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The International Labour Organisation is going to review the impact of the phasing out of quota on textile and clothing exports globally.
   In this connection a three-day tripartite meeting will be held in Geneva between October 24 and 26, 2005 where governments, entrepreneurs and labours’ representatives from 15 countries including Bangladesh will meet with ILO governing body.
   The other countries are: Brazil, Cambodia, China, France, Haiti, India, Kenya, Lesotho, Mexico, Morocco, the Philippines, Romania, Turkey and the United States.
   A report styled ‘promoting fair globalisation in textiles and clothing in a post-MFA environment’ has also been prepared by the ILO as a rapid assessment of impact of the end of decades-old multilateral arrangement in textile trading from January 1, 2005.
   The report has compiled and examined export trends and employment situations in the textile and clothing sector of 15 countries during the first six months of 2005 since the quota expired.
   The ILO rapid assessment observed that Bangladesh, Sri Lanka, Cambodia and Indonesia have been able to increase their market shares, while Pakistan and Thailand have succeeded in maintaining their stakes in global market.
   ‘Among the major exporters, China and India have both gained market shares since quotas were lifted as their exports have grown faster than others to the United States while Mexico and the EU 15 have lost market share,’ said ILO
   The report said most studies relating to the post-MFA environment in 2004 predicted that Bangladesh would see a major setback in the textile and clothing trade and huge employment losses.
   ‘Today, the picture is rather different,’ said the ILO. ‘Post-MFA potentials are now recognised, at least in certain segments of the textile and clothing industry.’
   ‘Garment factories are not closing down as they did during the 2001-03 period following the sharp decline in the United States market,’ the report added.
   ‘On the contrary, they are reportedly consolidating their capacity and some factories are even expanding in response to a predicted boom in 2005, as major United States and European buyers, consolidating and narrowing their outsourcing strategies, have indicated that they will keep Bangladesh among their top suppliers.’
   ILO was of the view that Bangladesh benefits from duty-free access to the European Union, with more generous rules of origin in sight.
   ‘The most encouraging sign for Bangladesh is the rapid growth in sales of knitwear products in the United States market, although the base level of knitwear exports to that market is still very low,’ the assessment continued.
   The ILO, however, did not make any observation on employment situation on Bangladesh as employment data for Bangladesh were not readily available.
   ‘It is thus difficult to identify a trend in the employment-unemployment situation due to movements of ready-made garments during the early part of 2005,’ it added.
   ‘From the modest growth of RMG products during the first quarter of 2005 compared to the same period in 2004 and 2003, it may be expected that there will be additional employment in this sector,’ the ILO assessment said.
   ILO also praised initiatives of the manufacturers’ associations as well as individual enterprises, primarily large-scale enterprises in past two years to diversify buyers and improve product quality and productivity.
   These were done through participation in international trade fairs, in-house skills training for workers and supervisors, acquisition of modern technology such as computer-assisted design and productivity improvement schemes, the report pointed out.
   ILO, however, mentioned that weak infrastructure, particularly low port efficiency and insufficient port capacity along with frequent power cuts, high costs of telecommunications and red tape prevent Bangladesh from realizing its potential as a low-cost clothing exporter.
   ‘If these problems are addressed, job losses could be limited or even avoided,’ the report added.

Major Pakistani textile entrepreneurs intend to invest in Bangladesh’s backward linkage industries for readymade garments sector, sources in the Board of Investment have told New Age.
   A high-profile delegation of Pakistani businessmen, representing 10 large companies, is scheduled to visit Bangladesh some time after the Eid-ul-Fitr to look for investment options.
   Some of the leading businessmen earlier this year had initial talks on investment with the Bangladesh Export Processing Zones Authority, chamber leaders and government leaders.
   Pakistan’s second largest textile company, namely Gul Ahmed, and another big name, SITE, will also be included in the investment mission. Pakistan produces 25 per cent of the world’s cotton and exports textiles worth over $12 billion a year.
   The Karachi chamber of commerce and industry will play a leading role in holding meetings with government officials and business leaders on how to make the investment initiative a success. Karachi, a port city and an industrial hub, accounts for about 70 per cent of Pakistan’s textile products.
   ‘They are coming with serious initiative to make millions of dollars of investment, mainly in textiles sector, in which the Pakistani businessmen have very good expertise,’ a top official of the Board of Investment (BoI) said.
   If Pakistani entrepreneurs set up textile units in Bangladesh, the current deficiency in raw materials for readymade garments will be largely met without depending only on imports, which reduce cost-competitiveness, the BoI official added.
   In a bid to increase textile products to meet growing fabric demands of garment units, the government this year decided to provide textile entrepreneurs with bank loans up to 70 per cent of their investment as equity support to bring in more local investment in the sector.
   Local textile mills can meet only 25-30 per cent of local fabric demand of woven garments and 90 per cent of knit garments. The country needs four times more investment than the current aggregate investment of Tk 20,400 crore in the sector, according to an official estimate.
   The Pakistani business team will discuss with the government officials and chamber leaders about their plans to invest in setting up food-processing and agro-based industries.
   The Pakistani businessmen are learnt to have been impressed by the facilities in Bangladesh’s export processing zones and they expect implementation of 30 per cent cash incentives in food-processing and agro-based industries in conformity with those offered for local ones.
   Earlier, the Karachi chamber reached an agreement with the Dhaka chamber to form Bangladesh-Pakistan Business Development Council for facilitating trade and investment between the two countries.
   The Karachi chamber president, Khalid Firoz Arfeen, during his Bangladesh visit, offered ‘effective cooperation’ between the businessmen of the two countries in sectors such as light engineering, pharmaceuticals, handicrafts, plastic and terry towels.
   Bangladesh currently suffers trade deficit of $67 million a year with Pakistan. Among other factors, absence of any direct shipping line between Chittagong and Karachi ports is blamed for lower trade transactions between the two countries.

Textile makers have denied the allegation that they have increased price of local yarn by as much as 40 cents per kilogram within a month, making local knitwear less competitive in export market.
   ‘We have not raised the price to that extent,’ MA Awal, president of the Bangladesh Textile Mills Association, said at a press conference in Dhaka Saturday.
   The Bangladesh Knitwear Manufacturers and Exporters Association wants the government to lift the ban on import of yarn through land port mainly from India as they claim that local yarn costs them more than imported ones.
   The association at a press conference on October 4 claimed that price of local yarn has gone up by $0.30 to $0.40 per kg over the past one month while during the same period, prices of yarn in India rose from $0.10 to $0.15.
   Speaking at the inaugural session of the BATEXPO 2005, the finance minister, M Saifur Rahman, also warned the local spinners of allowing import through land port if they fail to lower prices.
   Awal argued that they mull 10 to 15 per cent increase in yarn price to cope with price of cotton in global market. Price of cotton has gone up by about 12 per cent in the international market.
   The country’s demand for yarn stands about 700 to 750 tonnes per day while the local spin mills can produce 600 tonnes, he said.
   Awal said global price hike of raw material has prompted them to consider revising local yarn price upward by 10-12 per cent, but still local yarn is price competitive with Indian yarn. Local yarn now sells between $2.40 and $2.45 per kg.
   Awal said the demand for opening up of land ports for yarn import stands illogical since local producers meet 85 per cent of the demand.
   The government suspended import of yarn through land ports in March 2001 to check alleged smuggling of yarn into the country. Yarn import is allowed only through waterways.
   The textile industry leader repeated his concern that re-opening of land ports to yarn import would result in misuse of the facilities by the importers.

