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The Asian Development Bank lowered its growth projection for Bangladesh economy on grounds of higher oil prices, though it upgraded its forecasts for Asian growth with China and India taking the lead.
   The update version of the Asian Development Outlook, released on Thursday, revised the growth estimation downward to 5.5 per cent from earlier forecast of 6 per cent for the current fiscal.
   ‘Sustained high oil prices are a heightened risk to the macroeconomic outlook,’ said ADB.
   The Manila-based multilateral funding agency also added two other factors—elimination of textile export quota and political uncertainty, ‘especially in the lead-up to the January 2007 elections’— as downside risks for the Bangladesh economy.
   ‘High oil prices mean the government will also need to mobilize external financing adequately to ensure that foreign exchange is available in the market both for oil and other essential imports,’ the report said.
   ADB said that in the last fiscal, the oil import bill in Bangladesh jumped by $540 million to $1,540 million and very high import prices along with administered retail prices would deteriorate the financial position of the already lose-making Bangladesh Petroleum Corporation further.
   ADB was of the view that without a ‘substantial pass-through’ of global oil prices to consumers, losses of the BPC would remain large although budget has lowered duties of crude oil and petroleum products.
   ‘The accumulated losses—in effect, a quasi-fiscal obligation—will eventually need to be dealt with by the Government,’ it said
   The national budget lowered duty rate on crude oil to 7.5
   per cent from 25 per cent and petroleum products to 15 per cent from 25 per cent. Supplementary duty on products has also been slashed to zero from 15 per cent.
   It, however, mentioned the corporation is funding its operating losses with financing from the nationalised commercial banks and a credit line from the Islamic Development Bank as budget does not provide subsidies.
   ADB observed that as oil taxes have accounted for about 11 per cent of tax revenue in recent years, the issue of ‘forgone taxes will have an immediate impact’ on the budget although higher average oil prices in current fiscal year would raise the tax base.
   It mentioned that the effective tax rate appears now to be just less than 15 per cent.
   ADB, however, expected Inflation would be within 6 per cent level in the current fiscal provided that the recovery in crop production, tight monetary policy, gradual adjustment to international oil prices and the maintenance of strong fiscal policies continued.
   The lending agency was of the view that tight monetary policy would cover pressures on the foreign exchange rate as well as contain inflation.
   ‘Tightened interest and credit policies in turn may slow consumer and investment spending,’ the outlook said.
   ADB was of the view that foreign direct investment would maintain the current levels in the next couple of years but could pick up significantly if ongoing negotiations over several large investment projects become successful.
   For Asia as a whole, the ADB Outlook report upgraded its 2005 GDP forecast by 0.1 point to 6.6 per cent this year despite its concerns that surging oil prices will clip prospects in Southeast Asia.
   It upgraded the gross domestic product forecasts for China and India by 0.7 of a percentage point to 9.2 and 6.8 per cent respectively this year.

Prices of different kinds of paper have increased up to 30 per cent in the last couple of months affecting students, publishers and printing houses, said traders and industry people.
   Prices of white, offset, newsprints and art paper categories increased significantly, which they attributed to the rise of paper price in international market as well as market manipulation by a section of local producers.
   Price of per ream double demy (500 pieces of 23 inches and 36 inches paper) of local white paper of 61 gram weight increased up to Tk 1,200 at retail market against Tk 950 two months back while per ream of offset paper and art paper in different categories increased by up to Tk 200.
   Akram Hossain, general secretary of the Bangladesh Paper Merchant Association, alleged that a section of local millers have been manipulating market by production curtail, hoarding and frequent increases of rates.
   He linked the price hike to the international market, the dollar factor, tight import procedure and bloated prices of raw materials
   ‘The government can oblige the paper millers to regularly make public their company prices as they cannot increase price whimsically,’ Akram said.
   For reducing prices of imported papers, the paper merchant sought reduction in duty on paper and pulp import.
   Increase in the prices of whitish newsprint and whiteprint categories paper pushed up the prices of khata (copy book used by students), significantly raising the cost of education for students across the country.
   A quire (One-twentieth of a ream) of white paper and whitish newsprint increased by more than 20 per cent over the couple of months as retail prices of those papers have increased by up to Tk 4.
   The price of newsprint which has been on upward trend for over the last one year also marked increase during the period.
   Publishers in Banglabazar, country’s publishing hub, who prepare educational textbooks during this period every year, said increased paper prices were forcing them to tag high prices on books.
   ‘I think we will be compelled to sell text books at least by 20 per cent higher prices in the coming sales season,’ said Ashraful Haque Alo, managing director of the Prime Group of Publications.
   Businessmen in printing industry said soaring paper price created chaos in their businesses as press owners and production houses have been in trouble for costing calendar, diaries and greeting items.
   ‘Price of papers increased by up to 30 per cent and this abnormal flight has thrown our business into great trouble,’ said Rabbani Jabbar, president of the Bangladesh Printing Industries Association.
   The country consumes more than 2,00,000 tonnes of paper including about 1,00,000 tonnes newsprint and 30,000 tonnes offset paper.
   Local production by a dozen of mills caters to half of the total demand of whiteprint and newsprint while production of offset locally is below 10,000 tonnes, industry sources said.
   For art paper and art card, the country depends almost entirely on import, they said.

