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Premium income of the country’s insurance sector has doubled in five years between 2000 and 2004, with the private sector players gaining their strong foothold in the life insurance business.
   Total premium income stood at Tk 2,305.5 crore in 2004, which was Tk 1,108.6 crore in 2000, according to a data released in the annual report of Bangladesh Insurance Association last week.
   Of the total premium, premium earnings from the life insurance amounted to Tk 1,605.6 crore last year, up from Tk 682.34 crore of five years back, showed the report.
   The premium income generated from the general insurance business, also known as non-life insurance, grew to Tk 700 crore in 2004, from Tk 426.3 crore in 2000.
   Life insurers saw a 34 per cent growth in premium income in 2003, when the amount crossed Tk 1,000 crore-mark for the first time. The growth was 28 per cent in 2004.
   Private sector life-insurers maintained their dominance with 33 per cent growth in 2004, while the lone public sector life insurer, Jiban Bima Corporation, had a mere 1.4 per cent growth.
   Of the total premium in the private sector, last year premium registered a 25 per cent growth, while income from renewal premium showed a 39.6 per cent growth over the previous year.
   ‘Rise in premium income of private sector life insurers was the result of expansion of life insurance business in the country through introduction of micro insurance,’ said the annual report of the association.
   The products like Shujan Bima, Greeha Sanchaya Bima, Group Bima, Loka Bima, Jana Bima, Palli Bima, Islami Khurda Bima and Wage Earners’ Group Insurance Scheme helped to popularise life insurance among rural and urban low and middle income people.
   ‘We must not however be complacent over this situation, since a vast majority of people in the rural areas are still left outside the life insurance coverage,’ said the report, stressing that life insurance companies should make more efforts to net more clients. At present there are 17 companies operating in the life insurance business in Bangladesh, while the number of non-life insurance companies stands at 43.
   The gross premium income of general insurance companies has increased by 21.8 per cent in 2004 to Tk 622.5 crore, from Tk 510.52 crore in 2003.
   The income of the only state-owned insurance company, Sadharan Bima Corporation, increased by 1.57 per cent during the period under review, said the report.
   ‘The growth of private sector non-life insurance business was primarily due to the drive given and initiative taken by the private insurers in exploring new avenues,’ said the annual report of the association.
   It also mentioned that increase in project value and commodity prices in the global market, also contributed to the growth to some extent.
   The association stressed that the term ‘public property,’ now solely insured by the state-owned Sadharan Bima Corporation, needs to be redefined to clear the way for private insurers.

INCIDIN Bangladesh, a non-governmental organisation, has said the official delegation failed to convey people’s genuine concerns to the sixth ministerial meeting of the World Trade Organisation.
   The NGO expressed disappointment as Bangladeshi activists gathered in Hong Kong lacked coordination and miserably failed to put any pressure on the government.
   ‘In Hong Kong, our delegation leader was not seen in public gatherings, when it was very much needed to combat the pressure of the rich countries,’ the organisation’s executive director, Mushtaque Ali, said at a press meet in Dhaka on Friday.
   He said the Indonesian trade minister joined a public meeting and addressed the people, describing the latest situation on the negotiation.
   ‘Unfortunately, we couldn’t give any message to the trade negotiating team, as they were not responsive,’ he added.
   Mushtaque said Bangladesh now needs a comprehensive strategy to fight in 2006, where all the stakeholders, officials, experts and activities, should come under a common platform.
   ‘We have to review the whole text adopted in the Hong Kong ministerial very carefully, for devising future course of action,’ he added.
   Advocacy chief of the organisation, Nasimul Ahsan said outcome of the Hong Kong ministerial has threatened the life and livelihood of some two million garment workers in Bangladesh.
   ‘Identifying Bangladesh as a first category exporting competitive nation, USA is going to cut down the preferential trade benefit,’ he added.
   In reply to a question, he said about 40 garment factories have closed down, as a consequence of the withdrawal of quota facility applicable to the garments export.
   The press briefing was also attended among others, by the policy analyst of INCDIN, Rafiqul Islam, Tariqul Hasan, Musfiqur Rahman and Rita Das.

