Main Page «
Front Page «
Metro «
International «
Sports «
National «
Editorial «
Op-Ed «
Home «
Timeout «
Letters «

Archive «
Launch Supplement «
Special Supplements «

The Bangladesh economy continues to maintain its momentum with consumerism becoming an emerging trend, offsetting the shocks of natural disasters and MFA phase-out, a Citigroup analysis says.
   But the year 2006 remains crucial, as the government’s term comes to an end and political tensions are growing up, which may hamper the growth prospects, it says.
   Despite a difficult political climate, weak infrastructure and still high poverty rates, the economy marked a slow-but-steady progress, which has stemmed from prudent macroeconomic management, liberalisation of the investment regime, rising remittances, and export-oriented growth.
   ‘Bangladesh has established a credible record of sustained growth since FY00, when growth exceeded 6 per cent, and has since remained at over 5 per cent with headline growth likely to come in over 6 per cent in FY06,’ said the study, done by Citigroup’s economic and market analysts Rohini Malkani and Anushka Shah.
   ‘With progress in infrastructure, coupled with continued foreign direct investment and supportive government policy, we remain positive on growth in Bangladesh,’ it said.
   For a country once described as the ‘poorest of the poor’, Bangladesh has been drawn into a wave of consumerism led by rising incomes, coupled with increasing urbanisation.
   While the key growth sectors are automobiles, consumer durables, leisure and lifestyle, real estate, telecommunications and healthcare, much of this is concentrated in the cities of Dhaka and Chittagong.
   ‘More importantly, the uptrend in consumerism is also an indication of a widening
   gap between the rich and the poor,’ the study, however, pointed out.
   While Bangladesh has made improvements on the external front resulting in a current account surplus for three consecutive years, the widening trade deficit due to higher oil and non-oil imports sent the current account back into the red.
   There is pressure on inflation that is being fuelled by higher food prices following the floods and a partial pass-through of higher global oil prices. However, contractionary policies initiated by Bangladesh Bank should stem inflation, it hoped.
   Although the fiscal deficit has remained in the 4-4.5 per cent range since FY01, election expenditure could result in a slippage this year.
   The study finds private sector as key engine of growth. An emerging trend has also been steady improvements in private investment, up 18.5 per cent of GDP during the year from 15.6% in FY00.
   Expansion in GDP over the year was also driven by strong trends in workers remittances, and overall buoyancy in industry and services.
   Strong and relatively stable growth in the industry is likely to help tide over lower growth in agriculture over the long term.
   Capital flows continue to be supported by foreign direct investments. An indication of potential FDI flows is UNCTAD’s ‘Inward FDI Potential Index’, which ranks Bangladesh 115 out of 160 countries.
   FDI flows in telecommunications, pharmaceuticals, and textiles are particularly encouraging. Apart from the Tata Group’s proposal to invest $2.5 billion
   in the energy, steel, coal and fertiliser sectors, the Dhabi
   Group has also pledged to
   invest $1 billion in the telecommunications, pharmaceuticals and hotel sectors while recently several foreign companies
   such as the UK based firm Energy Asia have expressed interest
   in developing Bangladesh’s coal fields.
   Since Bangladesh imports almost all of its annual demand for petroleum products estimated at 3.8 million tonnes, this translates into a high risk of rising inflation on account of global oil prices.
   Domestic petroleum prices rose by just 30 per cent while global oil prices rose by 86 per cent over the past year. ‘This has taken a toll on government finances and resulted in severe losses for the Bangladesh Petroleum Corporation,’ the study said.
   Consequently, prices of most petroleum products (diesel, petrol and octane) are still cheaper than those in India.
   The high price differential has also given rise to concerns that diesel is smuggled out of the country and into India and Myanmar.
   Despite considerable progress, Bangladesh suffers from several structural impediments and faces many challenges in sustaining steady growth acceleration.
   Apart from the political environment and a poor law and order situation, key concerns include rising prices, fiscal correction, and a widening current account deficit, it said.
   
   l The slow but steady progress is a result of prudent macroeconomic management, liberalisation of the investment regime, rising remittances, and export-oriented growth
   l 2006 is a particularly crucial year. Hartals, or strikes, could become a major issue constraining growth
   l Widening trade deficit due to higher oil and non-oil imports resulted in the current account going back into the red
   l There is pressure on inflation.
   l Election expenditure could result in bigger fiscal deficit this year

Exporters are failing to take full advantage of the Bangladesh Bank managed $100 million Export Development Fund due to its rigid criteria although its demand has been increased.
   Higher value addition requirement against raw material imports, $1 million finance ceiling for individual exporter are the main barriers for them taking full advantage of the $100 million EDF, the exporters said.
   The government, with the $25 million IDA credit, formed the fund earlier for financing to procure raw materials and spare parts of exporters to diversify and promote export of non-traditional and higher value added items.
   Under the scheme, an exporter has to maintain 30 per cent value addition against his raw material imports for availing financing.
   The BB provides 70 per cent finance against the value of export LCs at an interest rate of 1.0 per cent plus the London Inter-bank Offer Rate (LIBOR) to the exporters through the commercial banks.
   The BB provides $0.5 million for single LC while up to $1.0 million for all the LCs opened by an individual exporter from the EDF.
   ‘The allocation of maximum $1.0 million is not enough for an individual exporter,’ said Tipu Munshi, president of the Bangladesh Garment Manufacturers and Exporters Association.
   He said it would facilitate more exports if the allocation for an individual exporter is raised up to $3.0 million. Referring to reduction of value addition limit and raising of ceiling, he said the BGMEA has placed the matter to the government.
   Fazlul Hoque, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the BB should raise the finance facility to an individual exporter from the current level.
   ‘It is difficult for the woven exporters to meet the 30 per cent value addition requirement due to scarcity of raw materials at a rate equivalent to 70 per cent,’ Annisul Huq, former president of the BGMEA said.
   He said the fund would give more benefit to the exporters if the value addition criteria are reduced to 15 per cent.