The lack of interconnectivity capacity of the T&T exchanges in local levels hinders the country’s private land phone operators to provide T&T access to their subscribers and expanding their operation and network.
   BTTB also admitted that the problem arose as there was no plan during the installation of the T&T exchange earlier, where the interconnectivity port for the other PSTN operators would have been kept.
   The four private PSTN operators who launched their operations this year claimed that despite repeated appeals, the T&T authorities were reluctant to take immediate measures in this regard.
   At least, ten private operators who have already signed for the T&T interconnectivity this year have been developing their infrastructures before launching operations.
   Bijoy phone of Jalalabad Telecom Ltd (JTL), Bay Phones of Westec Ltd, Bangladesh, Rankstel of Ranks Telecom Ltd and Onetel of Onetel Communications Ltd admitted that after their commercial launch along with infrastructure development in respective areas, no interconnectivity hassle was experienced with other private operators and even with mobile operators.
   Mahtabul Amin, manager (marketing and sales) of Onetel told BDNEWS that though the operator went for the commercial launch in five districts - Rajshahi, Rangpur, Bogra, Pabna and Sirajganj - of its approved northwest zone in its first phase, it experienced no T&T coverage in most of its approved areas.
   Officials of the Rankstel said that without Sylhet and Chittagong districts, the operator could not provide T&T interconnection facility to its subscribers in Feni, Noakhali, Comilla, Munshiganj, Dohar, Narsingdi, Manikganj, Gazipur and Tangail.
   They said it became tough to convince authorities concerned by any means for solving the problem. JTL is bringing 16 districts of the approved northeast zone, including grater Mymensingh, Narayanganj and Tangail; and Dhaka district, excluding the metropolitan area, under its network in phases.
   Bangladesh Telegraph and Telephone Board (BTTB) chairman Engr Abdul Maleque Akhand Saturday told BDNEWS that though the Board has limitation, it took initiative after getting such complain from the operators. Milu Chowdhury, an official of the Bay phones said that T&T interconnection is available in Chittagong district but in other areas of the zone including Feni, Hathazari, Fatikchhari, Anwara, Patiya, Noakhali, Mirersharai and Comilla, T&T has no interconnectivity capacity. ‘Why people would be our subscribers in those areas where T&T incoming and outgoing are uncertain though T&T phones are available,’ asked private operators.

Commercial extraction of coal from the country’s first mine in Barapukurua has become uncertain due to leakage of gas through pit.
   Sources said carbon monoxide gas started to emit from the underground mine on September 30, forcing CMC, the Chinese operator of the mine to suspend its operation.
   But Chairman of Petrobangla SR Osmani told the news agency in Dhaka that the leakage has been successfully sealed on Friday.
   ‘Now the danger is over… We are waiting for the next course of action. The operation of the mine will resume soon’, he said.
   He termed the incident of gas leakage a very natural one. ‘This frequently happens in many mines in the world. This does not expose any danger’.
   The Petrobangla chief, however, did not make any prediction as to when operation of the coal mine could be resumed.
   Meanwhile, the Chinese operators have forwarded an insurance claim to the state-owned Sadharan Bima Corporation (SBC) for the damage of its equipment due to the gas leakage.

Shares of biotechnology companies developing treatments to fight a possible outbreak of avian flu rose on Friday as delegates from around the world met to discuss plans for battling the illness.
   BioCryst Pharmaceuticals Inc, a small biotech in Birmingham, Alabama, saw its shares soar as much as 20 per cent to its highest price in nearly five years, while Gilead Sciences Incshares rose 5 per cent to touch an all-time high.
   ‘The current marketers of (antiviral drugs) Relenza and Tamiflu have been doing well,’ said Wedbush Morgan Securities analyst Vinny Jindal. ‘And really, any company with a capability for making viral vaccines has had some appreciation.’
   Shares of Gilead, which co-developed Tamiflu with Swiss drug maker Roche Holding AG, provided the greatest support to the Nasdaq in afternoon trading.

The country is likely to face a crisis in the supply of bitumen and its container drums as the operation of the state-owned bitumen plant in Chittagong remains closed for more than one-and-a-half month.
   Informed sources said operation of the plant, established by the state-owned Eastern Refinery Limited (ERL), was suspended on August 15 because of non-availability of ‘cold rolled sheet’ which is used for the production of the bitumen container drums.
   The non-operation of the drum-manufacturing unit forced the authorities to halt production of bitumen as well.
   The country has only two such plants—one at state-owned ERL and another owned by PHP, a private company owned by Bay Terminal Ltd. This private plant is also located in Chittagong.
   Bitumen is a by-product of crude oil. The country has an annual demand of 1.25 Lakh tons of bitumen, of which the ERL produces 70,000 tons.
   The ERL plant also produces between 1500 and 2000 container drums per day with an annual production capacity of 4.5 lakh drums.
   On the other hand, the PHP-owned plant, which is the lone competitor of the ERL in the market of bitumen and container drums, produces 1.5 lakh drums annually.
   Sources alleged that the government has been incurring a financial loss of Tk 5.00 lakh per day due non-operation of the ERL bitumen and drum production plant.
   ‘The ERL has already incurred a loss of about Tk 2.5 crore in last one and half months period’, claimed a source.
   It was also alleged that the management of ERL did not take any measure to import ‘cold rolled sheet’ to keep the drum factory operational.
   Meanwhile, industry insiders said that the closure of the operation of bitumen production plant would lead to a crisis in its market.
   Demand for bitumen, which is particularly used in road construction and repairing purpose, will increase in coming dry season.
   ‘Generally, the demand for bitumen is on the rise in the winter season’, said an official of the ERL expressing his concern.
   He suggested that the government should immediately take measures to resume the operation of the ERL bitumen plant.
   Despite repeated attempt, the managing director of ERL, MA Wadud Khan could not be reached over telephone for his comment on the issue.