The online facilities created by the government-run investment corporation and some private stockbrokers made it possible for the people of Rajshahi city to enter the share market recently.
   The private organisations are busy selling and buying shares online.
   The concerned sources said the online trading opportunity increased the movement of investment-interested people in the government and private offices in city’s ICB old building.
   The online facility to the Chittagong Stock Exchange also started in Rajshahi.
   A shareholder, Mizanur, said as the profits in the savings bond policy fell, his interests shifted to the share market business.
   He opined that the economic growth would be strong if the share market investments increased.
   The Globe Security Ltd and Salta Capital Ltd, two private owned brokers have recently started their venture in Rajshahi.
   The Globe Exchange trading has options to deal directly with Dhaka Stock Exchange.
   During the past three months they registered over 250 members.
   M Morshed, a Globe Security client said, when he was in Dhaka he had made some investments, but after getting transferred to Rajshahi, he was facing problems in communicating.
   The Salta Capital however, started their venture during the first week of this month and is trading with Chittagong Stock Exchange.
   Ali Haider Chowdhury, a senior executive of Salta said, as a part of business extension, they opened a wing in Rajshahi, after having their offices in Dhaka, Chittagong, Sylhet and Cox’s Bazar. In future they plan to open up an office in Barisal.

Participants in a dialogue in the city on Friday urged the government not to allow Tata to invest in Bangladesh with ‘destructive conditions’ that the Indian industrial giant has
   proposed.
   Compared with the purchase price of gas and the price proposed by Tata, Bangladesh will have to provide a seven-fold subsidy if the government accepts the condition of gas supply for 20 years to the Indian company, they pointed out.
   The domestic investors can invest more than what Tata proposed if provided with equal investment opportunities, the participants said at the dialogue styled ‘Investment proposal of Tata and the future of Bangladesh economy’.
   The Samaj Rupantar Adhyayan Kendra organised the dialogue at the Jatiya Press Club with its chairperson Professor Sirajul Islam Chowdhury in the chair.
   The Bangladesh Economics Association general secretary, Abul Barakat, economists Professor Abu Ahmed and Professor Anu Mohammad, former director of the FBCCI, Abdul Haque, Salimullah Khan, Tipu Biswas, and the Bangladesh Steel Mills Owners Association president, Badiul Alam, and the general secretary, Mahmudul Alam Masud, took part in the discussion.
   Terming all the Tata conditions destructive for the country’s economy, speakers urged the government to collect money, in case of any urgent need, through releasing ‘bond’ or ‘share’ in the market instead of accepting the multi-billion dollar investment proposal of Tata.
   Professor Sirajul Islam Chowdhury said Bangladesh needed investment as tens of thousands of people were still jobless here.
   ‘But how is it possible to provide Tata with gas and coal for many years in the circumstances when we are shutting down our industrial units one after another due to shortage of gas?’
   Blaming a section of the local media for what he said their inclination towards the Tata investment proposal, he said Tata might use the media to get their investment plan approved.
   Professor SI Chowdhury urged the owners of media organisations and the journalists to remain alert about the ‘negative’ intention of the outside investors.
   Professor Anu Mohammad in his introductory remarks alleged that the governments in Bangladesh had a common tendency to conceal the terms and conditions of any accord signed or to be signed. ‘The reason for this is that the condition usually goes against the interest of the common people,’ he said and termed ‘extremely illogical’ the conditions proposed by Tata.
   ‘It is much more illogical to ensure over three trillion cft of gas as well as coal and handing over thousands of acres of land to Tata for an investment of Tk 12,000 crore,’ the economist added.
   Professor Abu Ahmed underscored the need for public participation in the investment proposed by Tata for ensuring their ownership.
   Strongly criticising the bureaucrats for their poor performance at the negotiation table, he said: ‘Tata will have to purchase gas at international price, not at the rate to be decided at the negotiating table.’
   Professor Ahmed demanded that the details of the agreement between the government and Tata be made public.
   The BEA general secretary, Professor Abul Barakat, said the government was ‘going to sign a suicidal agreement with Tata only for an investment of Tk 12,000 crore.
   ‘But the government,’ he said, ‘pays no heed to the generation of black money amounting to Tk 70,000 crore every year and transaction of Tk 15,000 crore as bribe and Tk 30,000 crore in money laundering.’