The Asian Development Bank is ready to provide assistance for advanced research and agro-business expansion in Bangladesh.
   ‘The bank is now ready to finance a countrywide project to improve and expand agri-business in Bangladesh. It will help even the small-scale agri-producers to add value to their products,’ said ADB Country Director to Bangladesh Hua Du.
   The ADB assurance came when Hua Du met Agriculture Minister MK Anwar at his office here today.
   During the meeting, the minister sought ADB’s support in the areas of research, farmers’ training, expansion of quality seed supply and regaining soil fertility.
   He mentioned that the government wanted to provide training to 11.6 million farmers’ families in the country on a regular basis to make them familiar with modern production and post-harvest technologies to reduce yield-gap and cut production cost.
   ‘For this, we need at least one training centre in each upazila and it would require only $10 15 million which ADB could provide,’ MK Anwar told the ADB Country Director.
   The minister gave Hua Du a copy of Agriculture Sector Review, which has been prepared with assistance from FAO, UNDP and World Bank to identify the areas and the means to intervene.
   ‘We’re implementing a 5-year programme to boost quality seed production of all crops from the existing eight per cent to 20-25 per cent of the country’s total demand,’ the minister said.

European Union anti-dumping actions against Indian products are a major concern for New Delhi, which feels they are neither rational nor fair, India’s trade minister said Wednesday.
   Mounting stringency of standards, cumbersome and complex rules and procedures and frequent use of trade defence instruments were emerging as serious barriers to enhanced economic cooperation, Kamal Nath said.
   ‘A disproportionately large number of products in textiles, electronics, chemicals, pharmaceuticals, herbal remedies and steel sectors face such actions,’ Nath told an India-EU business conference which was also addressed by EU Trade Commissioner Peter Mandelson.
   The European Union is India’s largest trading partner and India-EU bilateral trade last year stood at $35 billion.

The foreign minister, M Morshed Khan, urged the Japanese businessmen to relocate the sunset industries in Bangladesh.
   ‘Bangladesh is a better place to relocate your sick industries…we’ll see the sunrise through the relocation of your industries,’ he said while speaking as chief guest at the Japan Trade Fair 2005 at Hotel Sheraton Thursday
   He offered a special economic zone for the Japanese investors with better access to all required facilities.
   He also urged them to invest in textile sector taking advantage of its cheap labour and energy resources.
   The three-day fair began for the first time in Bangladesh with the hope of further enhancement in economic and trade relations between the two countries.
   He urged the Japanese authorities to identify the IT sector of Bangladesh as the thrust sector and invited to explore other sectors where joint venture would be possible.
   The Japan Bangladesh Chamber of Commerce and Industry and the Japanese Commerce and Industry Association in Dhaka (SHOO-KOO-KAI) jointly organised the fair with the support of the Embassy of Japan and the Japan External Trade Organisation.
   Forty business and service organisations are participating in the fair in 86 stalls where mostly products of latest Japanese technology have been exhibited. The stalls will remain open from 10:00am to 8:00pm everyday.
   The ambassador of Japan in Bangladesh, Matsushiro Horiguchi, welcomed the JBCCI initiative of organising the fair and wished its success.
   The energy advisor and board of investment chairman, Mahmudur Rahman, appreciated Japan’s position as third in export processing zone in Bangladesh and called upon the Japanese investors to invest more in the country as the government was trying to improve the investment climate here.
   The representative of the trade organisation, Sotaro Nishikawa, said Japan had only human resource after the world war-II and it has turned into one of the largest economic giants using only this resource but Bangladesh has both human and natural resources. This country has the potential to become economically developed, he added.