Travel bookings in Asia rose 19 per cent in August from a year ago, suggesting another banner year for the industry despite high oil prices, a leading air ticketing and reservations agency said.
   Intra-Asian travel continued to power the increase, accounting for over 81 per cent of bookings which reached more than 4.41 million, Abacus International said in a statement.
   ‘As we said at the beginning of the year, 2005 looks to be another record year for Asia-Pacific travel as regional governments place more emphasis on developing tourism infrastructure and cultivating the tourist dollar,’ said Abacus president and chief executive Don Birch.
   ‘Despite the higher oil prices, the Asian Development Bank expects 6.6 per cent growth for regional economies this year, which I believe will translate into a travel growth rate of 6.0-8.0 per cent across the region.’
   Abacus, Asia’s leading air ticketing and reservations company, said a ‘surprise star performer was the Asia to Middle East route, which recorded a 107 per cent increase’ in August from the same month last year.
   It did not provide an explanation for the sharp increase.
   Crude oil prices touched an all-time high of more than 70 US dollars a barrel on August 30 after Hurricane Katrina battered oil refineries and platforms in the southern United States.

Subscribers of Banglalink cellphone will now be able to pay their bills in any of the branches of the Esatern Bank Limited as well as through the bank’s Internet banking facility.
   With this effect, the Banglalink chief executive officer, Lars P Reichelt, and the Eastern Bank acting managing director, Ali Reza lftekhar, signed an agreement in Dhaka on Wednesday.
   EBL executives Yusuf Saeed, Asif Saad Bin Shams and Iftekhar Hossain and Banglalink officials Ezzeldin M Heikal and Mahmudul Kabir were present at the signing ceremony.

Standard Chartered Bank opened, at IDB bhaban, a new specialised UN Cash Booth -marking the successful conversion of American Express Bank Ltd.'s license to that of SCB following the latter's recent purchase of AEBL's domestic business and branches in Bangladesh, said a press release.
   The UNDP resident representative in Bangladesh, Jorgen Lissner, inaugurated the cash booth, which is meant for exclusive use by UN agencies, their staff and a few selected corporate clients.
   Also present during the opening ceremony were Osman Morad, chief executive officer of SCB, Selim RF Hussain, chief financial officer of SCB, Carlyse Hessic, deputy resident representative of UNDP, Margaret Ann Goon, deputy resident representative of UNDP and other senior officials.

Beximco Pharmaceuticals is all set to become the first Bangladeshi company to get listed on London Stock Exchange on October 21.
   In a statement Saturday, the local drug maker announced that its Global Depository Receipt for tapping the UK capital market received overwhelming response at the close of subscription.
   The books for subscription of the GDRs closed in London on Thursday. A total of 2 crore GDRs have been issued to raise around Tk 142 crore from international institutional investors to be utilised in new manufacturing lines, new processes and repay foreign currency loans.
   ‘In addition, the company is expected to raise approximately another Tk 57 crore by issuing 6,666,662 GDR warrants to be issued to the subscribers of Global Depository Receipts,” said the announcement.
   ‘Joining Alternative Investment Market of the London Stock Exchange will give us extra visibility, improve the image of Bangladesh and shore up the confidence of foreign investors,” hopes the Vice Chairman of Beximco group Salman F Rahman.
   The money will be used to start producing for export to the least developed countries a range of innovative drugs developed by other pharmaceutical groups that are still protected by patents, including anti-retrovirals to treat HIV, he said.
   Beximco, which reported a net income of around Tk 33 crore on sales of Tk 277 crore last year, plans to invest in research and development so that it can begin by 2016, to innovate its own new drugs.

India is ready to move beyond software into the very heart of computing ... and make microchips. Its ambitions have been thwarted by inadequate water, power shortages and poor roads, but industry officials say the country now has critical mass in chip making as new firms emerge specialising in chip design, testing and packaging.
   They are lured by a growing domestic market for chips, estimated at $800 million by the end of the year, and a chance to compete with heavyweights China and Taiwan to win a slice of the global $220 billion chip pie.
   ‘There’s no shame in conceding we’re in this race rather late,’ said Finance Minister Palaniappan Chidambaram when he inaugurated Tessolve, a simulation and testing firm that officials say could serve 80 chip design houses in the city.
   India ultimately wants a fabrication plant, or ‘fab’, which would cost $3-4 billion. Poornima Shenoy, president of the Indian Semiconductor Association (ISA) said costs in China and Taiwan were helped by government support, which would also be a key factor in India’s quest to build fabs.
   The government has at least seven fab proposals, said Vinnie Mehta, executive director of the Manufacturers Association of Information Technology, including one from Indian Equipment Manufacturing Co. (IEMC).
   Chip-maker Advanced Micro Devices Inc. is also thinking about an Indian fab. Its India president, Ajay Marathe, said AMD was working towards making low-cost devices for India.
   ‘At the right time, we hope to bring this expertise to benefit the Indian semiconductor industry,’ he said. Information Technology Minister Dayanidhi Maran said in June that Intel Corp., the world’s top chip maker was ready to invest $400 million to assemble and test chips in India. But Intel did not confirm this.
   With chips in everything from credit cards and mobile phones to medical devices, it’s becoming common for ‘fab-less’ makers to design them and outsource manufacturing to Taiwan or China.
   ‘The semiconductor industry has a very, very long food chain,’ said Indian Semiconductor Association Chairman Raj Khare.
   Chips are increasingly loaded with software, where India’s $17 billion software industry has an edge Local firms now do both conceptual work and design, involving loading circuits onto silicon wafers, said Khare, who heads the local unit of fab- less chip maker Broadcom, created by buying a Bangalore start-up designing broadband video chips.
   Wireless equipment maker Qualcomm paid $19 million last year for Spike Technologies. Wipro Ltd., India’s No. 3 software firm, also designs chips as an outsourced service.
   India has its own fab-less firm in Hyderabad-based MosChip Semiconductor, and houses engineering centres for Intel, AMD, Infineon Technologies AG, Freescale Semiconductor Inc., Philips and Samsung Electronics Co. Ltd. Applied Materials and Magma Automation, which make tools to aid semiconductor firms, are also in India.
   Britain’s ARM Embedded Technologies opened in Bangalore this year, followed by U.S.-based Open-Silicon, which develops, tests, packages and ships silicon on behalf of chip makers. Open Silicon aims to roll out 20-25 different types of chips next year, said Satya Gupta, who co-founded the firm with Naveed Sherwani, a Pakistani-born U.S. scientist.
   India is home to start-ups like wafer fabrication technology developer Vignani, wafer packager SPEL Semiconductor Ltd. and Ittiam Systems, which makes videophone prototypes.

