of sugarcane. The rate of sugar recovery was 6.70 per cent.
The MD further said that this year the mills purchased sugarcane from the farmers at Tk 66 per maund (40 kg) but in the next season the purchasing rate of sugarcane will be Tk 80 per maund (40 kg).
He also said that last year sugarcane was cultivated on 5,492 acres of land only in the mills zone. But this year sugarcane was cultivated on 10,000 acres of land. For sugarcane cultivation the mills has distributed a loan of Tk. 5 crore in terms of seed, fertilizer and irrigation among the sugarcane growers.
This year the farmers become interested in STP (spaced transplantation) method of cultivation because the production in STP method is one and a half times more than that in the conventional method of cultivation. The mills authority is also giving Tk. 4,400 per acre as subsidy to the growers for STP method of cultivation.
Former president of Central Sugarcane Growers Association Yunus Ali said that if the mills wanted to bring down the loss further, they had to increase the area of sugarcane plantation in the mills zone, give more subsidy to the growers, take effective measures to curb corruption and stop the process of leasing the lands of the `Mills Farms’ to the potato growers and give the lease to the genuine sugarcane growers.
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WORLD ECONOMY
Lebanon, Jordan sign economic agreements
Lebanon and Jordan signed16 agreements, protocols and memoranda of understanding in Beirut on Friday, Lebanese PM Office announced.
Lebanese Prime Minister Saad Hariri met with visiting Jordanian Prime Minister Samir Rifai Friday at the Grand Serail in down town Beirut. Hariri and his Jordanian counterpart headed the meeting of the Lebanese-Jordanian committee and signed 16 agreements between the two countries.
The agreements include cooperation between the Jordanian Institute for the Development of Economic Projects and the Lebanese Trade Information Centre for the years 2010-2011, a technical program to activate the mutual recognition agreement on conformity certificates and quality marks, and administrative cooperation agreement on customs procedures.
They also include cooperation on animal health and production, cooperation in the agricultural sector, and the executive program for tourism cooperation for the years 2010-2012.
Earlier, Lebanese president Michel Suleiman met with Rifai at the presidential palace near Baabda where they discussed ‘the excellent relations between the two countries and the situation in the region’ said a statement released by Suleiman’s office.
Suleiman expressed his gratitude to Jordan’s King, and invited him to visit Lebanon. He also hailed the bilateral relations, and encouraged the signing of cooperation agreements between them.
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Wal-Mart to slash grocery prices
Wal-Mart Stores Inc will cut food prices and mount a new ad campaign over the next six weeks, a threat to other US grocers that sent an industry shares index down more than 2 per cent on Friday.
A Morgan Stanley analyst first reported the world’s largest retailer’s plan; calling it a major setback for other US grocers, and the company confirmed the promotions in an email.
‘While this helps address Walmart’s traffic woes, we view this as a major setback for the grocery stocks, which have been rallying on hopes of a return to more rational pricing,’ Morgan Stanley analyst Mark Wiltamuth wrote in a note on Friday.
The Standard & Poor’s Food Retail Sub-Industry Index closed down 2.2 per cent.
Walmart has used aggressive pricing in grocery and other units to bring shoppers into its stores. The grocery business is particularly pressured by such pricing, as its profit margins are already low.
Investors in Walmart have been concerned about signs that shoppers who gravitated to its stores during the worst of the recession — boosting sales and profits — are returning to rivals. Traffic fell in Walmart’s US stores during its fourth quarter, despite the holiday season, when shopping is at its peak.
In the promotions, customers entering Walmart stores will be greeted by signs advertising price rollbacks on 10,000 items. The focus of the price cuts will be on food and other consumables.
The changes, to hit stores by April 1, will be supported by a television and media campaign.
That timing means the campaign would be in place just before Easter, which falls on April 4 and is a big time for home-cooked meals.
Wiltamuth cited the ‘continued strain’ on grocers’ margins and questioned whether the market should begin to ask whether grocers will be able to pass inflationary costs through to consumers.
Safeway Inc shares closed down 2.5 per cent at $24.04 and Supervalu Inc shares fell 2.4 per cent to $16.73 on the New York Stock Exchange. Kroger Co shares fell 2.7 per cent to $21.64 and Whole Foods Market Inc closed down 0.5 per cent at $35.83 on the NASDAQ.
Walmart shares closed down 1.1 per cent at $55.34 on the NYSE.
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SOUTH ASIA
Indian govt clears ONGC, partners’ Venezuela investment
Saturday gave Oil and Natural Gas Corp (ONGC) and partner’s approval to invest $2.181 billion in a giant oilfield in Venezuela that will give energy deficient India 3.6 million tonnes a year of crude oil.
ONGC Videsh Ltd, the overseas arm of the state explorer, will invest $1.333 billion between 2010 and 2015 as its share of spending in the 400,000 barrels per day ‘Carabobo-1’ project. Indian Oil Corp (IOC) and Oil India will invest $ 454 million each in the project.
The cabinet committee on economic affairs approved the investment by Indian firms who together hold 18 per cent stake in the Carabobo-1 project, Indian home minister P Chidambaram told reporters after a meeting.
The Carabobo-1 project of the Orinoco extra-heavy oil belt of Venezuela would involve a total investment of close to $21 billion over 25 years. The three firms have for the time sought the government’s approval for investing $2.18 billion and may be able to fund most of the future investment from the revenues they will start earning when the project goes on-stream in three years.
Last month, the three won rights to develop Carabobo-1 project along with Spain’s Repsol-YPF and Petronas of Malaysia after committing themselves to pay a signing amount of $1.05 billion and an equivalent to Venezuela’s state-run PdV in loan.
Repsol-YPF, OVL and Petronas will each hold 11 per cent stake in the ‘Mixed Company’ that will develop Carabobo-1, with 7 per cent being split between IOC and OIL. Balance 60 per cent will be with PdV. The project will give India 3.6 million tonnes of crude oil annually out of the envisaged output of 400,000 barrels a day.
Chidambaram said OVL’s investment of $1.33 billion from 2010 to 2015 is made up of $302 million in equity, $289 million in loan of PdV, $ 454 million as contribution to Mixed Company as debt and $ 289 million as signature bonus.
IOC and OIL’s exposure of $0424 million each is made up of $96 million in equity contribution, $92 million in loan to PdV, $144 million as contribution to Mixed Company by way of debt and $92 million as signature bonus.
The Carabobo-1 project, comprising Carabobo-1 Central and Carabobo-1 North blocks, would develop extra-heavy crude production capacity of up to 400,000 barrels per day (20 million tonnes a year). Early output of at least 50,000 bpd is slated to start in 2012-13, rising to peak in 2016.
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WORLD
Rio staff trial seen as test for China
The trial of four Rio Tinto employees next week will be widely watched as a test of whether China is willing to honour commitments to foreign investors and be a responsible member of the world community.
Australian national Stern Hu and three Chinese employees of the mining giant will be in the dock Monday on bribery and trade secrets charges in a case that has upset Australia and raised questions about the rule of law in China.
Canberra wants transparency in the three-day trial in Shanghai, but hearings on the industrial espionage charges will be closed, adding to questions over whether the men will get a fair hearing in the politically charged case.
The four defendants, all employees of the Anglo-Australian mining giant, were arrested last July during contentious iron ore contract negotiations which later collapsed, and after Rio snubbed a near $20-billion cash injection from state-run Chinese mining firm Chinalco.
Australian Prime Minister Kevin Rudd Thursday warned China the ‘world will be watching’ the trial.
Australian National University law professor Ann Kent told AFP the timing of the trial smacked of gamesmanship.
It opens the same day Rio Tinto chief executive Tom Albanese speaks at an economic forum in Beijing and as tough iron ore price talks between Chinese steel mills and foreign miners are under way once again.
‘This is blatant power politics (by China),’ Kent said, adding that the timing was an ‘extraordinary coincidence.’
‘There might be a suggestion of a quid pro quo — we might let your executives off (with a light sentence) if you give us what we want.’
The trial also comes against the background of an announcement Friday from Rio Tinto that it had signed a $1.35 billion deal with Chinalco to develop a huge mine in Guinea.
Sino-Australian trade has rocketed in recent years, driven by China’s growing demand for Australian resources and the two countries have worked to minimize the diplomatic fallout.
Both sides said this week the trial will not affect bilateral relations, but the episode has put Canberra in a difficult position, said David Martin Jones, an international relations expert at Queensland University.
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Japan lends Turkmenistan $500 million for fertiliser plant
Japan’s state-run Bank for International Cooperation (JBIC) has loaned Turkmenistan $500 million to build a fertiliser plant, a state newspaper said Saturday.
The credit is for an ammonia and urea plant to be built by Japanese firms Kawasaki Plant Systems and Sojitz Corporation in the city of Mari in the south of the Central Asian state where its vast cotton industry is based, the Neutral Turkmenistan daily reported.
Ex-Soviet Turkmenistan harvests about one million tonnes of cotton yearly, according to official sources, and is among the world’s top 10 largest cotton producers.
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SOUTH ASIA
Bharti to sell iPhone 3GS in India
India’s top mobile phone company, Bharti Airtel, said Friday it had reached a deal with Apple Inc. to sell the iPhone 3GS in India.
In a statement, the company said the pact would allow Bharti to bring the latest iPhone to India ‘in the coming months.’
The announcement came a day after Bharti submitted its bid in a bandwidth auction for third generation, or 3G, mobile telephony services in India.
The successful bidders will be allowed to offer 3G services on a commercial basis from September.
The auction is expected to give an extra fillip to India’s mobile industry, already the fastest expanding globally, where scarcity of bandwidth has affected call quality.
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WORLD
Peru aims for Japan, South Korea trade talks in April
Peru is aiming to complete negotiations on free trade agreements with Japan and South Korea in April, trade minister Martin Perez said Friday.
The new round of talks with South Korea will take place in Washington in early April, while the Japan meeting will held the week of April 26 in Tokyo, Perez said, according to state news agency Andina.
‘Both Asian nations want this to be the last round’ of negotiations, he added.
At the last meeting between Peruvian and South Korean representatives, Seoul offered to lower a proposed tariff on 200 Peruvian products, Perez said.
He said Peru hoped Japan would exclude fewer than 1,000 Peruvian products from the tariff scheme in the economic partnership agreement under negotiation.
Trade negotiations between South Korea and Japan began in March and May of last year, respectively.
Peru said earlier this month that its free trade agreement with China went into effect at the same time as it sealed a similar trade pact with the European Union jointly with Colombia.
It also has free trade agreements with Canada, Singapore and the United States.
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US stocks sink after India’s surprise rate hike
US stocks fell Friday as investors took profits from recent gains and fretted about the global economic recovery following India’s surprise interest rate hike.
After opening with small gains, the Dow Jones Industrial Average fell 37.19 points (0.35 per cent) to finish at 10,741.98, snapping an eight-session rally that had brought the blue-chip index to an almost 18-month high.The tech-rich Nasdaq composite shed 16.87 points (0.71 per cent) at 2,374.41 while the broad-market Standard & Poor’s 500 index retreated 5.92 points (0.51 per cent) to 1,159.90.
The major indices spent almost the entire session in negative territory and closed better than lows hit in the final hour of trade amid the quarterly expiration of futures and options contracts, known as the ‘quadruple-witching’ hour.
Stocks extended losses ‘after the central bank of India made an intra-meeting move to raise interest rates, and traders viewed the action as a reminder that strong economic growth can bring the potential for rate hikes, which tend to give stock markets indigestion,’ Charles Schwab & Co. analysts said in a client note.
Traders ‘used the action as an excuse to book profits after a nice run,’ they said.
The Reserve Bank of India said as part of its exit strategy from extraordinary support measures taken in the face of the global economic crisis, it was raising two repo rates by a quarter of a percentage points to curb rising inflationary pressures, ‘with immediate effect.’
‘Given the lags in monetary policy, it is better to respond in a timely manner, even if it is outside the scheduled policy reviews, than take stronger measures at a later stage when inflationary expectations have accentuated,’ the central bank said in a statement.
Among stocks in the spotlight Friday, struggling handheld device maker Palm plunged 29.16 per cent to $4.00. It reported another quarterly loss after the market close Thursday and gave disappointing guidance.
Google dropped 1.12 per cent to $560.03. According to China Business News, the Internet giant will end operations in China on April 10, citing an official with an unidentified Chinese advertising agency, making good on its threat in January to pull out because of censorship and cyber attacks. Google’s Chinese rival Baidu climbed 0.88 per cent to $569.65.
Boeing slipped 0.21 per cent to $70.72. The aerospace giant said it would ramp up production on 777 and 747-8 planes to support an anticipated increase in customer demand as the aviation market rebounds amid a global economic recovery.
Electronics retail chain Best Buy added 1.33 per cent at $40.99 after a Goldman Sachs analyst upgrade.
The bond market weakened. The yield on the 10-year US Treasury bond rose to 3.687 per cent from 3.672 per cent on Thursday and that on the 30-year bond rose to 4.579 per cent from 4.572 per cent. Bond prices and yields move in opposite directions.
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Greek woes send dollar skyward
The dollar continued to hammer the euro and British pound on Friday, amid continued concerns about the Greek debt crisis and the robustness of Britain’s economic recovery.
The euro fetched $1.3530 by 2130 GMT, down from $1.3603 late Thursday, in the second straight day of heavy losses for the single European currency.
The dollar was up against the Japanese currency at 90.54 yen, versus 90.39 late Thursday.
‘Uncertainties stemming from the pending Greek bailout have sent the euro sharply lower for the second straight day,’ said Kathy Lien, director of currency research at Global Forex Trading.
Splits between France and Germany over the desirability of an International Monetary Fund bailout for Greece continued to weigh on the euro, ahead of a key European Union summit March 25-26.
CMC Markets analyst Michael Hewson said some ‘misplaced optimism’ about an EU bailout package for Greece was starting to ebb away, sending the euro lower.
The dollar also posted gains against the British pound, which bought just $1.5013, versus $1.5243 in late trades Thursday.
‘The British pound extended the previous day’s decline and slipped to a low of 1.5129 during the European trade as the Bank of England continued to see a risk for a double-dip recession,’ said David Song a currency analyst with DailyFX.com
The dollar rose to 1.0613 Swiss francs, versus 1.0579 on Thursday.
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Pressure mounts over IMF role in Greek crisis
Europe split over IMF intervention for debt-ridden Greece on Friday, upping pressure on national leaders to resolve crisis plans just days from a crunch EU summit.
Germany, changing tack, said it was open to the possibility of the International Monetary Fund helping Greece while the Netherlands, Finland and Italy — to varying degrees — also declared themselve open to IMF involvement.
‘The German government does not rule out aid from the IMF if Greece requests it,’ spokesman Ulrich Wilhelm said after reports that Berlin was concerned European aid for Greece could break German and EU law.
Investors reacted negatively, with Greek government bond yields- the interest rate that Athens must pay in order to raise money on debt markets- rising sharply. The euro weakened against the dollar, sliding to $1.3531 in London trade compared to 1.3603 in New York late on Thursday.
Non-euro peers Britain and Sweden firmly back an approach to the International Monetary Fund if Athens concludes that it cannot keep up with debt repayments.
The shift is not universal. There has been no change in the French position, which holds that the Greek troubles are an internal eurozone matter.
The IMF has never rescued a eurozone member, and a Greek bailout would be seen by some as a humiliation for the 16-nation bloc.
EU finance ministers agreed on the broad lines of such a European assistance plan when they met in the Belgian capital on Monday.
The EU’s budgetary overlord, Olli Rehn, said leaders had to come to a ‘specific political conclusion’ and clarify the way forward ‘next week,’ having compared notes with IMF chief Dominique Strauss-Kahn.
But in a pointed sign, a diplomatic source warned it was unlikely that EU president Herman Van Rompuy would find sufficient support to place the issue on the formal agenda for the March 25 and 26 EU summit.
Greek Prime Minister George Papandreou has urged the EU to help his country borrow more cheaply when they meet next week.
EU commission chief Jose Manuel Barroso on Friday urged European leaders to approve a coordinated loan facility for debt-laden Greece ‘as soon as possible,’ in order to restore confidence.
‘We cannot prolong any further the current situation,’ Barroso warned days ahead of a European summit.
‘I urge the EU’s leaders to agree on this instrument as soon as possible,’ he stressed, amid fears that the pressure on Greece could end up damaging the eurozone.
The help Barroso had in mind would be ‘a system of coordinated bilateral loans,’ and as such would be compatible with EU law which bans bailout loans to any of the eurozone countries.
Barroso did not go into any great detail about the sums involved but an EU official said Greece would require ‘around 22 billion euros ($30 billion),’ to help it service its massive debt burden.
According to another EU official, several partially or fully state-owned banks and financial institutions across Europe are considered as potential candidates to offer loans, including France’s Caisse des Depots, the Franco-Belgian bank Dexia and, if Berlin gives the green light, regional German banks.
The aid plan would allow Greece to borrow at ‘lower interest rates than it is currently paying’ on the markets, the source said.
The yield on Greek 10-year bonds rose Friday to 6.333 per cent from 6.265 per cent on Thursday, more than double the rate for German bonds.
‘Time is running out’ for definitive action, said Ulrich Leuchtmann, an analyst at Germany’s Commerzbank, as Greece needs to raise some 20 billion euros ($27 billion) from international debt markets over the next two months.
Under pressure from the EU, Athens has announced draconian action to fix its public finances- triggering strikes and violent protests on the streets of Athens.
On Friday, Papandreou said his country had come ‘one step from being unable to borrow’ on the world markets.
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YouTube creators cashed in big on sale to Google: documents
YouTube’s creators walked away with hundreds of millions of dollars after the startup was bought by Google in 2006, according to documents released in a copyright brawl between Viacom and Google.
While former PayPal pals Chad Hurley, Steve Chen and Jawed Karim each scored fortunes in Google stock by selling YouTube to the Internet giant, a venture capital firm that backed the online video-sharing service landed the lion’s share of the wealth.
Sequoia Capital got $516 million worth of Google stock as a return on approximately $9 million it invested in YouTube in late 2005 and early 2006, according to court documents made public this week.
Hurley’s haul was worth $334 million and Chen’s chunk tallied $301 million based on the stock price the November day the deal with Google was sealed, according to the documents.
YouTube’s third co-founder, Jawed Karim, had left the startup by then but got about $66 million worth of Google stock for his share in the fledgling company, the documents indicated.
Viacom presented the evidence while trying to make its case that YouTube’s founders and Google benefited from letting copyrighted videos is posted at the website.
Viacom is suing Google and YouTube for a billion dollars, arguing that they condoned pirated video clips at the website to boost its popularity.
Viacom was also a target in legal filings with Google countering that the US entertainment giant foisted some of its own content onto YouTube’s online stage and even wanted to buy the firm.
Viacom attorneys contended that after YouTube was launched in 2005, the startup’s strategy was to achieve meteoric growth by whatever means necessary so it would become a prize acquisition target.
YouTube was a year-old internet sensation when Google bought it in a $1.65-billion stock deal in 2006.
Viacom filed its copyright lawsuit against YouTube and Google two years ago.
The lawsuit has been merged with similar civil litigation being pursued by the English Premier League, which says soccer game clips are routinely posted on YouTube without authorization.
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China inflation goal tough but reachable: official
China’s 2010 inflation goal of 3 per cent is tough but achievable, with good grain supplies and excess capacity helping keep prices down; while growth should hit 8 or 9 per cent, senior government advisers told a conference on Saturday.
The chief economist of the National Bureau of Statistics, Yao Jungian, told the China High Level Development Forum that the government was battling a range of forces pushing up consumer prices this year — a key concern in Beijing.
Consumer prices rose 2.7 per cent in the year to February, up from 1.5 per cent in January and flirting with the government’s 3 per cent target for 2010.
More than one in two Chinese savers regard the current inflation rate as unacceptable, according to a central bank survey on Tuesday.
In his comments to the closed-door gathering, carried by the official Xinhua news agency, Yao said the challenges for China include the rising costs of imported inputs in a globalised economy, the impact of high inflation forecasts on consumer behavior, polluting growth and building a greener economy.
‘Achieving this year’s target of keeping the increase in the consumer price index at around 3 per cent will be quite difficult, but... it can be achieved,’ Xinhua quoted Yao saying.
Ample grain supplies after a good harvest last year would help keep prices in rural areas stable and other prices down, while excess production capacity could also help damp inflation, he added.
Premier Wen Jiabao told a news conference last week that inflation, along with income inequality and corruption, could upset social stability and even undermine the power of the state if it got out of hand.
An advisor to the central bank’s monetary policy committee, Fan Gang, told the Forum on Saturday that Chinese economic growth would be 8 to 9 per cent this year, returning to ‘normal’ next year.
Fan did not specify what he considered normal, but his forecast for 2010 is moderate compared to the expectations of Western economists.
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Greece was ‘one step’ away from loan paralysis: PM
Greece is enacting tough reforms after coming ‘one step from being unable to borrow’; Prime Minister George Papandreou said Friday as his debt-hit government pressed for EU political support.
‘We have been forced into the toughest decisions ever taken by a government in this country,’ Papandreou told a union congress in the northern city of Thessaloniki.
‘We did it because things had reached a critical state... we found ourselves one step from being unable to borrow,’ he said, hours after his government unveiled a new bill designed to combat deep-rooted tax evasion.
‘We want to prevent this very possibility,’ Papandreou said.
‘We are in a state of war, fighting against interests both within and outside our borders who want to take advantage of the difficult situation and the weakness in which Greece finds itself today.’
The Socialist government is trying to plug leaks in its budget-which last year ended up short of over 30 billion euros- and bring an end to decades of fiscal waste that accumulated nearly 300 billion euros in state debt.
Papandreou has repeatedly called on the European Union to help Athens bring down its borrowing costs which soared after his Socialists doubled the country’s budget deficit estimate after coming to power in October.
‘We want to prevent having to pay usurious interest rates for many decades, condemning the country to a deep and protracted recession,’ he said on Friday.
Papandreou blamed the previous conservative government of draining public coffers but also admitted that the Greek political system had harbored corruption for decades.
The prime minister has warned that Greece could appeal to the International Monetary Fund ‘as a last resort’ if Brussels fails to provide the necessary backing.
The interest rates demanded by investors to hold Greek bonds have failed to recede despite a spate of austerity cuts announced by the Greek government, worth around 16 billion euros this year.
The European Central Bank has already said that an approach by Greece to the IMF would be inappropriate.
But days from a European Union summit on March 25, Germany officially declared its openness to an IMF appeal, an unprecedented move by a eurozone country.
The Greek government’s austerity cuts have already sparked two general strikes and the tax hikes announced Friday are expected to raise fresh objection from work groups affected by the measures.
A wide range of professionals including taxi drivers, gas station owners, doctors and teachers have been holding separate strikes of their own in recent days.
But polls show most Greeks concede the cuts are necessary.
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US tanker bid war heats up with Airbus, Russia in wings
The US Air Force tanker bidding contest against Boeing heated up Friday, with Airbus parent EADS mulling a proposal and Russia’s state firm UAC gearing up for one next week.
EADS opened the door to a bid against US arch-rival Boeing for the 35-billion-dollar aerial refueling tanker contract on signs of pentagon willingness to extend the May deadline.
The European Aeronautic Defense and Space Company’s expressed interest in the competition, and the surprise emergence of a Russian competitor late Friday, marked new twists in the long-running saga to replace the aging Boeing fleet.
Just last week EADS, the parent of Airbus, was forced to withdraw from the bidding after its lead partner, US defense contractor Northrop Grumman, refused to compete, alleging the requirements were skewed in favour of Boeing.
Northrop’s exit from the competition left the field open to the Chicago-based Boeing, the aerospace giant that built the tanker fleet in the 1950s and has promised a formal bid by May 10.
Military commanders view the planned KC-X aircraft as crucial to sustaining US air power and are anxious to replace the older Boeing KC-135 Stratotankers.
The turning point for EADS appeared late Thursday, when the defense department acknowledged it would consider ‘a reasonable extension’ to the bidding deadline after learning from EADS it may re-enter the fray.
‘Yesterday the US department of defense indicated it would welcome a proposal from EADS North America as prime contractor for the KC-X tanker competition,’ EADS said in a statement Friday.