The Bangladesh Biman authority has decided to raise the salaries of its employees by 60 per cent.
   The raise is 30 per cent more than the salary announced for the government employees.
   Civil Aviation and Tourism Ministry sources said the steering committee of the pilots, engineers, officials and employees had earlier threatened the authorities to go on an indefinite work abstention from Friday 6am if their demand to raise salary is not met by that time.
   State minister for civil aviation Mir Mohammad Nasir Uddin, Biman’s acting managing director Colonel (retd) Mahmudur Rahman and other senior officials discussed the whole issue at a meeting Thursday.
   In the meeting, a consensus was reached. The steering committee withdrew their plan for strike.
   The Biman authority will sign a Memorandum of Understanding with the steering committee in this regard.

Oil prices moved higher on Thursday, recovering some of the week’s sharp losses ahead of US data expected to show heavy falls in crude and product stocks due to disruption from Hurricane Katrina.
   US light crude rose 57 cents to $64.94 a barrel by 1130 GMT, after plunging $1.59 on Wednesday.
   The market has fallen 8 per cent from a record $70.85 last week, after industrialised nations began to tap emergency reserves.
   London Brent crude rose 65 cents to $63.54 a barrel.

Speakers at a reunion said that the main reason for the unemployment problem in the country is lack of skills of the youth.
   There are a lot of job seekers but many of them are unskilled, they said at the reunion of the Juba Karmasangsthan Society’s job fair Sunday.
   Learning foreign languages like Arabic or English as well as technical and semi-technical training was also helpful for getting job outside or within the country, the speakers observed.
   The Juba Karmasangsthan Society, an organisation working for creating employment opportunities for the youth, organised the reunion of the job seekers, employers and 300 youths who got job from the job fair held last August at the Osmani Memorial Hall.
   A total of 27 companies of different sectors participated in the job fair to provide employments in 300 posts.
   Some 252 persons got jobs directly from the two-day fair and 73 were in waiting list out of around 14,000 applications.
   Speakers said every year around 27 lakh job seekers enter the job market in the country and among them only 7 lakh get jobs.
   They said that in last ten years only four per cent employment opportunities were created in the government job market and around 96 per cent in private sector where 80 per cent are informal.
   Hossain Al Masum, executive director of Jubak said, ‘We have no national plan to create employment facilities for the young generation when unemployment is a social problem and also reason of other social problems.

Social Investment Bank Limited has made contribution to the Sight Savers International for restoration of sight through cataract operation and giving spectacles to the poor from the profit of its Cash Waqf Fund.
   Besides contribution from the Cash Waqf Fund, SIBL executives have made personal contributions to support supply of spectacles to the poor patients. The SIBL managing director, KM Ashaduzzaman, handed over cheques to this effect to Sight Savers on September 7 at their Head Office at Gulshan in Dhaka.
   The managing director said the SIBL is the first in the country's banking history to introduce Cash Waqf Deposit Scheme that paved way for making investment in different religious, educational and social services. Savings made from earning by the well-off and the rich people of the society are utilised in an organised manner. Incomes earned from these funds are spent for different development purposes.
   This scheme of SIBL has been well received by the public in general due to its unique feature, Ashaduzzaman said, seeking more contribution from the well-off people of the society to poverty alleviation by taking part in social capital mobilisation through Cash Waqf Scheme, launched in 1998.
   Sight Savers International is one of the world's leading development agencies restoring sight, combating blindness and championing the rights of blind people in developing countries.
   SIBL senior vice president AFM Shamsuddoha, vice president Kazi Serajul Islam and In-charge Non-formal and Voluntary Banking Division Shawket-UI- Amin and Sight Savers Country Representative Dr Enamul Kabir and Resource Mobilisation Manager Zahidul Hassan were present on the occasion.