The United States said Friday it will offer specific proposals on cutting its farm subsidies at world trade talks next week, prompting a cautious welcome from the European Union and a warning from lawmakers that negotiators must not bow to ‘unreasonable’ demands.
   Until now the US had insisted it would only tackle domestic farm reform once it had gained significant concessions from other World Trade Organization countries giving it access to new markets.
   Agreement among the 148 member countries on a deal to cut trade- distorting subsidies and tariffs on agriculture is seen as key if a WTO ministerial meeting in Hong Kong this December is to finalize a blueprint for lowering global trade barriers.
   Washington has been encouraged by talks over the last week in Geneva, a US trade official said on Friday, at which countries had taken the step forward of putting specific numbers on the table regarding cuts to import duties.
   ‘Our basic premise was that we needed to make more progress on market access. The good news is we are getting into the issues, people are talking about numbers. And that has been heartening for us,’ said the official, who briefed media on condition of anonymity.
   Asked if this meant the US would now offer ideas on cutting domestic supports, he said: ‘We are going to be getting specific. We want to see them getting specific ... We’re going to work with (other countries) and try to do it in the most constructive way.’
   The United States is hosting a meeting of ministers from 15 leading World Trade Organization members in Zurich on Monday.
   The European Commission said it looked forward to hearing the US proposals, adding it was ready to play its part.
   ‘The European Commission looks forward to this step,’ said Peter Power, spokesman for European Trade Commissioner Peter Mandelson. ‘Everyone has to take their share of the heavy lifting in order to take the WTO round forward. We will certainly be playing our part.’
   However, senior US congressmen expressed concern about negotiating demands put forward by the EU and other countries and warned any deal should not tie Congress’ hands, nor stint on delivering market access for US farmers.
   Congress is preparing to draft the next programme-setting farm bill early next year, updating 2002 legislation that added some $6.4 billion a year to US crop and dairy spending.
   ‘Proposals from the European Union and others that would dramatically reduce US farm support while doing little to create new trading opportunities for American producers cannot be the basis for an agreement,’ Republicans Saxby Chambliss and Bob Goodlatte said in a letter to US Trade Representative Rob Portman. Chambliss heads the Senate Agriculture Committee and Goodlatte is chairman of the House agriculture panel.
   The EU has proposed a 65 per cent cut in its spending on farm supports and a 55 per cent cut for the US. That would trim US spending to $8.5 billion from $19.1 billion and the EU to about $27.6 billion from around $80 billion—although in reality some of the money would be shifted to new programmes.

In a cliffhanger vote held open by Republican leaders until they won, the US House of Representatives passed by two votes Friday a bill giving US oil refineries incentives to expand.
   The legislation, written by Republican Joe Barton of Texas, was barely approved, 212-210, even after Barton dropped a White House-backed provision that would have gutted clean air rules for refineries to expand existing plants.
   The bill wants to add 2 million barrels per day of capacity by offering abandoned military bases for refinery construction sites. It also gives federal insurance to refiners whose projects are delayed by lawsuits or regulatory snags, and puts the Energy Department in charge of processing permits.
   It was the first major House vote since Texan Tom DeLay was forced to step down as majority leader after being indicted on felony charges. Republicans won in a roll call vote that ran 44 minutes, far beyond the allotted five minutes.
   Some 13 Republicans, mostly from Northeast states, ultimately voted with 196 Democrats and 1 independent against the bill. No Democrats voted for it.
   Democrats in the chamber chanted ‘shame, shame, shame’ as the final tally was announced.
   When over two dozen Republicans initially voted no, DeLay, Barton, House Speaker Dennis Hastert and new Majority Leader Roy Blunt circled the chamber to cajole holdouts.
   Republican Wayne Gilchrest of Maryland was the last to switch. With the tally stuck at 211-211, Gilchrest changed his vote, making it 212-210. Barton promptly shook his hand and Republican Mike Simpson, who presided over the vote, gaveled it to an end.
   The rapidly shifting vote kept even senior Republicans at sea. ‘I didn’t know what to expect,’ Hastert said afterward.
   Several Democrats protested that the vote was held open. ‘I am informed that every member of Congress who is in town has voted,’ Democratic whip Steny Hoyer of Maryland said at one point, when the tally was 210 yes, 214 no.

The world’s largest steelmaker, Mittal Steel, signed an agreement Saturday to invest 400 billion rupees (nine billion dollars) in a steel project with India’s Jharkhand state, a company statement said.
   The project will be the second biggest foreign investment in India’s steel sector. South Korean steel maker POSCO decided to invest 12 billion dollars in the eastern Indian state of Orissa earlier this year.
   Mittal would develop a plant in two phases of six million metric tonnes capacity each, but the statement did not give a launch date.
   Mittal Steel chairman L.N. Mittal and Jharkhand state’s top bureaucrat P.P. Sharma signed a memorandum of understanding for the project. The company said a final agreement would be signed only after completion of a detailed project report.
   Mittal was also to study the possibility of setting up a 2,400 Megawatt capacity power plant and an adjacent township for employees.

World Bank president Paul Wolfowitz, preparing for a visit to China, said Friday the Bank had a role in helping the country tackle its high rates of poverty that remain a challenge despite the country’s growing clout as a world economic power.
   Wolfowitz will travel to China and another large World Bank borrower country Russia next week in a 15-day tour that will also take him to big donor nations Japan, Sweden and Finland.
   It is his first visit to the countries as new head of the globe’s largest development agency.
   The Bank has often faced criticism by several development experts for using its resources to lend to China, a country that has accumulated about $753.2 billion in savings amid booming trade and foreign investment.
   Wolfowitz said China had come a long way in its transition to a market economy and its high growth rates had lifted more than 400 million people out of poverty in the past two decades. The country, however, was still home to 18 per cent of the world’s poor, he added.
   The divide between rich and poor had also widened, a factor some analysts worry has become an increasing source of discontent among the poor.
   ‘As much as China has a success story to celebrate, and as much as skyscrapers of Shanghai are impressive, the poverty is large,’ Wolfowitz told a news briefing.
   ‘On one hand the success story of China is an important one ... and at the same the continued poverty in China is a challenge for China that the World Bank would like to continue to be helpful on,’ he added.
    Wolfowitz’s China tour will begin in western Gansu province, one of the country’s poorest regions, including a visit to the industrial city of Lanzhou, which is also one of the most polluted cities in the world.
   ‘I am looking forward to seeing what the world, and particularly countries in Africa, can learn from China, and also to hear from the Chinese people about their own aspirations,’ Wolfowitz said. Also in China, Wolfowitz will attend a Group of 20 meeting of finance ministers and central bankers on Oct. 15.

