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Farm credit disbursement looks set to miss the target fixed for the just concluded fiscal year despite a significant increase in lending flow compared with the previous fiscal.
   Bangladesh Bank statistics showed a total of Tk 4451.7 crore was advanced in agriculture sector in July-May period of the fiscal year 2004-05, which was up by 34.2 per cent from a year ago period.
   In July-May period of the 2003-04 fiscal, the farm credit disbursement figured Tk 3317.9 crore.
   The government earmarked Tk 5538 crore for agricultural lending for the 2004-05 fiscal that ended on June 30 as part of its enhanced focus on rural economy and post-flood rehabilitation.
   It also instructed the state-owned banks, the major tools for channeling farm credit, to avoid harshness in loan recovery and suspend filing certificate cases for one year to give a breathing space to farmers hit hard by severe flooding in July-August 2004.
   All the four nationalized commercial banbks joined hands with the two specialized banks -- Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank - in vigorous drive for farm loan expansion, resulting in significant growth over the previous year.
   Banks also performed better in agriculture loan recovery as they realized Tk 2653.5 crore during the July-May period of 2004-05, up from Tk 2578 crore of the same period of last fiscal.
   At the end of May 2005, overdue as percentage of outstanding was 42.2 per cent while it was 52.8 per cent at the end of May 2004.
   The amount of overdue at the end of May 2005 stood at Tk 5792 crore while it was Tk 6155.5 crore a year back.
   The loan disbursement in the last fiscal got its momentum from September and peaked to its highest monthly amount of Tk 595 in December.
   The amount dropped in February to Tk 383.24 crore before rebounding in March and April with Tk 505.20 crore and Tk 573.48 crore respectively.
   Failure to achieve the disbursement target is, however, a regular phenomenon over the years reflecting weakness in fund distribution.
   Even in the flood season, when farmers required more fund, the distributing agencies missed their monthly targets.
   In 1998-99, the government planned to disburse Tk 3270 crore among farmers to help them recoup flood damages, but finally Tk 3245.36 crore was disbursed, marginally missing the target.
   During last few years, recovery outpaced the amount disbursed in the farm sector, mirroring net outflow of resources from the rural economy.
   In 2001-02 fiscal, disbursement and recovery amounted to Tk 2954.9 crore and Tk 3259.6 crore respectively while they figured Tk 3278.37 crore and 3516.31 crore in 2002-03 fiscal.

The International Chamber of Commerce in Bangladesh has apprehended that prohibitive tax measures in the national budget would hinder domestic resource mobilisation.
   The ICCB made the observation in the editorial piece of its quarterly newsletter (April-June 2005) that reviewed national budget for the 2005-06 fiscal.
   The editorial also criticised the budgetary provision of whitening black money and pledges to channel more resources in rural economy without having in place a strong local government system.
   ‘While certain budgetary provisions were in the positive direction, prohibitive tax measures for the non-listed companies, which consist over 90 per cent of the country’s private sector, would not bring any good to the growth and development of the economy as a whole; neither would help mobilise internal resources as desired,’ the editorial mentioned.
   It also said the government should not have allowed the scope for whitening black money, time and again, on moral and ethical grounds since such a provision comes as a disincentive to honest taxpayers and breeds corruption.
   ‘Instead, there should be combined efforts to improve the image of the country, which is otherwise tarnished by continuous low rating of Bangladesh,’ the chamber suggested.
   The chamber pointed out that the national budget for the 2005-06 fiscal had a strong bias towards rural economy as mirrored in the provisions for increased subsidy to agriculture and higher allocations for rural infrastructure development and targeted programmes for the poor.
   ICCB was of the view that poor performance of the successive governments in implementing development plans and insufficient structural supports in the rural areas may hinder the achievement of basic budgetary goal of poverty reduction.
   ‘In effect, it seems that the government has planned to channel huge resources to rural areas without developing strong and effective local government institutions,’ the chamber mentioned.
   It feared that there would be extensive misuse of public fund by ‘unholy alliance of the vested groups’ at the various levels of implementation.
   Since this budget has been said to the first one tailored to the Poverty Reduction Strategy Paper (PRSP) under a three-year medium-term framework, the chamber said the PRSP is yet to be placed in the Parliament.
   The chamber disagreed to the claim that PRSP is home-grown and said, ‘It is also not a secret that multilateral donors breathed down the neck of the locals who were engaged in its preparation.’
   It also said that as the basic objective of the PRSP is poverty reduction, the means and ability to achieve that goal should come under scrutiny.

Teletalk mobile phone users will be able to talk to the AKTEL and CITYCELL users soon, as the state-run company Thursday signed interconnectivity agreement with the two private operators.
   The interconnectivity is expected to be activated within a weak, company officials said.
   M Obaidullah, Managing Director of Teletalk Bangladesh Ltd., said it would take time to install interconnection link through two exchange cables with the private operators.
   He hoped similar accords with the two other operators, GrameenPhone and Banglalink, would be signed soon.
   The Teletalk MD signed two separate accords with Chris Maloy, Chief Executive Officer of the Pacific Bangladesh Telecom Ltd., the operator of CITYCELL and Nasir Bin Baharom, Managing Director of TM International (Bangladesh) Ltd., the operator of AKTEL, for the interconnectivity.