Taiwan’s businesses may in future use India and Bangladesh as a springboard for entering the trade network of member countries of the South Asian Free Trade Agreement, report in Taipei said.
   ‘Taiwan’s businesses can use ‘made in India’ and ‘made in Bangladesh’ products to expand business throughout SAFTA member countries, while enjoying lower tariffs, or zero tariffs,’ said Wu Fu-cheng, deputy director of the Taiwan Institute of Economic Research Division of International Affairs.
   ‘Since Taiwan is not a member of any trade zone, it can enter other markets via India and Bangladesh,’
   Wu pointed out that since SAFTA took effect January 1, 2006, entering the South Asian market will allow Taiwanese businesses to enjoy favourable treatment.
   ‘Taiwan can also use India’s free-trade agreement with other countries to enjoy reduced tariffs, or zero tariffs. After India signs a free-trade agreement with the Association of Southeast Asian Nations, Taiwan can avoid being marginalised by increasing export opportunities to ASEAN markets via India,’ Wu said.
   Wu made the statement during a seminar on investment in India and Bangladesh sponsored by the Taiwan External Trade Development Council (TAITRA). TAITRA has held a series of seminars to assist and encourage Taiwan businesses with an interest in expanding trade ties with India and Bangladesh.
   ‘We can use India to balance out the lean of Taiwanese businesses toward China, yet we cannot try to use India to contain China, since India and China are not fighting against each other anymore, but are now cooperating and competing with each other,’ Wu said.
   ‘Taiwan’s businesses can also use their base in China to enter India,’ Wu said.
   Wu supported the case of investment in India by saying that even US leading distributor Walmart is considering the transfer of its textile and clothes merchandising centre from China to India due to gains made by the Renminbi. Wu said this showed that products that are ‘made in China’ can be replaced by ones that are ‘made in India.’

Supermarket giants in the UK are selling complete suits with a price of 30 Pound depending on cheap labour costs of Bangladesh and China, market players said.
   UK’s biggest retailer—Tesco, USA’s Walmart’s sister concern ASDA and fashion retailer Primark—now started to sell suits worth only 30 to 35 pound, whereas normally a complete suit generally cost at least 90 to 100 pound.
   Recently, an enquiry by the Daily Mail revealed that these cheap suits have three sources—China, Bangladesh and Bulgaria.
   An Asda spokesman told BDNEWS that although the labels of these suits read made in New York, it is actually made in either China or Bangladesh.
   China is favourite but sometimes overdoes its quotas and causes a diplomatic row, which is where the other countries like Bangladesh come in, he said.
   The spokesman said: ‘We’re able to charge such a low price because we buy in huge quantities, make only a modest profit and we keep our business simple and drive out unnecessary costs.’
   ‘This means our customers get the best possible price, safe in the knowledge that there’s no compromise on quality or production standards.’
   ‘We have sold 1,800 jackets and 7,000 pairs of trousers,’ said a store manager of the Primark store, in the Bull Ring at Birmingham adding, ‘The point is that it has been designed for any shape or any age. We don’t put too many flashings on it that could cause it to date. An 18-year-old or an 86-year-old could buy it. Youngsters get them for job or university interviews. Tall boys buy them to wear to school.’
   ‘This means our customers get the best possible price, safe in the knowledge that there’s no compromise on quality or production standards,’ the spokesperson said.

Indonesia must give immediate priority to completing tax, labour and other key reforms aimed at drawing investments crucial to boosting economic growth, a senior IMF official said.
   Daniel Citrin, deputy director of the Washington-based International Monetary Fund’s Asia and Pacific Department, said that with consistent policy implemention, Indonesian economic growth prospects were ‘good and things will pick up quite rapidly.
   ‘There are still issues that affect the investment climate and that’s the main priority,’ Citrin told AFP on Thursday after addressing the US-Indonesia Society in Washington.
   Asked what were the near term priorities for Southeast Asia’s biggest economy, he said ‘completing’ the tax reform agenda and new investment laws, already in the final stages of preparation.
   ‘It has to continue to make strides in simplying the tax system, dealing with corruption and having good labour laws,’ he said.

The industries minister, Matiur Rahman Nizami, has said government has taken various initiatives including cutting down expenses, repaying prices of sugarcanes and providing incentives to farmers to make the sugar industries viable.
   ‘Demand of sugar could largely be met from domestic production if high-yielding variety of sugarcane could be cultivated and sugar mills kept operative during the pick season,’ he said addressing officers and employees of the Joypurhat Sugar Mill and representatives of sugarcane farmers welfare association here Friday.
   Nizami hoped the Bangladesh Sugar and Food Industry Corporation would be able to make profit by overcoming previous losses because of practical steps taken by the government.
   He said the government is procuring sugarcanes in cash to encourage the farmers to produce high-quality sugarcane. Besides, subsidy is being provided to the growers to cultivate sugarcane in transplanted system.
   Presided over by the Joypurhat Deputy Commissioner, the meeting was addressed among others by Abu Yusuf M Khalilur Rahman MP, Abdul Alim MP, BFIC (Planning and Development) director MA Bakar and Managing Director Joypurhat Sugar Mill Ayub Ali.

