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Too many insurance companies for a small market have hindered the smooth growth of the important financial system instead of offering diversified services through competition, a central bank report said, stressing the need for efficiency and strong monitoring of the business.
   Though premium income of the insurers more than doubled in four years to 2004, the sector failed to reduce costs and improve quality of products it offers. Moreover, the report said, accumulated losses and failure in meeting requirements barred most of the intending companies to float IPOs, said the financial sector review of the Bangladesh Bank’s policy analysis unit.
   As the insurance is an important part of the country’s financial system, inefficiency of the industry could impede the development of the overall financial system of the country, it warned.
   It pointed out that performance of the insurance sector in the country’s capital market showed a declining trend last year in terms of market capitalisation, dividend declaration and price earning ratios.
   The sector’s share in overall transaction, however, increased mainly due to newly listed six companies that raised their capital base through the initial pubic offerings in 2005.
   The central bank’s analysis wing stressed that the sector needs to improve its efficiency and ensure effective monitoring and supervision of the business.
   In 2005, a total of 17 companies floated IPOs in the capital market and 10 of them were from the insurance sector. These insurance companies floated IPOs worth Tk 115 crore. Most of the companies came to the capital market mainly due to legal requirements.
   The insurance sector accounted for 5.63 per cent share of total turnover at the Dhaka Stock Exchange in 2005 which was only 0.74 per cent in 2004.
   It also found that the share of insurance sector in the total market capitalisation has declined from 4.13 per cent in 2004 to 3.74 per cent in 2005, when the share of banking sector increased from 46.60 per cent to 52 per cent.
   The central bank study, however, took into account market capitalisation of the DSE only.
   The trend of weighted average price earning ratio declined to 20.87 in 2005 from 26.92 in 2004. The ratio was 12.36 in 2003.
   ‘Over the last few years, average dividend declared by the insurance sector also shows a continuous downward trend, which has declined from 18.16 per cent in 2003 to 6.68 per cent in 2005,’ said the review.
   The central bank study also observed that growing competition should enhance efficiency of the market and lead to product diversification and fair pricing of insurance products.
   ‘However, it is alleged that the presence of a large number of general insurance companies in a small market is creating hindrance in smooth functioning of the overall insurance industry,’ said the review.
   At present there are 17 life insurance companies and 43 others are doing general insurance business.
   In this connection it mentioned that over the last one year and a half, the Securities and Exchange Commission rejected 28 IPO proposals of various companies as they submitted flawed documents and of these 21 are from the insurance industry- 14 general and seven life insurers.
   ‘Reasons behind the huge rejection of IPO proposals also include non fulfillment of commission’s requirements, accumulated losses and negative profitability of the companies,’ the central bank review added
   ‘Growing importance of the insurance industry in the financial system and its increasing economic significance in other developing countries highlights the fact that the industry needs a closer attention for its future development,’ it suggested.
   The insurance business in Bangladesh has been growing as reflected in the trend in premium income, which more than doubled between 2000 and 2004. The Bangladesh Insurance Association data showed that gross premium income stood at Tk 2,305.5 crore in 2004 from Tk 1,108.6 crore in 2000.

Banks opened import letters of credit worth $15.24 billion in the fiscal year 2005—06 registering an 8.4 per cent growth over the previous fiscal year due to higher spending on oil, capital machinery and textile raw materials, says a Bangladesh Bank statistics on Wednesday.
   In July-June period of fiscal year 2004-05, total value of import L/Cs was $14.06 billion.
   As the L/C value is an indicative amount for the actual import payments and around 10 per cent higher of the actual value on an average, it can be presumed that import payments would range between $14 and $14.5 billion level in the 2005-06 fiscal that ended on June 30.
   In fiscal year 2004-05, import payments stood at $13.14 billion but the figure in the balance of payment table was lower at $11.9 billion as roughly 10 per cent value has been deducted from the C&F value to calculate free on board value.
   During July-May period of the fiscal year 2005-06, value of import payments stood at $13.36 billion as c&f value while the fob value, as recorded in the balance of payment table, was $10.82 billion.
   The central bank data also showed that fresh L/Cs for importing petroleum and petroleum products increased by 31.9 per cent over the previous fiscal year and the L/C value amounted $2.01 billion.
   Fresh L/Cs for textile machinery has also registered 31.9 per cent growth in the last fiscal year followed by cotton yarn (29.55 pc), textile fabrics and accessories for garments (20.7 pc) and raw cotton (20.1 pc).