The Federation of Bangladesh Chambers of Commerce and Industry on Thursday published the primary list of 44 candidates for its election scheduled for August 21.
   The election board cancelled nomination of Bazlur Rahman of Narayanganj Chamber and Belayet Hossain of Chemical Merchant Association for improper documentation.
   Twenty-seven candidates from chamber group and 17 from association group have remained in the race for 12 posts of directors allotted to each of the groups.
   The election board also published names of 14 directors, nominated directly to the apex trade body from seven specified chambers and seven associations.
   Twenty-four other directors will be elected from the candidates.
   The total 38 directors – elected and nominated—will choose the president and two vice presidents—within 48 hours from the August 21 voting.
   Speculations are rife that this year election would be a managed one and two panels would share the posts of 24 directors equally.
   The FBCCI sources said Mohammed Ali, an incumbent director, nominated this year from Bangladesh Re-Rolling Mills Association, outlined a 12-member panel from Association Group.
   Khondokar Ruhul Amin, Sadique Ahshan and Sharif Khosru are among the independent candidates aspiring for the vital posts.
   FBCCI election board will publish final list candidates on August 3.

In a bid to uphold its position as Asia’s top MICE (Meetings, Incentives, Conventions and Exhibitions) destination, Singapore is now seeking corporate tourists from small countries like Bangladesh.
   The MICE organisers will now have wider opportunities to enjoy attractive packages when they select Singapore as tour destination.
   The Singapore Tourism Board (STB) extended it’s ‘Make it Singapore’ campaign for a year offering attractive facilities.
   To avail the facilities, the MICE organisers have to confirm their events in Singapore by 31 December 2005, and the event must be held by 2007.
   A top official from the Singapore Tourism Board last month visited Bangladesh and met senior government officials and business leaders to explore the possibility of increasing tourist flow from the country.
   As about 40 per cent of general Bangladeshi tourists spent leisure in Singapore followed by 35 per cent business tourists, the board thinks MICE organisers from Bangladesh will increase in near future.
   As a few companies have already chosen Singapore as MICE destination, the board is also planning widespread campaign in Bangladesh to attract more holidaymakers.
   The ‘Make it Singapore’ campaign, launched in 2003, have already attracted event organisers to hold at least 40 major MICE events in Singapore and the city state has lately come up with a new campaign styled ‘Make it Singapore Plus’.
   Some major MICE events taking place in Singapore in 2004 include International Conference on Materials for Advanced Technologies and Global Brand Forum.
   In 2005 also there have been many MICE events, of which the 3rd World Congress of Nephrology and the 117th International Olympic Committee Meeting are remarkable.
   Already a good number of multinational corporations have set up their headquarters in Singapore, not only to run their businesses more efficiently but also to have easy access to the global market by showcasing products and services.

Import through Benapole land port was suspended for an indefinite period from Thursday morning as Indian truckers called a strike.
   The Border Transport Owners’ Association of Bangaon of India enforced the strike demanding release of four Indian trucks seized by Benapole Customs recently for illegal entrance into Bangladesh’s territory.
   A delegation of strikers came to Benapole on Tuesday on a failed mission to settle the issue with the customs authority here.
   Going back home, they called the strike, halting transportation of Indian goods bound for Bangladesh.
   Although import from India has remained stopped, export activities have not been affected by the strike, port sources said.

Ispahani Group on Thursday has marketed its new food product with the brand name of Ispahani Puresnax Potato Chips.
   The chips will be available in two flavours — magic masala and tomato ketchup — in 15gm and 30gm packs respectively at Tk 5 and Tk 10.
   The company chairman, Mirza Behrouze Ispahani, launched the product at a city hotel. The product is free from any artificial colour, said the marketing manager of the company, SM Showkat Hussain.