A 10-year moratorium on new APEC membership is set to expire but there is confusion over how, or even whether, the premier forum linking Asia and the Pacific should expand.
   Even if new members are considered, there is expected to be heated debate within the 21-member grouping on who should be included, among them growing power India and military-ruled Myanmar.
   Russia, Peru and Vietnam were the last to be included in the Asia-Pacific Economic Cooperation (APEC) forum in 1997 before leaders of the 21-member body slammed the door for a decade on others in the membership queue.
   But the leaders, who were divided then on who would be allowed to join APEC next, had been vague on the question of admission.
   ‘There is some sort of a procedural question when the moratorium expires in 2007,’ senior US APEC official Michael Michalak told reporters on Thursday.
   ‘Does that mean that in 2007 we would invite new members to come into APEC or does that mean that from 2007, we have to decide on a set of criteria that will govern the invitation to new members?’
   ‘So far, I don’t think anyone has formally taken up the issue,’ Michalak said ahead of the first of a series of meetings to kick off next week among APEC senior officials preparing for the annual summit in Vietnam in November.
   He expects officials to begin informal discussions this year on the membership issue.
   APEC is the only forum that covers both sides of the Pacific Ocean and includes key partners such as the United States, China, Japan, Russia and Indonesia.
   It is also the only group which brings together—every year—leaders from 21 economies representing about half of global trade and 60 per cent of global gross domestic product.
   A membership moratorium was agreed among leaders ‘to give the APEC process a period in which to lay firm foundations for the future,’ the Singapore-based APEC secretariat said on its website.
   ‘By working with a constant group of members for a 10-year period, short- and long-term goals can be set,’ it said.
   But it left vague whether new members will be included next year. ‘In 2007, additional members will have the opportunity to apply for membership,’ it said.
   Potential candidates include failed applicants from 1997 — India, Colombia, Ecuador, Macao, Mongolia, Pakistan, Panama and Sri Lanka—as well as ASEAN economies that have not yet joined APEC: Cambodia, Laos and Myanmar.
   ‘The politics of membership is likely to dominate any economic criteria that may be developed by APEC officials,’ Woo Yuen Pau, director of an APEC study centre in Canada, said in a recent study.
   Barring major changes in reclusive North Korea, it is not likely to apply or to be considered, even though delegations from the hardline communist regime have been accepted as observers in APEC working groups since 2000, he said.
   It is also not clear if India will seek membership in APEC in 2007. There is a widespread view in New Delhi that India should not be in a position to be embarrassed again by rejection, Woo said.
   If the Association of Southeast Asian Nations (ASEAN) presses for Myanmar to be included in APEC, experts said there could be strong opposition from the United States and several other members.
   The United States ‘would have to take a good look at that,’ Michalak said. ‘We haven’t made up our minds on membership yet,’ he added.
   Myanmar has come under constant fire from the United States over its human rights record, especially its detention of democracy icon Aung San Suu Kyi.
   The 17-year-old APEC operates by consensus, meaning that the approval of each member is needed to reach a decision.
   APEC’s current members are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, the United States and Vietnam.

DBS, Southeast Asia’s biggest banking group, posted a dramatic slump in its annual net profit after booking a 1.13 billion dollar (691 million US) charge against its Hong Kong unit.
   The bank reported a 2005 net profit of 824 million dollars, against 1.995 billion dollars in 2004, after a goodwill impairment charge on DBS Hong Kong resulted in a fourth quarter loss of 441 million dollars.
   ‘Although our overall results were adversely affected by difficult markets, we recorded strong growth in our loan book and produced record interest income and fee income,’ said DBS chief executive officer Jackson Tai on Friday.
   The bottom line was also boosted by a one-time 303-million-dollar gain from a previously announced sale of office buildings in Singapore.
   Excluding one-time gains and goodwill charges, 2005 net profit fell 15 percent to 1.65 billion Singapore dollars.
   DBS said that under Singapore Financial Reporting Standards it had to assess the recoverable value of its investments and determine whether it was in line with their carrying value.
   ‘DBS Hong Kong’s estimated recoverable value was 9.6 billion dollars as at December 31, 2005, compared to a carrying value of 10.8 billion in DBS’ consolidated balance sheet,’ the bank said, accounting for the charge booked in the fourth quarter 2005.
   ‘The goodwill charge has little impact on DBS Group’s business operations or prospects as goodwill is deducted from regulatory capital when incurred,’ it said.
   Goodwill is a technical accounting practice, calculated by taking the book or underlying value of an acquisition away
   from the total price paid. This sum is then usually reduced progressively over a number of years.
   Net interest income rose nine percent to a record 2.94 billion dollars—surpassing the previous high in 2002 — as loans grew 14 percent to 79.5 billion dollars and margins increased from 1.87 percent in 2004 to 1.91 percent, DBS said.
   For the fourth quarter, net interest income grew seven percent from the previous three months to 800 million dollars and was up 20 percent from a year earlier.
   The non-performing loan
   rate in the three months was 2.1 percent compared with 2.5 percent a year earlier, DBS said, as total non-performing assets
   fell 3.0 percent to 1.87 billion dollars.
   For the year, fee income was up six percent to a record 986 million dollars, with most categories registering growth, among them wealth management products, which rose 8.0 percent to 129 million dollars.
   ‘Our margins are better and we maintained asset quality. We will continue to invest in a resurgent Asia but will balance our growth with a stronger focus on productivity,’ Tai said.
   Macquarie Securities regional banking analyst Ismael Pili said the weak treasury income was no surprise.
   ‘It has been well-flagged and should have been factored in the expectations,’ he said.