The Indian apex business chamber FICCI has taken a strong objection to a unilateral order of West Bengal government making passport and visa mandatory for truck drivers, cleaners and customs agents for delivering export cargo at Banapole on the Bangladeshi side of the border.
   This order, issued by the District Magistrate of 24 Parganas of West Bengal, is ‘impractical to implement’, said the Federation of Indian Chambers of Commerce and Industry in a statement.
   It observed that the order would only result in bringing Indo-Bangladesh trade, which is over Rs 6,000 Crore, and growing every year, to a grinding halt.
   Asserting that the issue should have been discussed with Bangladesh authorities before coming out with the order, the federation of Indian trade bodies proposed workable system to address ‘security concerns’ so that this problem is resolved without any delay.
   As an alternative, the FICCI has favoured use of smart cards with an electronic machines installed at zero point which could register their to-and-fro movement into Bangladesh and check any unauthorised crossing of the border.
   This procedure can be worked out by the immigration Division of the Ministry of Home affairs, customs and the government of Bengal. ‘It would help do away with the visa requirements for the truck drivers and also on restriction on the number of movements,’ said the statement.
   Similarly, the use of smart card can be suggested to the Bangladeshi authorities for registering movement of their nationals into the Indian territories. Indian truckers drive 1.5km inside Bangladesh to Benapole.

Vigorous economic growth and signs of inflation are drawing central banks into the US Federal Reserve’s footsteps on the path towards higher interest rates, marking the end of cheap money.
   Almost the entire global economy is facing the same combination, and alarms have begun to ring among monetary authorities after a long period of weak inflation came to an end with higher prices for oil and other raw materials.
   Consumer price increases in June averaged 3.3 percent in the 30 countries that belong to the Organisation for Economic Cooperation and Development, up from 2.1 percent 12 months earlier, OECD figures showed.
   Meanwhile, economic activity worldwide continues to expand by about 5.0 percent per
   year, according to an estimate by the International Monetary Fund.
   Those two factors could spell trouble for central bankers who keep a close watch on inflationary pressures and use interest rate levels either to stimulate activity or curb demand when economies begin to overheat.
   Barring any surprises, on Thursday the European Central Bank (ECB) will raise its key lending rate for the fourth time in less than a year, to 3.0 percent.
   Last week, Hungary, India, Slovakia and Turkey all raised their main rates, and the Bank of England, applying a key rate of 4.50 percent, is mulling a similar move within about a month.
   The country that has raised its interest rates the most has also been the global locomotive for the past few years, the United States.
   One of the most debated issues on financial markets at present is whether the US Federal Reserve, which has raised its key Fed funds rate 17 times in a row, will mark a pause in the increase cycle now that US economic growth appears to have come off the boil.
   Most analysts believe the Fed will now maintain the rate at 5.25 percent.
   Elsewhere in the world, in Europe and Japan in particular, interest rate cycles are out of step with that of the United States and have been “since the Internet bubble burst”, said Helene Baudchon, an economist at the French bank Credit Agricole.
   Fed officials decided at the time to apply monetary and budgetary stimulation that helped the United States rebound more quickly than the 12-nation eurozone.
   The Fed fund rate had been cut to a four-decade low point of 1.0 percent before the US central bank began in June 2004 to raise it gradually, but regularly.
   Economists believe the ECB is now roughly midstream in its rate increase cycle, which they do not believe will take the core repo rate higher than 3.5 percent.
   In Tokyo, the Bank of Japan (BoJ) was the last of the Group of Seven highly industrialised powers to act, putting an end in July to more than five years of its zero interest rate policy when it raised the cost of borrowing by a quarter percentage point.
   In doing so, BoJ officials also declared victory against deflation that had been a threat since 1998.
   
   Key rates
   US 5.25 percent
   Eurozone 2.75 percent
   Britain 4.50 percent
   Japan 0.25 percent
   Australia 6.0 per cent

On the heels of the ADB advice asking Bangladesh to consider Indian giant Tata’s $3billion investment, Tata Group on Wednesday said its proposal still stood with the Bangladesh government.
   ‘Our proposal is in front of the Bangladesh government. The World Bank as well as the Asian Development Bank extended their support to it. The project is still under consideration,’ the Tata Group chairman, Ratan Tata, said.
   Addressing the 87th annual general meeting of Tata Power, he said Bangladesh was likely to undergo general elections and it was a matter between the political parties there to clear the proposal, Zee News reported.
   ‘The investment proposal is on hold…It is purely an issue between the political parties there as both the ruling party and the opposition want to take credit for bringing in the investment,’ a top Tata official said.
   Tata Group has proposed setting up a 2.4 million tonne steel plant a urea fertilirer factory with one million tonne capacity, a 500MW coal-fired power station and a 1,000MW gas-fired power plant in Bangladesh, and also offered an equity to the government.

A trade body has proposed the government that an institute be set up to train workers to explore the job market in the booming construction sector at home and abroad.
   Such an institute can not only meet the local demand of skilled workers but also enable the manpower to seek better-paid jobs in the construction sectors in many growing economies.
   The office-bearers of the Bangladesh Association of Construction Industry, accompanied by the president of the Federation of Bangladesh Chambers of Commerce and Industry, Mir Nasir Hossain, put forward the proposal at a meeting with the commerce minister, Hafiz Uddin Ahmed, at the latter’s office on Tuesday.
   Despite price-hike of construction materials and fuel, the construction sector in Bangladesh has still been growing, contributing to 9 per cent of the gross domestic product. The sector is claimed to have employed 10 million people.
   Malaysia had earlier shown interest in collaborating on building quality manpower, focussing the construction sector and recently German businessmen expressed interests in importing workers to the European country, the association leaders told the minister.
   Oil-rich countries of the Middle East, including the Kingdom of Saudi Arabia, have undertaken massive development programmes to build mega cities and special economic zones by utilising their huge surplus foreign exchange earning, thanks to rising price of petroleum products.
   Sources in the foreign and expatriates’ welfare and overseas employment ministries said the prime minister, Khaleda Zia, during her scheduled visit to Saudi Arabia on August 12-14 would request the Saudi authorities to recruit more Bangladeshi workers.
   The commerce minister assured the construction industry association leaders of all necessary cooperation after they demanded one acre land for construction of a building of the planned training institute, which could also be used as the central office of the association.
   The association members are engaged in construction works encompassing roads and highways, bridges and culverts, port and airport, dams and embankments, institutional and industrial complexes, hospitals and hotels.