The impact of development projects funded by the International Fund for Agricultural Development (IFAD) in Bangladesh is to be reviewed at a national round table workshop in Dhaka on 24-25 July, a statement said Thursday.
   Jointly organized by IFAD and the Ministry of Finance, the workshop is expected to be attended by 100 IFAD stakeholders, development practitioners and decision makers from the government working on rural poverty issues, the statement by UNDP said.
   They will discuss the findings and recommendations of the recently completed IFAD Country Programme Evaluation.
   Finance and Planning Minister M Saifur Rahman will inaugurate the workshop, while Prime Minister's Principal Secretary Kamal Uddin Siddiqui will speak on the occasion.
   Workshop participants will include officials from the Ministries of Agriculture, Fisheries and Livestock, Local Government, Rural Development and Cooperatives, representatives from the United Nations Development Programme (UNDP), the Asian Development Bank (ADB), the Food and Agriculture Organization (FAO), the World Bank and the World Food Programme (WFP). Representatives from the bilateral development agencies of Japan, the Netherlands, the United Kingdom and the United
   States will also attend the programme.
   The workshop will be co-led by IFAD Assistant President, Project Management Department, James Carruthers, and Director, IFAD Evaluation Division, Luciano Lavizzari.
   The objective of the workshop is to share the findings and recommendations drawn from the review of IFAD's work in Bangladesh from 1994 to 2004 and develop a common understanding on the building blocks of a new IFAD country strategy in Bangladesh.
   The strategy, scheduled to be submitted to the IFAD Executive Board in early 2006, will be in line with the Bangladesh government's new National Strategy for Accelerated Poverty Reduction, also scheduled for release in 2006.
   Workshop participants will debate selected topics raised by the evaluation, including relationships between non-governmental organizations (NGOs) and government in development projects, the role of the private sector in reducing rural poverty, the importance of infrastructure for the rural poor and use of micro-finance services for agricultural production.
   Since 1978, Bangladesh has received 22 loans from IFAD, which is more than any other IFAD member state. IFAD-supported projects focused on addressing the needs of the country's most vulnerable groups in rural areas.

Kazi Farms Limited, the leading poultry industry of the country has recently signed an agreement with GrameenPhone Ltd. under corporate sales package initiative.
   Kazi Farms produces best quality day-old-chicks in Bangladesh. All of its sheds are automated. The group has a well-equipped poultry laboratory and feed mills to produce high quality feed for its own parent and grand parent stocks.
   Kazi Farms Limited has been provided GP subscriptions to establish effective communication among its offices and farms around the country. Subscription to the GP Corporate package has significantly reduced its communication cost and many of its services will become more efficient. Kazi Farms will also be benefited from GP’s unique Value Added Services.
   Kazi Zeeshan Hasan, Director of Kazi Farms Ltd. and Tanvir Ibrahim, Head of Corporate Sales, GrameenPhone Ltd. signed the agreement on behalf of their respective organisations. SM Kamal, executive director, Kazi Ali Afzal, executive director of Kazi Farms Ltd. Mahbubul Kabir, DGM Corporate Customer Services and Mir Rashedul Hossain Manager Corporate Sales were present at the signing ceremony. Other officials of GrameenPhone Limited were also present at the signing ceremony.

Prime Finance and Investment Limited signed an issue management agreement for managing the IPO of Fareast Finance and Investment Limited, in Dhaka, recently.
   The agreement singed by Md Akter Hossain Sannamat, SVP and company secretary of Prime Finance and Santanu Saha, managing director (Current Charge) of fareast finance, on behalf of their companies.
   Among others Ahsan Kabir Khan, AVP, Mom Al Kashem, AVP, Md Rezau Haque, senior manager, Mainul Huda Tushar, senior manager and H S Tareq Ahmed, management Trainee of Prime Finance and Asad Khan, managing director (Designated), Anwar Hossain, assistant manager, Waise-Ur-Rahman, assistant manager of Fareast Finance were also present in the signing ceremony, says a press resease.

The Hongkong and Shanghai Banking Corporation (HSBC) Ltd in Bangladesh held the closing and prize distribution ceremony of its Car Vendor Campaign for Reconditioned Vendors in Dhaka recently.
   The promotion campaign, from April 2005 to June 2005 generated a substantial number of car loan references from the top 27 car dealers operating in Dhaka and Chittagong.
   Mamoon M Shah, manager Personal Financial Services of HSBC Bangladesh handed over the prizes to the top three winners at a ceremony. Md Monirul Alam of Sal Sabeel Trading was awarded as the Best Performer, followed by Md Nurul Alam of HNS Automobiles as the 1st Runner up and Md Habib Ullah Dawn of Auto Museum Ltd as the 2nd Runner up. The occasion concluded with a certificate giving ceremony. Among others, executives of HSBC were present on the occasion.
   Speaking on the occasion, Shah expressed his gratitude to the participating vendors and their salesman and commented that HSBC’s car loan offers the most attractive rates in the market with a flexible repayment period along with the new partial security option and higher loan amounts for all prospective valued car loan customers, says a press release.