Rising prices for electricity, food and autos pushed US producer prices up 0.3 percent in January while prices outside of food and energy climbed 0.4 percent - twice market expectations and the fastest wholesale inflation in a year, a government report showed on Friday.
   The rise in the producer price index, a gauge of prices received by farms, factories and refineries, was smaller than December’s downwardly revised 0.6 percent gain but above Wall Street forecasts for a 0.2 percent rise in costs.
   The Labor Department said the so-called core PPI, which excludes food and energy, rose 0.4 percent for the largest monthly gain since January 2005, double economists’ forecasts for a 0.2 percent gain.
   The report suggests underlying inflation pressures were somewhat higher last month than financial markets had expected.
   The Federal Reserve has raised short-term interest rates 14 times since June 2004 in a bid to head off the pressure of rising prices, and another rate hike is anticipated in March.
   The producer price index was up 5.7 percent from January 2005, driven mostly by a 25 percent surge in the price of finished energy goods.
   However, core prices have increased just 1.5 percent in the last 12 months, suggesting energy price increases are not passing through to other goods.
   Energy prices were flat in January. The cost of residential electricity soared 3.0 percent,
   the largest monthly gain on record, while the price of residential natural gas climbed 0.8 percent.
   But those increases were offset by a 3.5 percent drop in the price of gasoline and a 6.8 percent decline in liquefied petroleum gas.
   Food costs rose 0.2 percent after a hefty 0.8 percent gain in December.
   The Labor Department said the price of passenger cars climbed 1.1 percent, while the price of light trucks was up 0.7 percent and civilian aircraft prices were 0.7 percent higher.

Prices at the wholesale level rose moderately in January as a big drop in gasoline costs helped to offset price increases in other areas.
   The Labor Department reported that wholesale inflation rose by 0.3 percent in January, just half the 0.6 percent surge
   in December, reflecting a calming of energy prices.
   However, core inflation, which excludes volatile energy and food prices, jumped by 0.4 percent in January, the biggest one-month rise in a year.
   The acceleration of underlying inflation pressures is certain to attract attention at the Federal Reserve.
   New Chairman Ben Bernanke told Congress this week that one of the major risks to the economy was the possibility that last year’s big surge in energy
   prices could start to spill over into more widespread inflation pressures.
   The 0.4 percent rise in core prices was the biggest increase since a 0.6 percent jump last January and followed small 0.1 percent increases in November and December.
   Last month’s acceleration reflected higher prices for new cars and light trucks, pharmaceutical products, books and civilian aircraft.
   The overall 0.3 percent rise in the Producer Price Index, which measures inflation pressures before they reach the consumer, was the smallest change since a 0.4 percent drop in November.
   That decline had followed huge increases in September and October as energy prices soared in the wake of hurricanes which disrupted production along the Gulf Coast.
   Bernanke, delivering his first monetary report to Congress since taking over as Fed
   chairman from Alan Greenspan on Feb. 1, said the economy should expand at a solid pace this year with inflation staying moderate.
   However, he said that one of the risks to that forecast was the possibility that inflation pressures will increase if the big jump in energy costs seen last year begins to spread to other areas of the economy.
   Bernanke’s comments were seen by financial markets as a strong signal the central bank, which has already raised interest rates 14 times since June 2004, will push rates up by another quarter-point at its March 28 meeting and may boost rates again at the May 10 meeting to make sure inflation does not get out of hand.
   For January, overall energy prices were unchanged after a sharp 2 percent jump in December.
   Gasoline costs actually declined by 3.5 percent, the biggest drop since November. However, that decline was
   offset by a record 3 percent surge in residential electric power prices.
   Food prices at the wholesale level posted a modest 0.2 percent gain following much bigger increases of 0.8 percent in December and 0.6 percent in November.
   The price of chickens and fresh fruit fell while prices for vegetables and soft drinks were up.
   For all of 2005, wholesale prices rose by 5.4 percent, the biggest gain since a 5.7 percent rise in 1990, another year when energy prices were surging. Excluding food and energy, core inflation at the wholesale level was up 1.7 percent, even lower than a 2.3 percent rise in core prices in 2004.

The Asian Development Bank (ADB) has announced to study the ways to facilitate more effective economic cooperation and integration between developing countries in East and South Asia.
   The Office of Regional Economic Integration (OREI) of the ADB will conduct the study for facilitating the cooperation, said an ADB statement issued Friday.
   Referring to the faster growth of the East Asia and south Asia, the ADB said, ‘In spite of their rapid growth, economic integration between the two sub-regions has increased only modestly.’
   The potential for sustaining high rates of growth in the two sub-regions through enhanced cooperation and integration is large. Both regions stand to gain from the consequent expansion of the market for goods and services, increased economies of scale, greater competition, lower prices, and more foreign direct investment, the statement added.
   ‘However, research on the implications of economic cooperation between sub-regions within Asia is relatively scarce. The study is to inform policymakers about the types and sequence of policies to garner support for, and gain from, regional economic cooperation,’ said Ganeshan Wignaraja, an ADB Senior Trade Economist.
   Under the study, the OREI will develop a model for estimating the potential effects of trade liberalisation under various scenarios.
   The model will identify sectors having the potential to make significant gains from cooperation, and specify policy options at the regional, sub-regional, and country levels needed to realize those benefits. The OREI will also undertake studies on the current degree of integration in merchandise trade and investment, trade in services, and infrastructure and trade facilitation, with corresponding case studies from the perspective of selected developing countries or country groups.

In 2005, 279 Chinese high-tech companies saw their annual export volume exceed 100 million U.S. dollars, the Ministry of Commerce said on Friday.
   The total exports of these 279 companies reached 172.82 billiondollars, accounting for 79.2 per cent of the country’s total high-tech product export in 2005, the ministry said.
   China now has one high-tech company whose annual export volume exceeds 10 billion dollars, four high-tech companies whose annual export exceeds 5 billion dollars and 38 companies whose annual export exceeds 1 billion dollars.
   In 2004, no high-tech company witnessed its annual export volume exceed 10 billion dollars, only three high-tech companies witnessed annual exports of over 5 billion dollars and 30 companies exported over 1 billion dollars.
   In 2005, the number of high-tech companies with an import volume above 100 million dollars and 1 billion dollars was 313 and 24 respectively, 45 and four more than those of 2004, the ministry said.
   The total import of these 313 companies reached 136.47 billion dollars, accounting for 69 per cent of the country’s total high-tech product import in 2005. Enditem