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Obama calls on congress to pass finance reforms
US president Barack Obama said Saturday that congress needs to enact comprehensive financial reforms to protect consumers, keep banks strong and ensure the US economy doesn’t sink into another great depression.
In his weekly radio and internet address, Obama said ‘we need commonsense rules that will our allow markets to function fairly and freely while reining in the worst practices of the financial industry.’
That, he said, is the central lesson of the current financial crisis that has cost millions of Americans their jobs and nearly caused the collapse of the entire financial system. ‘And we fail to heed that lesson at our peril,’ Obama said.
The senate banking committee is set to begin debate on a more than 1,300-page bill authored by its chairman, Christopher Dodd, D-Conn, that would give the government unprecedented powers to split up firms that threaten the economy, force the industry to pay for its most spectacular failures and create an independent consumer watchdog.
Already, Obama said, industry lobbyists are gearing up to spend millions of dollars in an attempt to defeat the legislation.
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German tax authorities target Credit Suisse clients
Over 1,000 rich Germans with accounts at Swiss bank Credit Suisse found themselves under investigation Friday following the purchase by authorities of a CD containing the names of tax dodgers.
‘State prosecutors have launched 1,100 investigations against customers and staff of Credit Suisse,’ Dirk Negenborn, spokesman for prosecutors in Duesseldorf, western Germany, told AFP.
‘The Credit Suisse clients have investments in total of around 1.2 billion euros ($1.6 billion).’
He said the total amount of tax owed to the authorities was unclear, but according to several sources the tax authorities stand to recover up to 400 million euros.
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UPDATE------------------MARCH 20, 2010 SATURDAY
BANGLADESH
NEWS IN FOCUS
Vegetable prices up, rice prices decline
Prices of some essentials, especially rice, sugar and spices, decreased in the city markets in the past week following enhanced domestic supply and price fall in the international market.
However, some early varieties of summer vegetables were retailed at higher prices in the week, market watchers said on Friday.
Coarse rice was selling between Tk 25 and Tk 27 a kilogram at Nakhalapara and Mohakhali bazars. Average price decline in per kg rice was Tk one in a week and Tk 3 in a month. Price of fine rice like najir declined Tk 3 a kg to Tk 5 and Tk 44 in the month.
Rice price declined by about Tk 100 a maund (37.3kg) in the previous three weeks, Shonchoy Mohajaon, a wholesaler in Ashuganj, told New Age.
‘Millers are releasing their old stocks as newly harvested Boro rice will start hitting the market in the middle of April,’ he said.
Higher supply from international market and a better prospect of sugar has led to the price fall of the item, which was retailed between Tk 45 and Tk 48 a kilogram, down by 20 per cent in the past one month.
Increased supply of local variety of onion caused decline in its price by Tk 2 as onion was selling between Tk 20 and Tk 24 a kg on Friday.
Garlic and red chili became cheaper in the week due also to their enhanced supply from local sources. Garlic was selling between Tk 60 and Tk 100 a kg, down by Tk 10 per kg over the week while the price of dry chili ranged between Tk 120 and Tk 140 a kg.
In Mohakhali Bazar on Friday, the price of tomato was at Tk 12 and Tk 20 a kg, aborigine at Tk 16 and Tk 20 a kg and potato at Tk 11 and Tk 12 a kg.
Newly harvested okra was selling at 36 a kg, both snake gourd and ridge gourd at Tk 40 a kg and sajna at Tk 60 a kg.
Price of beef was Tk 240 a kg, live broiler chicken Tk 145 a kg and eggs Tk 69 a dozen.
Loose super palm oil was selling at Tk 70 a kilogram, bottled soyaben at Tk 82 per litre while coarse flour at Tk 22-24 a kg and red lentils at Tk 80 and Tk 104 a kg in the week.
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Muhith emphasizes importance of women in economic development
Finance minister AMA Muhith on Friday underlined the importance of empowering women for the sake of the country’s economic development; given that nature’s balance means women comprise more-or-less half the country’s population.
‘The empowerment of women is also necessary for public services.
There can be no significant development if half the country’s population lags behind,’ he said, in his address to the national council of the Bangladesh Mahila Parishad (Bangladesh Women’s Council), which is being held at the BIAM Auditorium in Dhaka.
Chaired by Bangladesh Mahila Parishad President Ayesha Khanam, the inaugural session of the council was also addressed by the Norwegian ambassador to Dhaka, Ingebjorg Stofring, as a special guest. Earlier, the council’s general secretary, Maleka Banu, delivered the welcome address.
Muhith urged the leaders of the council to include a five-point recommendation put forward by him in the closing declaration at the end of their two-day council on Saturday. The one that generated the most excitement out of the Finance Minister’s five proposals is to do with a financial valuation system for the household work many women are engaged in across the country as homemakers.
Eliminating the existing disparity in wages between men and women across all sectors, instilling greater parity in the system of inheritance for men and women from deceased family members, ensuring security for women working in the garment industry, and helping women to face up to the challenges they face from fundamentalism, form the basis of the four other recommendations.
Muhith was keen to draw special attention to the conditions under which more than 2.5 million women work in the country’s lucrative garment industry, citing the recent example of a tragic fire that claimed 21 lives (of which 14 were women) in a Gazipur garment factory.
‘There should be a movement advocating workplace security in the garment industry,’ said the Sylhet-born finance minister.
In line with his government’s secular agenda, Oxford-educated Muhith observed that while women in the rural parts of the country are enjoying more freedoms these days, this has also meant that fundamentalist zealots prone to delivering edicts (fatwas) in the name of religion had become more active as well.
‘We need to strengthen our stand against fundamentalism,’ the cabinet’s senior-most member, and chief architect of the Awami League’s electoral manifesto, asserted.
Earlier, a condolence message was read out in memory of the late Hena Das, a legendary figure in the history of Bengal in the 20th century, who passed away last July. Comrade Hena Das, as she was known owing to her Leftist beliefs, led a remarkable life of constant struggle that saw her play significant roles as a woman leader in a number of movements in the region, from the anti-Colonial struggle to the peasant’s movement to Bangladesh’s Liberation War.
The Bangladesh Mahila Parishad, founded on the initiative of another legendary woman of Bengal, Begum Sufia Kamal, played a significant role in Bangladesh’s liberation struggle, in spite of still being a relatively new organization at the time. It had started its journey in August 1970, seven months before the outbreak of the war, as the East Pakistan Women’s Council.
The Parishad usually holds its local, regional and national councils at intervals of 2-3 years. They are held with the aim of propagating the ideas, programs and achievements of the organization and its 75000 registered members, spread across more than 150 thanas and at least 60 of the country’s 64 districts.
Some 450 of these members, representing various regions from across the country, have converged on the capital this weekend to participate in their latest national council.
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WORLD
Smuggled tiger parts sold as jewellery in S’pore
Tiger parts that have been smuggled into Singapore are being openly sold as jewellery and amulets in the retail capital of Southeast Asia, an animal welfare group said Friday.
The Animal Concerns Research and Education Society said it conducted an investigation of more than 130 jewellery and antique shops and found just under half offered products made from tiger parts like claws, teeth and fur.
Of the 59 shops selling such items, 52 were openly displaying the items for sale, the group said at a news conference.
Shopkeepers offered ACRES activists posing as buyers hundreds of items purportedly from tigers but the group said it could not verify whether all of them were authentic.
‘Whether it’s real or it’s fake, it’s actually driving up the demand for tiger parts in this region,’ said Louis Ng, the executive director of ACRES.
The products included claws set in gold or silver and worn as jewellery, amulets made of teeth with a piece of prayer paper rolled into them, and cuts of skin said to have been blessed for protection or strength.
Fewer than 3,200 tigers remain in the wild, down from an estimated 100,000 a century ago, and that number is still declining, ACRES said in a statement.
Butchered for traditional medicine, deprived of their habitat and killed for encroaching on villages, the onslaught has already seen three sub-species wiped out and the South China tiger has not been sighted for decades.
Video evidence from the investigation, which was conducted from December 2009 to February, showed one shopkeeper offering a piece of ‘blessed’ tiger skin that he said came from Songkhla in Thailand.
Another shopkeeper was caught on camera offering a necklace made from a tooth that he said came from Thailand, while a third said he had to stock up on tiger parts due to the pick-up in demand during the lunar New Year.
Shopkeepers named Thailand, China and India as their main sources.
Ng said Singapore played a key role in the illegal trade.
‘It’s critical especially for Singapore because all our neighboring countries have tiger populations. We don’t want to be driving up the demand for these products at this time when they are so critically endangered,’ he added.
Singapore is the shopping capital of Southeast Asia and welcomed 9.7 million tourists in 2009.
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Google to leave China April 10: state media
US Internet giant Google will close its business in China next month and may announce its plans in the coming days, Chinese media reported on Friday, after rows over censorship and hacking.
The China Business News quoted an official with an unidentified Chinese advertising agency as saying Google would go through with its threatened withdrawal on April 10, but that Google had yet to confirm the pull-out.
The agency is a business partner of Google, the report said.
The report did not specify whether Google would close all or part of its operations in the country.
The newspaper quoted an unidentified Google staff member as saying the company may announce on Monday the details of its exit from China and compensation for its local staff.
Google China spokeswoman Marsha Wang declined to comment on the report, telling AFP only that there had been ‘no update’ on the company’s situation.
The report was the latest in a series of clues to emerge recently indicating Google planned to leave China, which has the world’s largest population of online users, at 384 million.
Google has cried foul over what it said were cyber attacks aimed at its source code and the Gmail accounts of Chinese human rights activists.
The Financial Times reported last week that Google was ‘99.9 per cent’ certain to abandon google.cn, citing an unnamed source.
Chinese media said Wednesday that Google sent a notice to clients saying google.cn could close at the end of March.
The issue has sparked a simmering war of words between China and the administration of US president Barack Obama, which has called on Beijing to allow an unfettered Internet.
The dispute has exacerbated mounting tensions between the two over a range of trade and diplomatic issues.
Beijing tightly controls online content in a vast system dubbed the ‘Great Firewall of China’, removing information it deems harmful such as pornography and violent content, but also politically sensitive material.
Google has continued to filter google.cn results to abide by Chinese censorship demands, but says it will eventually stop the screening.
Google confirmed earlier this week that it had received a letter purportedly from a group of 27 Chinese advertising agencies calling for the US Company to open talks on compensation for possible business losses if it leaves China.
However, representatives of several of the firms subsequently told AFP they knew nothing of the letter and Chinese media reports have raised doubts about its authenticity.
Google’s Wang told AFP the company is still ‘reviewing’ the letter.
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France urges G20 to curb excessive bank profits
French foreign minister Bernard Kouchner on Friday criticized excessive bank profits following the global slump and said tougher financial regulations would be the key issue at this year’s G20 summit.
‘Look at the profit of the banking sector this year following the crisis: this is unacceptable. We must be strongly determined to balance this within the G20,’ Kouchner said in a wide-ranging speech in South Korea that also addressed relations with Pyongyang.
‘The most important issue of the G20 will be what we are going to accept in terms of regulation of the financial sector.’
South Korea hosts a summit of the Group of 20 leading global economies in November, with France taking over the chair next year.
‘This (regulation) is a very difficult issue that will require political will,’ added Kouchner, hinting at persistent differences among G20 members.
Kouchner also urged South Korea and other Asian countries to support French efforts to set up an international tax on financial transactions aimed at helping developing countries.
‘We need fresh money. And we will not raise the necessary funds without creating new financial mechanisms,’ said Kouchner, who was the founder of French non-governmental organization Doctors without Borders.
‘France cannot achieve this alone. This will be possible only if Korea, Asia and Africa join us,’ he told an audience of diplomats and students at Seoul National University.
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SOUTH ASIA
Bharti board to meet to discuss Zain deal
Bharti Airtel’s board is meeting on Saturday to discuss the progress of talks to buy Kuwaiti telecom Zain’s African assets in a deal worth $9 billion, a source with direct knowledge of the development said.
The source also said Bharti might put part of the purchase price in an escrow account to protect it from potential problems, including an ownership dispute in Zain’s Nigeria operations.
The companies are in exclusive talks until March 25 and Bharti is conducting a due diligence assessment of the Zain assets.
‘Currently Bharti is aiming to meet the March 25 deadline, but there could be a slippage of a day or two. Tomorrow’s board meet is crucial,’ the source said.
The source said financing details were likely to be finalised in the next two days.
A Bharti spokesman declined to comment on the board meeting and the possible setting up of an escrow account.
Both Bharti and Zain have said $700 million of the purchase price would be paid a year after the completion of the deal, and the source said part of it would be put in the escrow account.
‘The due diligence has been conducted quite speedily. So if something works out negatively, the money can be adjusted against that,’ the source said, referring to the money likely to be put in the escrow account.
‘No major issues have emerged in the due diligence apart from Nigeria,’ he said.
A dispute between Zain Nigeria and South Africa-based minority shareholder Econet Wireless Holdings could cause problems for Bharti’s third effort to get its hands on a sizeable business in Africa.
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India urges US ‘leadership’ on WTO
India on Thursday urged the United States to take the lead in resuming global free trade talks after the EU trade chief lashed out at ‘protectionism’ by US president Barack Obama’s administration.
Indian commerce minister Anand Sharma said he had a ‘very free and frank exchange of views’ with top US trade officials on a visit to Washington.
‘There are many other countries, both developing as well as developed countries, which have urged the United States, being the largest economy, to take leadership,’ Sharma told reporters.
Sharma voiced hope that the Obama administration would help ‘work towards reaching an understanding which loses the gaps’ among key trading partners.
Sharma said India had ‘similar’ views to the EU trade commissioner, Karel De Gucht, who in an interview blamed the Obama administration for holding up the decade-old Doha round of World Trade Organization negotiations.
Speaking to the Belgian business daily De Tijd, De Gucht took direct aim at Obama’s goal to double US exports over five years, saying: ‘I don’t see how anyone can double exports if there’s no movement towards free trade.’
Obama, who was elected with support of labour unions, has pledged commitment to trade liberalisation but has shown little sense of urgency in finalizing free trade agreements with Colombia, Panama and South Korea.
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WORLD
World markets boosted by upbeat Lloyds Bank
British stocks led Friday’s advance in global markets after the part-nationalized Lloyds Banking Group issued a buoyant trading update, but the euro continued to founder amid renewed fears about Greek debt crisis.
In Europe, the FTSE 100 index of leading British shares was up 41.26 points, or 0.7 per cent, at 5,683.88 while Germany’s DAX rose 24.89 points, or 0.4 per cent, to 6,037.20. The CAC-40 in France was 17.16 points, or 0.4 per cent, higher at 3,955.34.
Wall Street was also poised to join in the advance, which started earlier in Asia — Dow futures were up 11 points, or 0.1 per cent, at 10,728 while the broader Standard & Poor’s 500 futures rose 1.2 point, or 0.1 per cent, to 1,162.50.
Helping confidence were US data Thursday showing inflation remains in check and manufacturing is growing, adding to the broader impression of recovery in the world’s largest economy, a major export market for Asian countries.
Boosting confidence on Friday, particularly in London, was the news that Lloyds Banking Group, which is 41 per cent owned by the British government, expects to report a profit this year as trading has so far been strong and provisions for bad assets are not as large as previously forecast. In a brief statement, the bank said that in the first 10 weeks of the year net interest margin has come in line with guidance and income growth has been good.
‘An estimate of an unexpected profit in 2010, impairment charges down, margins better and cost controls coming back on the bridle - all music to shareholders’ ears and also to the government,’ said David Buik, markets analyst at BGC Partners.
Its shares were up 9.1 per cent at 60.30 pence in late-afternoon London trading. Shares in Royal Bank of Scotland, which is more than 80 per cent owned by the British government, rose 6 per cent in Lloyds’ slipstream.
Banks elsewhere were also in demand, including Germany’s Deutsche Bank AG and Commerzbank AG, as well as France’s Credit Agricole SA and BNP Paribas SA.
Still, the overall advance in shares was constrained by continuing worries about Greece’s debt crisis.
This week has brought new signs of European indecision and discord over the Greek debt crisis and there are now mounting expectations in the markets that Greece will be forced to turn to the International Monetary Fund for aid if European leaders can’t agree on a bailout plan next week.
With Germany seemingly leaning towards IMF involvement, the euro slid again Friday, trading another 0.3 per cent lower at $1.3573. As recently as Wednesday, hopes of an EU package materializing had seen the euro rise to above $1.38.
‘With Athens threatening to turn to the IMF if the problem cannot be resolved internally, once again question marks are lingering over what this means for the euro and with little else in the way of fundamental data to work on, some traders do seem to be getting nervous once again,’ said Ben Potter, a research analyst at IG Markets.
Earlier in Asia, Japan’s Nikkei 225 stock average reversed early losses to climb 80.69 points, or 0.8 per cent, to 10,824.72. South Korea’s Kospi rose 0.7 per cent to 1,686.11 and Hong Kong’s market rose 0.2 per cent to 21,370.82.
Elsewhere, Shanghai’s market added 0.7 per cent, Australia’s index ticked 0.2 per cent higher and Taiwan’s market rose 0.2 per cent.
Oil prices were lower, with the benchmark contract shedding 57 cents to $81.63 a barrel. The contract lost 73 cents overnight.
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Oil prices drop, driven by strong dollar
World oil prices fell further on Friday as a strong US currency dented investor enthusiasm for dollar-priced crude, analysts said.
New York’s main contract, light sweet crude for April delivery fell 59 cents to $81.61 a barrel.
London’s Brent North Sea crude for May delivery was down 65 cents to $80.83.
‘Today, it seems to be a quiet day in economic figures and investors’ focus might switch to the US dollar movements and global equity markets for further signs of the global economic conditions,’ said Sucden analyst Myrto Sokou.
The European single currency tumbled on Thursday and Friday as investors sought the safe-haven US currency amid uncertainty about international assistance for debt-plagued Greece.
The euro dived as low as $1.3533 on Friday, down from $1.3603 in late New York on Thursday.
A stronger greenback makes dollar-denominated crude more expensive for buyers using weaker currencies-and tends to dampen oil demand and prices.
Crude prices fell this week as traders tracked the dollar and Greek debt concerns, and shrugged off a widely-expected decision from the 12-nation OPEC oil cartel to maintain output levels.
Anxiety over the fate of Greek finances deepened as the European Union groped for common ground on how to ensure that Greece will be able to borrow money on financial markets at rates similar to those paid by its partners.
Clearly dissatisfied with what they see as a tepid EU response thus far, Greek authorities have made it clear they are prepared to go to the International Monetary Fund for help.
‘Oil prices were getting their cue from the broader market as persistent concerns over Greece saw another down day for the euro (on Thursday) with the commodity complex suffering as well,’ said VTB Capital’s Andrey Kryuchenkov.
‘Otherwise, little changed in the world of oil with market participants still digesting the bullish weekly report on US fuel inventories report and OPEC’s decision to keep production levels unchanged on Wednesday.’
OPEC left its output ceiling unchanged at 24.84 million barrels a day at a meeting in Vienna, citing uncertainty in the macroeconomic environment and global oil demand.
The cartel, which pumps 40 per cent of world oil, said it would review the economic situation at its next meeting on October 14.
Meanwhile on Wednesday, the US department of energy said stockpiles of distillates, including diesel and heating fuel, fell more than expected, by 1.5 million barrels, in the week ending March 12.
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Samsung aims for double-digit sales growth
Samsung Electronics predicted a strong 2010 as economic expansion in advanced and large developing economies gains speed and said it is aiming for double-digit sales, growth from last year’s record high.
The world’s largest manufacturer of flat screen televisions and second-biggest seller of mobile phones held its annual shareholders’ meeting Friday, where it also reveled in its status as a force in world business.
‘Our financial standing is on a global level,’ Samsung president and chief executive Choi Gee-sung told shareholders. ‘We have become a world class company.’
Over the past decade Samsung has become one of the world’s top technology companies in both consumer electronics and some of the key components that go into them.
The Suwon, South Korea-based Company is also the world’s largest manufacturer of computer memory chips and liquid crystal displays. It ranks behind Finland’s Nokia Corp in mobile phones.
Choi said that the global economy was likely to build on momentum from the second half of last year when it benefited from government stimulus measures put in place to bolster growth following the 2008 financial crisis.
‘In particular, the advanced countries such as the US and EU are likely to see a plus, or a positive, growth and the newly emerging countries, including BRICS, will accelerate their growth rate,’ he said, referring to Brazil, Russia, India and China.
Regarding sales, Choi said that Samsung will adjust to what he called exchange rate ‘uncertainties’ by working to reduce costs and gain further ‘market dominance,’ an apparent reference to increasing market share.
‘We hope to see a two-digit growth compared to year 2009’ sales, he said, referring to percentage change.
Samsung racked up record sales of 136.29 trillion won, or $120.48 billion at current exchange rates, in 2009 on a consolidated basis — which includes the performance of its overseas and domestic subsidiaries excluding financial businesses.
Samsung — as well as other South Korean exporters — are sensitive to swings in their country’s currency, the won. Won weakness against the dollar and other currencies can be a boon in inflating the value of overseas profits when sent back to South Korea. Won strength, however, can have the opposite effect.
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TV, travel have made cheese trendy
Americans who grew up on grilled cheese and macaroni have developed more adventuresome tastes in adulthood, experimenting with a broader range of cheeses and often seeking the sharper flavors that have traditionally been popular in Europe.
Food experts shared their observations on Americans’ evolving palates this week as judges chose the world’s best cheese at the 2010 world championship cheese contest in Madison. The top honour went to a Swiss Gruyere, a type of hard cheese that may once have been considered exotic but is now commonly featured in food magazines.
‘People are more open and adventurous than they used to be,’ said Liz Thorpe, a vice president with Murray’s Cheese in New York City. ‘Ten years ago if you offered someone goat’s milk cheese they’d say, ‘that’s weird, get it away.’ Now they say, ‘that’s weird, I want to try it.’’
The change of heart has been fed by a number of factors — food-related TV programming, greater access to a range of imported cheeses and attention to a growing number of awards for US cheese makers at international contests like the one held in Madison, Thorpe and others said. Tastes also have changed as more people travel internationally.
Cheeses made from sheep and goat’s milk are common in Europe because the smaller animals are better suited to grazing on hills and mountains than cows. The cheeses were all but unknown in the US until tourists who encountered them overseas began looking for them when they returned home, Thorpe said. As tourism increased, so did demand in the US.
For example, Murray’s Cheese sold $400,000 worth of goats and sheep’s milk cheese in 2004, Thorpe said. Last year, its sales were $2 million.
Bill Schlinsog, a former cheese maker and one of the judge’s at this year’s world championship cheese contest, said diners like the idea of sheep’s milk cheese for sampling something new.
‘It’s special, it’s something they haven’t tried before,’ he said. ‘And now that the quality of the cheese is improved, people are more accepting of it. They’re willing to be more adventuresome.’
American cheese makers once lacked Europeans’ skill in working with sheep’s milk, but that’s no longer the case, said Laura Werlin, who has written four books on cheese trends.
Jeff Roberts, a co-founder of the institute for artisan cheese at the University of Vermont, said he thought the recession also had encouraged Americans to be more adventurous, particularly at the grocer’s.
‘People started saying, ‘Instead of taking $20 to go out to eat, let’s take that $20 and go to a good specialty cheese store and eat it at home,’‘ he said.
And as more people sample specialty cheese, they see it as interesting rather than intimidating.
‘What we’re really starting to see is, this appeals to people who like to taste food from different areas and enjoy exploring different cultures,’ Christine Hyatt, the vice president of the American Cheese Society.
US cheese makers’ success in international contests also has helped boost sales, much as interest in wine grew when California vintners began holding their own in European wine competitions. For example, American cheese makers won gold medals in 51 of 77 categories this week in Madison, including nine for goat’s or mixed milk cheeses.
That means any diner should be able to find a cheese to match taste and budget, the experts said. Hyatt recommended pairing a sheep’s milk cheese with a fruity red wine to bring out the cheese’s rich buttery flavor, while Thorpe likes cheeses flavored with herbs or peppers.
The good thing about cheese is that ‘you can buy a small amount,’ Werlin said.