The Asian Development Bank announced Wednesday it had signed a 350 million-dollar private sector loan to help develop a natural gas project in Indonesia.
   The loan to the Tangguh Liquified Natural Gas Project in Irian Jaya will help in the building and operation of gas production wells, platforms and a liquefied natural gas (LNG) facility, the ADB said in a statement.
   The facility will export gas initially to China, South Korea and the West Coast of North America, it said.
   ‘The project encourages clean energy use around the region. At the same time, it will increase revenue flows to the national, provincial and local governments,’ to help social development, said ADB director-general for private sector projects, Robert Bestani.
   ‘Since this is ADB’s first private sector project in Indonesia’s oil and gas sector, it has the potential to spur subsequent projects not only in Indonesia but also in the region,’ the bank said.
   The multi-billion dollar project is being developed by the London-based energy firm BP, which has significant equity interest in the project.
   Financing will also come from various international investors and banks, including the Japan Bank for International Cooperation (JBIC).

The appellate division of Supreme Court Wednesday disposed off the petition by feeder vessel operators and issued stay order on congestion surcharge being taken by the feeder operators.
   After hearing a writ petition filed by Bangladesh Garments Manufacturers and Exporters Association (BGMEA), a full bench appellate division of Supreme Court issued the stay order.
   BGMEA filed the writ petition in the High Court (HC) on July 3 against imposition of $130 for a 20 feet and $260 for a 40 feet container as congestion surcharge.
   The HC issued stay order on the surcharge being taken by the feeder operators. The feeder vessel operators also filed a writ petition against HC order.
   In a press conference, BGMEA president SM Fuzlul Hoque said from now on the feeder vessel operators or any entity cannot collect any congestion surcharge from the exporters and importers of the country.
   Feeder operators imposed congestion surcharge from June 6 this year.
   He said, “Feeder operators have taken about $6.8 million from the exporters and importers of the country as congestion surcharge in first month.”
   He also said, “we will file a petition against feeder vessel operators for collecting the amount taken from us soon,” he said, adding that they would soon try to find information on the charges taken from the importers and exporters.
   Feeder operators have taken about TK 2.25 crore a day, Mahbub Chowdhury, a BGMEA director said.

The Exports from the Export Processing Zones rose by 18.23 per cent to $1830 million during the 2005-06 fiscal, compared to the corresponding period of the previous fiscal.
   According to the Bangladesh Export Processing Zones Authority, exports by EPZs fetched $1549 million during the 2004-05 fiscal that contributed 17.90 per cent of country’s total export.
   Garments, textile, terry-towels, caps, tents, electronics and footwear and leather were major exporting items from EPZs.
   The general manager of DEPZ, AZM Azizur Rahman, said Chittagong and Dhaka EPZs still hold more than 90 per cent of total exports from all EPZs. Chittagong and Dhaka EPZs fetched $6802 million and $4776 million respectively up to May 2006 .
   According to the BEPZA, total investment in all EPZs rose $91 million during the July-May period of the last fiscal.
   The total investment of all EPZs was $119 million in the 2004-05 fiscal. It was the highest investment so far in a single year.
   An official of BEPZA said, ‘We approved 36 industries that invested $543 million in different EPZs during the last fiscal. Of them, 20 were foreign investors, 10 were local investors and other six belong to join ventures’.
   He said some of the factories have started production.
   According to the BEPZA, about 1,76,000 workers have been employed in the all EPZs in the last fiscal year.
   The government established seven EPZs which are now functioning. Karnaphuli EPZ is now under the implementation stage.

Rajshahi Krishi Unnayan Bank has set a target of loan disbursement and recovery of Tk 800 crore each during the current 2006-07 fiscal.
   Recovery target of classified loan was also fixed at Tk 138 crore.
   This was disclosed at a daylong conference for zonal managers and regional audit officers of the bank held at the conference hall of Barind Multipurpose Develop-ment Authorities here Tuesday.
   Chairman of the board of directors of the bank Ruhul Kabir Rizvi attended the conference as the chief guest with Deputy Managing Director Engineer Fashiar Rahman in the chair.
   The managing director Ashraf Ali, general manager (administration), Kazi Neyamat Ullah, general manager (Rangpur), Muhammad Hanif and other high officials of both headquarters and field offices were present on the occasion.
   The conference was also informed that Tk 887.86 crore was disbursed as loan and Tk 747.03 crore loan was recovered during the last 2005-06 fiscal year.