The City Group of Industries has recently signed a corporate sales agreement with GrameenPhone Ltd, says a press release.
   The leading conglomerate with diversified business interests has selected GP as its total telecommunication partner.
   Khandaker Shahan Alam, director operations of City Group and Tanvir lbrahim, head of corporate sales of GP signed the agreement.

The Dhaka Bank Limited has organized a five-day training course on ‘Human Resource Management and Marketing of Bank Services’ at its training institute of from September 4.
   Seventeen executives are participating in the course, inaugurated by deputy managing director Khondker Fazle Rashid.
   The training institute principal, Shamshad Begum delivered the address of welcome, while faculty member Salahud Din Ahmed conducted the opening session.

Perfetti Van Melle Bangladesh Pvt Ltd, a subsidiary of the world famous Dutch candy maker Perfetti Van Melle Holding, has launched a new brand of mint candy, Chlor-mint, in local market in mid August, says a press release.
   Chlor-mint, a popular breath freshener worldwide, is bright, transparent and green in colour.
   The mint candy, manufactured at the company’s Gazipur plant, will be available in all cities and towns in Bangladesh at Tk 1 per piece.
   It is also being marketed in 230-piece jar and 60-piece pouch. Established in July 2003, Perfetti Van Melle Bangladesh Pvt Ltd commissioned its manufacturing facilities at Sreepur, Gazipur in February 2005.

Citibank, N A Bangladesh organised a two-day seminar on ‘Treasury Management’ in Dubai, United Arab Emirates August 21-22, says a press release.
   Fourteen senior executives from private and nationalized commercial banks and the central bank attended the seminar that focused on modern tools and techniques of managing treasury functions.
   Senior resource persons of Citibank Dubai conducted sessions on treasury structure, risk management, treasury management and various aspects of treasury systems.
   Amuanullah, deputy managing director of Sonali Bank, conducted the discussion sessions.

Developing Asian economies should grow by 6.6 percent this year despite surging oil prices that will clip prospects in Southeast Asia, the Asian Development Bank (ADB) said Thursday.
   China and India will carry the region over the next two years with international trade and financial conditions expected to remain favorable for Asian exports as well as investments into the region, the Philippines-based lender said in a report.
   It upgraded the gross domestic product (GDP) forecast for China by 0.7 of a percentage point to 9.2 percent this year and by 0.1 point to 8.8 percent in 2006.
   India’s 2006 GDP forecast rose by 0.7 percentage points to 6.8 percent, while the bank’s 2005 forecast for the country was unchanged at 6.9 percent.
   For developing Asia as a whole, the Asian Development Outlook report upgraded its 2005 GDP forecast by 0.1 point to 6.6 percent this year, while maintaining its 6.6 forecast for 2006.
   The report, an update of an edition released in April, kept its GDP growth forecast for the major industrialized economies unchanged at 2.5 percent, a full percentage point below last year’s pace but slightly better than the five-year average of 2.4 percent.
   However, ‘the overall outlook for developing Asia is more uncertain than earlier in the year’, it said, citing the ‘more accentuated’ risks like rising oil prices and US interest rates.
   The ADB said: ‘Oil prices sustained at current levels over a protracted period would have the potential to cut developing Asia’s growth and would pose challenges for economic management’.
   Oil prices are currently about 75 percent above the ADB’s projected 2005 average.
   Developing Asia’s economic growth averaged a resilient 6.7 percent over three years to 2004 despite the doubling of oil prices, but Asia must now ‘begin to adjust to the possibility that higher oil prices will persist for some time’, the report warned.
   Pent-up demand, not the least from Asia, is pushing up import bills and inflation, while currency reserves are being eroded in some countries, it said.
   East Asia should now grow 6.9 percent this year and at the same pace next year, propelled by fast investment growth and surging exports in China. But the rest of the sub-region should see growth moderate to 3.8 percent, instead of 4.4 percent.
   South Asia should grow by 6.8 percent this year, the same pace as in 2004, with the 2006 outlook revised upward by 0.4 percentage points to 6.6 percent from the April forecast.
   Pakistan had posted a 20-year high in GDP growth in the fiscal year to June 2005, while Bangladesh’s garments sector has surprised many despite the ending of the Multifiber Arrangement quotas, it said.
   However, the ADB cut its GDP forecast for Southeast Asia to 5.0 percent this year and 5.4 percent in 2006 due to poor harvests in the Philippines and Thailand, a cyclical downturn in the global electronics sector and higher oil prices.
   Central Asia’s 2005 GDP growth prospects have been raised by 1.4 percentage points to 7.4 percent due to higher oil prices and new production capacity. Next year’s forecast also rose 1.3 points to 6.6 percent.
   The bank cut its 2006 growth forecast for the Pacific island economies by 0.8 percentage points to 3.2 percent due to the intensive use of oil for energy generation and the end of international quota access for Fiji’s garments industry.
   The report cited varying prospects for inflation, with favorable harvests in China and India trimming food prices and keeping inflation in check. However, poor harvests and higher oil prices would jack up inflation in Bangladesh, the Philippines, Thailand and Vietnam.
   With oil a key factor, developing Asia’s current account surplus should narrow to 3.4 percent of GDP this year and 2.7 percent of GDP next year—gradually diminishing in Southeast Asia and with South Asia’s deficits expected to widen.