‘Leave your Costco mentality at home,’ she recommended, ‘buy just what you need for tonight and just enjoy it.’
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Boeing speeds up production of 747, 777 models
Boeing will speed up production plans for its 777 and 747 models in anticipation of greater demand from commercial airlines in a couple of years.
Both are wide-body planes capable of carrying more than 300 passengers and flying longer routes. They’re also more fuel-efficient than other aircraft models.
Most major airlines reported losses in 2009 as travel demand slumped. The aircraft maker said Friday that it sees the airline industry recovering this year, followed by a return to profitability in 2011. That should lead to demand for new aircraft in 2012 and beyond, the company said.
Boeing, based in Chicago, will increase production of its 777 in mid-2011 to seven airplanes per month from five. The ramp-up was originally planned for early 2012. The 777 seats for more than 300 people.
The 747-8, the newest version of Boeing’s iconic jumbo jet, has been plagued by production problems. The passenger version, which carries more than 400 people, is scheduled to be delivered in the second quarter of 2011. Production will increase to two airplanes per month from 1.5 in mid-2012. The ramp-up had been scheduled for mid-2013.
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Palm revenue forecast lower than analyst estimates
Palm Inc warned that revenue for the current quarter would be far below Wall Street’s expectations, after tepid demand for its smartphones left wireless carriers with piles of excess inventory.
The company’s shares fell 14 per cent in after-hours trading on Thursday.
Taking into account Thursday’s after-hours losses, Palm will have lost half its market value since the year began.
‘The window is closing, there’s no question. They’ve got cash burn going against them and they’ve got competition going against them,’ said Avian Securities analyst Matt Thornton. ‘I just don’t see what changes here.’
Palm executives told analysts on a conference call that fourth-quarter revenue will be less than $150 million, as the company helps its carrier partners, Sprint Nextel Corp and Verizon Wireless work through inventory overhang.
Analysts had been expecting revenue of about $306 million, according to Thomson Reuters I/B/E/S.
The Company shipped a total of 960,000 smartphones during the third quarter ended February 26, but sell-through -which reflects how many devices actually end up in consumers’ hands-totaled 408,000 units, lagging the 600,000 units or more many analysts expected.
‘The May quarter guidance is the key number; it’s very low indeed,’ said Tero Kuittinen of MKM Partners, an institutional equity trading and research firm.
For the current quarter, Palm also forecast a gross margin in the mid-teens compared with a Wall Street estimate of 26 per cent.
‘Our recent underperformance has been extremely disappointing to me personally,’ chief executive Jon Rubinstein said on a conference call with analysts.
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Dollar flat in Tokyo ahead of long weekend
The dollar was little moved in thin Tokyo trading Friday as investors looked for new clues before the end of the Japanese fiscal year, dealers said Friday.
The dollar stood at 90.45 yen, up slightly from 90.39 in Thursday afternoon in New York. The euro was at $1.3621 and 123.20 yen, compared with $1.3603 and 123.07 yen in New York.
Stock market gains benefited the dollar, but its upper movement was capped by a dearth of incentives heading into a long weekend in Japan. Monday is a national holiday.
Tokyo’s benchmark Nikkei-225 index rose 71.49 points to 10,815.52 by the morning break and stayed in positive territory in the afternoon, following an overnight rise on Wall Street.
‘It appears that the support for the dollar is very solid. But selling is seen once it climbs a bit,’ said Resona Bank dealer Masatoshi Omata. ‘It seems the market is just saving up its energy for whatever comes next.’
Market activity should increase as the close of the Japanese fiscal year approaches at the end of this month and businesses square away trading positions, Omata said.
Against regional currencies the dollar eased to 1,131.10 South Korean won from 1,132.25 a day earlier, to 9,095 Indonesian rupiah from 9,130, and to 45.56 Philippine pesos from 45.63.
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China warns US not to politicize yuan debate
China urged the United States Friday not to politicize a row over the value of its currency as it announced a top official would travel to Washington for talks on the issue and other trade disputes.
As trade tensions between the two powers rise, Beijing warned of a negative impact from pending US legislation that would impose tough new penalties on China if it failed to revalue its currency.
‘We should take every measure possible to avoid politicization of the issue and allowing emotion to come into the debate,’ He Ning, a top ministry official overseeing US trade, told journalists.
‘If there are any political factors added ... it will make the whole situation complicated and affect negotiations and dialogue, which is not what we would like to see,’ he said when asked about the legislation.
The legislation, which enjoys support from both sides of the US political divide, would punish currency manipulation as an unfair subsidy and could trigger retaliatory US actions.
China announced that vice commerce minister Zhong Shan will visit Washington from March 24 to 26 to meet US lawmakers and officials at the US commerce and treasury departments as well as the US Trade Representative’s office.
‘This visit is an effort to consult and exchange views on the Sino-US trade balance, trade frictions and other concerned trade issues,’ a ministry statement said.
Critics of China’s forex policy say Beijing keeps the yuan’s value artificially low, making its exports cheaper and thus more competitive on overseas markets.
But in an interview with Dow Jones Newswires, Zhong said a further rise in the currency’s value would endanger the survival of some Chinese exporters, a situation Beijing cannot afford.
‘Water doesn’t boil if it is heated to 99 degree Celsius. But it will boil if it is heated by one more degree,’ Zhong said, adding ‘a further rise in the yuan by a very small magnitude might cause fundamental changes’.
Criticism over its forex policy has risen as China’s trade surplus and foreign exchange reserves have skyrocketed.
In 2005, international pressure led it to adopt a managed float of the yuan, which led to a 21 per cent increase in its value against the dollar by 2008, when the global financial crisis struck.
Since then, China has effectively pegged the yuan to the dollar, a move that has helped its exporters weather the global crisis, but also triggered a fresh round of foreign pressure.
On Wednesday, the International Monetary Fund urged China to allow its ‘much undervalued’ currency to rise, lending support to US and European Union calls.
‘The renminbi (yuan) is very much undervalued’ and it is logical that with the world economy regaining its balance ‘the renminbi will appreciate’, IMF chief Dominique Strauss-Kahn told the European parliament in Brussels.
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Greece ‘should consider insolvency’
Greece should be prepared to declare it insolvent if it cannot repay its debts, a director of the German central bank said in remarks published Friday, signaling a hard line against help for heavily indebted EU countries.
Bundesbank board member Thilo Sarrazin said that if Greece were unable to finance its debts, ‘it will have to do what all the indebted do, declare itself insolvent ... that would be the best warning example for other potentially weak states’ in Europe.
In his remarks to the Salzburger Nachrichten daily, Sarrazin did not name which countries he considered to be weak but did say that ‘The Netherlands, Germany, Austria, Belgium and Luxembourg will not have this type of problem because we have a different mentality.’
Sarrazin is one of six board members at the Bundesbank, whose head in turn sits on the governing council of the European Central Bank. The ECB controls monetary policy for the 16-nation eurozone.
He said that if financial aid for Greece from the European Union was ‘the only protection against the unsound financial policies of some countries and if they get into massive rampant debt, then we will have a risk of unforeseeable consequences.’
Critics of proposals to bail out Greece, laboring under huge budget and debt deficits, say that to do so would only encourage weak eurozone members to rely on the EU to fix their problems, letting their governments pass the buck on the stiff measures they themselves should take.
Sarrazin noted that in the past, France, Italy and Spain had had a tendency of wanting to deal with their debt problems by allowing higher rates of inflation, which reduces the real value of the money owed but also threatens savings and the health of the wider economy.
In morning trade, the euro was lower against the dollar, continuing a trend of the last few weeks as the crisis over Greece, and in turn the eurozone, has deepened.
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Rio Tinto signs huge China deal as staff await trial
Mining giant Rio Tinto announced a huge iron ore deal with China’s state-run Chinalco Friday, days before four if its staff go on trial in a case that has threatened diplomatic and trade ties.
Rio said Chinalco signed a non-binding, $1.35 billion deal to help develop a massive mine in Guinea, drawing a line under a period of turbulent relations with its biggest shareholder.
‘We have long believed that Rio Tinto and Chinalco could work together on major projects for mutual benefit,’ said Rio chief executive Tom Albanese.
The debt-strapped Anglo-Australian miner snubbed a $19.5 billion cash injection from Chinalco last June, angering some Chinese commentators.
Weeks later, China’s spy agency swooped on Australian citizen Stern Hu and three Chinese colleagues in Shanghai, prompting a rapid plunge in relations with Canberra and sending shudders through China’s foreign business community.
Hu, Wang Yong, Ge Minqiang and Liu Caikui are scheduled for a three-day trial in Shanghai from Monday over alleged bribery and industrial espionage, setting the stage for renewed sparring between the two governments.
Australia on Friday insisted business with China, now its biggest trading partner, would not be harmed by the trial. ‘The two matters are separate,’ trade minister Simon Crean told public broadcaster ABC.
‘We are treating the Stern Hu case strictly as a consular case. We’ve never sought to make any link and neither have the Chinese in their discussions with us.’
However, Prime Minister Kevin Rudd has already warned that the ‘world will be watching’.
Analysts say the case goes to the heart of Australia’s relationship with China, as it centres on its biggest export to the country, iron ore, and touches on issues such as judicial independence. The trial will be held against the backdrop of new iron ore tensions, after China ignored Australia’s request to stay out of annual contract negotiations and vowed to support steelmakers in a pricing dispute with top miners.
Guinea’s Simandou mine, long mired by political upheaval, is described as the world’s best undeveloped source of high-grade iron ore, which is being consumed in vast quantities by industrializing China.
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Obama signs $17.6b jobs bill
President Barack Obama offered hope Thursday that the faltering US economy will soon create more jobs, as he signed a multibillion-dollar employment package to aid the fragile recovery.
Signing into law a 17.6-billion-dollar measure designed to boost hiring, Obama said the economy was ‘beginning to move in the right direction,’ but admitted ordinary Americans were still bearing too great a burden from the economic crisis.
‘Our economy is growing again and we may soon be adding jobs instead of losing them, the jobs bill I’m signing today is intended to help accelerate this process,’ Obama said in a signing ceremony in the White House Rose Garden.
Addressing employers who have been slow to hire amid continued economic uncertainty, Obama said: ‘If you hire a worker whose unemployed, you won’t have to pay payroll taxes on that worker for the rest of the year.’
The legislation also includes infrastructure investments for items like highway construction and help for states to build schools.
As US unemployment levels hover near double digits, the White House has struggled to claw back some of the estimated eight million jobs that have been lost since the economy entered recession in December 2007.
On Thursday the Labour Department reported new claims for unemployment insurance benefits dipped only marginally last week, with 457,000 Americans beginning to ask the government for help, down 5,000 from the previous week.
According to Ryan Sweet, a senior economist with Moody’s Economy.com, employment is trending in the right direction, but the slow speed of change is ‘dashing any expectation that jobs will roar back.’
For the Obama administration, speeding that recovery has become all the more urgent as the country faces midterm elections in November that will decide whether the president’s Democratic Party keeps control of Congress.
But with the unemployment rate not expected to ease quickly, Obama and his treasury secretary, Timothy Geithner, have begun to focus on more modest indications of recovery — pointing to increased hours put in by workers and firms shifting employees to a full-time schedule.
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EU chief calls for quick deal to help Greece
European Commission president Jose Manuel Barroso says the EU needs to agree as soon as possible on a mechanism to support Greece financially if needed.
European Union leaders are meeting next week to discuss a rescue package to convince markets that Greece will not be allowed to default, therefore easing its borrowing rates. However, Germany has resisted the idea of direct financial support.
Greece warned it will be forced to turn to the International Monetary Fund if the EU can’t agree to a bailout plan.
Barroso told France 24 TV that Europe believes what ‘we should have now is as soon as possible some kind if mechanism prepared just in case.’
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German govt says IMF aid an option for Greece
The German government sees aid to Greece from the International Monetary Fund as an option to resolving its debt problems, Chancellor Angela Merkel’s spokesman said on Friday.
‘The German government does not rule out aid from the IMF if Greece requests it,’ spokesman Ulrich Wilhelm said at a regular news conference after reports that Berlin was concerned European aid could break German and EU law.
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Talks on avoiding BA strike collapse
Talks aimed at preventing a strike by British Airways cabin crew have collapsed, the Unite trade union said Friday, less than 12 hours before the action was due to start.
‘It’s with great disappointment that I have to tell you all that negotiations have broken down,’ Unite’s joint leader Tony Woodley told reporters. ‘The strike goes ahead at midnight tonight (Friday).’
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Venezuela ups proven oil reserves by 23pc
Venezuela announced on Thursday its proven oil reserves rose to 211.17 billion barrels at the end of 2009, a 23 per cent increase thanks mostly to heavy crude oil finds that are difficult to extract.
The new aggregate reserves - an additional 39.24 billion barrels - came mainly from the Orinoco Heavy Oil Belt, a south-eastern area where Venezuela has intensified its investments in exploration and development, and only a small part from traditional oil fields.
In March 2009, the country’s proven reserves stood at 172.32 billion barrels.
Venezuela, the top crude oil exporter in South America, now holds the second-largest proven reserves in the world, behind Saudi Arabia (266 billion barrels) and ahead of Iran (138 billion barrels), according to the Organization of the Petroleum Exporting Countries.
After its proven reserves fell to 76 billion barrels of oil in 1998, Venezuela launched a ‘socialist project’ in 2005 to boost reserves to 314 billion barrels, which would give it the world’s largest reserves.
‘This project would confirm that the country has the world’s biggest crude reserves, and it would put them to work for humanity,’ state-owned oil company PDVSA said in a statement.
Venezuela is estimated to have 235 billion barrels of oil in the Orinoco basin, but the oil there is heavy, difficult to extract and more costly to refine than conventional crude.
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BANGLADESH
EXCLUSIVE
Low-priced Chinese mobiles take on known brands
Sales of low-priced Chinese origin mobiles marked a high growth in recent times in Bangladesh challenging the domination of leading global mobile brands, experts and traders said.
Brand giants such as Nokia, Samsung, LG, Siemens, Sagem and Sony Eriksson which dominated the market even two years ago are now facing challenges these days from lesser known brands such as Symphony, Maximus, Sprint, Digital and I-Max.
‘Most of such non-brand Chinese sets account for about 60 per cent of the monthly sales volume,’ the Bangladesh Mobile Phone Businessmens’ Association president, Nizam Uddin Ziku, said.
He told New Age customers, especially low-end users, were showing less interest in known brands which sell for double the prices of Chinese origin sets but have less features.
Users also feel comfortable as importers give a year’s warranty for such Chinese sets, said an official of the Siemens Bangladesh, which started marketing Maximus two years ago.
On an average at least a million new mobiles are sold in Bangladesh every month as the Bangladesh Telecommunications Regulatory Commission statistics show the number of new connections increased to 53.83 million till January from 50.51 million in November 2009.
Market operators have said traders have sold mobiles worth Tk 300 crore each month in the recent past.
They said official dealers had almost stopped selling brands such as Motorola, Siemens, Sagem and Sony Eriksson in the local market.
Many of them have rather started marketing low-priced Chinese origin sets to stay competitive against market leaders Nokia and Samsung, they said.
Rageebul Kabir, managing director of the CMPL Nokia, a major distributor of Nokia brand in Bangladesh, said in July 2009 that import of a large quantity of non-brand Chinese mobile had posed worries for traders of mobiles of reputed brands.
There are around 300 mobile importers in Bangladesh, according to statistics available with the telecoms regulatory commission. But only 30 to 40 businessmen are active. Almost all mobile imports are from China.
The mobile phone businessmen’s association president said, ‘All mobiles come from China but we supply sets for low prices.’
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NEWS
Cabinet rejects proposal for tax on share trade profit
The cabinet on Monday rejected an Internal Resources Division proposal for imposition of income tax on the amount of profit generated from share trading and an increase in annual fees for beneficiary owners’ accounts.
At the weekly meeting of the cabinet, the IRD, a division of the finance ministry, placed the proposal for amending the Income Tax Ordinance 1984 to realize income tax at the source for renewal of the beneficiary owners’ accounts by which individual and institutional investors are doing share trading.
The division also sought approval from the cabinet, headed by Prime Minister, Sheikh Hasina, for increase in renewal fees for BO accounts to Tk 1,000 from Tk 300.
‘The cabinet has rejected the IRD proposal for amending Income Tax Ordinance 1984 to impose tax at source for renewal of the beneficiary owners’ accounts,’ the PM’s press secretary, Abul Kalam Azad, told reporters after the meeting at the secretariat.
Currently, the account holders do not need to pay tax to operate their accounts and are enjoying exemption from tax on profit generated by share trading.
The IRD proposed the formulation of a new guideline for beneficiary owners’ accounts with three per cent income tax on profit ranging from Tk 7, 00,000 to Tk 10, 00,000, and five per cent on profit exceeding Tk 10, 00,000, said officials.
Officials of the finance ministry said that they also wanted to increase BO account renewal fees to restrict the number of accounts, which has been swelling in recent times.
The new rules would have affected some 2.2 million account holders engaged in share trading in the stock exchanges of Dhaka and Chittagong. The government has also provided an opportunity for investment of undisclosed money in the share market after paying 10 per cent income tax.
The Securities and Exchange Commission, the stock market’s watchdog, has urged the investors, especially retail traders, to be ‘careful about investment’ after record-breaking rallies became daily occurrences in the share market in the past several months.
Some 1, 70,000 accounts were opened in February, the second highest number after 1, 91,000 accounts opened in October 2007.
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Nitol plans Nano plant in Bangladesh
Brand new car may cost customers Tk 3 lakh
Nitol Motors, a local assembling company which sells automobiles manufactured by India’s Tata Motors, is now planning to make and market a Bangladeshi version of Nano, Tata’s much-hyped brand affordable to the lower middle class Indians.
The chairman of Nitol Motors, Abdul Matlub Ahmad, claims that the Nano cars can be made in his planned pant in Bangladesh and the customer-level price of each car will not exceed Tk 3 lakh.
If a deal is struck between Tata and Nitol, the small car manufacturing plant would be set up in Chittagong or Khulna in view of the proximity of the site to seaport, he told New Age on Monday.
The Nitol chairman is scheduled to have a ‘crucial’ meeting in this regard with the managing director of Tata Motors, PM Telang, in Dhaka on March 25.
However, the objective of Telang’s visit is to expand the company’s business in Bangladesh, especially enhancing capacity of Tata’s commercial vehicles assembling unit in Jessore and setting up a new plant in Kishoreganj for assembling Tata’s ACE series of mini trucks, said Matlub.
‘It is my dream to manufacture made-in Bangladesh cars and export them to different countries after meeting domestic demand,’ the Nitol chief said adding that he would be negotiating a deal with the Tata Motors to set up the plant. He mentioned that almost 60 per cent of Nano components would be made in the planned Bangladesh plant under the supervision of Tata Motors.
Bangladeshi customers showed interests in Nano showcased in the India Trade Fair in Dhaka in the past month. ‘But the price of each piece of imported Nano, including one hundred per cent duty, would stand at nearly Tk 6 lakh,’ Matlub pointed out.
He gave his estimate that a unit requires annual production of at least 50,000 cars for its business viability. ‘We see the prospect of selling 10,000 Nano cars a year while the rest can be exported,’ he added.
According to the businessman, northeast Indian states and West Bengal can the convenient export destinations and Nano cars can also be shipped to Europe or Africa.
Nano is a rear-engine four-passenger car which Tata launched in the Indian market in March 2009. It was a pledge by Tata group chairman Ratan N Tata to provide each of common Indians with a car at a price of Rs 100,000.
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FBCCI to elect 28 directors June 17
The Federation of Bangladesh Chambers of Commerce and Industries will elect 28 directors of its 44-member board through direct votes on June 17, according to the election board of the apex trade body.
The board declared election schedules on Monday.
As per the schedules, primary voter list of the trade body will be published on April 25 and the final version of the list will be published on May 5. Last day for submission of nomination papers by candidates is May 10. Primary list of the candidates will be published on May 20 and the list of valid nominations will be published on May 27.
The final list of candidates will be published on June 1, after providing time to candidates for withdrawing nominations.
According to the newly amended rules, 28 directors-14 from association group and 14 from chamber group- to the 44 strong FBCCI board will be elected through polls.
Sixteen of the directors will be automatically elected, equally from chamber and association groups – a provision that the present government has decided to continue in spite of demand for direct elections in all posts.
Within 48 hours of the elections, both elected and nominated directors will together elect the next president and two vice presidents for the next two years, say the current rules.
The government has meantime extended till June 30 the tenure of the present executive committee, headed by its president Annisul Huq, which was set to expire on March 24.
Some 2,000 general body members of 275 affiliated associations of the FBCCI will vote for electing 14 directors while 400 members of 70 affiliated chambers will elect the same number of directors.
Among eight unelected directors from the chamber group, one each director will be nominated by six divisional chambers, the Metropolitan Chamber of Commerce and Industry and the Bangladesh Chamber of Industries.
In the association group, one each director post will go to leading associations — BGMEA, BTMA, BKMEA, BJMA, BAPA, BFFEA, BAB and BIA, according to the amended rules.
In line with a rotation system, the president of the FBCCI this year will be elected from the association group and the first vice-president from the chamber group.
The current FBCCI board of directors is comprised of 38 representatives including 24 directors elected through direct voting polls.
The commerce ministry, which regulates the trade bodies, decided to raise the number of unelected directors to 16 from 14. The Annual General Meeting of the FBCCI a week ago opposed the indirect elections of a significant number of directors but the ministry did not pay heed to such criticism.
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Economic coordination council meeting Wednesday
The government’s top policymaking body on monetary and exchange rate affairs is set to explore strategies for containing inflation and keep the exchange rate of taka at a reasonable level.
The Coordination Council of Monetary Policy and Exchange Rate for Macroeconomic Framework, headed by the finance minister AMA Muhith, will sit for its fifth meeting on Wednesday to discuss the issues at a time when Bangladesh is coming out from the current global recession, said finance ministry sources.
‘The council meeting will decide strategies for implementing the monetary policy announced by the Bangladesh Bank and harmonizing it with government’s fiscal policy,’ said a senior official of the finance ministry on Monday.
He said the meeting would also examine the country’s current balance of payments situation and discuss macroeconomic situation and inflation under a three–year mid-term macroeconomic framework.
The country’s budget surplus was Tk 946 crore in July–December 2009, compared to Tk 6,129 crore deficits during similar period of the previous year, according to the half year budget implementation report.
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SOUTH ASIA
Coca-Cola hit by pollution claim in India
Coca-Cola contaminated water and polluted the environment at a south Indian bottling plant and should pay $47 million in compensation, local authorities said on Monday.
The government in Communist-run Kerala state said it had accepted the findings of a panel that investigated the soft drinks giant and recommended a fine of 2.16 billion rupees.
Coca-Cola denied all the allegations.
The state panel said that the Palakkad bottling factory, which was closed in 2005 after protests from activists and residents, damaged the local environment by polluting groundwater and dumping solid waste.
‘Several studies were conducted and they revealed that the Coca-Cola plant has contaminated the water and soil of the area. So the company must pay for it,’ NK Premachandran, the state minister for water, told AFP.
Coca-Cola dismissed the panel’s findings, saying that any claim must be taken to the courts.
It said numerous investigations by the state government and others had cleared the company of any wrong-doing.
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BANGLADESH
DSE elects 4 new directors
Four directors, including incumbent president Rakibur Rahman and former president Ahmed Iqbal Hasan, were elected to the Dhaka Stock Exchange on Sunday.
The two other elected directors are Khwaja Ghulam Rasul and Sharif Ataur Rahman, said a DSE press release.
Rakibur Rahman of Midway Securities bagged the highest number of 178 votes out of 210 valid votes. Khwaja Ghulam Rasul of Khwaja Equity Services got 155, Ahmed Iqbal Hasan of Ahmed Iqbal Hasan Securities 128 and Sharif Ataur Rahman of SAR Securities 104.
Of 228 votes, 213 were cast in the elections held on Sunday. The election commission cancelled 3 ballots.
Among the four others, who also vied for directorship Abdul Haque of Royal Green Securities got 98 votes, Ahmad Rashid Lali of Rashid Investment Services 82 votes, Dastagir Md Adil of Adil Securities 62 votes and Ghulam Quader of GQ Securities 33 votes.