The US president, George W Bush, has asked Congress for $72.4 billion in additional funding for military operations in Iraq and Afghanistan this year, the White House said.
   If approved by Congress as expected, the request would raise war-related spending to nearly $400 billion since the September 11, 2001 attacks on the United States.
   ‘These funds support US armed forces and coalition partners as we advance democracy, fight the terrorists and insurgents, and train and equip Iraqi security forces so that they can defend their sovereignty and freedom,’ Bush said in a letter to Congress.
   The bulk of the money — $34.7 billion —will go to cover the cost of maintaining 138,000 US troops in Iraq and about another 15,000 in Afghanistan.
   But billions of dollars more will go to train and equip Iraqi security forces, deploy better armour for US troops, replace equipment losses, and reorganise the US Army into more mobile combat brigades.
   The Pentagon has come under repeated criticism for not moving more quickly to provide troops armour and other protection in a war zone that has claimed the lives 2,274 of US military personnel and wounded another 16,742.
   Its response can be seen in the $2.6 billion earmarked for improved armour protection, night-vision gear, sensors and systems to make helicopters more survivable.
   Another $1.9 billion will go for efforts to develop ways to counter improvised explosive devices, the top killer of US troops.
   Replacing equipment that has been destroyed in combat or worn out through wear and tear will account for $8.3 billion of the extra funding.
   Reorganising the army into smaller, more mobile brigade combat teams will be given $3.4 billion.
   The request asks for $1.5 billion to cover the costs of increased death benefits as well as benefits for military personnel wounded in combat.
   It also includes $3.7 billion to train and equip the security forces, which now number about 227,000.
   ‘This request provides the resources necessary to continue that effort so the coalition can continue to hand over control of more territory to Iraqi forces,’ Bush said in his letter.
   In Afghanistan, the United States will use $2.2 billion of the funds to train and equip the security forces.
   The funding request also includes $75 million for a new State Department campaign to promote democracy in Iran.
   Joel Kaplan, the deputy director of the White House Office of Management and Budget, said $66.3 billion of the latest request for supplemental funding will go to the Defence Department.
   Another $3.2 billion will go to the State Department, and $2.9 billion for the intelligence agencies, he said.
   The request is on top of $50 billion approved earlier in fiscal 2006, raising the total for the year to $120 billion.
   Additionally, the White House plans to seek another $50 billion in bridge funding for military operations in Iraq and Afghanistan for fiscal 2007, which begins October 1.
   The Pentagon, which has requested a $439.3 billion budget for fiscal 2007 earlier this month, typically funds military operations outside of its normal budget

China and Iran could sign a multi-billion dollar agreement on developing a major oilfield in Iran as early as next month, the semi-official Caijing Magazine said on its Web site.
   The magazine cited Mu Shuling, an executive at Sinopec Corp, as saying a delegation of the National Development and Reform Commission, China’s economic-planning body, could go to Iran as early as March, where the two could sign a deal on jointly developing the Yadavaran field in southern Iran.
   The deal, which the magazine said could be worth as much as $100 billion in gas and oil sales and field development costs, follows a memorandum of understanding signed in October 2004. Negotiations over Iranian oil projects often drag on for years.
   A spokesman at the Iranian embassy said he could not confirm the report but news of the potential deal comes as Iran is engaged in a stand-off with the West over its nuclear program.
   The International Atomic Energy Agency (IAEA) voted earlier this month to report Iran’s case to the UN Security Council, which could impose sanctions.
   Under the terms of the agreement, China, which has repeatedly urged a diplomatic solution to the nuclear crisis, would agree to buy 10 million tonnes of liquefied natural gas (LNG) from Iran each year over the next 25 years in return for the right to develop the field, the magazine said.
   Yadavaran has estimated reserves of about 3 billion barrels and is expected to produce about 300,000 barrels per day (bpd), about the same volume of crude that China imports from Iran.
   The magazine said that under the current arrangement, Sinopec would take a 51 percent stake in the project, and India’s Oil and Natural Gas Corp would own 29 percent, slightly bigger shares than had been initially agreed.

French plans to give French companies extra defences against hostile takeover attacks will have ‘a dissuasive effect’ on predators, French Economy and Finance Minister Thierry Breton said on Friday.
   He told French newspaper Le Figaro that an amendment to legislation proposed by the centre-right government would help shield French companies from unsolicited bids.
   Breton, speaking against a background of French objections to a hostile bid by Mittal Steel for Arcelor, said: ‘These measures will certainly have a dissuasive effect against a certain form of takeover offer, those that are totally hostile and undertaken without prior consultation.
   ‘Before making an offer for a company benefiting from the measures, the predator would be strongly encouraged to enter into dialogue with it (the target company), to make the offer as friendly as possible.
   ‘My only aim is to offer French companies the same defensive mechanisms as anglo-saxon companies. Nothing more, nothing less,’ he said
   A second reading of a new law on takeovers is to take place in the French Senate on Febrary 21. The amendment for hostile bids, if passed, would allow companies to issue equity warrants in the event of a hostile bid, shoring up their capital and making a takeover more expensive for the predator company.
   The issue of hostile takeover bids in France has been forced into the spotlight by the unsolicited bid by Mittal Steel for European steel giant Arcelor.
   Hostile takeover bids are often portrayed in France as an unwelcome and aggressive feature of ‘anglo-saxon’ capitalism.
   Breton, while being careful not to condemn the hostile bid for Arcelor outright, has deplored the lack of dialogue between the two companies and the lack of consultation with the government.
   Breton insisted to Le Figaro that the amendment was not linked to the Mittal-Arcelor takeover tussle and had been drafted ‘long before Mittal Steel launched its offer on Arcelor’.