The United States will push for trade liberalisation and highlight problems caused by sky-high energy prices when the Group of 20 developing and rich nations meet in China, an official said Friday.
   The October 15-16 meeting is mainly focussed on development issues and reform of the International Monetary Fund and World Bank, ‘though I suspect the top issue will be energy’, US Treasury Undersecretary Tim Adams said.
   ‘You have both producers and consumers sitting around the same table,’ said the deputy to US Treasury Secretary John Snow, who leaves this weekend on a 10-day tour that takes in Japan as well as China.
   The G20 meeting comes with high oil prices straining economies in both the developed and developing worlds. It also comes as the World Trade Organisation prepares for a crucial ministerial gathering in Hong Kong in December.
   ‘Hopefully I expect we’ll reaffirm the importance of having a successful Doha (WTO) round and the importance of ever-increasing trade to global growth,’ Adams said ahead of the G20.
   Created in 1999, the forum gathers the finance ministers and central bank governors of larger developing countries and advanced economies for discussions aimed at improving the international financial and monetary system.
   Though the G20 is dismissed by some as a talking shop, Adams said he was a ‘big supporter’ of the organisation.
   ‘I think it’s important that we take this body seriously,’ he said, highlighting the need for collective action on issues such as high energy prices and global economic imbalances. ‘These are issues that we confront globally, and we should use every forum available to us to discuss them,’ Adams said.
   The G20 groups Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.
   The heads of the IMF, World Bank and European Central Bank are also due to attend the talks at Xianghe, some 50 kilometres (30 miles) east of the Chinese capital.

Aeronuatics groups in Russia, China and India could be among those firms helping to finance the new Airbus A350 aircraft, in which total foreign participation could amount to 40 per cent of the development cost, the head of Airbus said Friday.
   Airbus chief executive Gustav Humbert told a press conference that the Russian aviation industry had been invited to contribute up to three per cent of the programme costs while China’s contribution could reach five per cent.
   Airbus communications director Christoph Hoppe added that India could also figure among Airbus partners in developing the A350, a mid-size, long-haul carrier destined to compete with Boeing’s fuel efficient 787 Dreamliner.
   Airbus’s shareholders, the European Aeronautic Defence and Space Company and BAE Systems of Britain, on Thursday gave official backing for the industrial launch of the A350, a programme expected to cost 4.35 billion euros ($5.3 billion).
   Airbus has to date received 140 commitments to purchase the A350 from nine different airlines and hopes to have 200 orders in hand by the end of the year.

General Motors Corp. is giving up a bid to buy a Daewoo car plant in India after waiting three years for a debt settlement that never came, a spokesman for the US company said Friday.
   The world’s largest car maker had hoped to buy the plant to make a small car, but there has been a long battle over dues owed to customs officials and creditors that local media put at nearly 30 billion rupees ($676 million).
   ‘A number of factors led GM to this decision, including the need for GM to step back and re-evaluate our long-term requirements in India,’ Rob Leggat, director of communications for GM Asia-Pacific, said in a statement.
   GM, in India since the mid-1990s, aims to use India as a hub for exports of cars and components and also grab 10 per cent of its fast-growing market by 2010.
   To reach that goal, GM needs to quintuple its estimated 2006 sales of 50,000 vehicles and launch a small car, since small cars made up more than three-quarters of the nearly 1 million passenger vehicles sold in India last year.
   The Daewoo plant in the northern state of Uttar Pradesh had capacity to make 85,000 cars a year and produced the popular Matiz compact and the Cielo and Nexia sedans before closing nearly two years after its parent collapsed in November 2000.
   GM would now focus efforts on its Halol plant in the western state of Gujarat, Leggat said. GM would have used the Daewoo unit to make the Chevrolet Spark compact, and had said it would consider a new plant or retooling Halol if it did not buy it.
   ‘You can’t be a major player in this market without a mini car. We are dead serious about bringing in a mini car,’ GM’s president for India, Rajeev Chaba, said in June.
   GM India makes variants of the German-engineered Opel Corsa and Chevrolet Optra sedans, as well as the Tavera sports utility vehicle, and it imports the Opel Vectra and Chevrolet Forester.
   With $300 million invested in India, GM has just more than doubled capacity to 60,000 units and will raise that to 80,000 next year. It broke even in 2004 and expects a profit this year.
   GM competes with the local units of Ford Motor Co., Hyundai Motor Co., Toyota Motor Co. and Honda Motor Co., besides top Indian car maker Maruti Udyog Ltd. and Tata Motors Ltd.

President George W Bush wants to pick a replacement for retiring Federal Reserve Chairman Alan Greenspan as soon as possible, the White House said Friday.
   Spokesman Scott McClellan said Bush was actively searching for the next Fed chairman. Greenspan’s 18-year run on the Federal Reserve is expected to end on January 31.
   ‘As soon as possible,’ McClellan said when asked when Bush might choose a Greenspan successor. ‘The president will make a decision when he’s ready to do so, but we are moving ahead on the nomination.’
   McClellan said the process had not been slowed by the focus in the past couple of months on Hurricane Katrina and the nominations of John Roberts and Harriet Miers for the Supreme Court. He called the Fed chairman position a ‘priority appointment’ and said Bush was thinking about it very carefully and his staff had been working hard on potential candidates.
   Greenspan, 79, has signaled he prefers to retire when his term ends early next year, although the White House could ask him to stay on longer if a successor is not confirmed by Jan. 31.
   Asked about the Fed search process at a news conference on Tuesday, Bush said he had not yet seen a list of prospective nominees but would select a successor to Greenspan ‘at an appropriate time.’
   He also said he wanted to name someone who is viewed as independent from politics. Three potential candidates are regularly mentioned—Glenn Hub-bard, a past adviser to Bush; Harvard economist Martin Felds-tein; and Fed Governor-turned-White House adviser Ben Bernanke.

The OECD said Friday its composite leading indicator (CLI) rose to 104.0 in August from 103.9 in July, pointing to moderate growth in world’s most advanced economies in the period ahead.
   The CLI summarises information from a number of key short- term economic performance indicators and provides early signals of turning points between expansions and slowdowns in activity.
   Such turning points are highlighted by the six-month rate of change in the CLI, which compares the current month’s CLI figure with the average of the previous 12 months.
   The six-month rate of change showed an annualised increase of 1.1 per cent in August, unchanged from July, the Organisation for Economic Cooperation and Development said.
   For the United States, the CLI fell to 102.9 from 103.1, while the CLI for the eurozone rose to 106.0 from 105.5.

The Korean National Oil Corp said Saturday it had signed a deal to transport natural gas from an off-shore platform in southern Vietnam to processing plants via the Nam Con Son sub-sea pipeline.
   The deal was signed on Friday in Hanoi by the gas suppliers, KNOC and its local partner PetroVietnam, and the investors in the 370-kilometer Nam Con Son pipeline—PetroVietnam, British BP and American Conoco Phillips.
   ‘The amount of the deal is confidential,’ said Seong Hoon Kim, executive director of KNOC in Vietnam, refusing to elaborate.
   The area in southern Vietnam controlled by KNOC is expected to produce 3.7m cubic meters of natural gas per day over 23 years. KNOC signed a $300m contract in Dec. 2004 to develop the area.