April to September is the slack season for Indian hoteliers, but this year 7 out of 10 rooms are booked and a one-night stay in the big cities costs up to 75 per cent more than the going rate across the United States.
   The industry suffered a global tourism recession in the aftermath of the Sept. 11 attacks, and took a fresh hit from December's tsunami, but thanks to a strong economy and growth in business and leisure travel, a vigorous recovery is in hand.
   Room prices look set to increase further, as demand outstrips a frenzy of new construction.
   ‘The outlook is very good. Occupancy has never been this high in the off-season, and rates are bound to go up because they haven't come down during the off-season,’ said Ajoy Misra, senior vice president of sales at Indian Hotels Ltd., India's biggest independently-listed hotels firm.
   Indian Hotels' 8,600 rooms produce an average revenue of $62 per day, against $80 per room from the 12,000 rooms of Singapore's Raffles Holdings dotted around Asia.
   Raffles' shares surged this week after it agreed to sell its entire hotel business to US investment firm Colony Capital for $859 million.
   The company cited strong asset values and active takeover activity in the buoyant sector.
   India is at the centre of the boom. The nation will need an estimated 60,000-80,000 additional hotel rooms over the next five years according to industry data, with economy hotels and serviced apartments the most urgent requirement.
   Indian hotel firms are scrambling to expand, while international players are eyeing the market keenly.
   Indian Hotels, which operates the Taj luxury and business chain, plans to build 150 of its IndiOne economy hotels over five years for $328 million.
   India's InterGlobe Enterprises and France's Accor formed a joint venture in March to develop about 25 Ibis economy hotels across India and South Asia for more than $195 million.
   Hong Kong-listed Shangri-La Hotels, in affiliation with the the Adarsh Group, plans to raise its India capacity to 1,000 rooms, via expansion in Madras and New Delhi and three new hotels in Bangalore, the tech boom town where it is often impossible to book a room at short notice.
   Prestige Estates Projects is building a 300-room hotel for the Hilton Group in Bangalore, while Viceroy Hotels is investing nearly $21 million in a hotel it will manage for JW Marriott in Hyderabad.
   But analysts see a squeeze developing in the meantime.
   ‘Over the next two years, we are going to see a consistent increase in occupancy, which will in return reflect on average room rates,’ said Abhijeet Kundu at Angel Broking.

The Station Road branch Chittagong of Eastern Bank Limited has been relocated to a new premises at the Asian SR Hotel building at station road. It is a modern state-of-the-art, fully online branch.
   The chairman of EBL M. Ghaziul Haque opened the branch for its customers at a ceremony at the branch recently.
   M M Abdur Rahim, director and K Mahmood Sattar, managing director of EBL, and other high officials and the customers were also present at the occasion.

ADDS details about revaluation, cenu China Thursday revalued its currency for the first time in about a decade, scrapping the peg to the dollar in favour of a basket of currencies.
   The currency is now valued at 8.11 yuan to the US dollar compared to the old rate of 8.2765 yuan, effectively a two percent revaluation. The move was effective from 1100 GMT.
   “From today, the renminbi rate against the US dollar will appreciate by two percent,” said the website of China’s central bank, the People’s Bank of China, (PBOC).
   “One US dollar will exchange for 8.11 yuan.”
   Almost simultaneously, Malaysia scrapped the ringgit currency’s peg to the dollar and said it would move to a managed float.
   The dollar sank to 110.38 yen immediately following the Chinese announcement. It had stood at 112.50 yen before the move.
   The PBOC also said it has scrapped the yuan peg to the US dollar and repegged the Chinese unit to a basket of trade-weighted currencies, but did not reveal what they were. Previously, the foreign exchange trade center said it could include the Hong Kong dollar, the yen, the pound, the Swiss franc, the Australian dollar, Canadian dollar and the euro.
   Non-US dollar currencies trading against the yuan will be allowed to trade within certain bands, the central bank added without elaboration.
   “The renminbi currency rate will not be pegged only to the US dollar any longer, but according to the actual situation of China’s foreign trade development, it will be pegged to several major currencies in a currency basket to give these currencies relevant importance,” the PBOC said. China’s yuan, or renminbi, has been pegged to the dollar at 8.28 since 1997.
   The last time the Chinese government revalued it was in 1994 when Beijing devalued the currency by over 50 percent, from 5.70 or so to 8.30, from whence it moved up to 8.28 by 1997 where the authorities have held it ever since.
   China has come under intense pressure from its trade partners, especially the United States, to revalue the yuan in recent months.
   On Wednesday, US Federal Reserve chief Alan Greenspan warned that Beijing’s policy of pegging the currency to the dollar could cause “very serious” problems for the giant Asian economy.
   This was largely because financial operations that China uses to support its currency require the central bank to accumulate “very large” amounts of US Treasury bonds, he said.
   US officials have long argued the yuan’s fixed exchange rate against the dollar has left the Chinese currency significantly undervalued, lifting Chinese exports, giving them an unfair advantage, and inflating the US trade deficit.