Chinese lawmakers are likely to ratify a United Nations convention against terrorism financing when they meet at the end of the month, state media said Friday.
   The International Convention for the Suppression of the Financing of Terrorism is on the agenda for the Standing Committee of the National People’s Congress when it meets for four days from February 25, Xinhua news agency said.
   Approval of the convention will help prevent ‘anti-Chinese forces’ overseas financing domestic terrorist activities, thus safeguarding national security and social stability, Xinhua said.
   It will also ‘demonstrate China’s resolution to fight terrorism and showcase the country’s image as a responsible country in the international society,’ Xinhua said, citing a senior lawmaker.
   Ratification will have taken more than four years after the Chinese government signed the convention in November 2001.
   The Xinhua report did not specify where China was facing a terrorist threat, but Beijing generally refers to those involved in a strong separatist movement in its northwestern region of Xinjiang as terrorists.
   The Standing Committee of the National People’s Congress is a body of about 160 ranking politicians who meet at regular intervals throughout the year for routine legislative work.

Eurozone industrial production edged up 0.1 per cent in December, bringing the increase over one year to 2.5 per cent, data released Friday by the EU’s Eurostat statistics agency showed.
   The figures, which were adjusted for seasonal variations, were slightly weaker than economists expectations for an increase of 0.2 per cent over one month and 2.2 per cent over one year.
   They also marked a slowdown from November when the output of eurozone factories grew 1.4 per cent over one month and 2.9 per cent over one year.
   In December, the increase was underpinned by firm growth in energy production, which rose 2.9 per cent over one month.
   Non-durable goods, such as food and clothing, rose 0.8 per cent in December but all other categories saw output fall.
   Durable consumer goods such as appliances or furniture eased 0.1 per cent, capital goods used to make other products fell 0.5 per cent and intermediate or semi-finished goods dropped 0.6 per cent.
   Over one year, capital goods output increased 3.8 per cent in December, energy was up 3.4 per cent, durable consumer goods rose 3.3 per cent, intermediate goods posted a 2.3 per cent gain, and non-durable consumer goods climbed 1.0 per cent.
   In the 25 nation European Union, industrial output grew 0.3 per cent over one month and 2.5 per cent and one year.

Germany must build its own high-speed Transrapid train link quickly in order to retain its global lead with the futuristic technology, the regional state premier of Bavaria, Edmund Stoiber, said in a newspaper interview Friday.
   ‘The Transrapid must be built in Germany now, not in 2010 or 2012,’ Stoiber told the mass-circulation daily Bild.
   ‘Our technological lead with the Transrapid over China is only a matter of a few years. If we won’t act now, this technology will no longer be exported by Germany but by the Chinese,’ the head of the conservative CSU party said.
   ‘It would be a joke if a high-tech country like Germany came up with all the inventions, but the Far East made all the money out of them.’
   Transrapid is a high-speed magnetic levitation (maglev) train designed and built by engineering giants Siemens and ThyssenKrupp.
   It is already in commercial operation in China on a 38-kilometre route between Shanghai and Pudong and a second much longer 160-kilometre route between Shanghai and Hanghzou is currently under discussion.
   However, Chinese newspaper reports have suggested that China wants to build its own maglev train without using the Transrapid technology.
   ‘What is going on in China now smells like technology theft,’ Stoiber said.

International donors allocated more than 17 million dollars Friday to protect tropical forests in Indonesia’s Aceh as reconstruction in the tsunami-hit province gains momentum.
   With some 78,000 houses slated to be built this year, the main consortium of donors known as the Multi Donor Fund said it does not want the construction boom to be fueled by illegally logged timber and poor environmental practices.
   Programs funded with the cash ‘will protect the biodiversity of forests that provide 60 per cent of the water supply to Acehnese, water for their agriculture, their drinking water,’ said the Fund’s Joe Leitman.
   As part of the drive, traditional village leaders will be enlisted to establish community patrols to protect forests from illegal logging, Frank Momberg from Fauna and Flora International (FFI) told AFP.
   He made his remarks after conservation groups FFI and Leuser International Foundation inked an agreement with the donor fund and Aceh’s reconstruction agency to go ahead with programs worth 17.5 million dollars.
   Illegal logging is rife in Indonesia. Many environmental groups fear that Leuser
   National Park, which covers parts of Aceh and neighboring North Sumatra province, could be raided to provide construction materials.
   Environmentalists have already charged that aid groups have been using timber they know was illegally logged in Aceh.

Federal Reserve Chairman Ben Bernanke, barraged with lawmakers’ questions on Thursday over rising foreign ownership of US assets, played down fears that China held enough dollars to endanger the US economy.
   In a second day of Capitol Hill testimony, the new central bank chief was pressed hard by Senate Banking Committee members about whether soaring US trade deficits, financed by foreign borrowing, made the economy and the dollar
   vulnerable.
   ‘I don’t think that the Chinese ownership of U.S. assets is so large as to put our country at risk economically,’ Bernanke said, minimizing the possibility that China might suddenly dump some of its U.S. debt.
   ‘It would be very much against their own interest to do so,’ he said, ducking a question whether these holdings gave Beijing a potential political lever over the United States.
   Congressional anger toward China has grown along with soaring U.S. trade deficits that hit a record $725.8 billion in 2005 — about 28 percent of that with China alone.
   At the end of 2005, China held some $819 billion worth of U.S. assets, mostly in Treasury debt. Its U.S. holdings were surpassed only by Japan, which held $829 billion worth.
   Beijing and Tokyo acquired most of their U.S. securities with money they earned from selling cars, computers and other consumer goods into U.S. markets — goods U.S. competitors and some lawmakers argue are kept unfairly cheap because of currency actions by the Asian nations.
   Bernanke said if foreign governments announced they were going to buy less U.S. debt or even sold some, this would not be destabilizing for the United States.