The DSE polls commission chairman, AKM Rafiqul Islam, named the winners.
The newly elected directors and eight existing directors will elect a president, a senior vice-president and a vice-president on March 27 for one year.
The DSE board comprises 25 members, of whom 12 are elected, 12 nominated and one ex-officio.
According to DSE regulations, four directors retire every year and four replace them through direct voting.
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WORLD ECONOMY
Turkey optimistic about economic recovery
Recovery in the crisis-hit Turkish economy is expected to be stronger than initially projected given recent improvement in economic activity; a senior Turkish official was quoted as saying Sunday.
‘In our 2010 mid-term programme, we envisaged a growth of 3.5 per cent. But as of today, the figure is projected... between 3.7 and 5.5 per cent,’ said Deputy Prime Minister Ali Babacan, who holds the economy portfolio, Anatolia news agency reported.
Babacan said annual contraction in gross domestic product last year was also expected to be smaller than the six per cent projection.
‘Recovery in the past three months shows that... the Turkish economy has contracted less than six percent, below the expectations,’ he said.
The global crisis has plunged Turkey’s once-booming economy into recession, causing GDP to contract by 8.4 per cent in the first nine months of 2009.
The fourth-quarter figures will be released on March 31, Babacan said.
‘We will come to the pre-crisis level at the end of 2011. But even this pace of recovery is faster than the world average,’ he said.
The minister however stressed that unemployment remained a major challenge given the country’s growing population, adding that reducing the jobless rate to fewer than 10 per cent by the end of 2011 appeared ‘difficult’.
Turkey’s unemployment rate stood at 13.5 per cent in the three months to the end of January, according to latest official data.
In 2009 the rate rose to 14 per cent, up three percentage points from the previous year.
Earlier this month, Ankara said it had called off loan talks with the International Monetary Fund because of ‘Turkey’s outlook as a country that is able to stand on its own feet economically.’
The decision ended nearly two years of negotiations on a stand-by deal dogged by disagreement on key issues.
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SOUTH ASIA
India’s Tata Motors invests in Myanmar
India’s largest vehicle maker Tata Motors said on Monday it signed a contract with Myanmar Automobile and Diesel Industries to set up a heavy truck plant in the military-ruled country.
The new plant would be set up at Magwe, nearly 480 kilometres (300 miles) from Yangon, and will be operational in the last quarter of the financial year ending March 2011, it said in a statement.
Myanmar, which has been ruled by the military since 1962, is under economic sanctions by the United States and Europe because of its human rights record and long-running detention of pro-democracy leader Aung San Suu Kyi.
But the impact of the sanctions has been weakened as neighbors such as China, India and Thailand invest billions of dollars, particularly in its oil and gas industry.
Tata Motors, which owns the formerly British brands Jaguar and LandRover, said the plant would have a capacity of 1,000 vehicles per year, which could be expanded to 5,000 vehicles.
No financial details were given, but the plant will be funded by a line of credit from the government of India.
Myanmar’s military government held talks with an Indian delegation on March 1 in its remote capital Naypyidaw.
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WORLD ECONOMY
Toyota shareholders sue over fallen stock price
Toyota shareholders incensed over a sudden drop in the Japanese automaker’s stock price are heading to court with lawsuits claiming company executives deliberately misled investors and the public about the depth of accelerator problems in millions of its vehicles.
At least three proposed class-action lawsuits filed by Toyota investors say the company gave false initial assurances that the sudden acceleration problem was a simple matter of floor mats trapping gas pedals, helping prop up the stock price.
The shareholder cases are part of an avalanche of potentially costly lawsuits against Toyota Motor Corp over the acceleration issue, including those filed by crash victims and their families and those brought by Toyota owners contending their vehicles are worth far less because of the recalls.
The investor lawsuits say Toyota spread misleading information through press releases, conference calls with stock analysts and TV interviews to assure stockholders and the public that the accelerator problem was easily fixed or might be the driver’s fault.
Instead, the lawsuits contend, top Toyota executives have known for nearly a decade that faulty electronic throttle controls caused vehicles to sometimes careen wildly out of control but covered it up to protect the company’s reputation for safety — and its stock price. The company has not issued any recalls involving flaws in the electronic throttles and has repeatedly denied they are the problem.
US-listed shares rose from just over $75 on October 5, the day of the floor mat recall, to above $90 on January 21, when Toyota announced another recall — over gas pedals it says can stick in certain conditions.
After that, the stock price fell, dropping 16 per cent as of early March. Shares have since rebounded somewhat, closing Thursday on the New York Stock Exchange at $79.34, but some investors say the recovery did not prevent them from losing potentially millions of dollars as the stock was dropping.
Since the sticky pedal recall in late January, Toyota’s total US market capitalization has fallen 13 per cent to $135.87 billion. In trading on the Tokyo Stock Exchange, Toyota shares also have lost nearly 17 per cent of their value since January 21. That’s wiped out about 2.27 trillion yen ($25.1 billion) of the company’s market capitalization there.
Toyota declined comment because the cases are pending in court. The company has repeatedly denied its electronic throttle controls are to blame for sudden acceleration.
In the lawsuits, the shareholders are asking a judge to certify a ‘class’ of plaintiffs that would represent all Toyota shareholders in the US who held company stock on specific dates. If Toyota is found liable, damages could easily run into the hundreds of millions or even billions of dollars.
The shareholder lawsuits are pending in federal court in California, the location of Toyota’s North American headquarters.
In one of the lawsuits, Toyota stockholder Harry Stackhouse of Richboro, Pa, contends the company ‘misled investors by failing to disclose that there was a major design defect in Toyota’s acceleration system, which could cause unintended acceleration.’
‘This drop removed the inflation from Toyota’s securities prices, causing real economic loss to investors who had purchased securities,’ said Stackhouse, who said he bought 40 shares in late 2009 just as the accelerator problems became more widely known.
Stackhouse and the others filing suit — shareholders from Ohio and Tennessee_ did not return several telephone calls seeking comment. All three investors filed sworn statements that they did not buy the shares as an excuse to sue the company.
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Thailand plays down unrest impact on FDI
Thailand’s finance minister on Monday said anti-government protests had not deterred foreign investors in the country, but said its tumultuous politics was ‘impossible to understand’.
‘Broadly speaking, we’re not seeing any signs yet that investors are staying away because of the political situation,’ Korn Chatikavanij told reporters at an Asian investment conference in Hong Kong.
‘The main issue... is that we manage it in a civilized manner within the rules of law and under democratic principles,’ he said.
‘On the government side, we intend to fully adhere to that and deal with the issues being raised.’
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Germany to introduce bank levy
The German government plans to introduce a levy on banks to ensure that they pay for the costs of any future crises.
Volker Kauder, the parliamentary leader of Chancellor Angela Merkel’s conservative bloc, told ZDF television Monday that her governing coalition has agreed in principle on the plan.
Kauder said coalition leaders agreed that ‘banks cannot in future gamble at the taxpayer’s expense’ and that ‘provisions must be made so that they — if it gets difficult — pay for things themselves.’
Kauder gave no details on the size of the resulting fund but said it would run into the billions of euros.
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ASIA
Oil prices dip in Asia
Oil prices dipped to near $80 a barrel in Asian trade Monday, extending last week’s losses which were caused by gains in the US dollar.
New York’s main contract, light sweet crude for April delivery was down 50 cents to $80.18 a barrel.
London’s Brent North Sea crude for May delivery shed 39 cents to $79.49 a barrel.
‘The market’s downward movement today is likely due to the fallout from the market’s sentiment on Friday,’ said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.
The oil market Friday took a hit from a stronger greenback which sent the New York contract slumping $1.52, briefly dropping below the psychological barrier of $80 per barrel.
A stronger US unit makes dollar-denominated crude more expensive for buyers using weaker currencies and so tends to dampen oil demand and prices. Prices fell sharply last week as investors sought the safe-haven greenback on uncertainty over international assistance for debt-plagued Greece.
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WORLD ECONOMY
World stocks hit by Greek debt, India rate hike
World stock markets retreated Monday following Wall Street’s sell-off on Friday and amid ongoing concerns about Greece’s debt crisis ahead of a key meeting of EU leaders later this week.
European markets followed their Asian counterparts lower with the FTSE 100 index of leading British shares down 55.36 points, or 1 per cent, at 5,594.76. Germany’s DAX fell 49.73 points, or 0.8 per cent, to 5,932.70 while the CAC-40 in France was 37 points,
or 0.9 per cent, lower at 3,888.44.
Wall Street was poised for further losses after closing down Friday for the first time in nine days — Dow futures were down 61 points, or 0.6 per cent, at 10,626, while the broader Standard & Poor’s 500 futures fell 8.5 points, or 0.7 per cent, to 1,147.80.
‘Some kind of adjustment — especially given concern over mounting debt in developed economies — was always looking imminent,’ said Anthony Grech, market strategist at IG Index.
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EU presidency wants Greek aid decision at summit
The Spanish presidency of the European Union said on Monday it would push the bloc to agree on financial aid for Greece at a summit this week, despite reservations from EU powerhouse Germany.
‘The Spanish presidency will work towards that,’ Spanish foreign minister Miguel Angel Moratinos told reporters before a meeting with his EU counterparts in Brussels.
‘It is an important moment for the future of the EU and the euro,’ he said ahead of the two-day summit which starts Thursday.
‘We will make every effort to give this trust, this solidarity that I think (Greece) deserves thanks to the measures that the government of (George) Papandreou has already taken,’ Moratinos said.
Greek Prime Minister Papandreou has urged EU leaders to agree on financial help for his heavily indebted country during the summit and warned that his government might be forced to turn to the International Monetary Fund instead.
European Commission Chief Jose Manuel Barroso urged EU leaders on Friday to approve soon the creation of a financial aid mechanism for Greece to use if necessary, warning: ‘We cannot prolong any further the current situation.’
He stepped up that effort in new comments on Monday, telling German daily Handelsblatt that ‘we need a decision at this summit so that we know how we are going to manage (the Greek crisis).
‘Otherwise, deep uncertainty threatens to drag on for some time.
‘We can’t keep going this way; we risk endangering the stability of the eurozone and feeding speculation (on markets).’
Merkel said on Sunday that ‘raising false expectations’ ahead of Thursday and Friday’s gathering of EU leaders in Brussels would cause ‘turbulence’ on markets.
The German government’s reluctance to approve any aid to Greece reflects widespread unease among taxpayers, with a Financial Times poll showing on Monday that 61 per cent of Germans oppose the idea of a bailout.
Greece, buried under a debt of 300 billion euros, has approved austerity measures to slash a runaway public deficit that is close to 13 per cent of national - more than four times the limit allowed by the eurozone.
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Climate change could slow Southeast Asia growth by 7pc: IMF
Southeast Asian economic growth could slow this century by almost seven per cent a year unless action is taken against climate change, a senior IMF official said Monday.
‘If nothing is done, Southeast Asia could lose the equivalent of 6.75 per cent of GDP each year by the end of this century. That’s more than twice the estimated global average,’ John Lipsky, first deputy managing director of the International Monetary Fund, told a conference in Hanoi.
He said climate change is ‘one of the greatest long-term risks facing the developing world’ and Southeast Asia is particularly vulnerable because of its long populated coastlines and its reliance on agriculture, natural resources and forestry.
‘The incipient effects of climate change already are notable: exacerbating water shortages, threatening food security and increasing health risks,’ Lipsky said.
He was speaking to an international gathering of policymakers, diplomats, analysts and non-governmental groups discussing post-crisis growth and poverty reduction in Asia’s developing countries.
In January, IMF managing director Dominique Strauss-Kahn said the agency is planning a 100-billion-dollar fund to help countries mitigate the effects of climate change.
Among its aims, the IMF seeks to reduce poverty, foster global monetary cooperation and secure financial stability.
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Rio employees’ China trial opens, guilty plea reported
Four employees of mining giant Rio Tinto stood trial in China on Monday, while the company’s chief executive said in Beijing that Rio remained committed to working with the key Asian customer.
Australian national Stern Hu and three Chinese employees of Rio faced prosecutors in the court in Shanghai, China’s financial hub, all accused of taking bribes and violating commercial secrets.
Hu pleaded guilty to taking bribes worth some 6 million yuan ($879,000), Bloomberg reported, citing Tao Wuping, the lawyer for another defendant.
The case has highlighted the risks of doing business in a country with a huge market but close ties between the ruling Communist Party, police and courts.
While the trial got underway in a concrete building near an elevated highway in Shanghai, Rio chief executive Tom Albanese signaled to an audience in the Chinese capital that he did not want to jeopardize business ties with China, the world’s biggest consumer of iron ore.
‘This issue is obviously of great concern to us,’ Albanese told a forum of officials and executives, referring to the case.
‘I can only say we respectfully await the outcome of the Chinese legal process,’ he told the forum, held in an exclusive state guesthouse.
Albanese said ‘we remain committed to strengthening our relationship with China, not just because you are our biggest customer, but because we see long-term business advantages for both of us.’
Foreign reporters were not allowed to attend the forum, and Rio emailed copies of Albanese’s speech. A Chinese web cast of it did not include his comments on the trial.
The four employees from Rio’s iron ore team, including Hu, were detained last summer at the height of fraught negotiations over 2009 ore prices, creating a furore over China’s opaque state secrets laws.
Chinese media last summer accused the four of seeking information about Chinese mines and steel mills, which many firms consider legitimate market information.
Rio has said that its employees did nothing wrong.
Shanghai is likely to want the case over quickly, before its much ballyhooed 2010 World Expo opens in Shanghai in May.
Foreign reporters were not allowed to attend the trial.
China has excluded Australian diplomats from observing the part of the trial concerning commercial secrets, drawing protests from Canberra, which says they have the right to be present for the whole trial, scheduled to last three days.
Before entering the court, Australia’s consul-general in Shanghai, Tom Connor, told a crush of reporters he would make a statement after the day’s proceedings.
A Chinese researcher in a think-tank run by the nation’s ministry of commerce said there was a strong case against the Rio employees and warned Australia to keep a distance.
‘The Australian government and public need to calmly and rationally consider this question: should the government waste such a large amount of political and financial resources to pay the bill for certain companies’ immature and even illegal ways?’ the researcher, Mei Xinyu, wrote in the Chinese-language Shanghai Securities News.
‘What Rio Tinto and Stern Hu did would be utterly taboo in any host country,’ wrote Mei.
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Germany’s Merkel caught in Greek crisis crossfire
Germany came under European pressure on Monday to drop its resistance to a Greek financial rescue plan, but a poll showed that a large majority of Germans oppose any bailout.
Chancellor Angela Merkel got support for maintaining a hard line from a Financial Times poll that showed 61 per cent of Germans opposed aid for Greece and almost one-third thought Athens should leave the 16-nation eurozone.
But the head of the European commission and the Spanish presidency of the European Union called on bloc leaders to agree on an aid scheme for Greece during a two-day summit this week.
The Greek debt crisis has shaken the euro and as the eurozone’s richest member, Germany is being pressed to commit to an aid plan for Athens, which has officially only asked for help to fend off financial speculators.
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BA strike enters 3rd day
British Airways and the union representing its cabin crew are no closer to resolving a dispute over pay and conditions as a strike enters its third — and busiest — day.
Monday’s operations at the airline are expected to be under more strain as there are far more flights packed in to normal scheduling.
The Unite union and BA both claim victory over the walkout that has caused the airline to cancel over half its 1,950 flights normally scheduled over the period. Unite disputes BA’s claim that a substantial number of workers crossed the picket line.
The union is due to strike again from Saturday for four days if the dispute is not resolved. BA has warned knock-on effects from this walkout will carry on throughout this week.
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UPDATE----------MARCH 22, 2010 MONDAY
BANGLADESH
NEWS
Govt plans to raise BO account fees
Cabinet likely to make a decision today
The government has planned to raise annual fees for beneficiary owners’ account for share market trading to Tk 1,000 from the existing Tk 300, aiming to increase country’s non-tax revenue, official sources said.
The finance ministry is schedule to place a proposal for raising the BO accounts’ annual fees before the weekly cabinet meeting today, they said.
Officials said that amendments to the Income Tax Ordinance 1984 would be needed to increase the annual fees.
Currently the number of BO accounts, through which investors take part in trading, is around 22 lakh but most of the accounts are used only to participate in the initial public offerings.
‘We have sent the proposal to raise the BO accounts fees for increasing non-tax revenue. Besides, there is an unnecessary rush for opening the BO accounts by people in recent times,’ said a senior official of the finance ministry.
The official also said they wanted to restrict the use of the OB accounts.
The government in 2008 amended guidelines for opening BO accounts making mandatory submission of bank certificate or a photocopy of national identity card and applicant’s photo with signature.
Stock market analyst Moin Al Kashem told New Age that it will be discouraging for the small investors if the government increases the annual fees of the BO accounts.
‘Small investors who participate in the initial public offerings will the pain of increased fees,’ he added.
Moin said fees for the BO accounts in western countries are costlier than Bangladesh, but the western countries are providing various types of facilities to their stock businessmen.
‘Government has always taken discouraging initiative for the country’s share market investors and as a result there will be negative impacts on the country’s stock markets,’ he said.
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Purchase body Okays 4 more peaker bids
Nine plants to generate 620MW in 15 months
The cabinet committee on public purchase on Sunday approved a Power Division proposal to award two companies contracts for the installation of four peaking power plants with a total generation capacity of 270MW.
The committee, headed by the finance minister, Abdul Maal Abdul Muhith, approved the selection of a consortium of Energypac for the award of turn-key contracts for the installation of three power plants.
The consortium was selected by the Power Development Board to set up the Shantahar 50MW plant at a cost of Tk 368.11 crore, Katakhali 50MW at Tk 350 crore and Gopalganj 100MW at Tk 693.81 crore.
The Hyundai Corporation was selected for the Bera 70MW plant at a cost of Tk 484.68crore.
The furnace oil-run power plants are expected to go into operation after the selected companies would sign agreements with the power board.
The purchase committee in February approved the selection of bidders for five other peaking plants with a total capacity of 350MW.
The power board in 2009 invited tenders for the installation job of 10 peaker with a total capacity of 830MW. A tender for a 200MW plant at Ghorashal was scrapped.
The government has undertaken the projects complete its implementation by the end of 2011 to address the present generation shortage.
A meeting of the executive committee of the National Economic Council on March 16 approved the projects, allocating funds to the tune of Tk 7,203 crore from the state exchequer.
Of the total project cost, Tk 7,085 crore will be provided by the government while Tk 118 crore will be provided by the power board.
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BB asks banks to submit action plan on SME loan disbursement
The Bangladesh Bank on Sunday asked all commercial banks to submit soon their action plan to the central on disbursement of Tk 24000 crore in SME loan.
A meeting between the central bank and the managing directors of the country’s private banks Sunday identified 60 SMEs to provide them with adequate fund to flourish, reported Bangladesh Sangbad Sangstha.
Briefing newsmen on the outcome of the meeting held at his office, BB governor Atiur Rahman said like agriculture credit, all the banks agreed to lend SMEs to a bigger extend.
Small and Medium Enterprises (SMEs) will get Tk 24,000 crore in loan by this year.
All the commercial banks will disburse the loan under their own action plans. Bangladesh Bank (BB) will supervise the loan disbursement through a three-tire monitoring cell.
‘The banks will soon submit their action plan to the central bank under which they will disburse the loan to SMEs by this year’, the governor said.
He did not give any details about the rate of interest, repayment’s conditions and eligibility.
Official sources said the details about the interest rate and other conditions would be made available after getting the action plan from the respective banks.
Atiur said the banks have been suggested to disburse the loan on cluster basis, considering regional track record and prospect.
For instance, he said some areas in the northern part of the country are well- known for building motor vehicles’ body; some areas are famous for producing motor parts and other stuffs.
He said the banks would consider the trend and strength of the local SMEs to offer them the credit on cluster basis.
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EXCLUSIVE
Bangladesh too cheap for comfort for leading brands
The process of outsourcing production by Western companies is all about finding cheap labour to cut costs. But in Bangladesh, some retail groups are finding the wages too low for comfort.
As Chinese labour prices increase, Western giants such as Wal-Mart and H&M are increasingly shifting production to factories in Bangladesh- where some have found themselves on the same side as the unions in an unusual alliance.
The South Asian country of 144 million suffers chronic power outages and poor infrastructure but is one of the cheapest manufacturing destinations on Earth, largely because factory worker wages are set at just $25 a month.
Conditions on the factory floor are cramped and frequent accidents such as a fire last month that killed 21 people at a factory producing knitwear for H&M, worry image-savvy Western companies.
For the first time, they are now speaking out.
‘It’s absolutely unacceptable that minimum wages are just $25,’ the Dhaka-based head of a top Western store, speaking on condition of anonymity, told AFP.
‘We pay enough to factory owners, but we don’t think that the benefits trickle down to workers or are being spent on improving conditions,’ he added.
In January, buyers including Wal-Mart, H&M, French giant Carrefour and Levi Strauss wrote to the prime minister saying that ‘below the poverty line wages...contributed to unrest’ among workers and should be addressed.
Current minimum wages ‘do not meet the basic needs of the workers and their families,’ the letter said, adding that the government should set up a review board to reassess the minimum wage.
‘The increased cost of living during 2008 and 2009 has contributed to the unrest among workers in the garment sector as wages have not been regularly revised,’ the letter added.
Bangladesh’s 4,500 garment factories are the country’s largest employers-providing jobs to 2.5 million people or 40 per cent of the nation’s industrial workforce.
Last year the country was one of the world’s top three garment exporters, with shipments up 10 per cent to 12.3 billion dollars-around 80 per cent of the country’s total exports.
‘But workers are as poor as ever. You can’t buy food with $25 a month, let alone pay rent,’ said Mosherefa Mishu, a middle-aged woman who heads the country’s best known union, the Garment Workers Unity Forum.
For Mishu, a ‘vicious cycle’ of greedy factory owners, Western buyers and a government keen only to see export figures growth has ‘trapped thousands of workers in poverty.’
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NEWS
Oil tankers threaten strike
Oil tanker owners have threatened suspension of operations from March 24 if the government does not cancel a plan to procure additional vessels.
At present there are 81 coastal ships used for transporting oil across the country from seaports.
‘As the use of petroleum has plummeted by around 35 per cent in recent years, due to an increase in CNG (compressed natural gas) the companies cannot run more than two trips a day at present,’ the Oil Tanker Owners Association president, TM Giasuddin, told a press briefing on Sunday.
Many oil tankers already face huge losses everyday as they do not get enough trips in a day but have to keep up for costly maintenance of the ships, he said.
Under these circumstances, an ‘influential quarter’ of the government is planning to add another 30/40 ships, alleged Gias.
‘If the ships are brought in … the whole industry will be in crisis,’ he added.
The association’s senior vice-president, Habibul Alam, said they would sit with the government before March 24 to reach an understanding.
‘If the talks fail we will stop operations from March 24 midnight,’ he said.
The association sought a prompt decision by the government to avoid unrest in the sector.
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SOUTH ASIA
Bharti wraps up $8.3b in financing for Zain
India’s largest telecommunications operator, Bharti Airtel Ltd., has finalised $8.3 billion in financing needed for its proposed acquisition of the Africa assets of Kuwait’s Zain, Bharti said Sunday.
‘The financing was oversubscribed, with major international banks committing to underwrite the total amount,’ Bharti said in a statement.
Zain accepted a $10.7 billion offer from Bharti Airtel in February to sell most of its Africa businesses as it refocuses on its home market in the Middle East.
The deal includes $1.7 billion of Zain debt, plus $8.3 billion to be paid by Bharti upfront and $700 million one year from now, said a person familiar with the negotiations who spoke on condition of anonymity because he was not authorized to speak to media.
A consortium of international banks, led by Standard Chartered Bank, Barclays and the State Bank of India will provide $7.5 million in loans, Bharti said.
ANZ, BNP Paribas, Bank of America Merrill Lynch, Credit Agricole CIB, HSBC, Singapore’s DBS Group, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. also participated in the underwriting, it said.