Anglo-Australian miner BHP Billiton and Japanese conglomerate Mitsubishi Corp. are to jointly build an alumimium smelter in the eastern Malaysian state of Sarawak.
   The companies said in a statement released late Thursday they had concluded a memorandum of understanding on the project but few other details were released, such as the location of the smelter.
   ‘BHP Billiton expertise in aluminium smelter development and Mitsubishi expertise in infrastructure development will help deliver a world-class smelter industry to Sarawak,’ said the statement.
   ‘Mitsubishi has also developed extensive business knowledge and expertise within Malaysia as a result of Mitsubishi’s 45-year history of operations in the country.

Oil prices slumped this week, hit by easing demand for energy in the United States, while copper reached a new high point.
   The Commodities Research Bureau's index of 17 commodities fell to 324.34 points on Friday from 326.28 points the previous week.
   GOLD: Gold prices eased, but stayed close to 18-year high points as the dollar weakened towards the end of the week.
   'The rebounding euro prompted a fresh round of fund buying,' said James Moore, an analyst at the specialist website TheBullionDesk.com.
   On the London Bullion Market, gold prices fell to 472.70 dollars per ounce at the late fixing on Friday from 473.25 dollars the previous week.
   SILVER: Silver prices received a late lift from gold.
   'Silver again took direction from its golden cousin with the bullish copper market also adding to the metal's movements,' Moore said.
   On the London Bullion Market, silver prices rose to 7.62 dollars per ounce at the late fixing Friday from 7.53 dollars the previous week.
   PLATINUM AND PALLADIUM: Platinum and palladium prices increased, with the former reaching the highest level for one and a half years.
   Platinum reached 932 dollars per ounce at Friday's early fixing-the highest level since April 2004.
   'There was some positive news for platinum demand in the longer term,' Barclays Capital analyst Yingxi Yu said, noting that scientists in South Africa have developed a platinum-based superalloy which works at higher temperatures than traditional nickel-based composites used in turbine blades.
   On the London Platinum and Palladium Market (LPPM), an ounce of platinum rose to 930 dollars per ounce at the late fixing Friday, from 929 dollars the previous week.
   Palladium climbed to 196 dollars per ounce, from 194 dollars.
   BASE METALS: Base metals prices mostly rose, as copper reached a fresh record high.
   On Friday, three-month copper prices on the London Metal Exchange (LME) hit 3,895 dollars per tonne-the highest price for the metal since it was first quoted in its current form in 1870. The metal has risen 11 per cent in three weeks.
   'Very recent gains got a boost from a sharp rally in the euro while recent copper specific supply and demand data has been strongly supportive,' Barclays Capital analyst Ingrid Sternby said.
   By Friday, three-month copper prices on the LME increased to 3,893 dollars per tonne from 3,799 dollars the previous week.
   Three-month aluminum prices rose to 1,906 dollars per tonne from 1,870 dollars.
   Three-month nickel prices fell to 13,125 dollars per tonne from 13,700 dollars.
   Three-month lead prices climbed to 964 dollars per tonne from 939 dollars.
   Three-month zinc prices advanced to 1,470.50 dollars per tonne from 1,410 dollars.
   Three-month tin prices dipped to 6,575 dollars per tonne from 6,600 dollars.
   OIL: World oil prices sank this week, reaching the lowest point for more than two months on evidence that energy demand is cooling in the United States.
   New York's main contract, light sweet crude for delivery in November, plunged 2.09 dollars to 60.70 dollars per barrel at one point on Thursday-the lowest level since August 3.
   In London, the price of Brent North Sea crude for November delivery plummeted 1.88 dollars to 58.24 dollars per barrel also on Thursday. That was the lowest level since July 28, one month before Hurricane Katrina sent prices to record highs.
   'The term 'demand destruction' is rapidly gaining widespread currency in the oil market, with the majority of market participants now acting on the view that this factor is likely to more than offset supply losses due to (hurricanes) Katrina and Rita, there justifying significantly lower prices for crude oil and products,' Barclays Capital analyst Kevin Norrish said.
   Crude futures had begun falling sharply on Tuesday as speculators bailed out on signs the United States might release more emergency stockpiles of crude.
   They extended losses on Wednesday after the US Department of Energy provided evidence of weaker demand for energy.
   The DoE said that US demand for gasoline (petrol) was 2.6 per cent lower than a year earlier. Meanwhile demand for distillates in the world's biggest consumer of energy has fallen by 3.8 per cent.
   Falling demand offset declines in US crude inventories.
   Crude stocks fell by 300,000 barrels to 305.4 million barrels in the week to September 30, the DoE said.
   Gasoline inventories dropped 4.3 million barrels to 195.5 million and distillate supplies used for diesel and heating oil dropped 5.6 million barrels to 128 million.
   The DoE added that US refineries were operating at only 69.8 per cent capacity in the week to September 30, against 86.7 per cent the previous week, after Hurricane Rita struck the Texas and Louisiana coast on September 24.
   US refineries were already struggling with the aftermath of Hurricane Katrina, which swept through the Gulf Coast at the end of August.
   With the northern hemisphere winter fast approaching, concerns are growing that supplies of products like heating oil could be tight and that may trigger another run-up in crude prices.
   Oil prices rocketed to all-time peaks at the end of August, touching 70.85 dollars in New York and 68.89 dollars in London, on supply concerns as Katrina tore through oil rigs and refineries in the Gulf of Mexico, severely disrupting US energy production.
   The barrel of Brent North Sea crude for delivery in November plunged to 58.77 dollars late Friday, compared to 62.38 dollars the previous week.
   In New York, the barrel of crude for delivery in November plummeted to 61.81 dollars from 65.80 dollars.

London investors will look to merger and aquisition news next week to drive share prices higher, alongside a smattering of corporate results and economic data.
   The FTSE 100 index of leading London shares closed at 5,362.3 points on Friday, shedding 2.15 per cent or 115.4 points from the previous week.
   The index had closed above the 5,500-point level for the first time in four years on Monday, with news of merger plans by Boots and Alliance UniChem boosting the market.
   However the FTSE fell heavily, in line with other global stock markets, during the remainder of the week on concerns about the outlook for the US economy amid expectations of higher US inflation and interest rates.
   ‘European equities look attractive,’ noted ABN Amro analyst Rolf Elgeti.
   ‘Merger and acquisition activity has become increasingly important in recent weeks,
   with speculation having boosted most sectors in the market.’
   ‘A further increase in corporate activity is likely over the coming months.’
   Possible takeover news next week could include Cadbury Schweppes, the British confectionery and soft drinks giant, which offered for sale last month its European beverages business, which includes the brands Schweppes, Orangina and Oasis.
   Investors will also monitor BPB, the world’s biggest plasterboard maker, which is in the midst of a hostile takeover battle with French rival Saint-Gobain.
   Finally, any twist in the battle for control of Aegis, the British media and market research group, will be analysed by stock market watchers.
   Trading updates from Burberry on Tuesday and parent group GUS on Wednesday will be closely examined for a reading on the state of the faltering British retail sector.
   On the macroeconomic front, producer prices data is published on Monday, while unemployment numbers are due Wednesday.