Japan’s economy grew at a stunning 5.5 percent annual pace in the fourth quarter, the government said Friday, indicating a convincing recovery is underway.
   Soaring car exports and solid consumer spending propelled growth in the October-December period as Japanese shopped for flat-panel TVs and portable music players, Fumikazu Hida of the Cabinet Office told reporters.
   Compared to the previous quarter, the economy expanded 1.4 percent in the quarter, marking the fourth straight quarter of growth. If that rate were maintained for a full year, Japan’s gross domestic product — the value of goods and services it produces — would expand 5.5 percent.
   That’s the strongest growth for the world’s second largest economy since the first quarter of 2005.
   The better-than-expected numbers are the latest sign Japan is emerging from more than a decade of stagnant growth and periods of recession.

French President Jacques Chirac has said Mittal Steel’s hostile takeover bid for Arcelor is not in the European firm’s best interests but added the dispute is not a problem between India and France.
   Chirac, in an interview with India Today magazine ahead of a two-day state visit to India, said European opposition to the takeover has ‘nothing to do with Mr Mittal...it has nothing to do with France and India.’
   Indian billionaire Lakshmi Mittal sprang a surprise 18.6-billion-euro (22.3-billion-dollar) bid for Arcelor in January in an attempt to create a giant in the industry that would control about 10 per cent of the global market.
   The Luxembourg-based Arcelor has rejected the bid and has enlisted the help of European governments to fight it.

Poland will not adopt the euro before 2010, Polish Finance Minister Zyta Gilowska said in an interview published Friday in liberal daily Rzeczpospolita.
   ‘Poland cannot enter the eurozone before 2010’, Gilowska told the paper. ‘As an economist, I have always felt that 2011 is an achievable deadline,’ she said.
   ‘But as finance minister I have to be wary of putting forward a date because that would mean a commitment on the part of the Polish government. And as things stand today, we cannot make a commitment,’ she said.
   On the other hand, ‘we intend to fulfill all the convergence criteria by 2009,’ said Gilowska.
   Poland is the sole new EU member state not to have set a date for joining the euro.

Singapore’s key non-oil domestic exports grew 17.5 per cent in January compared with a year earlier, the government said Friday, reporting figures at the top end of analyst forecasts.
   January’s upturn followed a bumper 31.6 per cent gain in December, said International Enterprise Singapore.
   Boosted by the electronic and non-electronic sectors—particularly pharmaceuticals—non-oil domestic exports were valued at 13.5 billion Singapore dollars ($8.3b) for January, IES said.
   Economists had forecast NODX growth of between 5.8 to 19.7 per cent for January.
   On a month-on-month seasonally adjusted basis, NODX declined by 8.1 per cent in January after expanding 13 per cent in December, IES said.

South Africa should impose a moratorium on the sale of land to ‘non-citizens’ with immediate effect, a panel of land experts recommended on Friday.
   ‘The panel recommends that a moratorium on the purchase and sale of South African land to non-citizens be imposed with immediate effect as an interim measure until appropriate legislation has been promulgated,’ the panel said in a statement issued in Pretoria.
   Other recommendations by the panel also included that land and property owners have to declare gender, citizenship, nationality and passport number, company and tax registration numbers among others.
   The recommendations will be taken before parliament for a decision by the South African government on whether to implement them, South Africa’s Lands Affairs Minister Thoko Didiza said.

French president Jacques Chirac has expressed regret at the controversy over the aircraft carrier Clemenceau, which he ordered back to France after environmentalists protested at plans to break up the asbestos-lined ship in India.
   In an interview with India Today magazine, Chirac proposed a meeting with European partners to find ways to dispose of hundreds of ageing warships.
   The text was distributed on Friday by the Elysee Palace, two days before Chirac starts an official visit to India.
   ‘I regret that the controversy happened despite the efforts we undertook to ensure the environmental and health soundness of the operation,’ he said.
   Chirac was forced to order the ship home after France’s State Council, blocked its transfer to India.

Oil prices climbed on Friday, recovering some of the ground lost in the past week ahead of a long holiday weekend in the United States, dealers said.
   New York’s main contract, light sweet crude for delivery in March, climbed 45 cents to 58.91 dollars per barrel in electronic trading.
   In London, the price of Brent North Sea crude for April delivery added 65 cents to 59.44 dollars per barrel.
   ‘It is a correction. Oil is rebounding because the market felt it was oversold,’ said Victor Shum, an energy analyst with Purvin and Gertz.
   Oil prices had tumbled Wednesday after the weekly US Department of Energy inventory results showed better-than-expected US crude and heating oil supplies.
   But they rebounded Thursday as tensions over Iran came back into focus and traders took positions in anticipation of the US holiday weekend, dealers said.
   Many traders will be absent from the market for the Presidents Day holiday on Monday.
   The unfolding crisis over Iran has led to concerns of possible disruptions to the country’s oil exports of 2.6 million barrels of crude per day.
   Iran insisted Thursday that it was not seeking a nuclear weapon, rejecting accusations by France that its atomic drive was ‘clandestine’ and ‘military’ in nature.
   Iranian nuclear experts arrive in Moscow on Monday next week to negotiate a Russian proposal on enriching uranium that is seen as a last chance for Tehran to resolve the deepening international crisis over its nuclear programme.

The dollar topped 118 yen in Asian trade on Friday despite news of a sharp acceleration of Japan’s economic growth in the fourth quarter of 2005, dealers said.
   The dollar rose to 118.10 yen in Tokyo afternoon trade, up from a low of 117.32 yen in early deals and after 117.62 yen in New York late Thursday.
   The euro bought 1.1885 dollars against 1.1900 dollars while rising to 140.36 yen from 140.00 yen.
   Japan’s gross domestic product grew by an impressive 5.5 per cent on an annualized basis in the fourth quarter of 2005 as a pickup in domestic demand kept the recovery on track.
   The strength of the economy had made Japanese investors more willing to take risks and invest overseas, for which they need to buy foreign currencies, he said, predicting the dollar would now head up towards 120 yen.
   But while the headline growth figure was strong, the GDP deflator, which measures the degree of deflation in the economy, increased to minus 1.6 per cent, compared to minus 1.3 per cent in the previous quarter.