Almost all Pakistan’s sugar mills were shut Thursday, because of a price dispute with farmers, while the government tried to work out a compromise on cane prices, industry officials said.
   Zaka Ashraf, chairman of the private Pakistan Sugar Mills Association, told the news agency that 76 out of 78 sugar mills in the country had stopped production.
   The only two mills that have stayed open are in North West Frontier Province where they supply sugar to neighbouring Afghanistan.
   The mills stopped work after farmers increased the minimum selling price of cane to 60 rupees for 40 kg from 45 rupees following a fall in supplies.
   Output fell this year to 46 million tonnes from 47 million in the 2004-05 season, because of low rainfall and the loss of sugar-growing land to cotton.
   Declining returns for cane are encouraging farmers to switch to crops such as cotton and wheat.
   Pakistan’s sugar production is expected to decline in the 2005-06 crop year to between 2.8
   million and 3.0 million
   tonnes from a year-earlier 3.2 million.
   The country will need to import 8,00,000 tonnes of sugar by the middle of calendar 2005 to fill a growing supply gap and to avoid price spikes, government officials say.
   Annual consumption is estimated by the government at 3.8 million tonnes.
   Industry officials said farmers in Punjab province were even demanding 100 to 120 rupees for 40 kg of cane, almost 100 per cent higher than the government’s fixed price.
   An agriculture ministry official said the government had been trying to sway farmers and sugar mills to agree on 60 to 70 rupees per 40 kg.
   Sugar mills have proposed a maximum buying price of 55 rupees.
   Mills also fear that cheap imports of white sugar could dent their profitability.
   Pakistan imported 973,000 tonnes of refined and raw sugar in 2005 after the government removed import duties in February.

An Indian sugar mill sold 2,300 tonnes of white sugar to Pakistan Thursday, close on the heels of another company clinching a deal to deliver about 2,400 tonnes sugar to that country.
   The firms said they had sold the sugar to Pakistan, which is looking for the sweetener to bridge a supply shortfall, under the obligation to re- export raw sugar after refining.
   Indian mills, who can import raw sugar duty-free under the government’s advance licence scheme, have an obligation to export a similar quantity of refined sugar.
   Indian mills have bought around 2.65 million tonnes of raw sugar under the scheme during the last two years to offset a shortfall in supplies.
   The farm minister, Sharad Pawar, said India was expected to produce in excess of 18 million tonnes of sugar in the season that began in October, sharply up from about 13 million tonnes in the previous season.
   An official of a sugar mill, based in the northern state of Uttar Pradesh, said it sold 2,300 tonnes of white sugar to Pakistan at $376 per tonne free on board. It will be delivered at Attari border before January 31. The official said the company has also sold 6,200 tonnes of white sugar after refining to the Indian Sugar Export and Import Corp at $385 per tonne.

Bangladesh, a traditional exporter of hilsa fish and jamdani sari to India, will like the next-door neighbour to diversify the products in the bilateral trade basket.
   This was stated by Mir Nasir Hossain, president of the Federation of Bangladesh Chambers of Commerce and Industry, at an interactive meeting with Indian traders at the 19th Industrial India Trade Fair in Kolkata.
   “Bangladesh’s narrow product base has diversified with manufactured products like toiletries, pottery, dry-cell batteries, inverters, melamine crockery and cosmetics that India could consider importing from Bangladesh,” said Hossain.
   Agro products and frozen fish are two other items that Bangladesh would like to export to India, according to Indian website Business Standard.
   During 2004-05, Indian exports to Bangladesh were worth Rs 7,218 crore while imports from Bangladesh stood at Rs 266 crore.
   Mohammad Imran, deputy high commissioner of Bangladesh in Kolkata, said efforts should be made on both sides of the border to reduce this imbalance.
   The central government has granted West Bengal Rs 82 crore to improve infrastructure at land ports on the Indo-Bangladesh border.
   The Bangladeshi delegates complained of tariff and non-tariff barriers at the Indian border that was hampering trade between the two nations.
   They said the obstructions were encouraging more and more informal trade across the border.
   Hossain pointed out the constraints hampering trade of pharmaceuticals, cement, fruit-juice, batteries and cosmetics. He mentioned the complex registration procedures for pharmaceutical products and standards certification for cement.
   The Bangladesh delegation also suggested that Bangladeshi traders should be provided with the option of obtaining multiple-entry visas or admits cards to come in to India for trading purposes.
   They said the current process of obtaining visas is very tedious and not cost-effective not only for the Bangladeshi traders, but for patients coming to India for treatment as well as for the students.
   The recent decision of the Bangladesh government to allow a two-day holiday every week to Bangladeshi employees at the Benapol-Petrapol border has inconvenienced Indian traders greatly.
   However, Hossain said talks were on with the government to reduce the duration of this break to facilitate cross-border trade and reduce losses.