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BANGLADESH
NEWS
Agriculture, technology fair begins
A three-day agriculture and technology fair was opened on Sunday aiming at spreading new technologies among farmers at Daulatpur in the city.
The fisheries and livestock and agriculture extension departments organised the fair at Metropolitan Agriculture Office premises.
Khulna city corporation mayor Talukder Abdul Khaleque opened the fair as chief guest.
Chaired by Khulna additional deputy Commissioner Satendra Kumar Sarkar, the inaugural ceremony was also addressed by Jessore regional AED additional director Md Bajlul Haque Mia, Professor Shafiur Rahman, district livestock officer Md Obaydul Karim, Khulna AED deputy director Makhan Lal Das and district fisheries officer Nityananda Das, among others.
The fair, which will end on Tuesday, will remain open from 8:00 am to 8:00 pm.
Different governmental and non-governmental organizations are displaying their goods and technologies at 25 stalls at the fair ground.
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Made-in Bangladesh fair in city in June
Bangladesh Chamber of Industries, a leading trade body, has organised an exhibition of a wide range of industrial products in the city in next June to promote ‘made-in Bangladesh’ items.
Amar Pannyo Amar Desh [my products, my country] Exhibition -2010 will be held at Bangabadhu International Conference Centre in June 10-12, the chamber announced on Sunday.
‘The made-in-Bangladesh fair has been designed to effectively showcase Bangladeshi products and improve public perception about our own products,’ Shahedul Islam Helal, president of the chamber, told a press briefing at its office.
The chamber, which groups manufacturers of a wide range of sectors, has been, for the past couple of years, carrying out the campaign styled ‘my products, my country’, he added.
The business leader pointed out that Bangladeshis industries were now in a critical juncture due to effects of the recent global recession. ‘Such fair help bring back entrepreneurs’ confidence and develop local brands.’
A total of 150 stalls and pavilions will be set up at the fair venue, said Abul Kalam Bhuiyan, a chamber leader. AK Azad, a former BCI president and chairman of Hameem Group, was also present at the briefing.
In organizing the fair, the Bangladesh chamber will receive cooperation from several government and non-government business development organizations including the Board of Investment, SME Foundation, FFCCI, BGMEA, BKMEA, BPGMEA, TOAB and BASIS.
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President for expansion of labour market in Thailand
President Zillur Rahman Sunday urged the newly appointed Bangladesh ambassador to Thailand Qazi Imtiaz Hossain to work for further expanding Bangladesh labour market in Thailand.
The president gave the directive when he called on him prior his departure for Thailand to take up his new assignment. During the call on, the president urged the ambassador to pay a more responsible role in increasing Thai investment in Bangladesh as well as further expansion of trade and commerce relations between the two countries.
‘There are many ways to work for the welfare of one’s own country,’ the president observed.
Qazi Imtiaz assured that he would do his level best in increasing the bilateral relations especially the trade and commerce cooperation between Bangladesh and Thailand. Secretaries concerned of the president’s office were present.
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WORLD ECONOMY
Gas the next fuel to fire Australia’s boom
First gold, then coal and iron ore. Now, a new bonanza is about to be unleashed from beneath down under: Australia’s got gas.
Projects being ramped up to tap huge undersea fields off the country’s northwest could quadruple Australia’s exports of liquefied natural gas in the next few years and turn it into what the country’s resources minister has called an ‘energy superpower.’
It will be the next stage of a long boom that has enriched Australia and made it a key supplier of the raw materials underpinning Asia’s development — from the girders in city skyscrapers to the fuel burned to light them.
‘We have what the world, and particularly the rapidly growing economies of Asia, want — iron ore, energy and minerals,’ said Colin Barnett, the premier of Western Australia state, which is at the heart of the new boom.
The mostly desert state has become known for a frontier atmosphere not unlike that of Australia’s 19th century gold rush, the country’s first mining boom that drew enough migrants to almost triple Australia’s population within a decade.
As a major source of the materials driving Asia’s economic surge, Australia has increasingly been drawn into the orbit of emerging giants China and India, spawning tensions and discord. There are also nagging worries over economic overheating and long-lasting environmental damage caused by its thriving resource industry.
Gas was discovered off Australia’s remote northwest coast in the 1970s. But its exploitation has lagged behind iron ore and coal that have been easier to get and more in demand.
Now, gas is gaining popularity as a cleaner-burning alternative to coal in power generation, with a fraction of the greenhouse gas emissions.
The biggest boost in the sector came last September, when Chevron and joint venture partners ExxonMobil and Royal Dutch Shell announced they would go ahead with the massive Gorgon project.
The venture will drill fields about 80 miles (130 kilometres) offshore to tap into an estimated 40 trillion cubic feet of gas, build pipelines and a liquefaction plant and port for about AU$43 billion ($41 billion) — roughly the size of Guatemala’s gross national product.
If that sounds big, the numbers stack up. The decision to proceed came on the heels of news that ExxonMobil Corp. had signed a 20-year deal worth about AU$50 billion to supply PetroChina Co. with LNG from its share of Gorgon. Similar deals for Gorgon gas worth another AU$70 billion were struck with power companies in Japan, South Korea and India.
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China key to global tourism growth in 2010: UNWTO official
A senior official with the United Nations World Tourism Organization said Saturday that China was expected to contribute a lot to global tourism recovery in 2010.
Taleb Rifai, the secretary general of the UNWTO, said global tourism experienced the most difficult year in 2009 with the global tourism revenue dropped by four per cent.
The UNWTO forecast the global tourism revenue in 2010 was expected to grow by 2-3 per cent and China would contribute a lot to the growth, he said.
He made the remarks at the opening ceremony of the 2010 Boao International Tourism Forum.
Global tourism was at a crucial recovery phase and it was necessary to pool wisdom worldwide and information to boost tourism growth, said Shao Qiwei, chairman of the National Tourism Administration of China.
The forum provided a rare chance for Hainan to learn from advanced experiences in its drive to grow into an international tourism island, said Wei Liucheng, secretary of the Hainan Provincial Committee of the Communist Party of China.
The forum held in Sanya has attracted about 2,000 people from worldwide tourist sectors to exchange their experiences in boosting tourism amid the global financial downturn.
Sponsors of the forum included Hainan Provincial government, the National Tourism Administration and the United Nations World Tourism Organization.
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SOUTH ASIA
Indian imports boost Dubai pearl trade
Trade of natural pearls in Dubai has grown over 10 times monetarily in recent years and exports to India and Australia last year have contributed to this leap, the Dubai Pearl Exchange has said.
This is in addition to re-exports to new markets
and diverse markets including Bahrain, Hong Kong, Japan, Lebanon and Switzerland.
DPE, which is a subsidiary of Dubai Multi Commodities Centre Authority and a pearl trading facility, announced Saturday that a total of 99.6 million dirhams worth of pearls were traded in Dubai in 2009.
The pearl trade rose from 95 million dirhams to 99.6 million dirhams last year, driven by a 30 per cent increase in imports, a considerable feat given the extremely tough economic conditions.
The trend towards high-quality pearls has increased significantly in Dubai, highlighting a shift in consumer preference towards exclusive pearls, it said. Pearl consumption in Dubai has also increased over the last year, reflected through lower exports than the previous year. This was driven by substantial growth in the natural pearls segment, where volumes increased by 50 per cent and values tripled.
‘Pearls are integral to the history of the region, and DMCCA is working towards revitalizing the traditional Arabian pearl trade that once thrived through the ports of the UAE,’ said Ahmed bin Sulayem, executive chairman of DMCCA.
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China to begin trial of 4 Rio Tinto employees
An Australian executive and three other employees of mining giant Rio Tinto face charges of stealing secrets and offering bribes in a Shanghai trial beginning Monday that is viewed as a barometer of China’s handling of foreign business.
China has warned against politicizing the case, which has been an irritant in relations with Australia. Australia has protested the plan to close court sessions involving the commercial secrets charges.
The trial comes at a time of friction with the US over China’s currency policies and doubts among some in the foreign business community over Beijing’s commitment to an open and fair business environment.
Australian citizen Stern Hu and three Chinese nationals were arrested nine months ago at a time when Rio Tinto was acting as lead negotiator for global iron ore suppliers in price talks with Chinese steel mills. Hu was Rio Tinto’s senior executive in China in charge of iron ore.
Few details of the allegations against the suspects have been made public, and the four Rio Tinto employees have not been allowed any public comment since their arrest. Lawyers contacted over the weekend, ahead of Monday’s trial, refused comment.
The Australian department of foreign affairs and trade issued a statement saying it was disappointed with the Chinese court’s decision not to allow its consular officials to attend sessions having to do with commercial secrets.
‘The Government’s disappointment with the decision has been registered with Chinese officials in Beijing and Canberra.
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India faces more rate hikes: analysts
India’s central bank looks set to tighten monetary policy further after raising interest rates for the first time in nearly two years as it bids to check spiraling inflation, economists say.
In a move that surprised experts, the Reserve Bank of India hiked short-term rates from record lows late Friday to battle near double-digit annual inflation amid fast-strengthening industrial output.
Expectations had been for a rate hike at the bank’s scheduled policy review on April 20 but the RBI said in a statement that inflation had ‘been a source of growing concern.’
The wholesale price index in Asia’s third-largest economy was 9.89 per cent in February, well above the central bank’s own estimate of 8.5 per cent by the end of the current financial year this month.
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WORLD ECONOMY
Crude oil prices dive in volatile trade
Oil prices sank heavily this week as traders tracked the dollar and Greek debt concerns, and shrugged off a widely-expected decision from the 12-nation OPEC cartel to maintain crude output levels.
Many other commodities were also dragged lower by stubborn concerns about Greece, and the stronger greenback, which makes dollar-priced raw materials more expensive for buyers using weaker currencies, and therefore hits demand.
‘Oil prices were getting their cue from the broader market as persistent concerns over Greece ... with the commodity complex suffering as well,’ said VTB Capital’s Andrey Kryuchenkov.
‘Otherwise, little changed in the world of oil with market participants still digesting the bullish weekly report on US fuel inventories report and OPEC’s decision to keep production levels unchanged on Wednesday.’
Anxiety over the fate of Greek finances deepened as the European Union groped for common ground on how to ensure that Greece will be able to borrow money on financial markets at rates similar to those paid by its partners.
Greek authorities have made it clear they are prepared to go to the International Monetary Fund for help, sending a further jolt through financial markets.
OPEC meanwhile left its output ceiling at 24.84 million barrels a day at a meeting in Vienna on Wednesday, citing uncertainty in the macroeconomic environment and global oil demand.
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China warns US against yuan sanctions
China warned Sunday it may retaliate if the United States imposes trade sanctions and other penalties over its exchange rate policy, state media reported.
‘We will not turn a blind eye,’ People’s Daily quoted commerce minister Chen Deming as saying in response to a US threat to impose sanctions on China if the US treasury department deems it to be a currency manipulator.
Chen also again denied the yuan was undervalued and accused the United States of ‘politicizing’ the currency issue.
His remarks at a closed-door economic forum in Beijing follow US lawmakers’ demand that US president Barack Obama label China a currency manipulator, a move that could trigger tough penalties.
Treasury secretary Timothy Geithner has to decide on the issue next month.
Beijing has effectively pegged the yuan to the US dollar since mid-2008, which critics say keeps the currency’s value artificially low, making its exports cheaper and thus more competitive on overseas markets.
China, the world’s biggest exporter, has repeatedly defended its exchange rate policy as necessary for the survival of Chinese manufacturers and supporting jobs growth in the economy.
Premier Wen Jiabao said last Sunday China would not be bullied into changing its exchange rate policy.
‘We are opposed to the practice of engaging in mutual finger-pointing among countries or taking strong measures to force other countries to appreciate their currencies,’ he told reporters at the end of China’s annual session of parliament.
Amid the growing trade tensions between China and the US, Beijing said Friday vice commerce minister Zhong Shan will visit Washington from March 24 to 26.
Zhong will meet US lawmakers and officials at the US commerce and treasury departments as well as at the US trade representative’s office.
‘This visit is an effort to consult and exchange views on the Sino-US trade balance, trade frictions and other concerned trade issues,’ a ministry statement said.
Criticism over its forex policy has risen as China’s trade surplus and foreign exchange reserves have skyrocketed.
In 2005, international pressure led China to adopt a managed float of the yuan, which led to a 21 per cent increase in its value against the dollar by 2008, when the global financial crisis struck.
Since then, China has effectively pegged the yuan to the dollar, a move that has helped its exporters weather the global crisis, but also triggered a fresh round of foreign pressure.
China said this month the exchange rate policy was temporary and would be withdrawn ‘sooner or later’ along with other stimulus measures.
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BA cabin crew strike for 2nd day
British Airways cabin crews walked off the job for a second day Sunday, upsetting travel plans for scores of customers, but the airline said its contingency plans were working well and more planes were taking off than expected.
The airline — locked in a bitter dispute with workers over a pay freeze and changing working conditions — said it was able to add several extra flights because many crew members ignored the three-day strike call.
‘Our contingency plans are continuing to work well on Sunday morning around the world,’ it said in a statement.
BA said all long-haul aircraft from overseas airports were able to arrive in London as planned on Sunday morning. The airline added there has been no evidence of strikes at any overseas airports directed at its flights.
Union leaders, however, dispute those claims. Unite, the union representing BA cabin crew, said scores of BA planes were grounded and that 10,000 members walked out on Saturday.
BA was able to avoid extended chaos because it leased planes and crew from rival carriers to take up some of the shortfall. About 1,100 flights out of the 1,950 BA flights scheduled to operate during the three-day walkout were expected to be cancelled.
The airline had said at the start of the strike that it could handle as many as 49,000 passengers a day on both Saturday and Sunday — compared to the average 75,000 for a normal weekend day in March.
The airline on Sunday declined to provide details of whether that goal was achieved or discuss the number of flights cancelled or delayed, but it said that it managed to reinstate more than a dozen of the cancelled flights — including those to Paris, Miami and Los Angeles.
The acrimonious dispute with its workers will be financially crippling for BA. Analysts estimated it could cost the airline more than the 63 million pounds ($95 million) that chief executive Willie Walsh is trying to save through the changes to workers’ pay and conditions.
BA argues that the disputed changes — including a pay freeze in 2010, a switch to part-time work for 3,000 staff and a reduction in cabin crew sizes from 15 to 14 on long-haul flights from Heathrow airport in London — are critical for its survival.
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World coffee exports dip
Global coffee exports declined 9.3 per cent to 28.4 million bags in the first four months of the 2009-10 coffee year ending September, while shipments from
India rose 32 per cent, the International Coffee Organisation has said.
Coffee exports from India, Asia’s third-biggest supplier, rose to 1.02 million bags during October-January period of the 2009-10 crop year against 0.77 million bags in the same period last year, it said. One bag contains 60 kg of coffee.
According to the ICO, world coffee exports declined to 28.4 million bags in the first four months of the current crop year from 31.3 million bags in the year-ago period.
A fall in the world’s total coffee exports was due to 29 per cent dip in shipments of the milds variety from Columbia, one of the world’s top three coffee producers, on low production for the second consecutive year, it said.
‘Furthermore, levels of opening stocks in exporting countries for this crop year are low, while supplies of quality coffee remain tight,’ ICO said. The data maintained by the ICO showed a sharp fall in shipments from the world’s top three leading coffee exporting countries — Brazil, Vietnam and Colombia.
The shipments from Brazil declined to 10.39 million bags during October-January of 2009-10 crop year against 11.58 million bags in the last one.
Vietnam’s coffee exports were down at 5.06 million bags against 5.74 million bags, while Colombia’s shipments stood at 2.47 million bags against 3.62 million bags last crop year.
However, coffee exports from Indonesia and India showed improvement with the former shipping 1.77 million bags against 1.74 million bags in the review period.
A domestic trade expert said India’s shipments are increasing on bigger crop and recovery in demand. Italy and Russia are the major export destination for Indian coffee.
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Europe waits on Germany as Greece deadline looms
The summit opens on Thursday, the subject isn’t even on the agenda and the markets have control of the political keys, even as Germany debates what to do about Greece.
As one experienced observer notes, it’s as if German chancellor Angela Merkel is busy planning what to do with the summer holidays, just as the family car is sliding off the edge of a cliff.
The leaders of the 27 European Union nations gather this week for a summit officially called to decide on a long-term strategy for competing with rival, emerging economies.
Despite the head of the body that manages the bloc’s day-to-day affairs, responsible for supervising Greek efforts to quit blowing the budget, pushing for early agreement, the EU’s serious powerbrokers are still caught in a conundrum.
Under intense pressure from peers, traders and his own counterparts, Merkel’s finance minister, Wolfgang Schaeuble, has made it known that Berlin could stomach bilateral, voluntary loans in an effort to close a deal among eurozone nations.
Brussels officials have been busy this weekend trying to drum up support, in an effort to head off Greek threats to call in the financial cavalry, the International Monetary Fund.
They want loans from the likes of Belgium, through Dexia bank, France and, yes, Germany, through regional money lenders that don’t need a federal constitutional court go-ahead to help.
European commission Chief Jose Manuel Barroso went out on a limb on Friday night to demand that Merkel, French president Nicolas Sarkozy and the rest reach a meaningful political agreement later this week.
There is time yet, but some pointed remarks from Merkel, essentially the EU’s boss, mean anyone looking for a rapid turnaround is likely to be disappointed.
‘I don’t believe that Greece has need for money at the moment, and the Greek government will confirm that,’ Merkel said on German radio on Sunday morning.
‘That’s why I advise against causing turbulence on the markets by raising false expectations about the European Council meeting this Thursday,’ she underlined.
Pressure from Greece, whose prime minister was in town last week, from fellow EU heavyweights like Barroso, and from markets, who had dragged down the euro and raised the bond yields representing the interest rates Greece needs to pay on critical borrowings, didn’t do much there.
The EU needs to act, but Merkel seems to think not just yet.
So what is this week’s summit going to achieve?
A deal on broad-brush strategy going forward to 2020? Even before the weekend, EU officials could show you the final conclusions on the issue behind the Spring summit- all that’s missing is a green light from leaders, almost all of whom will be long gone from their national political scene before the time to judge these pledges comes up.
Another on fighting climate change? Again, anyone following the summit in Brussels will, more than anything else, want to know if Europe is going to cough up real money of its own to stop Greece’s problems threatening the euro currency and its economy as a whole.
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China says trade deficit likely in March
China’s export-dependent economy is likely to experience a trade deficit in March, a senior government official warned Sunday, possibly signalling a slowdown in overseas shipments.
Commerce minister Chen Deming also defended the nation’s exchange rate policy, noting a stronger yuan by itself could not resolve global trade imbalances.
Chen’s remarks at the closed-door China Development Forum in the capital were published by the official Xinhua news agency and People’s Daily newspaper and come amid growing international pressure for the yuan to appreciate.
Analysts have warned of a temporary slump in exports this month, after manufacturers cranked up production before China’s Lunar New Year holiday in February to meet overseas orders for the Easter holiday in April.
China’s exports soared 45.7 per cent in February, their fastest pace in three years, continuing a rebound that started in December when exports grew 17.7 per cent and snapped a 13-month falling streak.
The nation’s trade surplus reached $7.61 billion in February, up 57.2 per cent year-on-year, while imports rose 44.7 per cent year-on-year to $86.9 billion.
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GM Daewoo to recall 58,000 vehicles in S Korea
GM Daewoo, the South Korean subsidiary of US car giant General Motors, Sunday recalled more than 58,000 vehicles because of defects, in the latest blow to Asia’s crisis-hit auto industry.
The recall affects vehicles sold in South Korea but will be expanded to include those sold abroad, according to GM Daewoo, the country’s third largest carmaker. It gave no immediate idea of the size of the foreign recall, or which countries would be affected.
‘GM Daewoo Auto and Technology has reported that it will recall 58,696 vehicles that it has made and sold in Winstrom, Lacetti Premiere and Damas models due to manufacturing defects,’ Seoul’s ministry of land, transport and maritime affairs said in a statement.
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UPDATE----------------MARCH 21, 2010 SUNDAY
Bangladesh
News
Four private companies to take $36m in foreign suppliers’ credit
Four local private companies have won the approval by the government for securing a total of $36.37 million of suppliers’ credit from three foreign companies to import machinery and equipments, official sources said.
The four local companies — Dutch-Bangla Pack Limited, Ever Smart Bangladesh Limited, Banglalion Communication Limited and RFL Plastic Limited — will also have to take services from the foreign companies in exchange of taking the suppliers’ credit, according to their contracts.
Supplier’s credit is an agreement between a supplier and a buyer whereby the supplier agrees to receive deferred payment and accepts payment in installments for the supplied goods.
The central bank’s scrutiny committee for supplier’s credit, at a meeting chaired by the Bangladesh Bank governor, Atiur Rahman, in the first week of March, gave its consent to the proposals from the four local companies to get the suppliers’ credit, the first time during the present government.
The Board of Investment also approved the proposals.
‘We have given our consent to the proposals for taking suppliers’ credit in exchange for importing machinery and equipments,’ a member of the scrutiny committee told New Age on Friday.
The committee gave the permission to the RFL Plastic Company giving condition that the company would take loan from Prime Bank offshore account, said the member.
Another member said they were assured that repayment of suppliers’ credit to be drawn from foreign companies would not affect the country’s foreign exchange reserve which stood at around d $10. billion.
The Dutch-Bangla Pack limited will get loan of $1.50 million from the Netherlands’ LC Packaging International for new machinery at 4 per cent interest rate annually plus the London’s inter-bank offered rate.
The LC Packaging loan, which will come through offshore unit of Prime Bank Limited, will be repaid in seven years and six months.
Ever Smart Bangladesh Limited will get foreign loan of $13.37 million from its equity holder of Singapore’s CPAT Private Limited through Citibank N.A. Motijheel branch to expand their operations.
The RFL Plastic Limited will borrow $15 million from offshore unit of the Prime Bank at a 3.5 per cent interest rate plus LIBOR. The fund will be used to set up a new factory.
Asked to explain the purchase of machinery and equipment worth $3.15 million from the local market, the company’s representative informed the committee that it would be easier and faster to implement the expansion project, meeting sources said.
Banglalion Communication Limited will get a loan of $6.58 million from Chinese company ZTE Corporation. That loan excludes engineering service charge of $0.41 million. The borrowing company will have to repay the supplier’s credit through their nominated AB Bank Limited, Gulshan Branch.
The amount of loan at $36.37 million is not a big deal, given the country’s foreign currency reserve, former finance adviser AB Mirza Azizul Islam told New Age.
‘It is often alleged that suppliers’ credits are over priced, resulting in more fund remitted through repayment of the credit,’ he viewed.
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NBR asked to settle 12,000 cases to realize tax
A parliamentary panel has asked the National Board of Revenue to immediately settle some 12,000 pending cases for realizing an outstanding tax amount of Tk 5,000 crore.
The parliamentary standing committee on the finance ministry at a meeting on Saturday gave the directive and suggested that the board should hire additional manpower, if needed, to settle the cases as ‘quickly as possible’.
The committee chairman, AFM Mustafa Kamal, who chaired the meeting, said that the revenue [Tk-5,000cr] remained unrealized as different parties filed lawsuits against government demands for tax of different types.
‘These cases have been pending for a long time,’ he said after the meeting held at the Sangsad Bhaban.
The government has fixed a target of earning Tk 61,000 crore revenue in the budget for the 2009-10 fiscal year, the meeting was told.
It expressed satisfaction at the revenue board’s performance in the first six months of the fiscal, saying that the board needed more steps to achieve the target at the end of the fiscal.
The meeting asked the government to reconstitute the income tax tribunal comprising manpower from judicial service and the government’s accounts department.
The standing committee also asked the authorities concerned to make easy the process of submitting income tax return by individuals so that the people are encouraged to pay tax.
The meeting suggested the finance ministry to take an initiative to bring the 1984 income tax ordinance in the parliament to make it compatible with the current situation.
Among others, committee members Ali Ashraf, AKM Maidul Islam, MA Mannan and Farida Rahman attended the meeting.
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World News
Thousands of BA flights cancelled as crew on strike
British Airways cancelled more than 1,000 flights after its cabin crew launched a three-day strike Saturday, wreaking havoc on the plans of tens of thousands of passengers just before the busy spring holiday season.