Malaysia has scrapped the ringgit currency’s seven-year-old peg to the dollar and will move to a managed float, central bank governor Zeti Akhtar said Thursday shortly after China revalued the yuan.
   “We announce we are moving to a managed float with immediate effect,” Zeti told reporters. “It will be against a basket of currencies. It will have a positive effect on the economy.”
   Zeti declined to give an estimate of the new value of the ringgit, which is widely seen as undervalued. “This is not disclosed,” she said. The central bank said in a statement that the ringgit’s value would now be “determined by economic fundamentals” but that it did not expect its value to change significantly from the peg of 3.8 to the dollar.
   “Bank Negara Malaysia will monitor the exchange rate against a currency basket to ensure that the exchange rate remains close to its fair value,” it said.
   “Given that the current valuation of the ringgit is consistent with our fundamentals and after taking into consideration developments in our trading partner countries, the exchange rate after shifting to this new system is not expected to deviate significantly from the current prevailing level.”
   China on Thursday revalued its currency for the first time in about a decade, pegging the yuan to the dollar at 8.11, up from 8.28, and also scrapping the decades-old peg to the dollar in a favour of basket of currencies.
   Bank Negara said that “changes in the international and regional financial and economic environment” made it important for Malaysia to have a stable exchange rate against its major trading partners.
   “Such stability can best be achieved by maintaining the value of the ringgit against a trade-weighted index of Malaysias major trading partners,” it said.

Take a look at Asia's economy and you see a region slowing in the face of persistently high oil prices and sluggish export growth.
   But some economists see it differently.
   Asia is heading for a bubble, they say, perhaps starting next year. Prices of local goods and property are expected to soar due to low interest rates and tightening labour markets.
   Stock markets in Hong Kong, South Korea and Singapore are at multi-year highs, while property prices from Bombay to Hong Kong are booming.
   And with most Asian central banks likely to keep rates down, partly to offset the impact of heady oil prices, consumption is seen rising further.
   'Asia is headed for a bubble next year. Cheered on by ultra- supportive central banks, domestic goods and property prices are set to surge,' said TJ Bond, chief Asian economist at Merrill Lynch in Hong Kong.
   'In its initial stages, the bubble will also be positive for Asian stock markets. For many investors, the risk is that when it happens, they will be looking the other way.'
   The word 'bubble' tends to conjure boom-bust scenarios that leave investors and policy makers reeling. But analysts say this one is in its early stages and investors need not worry just yet that a sudden burst in the bubble could hurt economic growth.
   The region is already feeling a lot wealthier.
   Merrill Lynch estimates that, over the past three years, low interest rates have boosted domestic wealth in Asia excluding Japan by nearly 50 percent of gross domestic product as equity and property values have soared.
   Most Asian central banks have been tightening monetary policy, but real interest rates - the nominal level of interest rates minus inflation - remain low, boosting asset prices.
   One reason for low real rates is a rise in foreign exchange reserves. This has lead to the printing of local currencies and a build up of excess liquidity that has helped keep inflation high.
   Asia's foreign exchange reserves total more than $2.5 trillion, after rising more than half a trillion dollars in 2004.
   Real rates are zero in India, and negative in Malaysia, the Philippines, Taiwan and Thailand.
   There are signs that asset prices are picking up speed.

Alan Greenspan, in one of his last appearances before Congress as Federal Reserve chairman, told lawmakers yesterday the U.S. growth outlook was solid and the Fed will keep lifting interest rates.
   But he warned ‘significant uncertainties’ confront this positive prospect, including high energy prices, labor costs, the future path of long-term interest rates and the danger this could spell for the country’s housing market.
   ‘Our baseline outlook for the U.S. economy is one of sustained economic growth and contained inflation pressures,’ Greenspan, who is due to retire in January 2006, told the House of Representatives Financial Services Committee.
   His appearance on Wednesday was the first of two days of semiannual Congressional testimony on the economy and monetary
   policy.
   ‘In our view, realizing this outcome will require the Federal Reserve to continue to remove monetary accommodation.
   This generally favorable
   outlook, however, is attended by some significant uncertainties that warrant careful scrutiny.’
   Stocks initially softened on Greenspan’s comments but later pushed ahead, with the S&P 500 index, one of the broadest measures of US equities, advancing to a new 4-year high.
   The Dow Jones Industrial Average posted an unofficial close of 10,686.37, up 39.81 points.
   The dollar also initially firmed and bond prices fell, but the currency subsequently drifted lower against the euro on technical selling while US government bonds won back lost ground in longer-dated maturities.
   ‘The overall thrust of the remarks is that the expansion is nowhere near its later stages. The chairman’s remarks show a remarkable amount of confidence in the economy’s prospects,’ said Richard DeKaser, chief economist at National City Corp.