THE Khulna salt millers, who stopped short of shutting their production units from Thursday, renewed the threat that they would be compelled to go for a complete closure of if their raw material supply is made free of alleged interruption and harassment by the coastguard.
   The members of coastguard seized 10,000 quintals of crude salt from a cargo on Bhairab river at Phultala at the time of being downloaded into a warehouse and another 10,000 quintals from the storerooms of two salt industries at Phultala in Khulna on December 12.
   The coastguard sources said the shipments were seized on specific information that those were smuggled into the country from Myanmar. The seized crude salt, worth about Tk 1 crore, was dumped in the Bhairab river, causing anger among the millers who claimed that the shipments were coming from Cox’s Bazar salt beds.
    The Khulna Salt Mill Owners’ Association, which earlier threatened to go for indefinite shutdown of salt refining units, will take a fresh decision after a meeting with the district administration scheduled for today.
   ‘We will decide next course after the meeting,’ said the salt association general secretary, Rafi Ahmed Babla.
   The association sources said if any case of smuggling is detected, it must be proved and action taken against those involved. But industry must not suffer due to harassment caused by unfounded suspicion of smuggling, they said.
   The Khulna salt mills depend on crude salt supply from salt beds in Cox’s Bazar and the Sundarbans.
   There are 38 salt mills in Khulna and, among them, 15 mills are in regular production.
   The closing down of the salt mills would leave about 5000 workers without job and the price of salt might go up in the market, the sources feared.

UNDP is planning to introduce Credit Union, as one of the easy and available sources of finance for women entrepreneurs, which will help them to strengthen and extend their existing entrepreneurs as well as set up small and medium enterprises.
    CU will be an entrepreneurs association which is a non-profit and non- banking financial institution, owned and operated by its members. It will be a safe and sound institution to save and borrow money at the reasonable and affordable rates.
   CU will be formed by Jatiya Mohila Sangstha under its ‘Entrepreneurship Development of Women’ project funded by United Nations Development Programme.
   The international policy dialogue specialist of UNDP, Alimdjanova Dinara, told the news agency that the EDW has already facilitated some 5,000 women entrepreneurs from 64 districts.
   Of them, 1802 have received micro credit of Tk 5.82 crore before the programme ceased in April.
   The national consultant of the project, Moushumi Quader, said at the beginning they would form a central CU titled ‘Association of Bangladesh Rural and Urban Women Entrepreneurs’ and six CU in all divisions will be formed as pilot basis.
   She said that CU would help women to strengthen capacity of their business and to move to the upper stage of business activities, which will open them the doors of the banks in Bangladesh.
   Government authority will register CU and as a result CU would be able to get fund from government and donors partners for ensuring flow of finance to extend entrepreneurs.
   ‘CU will be democratic in action as it will be managed by a volunteer board selected by members and the policy and regulations will be adopted by equal members and very friendly environment,’ Moushumi added.
   Not only JMS entrepreneurs but also any small or medium women entrepreneurs and women organizations or associations will be eligible for joining or form credit union all over the country.

The board of directors of Chittagong Stock Exchange Ltd elected Fakhor Uddin Ali Ahmed and AQI Chowdhury as the vice-presidents for the year 2006, said a press release.
   Fakhor Uddin is also the chairman of a CSE member firm ‘International Securities Ltd’.
   AQI Chowdhury was the founder director of CSE from 1995-1998 and presently is the chairman of a CSE member firm ‘Royal Capital Ltd’. Chowdhury is now the chief executive of JF (Bangladesh) Limited, a successor company to Finlay.