The damage from Hurricane Katrina could include up to 400,000 lost jobs and slower US growth, a congressional report said yesterday, as President George W. Bush sought $51.8 billion in fresh aid for the disaster zone.
   Congress is expected to approve the latest aid request this week. Bush signed a $10.5 billion measure on Friday.
   Amid fierce criticism of Bush’s early handling of what may be the deadliest disaster to hit the United States, the White House has promised to spare no effort to help the survivors.
   Like the first request, the latest proposal will be aimed at meeting the immediate needs of those displaced or hurt by the hurricane and at emergency clean-up efforts.
   For long-term spending on rebuilding and assistance with housing, jobs and other needs, White House spokesman Scott McClellan said Bush is looking at ‘big ideas and big solutions.’ Some in Congress estimate that federal spending will ultimately total upward of $150 billion.
   Tallying damage from the storm to the US economy, Douglas Holtz- Eakin, director of the Congressional Budget Office, said the economic impact seems likely to be ‘significant but not overwhelming.’
   His report said Katrina could slow economic growth in the second half of the year by one-half to 1 percentage point.
   Holtz-Eakin also said rebuilding could ultimately ease unemployment by spurring a jobs rebound. But he acknowledged the estimates were ‘fraught with uncertainty.’
   Included in the initial relief funds is money for $2,000 debit cards that are being given to tens of thousands of households. That program is to be expanded.
   There is also money for jobless benefits, early damage assessment for homes and temporary housing.
   The White House declined to comment on the estimates put forth by some in Congress of spending for Katrina’s aftermath possibly topping $150 billion.
   Even spending of in that range would be less than the roughly $300 billion that has been approved so far for the Iraq war.

Finance ministers from Pacific rim nations agreed Thursday to step up joint efforts to cope with high oil prices and other challenges to their economies, with host South Korea calling for market transparency to fight speculative demand for energy.
   Surging oil prices cast a long shadow over the 21-member Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ meeting, which had convened here for a two-day session on the themes of ‘free and stable movement of capital’ and ‘the challenges of ageing economies.’
   The ministers or their deputies also addressed concerns over the sizzling US property market, which, if the bubble bursts, would seriously hamper the growth potential of the global economy, sources close to the meeting said.
   In a keynote speech, South Korean Finance and Economy Minister Han Duck-Soo said rising oil prices are pressing hard on most APEC member economies, clouding the Asia-Pacific economic outlook.
   ‘Rising demand, despite supply constraints, is the main cause pushing oil prices up. However, those factors that undermine the efficiency of the oil market, such as speculative demand and lack of transparency in market information, are also contributing to the consistent rise of oil prices,’ Han said.
   He said there is an ‘urgent’ need for oil-producing and consuming economies to strengthen dialogue channels to help bring demand and supply into balance and enhance the oil market’s efficiency.
   ‘Until now, dialogue between the two parties (oil-producing and consuming economies) was unsystematic and sporadic. It is time for us to come up with more concrete and practicable solutions,’ Han said.
   APEC’s 21 members consume more than half of global oil output and include four of the world’s five biggest oil importers—the United States, Japan, China and South Korea.
   A draft joint statement for the meeting obtained by AFP suggested participants will stress the need for more investment in oil production and refining capacity, coupled with technology transfer for energy conservation.
   They will also call for an end to ‘demand-distorting’ fuel subsidies and price controls.
   International Energy Agency (IEA) reports issued over past months suggest that China is in effect heavily subsidising huge growth in demand for oil to feed its insatiable economy.
   Shengman Zhang, managing director of the World Bank, called for the removal of price subsidies for oil.
   ‘The increase in oil prices underscores the need to reduce demand-distorting prices subsidies, which can threaten sustainability and undermine energy efficiency,’ he said at the APEC forum on this southern resort island.