The industries minister, Motiur Rahman Nizami Wednesday said the present government has attached priority to the production of milk to increase supply of baby food and fulfill the national nutrition demand.
   He called upon farmers to put in their efforts to raise the production of milk through proper care of dairy cows.
   Nizami was addressing a function as the chief guest in the conference room of Bera Upazila Council in the district.
   He also distributed cheques for grant as incentive by the government to milk farmers.
   With Upazila Nirbahi Officer Mohammad Tariqul Alam in the chair, the function was also addressed, among others, by Additional Deputy Commissioner of the district Mohammad Dabirul Islam, Animal Resources Officer Dr Abdul Hye, Vice-President of the district unit of BNP Mohammad Abdul Hye and Principal of Bera Al-Hera Academy Moksed Alam Chowdhury.
   Nizami said increased production of milk would not only ensure welfare of farmers, but also play an important role in achieving economic development and prosperity of the country.
   He said a huge amount of foreign currency is spent every year to import powdered milk. ‘By properly using government grant and loan, farmers can help halt outflow of currency.’
   He also urged the farmers, who received grant and loan for growing cows to increase milk production, to use public money with transparency and honesty.

Employment of children under 14 in households, roadside eateries and hotels will be illegal in India from October, the government has announced.
   Rights activists though held out little hope that the lot of millions of child labourers would change.
   A labour ministry statement late Tuesday said the ban has been imposed under the Child Labour Prohibition and Regulation Act of 1986 and will be in force from October 10.
   It warned that anyone employing children in roadside eateries, restaurants, hotels, motels, teashops, resorts, spas or in other recreational centres will be liable to prosecution.
   Penalties range from a prison term of up to two years and/or a fine of between 10,000 rupees and 20,000 rupees (212 and 424 dollars).
   The ban is expected to ‘ameliorate’ the sufferings of millions of working children, said the labour ministry, estimating that there are some 12.6 million child labourers in India.
   Describing the employment of children as domestic helps or in the hospitality industry as ‘hazardous,’ the statement said that in most cases they were subject to physical violence, psychological trauma and sexual abuse.
   Those working in highway eateries were identified as
   the ‘most vulnerable’ and ‘easy prey to sex and drug abuse’ thanks to contacts with various people.
   These abuses went unnoticed and unreported as they took place in the close confines of the households or restaurants, the government said.
   ‘Children are made to work for long hours and are made to undertake various hazardous activities severely affecting their health and psyche,’ it added.
   India has already banned children from working in hazardous industries like making fire crackers and glass factories under a parliamentary act passed in 1986.
   There is also an embargo on bureaucrats hiring children below 14 as domestic helps.
   But activists said the ban would not make much difference eliminating child labour in the country.

‘Horizontal Contour Planting’, a new pineapple farming method, could double the production of fruits as well as reduce soil erosion in wetland areas of the northeastern region of the country.
   Masud Ahmed, a self-proclaimed ‘pineapple pioneer’ of the Hail Haor wetland areas, started working with the US Agency for International Development (USAID) to raise pineapple production by adopting the contour planting technique in 2002.
   Ahmed’s yield nearly doubled after he employed the contour method. He has contoured five hectares of the 10 hectares he cultivates, with plans eventually to contour all his land.
   The USAID introduced horizontal contour planting in the region to combat soil erosion, sources in the Bureau of International Information Programs, U.S. Department of State said here today.
   Ahmed said deforestation and poor land use for the last 20 years had increased the rate of soil erosion in the wetlands and the traditional practice of planting pineapples in vertical rows on hill slopes had also been particularly damaging.
   During the monsoon, soil, exposed to a large amount of rainfall was swept away to lower-lying wetlands, rapidly accumulating as silt and contributing to a loss of wetland habitats that support diverse animal and plant species, Ahmed said.
   ‘By following the contouring method, I could reduce erosion and improve my output of pineapples,’ Ahmed said adding, ‘We had never seen fields like this before.’
   Following Ahmed’s results, an additional 20 farmers, including those who had called contouring a crazy idea, are now applying the same technique to their own fields and are able to earn up to 50 per cent more utilizing the same amount of land.