Grant Muddle joins Apollo Hospitals Dhaka as director operation with a 10 years working background in nursing homes and 5 star hotels, said a press release.
   He worked at the world famous Ayers Rock Resort and with the luxury Raffles Hotel Group.
   Before joining Apollo he served as the hospitality group manager for the Amity Group of nursing homes in Australia.
   Grant is focused on delivering the quality and consistency of service at Apollo Hospitals Dhaka.

India’s November trade deficit widened to $3.74 billion as a rapidly expanding economy drew in more imports, government data showed Thursday.
   The shortfall was $2.16 billion in the same period a year ago. India’s April-November deficit stood at $27.64 billion, bigger than the deficit of $16.34 billion in the same period last year.
   Non-oil imports, a key indicator of industrial activity, rose 23 per cent in April-November to $56.94 billion from a year earlier.
   India’s $700-billion economy, Asia’s third-largest, is poised for more than seven per cent expansion in the current fiscal year to March, 2006, powered by manufacturing and services.
   India ran up a record trade shortfall of $38.13 billion for the year to March 2005, according to the central bank, which includes defence deals in its calculations.
   Rapid growth of nearly 7 per cent last year had mainly contributed to the spurt in trade deficit, but rising oil prices have also bumped up India’s import bill. November exports fell 11.4 per cent to $6.16 billion from the same month a year earlier, while imports rose 9 per cent to $9.91 billion.

Hong Kong exports probably rose 10.5 per cent in value in November from a year earlier, suggesting a further cooling in demand for goods from China, especially from the United States, a news agency’s survey showed.
   In October, exports rose 11.6 per cent from a year earlier, below a forecast 14 per cent. Growth in September was 17 per cent, the highest this year, reflecting a pick-up in the global electronics sector and robust demand at that point for Chinese goods.

Fourteen anti-globalisation protesters arrested after violent clashes with police during a WTO summit last week were remanded on bail by a Hong Kong court Friday, charged with unlawful assembly. The 14 — 11 South Koreans, a Japanese, a Taiwanese and a Chinese national—were bailed to appear before magistrates again on January 30.
   All but the Taiwanese defendant were told not to leave Hong Kong, judicial sources said.
   More than 900 people were arrested after the December 17 skirmishes, which came as protesters broke through police cordons and tried to storm the venue where finance ministers were holding trade liberalisation talks.
   Police fired teargas to fight off the demonstrators, who then staged a 14-hour face-off with more than 1,000 riot police.
   Dozens of supporters of the protesters, including Bishop Joseph Zen the head of the city’s Catholic church, held a noisy vigil outside the Kwun Tong court in the Chinese territory’s Kowloon district during the hearing.