Iran’s conservatives have already got their knives out for foreign energy projects, and are not waiting for hardliner Mahmoud Ahmadinejad to become president before striking their first blows.
   But oil consultants said investors should not take fright yet and should wait to see whether the new president will listen to more pragmatic voices than populist conservatives.
   Ahmadinejad won June’s election and will take power in OPEC’s no. 2 crude exporter in August. Key conservatives are already buoyed by his firm stance on not pandering to foreign investors and are opening fire on major projects.
   First in their sights is a $1.2 billion deal that Iran’s National Petrochemical Company (NPC) signed with Germany’s Linde and Hyundai of South Korea.
   Analysts view this contract, to build two ethane crackers in the Gulf port of Assaluyeh, as a litmus test of whether Iran is ripe for investment.
   Conservative parliamentarians complained the deal was unfairly tendered and that the job could be done just as well but far more cheaply by two Iranian bidders.
   This chimes with rhetoric from Ahmadinejad, allied to parliament’s vocal conservatives, who has said foreign firms will get no preferential treatment in his presidency.
   Both the NPC and foreign partners argue that lower tender offers from the Iranian firms were highly unrealistic and that only foreigners have the technological know-how to do the job.
   ‘I believe Iranian companies should join foreign partners, so technology is transferred and capabilities improved,’ said NPC’s Managing Director Mohammad Reza Nematzadeh.
   Parliament has already shown its muscle in scuppering foreign investment deals, slashing the stake that Turkcell was allowed to take in a mobile phone operating licence, potentially worth $3 billion.
   Lawmakers have also attacked Shell, accusing the oil giant of ‘cultural imperialism’ in Iran. Shell operates Iran’s 200,000 barrels per day offshore Soroush and Nowruz oilfields.
   Sensing danger to his country’s investment-hungry energy sector, Oil Minister Bijan Zanganeh retorted that parliament had no right to interfere in the tendering of energy deals.
   Iran’s ‘buy-back’ foreign investment model, repaying oversees oil firms with proceeds from output, has failed to boost output capacity above the four million barrels per day mark.
   Upstream experts say Iran’s crude capacity will start to sag heavily without big foreign investment, as the largest fields lose about seven percent of capacity each year.

The US Senate yesterday approved a provision aimed at delaying foreign, government-owned companies from buying U.S. companies, a move directed at China’s attempt to buy a U.S. oil company.
   If a foreign, government-owned company tried to buy a U.S. company, the measure would bar the U.S. government from approving the deal until 30 days after the U.S. State Department reports to Congress on how U.S. companies are treated when they try to buy companies in the same industry in that country.
   The provision, if accepted by the U.S. House of Representatives and signed by President George W. Bush, could have implications for China’s CNOOC Ltd. that has offered to acquire U.S. oil company Unocal Corp..
   CNOOC, which is controlled by the Chinese government, has offered about $18.5 billion for Unocal.
   However, Unocal has embraced a $17 billion offer from Chevron Corp., which yesterday sweetened its previous offer of more than $16 billion.
   The measure, offered by New York Democrat Sen. Charles Schumer, was included in a bill that provides funding for U.S. foreign operations for the fiscal year that begins Oct. 1.
   ‘The Chinese government creates de facto barriers that almost always require Western companies to give up some degree of control over its enterprise that would be highly irregular in any truly free market,’ Schumer said.
   ‘Free trade should mean fair trade and all countries, including China, should be as open to U.S. investment as the United States is to foreign investment,’ he said in a statement.
   The U.S. House last month passed a measure blocking the Bush administration from approving a CNOOC purchase of Unocal. So far the Senate is yet to approve a similar measure.
   China has criticized U.S. lawmakers for interfering with a commercial transaction.