The European Central Bank is watching the economic impact from Hurricane Katrina closely but it is too early to say how it might affect interest rate policy, ECB Governing Council member Axel Weber said on Thursday.
   ‘We will have to take these events and potential changes in the economic environment into account in our next decision,’ he said.
   Weber said he expected oil prices, trading at just under $65 per barrel on Thursday , would gradually come down from their peaks.

The privatisation of postal services, focus of a watershed election in Japan over economic and social reform, is well underway in Europe under the twin pressures of competition and financing.
   Many of the objections being raised in Japan have already been aired in Europe, albeit with less dramatic effects.
   Opposition, sometimes virulent, continues in some areas as a trend towards the introduction of private finance into what used to be an almost entirely publicly owned and run sector gathers pace.
   In the United States the postal service, the largest in the world, remains a federal agency with a monopoly on letter mail. But its market share has been eroded in the parcel delivery market by private operators such as UPS, DHL and Federal Express.
   And in Canada, where the postal service is profitable, there is no talk of privatisation.
   In Europe, various factors have come in to play in different countries but there are some common themes: for example increased opportunities for new entrants to compete, if only for parts of the traditional postal business, such as next-day parcel delivery, a sector that has boomed worldwide in the last decade.
   Another is a much wider trend towards privatisation to relieve the public sector from the cost of investment, and in some cases of the burden of losses, and in a broad context of an increasingly globally competitive and free-market economic environment.
   Japanese Prime Minister Junichiro Koizumi called an early election for Sunday after parliament refused to privatise the Japan Post, a move which the government said would have stimulated the economy, sent a strong signal of reform and helped strengthen central government finances.
   The Japanese post office, which is effectively the world’s largest bank with three trillion dollars of funds in savings and insurance money, has been criticized as a resource for the government to finance wasteful but popular public works. It is also a huge employer.
   Although reform of the Post Office in Japan has come as a major shock to the political system, privatisation has received the stamp of legislative approval in many countries in Europe and is on the way to delivery.
   The European Union has sought to open the postal services to competition in the 25-member bloc while keeping the public-service character of the organisations, such as the distribution of mail in all parts of a given country even if some routes are not profitable.
   European competition law does not lay down the legal status of post offices which remains a matter of national choice.
   However, many EU countries have opted to at least part-privatise their postal services and a growing number are planning to list them on stock exchanges.
   The postal services of The Netherlands and Germany are already listed on the stock market, and Austria and Italy also plan to take their post offices to the markets