Asia’s main stock markets head for 2006 on the back of big gains from Tokyo to Mumbai and Seoul to Sydney and should continue to prosper as Japan’s economic growth gains traction, China’s red-hot expansion cools only slightly and US interest rates near a peak.
   There is also rising optimism for South Korea’s economy and confidence in India’s long-term growth, though record-breaking runs this year may trigger bouts of profit-taking, analysts said.
   Domestic drivers are seen pushing Asian stocks higher, while any major risks are more likely to come from outside the region - - such as a sustained rise in oil prices or a sharp slowdown in US consumption.
   Many analysts like domestic consumer-related stocks, playing on the increasing spending power of Asian consumers while tech firms are favoured thanks to a pickup in earnings growth.
   ‘Technology stocks in the region will go from having the worst earnings momentum in 2005 to having the fastest earnings growth next year,’ said Stewart Paterson, CSFB’s head of equity strategy for Asia Pacific.
   JP Morgan’s top picks include Taiwan’s Acer Inc., the world’s fourth-largest PC maker; AU Optronics Corp., the world’s third- largest maker of LCDs; and China’s top offshore oil producer CNOOC.
   The world’s No. 3 PC maker Lenovo Group Ltd., fashion retailer Esprit Holdings, Thai industrial conglomerate Siam Cement and Anglo-Australian mining giants Rio Tinto and BHP Billiton are also among its large cap top picks. Goldman Sachs analysts are positive on some large-cap companies that will benefit from rising capital expenditure.
   These include Japan’s industrial robot maker Fanuc Ltd., Mitsubishi Electric Corp., chip equipment maker Tokyo Electron, South Korea’s Daewoo Shipbuilding & Marine Engineering and Hyundai Engineering and Construction.
   Among Asia’s best performing major markets this year, Seoul’s KOSPI index is up more than 50 per cent, its best since 1999. India’s SENSEX has gained more than 40 per cent and Japan’s Nikkei average has put on 38 per cent—its best performance since 1988.
   ‘Japan is now starting to flex its economic muscles on a global stage for the first time in 15 years,’ said Lewis at JF Asset Management, adding Japan’s stock rally has further to run.
   ‘That is a big plus for Asia ex-Japan, because Japan is a part of a dynamic north Asian economy.’
   Despite this year’s strong run, South Korea still trades at a discount to regional peers and looks attractive with returns on equity that exceed the regional average, said Markus Rosgen, Citigroup’s regional head of equity strategy. India, by contrast, appears expensive, he said.
   ‘The underlying long-term structural story for India is very strong, consumption is certainly picking up, investment is another very strong theme. It’s just that the entry point is a little on the high side,’ Rosgen said.

Oil prices were steady on Friday, as US winter fuel supplies looked more comfortable after data showing a smaller-than-expected drop in natural gas stocks.
   US February light crude futures slipped one cent to $58.27 a barrel by 4:58 a.m. EST, after losing 28 cents on Thursday. London Brent crude was up eight cents at $56.63 a barrel, following a 17-cent fall the previous day.
   Traders and analysts expected thin activity, with most positions covered ahead of the long weekend break.
   The market lost ground on Thursday after US government data showed US natural gas inventories fell last week by 162 billion cubic feet (bcf), against expectations of a 169 bcf draw.
   Combined with forecasts predicting much of the United States would get unseasonably mild temperatures in the first three months of 2006, that helped ease worries over heating fuel supplies this winter.

Ford Motor Co has injected another 1.2 billion pounds ($2.1 billion) into Jaguar Cars to cover heavy losses and investment writedowns at its British luxury car subsidiary, the company said on Friday.
   The move marks the second time within two years that the number-two US carmaker has had to recapitalise Jaguar, which has battled weak sales.
   ‘The 1.2 billion pounds is correct as a recapitalization,’ Jaguar spokesman Don Hume said, confirming press reports.
   However he did not comment on whether more such operations might be needed.

Anglo-Dutch consumer products group Unilever Plc said on Friday it has signed an outsourcing contract with IBM, the world’s biggest computer company, which will lead to several hundred job cuts.
   Financial terms were not disclosed although Unilever said cost savings under the 7-year outsourcing contract would contribute to a targeted 700 million euros ($831.4 million) of annual savings.
   Unilever said IBM would provide a number of financial services from IBM centers in Portugal, Poland and India.
   Around Unilever 750 jobs are likely to be affected.

Venezuela set to take over oil field Jan 1
Venezuela’s energy minister said the government was preparing to take over an oil operation of US-based ExxonMobil and Spain’s Repsol on January 1 if the US firm refuses to accept new terms for foreign oil companies. ‘Of course we will take control of it,’ the energy minister, Rafael Ramirez, who also serves as president of state-owned Petroleos de Venezuela, told reporter in response to a question on the Quiamare-La Ceiba oil field. If ExxonMobil fails to agree to the new joint-venture plan by January 1, Ramirez said ‘we will enter unfortunately into the judicial arena.’ He noted that Repsol but not ExxonMobil had agreed to new rules for foreign oil companies operating in the country that require the state-owned firm to have a 50 per cent stake in any operation. The minister said that ‘if a company is looking to be different, it will be operating illegally, completely illegally.’ President Hugo Chavez’s government has begun enforcing the terms of a 2001 law, and all foreign oil firms except ExxonMobil have agreed, according to officials.
— AFP