Construction magnate Mahmoud al-Fara has a dream—modern apartment blocks for Palestinian refugees rising in the place of Jewish settler villas he can see beyond the barbed wire from his office window.
   With Israel set to vacate settlements in the Gaza Strip, Fara’s crumbling, crowded hometown of Khan Younis has mapped out expansion plans with new housing, shopping districts, prime farmland and seaside tourism.
   ‘We can end the days of 20 relatives living in two rooms,’ said Fara, a U.S.-based businessman for decades but now keen to develop Gaza starting with a low-cost housing project for tens of thousands from Khan Younis’s refugee camp.
   ‘To be able at last to live in modern homes, without power cuts or open sewers, and to find work and go to the beach over there, will be great,’ said refugee Abu Omar, 57, gazing at the Mediterranean glinting beyond barriers posed by a settlement.
   But while Israel’s first removal of settlers from occupied territory Palestinians want for a state is barely a month away, investors have yet to pounce since no one knows what assets will be left behind, or whether Gaza will be accessible from abroad.
   Both sides agree that Israeli troops would raze the 1,500 suburban settler houses. But they disagree over who should dispose of the rubble and where—a row that has muddied prospects for decisions on how to dispose of other settler holdings such as 4,000 greenhouses.
   Israel says it would withdraw forces from Gaza’s border with Egypt, the territory’s only outlet to the Arab world, by year’s end if a special security force that Cairo would form proves able to stop gun-running to Palestinian militants.
   But it aims to keep control over Gaza’s air space and offshore waters, which could deter Arab investment. Israel is also undecided about granting Gaza an important travel and trade corridor through its territory to the West Bank.
   Israel cites doubts about the Palestinian Authority’s ability to subdue armed factions who reject peacemaking. Gaza militants have repeatedly flouted a February ceasefire pledge, saying they would follow the de facto truce but also respond to Israeli raids.
   Palestinian police confronted militants responsible for a mid-July suicide bombing and rocket salvo that killed six Israelis in all. The tension remains high despite a deal between both sides to end internal fighting.
   ‘The internal obstacle to development in Gaza is that the Palestinian Authority is not in control of things on the ground,’ Fara said. ‘There’s fear of a post-pullout power vacuum.’
   Palestinian leaders say Israel wants to keep Gaza as a
   captive market by refusing to open it up. They fear that continued isolation will deepen despair and disorder in Gaza, harming Palestinians’ claim to statehood.
   ‘Whatever assets Gaza gets, without meaningful access to the world, life here will be hell,’ said Mohammed Samhouri, consultant to a Palestinian cabinet committee mulling what to do with vacated settlements.
   ‘If Gaza stays a prison, there is no chance to run it well and Israel can say, ‘See, the Palestinians screwed it up. They should be given no more land’,’ he said, referring to the West Bank which Palestinians want for the bulk of a future state.
   Compounding the uncertainty, talks on coordinating security steps for the withdrawal have gone nowhere. The impasse has sown fears of a looting spree in abandoned settlements and a seizure of property by armed groups.
   Any such outcome would crimp development prospects offered by a World Bank plan to draw $3 billion from industrialised nations into the region to build an economic basis for peace.
   The Palestinian Authority’s slowness to tackle rampant internal corruption and incompetence is also a serious impediment to capital investment, economists and diplomats say.
   Diplomatic mediators and development agencies urge Israel to invest in high-tech security scanners for cargo crossing Gaza’s border as a short- term solution to its security concerns. They also want the Palestinian Authority to control militants.
   Reopening Gaza’s sole airport, which Israeli forces smashed and shuttered during fighting in 2001, is also seen as crucial for trade and investment. Israel says air traffic could bring arms-smuggling.

Vietnamese Prime Minister Phan Van Khai has ordered an all-out effort to achieve second- half economic growth of 9.3 percent after expansion in the first six months left the country struggling to hit its 2005 target.
   ‘The economy is still facing many difficulties. GDP growth during the first half of 7.6 percent was much lower than our plan,’ state media quoted a Khai directive today as saying.
   ‘We need to strive to grow at least 9.3 percent in the last 6 months of the year to meet our target growth of 8.5 percent,’ the directive said.
   It urged ministries to create ‘favourable administrative procedures’ to help firms in both the state and private sectors do business better.

The dollar sank to 110.38 yen on Thursday following the announcement that China was to revalue the yuan for the first time in a decade.
   The dollar stood at 112.50 yen before the announcement.
   "From Thursday, the renminbi rate against the US dollar will appreciate by 2.0 percent," said the website of China's central bank, the People's Bank of China (PBOC), on Thursday.
   "One US dollar will exchange for 8.11 yuan."
   China's yuan, or renminbi, was previously fixed in a narrow range around 8.28 to the dollar, which the US and Europe Union claimed had undervalued the Chinese currency and gave Chinese exports an unfair competitive advantage.
   The PBOC added that the yuan will now be pegged to a basket of currencies.
   "The renminbi currency rate will not be pegged only to the US dollar any longer, but according to the actual situation of China's foreign trade development, it will be pegged to several major currencies in a currency basket to give these currencies relevant importance," the PBOC said.

World oil prices dipped on Thursday on relief that crude stockpiles in the United States were little affected by a hurricane in the Gulf of Mexico, dealers said.
   New York's main contract, light sweet crude for delivery in September, shed 55 cents to 57.47 dollars per barrel in electronic deals. The August contract had expired on Wednesday at 56.72 dollars per barrel.
   In London on Thursday, the price of Brent North Sea crude oil for delivery in September fell 77 cents to 55.88 dollars per barrel.
   The weekly snapshot of US inventories on Wednesday showed that crude imports into the United States surged higher in the week ending July 15 -- despite concern that Hurricane Dennis would affect Gulf of Mexico oil production.
   "The initial shocker in (the) figures is crude imports, topping 10.8 million barrels per day and within 4.0 percent of their highest ever" figure, said Societe General analyst Deborah White.