Australia’s central bank raised interest rates by 25 basis points to a six-year high of 6.0 per cent Wednesday in an effort to head off inflationary pressures in a booming economy.
   The widely-anticipated move by the Reserve Bank of Australia (RBA) board came after the headline annual inflation rate hit 4.0 per cent in the June quarter, well above the bank’s overall target range of 2.0-3.0 per cent.
   ‘The decision reflects the board’s assessment that economic activity remains strong and that inflation pressures have increased,’ RBA governor Ian Macfarlane said in a statement.
   It was the second hike in three months after rates were raised 25 points per cent in May, which was the first increase in 14 months.
   Prime Minister John Howard acknowledged the central bank had no choice but to lift interest rates although he won an emphatic election victory in late 2004 with a promise to mortgage-belt voters to keep rates low.
   ‘Nobody likes interest rates going up but I don’t believe that the Reserve Bank had any responsible alternative other than to take that decision,’ Howard said.
   ‘In good economic times you can’t expect every economic announcement to contain good news.’
   Howard earlier said that his government was powerless to act against the main reason for the rate rise—the soaring cost of oil.
   ‘It’s not something that any government in Australia can control because everybody’s grappling with the problem, everybody around the world,’ he said.
   Macfarlane said that when making its decision the RBA had taken into consideration the June quarter spike in inflation caused by rising fuel costs and a sharp increase in fruit prices following a cyclone earlier this year.
   He said the factors had taken underlying inflation to just under three per cent, reflecting an upward trend in the cost of living in Australia that the RBA needed to address.
   ‘Overall the board’s assessment, based on the gradual increase in underlying inflation this year, and the wider background of above-average global growth and strong domestic demand, was that underlying inflation in the period ahead was likely to exceed previous forecasts,’ he said.
   ‘Given these circumstances, the board judged that an increase in the cash rate was warranted in order to contain inflation in the medium term.’

British confectionery and soft drinks giant Cadbury Schweppes reported on Wednesday strong interim profits but warned it would take a hit from a recent salmonella food scare.
   Underlying pre-tax profits jumped 24 per cent to 402 million pounds (588 million euros, 754 million dollars) in the six months to June 30, compared with 322 million for the same period of 2005, Cadbury said in a statement.
   Net profit more than tripled to 819 million pounds in the first half, from 237 million in the comparable period of 2005.
   Shares in Cadbury Schweppes shares leapt 3.17 per cent to close at 537.5 pence on Wednesday as the underlying pre-tax figure beat analysts’ expectations of a range between 376-398 million pounds. London’s FTSE 100 index of leading shares meanwhile finished 0.87 per cent higher at 5,932.10 points.
   Cadbury estimated it would take a 20-million-pound hit in its full-year results from the salmonella scare.
   More than one million Cadbury candy bars were taken off the shelves in shops across Britain in June over fears that they may be contaminated with a rare strain of salmonella.
   The contamination was traced to a leaking pipe—since repaired—at the Marlbrook plant, near Leominster in west central England, which generates 97,000 tonnes of milk chocolate crumb base material every year.
   ‘We have apologised to our consumers, customers and colleagues for any concerns caused and are implementing changes to our UK manufacturing and quality assurance processes so that this cannot happen again,’ Cadbury said.
   Group revenue meanwhile climbed 12.0 per cent to 3.416 billion pounds in the first half, driven by new product ranges and growth in emerging markets.
   The product recall on June 23 centred on seven of its most popular products—Dairy Milk, Dairy Milk Turkish, Dairy Milk Caramel, Dairy Milk Mint, Dairy Milk 8, the Dairy Milk Buttons Easter Egg and the Freddo bar.
   However, Cadbury emphasised Wednesday that the lines represented less than 3.0 per cent of British sales and only about 0.5 per cent of group sales.

HP has announced that its researchers have developed a miniature wireless data chip that could provide broad access to digital content in the physical world.
   With its combination of size, memory capacity and data access speed, the tiny chip could be stuck on or embedded in almost any object and make available information and content now found mostly on electronic devices or the internet.
   The newly unveiled chip has some of the potential applications include storing medical records on a hospital patient’s wristband; providing audio-visual supplements to postcards and photos; helping fight counterfeiting in the pharmaceutical industry; adding security to identity cards and passports; and supplying additional information for printed documents.
   ‘The Memory Spot chip frees digital content from the electronic world of the PC and the internet and arranges it all around us in our physical world,’ said Ed McDonnell, Memory Spot project manager, HP Labs.
   The chip has a 10 megabits-per-second data transfer rate —10 times, faster than Bluetooth wireless technology and comparable to Wi-Fi speeds — effectively giving users instant retrieval of information in audio, video, photo or document form. With a storage capacity ranging from 256 kilobits to 4 megabits in working prototypes, it could store a very short video clip, several images or dozens of pages of text. Future versions could have larger capacities.
   Information can be accessed by a read-write device that could be incorporated into a cell phone, PDA, camera, printer or other implement. To access information, the read-write device is positioned closely over the chip, which is then powered so that the stored data is transferred instantly to the display of the phone, camera or PDA or printed out by the printer. Users could also add information to the chip using the various devices.
   The chip incorporates a built-in antenna and is completely self-contained, with no need for a battery or external electronics. It receives power through inductive coupling from a special read-write device, which can then extract content from the memory on the chip.
   Inductive coupling is the transfer of energy from one circuit component to another through a shared electromagnetic field. A change in current flow through one device induces current flow in the other device.