Hoping to keep as many passengers happy as possible, BA scrambled to rebook some on other services, chartered planes from rival airlines and drafted in volunteer crew. But it still had to scrap more than half of its 1,950 scheduled flights over the period.
Chief executive Willie Walsh issued a direct apology via YouTube for the walkout, the airlines first in almost 15 years, saying it was a ‘terrible day for BA.’
The strike — backed by some unions in the United States, Germany and Spain — also risked harm to Britain’s Labour government before a tough general election expected before June.
On Saturday morning at BA’s London Heathrow hub, the cavernous Terminal 5 was nearly deserted after some passengers had flown out early to avoid the strike or simply stayed away altogether. But delays were beginning to mount and passengers were warned that many long-haul flights would not have full meal services.
One man trying to get home to Sweden said he was already looking at a four-hour delay.
‘Our flight from Dallas arrived two hours late, and now we’re waiting to go to Stockholm — that flight is two hours late as well,’ said Bjorn Barka, a high school principal.
Michael Clements, a security director for a California-based company, was able to check in for his business trip to Amsterdam but was told it would be an hour before he could check in his heavy luggage. ‘Not enough people,’ he said with a shrug.
Charity worker Elizabeth Robb was told there would be no hot food on her flight to Dubai.
The Eurostar train service between London and continental Europe and Virgin’s rail services between London and Scotland were expected to be busy as passengers sought alternate routes.
BA also warned that the disruption would likely last several days beyond the three-day strike, because of a knock-on effect on flights that would carry through to the end of a second strike planned for March 27-30.
‘We’re in limbo land,’ said Susan Danby, a school worker from the northern English city of Hull. She is due to fly March 29 to Las Vegas with friends to celebrate their 50th birthdays. ‘This is our dream trip, we booked it last August and we’ve been planning it for years.’
‘We all want more money and better conditions, but people shouldn’t ruin other people’s holidays,’ Danby said.
As protesters were readying picket lines Saturday outside London’s Heathrow international airport, analysts estimated BA has already lost more than 25 million pounds (more than $37 million) because of cancelled tickets and contingency costs.
The two planned strikes combined could cost the airline more than the 63 million pounds ($95 million) that Walsh is trying to save through the disputed changes to workers’ pay and conditions.
BA’s pilots are not part of the strike, after their union resolved a separate dispute over pay with the airline.
US, German and Spanish unions have given some support for Unite’s action, but stopped short of pledges for coordinated activity that would disrupt BA’s ability to refuel and service the planes it is operating during the walkout.
The US International Brotherhood of Teamsters, which represents 40,000 aviation industry workers, urged travelers to find alternatives and said it was keeping its options ‘open.’ The US Association of Professional Flight Attendants also expressed support for BA.
‘Many of us have taken decisions not to pull extra flights or routes to help BA pick up the slack,’ said a pilot for a Chicago-based airline, who spoke on condition of anonymity for fear it could cause him repercussions with his job. ‘We don’t want to be seen as supporting scab labour.’
BA said it would handle as many as 49,000 passengers on both Saturday and Sunday. That compares with the average 75,000 for a normal weekend day in March.
At its Heathrow base, more than 60 per cent of long-haul flights will operate, but only 30 per cent of short-haul. At Gatwick, all long-haul flights and more than half short-haul flights will run as normal. London City flights, including flights to New York, are operating as normal.
Aside from hurting BA financially, the strike is also an unwelcome event for Britain’s governing Labour Party before the upcoming national elections.
Prime Minister Gordon Brown irritated Unite, a major political donor, by calling the union ‘deplorable’ and saying as late as Friday night that it should call off the strike.
Britain faces even more possible travel chaos in the run-up to the April 2-5 Easter break, as railway signal workers voted last week to join rail maintenance workers in a strike. The rail, maritime and transport union has not called dates for the walkout, but refused to rule out the long Easter weekend.
And over this weekend, engineering works on the London Underground were forcing closures between central London and Heathrow, though the Heathrow Express train service was operating as normal.
Opposition Conservative Party leader David Cameron criticized the stranglehold that unions such as Unite have over the Labour Party.
Cameron is seeking to evoke memories of the difficulties the Labour government, which receives millions of pounds (dollars) in donations from unions, had in the 1970s, culminating in the mass strikes that became known as Britain’s ‘winter of discontent’ and led to the election of Conservative leader Margaret Thatcher in 1979. Unite alone has donated 11 million pounds to the Labour Party in recent years.
‘Once again, under Gordon Brown the vested interests triumph and the people lose out,’ Cameron said Saturday. ‘This threatens the future of one of Britain’s greatest companies along with thousands of jobs.’
At a rally of hundreds of striking workers in Bedfont, north of London, Unite spokesman Steve Turner said BA ‘is effectively at war with very proud, very dedicated employees.’ In a symbol of the acrimonious nature of the dispute, some protesters wore masks depicting Walsh as Hitler.
Walsh said the disputed changes are critical to the airline’s survival — BA has been particularly hard hit by the global economic recession because of its heavy running costs and reliance on increasingly unpopular premium fares.
The airline on Friday offered a compromise on a proposed pay freeze this year, offering a three per cent rise next year and the year after and then an inflation-linked increase in 2013/14 capped at four per cent.
Unite argues it was not properly consulted on the changes, which also include a switch to part-time work for 3,000 staff and a reduction in cabin crew sizes from 15 to 14 on long-haul flights from Heathrow.
Any passengers with cancelled flights from Saturday through the end of the second planned strike on March 30 will be allowed to rebook on another BA flight within 355 days at no extra charge, but no refunds were being offered, the airline said.
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BANGLADESH
EXCLUSIVE
‘Country set to lose $2b RMG market, 3 lakh jobs’
The country is set to lose an opportunity to create 3 lakh jobs due to decline in readymade garment exports this fiscal, believes an apparel sector leader.
Bangladesh is likely to lose $2 billion or Tk 13,000 crore in export value compared to its market share last year, Anwar-Ul-Alam Chowdhury Parvez, a former president of Bangladesh Garment Manufacturers and Exporters Association, said analyzing the export trends.
Apparel exports dropped 13.82 per cent in knitwear and 16.13 per cent in woven garments in the six months of the fiscal, official statistics show.
‘A 16 per cent negative growth would mean a loss of 300,000 employments directly and a million jobs indirectly,’ he said during an interaction with a group of journalists in the city on Saturday.
The decline in garment exports has been attributed to Bangladesh’s loss of competitiveness in the international market plagued by global recession and complacence at the national level that Bangladesh’s exports would not be affected.
‘Bangladesh’s rivals such as China, India, Vietnam and Cambodia have attained a positive export growth. All these countries excepting Bangladesh have cut per unit price of garments to retain their market shares,’ Parvez noted.
In their bid to tackle the impacts of recession, China cut per unit price by 12.44 per cent, India 4.68 per cent, Vietnam 12.42 per cent and Cambodia 6.59 per cent between January and December 2008.
Bangladeshi exporters, who offered the lowest price so far, rather increased per unit price by 2.32 per cent. After the price readjustments, their comparative per unit price stands at $2.36 for Bangladesh, $2.45 for Cambodia, $2.68 for China, $3.07 for India and $2.91 for Vietnam.
‘Bangladeshi manufacturers could not reduce the price because they did not get the support that exporters of other countries are offered by their governments. Moreover, energy crisis has increased the cost of production,’ said the business leader.
He gave an estimate that the garment exporters would have slashed price by 2-3 per cent, had the government agreed to spend $210 million overall to support them.
The Bangladesh government, in its stimulus package for export sectors, announced support such as interest rate cut, loan rescheduling facilities and waiver of license fees on captive power plants.
Other countries either devalued their currencies or provided fiscal and financial support for exports to retain the market in the face of challenges of global recession, Parvez pointed out.
The finance minister, AMA Muhith, recently said the government would review the situation and consider if it would continue the stimulus package for export-oriented industries in the next fiscal.
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NEWS IN FOCUS
Tk 600cr fresh water shrimps exported to EU after ban withdrawal
Bangladesh has exported freshwater shrimps worth Tk 600 crore to destinations mostly European countries since January 10 after withdrawal of the `self-imposed ban’ on export of such items to the EU countries, said chief of Bangladesh Frozen Foods Exporters Association on Saturday.
The BFFEA is also set to earn Tk 4,500 crore by exporting freshwater shrimp if any problem does not arise, Musa Meah, president of the BFFEA told the Bangladesh Sangbad Sangstha.
Bangladesh exported freshwater shrimp (galda, also known as green tiger prawn) worth Tk 114 crore to different destinations excepting the EU during June to November, 2009 while it was Tk 246 crore during corresponding period in 2008.
Besides, export of shrimp (bagda) stood Tk 1,348 crore during June- November in 2009, a Tk 173 crore more than that of the same period of the previous year.
The country exported around 50,368 tonnes of shrimp (all categories) and earned Tk 2,774 crore last year while this year the government is expected to export 55,000 tonnes of shrimp.
Musa sought Tk 425 crore initial financial supports from the government to help shrimp farmers cope with the rise of raw materials’ price in the international market.
‘Shrimp production has been reduced due to price rise of raw materials in the international market, which led to lower shrimp production. Initially we need Tk 425 crore to increase the production,’ he told the news agency.
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Trade through Bhomra land port suspended
Trade with India through Bhomra land port remained suspended as Ghojadanga Truck Drivers’ Association enforced an indefinite strike on Saturday morning at the Ghojadanga land port in India.
The strike was announced following an alleged assault on an Indian truck driver Sirajul Islam by members of the BDR over parking of his truck on the main road at the port on March 19, said Bhomra clearing and forwarding association sources.
According to reports received from across the border, leaders of Ghojadanga Truck Drivers’ Association and Ghojadanga Truck Owners’ Association on Saturday held a meeting over the issue at Ghojadanga where the drivers’ association demanded punishment of the BDR men while the owners’ association considered the issue resolved through dialogue between the BDR and the truckers on the spot.
The truckcers enforced indefinite strike at about 11:00am at Ghojadanga to press home their demand, sources said.
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Thakurgaon Sugar Mills incurs Tk 16cr in losses
The production in Thakurgaon Sugar Mills increased this year reducing its loss by Tk 3.5
crore as compared to the last year.
Sources at the mills said this year the amount of loss came down to Tk 16 crore from last year’s Tk 19.52 crore. During the current season, other expenses of about Tk 70 lakh has also come down due to strict administrative measures.
Managing director of the Mills Rafiqul Islam said that in the current season the mills started production of sugar from December 25, 2009 and continued up to February 9, 2010. During the time, the mills produced 3,814 tonnes of sugar by crushing 57,438 tonnes of sugarcane. The rate of sugar recovery was 6.70 per cent.
The MD further said that this year the mills purchased sugarcane from the farmers at Tk 66 per maund (40 kg) but in the next season the purchasing rate of sugarcane will be Tk 80 per maund (40 kg).
He also said that last year sugarcane was cultivated on 5,492 acres of land only in the mills zone. But this year sugarcane was cultivated on 10,000 acres of land. For sugarcane cultivation the mills has distributed a loan of Tk. 5 crore in terms of seed, fertilizer and irrigation among the sugarcane growers.
This year the farmers become interested in STP (spaced transplantation) method of cultivation because the production in STP method is one and a half times more than that in the conventional method of cultivation. The mills authority is also giving Tk. 4,400 per acre as subsidy to the growers for STP method of cultivation.
Former president of Central Sugarcane Growers Association Yunus Ali said that if the mills wanted to bring down the loss further, they had to increase the area of sugarcane plantation in the mills zone, give more subsidy to the growers, take effective measures to curb corruption and stop the process of leasing the lands of the `Mills Farms’ to the potato growers and give the lease to the genuine sugarcane growers.
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WORLD ECONOMY
Lebanon, Jordan sign economic agreements
Lebanon and Jordan signed16 agreements, protocols and memoranda of understanding in Beirut on Friday, Lebanese PM Office announced.
Lebanese Prime Minister Saad Hariri met with visiting Jordanian Prime Minister Samir Rifai Friday at the Grand Serail in down town Beirut. Hariri and his Jordanian counterpart headed the meeting of the Lebanese-Jordanian committee and signed 16 agreements between the two countries.
The agreements include cooperation between the Jordanian Institute for the Development of Economic Projects and the Lebanese Trade Information Centre for the years 2010-2011, a technical program to activate the mutual recognition agreement on conformity certificates and quality marks, and administrative cooperation agreement on customs procedures.
They also include cooperation on animal health and production, cooperation in the agricultural sector, and the executive program for tourism cooperation for the years 2010-2012.
Earlier, Lebanese president Michel Suleiman met with Rifai at the presidential palace near Baabda where they discussed ‘the excellent relations between the two countries and the situation in the region’ said a statement released by Suleiman’s office.
Suleiman expressed his gratitude to Jordan’s King, and invited him to visit Lebanon. He also hailed the bilateral relations, and encouraged the signing of cooperation agreements between them.
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Wal-Mart to slash grocery prices
Wal-Mart Stores Inc will cut food prices and mount a new ad campaign over the next six weeks, a threat to other US grocers that sent an industry shares index down more than 2 per cent on Friday.
A Morgan Stanley analyst first reported the world’s largest retailer’s plan; calling it a major setback for other US grocers, and the company confirmed the promotions in an email.
‘While this helps address Walmart’s traffic woes, we view this as a major setback for the grocery stocks, which have been rallying on hopes of a return to more rational pricing,’ Morgan Stanley analyst Mark Wiltamuth wrote in a note on Friday.
The Standard & Poor’s Food Retail Sub-Industry Index closed down 2.2 per cent.
Walmart has used aggressive pricing in grocery and other units to bring shoppers into its stores. The grocery business is particularly pressured by such pricing, as its profit margins are already low.
Investors in Walmart have been concerned about signs that shoppers who gravitated to its stores during the worst of the recession — boosting sales and profits — are returning to rivals. Traffic fell in Walmart’s US stores during its fourth quarter, despite the holiday season, when shopping is at its peak.
In the promotions, customers entering Walmart stores will be greeted by signs advertising price rollbacks on 10,000 items. The focus of the price cuts will be on food and other consumables.
The changes, to hit stores by April 1, will be supported by a television and media campaign.
That timing means the campaign would be in place just before Easter, which falls on April 4 and is a big time for home-cooked meals.
Wiltamuth cited the ‘continued strain’ on grocers’ margins and questioned whether the market should begin to ask whether grocers will be able to pass inflationary costs through to consumers.
Safeway Inc shares closed down 2.5 per cent at $24.04 and Supervalu Inc shares fell 2.4 per cent to $16.73 on the New York Stock Exchange. Kroger Co shares fell 2.7 per cent to $21.64 and Whole Foods Market Inc closed down 0.5 per cent at $35.83 on the NASDAQ.
Walmart shares closed down 1.1 per cent at $55.34 on the NYSE.
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SOUTH ASIA
Indian govt clears ONGC, partners’ Venezuela investment
Saturday gave Oil and Natural Gas Corp (ONGC) and partner’s approval to invest $2.181 billion in a giant oilfield in Venezuela that will give energy deficient India 3.6 million tonnes a year of crude oil.
ONGC Videsh Ltd, the overseas arm of the state explorer, will invest $1.333 billion between 2010 and 2015 as its share of spending in the 400,000 barrels per day ‘Carabobo-1’ project. Indian Oil Corp (IOC) and Oil India will invest $ 454 million each in the project.
The cabinet committee on economic affairs approved the investment by Indian firms who together hold 18 per cent stake in the Carabobo-1 project, Indian home minister P Chidambaram told reporters after a meeting.
The Carabobo-1 project of the Orinoco extra-heavy oil belt of Venezuela would involve a total investment of close to $21 billion over 25 years. The three firms have for the time sought the government’s approval for investing $2.18 billion and may be able to fund most of the future investment from the revenues they will start earning when the project goes on-stream in three years.
Last month, the three won rights to develop Carabobo-1 project along with Spain’s Repsol-YPF and Petronas of Malaysia after committing themselves to pay a signing amount of $1.05 billion and an equivalent to Venezuela’s state-run PdV in loan.
Repsol-YPF, OVL and Petronas will each hold 11 per cent stake in the ‘Mixed Company’ that will develop Carabobo-1, with 7 per cent being split between IOC and OIL. Balance 60 per cent will be with PdV. The project will give India 3.6 million tonnes of crude oil annually out of the envisaged output of 400,000 barrels a day.
Chidambaram said OVL’s investment of $1.33 billion from 2010 to 2015 is made up of $302 million in equity, $289 million in loan of PdV, $ 454 million as contribution to Mixed Company as debt and $ 289 million as signature bonus.
IOC and OIL’s exposure of $0424 million each is made up of $96 million in equity contribution, $92 million in loan to PdV, $144 million as contribution to Mixed Company by way of debt and $92 million as signature bonus.
The Carabobo-1 project, comprising Carabobo-1 Central and Carabobo-1 North blocks, would develop extra-heavy crude production capacity of up to 400,000 barrels per day (20 million tonnes a year). Early output of at least 50,000 bpd is slated to start in 2012-13, rising to peak in 2016.
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WORLD
Rio staff trial seen as test for China
The trial of four Rio Tinto employees next week will be widely watched as a test of whether China is willing to honour commitments to foreign investors and be a responsible member of the world community.
Australian national Stern Hu and three Chinese employees of the mining giant will be in the dock Monday on bribery and trade secrets charges in a case that has upset Australia and raised questions about the rule of law in China.
Canberra wants transparency in the three-day trial in Shanghai, but hearings on the industrial espionage charges will be closed, adding to questions over whether the men will get a fair hearing in the politically charged case.
The four defendants, all employees of the Anglo-Australian mining giant, were arrested last July during contentious iron ore contract negotiations which later collapsed, and after Rio snubbed a near $20-billion cash injection from state-run Chinese mining firm Chinalco.
Australian Prime Minister Kevin Rudd Thursday warned China the ‘world will be watching’ the trial.
Australian National University law professor Ann Kent told AFP the timing of the trial smacked of gamesmanship.
It opens the same day Rio Tinto chief executive Tom Albanese speaks at an economic forum in Beijing and as tough iron ore price talks between Chinese steel mills and foreign miners are under way once again.
‘This is blatant power politics (by China),’ Kent said, adding that the timing was an ‘extraordinary coincidence.’
‘There might be a suggestion of a quid pro quo — we might let your executives off (with a light sentence) if you give us what we want.’
The trial also comes against the background of an announcement Friday from Rio Tinto that it had signed a $1.35 billion deal with Chinalco to develop a huge mine in Guinea.
Sino-Australian trade has rocketed in recent years, driven by China’s growing demand for Australian resources and the two countries have worked to minimize the diplomatic fallout.
Both sides said this week the trial will not affect bilateral relations, but the episode has put Canberra in a difficult position, said David Martin Jones, an international relations expert at Queensland University.
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Japan lends Turkmenistan $500 million for fertiliser plant
Japan’s state-run Bank for International Cooperation (JBIC) has loaned Turkmenistan $500 million to build a fertiliser plant, a state newspaper said Saturday.
The credit is for an ammonia and urea plant to be built by Japanese firms Kawasaki Plant Systems and Sojitz Corporation in the city of Mari in the south of the Central Asian state where its vast cotton industry is based, the Neutral Turkmenistan daily reported.
Ex-Soviet Turkmenistan harvests about one million tonnes of cotton yearly, according to official sources, and is among the world’s top 10 largest cotton producers.
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SOUTH ASIA
Bharti to sell iPhone 3GS in India
India’s top mobile phone company, Bharti Airtel, said Friday it had reached a deal with Apple Inc. to sell the iPhone 3GS in India.
In a statement, the company said the pact would allow Bharti to bring the latest iPhone to India ‘in the coming months.’
The announcement came a day after Bharti submitted its bid in a bandwidth auction for third generation, or 3G, mobile telephony services in India.
The successful bidders will be allowed to offer 3G services on a commercial basis from September.
The auction is expected to give an extra fillip to India’s mobile industry, already the fastest expanding globally, where scarcity of bandwidth has affected call quality.
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WORLD
Peru aims for Japan, South Korea trade talks in April
Peru is aiming to complete negotiations on free trade agreements with Japan and South Korea in April, trade minister Martin Perez said Friday.
The new round of talks with South Korea will take place in Washington in early April, while the Japan meeting will held the week of April 26 in Tokyo, Perez said, according to state news agency Andina.
‘Both Asian nations want this to be the last round’ of negotiations, he added.
At the last meeting between Peruvian and South Korean representatives, Seoul offered to lower a proposed tariff on 200 Peruvian products, Perez said.
He said Peru hoped Japan would exclude fewer than 1,000 Peruvian products from the tariff scheme in the economic partnership agreement under negotiation.
Trade negotiations between South Korea and Japan began in March and May of last year, respectively.
Peru said earlier this month that its free trade agreement with China went into effect at the same time as it sealed a similar trade pact with the European Union jointly with Colombia.
It also has free trade agreements with Canada, Singapore and the United States.
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US stocks sink after India’s surprise rate hike
US stocks fell Friday as investors took profits from recent gains and fretted about the global economic recovery following India’s surprise interest rate hike.
After opening with small gains, the Dow Jones Industrial Average fell 37.19 points (0.35 per cent) to finish at 10,741.98, snapping an eight-session rally that had brought the blue-chip index to an almost 18-month high.The tech-rich Nasdaq composite shed 16.87 points (0.71 per cent) at 2,374.41 while the broad-market Standard & Poor’s 500 index retreated 5.92 points (0.51 per cent) to 1,159.90.
The major indices spent almost the entire session in negative territory and closed better than lows hit in the final hour of trade amid the quarterly expiration of futures and options contracts, known as the ‘quadruple-witching’ hour.
Stocks extended losses ‘after the central bank of India made an intra-meeting move to raise interest rates, and traders viewed the action as a reminder that strong economic growth can bring the potential for rate hikes, which tend to give stock markets indigestion,’ Charles Schwab & Co. analysts said in a client note.
Traders ‘used the action as an excuse to book profits after a nice run,’ they said.
The Reserve Bank of India said as part of its exit strategy from extraordinary support measures taken in the face of the global economic crisis, it was raising two repo rates by a quarter of a percentage points to curb rising inflationary pressures, ‘with immediate effect.’
‘Given the lags in monetary policy, it is better to respond in a timely manner, even if it is outside the scheduled policy reviews, than take stronger measures at a later stage when inflationary expectations have accentuated,’ the central bank said in a statement.
Among stocks in the spotlight Friday, struggling handheld device maker Palm plunged 29.16 per cent to $4.00. It reported another quarterly loss after the market close Thursday and gave disappointing guidance.
Google dropped 1.12 per cent to $560.03. According to China Business News, the Internet giant will end operations in China on April 10, citing an official with an unidentified Chinese advertising agency, making good on its threat in January to pull out because of censorship and cyber attacks. Google’s Chinese rival Baidu climbed 0.88 per cent to $569.65.
Boeing slipped 0.21 per cent to $70.72. The aerospace giant said it would ramp up production on 777 and 747-8 planes to support an anticipated increase in customer demand as the aviation market rebounds amid a global economic recovery.
Electronics retail chain Best Buy added 1.33 per cent at $40.99 after a Goldman Sachs analyst upgrade.
The bond market weakened. The yield on the 10-year US Treasury bond rose to 3.687 per cent from 3.672 per cent on Thursday and that on the 30-year bond rose to 4.579 per cent from 4.572 per cent. Bond prices and yields move in opposite directions.
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Greek woes send dollar skyward
The dollar continued to hammer the euro and British pound on Friday, amid continued concerns about the Greek debt crisis and the robustness of Britain’s economic recovery.
The euro fetched $1.3530 by 2130 GMT, down from $1.3603 late Thursday, in the second straight day of heavy losses for the single European currency.
The dollar was up against the Japanese currency at 90.54 yen, versus 90.39 late Thursday.
‘Uncertainties stemming from the pending Greek bailout have sent the euro sharply lower for the second straight day,’ said Kathy Lien, director of currency research at Global Forex Trading.
Splits between France and Germany over the desirability of an International Monetary Fund bailout for Greece continued to weigh on the euro, ahead of a key European Union summit March 25-26.