Reverse repo
auction held
Reverse repo auction for the commercials banks and financial institutions was held at the Bangladesh Bank on Thursday. Five bids of 2-day tenor amounting to Tk 223.00 crore, three bids of 4-day tenor amounting to Tk 125.00 crore, four bids of 5-day tenor amounting to Tk 290.00 crore and one bid of 6-day tenor amounting to Tk 20.00 crore, in grand-total of thirteen bids of Tk 658.00 crore were received and accepted, said a Bangladesh press release. The rates of interest against the accepted bids were 4.50 –4.60 per cent per annum for 2-day tenor and 5.00 per cent per annum for 4-day, 5-day and 6-day tenor.
— UNB

PKSF disburses Tk2091.21 crore to 230 NGOs
Palli Karma Shahayak Foundation (PKSF), a government subsidiary, has provided Taka 2091.21 crore till March of 2005 to 230 non-government organizations running micro credit programmes in rural and urban areas across the country. The number of beneficiaries of the soft loan has reached 53,96,894, including 48,92,262 women who constitute 90 per cent of the total beneficiaries and champions of loan repayment. PKSF provides loan to credible organizations trying to arrest poverty through micro financing. It offers credit in four categories namely Rural Micro Credit, Urban Micro Credit, Micro Credit for Ultra Poor and Small Entrepreneurship. Sources in the PKSF said it has a plan to disburse an additional amount of Taka 225 crore to the small entrepreneurs in 64 districts during the fiscal 2005-06.
— BSS

India’s Satyam Computer Q1 profit up
India’s fourth-largest software exporter, Satyam Computer, said Thursday that first-quarter net profit climbed 16 per cent as it won more clients in a continued outsourcing boom but the figure fell short of forecasts.Net profit rose to 1.9 billion rupees (42.2 million dollars) for the three months to June from 1.64 billion rupees a year earlier as revenue increased by 35.7 per cent to 10.6 billion rupees.The net profit was below average analyst expectations of 2.02 billion rupees, mainly due to increased wage costs, but revenues were above market forecasts of 10.31 billion rupees.Shares of New York-listed Satyam Computer Services Ltd rose 1.41 per cent to 511.50 rupees on the Mumbai stock exchange after the company revised upward its earnings guidance.
— AFP

Coca-Cola’s Q2 net income rises
Coca-Cola Co., the world’s largest soft-drink maker, said second-quarter profit rose as increased marketing spending boosted sales in North America and Europe. Net income was $1.72 billion, or 72 cents a share, compared with $1.58 billion, or 65 cents, a year earlier, Atlanta-based Coca-Cola said in a statement. Sales rose to $6.31 billion from $5.91 billion. Coca-Cola increased spending on advertising and promotions as it introduced two no-calorie drinks, Coca-Cola Zero and Diet Coke with Splenda. Chief Executive E. Neville Isdell is trying to increase sales after gains at Pepsi Co Inc. outpaced Coca-Cola’s over the past five years. “A new management team is allocating more money for advertising spending for branding,” said Michael Bee, who helps manage $3.3 billion for Cleveland-based Boyd Watterson Asset Management, including 100,000 Coca-Cola shares. ‘The company is addressing issues that have plagued it for five years.’ Coca-Cola was expected to earn 64 cents a share, the average of 16 analysts surveyed by Thomson First Call. Coca-Cola had beat estimates the past six quarters.
— Bloomberg

BMW in talks to build factory in India
BMW, the German luxury car maker, is negotiating with the authorities in India with regard to the possible construction of a manufacturing plant on the sub-continent, a company spokesman said Thursday. Nevertheless, no contract had yet been signed on the matter, the spokesman added.According to the Indian daily Business Standard, BMW is preparing to build a assembly plant in Chenglepet in Tamil Nadu for one billion rupees (around 18 million euros, 22 million dollars). The newspaper quoted sources close to the project. BMW said last year that it aimed to expand in India where it is currently only represented via three independent dealers.
— AFP

Nokia shares drop as profit misses estimates
Shares of Nokia Oyj, the world’s largest mobile-phone maker, had their biggest drop in a year after the company’s second-quarter profit missed analysts’ estimates and it said earnings may fall this quarter. The stock fell as much as 8.7 per cent to 13.42 euros, and traded at 13.58 euros as of 1:24 p.m. in Helsinki. Second-quarter net income rose 15 per cent to 799 million euros ($972 million), or 18 cents a share, from 695 million euros, or 15 cents, a year earlier, Nokia said. It forecast third-quarter profit will be 14 cents to 17 cents a share, compared with 15 cents a year earlier. “Prices are coming down for Nokia’s phones, while Motorola has succeeded much better in terms of pricing, design and brand,” said Jussi Hyoety, an analyst at FIM Securities in Helsinki, who is reviewing his “buy” rating for the stock. Nokia, based in Espoo, Finland, is trying to take business from competitors including Motorola Inc. and Siemens AG by adding features such as music players and higher-resolution cameras to its phones.
— Bloomberg

All India Consumer Price Index rises
Fueled by rise in prices of rice, wheat atta, maize, chillies, vegetables and fruits, all India Consumer Price Index (CPI) for agricultural and rural labourers (Base 1986-87 = 100) has increased by two points each during June 2005 to stand at 345 points for agricultural labourers and 347 for rural labourers. The rise and fall in index varied from state to state. In case of agricultural labourers 13 states reflected an increase in indices ranging between two to five points while five states showed a decrease ranging between one to four points, a release by Ministry of Labour and Employment said. While the indices remained constant in two states, it added.
— ANI