Trading in shares in the resuscitated Parmalat food group were sharply down on its second day back on the market Friday in contrast to a strong initial launch the day before.
   Parmalat had lost 12.89 per cent to 2.63 euros at the end
   of trading, after the bourse widened the price fluctuation band to 15 per cent following a suspension in trading in the company’s shares in the afternoon when it fell below the previous band limit of 10
   per cent.
   The dip follows concerns that the company’s legal claims—totalling 40 billion euros (48 billion dollars) — against banks and accounting firms which advised it before its collapse will recover less than expected, brokers said.
   ‘This price reflects that Parmalat can get a lot of money from the legal cases it has launched against banks and institutions,’ said an analyst.
   ‘But at the moment, the visibility on these is absolutely low,’ he said.
   One broker said the share had been hit by profit-taking following the ‘euphoria’ of the stock relisting on Thursday at a starting price of 3.15 euros.
   Parmalat has been under administration and has undergone deep restructuring since its global food empire collapsed at the end of 2003 when a hole of 14.3 billion euros was discovered in its accounts.
   The collapse has resulted in many investigations, civil claims for damages, and a number of court proceedings.
   A trial involving the founder, Calisto Tanzi, began on September 28.

European stock exchanges weakened Friday, undermined by disappointing corporate news and in spite of a better-than-expected job report in the United States.
   The London FTSE 100 index shed 0.19 per cent to close at 5,362.3 while in Paris the CAC 40 fell 0.18 per cent to 4,528.79. In Frankfurt the DAX gave up 0.19 per cent to end the week at 5,007.77.
   The Euro Stoxx 50 index of leading eurozone shares fell 0.30 per cent to 3,374.10.
   On the currency market the dollar edged higher against the euro on news that job losses in the United States after Hurricane Katrina were much lower than had been feared.
   The single European currency in late-day trade at around 1600 GMT was at 1.2118 dollars, against 1.2181 dollars late Thursday in New York.
   US payrolls fell by 35,000 in September when some sections of the market had been predicting a decline of around 150,000. The losses were largely due to the effects of Hurricane Katrina, which devastated the southern states of Louisiana, Mississippi and Alabama.
   In New York, Wall Street struggled higher as the market mulled the payroll report, which economic resilience but could also portend higher inflation and interest rates.
   The Dow Jones Industrial Average clung to a gain of 0.11 per cent at 10,298.63 while the tech-heavy Nasdaq composite edged up 0.11 per cent to 2,086.30 at 1515 GMT.
   For some investors the job-loss report was a double-edged sword as a strong economy also offered little hope the Federal Reserve may pause in its current cycle of interest rate hikes, especially in light of its concerns over inflation.
   ‘The immediate response was mixed as some worry that the economy is too strong and inflation is a worry,’ said Alfred Goldman at AG Edwards.
   ‘There’s no doubt that the strength of this report will reinforce a lot of the hawkish sentiment we have heard from the Federal Reserve since the hurricane,’ said Ivana Rupcic at RBC Financial Group.
   In London telecommunications group Cable and Wireless plunged 14.11 per cent to 121.75 pence after warning of lower sales in the first half.
   In Paris shares in the European Aeronautic Defence and Space Company fell 0.03 per cent to 29.10 euros while steelmaker Arcelor crept up 0.88 per cent to 19.42 euros after taking control of the Brazilian group Acesita.
   In Frankfurt sentiment was affected by Hypovereinsbank, which shed 2.13 per cent to close at 22.55 euros on press reports that Italian bank UniCredit could prolong
   by two weeks its public takeover offer in the face of reservations by certain shareholders.
   Elsewhere there were declines of 0.11 per cent to 6,946.95 on the Swiss Market Index, 0.31 per cent to 398.66 on the AEX in Amsterdam, 0.73 per cent to 33,620 on the SP/Mib in Milan, 0.30 per cent to 3,329.62 on the Bel-20 in Brussels and 0.17 per cent to 10,732.4 on the Ibex-35 in Madrid.
   In Asia, Tokyo’s benchmark Nikkei-225 index fell 0.99 per cent to 13,227.74 points, also on concerns about US economic growth, dealers said.
   Hong Kong’s key Hang Seng Index closed up 0.06 per cent to 14,847.79 points, though modest gains posted in the morning session due to bargain-hunting were later eroded as interest rate worries resurfaced.

An investor suit alleges that News Corp and its chairman Rupert Murdoch reneged on promises about shareholder protection at the time of its move from Australia to the United States, lawyers announced.
   The institutional investors claim in a suit filed in the state of Delaware that the media-entertainment giant broke promises on corporate governance that would ‘balance the power of the Murdoch clan,’
   at the time of the reincorporation of the former Australian firm.
   ‘Shareholders feel betrayed after voting to approve switch from Australian incorporation of News Corp. to Delaware reincorporation,’ said a statement from the law firm representing the plaintiffs.
   ‘In return for approving the move, shareholders insisted on the no-long-term-poison-pill promise, as well other assurances of improved corporate governance that would balance the power of the Murdoch clan,’ the statement said.
   A ‘poison pill’ is a measure used to defend against hostile takeovers by allowing the company to issue special shares that make a takeover far more expensive.
   ‘Shareholders considered these assurances necessary before agreeing to reincorporation because Australian corporate law generally provides greater protections for shareholders than Delaware corporate law,’ the statement said.
   Murdoch and his family own 30 per cent of News Corp’s common stock, according to the suit.
   The investors feared that given free reign under Delaware law, News Corp. could adopt provisions ‘that would allow them to become permanently entrenched and impervious to shareholder and outside scrutiny,’ the statement said.
   Responding to the suit, News Corp. said in a statement, ‘The company has reviewed the complaint and found it baseless, frivolous and without merit.’
   The reincorporation became effective on November 12, 2004. But on August 11, the suit alleges, News Corp. ‘unilaterally announced that come November 8 the company would extend its poison pill provision for two more years,’ the statement said.

The dollar edged higher against the euro here Friday on news that job losses in the United States after Hurricane Katrina were much lower than had been feared.
   The single European currency in late-day trade at around 1600 GMT was at 1.2118 dollars, against 1.2181 dollars late Thursday in New York.
   The dollar was meanwhile trading at 113.84 yen after 113.23 on Thursday.
   US payrolls fell by 35,000 in September when some sections of the market had been predicting a decline of around 150,000.
   The loses were largely due to the effects of Hurricane Katrina, which devastated the southern states of Louisiana, Mississippi and Alabama.
   ‘The fact that the outcome was less negative than feared corresponds with the jobless claims data, which also suggests that claims have not risen as much as feared,’ said Mitul Kotecha at CALYON.