Nigerian pipeline fire under control: Shell
A fire that has raged at a Nigerian oil pipeline since Tuesday has been brought under control, a spokesman for Anglo-Dutch oil major Royal Dutch Shell told the news agency. A fire on a 28-inch pipeline was extinguished overnight and repairs were under way, the spokesman said. ‘There is no more fire, just a few remains burning here and there,’ he said. A fire on a 24-inch pipe was extinguished late Thursday, ‘and repairs on this one are completed,’ he said Friday. The president, Olesegun Obasanjo, declared a state of alert in the oil-rich Niger Delta Thursday after at least eight people were reported to have died in an explosion that set ablaze the pipeline. Shell said Tuesday that unknown assailants had attacked its pipeline near the main oil city Port Harcourt resulting in a major spill and fire, and slashing production by about seven per cent of Nigeria’s total crude export. The incident has helped lift world oil prices.
— AFP

Draghi tipped for Bank of Italy post
A former head of the Italian treasury, Mario Draghi, has emerged as the favourite to become the next head of the Bank of Italy following the resignation of the discredited Antonio Fazio, Italian media reported Friday. The deputy prime minister, Gianfranco Fini, was widely quoted in the Italian press as saying he knew who the new central bank governor would be, but refused to elaborate. ‘The nomination will come, but first we have to pass the savings legislation,’ he said. The legislation, which includes reforms to the Bank of Italy and changes to the way the governor is appointed, is expected to get final approval in the Senate on Friday. Newspapers reported cross-party efforts to reach agreement on Draghi, but some reports said there was some resistance in the centre-right government. Meanwhile, Draghi—currently vice chairman Europe of US investment bank Goldman Sachs—told reporters in Rome that he was in the city for Christmas and had no meetings planned. Draghi was director general of the Italian treasury from 1991-2001, serving under a mix of centre-left and centre-right governments.
— AFP

Cadbury sells Grandma’s Molasses
Cadbury Schweppes, the world’s biggest confectionery group, said on Friday it had agreed to sell its US-based Grandma’s Molasses brand to food maker B&G Foods for $30 million in cash. The maker of Dairy Milk chocolate, Trident gum and Dr Pepper drinks said in a statement that the sale, which is expected to be completed early next year, was part of its strategy to dispose of non-core businesses. Molasses is the syrup left from the processing of sugar cane or beet and is usually used to make cakes and biscuits.
— Reuters

German govt wants new banker on ECB board
Germany wants to replace one hawkish central banker with another on the executive board of the European Central Bank, signalling that Angela Merkel’s election as German chancellor has dashed the fleeting prospect of a more flexible candidate. ‘The cabinet decided officially Tuesday to name the Bundesbank’s vice president, Juergen Stark, candidate to the executive board’ of the ECB, a finance ministry spokeswoman said Thursday. If approved, Stark would succeed another German on the ECB board, Otmar Issing, the bank’s chief economist. Issing’s eight-year mandate is due to end on May 31, 2006. The formal nomination of Stark now must wend its way through a complex European Union procedure that requires vetting by the finance ministers of the 12-nation eurozone, the European Parliament and the ECB itself. Finally, the nomination is sealed by the Council of the EU, the 25-nation bloc’s main decision-making body.
— AFP

Placer Dome grants Barrick takeover bid
Canadian gold company Placer Dome accepted an increased takeover bid from rival Barrick Gold worth $10.4 billion, the companies announced, creating the world’s largest gold producer. Barrick had made a hostile bid at the end of October worth $9.2 billion. The new combined company will eclipse competitors Newmont Mining Corp and AngloGold Ashanti Ltd with gold production this year of 8.3 million to 8.4 million ounces. ‘We are very excited about the coming together of two great gold-mining companies,’ the Barrick president and chief executive, Greg Wilkins, said in a statement. He said the two companies would exploit ‘substantial synergies,’ providing ‘an unparalleled opportunity to achieve the vision of becoming the best gold-mining company in the world.’ Placer Dome’s shareholders may opt to receive $22.50 in cash or 0.8269 of a Barrick common share plus $0.05 in cash for each Placer Dome common share. The payout is not expected to exceed $1.344 billion, and the maximum number of Barrick shares issued would be about 333 million.
— AFP