Foreign sales of French wines and spirits rose sharply in the first half of 2006, largely thanks to returning international demand for Bordeaux, the Federation of Exporters of Wines and Spirits (FEVS) said Wednesday.
   Overall exports to the end of May were up by 18.6 per cent, with the highly-praised 2005 vintage for Bordeaux wines taking much of the credit.
   ‘France has always done well with its top quality wines. What is encouraging is that the medium range wines are becoming competitive again on the international market,’ said FEVS director general Renaud Gaillard.
   The French wine industry has been facing its worst crisis in dacades as a result of falling domestic consumption and growing competition abroad from countries like Chile and Australia.
   In the first half of 2006, the US saw the biggest increase in imports of wine and spirits from France—up by 40 per cent—with Asia close behind.
   Sales of champagne and cognac led the way, along with quality French vodkas such as ‘Grey Goose’ which have made big inroads into the US market.
   Other French wines did less well than Bordeaux, which saw sales rise by more than 40 per cent. Exports of Burgundy rose by 9.6 per cent and those of Val de Loire wines fell by 6.5 per cent.

The world’s largest trading powers will meet in Australia next month in a bid to salvage failed global free trade talks, the government said Wednesday.
   Trade Minister Mark Vaile said he would propose a compromise over farm aid in an effort to break the deadlock between the European Union and United States.
   He said the extended meeting of the 18-member Cairns Group of agricultural exporters would aim to ‘inject some energy’ into the Doha Round of talks, which collapsed last week.
   World Trade Organization chief Pascal Lamy, US Trade Representative Susan Schwab and US Agriculture Secretary Mike Johanns had indicated they would attend, Vaile said. EU Trade Commissioner Peter Mandelson has also been invited.
   Vaile’s office said Canberra was also ‘looking at the possibility’ of inviting the major Group of Six (G6) trading powers ‘to meet on the margins.’
   As well as Australia, the G6 includes the United States, EU, Japan, India and Brazil.
   ‘The round’s not dead but it really is only hanging by a thread,’ Vaile told Australian Broadcasting Corporation radio.
   Vaile’s office confirmed a report in The Australian newspaper that Canberra was proposing a compromise that would involve the United States cutting its farm subsidies by a further 5.0 billion dollars and the EU reducing its tariffs by a further 5.0 per cent.
   Australia hopes that any movement by Brussels and Washington could breathe new life into the free trade negotiations, which opened in the Qatari capital in 2001.
   Vaile said a global trade treaty would not be reached by the December 2006 deadline but any progress at the September 20-22 meeting could encourage the US Congress to extend President George W. Bush’s fast track authority on international trade deals.
   Bush must surrender that authority to Congress in July 2007, potentially making it harder for the US to offer concessions.
   ‘The window is almost closed but some commentators in the United States have said there’s a possibility of extending (the) trade promotion authority so there’s half a chance,’ Vaile told the ABC.
   The Doha Round was supposed to dismantle worldwide barriers in agricultural and industrial trade and use commerce to give developing countries a boost.
   It was meant to yield a trade treaty by the end of 2004 but the target was progressively put back to the end of this year.
   Lamy then suspended the round last week when the G6 failed to compromise on tariffs and subsidies, especially in agriculture, at last ditch talks in Geneva.
   The major protagonists, particularly the United States and EU, have bitterly traded blame for the collapse of talks, each accusing the other of inflexibility over aid to farmers.

China’s steel industry wants tighter controls on foreign investment, state media said Wednesday, amid growing concerns a more protectionist mood may be taking hold in Asia’s second-largest economy.
   It should be made harder for foreign investors to buy shares in domestic steel firms, especially the large ones, said Luo Bingsheng, vice chairman of the China Iron and Steel Association.
   ‘The sector should be controlled by Chinese state-owned and privately owned steelmakers, instead of foreigners, as it is one of the country’s most important basic industries,’ Luo said in a China Daily report.
   A national steel industry policy launched last year already bans foreign investors from having a controlling stake in Chinese steelmakers.
   The report came just two days after US Undersecretary of Commerce Franklin Lavin warned of emerging signs that China could be adopting a less welcoming attitude to foreign investment in certain sectors.
   The reasons are complacency caused by years of fast growth, combined with a weakened impetus to reform as China has gradually implemented most of its concessions made to gain entry into the World Trade Organization, Lavin said.
   The debate over the future thrust of China’s reform coincides with a period of unprecedented change in the global steel industry which is also likely to affect China.
   Mittal Steel’s takeover of European peer Arcelor, creating an uncontested steel giant, poses a great challenge for China, Luo said in Wednesday’s China Daily.

Animal health officials said Wednesday they had burned almost 1,300 chickens after most tested positive for the bird flu virus on Indonesia’s popular resort island of Bali.
   Officials in the Jembrana district killed some 845 backyard chickens that tested positive for potentially deadly H5N1 strain of the virus, said I Gusti Ngurah Sanjaya, head of the district’s animal health office.
   He told AFP that workers and local residents also burned a further 450 sick birds living within three kilometers (two miles) from the outbreak.
   ‘We have carried out bio-security measures by spraying coops in five separate locations in Jembrana. Any chickens found dead or sick were burned and buried and public awareness of the disease is quite good,’ Sanjaya said.
   The world’s fourth most populous nation shares the highest number of human bird flu fatalities, reporting 42 deaths, the same number as Vietnam. Outbreaks in poultry have been found in 27 of its 33 provinces.
   Sanjaya said no residents of Jembrana, where there are about 1.5 million backyard chickens, had so far been hospitalised on suspicion of infection.
   ‘There are none reported so far but clearly we are concerned about this and that’s why we are conducting preemptive measures,’ he said, adding that officials recently gave 200,000 vaccine doses to backyard farmers in Jembrana.