Thai share prices closed 0.25 per cent lower Friday with foreign investors taking profits in energy stocks after oil prices fell, dealers said.
   The Stock Exchange of Thailand (SET) composite index shed 1.81 points to 708.98 and the bluechip SET 50 index was off 1.94 points at 498.67.
   Losers outnumbered gainers 148 to 123 and 131 stocks were unchanged amid sluggish trading of 1.6 billion shares worth 10.5 billion baht (257.0 million dollars).
   The baht continued to gain on the US dollar amid investor expectations that the Bank of Thailand will raise its benchmark interest rate at the next Monetary Policy Committee meeting October 19.
   The dollar lost against other major currencies, dealers said.
   The Thai unit closed Friday at 40.83-85 baht to one dollar against 40.96-99 Friday.

Wal-Mart keeps October sales forecast
Wal-Mart Stores Inc. on Saturday said it still expects a 2 per cent to 4 per cent increase in October sales at its US stores open at least a year, confirming a forecast it gave just two days earlier. On a recorded message, the world’s biggest retailer said grocery demand outpaced sales of general merchandise, and the West was its strongest region. Wal-Mart said two of its stores remained closed due to Hurricane Rita as of Saturday, while 11 were still closed because of Hurricane Katrina.
— Reuters

Nestle launches fair trade coffee
Nestle has launched a fair trade instant coffee as it looks to tap into growing demand among consumers. The firm is the first of the four major global coffee firms - the others are Kraft, Sara Lee, and Procter and Gamble - to put out such a product. Ethical shopping is an increasing trend in the UK, as consumers pay more to ensure poor farmers get a better deal. But the involvement of a leading multinational has proved controversial among the aid and development workers. The decision represents a turn-around for the Fairtrade Foundation which has endorsed the move. ‘This is a turning point for us and for the coffee growers,’ said Harriet Lamb, director of the Fairtrade Foundation, which helps regulate and mark fair trade products. ‘This just shows what we, the public, can achieve,’ she said. ‘Here is a major multinational listening to people and giving them what they want.’ Development charity Oxfam cautiously welcomed the move, but said that it was only a small step in the right direction.
— BBC

Air Canada targets weight to save on fuel costs
ACE Aviation Holdings Inc unit Air Canada is aiming to trim flight weight to counter the spiraling cost of fuel, the airline said on Friday. In a note to employees, Montie Brewer, president and chief executive of Air Canada, said the airline’s ‘weight reduction team has targeted an improvement in fuel efficiency of 1.5 per cent, worth C$45 million ($38 million) annually.’ The airline, which is Canada’s largest, has already increased its passenger and cargo fuel surcharges, and begun a fuel hedging strategy. ‘We all need to remain extremely sensitive and vigilant as to how we utilize our fuel and conserve energy,’ Brewer said, without giving details of how the airline would cut weight. Jet fuel prices have surged 54 per cent in the third quarter from the year earlier period and are 21 per cent above this year’s second quarter, he added. It costs Air Canada C$189 in fuel to fly one seat on a Boeing 767 between Toronto and London’s Heathrow, and C$86 a seat on an Airbus A320 between Vancouver and Montreal, Brewer said. ACE Aviation’s restricted voting shares were off 40 Canadian cents at C$34.40 on the Toronto Stock Exchange on Friday.
— Reuters

Delta resuming full schedule after fuel saving bid
Delta Air Lines Inc. resumed a full flight schedule, the No. 3 US airline said on Friday ending a two-week cutback to conserve fuel amid shortages created by Hurricanes Katrina and Rita. The hurricanes shut down several Gulf Coast refineries, leading to sharply higher jet fuel prices and concerns about spot shortages. Delta said fuel supplies in the Southwestern United States had stabilized, allowing the bankrupt carrier to resume its full flight schedule starting on Saturday. Delta, which filed for bankruptcy protection last month in part because of the fuel price spike, said it has been pursuing various other conservation efforts including re-routing flights, reducing taxi times and aircraft weights. Among other carriers, American Airlines has canceled 15 daily domestic round-trip flights through October because of the soaring fuel prices. Continental Airlines Inc. said last Friday it was mulling similar cutbacks, but spokesman David Messing said no such moves were taken.
— Reuters

Indian fiscal deficit ‘unacceptably high’
The Prime Minister said on Saturday the health of the central and state government finances was a cause of concern and there was a need to curtail wasteful expenditure to keep the high fiscal deficit in check. ‘The fiscal deficit remains at an unacceptable high level,’ Manmohan Singh told heads of 15 Congress-ruled states. ‘As revenues are rising, so is expenditure. We are in danger of sliding back on our commitment to fiscal responsibility.’ A recent Reserve Bank of India (RBI) report showed the combined state and central deficit in Asia’s third-largest economy fell to 8.3 per cent of gross domestic product (GDP) last year from 10 per cent in 2001/02. Rating agencies criticise India’s public debt level, estimated at more than 80 per cent of GDP, citing it as one of the biggest impediments to an upgrade and sustained double-digit growth needed to alleviate poverty in the $700 billion economy.
— Reuters

VW offering Porsche bigger stake-report
German carmaker Volkswagen has offered Porsche to help it secure another 3.4 per cent stake via a capital increase, cementing the two firms’ cooperation, according to media reports on Saturday. Luxury carmaker Porsche is already in the process of securing a 18.53 per cent stake in Europe’s largest carmaker, which would make it the largest shareholder in the mass car producer once the transaction is completed later this month.
— Reuters

Indian rupee hits
10-month low
The rupee fell to a fresh 10-month closing low on Friday as foreign investors took advantage of an arbitrage opportunity between the offshore and onshore forward market to buy dollars, dealers said. Their buying came on a day when the stock market extended losses into a third day, sparking concern about a foreign fund outflow. The latest data showed foreign funds had sold a net $129.4 million of Indian equities on Thursday. Traders said dollar purchases by oil companies to fund imports also weighed on the rupee. The partially convertible rupee ended at 44.38/39 per dollar, its lowest level since Dec. 10 when it ended at 44.7650/78, and weaker than the previous close of 44.28/2850.
— Reuters

SBI to take over Kenyan bank
India’s largest commerical bank, State Bank of India, said on Friday it had entered into an agreement to buy 76 per cent of Kenya’s Giro Commercial Bank for $7 million, as part of a broader plan to expand overseas. Nairobi-based Giro Commercial is a closely held bank, founded by people of Indian origin, with six branches in Nairobi, Mombassa and Kisumu. ‘With the proposed acquisition, State Bank would increase its footfall in Africa where we are already present in four other countries,’ SBI Chairman A.K. Purwar said in a statement, later telling reporters that the purchase had cost $7 million.
— Reuters