CMC Markets analyst Michael Hewson said some ‘misplaced optimism’ about an EU bailout package for Greece was starting to ebb away, sending the euro lower.
The dollar also posted gains against the British pound, which bought just $1.5013, versus $1.5243 in late trades Thursday.
‘The British pound extended the previous day’s decline and slipped to a low of 1.5129 during the European trade as the Bank of England continued to see a risk for a double-dip recession,’ said David Song a currency analyst with DailyFX.com
The dollar rose to 1.0613 Swiss francs, versus 1.0579 on Thursday.
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Pressure mounts over IMF role in Greek crisis
Europe split over IMF intervention for debt-ridden Greece on Friday, upping pressure on national leaders to resolve crisis plans just days from a crunch EU summit.
Germany, changing tack, said it was open to the possibility of the International Monetary Fund helping Greece while the Netherlands, Finland and Italy — to varying degrees — also declared themselve open to IMF involvement.
‘The German government does not rule out aid from the IMF if Greece requests it,’ spokesman Ulrich Wilhelm said after reports that Berlin was concerned European aid for Greece could break German and EU law.
Investors reacted negatively, with Greek government bond yields- the interest rate that Athens must pay in order to raise money on debt markets- rising sharply. The euro weakened against the dollar, sliding to $1.3531 in London trade compared to 1.3603 in New York late on Thursday.
Non-euro peers Britain and Sweden firmly back an approach to the International Monetary Fund if Athens concludes that it cannot keep up with debt repayments.
The shift is not universal. There has been no change in the French position, which holds that the Greek troubles are an internal eurozone matter.
The IMF has never rescued a eurozone member, and a Greek bailout would be seen by some as a humiliation for the 16-nation bloc.
EU finance ministers agreed on the broad lines of such a European assistance plan when they met in the Belgian capital on Monday.
The EU’s budgetary overlord, Olli Rehn, said leaders had to come to a ‘specific political conclusion’ and clarify the way forward ‘next week,’ having compared notes with IMF chief Dominique Strauss-Kahn.
But in a pointed sign, a diplomatic source warned it was unlikely that EU president Herman Van Rompuy would find sufficient support to place the issue on the formal agenda for the March 25 and 26 EU summit.
Greek Prime Minister George Papandreou has urged the EU to help his country borrow more cheaply when they meet next week.
EU commission chief Jose Manuel Barroso on Friday urged European leaders to approve a coordinated loan facility for debt-laden Greece ‘as soon as possible,’ in order to restore confidence.
‘We cannot prolong any further the current situation,’ Barroso warned days ahead of a European summit.
‘I urge the EU’s leaders to agree on this instrument as soon as possible,’ he stressed, amid fears that the pressure on Greece could end up damaging the eurozone.
The help Barroso had in mind would be ‘a system of coordinated bilateral loans,’ and as such would be compatible with EU law which bans bailout loans to any of the eurozone countries.
Barroso did not go into any great detail about the sums involved but an EU official said Greece would require ‘around 22 billion euros ($30 billion),’ to help it service its massive debt burden.
According to another EU official, several partially or fully state-owned banks and financial institutions across Europe are considered as potential candidates to offer loans, including France’s Caisse des Depots, the Franco-Belgian bank Dexia and, if Berlin gives the green light, regional German banks.
The aid plan would allow Greece to borrow at ‘lower interest rates than it is currently paying’ on the markets, the source said.
The yield on Greek 10-year bonds rose Friday to 6.333 per cent from 6.265 per cent on Thursday, more than double the rate for German bonds.
‘Time is running out’ for definitive action, said Ulrich Leuchtmann, an analyst at Germany’s Commerzbank, as Greece needs to raise some 20 billion euros ($27 billion) from international debt markets over the next two months.
Under pressure from the EU, Athens has announced draconian action to fix its public finances- triggering strikes and violent protests on the streets of Athens.
On Friday, Papandreou said his country had come ‘one step from being unable to borrow’ on the world markets.
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YouTube creators cashed in big on sale to Google: documents
YouTube’s creators walked away with hundreds of millions of dollars after the startup was bought by Google in 2006, according to documents released in a copyright brawl between Viacom and Google.
While former PayPal pals Chad Hurley, Steve Chen and Jawed Karim each scored fortunes in Google stock by selling YouTube to the Internet giant, a venture capital firm that backed the online video-sharing service landed the lion’s share of the wealth.
Sequoia Capital got $516 million worth of Google stock as a return on approximately $9 million it invested in YouTube in late 2005 and early 2006, according to court documents made public this week.
Hurley’s haul was worth $334 million and Chen’s chunk tallied $301 million based on the stock price the November day the deal with Google was sealed, according to the documents.
YouTube’s third co-founder, Jawed Karim, had left the startup by then but got about $66 million worth of Google stock for his share in the fledgling company, the documents indicated.
Viacom presented the evidence while trying to make its case that YouTube’s founders and Google benefited from letting copyrighted videos is posted at the website.
Viacom is suing Google and YouTube for a billion dollars, arguing that they condoned pirated video clips at the website to boost its popularity.
Viacom was also a target in legal filings with Google countering that the US entertainment giant foisted some of its own content onto YouTube’s online stage and even wanted to buy the firm.
Viacom attorneys contended that after YouTube was launched in 2005, the startup’s strategy was to achieve meteoric growth by whatever means necessary so it would become a prize acquisition target.
YouTube was a year-old internet sensation when Google bought it in a $1.65-billion stock deal in 2006.
Viacom filed its copyright lawsuit against YouTube and Google two years ago.
The lawsuit has been merged with similar civil litigation being pursued by the English Premier League, which says soccer game clips are routinely posted on YouTube without authorization.
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China inflation goal tough but reachable: official
China’s 2010 inflation goal of 3 per cent is tough but achievable, with good grain supplies and excess capacity helping keep prices down; while growth should hit 8 or 9 per cent, senior government advisers told a conference on Saturday.
The chief economist of the National Bureau of Statistics, Yao Jungian, told the China High Level Development Forum that the government was battling a range of forces pushing up consumer prices this year — a key concern in Beijing.
Consumer prices rose 2.7 per cent in the year to February, up from 1.5 per cent in January and flirting with the government’s 3 per cent target for 2010.
More than one in two Chinese savers regard the current inflation rate as unacceptable, according to a central bank survey on Tuesday.
In his comments to the closed-door gathering, carried by the official Xinhua news agency, Yao said the challenges for China include the rising costs of imported inputs in a globalised economy, the impact of high inflation forecasts on consumer behavior, polluting growth and building a greener economy.
‘Achieving this year’s target of keeping the increase in the consumer price index at around 3 per cent will be quite difficult, but... it can be achieved,’ Xinhua quoted Yao saying.
Ample grain supplies after a good harvest last year would help keep prices in rural areas stable and other prices down, while excess production capacity could also help damp inflation, he added.
Premier Wen Jiabao told a news conference last week that inflation, along with income inequality and corruption, could upset social stability and even undermine the power of the state if it got out of hand.
An advisor to the central bank’s monetary policy committee, Fan Gang, told the Forum on Saturday that Chinese economic growth would be 8 to 9 per cent this year, returning to ‘normal’ next year.
Fan did not specify what he considered normal, but his forecast for 2010 is moderate compared to the expectations of Western economists.
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Greece was ‘one step’ away from loan paralysis: PM
Greece is enacting tough reforms after coming ‘one step from being unable to borrow’; Prime Minister George Papandreou said Friday as his debt-hit government pressed for EU political support.
‘We have been forced into the toughest decisions ever taken by a government in this country,’ Papandreou told a union congress in the northern city of Thessaloniki.
‘We did it because things had reached a critical state... we found ourselves one step from being unable to borrow,’ he said, hours after his government unveiled a new bill designed to combat deep-rooted tax evasion.
‘We want to prevent this very possibility,’ Papandreou said.
‘We are in a state of war, fighting against interests both within and outside our borders who want to take advantage of the difficult situation and the weakness in which Greece finds itself today.’
The Socialist government is trying to plug leaks in its budget-which last year ended up short of over 30 billion euros- and bring an end to decades of fiscal waste that accumulated nearly 300 billion euros in state debt.
Papandreou has repeatedly called on the European Union to help Athens bring down its borrowing costs which soared after his Socialists doubled the country’s budget deficit estimate after coming to power in October.
‘We want to prevent having to pay usurious interest rates for many decades, condemning the country to a deep and protracted recession,’ he said on Friday.
Papandreou blamed the previous conservative government of draining public coffers but also admitted that the Greek political system had harbored corruption for decades.
The prime minister has warned that Greece could appeal to the International Monetary Fund ‘as a last resort’ if Brussels fails to provide the necessary backing.
The interest rates demanded by investors to hold Greek bonds have failed to recede despite a spate of austerity cuts announced by the Greek government, worth around 16 billion euros this year.
The European Central Bank has already said that an approach by Greece to the IMF would be inappropriate.
But days from a European Union summit on March 25, Germany officially declared its openness to an IMF appeal, an unprecedented move by a eurozone country.
The Greek government’s austerity cuts have already sparked two general strikes and the tax hikes announced Friday are expected to raise fresh objection from work groups affected by the measures.
A wide range of professionals including taxi drivers, gas station owners, doctors and teachers have been holding separate strikes of their own in recent days.
But polls show most Greeks concede the cuts are necessary.
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US tanker bid war heats up with Airbus, Russia in wings
The US Air Force tanker bidding contest against Boeing heated up Friday, with Airbus parent EADS mulling a proposal and Russia’s state firm UAC gearing up for one next week.
EADS opened the door to a bid against US arch-rival Boeing for the 35-billion-dollar aerial refueling tanker contract on signs of pentagon willingness to extend the May deadline.
The European Aeronautic Defense and Space Company’s expressed interest in the competition, and the surprise emergence of a Russian competitor late Friday, marked new twists in the long-running saga to replace the aging Boeing fleet.
Just last week EADS, the parent of Airbus, was forced to withdraw from the bidding after its lead partner, US defense contractor Northrop Grumman, refused to compete, alleging the requirements were skewed in favour of Boeing.
Northrop’s exit from the competition left the field open to the Chicago-based Boeing, the aerospace giant that built the tanker fleet in the 1950s and has promised a formal bid by May 10.
Military commanders view the planned KC-X aircraft as crucial to sustaining US air power and are anxious to replace the older Boeing KC-135 Stratotankers.
The turning point for EADS appeared late Thursday, when the defense department acknowledged it would consider ‘a reasonable extension’ to the bidding deadline after learning from EADS it may re-enter the fray.
‘Yesterday the US department of defense indicated it would welcome a proposal from EADS North America as prime contractor for the KC-X tanker competition,’ EADS said in a statement Friday.
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Obama calls on congress to pass finance reforms
US president Barack Obama said Saturday that congress needs to enact comprehensive financial reforms to protect consumers, keep banks strong and ensure the US economy doesn’t sink into another great depression.
In his weekly radio and internet address, Obama said ‘we need commonsense rules that will our allow markets to function fairly and freely while reining in the worst practices of the financial industry.’
That, he said, is the central lesson of the current financial crisis that has cost millions of Americans their jobs and nearly caused the collapse of the entire financial system. ‘And we fail to heed that lesson at our peril,’ Obama said.
The senate banking committee is set to begin debate on a more than 1,300-page bill authored by its chairman, Christopher Dodd, D-Conn, that would give the government unprecedented powers to split up firms that threaten the economy, force the industry to pay for its most spectacular failures and create an independent consumer watchdog.
Already, Obama said, industry lobbyists are gearing up to spend millions of dollars in an attempt to defeat the legislation.
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German tax authorities target Credit Suisse clients
Over 1,000 rich Germans with accounts at Swiss bank Credit Suisse found themselves under investigation Friday following the purchase by authorities of a CD containing the names of tax dodgers.
‘State prosecutors have launched 1,100 investigations against customers and staff of Credit Suisse,’ Dirk Negenborn, spokesman for prosecutors in Duesseldorf, western Germany, told AFP.
‘The Credit Suisse clients have investments in total of around 1.2 billion euros ($1.6 billion).’
He said the total amount of tax owed to the authorities was unclear, but according to several sources the tax authorities stand to recover up to 400 million euros.
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UPDATE------------------MARCH 20, 2010 SATURDAY
BANGLADESH
NEWS IN FOCUS
Vegetable prices up, rice prices decline
Prices of some essentials, especially rice, sugar and spices, decreased in the city markets in the past week following enhanced domestic supply and price fall in the international market.
However, some early varieties of summer vegetables were retailed at higher prices in the week, market watchers said on Friday.
Coarse rice was selling between Tk 25 and Tk 27 a kilogram at Nakhalapara and Mohakhali bazars. Average price decline in per kg rice was Tk one in a week and Tk 3 in a month. Price of fine rice like najir declined Tk 3 a kg to Tk 5 and Tk 44 in the month.
Rice price declined by about Tk 100 a maund (37.3kg) in the previous three weeks, Shonchoy Mohajaon, a wholesaler in Ashuganj, told New Age.
‘Millers are releasing their old stocks as newly harvested Boro rice will start hitting the market in the middle of April,’ he said.
Higher supply from international market and a better prospect of sugar has led to the price fall of the item, which was retailed between Tk 45 and Tk 48 a kilogram, down by 20 per cent in the past one month.
Increased supply of local variety of onion caused decline in its price by Tk 2 as onion was selling between Tk 20 and Tk 24 a kg on Friday.
Garlic and red chili became cheaper in the week due also to their enhanced supply from local sources. Garlic was selling between Tk 60 and Tk 100 a kg, down by Tk 10 per kg over the week while the price of dry chili ranged between Tk 120 and Tk 140 a kg.
In Mohakhali Bazar on Friday, the price of tomato was at Tk 12 and Tk 20 a kg, aborigine at Tk 16 and Tk 20 a kg and potato at Tk 11 and Tk 12 a kg.
Newly harvested okra was selling at 36 a kg, both snake gourd and ridge gourd at Tk 40 a kg and sajna at Tk 60 a kg.
Price of beef was Tk 240 a kg, live broiler chicken Tk 145 a kg and eggs Tk 69 a dozen.
Loose super palm oil was selling at Tk 70 a kilogram, bottled soyaben at Tk 82 per litre while coarse flour at Tk 22-24 a kg and red lentils at Tk 80 and Tk 104 a kg in the week.
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Muhith emphasizes importance of women in economic development
Finance minister AMA Muhith on Friday underlined the importance of empowering women for the sake of the country’s economic development; given that nature’s balance means women comprise more-or-less half the country’s population.
‘The empowerment of women is also necessary for public services.
There can be no significant development if half the country’s population lags behind,’ he said, in his address to the national council of the Bangladesh Mahila Parishad (Bangladesh Women’s Council), which is being held at the BIAM Auditorium in Dhaka.
Chaired by Bangladesh Mahila Parishad President Ayesha Khanam, the inaugural session of the council was also addressed by the Norwegian ambassador to Dhaka, Ingebjorg Stofring, as a special guest. Earlier, the council’s general secretary, Maleka Banu, delivered the welcome address.
Muhith urged the leaders of the council to include a five-point recommendation put forward by him in the closing declaration at the end of their two-day council on Saturday. The one that generated the most excitement out of the Finance Minister’s five proposals is to do with a financial valuation system for the household work many women are engaged in across the country as homemakers.
Eliminating the existing disparity in wages between men and women across all sectors, instilling greater parity in the system of inheritance for men and women from deceased family members, ensuring security for women working in the garment industry, and helping women to face up to the challenges they face from fundamentalism, form the basis of the four other recommendations.
Muhith was keen to draw special attention to the conditions under which more than 2.5 million women work in the country’s lucrative garment industry, citing the recent example of a tragic fire that claimed 21 lives (of which 14 were women) in a Gazipur garment factory.
‘There should be a movement advocating workplace security in the garment industry,’ said the Sylhet-born finance minister.
In line with his government’s secular agenda, Oxford-educated Muhith observed that while women in the rural parts of the country are enjoying more freedoms these days, this has also meant that fundamentalist zealots prone to delivering edicts (fatwas) in the name of religion had become more active as well.
‘We need to strengthen our stand against fundamentalism,’ the cabinet’s senior-most member, and chief architect of the Awami League’s electoral manifesto, asserted.
Earlier, a condolence message was read out in memory of the late Hena Das, a legendary figure in the history of Bengal in the 20th century, who passed away last July. Comrade Hena Das, as she was known owing to her Leftist beliefs, led a remarkable life of constant struggle that saw her play significant roles as a woman leader in a number of movements in the region, from the anti-Colonial struggle to the peasant’s movement to Bangladesh’s Liberation War.
The Bangladesh Mahila Parishad, founded on the initiative of another legendary woman of Bengal, Begum Sufia Kamal, played a significant role in Bangladesh’s liberation struggle, in spite of still being a relatively new organization at the time. It had started its journey in August 1970, seven months before the outbreak of the war, as the East Pakistan Women’s Council.
The Parishad usually holds its local, regional and national councils at intervals of 2-3 years. They are held with the aim of propagating the ideas, programs and achievements of the organization and its 75000 registered members, spread across more than 150 thanas and at least 60 of the country’s 64 districts.
Some 450 of these members, representing various regions from across the country, have converged on the capital this weekend to participate in their latest national council.
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WORLD
Smuggled tiger parts sold as jewellery in S’pore
Tiger parts that have been smuggled into Singapore are being openly sold as jewellery and amulets in the retail capital of Southeast Asia, an animal welfare group said Friday.
The Animal Concerns Research and Education Society said it conducted an investigation of more than 130 jewellery and antique shops and found just under half offered products made from tiger parts like claws, teeth and fur.
Of the 59 shops selling such items, 52 were openly displaying the items for sale, the group said at a news conference.
Shopkeepers offered ACRES activists posing as buyers hundreds of items purportedly from tigers but the group said it could not verify whether all of them were authentic.
‘Whether it’s real or it’s fake, it’s actually driving up the demand for tiger parts in this region,’ said Louis Ng, the executive director of ACRES.
The products included claws set in gold or silver and worn as jewellery, amulets made of teeth with a piece of prayer paper rolled into them, and cuts of skin said to have been blessed for protection or strength.
Fewer than 3,200 tigers remain in the wild, down from an estimated 100,000 a century ago, and that number is still declining, ACRES said in a statement.
Butchered for traditional medicine, deprived of their habitat and killed for encroaching on villages, the onslaught has already seen three sub-species wiped out and the South China tiger has not been sighted for decades.
Video evidence from the investigation, which was conducted from December 2009 to February, showed one shopkeeper offering a piece of ‘blessed’ tiger skin that he said came from Songkhla in Thailand.
Another shopkeeper was caught on camera offering a necklace made from a tooth that he said came from Thailand, while a third said he had to stock up on tiger parts due to the pick-up in demand during the lunar New Year.
Shopkeepers named Thailand, China and India as their main sources.
Ng said Singapore played a key role in the illegal trade.
‘It’s critical especially for Singapore because all our neighboring countries have tiger populations. We don’t want to be driving up the demand for these products at this time when they are so critically endangered,’ he added.
Singapore is the shopping capital of Southeast Asia and welcomed 9.7 million tourists in 2009.
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Google to leave China April 10: state media
US Internet giant Google will close its business in China next month and may announce its plans in the coming days, Chinese media reported on Friday, after rows over censorship and hacking.
The China Business News quoted an official with an unidentified Chinese advertising agency as saying Google would go through with its threatened withdrawal on April 10, but that Google had yet to confirm the pull-out.
The agency is a business partner of Google, the report said.
The report did not specify whether Google would close all or part of its operations in the country.
The newspaper quoted an unidentified Google staff member as saying the company may announce on Monday the details of its exit from China and compensation for its local staff.
Google China spokeswoman Marsha Wang declined to comment on the report, telling AFP only that there had been ‘no update’ on the company’s situation.
The report was the latest in a series of clues to emerge recently indicating Google planned to leave China, which has the world’s largest population of online users, at 384 million.
Google has cried foul over what it said were cyber attacks aimed at its source code and the Gmail accounts of Chinese human rights activists.
The Financial Times reported last week that Google was ‘99.9 per cent’ certain to abandon google.cn, citing an unnamed source.
Chinese media said Wednesday that Google sent a notice to clients saying google.cn could close at the end of March.
The issue has sparked a simmering war of words between China and the administration of US president Barack Obama, which has called on Beijing to allow an unfettered Internet.
The dispute has exacerbated mounting tensions between the two over a range of trade and diplomatic issues.
Beijing tightly controls online content in a vast system dubbed the ‘Great Firewall of China’, removing information it deems harmful such as pornography and violent content, but also politically sensitive material.
Google has continued to filter google.cn results to abide by Chinese censorship demands, but says it will eventually stop the screening.
Google confirmed earlier this week that it had received a letter purportedly from a group of 27 Chinese advertising agencies calling for the US Company to open talks on compensation for possible business losses if it leaves China.
However, representatives of several of the firms subsequently told AFP they knew nothing of the letter and Chinese media reports have raised doubts about its authenticity.
Google’s Wang told AFP the company is still ‘reviewing’ the letter.
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France urges G20 to curb excessive bank profits
French foreign minister Bernard Kouchner on Friday criticized excessive bank profits following the global slump and said tougher financial regulations would be the key issue at this year’s G20 summit.
‘Look at the profit of the banking sector this year following the crisis: this is unacceptable. We must be strongly determined to balance this within the G20,’ Kouchner said in a wide-ranging speech in South Korea that also addressed relations with Pyongyang.
‘The most important issue of the G20 will be what we are going to accept in terms of regulation of the financial sector.’
South Korea hosts a summit of the Group of 20 leading global economies in November, with France taking over the chair next year.
‘This (regulation) is a very difficult issue that will require political will,’ added Kouchner, hinting at persistent differences among G20 members.
Kouchner also urged South Korea and other Asian countries to support French efforts to set up an international tax on financial transactions aimed at helping developing countries.
‘We need fresh money. And we will not raise the necessary funds without creating new financial mechanisms,’ said Kouchner, who was the founder of French non-governmental organization Doctors without Borders.
‘France cannot achieve this alone. This will be possible only if Korea, Asia and Africa join us,’ he told an audience of diplomats and students at Seoul National University.
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SOUTH ASIA
Bharti board to meet to discuss Zain deal
Bharti Airtel’s board is meeting on Saturday to discuss the progress of talks to buy Kuwaiti telecom Zain’s African assets in a deal worth $9 billion, a source with direct knowledge of the development said.
The source also said Bharti might put part of the purchase price in an escrow account to protect it from potential problems, including an ownership dispute in Zain’s Nigeria operations.
The companies are in exclusive talks until March 25 and Bharti is conducting a due diligence assessment of the Zain assets.
‘Currently Bharti is aiming to meet the March 25 deadline, but there could be a slippage of a day or two. Tomorrow’s board meet is crucial,’ the source said.
The source said financing details were likely to be finalised in the next two days.
A Bharti spokesman declined to comment on the board meeting and the possible setting up of an escrow account.
Both Bharti and Zain have said $700 million of the purchase price would be paid a year after the completion of the deal, and the source said part of it would be put in the escrow account.
‘The due diligence has been conducted quite speedily. So if something works out negatively, the money can be adjusted against that,’ the source said, referring to the money likely to be put in the escrow account.
‘No major issues have emerged in the due diligence apart from Nigeria,’ he said.
A dispute between Zain Nigeria and South Africa-based minority shareholder Econet Wireless Holdings could cause problems for Bharti’s third effort to get its hands on a sizeable business in Africa.
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India urges US ‘leadership’ on WTO
India on Thursday urged the United States to take the lead in resuming global free trade talks after the EU trade chief lashed out at ‘protectionism’ by US president Barack Obama’s administration.
Indian commerce minister Anand Sharma said he had a ‘very free and frank exchange of views’ with top US trade officials on a visit to Washington.
‘There are many other countries, both developing as well as developed countries, which have urged the United States, being the largest economy, to take leadership,’ Sharma told reporters.
Sharma voiced hope that the Obama administration would help ‘work towards reaching an understanding which loses the gaps’ among key trading partners.
Sharma said India had ‘similar’ views to the EU trade commissioner, Karel De Gucht, who in an interview blamed the Obama administration for holding up the decade-old Doha round of World Trade Organization negotiations.