With months of US economic data likely to be heavily distorted by the effects of Hurricane Katrina, financial markets are being forced to take a long-term leap of faith, and they are betting on life after the flood.
   The sheer momentum of global economic activity prior to Katrina - which last week killed thousands, deluged New Orleans and smashed parts of the US oil and gas infrastructure—may prove a sufficient buffer to absorb ensuing energy shocks.
   According to worldwide surveys of thousands of businesses, released this week, the global private sector economy was expanding at its fastest pace in over a year in August. That was despite a 60 per cent rise in crude prices in just 12 months.
   Investors in global stock markets, for now at least, seem to believe that if that sort of growth was a basis for optimism 8 days ago, then it remains so now, and a Katrina-related blow to US consumers and wider economic growth will be fleeting.
   World equities .MSCIWD—a bellwether of economic growth to the extent they discount future corporate profits—have soared 3.5 per cent in the week after the hurricane and hit their highest since late 2000 on Wednesday.
   ‘So far, over the past year or so, the higher oil price has not affected corporate profits in any significant way,’ said Stephen King, chief global economist at HSBC. He added that this may be boosting investors’ faith in companies’ ability to weather the latest energy shock as well.
   US corporate profits, for example, were up 6.9 per cent in the second quarter and their share of overall gross domestic product—at 7.99 per cent—was the highest on record.
   King said while the immediate outlook remained extremely hazy, a slight loosening of financial conditions last week—as interest rate markets bet the US Federal Reserve may delay its next interest rate rise - - may also have boosted markets.
   Even those interest rate markets are now also beginning to look beyond the storm. Ten-year borrowing rates—which dropped a fifth of a per centage point to below 4 per cent last week, in recent days jumped back close to pre-Katrina levels.
   To be sure, a post-storm spike higher in US retail gasoline and home heating prices will take a chunk of extra cash from American consumers. But this could prove more fleeting than first feared as a recovery of Gulf oil production and refining proceeds rapidly, with gas prices expected to return below $3 per gallon.
   More important for the global economy at large is crude oil, which had been climbing to record highs close to $70 per barrel before Katrina hit.

India’s benchmark BSE share index crossed 8,000 points for the first time on Thursday, stretching gains from the start of the year on optimism about robust corporate earnings in a fast expanding economy. The 30-issue index has gained nearly a fifth this year, with 14 per cent gains coming in the past 2-½ months, helped by foreign fund inflows of more than $7 billion.
   ‘Basically the liquidity in the market is too high and it is a broad-based rally that is happening,’ said Chandan Desai, director at TAIB Securities, explaining the unrelenting upward march of the index. At 10:45 a.m., the index was up 0.88 per cent at 8,016.33 points.
   Advancing issues beat declining issues 1,703 to 608 at the Bombay Stock Exchange, with 95 million shares traded. The broader 50-issue National Stock Exchange index, or Nifty, was up 0.77 per cent at 2,447.25. Desai said most market intermediaries were expecting some kind of correction, but it was not happening because foreign fund buying was huge and retail investors were churning stocks. Finance Minister Palaniappan Chidambaram said the share market rise was not a cause for worry.
   ‘We are looking at the price-earning ratio both at the Bombay Stock Exchange and the Nifty carefully. They are between 14.5 and 15.5. At this level, they look comfortable,’ he told reporters. DSP Merrill Lynch said on Wednesday foreign fund flows this year could touch a record $10 billion, above last year’s $8.5 billion. India has attracted Japanese and Korean funds this year, besides traditional investors from the United States, Europe and Southeast Asia.
   Andrew Holland, chief administrative officer of DSP Merrill, told Reuters that there was a shift in assets from the United States to developing markets and that India and China were at the forefront.
   ‘The economic growth story is definitely there, the outsourcing happening in India is a boost,’ Desai said.

Bangladesh trade fair in London Sept 15
A three-day single-country Bangladesh trade fair titled “Expo-Bangladesh-2005” begins in London, UK, on September 15 as part of a drive to expand market of the country’s products in Europe. London-based Bangladesh-British Chamber of Commerce (BBCC) is organizing the exhibition in cooperation with Export Promotion Bureau (EPB) and Bangladesh High Commission in the British capital. Commerce Minister Altaf Hossain Chowdhury will open the fair while London City Mayor Ken Livingston and high-level British government officials and business entrepreneurs attend the function. Some 60 Bangladeshi business firms will exhibit their goods in the fair under 21 product categories, including RMG, home textiles, textile fabrics, ceramics, handloom, furniture, herbal medicine, pharmaceuticals, handicraft, footwear, orchid, food items, real estate, imitations, and jute and plastic products.
— UNB