Australia hopes to start negotiations next year on a free trade agreement (FTA) with its largest market Japan, Foreign Minister Alexander Downer was quoted as saying Wednesday.
   Japan, which is famous for protecting its agricultural sector, had earlier expressed reluctance at a trade pact, believing it would favor Australia.
   ‘Australia hopes to start official negotiations on an FTA next year,’ Downer told Japanese Foreign Minister Taro Aso, as quoted by a Japanese official privy to their talks.
   ‘It is possible to proceed with negotiations while paying consideration to sensitive issues for both countries,’ Downer said.
   Japan during an April 2005 visit by Prime Minister John Howard agreed only to a two-year feasibility study on a free trade agreement—not actual negotiations.
   Aso said he was willing to move more quickly with the feasibility study but did not say whether Japan would open FTA negotiations with Australia.
   ‘The economic relationship between Japan and Australia is very important and this should be strengthened. And the feasibility study should be sped up,’ Aso was quoted as saying.
   But he added: ‘Japan’s agriculture sector’s liberalization has been gradually proceeding step by step. This sensitivity needs to be considered.’

The Russian press on Wednesday slammed the decision by a Moscow court to declare oil giant Yukos bankrupt and said the move contradicted earlier promises made by Russian President Vladimir Putin.
   ‘Moscow’s arbitration court yesterday acted against the interests of power, of the government and the Russian economy,’ the daily Vremya Novostei wrote.
   Putin pledged in June 2004 to save Yukos from bankruptcy, insisting that Russia had ‘no interest in the bankruptcy of a company like Yukos’.
   Nevertheless the company was driven into the ground, the business daily Vedomosti noted, blaming ‘three years of relentless work by prosecutors’.
   ‘They drew a cross on (the tomb of) Yukos,’ was the headline in Izvestia, which referred to the unprecedented legal campaign against the group, seen by critics as vengeance directed from behind the scenes by the Kremlin.
   Tuesday’s court decision marked the end of a company that had become a virtual empire under ambitious former chief executive Mikhail Khodorkovsky, who is now serving an eight-year prison sentence for financial crimes in Siberia. Khodorkovsky, who bought a controlling stake in Yukos in 1995, led the company to become Russia’s oil leader and became the country’s richest man in the process, until his arrest by security officers in 2003.

A chronic fuel shortage in Baghdad, capital of one of the world’s most oil rich countries, has created a black market for petrol which sustains a growing population of dirty-faced street kids.
   Along the pavements of the Saadun Avenue, cutting through the centre of the Iraqi capital, dozens of children siphon petrol into cars from five gallon drums, using funnels made of soda bottles and lengths of garden hose.
   On the other side of the street, a once prosperous thoroughfare now marred by razor-wire, concrete barricades and shuttered shops, motorists queue for up to five hours to buy subsidised petrol at official rates. Those who have the cash, but no time to wait, can ask kids like 13-year-old Mohammed Riyad to fill their tanks on the spot for 15,000 dinars ($10) for five gallons (20 litres), more than twice the official price.
   Prices may be cheap by western standards, but Iraq boasts the world’s second largest confirmed oil reserves and its population expects access to fuel.
   Violence and underinvestment have damaged the pipeline and refinery network, leaving the country partly reliant on imported refined products, and smugglers exploit state subsidies to re-export cheap fuel to Iraq’s richer neighbours.
   Oil minister Hussein Shahristani says Iraq produces 10 million litres of petrol and imports seven million litres per day, whereas the market sucks up 22 million and distribution is hit by ‘terrorism and administrative corruption.’

Steel giants Arcelor and Mittal Steel, which are to combine to create by far the biggest world steel group, said Wednesday that their joint net profit was 1.310 billion euros in the second quarter.
   But Mittal Steel second-quarter net profit was little change from the equivalent figure last year, and Arcelor reported a 35.0-per cent slump in the second quarter and 28.2-per cent fall for the first half.
   Both steel gaints presented their second-quarter results on Wednesday together with the joint pro forma results of Arcelor Mittal.
   This is the first time they have presented such a joint operating front since the bitter six mont battle by Mittal Steel to win control of Arcelor.
   The combined figure was based on 92.0 per cent of Arcelor’s results reflecting acceptance to this extent by Arcelor shareholders of takeover terms by Mittal Steel.
   Arcelor reported a 35-per cent drop in net profit in the second quarter at 653 million euros (837 million dollars) compared to 1.003 billion euros a year
   earlier.
   In a statement, Arcelor said it was counting on ‘good perspectives’ for the rest of the year ‘for all of its activities’.