Speaking to the Belgian business daily De Tijd, De Gucht took direct aim at Obama’s goal to double US exports over five years, saying: ‘I don’t see how anyone can double exports if there’s no movement towards free trade.’
Obama, who was elected with support of labour unions, has pledged commitment to trade liberalisation but has shown little sense of urgency in finalizing free trade agreements with Colombia, Panama and South Korea.
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WORLD
World markets boosted by upbeat Lloyds Bank
British stocks led Friday’s advance in global markets after the part-nationalized Lloyds Banking Group issued a buoyant trading update, but the euro continued to founder amid renewed fears about Greek debt crisis.
In Europe, the FTSE 100 index of leading British shares was up 41.26 points, or 0.7 per cent, at 5,683.88 while Germany’s DAX rose 24.89 points, or 0.4 per cent, to 6,037.20. The CAC-40 in France was 17.16 points, or 0.4 per cent, higher at 3,955.34.
Wall Street was also poised to join in the advance, which started earlier in Asia — Dow futures were up 11 points, or 0.1 per cent, at 10,728 while the broader Standard & Poor’s 500 futures rose 1.2 point, or 0.1 per cent, to 1,162.50.
Helping confidence were US data Thursday showing inflation remains in check and manufacturing is growing, adding to the broader impression of recovery in the world’s largest economy, a major export market for Asian countries.
Boosting confidence on Friday, particularly in London, was the news that Lloyds Banking Group, which is 41 per cent owned by the British government, expects to report a profit this year as trading has so far been strong and provisions for bad assets are not as large as previously forecast. In a brief statement, the bank said that in the first 10 weeks of the year net interest margin has come in line with guidance and income growth has been good.
‘An estimate of an unexpected profit in 2010, impairment charges down, margins better and cost controls coming back on the bridle - all music to shareholders’ ears and also to the government,’ said David Buik, markets analyst at BGC Partners.
Its shares were up 9.1 per cent at 60.30 pence in late-afternoon London trading. Shares in Royal Bank of Scotland, which is more than 80 per cent owned by the British government, rose 6 per cent in Lloyds’ slipstream.
Banks elsewhere were also in demand, including Germany’s Deutsche Bank AG and Commerzbank AG, as well as France’s Credit Agricole SA and BNP Paribas SA.
Still, the overall advance in shares was constrained by continuing worries about Greece’s debt crisis.
This week has brought new signs of European indecision and discord over the Greek debt crisis and there are now mounting expectations in the markets that Greece will be forced to turn to the International Monetary Fund for aid if European leaders can’t agree on a bailout plan next week.
With Germany seemingly leaning towards IMF involvement, the euro slid again Friday, trading another 0.3 per cent lower at $1.3573. As recently as Wednesday, hopes of an EU package materializing had seen the euro rise to above $1.38.
‘With Athens threatening to turn to the IMF if the problem cannot be resolved internally, once again question marks are lingering over what this means for the euro and with little else in the way of fundamental data to work on, some traders do seem to be getting nervous once again,’ said Ben Potter, a research analyst at IG Markets.
Earlier in Asia, Japan’s Nikkei 225 stock average reversed early losses to climb 80.69 points, or 0.8 per cent, to 10,824.72. South Korea’s Kospi rose 0.7 per cent to 1,686.11 and Hong Kong’s market rose 0.2 per cent to 21,370.82.
Elsewhere, Shanghai’s market added 0.7 per cent, Australia’s index ticked 0.2 per cent higher and Taiwan’s market rose 0.2 per cent.
Oil prices were lower, with the benchmark contract shedding 57 cents to $81.63 a barrel. The contract lost 73 cents overnight.
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Oil prices drop, driven by strong dollar
World oil prices fell further on Friday as a strong US currency dented investor enthusiasm for dollar-priced crude, analysts said.
New York’s main contract, light sweet crude for April delivery fell 59 cents to $81.61 a barrel.
London’s Brent North Sea crude for May delivery was down 65 cents to $80.83.
‘Today, it seems to be a quiet day in economic figures and investors’ focus might switch to the US dollar movements and global equity markets for further signs of the global economic conditions,’ said Sucden analyst Myrto Sokou.
The European single currency tumbled on Thursday and Friday as investors sought the safe-haven US currency amid uncertainty about international assistance for debt-plagued Greece.
The euro dived as low as $1.3533 on Friday, down from $1.3603 in late New York on Thursday.
A stronger greenback makes dollar-denominated crude more expensive for buyers using weaker currencies-and tends to dampen oil demand and prices.
Crude prices fell this week as traders tracked the dollar and Greek debt concerns, and shrugged off a widely-expected decision from the 12-nation OPEC oil cartel to maintain output levels.
Anxiety over the fate of Greek finances deepened as the European Union groped for common ground on how to ensure that Greece will be able to borrow money on financial markets at rates similar to those paid by its partners.
Clearly dissatisfied with what they see as a tepid EU response thus far, Greek authorities have made it clear they are prepared to go to the International Monetary Fund for help.
‘Oil prices were getting their cue from the broader market as persistent concerns over Greece saw another down day for the euro (on Thursday) with the commodity complex suffering as well,’ said VTB Capital’s Andrey Kryuchenkov.
‘Otherwise, little changed in the world of oil with market participants still digesting the bullish weekly report on US fuel inventories report and OPEC’s decision to keep production levels unchanged on Wednesday.’
OPEC left its output ceiling unchanged at 24.84 million barrels a day at a meeting in Vienna, citing uncertainty in the macroeconomic environment and global oil demand.
The cartel, which pumps 40 per cent of world oil, said it would review the economic situation at its next meeting on October 14.
Meanwhile on Wednesday, the US department of energy said stockpiles of distillates, including diesel and heating fuel, fell more than expected, by 1.5 million barrels, in the week ending March 12.
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Samsung aims for double-digit sales growth
Samsung Electronics predicted a strong 2010 as economic expansion in advanced and large developing economies gains speed and said it is aiming for double-digit sales, growth from last year’s record high.
The world’s largest manufacturer of flat screen televisions and second-biggest seller of mobile phones held its annual shareholders’ meeting Friday, where it also reveled in its status as a force in world business.
‘Our financial standing is on a global level,’ Samsung president and chief executive Choi Gee-sung told shareholders. ‘We have become a world class company.’
Over the past decade Samsung has become one of the world’s top technology companies in both consumer electronics and some of the key components that go into them.
The Suwon, South Korea-based Company is also the world’s largest manufacturer of computer memory chips and liquid crystal displays. It ranks behind Finland’s Nokia Corp in mobile phones.
Choi said that the global economy was likely to build on momentum from the second half of last year when it benefited from government stimulus measures put in place to bolster growth following the 2008 financial crisis.
‘In particular, the advanced countries such as the US and EU are likely to see a plus, or a positive, growth and the newly emerging countries, including BRICS, will accelerate their growth rate,’ he said, referring to Brazil, Russia, India and China.
Regarding sales, Choi said that Samsung will adjust to what he called exchange rate ‘uncertainties’ by working to reduce costs and gain further ‘market dominance,’ an apparent reference to increasing market share.
‘We hope to see a two-digit growth compared to year 2009’ sales, he said, referring to percentage change.
Samsung racked up record sales of 136.29 trillion won, or $120.48 billion at current exchange rates, in 2009 on a consolidated basis — which includes the performance of its overseas and domestic subsidiaries excluding financial businesses.
Samsung — as well as other South Korean exporters — are sensitive to swings in their country’s currency, the won. Won weakness against the dollar and other currencies can be a boon in inflating the value of overseas profits when sent back to South Korea. Won strength, however, can have the opposite effect.
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TV, travel have made cheese trendy
Americans who grew up on grilled cheese and macaroni have developed more adventuresome tastes in adulthood, experimenting with a broader range of cheeses and often seeking the sharper flavors that have traditionally been popular in Europe.
Food experts shared their observations on Americans’ evolving palates this week as judges chose the world’s best cheese at the 2010 world championship cheese contest in Madison. The top honour went to a Swiss Gruyere, a type of hard cheese that may once have been considered exotic but is now commonly featured in food magazines.
‘People are more open and adventurous than they used to be,’ said Liz Thorpe, a vice president with Murray’s Cheese in New York City. ‘Ten years ago if you offered someone goat’s milk cheese they’d say, ‘that’s weird, get it away.’ Now they say, ‘that’s weird, I want to try it.’’
The change of heart has been fed by a number of factors — food-related TV programming, greater access to a range of imported cheeses and attention to a growing number of awards for US cheese makers at international contests like the one held in Madison, Thorpe and others said. Tastes also have changed as more people travel internationally.
Cheeses made from sheep and goat’s milk are common in Europe because the smaller animals are better suited to grazing on hills and mountains than cows. The cheeses were all but unknown in the US until tourists who encountered them overseas began looking for them when they returned home, Thorpe said. As tourism increased, so did demand in the US.
For example, Murray’s Cheese sold $400,000 worth of goats and sheep’s milk cheese in 2004, Thorpe said. Last year, its sales were $2 million.
Bill Schlinsog, a former cheese maker and one of the judge’s at this year’s world championship cheese contest, said diners like the idea of sheep’s milk cheese for sampling something new.
‘It’s special, it’s something they haven’t tried before,’ he said. ‘And now that the quality of the cheese is improved, people are more accepting of it. They’re willing to be more adventuresome.’
American cheese makers once lacked Europeans’ skill in working with sheep’s milk, but that’s no longer the case, said Laura Werlin, who has written four books on cheese trends.
Jeff Roberts, a co-founder of the institute for artisan cheese at the University of Vermont, said he thought the recession also had encouraged Americans to be more adventurous, particularly at the grocer’s.
‘People started saying, ‘Instead of taking $20 to go out to eat, let’s take that $20 and go to a good specialty cheese store and eat it at home,’‘ he said.
And as more people sample specialty cheese, they see it as interesting rather than intimidating.
‘What we’re really starting to see is, this appeals to people who like to taste food from different areas and enjoy exploring different cultures,’ Christine Hyatt, the vice president of the American Cheese Society.
US cheese makers’ success in international contests also has helped boost sales, much as interest in wine grew when California vintners began holding their own in European wine competitions. For example, American cheese makers won gold medals in 51 of 77 categories this week in Madison, including nine for goat’s or mixed milk cheeses.
That means any diner should be able to find a cheese to match taste and budget, the experts said. Hyatt recommended pairing a sheep’s milk cheese with a fruity red wine to bring out the cheese’s rich buttery flavor, while Thorpe likes cheeses flavored with herbs or peppers.
The good thing about cheese is that ‘you can buy a small amount,’ Werlin said.
‘Leave your Costco mentality at home,’ she recommended, ‘buy just what you need for tonight and just enjoy it.’
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Boeing speeds up production of 747, 777 models
Boeing will speed up production plans for its 777 and 747 models in anticipation of greater demand from commercial airlines in a couple of years.
Both are wide-body planes capable of carrying more than 300 passengers and flying longer routes. They’re also more fuel-efficient than other aircraft models.
Most major airlines reported losses in 2009 as travel demand slumped. The aircraft maker said Friday that it sees the airline industry recovering this year, followed by a return to profitability in 2011. That should lead to demand for new aircraft in 2012 and beyond, the company said.
Boeing, based in Chicago, will increase production of its 777 in mid-2011 to seven airplanes per month from five. The ramp-up was originally planned for early 2012. The 777 seats for more than 300 people.
The 747-8, the newest version of Boeing’s iconic jumbo jet, has been plagued by production problems. The passenger version, which carries more than 400 people, is scheduled to be delivered in the second quarter of 2011. Production will increase to two airplanes per month from 1.5 in mid-2012. The ramp-up had been scheduled for mid-2013.
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Palm revenue forecast lower than analyst estimates
Palm Inc warned that revenue for the current quarter would be far below Wall Street’s expectations, after tepid demand for its smartphones left wireless carriers with piles of excess inventory.
The company’s shares fell 14 per cent in after-hours trading on Thursday.
Taking into account Thursday’s after-hours losses, Palm will have lost half its market value since the year began.
‘The window is closing, there’s no question. They’ve got cash burn going against them and they’ve got competition going against them,’ said Avian Securities analyst Matt Thornton. ‘I just don’t see what changes here.’
Palm executives told analysts on a conference call that fourth-quarter revenue will be less than $150 million, as the company helps its carrier partners, Sprint Nextel Corp and Verizon Wireless work through inventory overhang.
Analysts had been expecting revenue of about $306 million, according to Thomson Reuters I/B/E/S.
The Company shipped a total of 960,000 smartphones during the third quarter ended February 26, but sell-through -which reflects how many devices actually end up in consumers’ hands-totaled 408,000 units, lagging the 600,000 units or more many analysts expected.
‘The May quarter guidance is the key number; it’s very low indeed,’ said Tero Kuittinen of MKM Partners, an institutional equity trading and research firm.
For the current quarter, Palm also forecast a gross margin in the mid-teens compared with a Wall Street estimate of 26 per cent.
‘Our recent underperformance has been extremely disappointing to me personally,’ chief executive Jon Rubinstein said on a conference call with analysts.
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Dollar flat in Tokyo ahead of long weekend
The dollar was little moved in thin Tokyo trading Friday as investors looked for new clues before the end of the Japanese fiscal year, dealers said Friday.
The dollar stood at 90.45 yen, up slightly from 90.39 in Thursday afternoon in New York. The euro was at $1.3621 and 123.20 yen, compared with $1.3603 and 123.07 yen in New York.
Stock market gains benefited the dollar, but its upper movement was capped by a dearth of incentives heading into a long weekend in Japan. Monday is a national holiday.
Tokyo’s benchmark Nikkei-225 index rose 71.49 points to 10,815.52 by the morning break and stayed in positive territory in the afternoon, following an overnight rise on Wall Street.
‘It appears that the support for the dollar is very solid. But selling is seen once it climbs a bit,’ said Resona Bank dealer Masatoshi Omata. ‘It seems the market is just saving up its energy for whatever comes next.’
Market activity should increase as the close of the Japanese fiscal year approaches at the end of this month and businesses square away trading positions, Omata said.
Against regional currencies the dollar eased to 1,131.10 South Korean won from 1,132.25 a day earlier, to 9,095 Indonesian rupiah from 9,130, and to 45.56 Philippine pesos from 45.63.
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China warns US not to politicize yuan debate
China urged the United States Friday not to politicize a row over the value of its currency as it announced a top official would travel to Washington for talks on the issue and other trade disputes.
As trade tensions between the two powers rise, Beijing warned of a negative impact from pending US legislation that would impose tough new penalties on China if it failed to revalue its currency.
‘We should take every measure possible to avoid politicization of the issue and allowing emotion to come into the debate,’ He Ning, a top ministry official overseeing US trade, told journalists.
‘If there are any political factors added ... it will make the whole situation complicated and affect negotiations and dialogue, which is not what we would like to see,’ he said when asked about the legislation.
The legislation, which enjoys support from both sides of the US political divide, would punish currency manipulation as an unfair subsidy and could trigger retaliatory US actions.
China announced that vice commerce minister Zhong Shan will visit Washington from March 24 to 26 to meet US lawmakers and officials at the US commerce and treasury departments as well as the US Trade Representative’s office.
‘This visit is an effort to consult and exchange views on the Sino-US trade balance, trade frictions and other concerned trade issues,’ a ministry statement said.
Critics of China’s forex policy say Beijing keeps the yuan’s value artificially low, making its exports cheaper and thus more competitive on overseas markets.
But in an interview with Dow Jones Newswires, Zhong said a further rise in the currency’s value would endanger the survival of some Chinese exporters, a situation Beijing cannot afford.
‘Water doesn’t boil if it is heated to 99 degree Celsius. But it will boil if it is heated by one more degree,’ Zhong said, adding ‘a further rise in the yuan by a very small magnitude might cause fundamental changes’.
Criticism over its forex policy has risen as China’s trade surplus and foreign exchange reserves have skyrocketed.
In 2005, international pressure led it to adopt a managed float of the yuan, which led to a 21 per cent increase in its value against the dollar by 2008, when the global financial crisis struck.
Since then, China has effectively pegged the yuan to the dollar, a move that has helped its exporters weather the global crisis, but also triggered a fresh round of foreign pressure.
On Wednesday, the International Monetary Fund urged China to allow its ‘much undervalued’ currency to rise, lending support to US and European Union calls.
‘The renminbi (yuan) is very much undervalued’ and it is logical that with the world economy regaining its balance ‘the renminbi will appreciate’, IMF chief Dominique Strauss-Kahn told the European parliament in Brussels.
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Greece ‘should consider insolvency’
Greece should be prepared to declare it insolvent if it cannot repay its debts, a director of the German central bank said in remarks published Friday, signaling a hard line against help for heavily indebted EU countries.
Bundesbank board member Thilo Sarrazin said that if Greece were unable to finance its debts, ‘it will have to do what all the indebted do, declare itself insolvent ... that would be the best warning example for other potentially weak states’ in Europe.
In his remarks to the Salzburger Nachrichten daily, Sarrazin did not name which countries he considered to be weak but did say that ‘The Netherlands, Germany, Austria, Belgium and Luxembourg will not have this type of problem because we have a different mentality.’
Sarrazin is one of six board members at the Bundesbank, whose head in turn sits on the governing council of the European Central Bank. The ECB controls monetary policy for the 16-nation eurozone.
He said that if financial aid for Greece from the European Union was ‘the only protection against the unsound financial policies of some countries and if they get into massive rampant debt, then we will have a risk of unforeseeable consequences.’
Critics of proposals to bail out Greece, laboring under huge budget and debt deficits, say that to do so would only encourage weak eurozone members to rely on the EU to fix their problems, letting their governments pass the buck on the stiff measures they themselves should take.
Sarrazin noted that in the past, France, Italy and Spain had had a tendency of wanting to deal with their debt problems by allowing higher rates of inflation, which reduces the real value of the money owed but also threatens savings and the health of the wider economy.
In morning trade, the euro was lower against the dollar, continuing a trend of the last few weeks as the crisis over Greece, and in turn the eurozone, has deepened.
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Rio Tinto signs huge China deal as staff await trial
Mining giant Rio Tinto announced a huge iron ore deal with China’s state-run Chinalco Friday, days before four if its staff go on trial in a case that has threatened diplomatic and trade ties.
Rio said Chinalco signed a non-binding, $1.35 billion deal to help develop a massive mine in Guinea, drawing a line under a period of turbulent relations with its biggest shareholder.
‘We have long believed that Rio Tinto and Chinalco could work together on major projects for mutual benefit,’ said Rio chief executive Tom Albanese.
The debt-strapped Anglo-Australian miner snubbed a $19.5 billion cash injection from Chinalco last June, angering some Chinese commentators.
Weeks later, China’s spy agency swooped on Australian citizen Stern Hu and three Chinese colleagues in Shanghai, prompting a rapid plunge in relations with Canberra and sending shudders through China’s foreign business community.
Hu, Wang Yong, Ge Minqiang and Liu Caikui are scheduled for a three-day trial in Shanghai from Monday over alleged bribery and industrial espionage, setting the stage for renewed sparring between the two governments.
Australia on Friday insisted business with China, now its biggest trading partner, would not be harmed by the trial. ‘The two matters are separate,’ trade minister Simon Crean told public broadcaster ABC.
‘We are treating the Stern Hu case strictly as a consular case. We’ve never sought to make any link and neither have the Chinese in their discussions with us.’
However, Prime Minister Kevin Rudd has already warned that the ‘world will be watching’.
Analysts say the case goes to the heart of Australia’s relationship with China, as it centres on its biggest export to the country, iron ore, and touches on issues such as judicial independence. The trial will be held against the backdrop of new iron ore tensions, after China ignored Australia’s request to stay out of annual contract negotiations and vowed to support steelmakers in a pricing dispute with top miners.
Guinea’s Simandou mine, long mired by political upheaval, is described as the world’s best undeveloped source of high-grade iron ore, which is being consumed in vast quantities by industrializing China.
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Obama signs $17.6b jobs bill
President Barack Obama offered hope Thursday that the faltering US economy will soon create more jobs, as he signed a multibillion-dollar employment package to aid the fragile recovery.
Signing into law a 17.6-billion-dollar measure designed to boost hiring, Obama said the economy was ‘beginning to move in the right direction,’ but admitted ordinary Americans were still bearing too great a burden from the economic crisis.
‘Our economy is growing again and we may soon be adding jobs instead of losing them, the jobs bill I’m signing today is intended to help accelerate this process,’ Obama said in a signing ceremony in the White House Rose Garden.
Addressing employers who have been slow to hire amid continued economic uncertainty, Obama said: ‘If you hire a worker whose unemployed, you won’t have to pay payroll taxes on that worker for the rest of the year.’
The legislation also includes infrastructure investments for items like highway construction and help for states to build schools.
As US unemployment levels hover near double digits, the White House has struggled to claw back some of the estimated eight million jobs that have been lost since the economy entered recession in December 2007.
On Thursday the Labour Department reported new claims for unemployment insurance benefits dipped only marginally last week, with 457,000 Americans beginning to ask the government for help, down 5,000 from the previous week.
According to Ryan Sweet, a senior economist with Moody’s Economy.com, employment is trending in the right direction, but the slow speed of change is ‘dashing any expectation that jobs will roar back.’
For the Obama administration, speeding that recovery has become all the more urgent as the country faces midterm elections in November that will decide whether the president’s Democratic Party keeps control of Congress.
But with the unemployment rate not expected to ease quickly, Obama and his treasury secretary, Timothy Geithner, have begun to focus on more modest indications of recovery — pointing to increased hours put in by workers and firms shifting employees to a full-time schedule.
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EU chief calls for quick deal to help Greece
European Commission president Jose Manuel Barroso says the EU needs to agree as soon as possible on a mechanism to support Greece financially if needed.
European Union leaders are meeting next week to discuss a rescue package to convince markets that Greece will not be allowed to default, therefore easing its borrowing rates. However, Germany has resisted the idea of direct financial support.
Greece warned it will be forced to turn to the International Monetary Fund if the EU can’t agree to a bailout plan.
Barroso told France 24 TV that Europe believes what ‘we should have now is as soon as possible some kind if mechanism prepared just in case.’
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German govt says IMF aid an option for Greece
The German government sees aid to Greece from the International Monetary Fund as an option to resolving its debt problems, Chancellor Angela Merkel’s spokesman said on Friday.
‘The German government does not rule out aid from the IMF if Greece requests it,’ spokesman Ulrich Wilhelm said at a regular news conference after reports that Berlin was concerned European aid could break German and EU law.
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Talks on avoiding BA strike collapse
Talks aimed at preventing a strike by British Airways cabin crew have collapsed, the Unite trade union said Friday, less than 12 hours before the action was due to start.
‘It’s with great disappointment that I have to tell you all that negotiations have broken down,’ Unite’s joint leader Tony Woodley told reporters. ‘The strike goes ahead at midnight tonight (Friday).’
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Venezuela ups proven oil reserves by 23pc
Venezuela announced on Thursday its proven oil reserves rose to 211.17 billion barrels at the end of 2009, a 23 per cent increase thanks mostly to heavy crude oil finds that are difficult to extract.
The new aggregate reserves - an additional 39.24 billion barrels - came mainly from the Orinoco Heavy Oil Belt, a south-eastern area where Venezuela has intensified its investments in exploration and development, and only a small part from traditional oil fields.
In March 2009, the country’s proven reserves stood at 172.32 billion barrels.
Venezuela, the top crude oil exporter in South America, now holds the second-largest proven reserves in the world, behind Saudi Arabia (266 billion barrels) and ahead of Iran (138 billion barrels), according to the Organization of the Petroleum Exporting Countries.
After its proven reserves fell to 76 billion barrels of oil in 1998, Venezuela launched a ‘socialist project’ in 2005 to boost reserves to 314 billion barrels, which would give it the world’s largest reserves.
‘This project would confirm that the country has the world’s biggest crude reserves, and it would put them to work for humanity,’ state-owned oil company PDVSA said in a statement.
Venezuela is estimated to have 235 billion barrels of oil in the Orinoco basin, but the oil there is heavy, difficult to extract and more costly to refine than conventional crude.
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