BPC to hand over 5 cottages to private sector
Bangladesh Parjatan Corporation (BPC), the state-run tourism sector, decided to hand over five of its cottages at Cox’s Bazar to private sector management. These are: Tanima, Tatini, Tapoti, Tanmoy and Taranga located at Parjatan Holiday Complex at Cox’s Bazar. “Initially, the cottages will be leased out for a period of 15 years and may be renewed for further time on mutually agreed terms and conditions,” said Khalilur Rahman, General Manager of BPC. The BPC floated tender Thursday seeking invitations from eligible bidders, including foreign firms, and would open the tender box on October 31.
— BDNEWS

ACU payment pulls reserve
The foreign exchange reserve is likely to come down below $3 billion level in next week when central bank will settle the payment of the Asian Clearing Union (ACU). Some $290 million will be deducted from the existing reserve as ACU payment, said sources in the central bank. Forex reserve on Thursday stood at $3.01 billion.
— New Age

Google expects proceeds from shelf
Google Inc said in a regulatory filing on Thursday that it expects to receive $4.11 billion in net proceeds from its shelf offering of 14.16 million Class A shares. Google, the world’s most popular Internet search engine, did not provide further details on what it will use the proceeds for, stating that the funds will go toward general corporate purposes, including working capital, capital expenditures, and acquisitions of complementary business, technologies or other assets.
— Reuters

Ford, Toyota recall vehicles
Ford Motor Coon Wednesday recalled nearly 4 million pickup trucks and sport utility vehicles in the United States because of the risk of engine fires. The same day, Japanese rival Toyota Motor Corp issued a recall for 978,000 pickup trucks and sport utility vehicles sold in the same market citing a faulty steering mechanism. Toyota said its recalled vehicles include power-steering equipped 4Runner sport utility vehicles and compact pickups and T-100 pickups from the 1989-1996 model years. Ford’s recall of an estimated 3.8 million vehicles, comes as the second-largest U.S. automaker is trying to stem steep losses in its North American automotive operations. Ford recalled about 792,000 pickup trucks and SUVs for a similar problem involving the speed control switch in January.
— Reuters

Siemens sees delay in 3G license award
Germany’s Siemens expects a delay in China’s highly anticipated award of third-generation (3G) mobile licenses, and now expects them to be delivered in the first half of 2006, adding to the list of foreign executives who expect a longer wait. Most industry observers and executives had previously expected China to issue three or four 3G licenses in the second half of this year, following several delays to previous expectations. But many are now starting to doubt that the issue of licenses — expected to spark billions of dollars of buying of new telecom equipment — will occur this year at all. An executive from Nokia, the world’s largest mobile phone maker and also a major supplier of mobile telecom equipment, said late last month he expected licenses for 3G, which enables high-speed data applications like video calling, to most likely come out in the first half of next year. Last week, Carl-Henric Svanberg, chief executive of Ericsson, the world’s largest telecom equipment maker, also said he expected China to award the licenses in the first half of 2006.
— Reuters

Lenovo to focus on laptops, cell phones
Lenovo Group Ltd., the world’s third-largest personal computer maker, will tap worldwide demand for laptops and mobile phones to drive sales and keep cutting costs to boost profit. “We’re not as efficient as we need to be yet,” chief executive officer Stephen Ward told investors Wednesday at a Citigroup Inc. technology conference in New York. “Our expense-to-revenue ratio is too high.” China’s Lenovo, which bought International Business Machine Corp.’s money-losing PC business in May for US$1.25 billion, said last month that first-quarter profit rose unexpectedly after trimming costs and winning market share in China. The company changed how it purchases services from IBM to lower expenses and will push faster-selling notebook PCs and cell phones to stimulate sales, Ward said. To boost market share in China, Beijing-based Lenovo plans to open 800 new franchise stores by year-end, bringing the total to 5,500, Ward said.
— Xinhuanet

Google expects proceeds from shelf
Google Inc said in a regulatory filing on Thursday that it expects to receive $4.11 billion in net proceeds from its shelf offering of 14.16 million Class A shares. Google, the world’s most popular Internet search engine, did not provide further details on what it will use the proceeds for, stating that the funds will go toward general corporate purposes, including working capital, capital expenditures, and acquisitions of complementary business, technologies or other assets.
— Reuters