Oil prices jumped back above 75 dollars in Asian trade Wednesday as hopes for a quick ceasefire in Lebanon faded while concerns grew at the approach of a tropical storm in the United States, dealers said.
   At 2:18 pm (0618 GMT) New York’s main contract, light sweet crude for September delivery, was 51 cents higher at 75.42 US dollars a barrel from 74.91 dollars in late US trades Tuesday.
   The contract hit 75.45 dollars earlier Tuesday, its highest level since July 18.
   Brent North Sea crude for delivery in September was up 57 cents at 76.46 dollars. On Tuesday it briefly touched 76.58, which was also last seen on July 18.
   ‘It seems right now the Middle East conflict will take longer than people expected, especially the prospects for a ceasefire,’ said Dariusz Kowalczyk, senior investment strategist with CFC Seymour in Hong Kong.
   Israeli troops struck far deeper than previously into Lebanon Wednesday as United Nations Security Council members struggled to overcome differences on how to end the violence.
   Israel’s decision to widen its three-week-old offensive came amid apparent disagreement among major powers on how to end the conflict.
   Ambassadors from the five permanent Security Council members appeared split over the timing of a ceasefire after holding what were described as ‘frank discussions’ along with UN Secretary General Kofi Annan in New York.
   The five—Britain, China, France, Russia and the United States—were unable to agree on a resolution amid differences over the sequence of any ceasefire and the deployment of an international force.
   White House spokesman Tony Snow said an immediate ceasefire was ‘something that at this point doesn’t seem to be in the cards.’

A number of banking, insurance and manufacturing companies reported their half-yearly accounts up to June 30 to the Dhaka Stock Exchange on Wednesday.
   
   Profit
   One Bank’s half-year profit up
   As per un-audited accounts for the half year till 30 June, One Bank Ltd earned a net profit of Tk 15.70 crore with an earning per share of Tk 17.68, up from Tk 9.17 crore and Tk 11.35 respectively of the half-year close of the year back.
   The bank’s turnover totalled Tk 20.10 crore while operating profit figured Tk 47.66 crore, both marking growth over the year ago period.
   * Standard Bank reports net profit of Tk 17.36 crore with EPS of Tk 16 in the half year up to June 30, compared to Tk 12.42 crore and Tk 14 respective of a year back.
   * Ambee Pharmaceuticals company has reported net profit of Tk 36.4 lakh with EPS of Tk 1.82.
   * Federal Insurance Co Ltd earned net profit of Tk 30.8 lakh with EPS (basic) of Tk 4.66 in the half year.
   * Peoples Insurance Co Ltd made a net profit of Tk 1.37 crore with EPS of Tk 18.27.
   * Sonargaon Textiles Ltd reports net profit of Tk 51.6 lakh and EPS of Tk 5.21.
   * Prime Insurance Co Ltd reports Tk 66.3 lakh as net profit and EPS of Tk 4.42.
   * Safko Spinning Mills Ltd earned Tk 10.5 lakh as net profit with EPSof Tk 0.66.
   * GQ Ball Pen Industries Ltd reports net profit of Tk 1.18 crore with EPS of Tk 2.62.
   * Bangladesh General Insurance Co Ltd reports net profit of Tk 1.06 crore and EPS Tk 7.58.
   The company announced bonus share, which will be credited to shareholder’s BO Account today.
   Legacy Footwear Ltd reports net profit of Tk 12.6 lakh with EPS of Tk 0.17.
   Pragati Insurance Ltd reports net profit of Tk 4.03 crore with EPS of Tk 18.60.
   
   Loss
   * Arbee Textile has reported net loss of Tk 51.2 lakh with a negative earning per share of Tk 1.18.
   * Sreepur Textile Mills Ltd reports net loss of Tk 1.95 crore with negative EPS of Tk 13.93.
   * National Tea Co Ltd reports net loss of Tk 7.2 crore with negative EPS of Tk 109.09.
   Sources: DSE, CSE

BPC sells 9,370 tonnes fuel oil
Three marketing companies of the Bangladesh Petroleum Corporation on Tuesday sold refined fuel oil of various grades from their depots across the country. A total of 421 tonnes of octane, 444 tonnes of petrol, 1,461 tonnes of kerosene and 7,044 tonnes of diesel were sold.
— BSS

SingTel’s subscriber base tops 92 million
Strong growth in India and Indonesia helped push Singapore Telecommunications’ regional mobile phone user base above 92 million at the end of June, Southeast Asia’s biggest phone company said Wednesday. The company said it added 7.4 million mobile phone subscribers in the three months to June compared with the previous quarter, the highest increase in its history. On a year-on-year basis, SingTel’s mobile users rose 30 per cent from 71 million. The bulk of the growth came at SingTel’s associates, Bharti in India and Indonesia’s Telkomsel, the company said in a statement. Bharti’s mobile subscribers jumped 88 per cent over the year while Telkomsel recorded a 36 per cent gain. SingTel’s Australian subsidiary Optus added 8.8 per cent year-on-year to bring its overall base to 6.56 million. At home, SingTel had 1.62 million mobile users compared with 1.55 million a year ago. SingTel also has stakes in Thailand mobile operator Advanced Info Service (AIS), Globe Telecom in the Philippines and in Pacific Bangladesh Telecom Limited (PBTL).
— AFP