The Bank of China said Friday it had sold a 5.0 per cent stake to Singapore’s Temasek Holdings for just over 1.5 billion dollars, in the latest sale of mainland banking assets to an foreign investor.
   ‘I can confirm we have already finalised the five per cent stake transfer (to Temasek),’ Bank of China spokesman Wang Zhaowen told AFP.
   ‘It is half of the previous 3.1 billion dollars.’
   Wang was referring to a previous agreement reached in August in which Temasek, the Singapore government-linked investment body, was to acquire a 10 per cent stake of Bank of China for 3.1 billion dollars.
   That deal fell through when the Bank of China’s state-owned parent, China Huijin Investment Co., rejected it, reportedly due to concerns that Temasek might wield too much influence over the domestic banking sector.
   The Singapore-government investment arm already owns 5.1 per cent in another one of China’s big four commercial lenders, China Construction Bank.
   Regulators had also been worried that Temasek’s offer was purely financial and did not bring the technical know-how that Chinese banks desperately need, according to Zuo Xiaolei, chief economist with Beijing-based Galaxy Securities.
   ‘Huijins concern was (how much) Temasek could contribute in terms of risk controls and management skills,’ Zuo said.
   ‘Temasek is just an investing company, but the Bank of China does not lack capital.’
   Nevertheless, Temasek said it was happy with acquiring the reduced stake, which China Huijin and the China Banking Regulatory Commission had approved.
   ‘We are pleased to have this opportunity to invest in Bank of China,’ Temasek said in a statement.
   ‘As a long-term shareholder, we will work closely with Bank of China and our fellow shareholders to support the bank’s further growth.’

The London Stock Exchange on Friday said it would return 510 million pounds (745 million euros, 885 million dollars) to shareholders as it continued to reject a takeover attempt by Australian investment bank Macquarie.
   The LSE said it was more than doubling its cash return programme from a previously-announced 250 million pounds, while also revealing a rolling programme of share buybacks of up to 50 million pounds per year.
   ‘Our continued strong trading performance is delivering excellent financial results, which enables us to announce an increased capital return and significantly increased dividend,’ LSE chairman Chris Gibson-Smith said in a circular to shareholders.
   ‘Macquarie’s offer recognises none of this. It provides no value today and reflects no value tomorrow. Shareholders should continue to reject the offer.’
   Earlier this week, Macquarie extended its hostile 580-pence-per-share offer until February 28. The group said last month that it had received acceptances for just 0.4 per cent of the LSE’s shares.
   The LSE also said Friday that it would pay a full-year dividend of 12 pence per share in 2006, a 71-per cent increase on the previous year.
   The London Stock Exchange, the biggest equity market in Europe, has repeatedly rebuffed Macquarie’s offer which valued it at 1.5 billion pounds (2.2-billion-euros, 2.6-billion-dollars).
   Macquarie launched its takeover bid on December 15 last year.
   The LSE’s share price has consistently remained above the offer price since then, supported by the group’s robust trading performance, and by expectations that a higher bid may emerge.
   In Friday morning trade, the LSE’s share price jumped 3.68 per cent to 789.5 pence,
   while London’s FTSE 250 fell 0.04 per cent to 9,365.30 points. The group lists on the second tier of the British stock market.

As Kenneth Rice prepared to tell the Enron Corp. board of directors in May 2001 about the company’s broadband unit he headed, the outlook was bleak both for Enron Broadband Services and the telecom industry in general.
   ‘Dangerously weak,’ he wrote in an early draft of a slide presentation to the board. ‘Bad news... Nobody is buying nothing.’
   The board, however, never saw or heard the gloomy prospects.
   Rice, testifying Thursday at the federal fraud and conspiracy trial of former Enron CEO Jeff Skilling and company founder Kenneth Lay, said Skilling pressed him to paint a rosy, misleading picture for the board that was more in line with false statements Rice said he’d already made to financial analysts earlier that year.
   ‘Mr Skilling asked me to change direction, to make a different presentation,’ said Rice, who is among 16 ex-Enron executives who have pleaded guilty to crimes stemming from the government’s investigation of the energy company’s swift tumble into bankruptcy proceedings in December 2001.
   ‘He didn’t like the way it flowed. He wanted to go back to the standard presentation we were using at the analyst conference.’
   But Rice, the former CEO of the Enron broadband unit, said in his third day of testimony he had no documents and ‘only my recollection’ to back up a 15- to 20-minute conversation he had alone with Skilling in the CEO’s office.
   ‘From my conversation with Skilling, I gave up on the draft I was working on,’ Rice said.
   In January 2001, Rice told Wall Street analysts who influenced the company’s stock price that the business was poised for strong long-term financial performance. In reality, EBS was spending $100 million per quarter and generating little revenue and business, Rice said.
   In May, he touted the successes and bright prospects for his unit, that its broadband network was substantially complete and had an ‘excellent deal flow’ in trading activities.
   ‘What I presented to board was inconsistent with what was going on at EBS,’ said Rice.
   As he has done throughout his testimony in this case, Rice, however, stopped short of saying Skilling lied to investors about the health of Enron.
   ‘I knew that Mr. Skilling and I had misled investors on a number of occasions on the prospects of our business within EBS,’ Rice said under questioning by Skilling attorney Mark Holscher.
   When Holscher asked Rice if he’d ever expressed concerns to ‘your friend’ Skilling about any of those misleading statements, Rice replied: ‘I don’t know if I did.’
   Skilling is on trial for 31 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces seven counts of fraud and conspiracy related to the months after he replaced Skilling as CEO. Both men sold millions in stock before the company crumbled, but only Skilling is charged with improper stock sales.
   Rice pleaded guilty in July 2004 to securities fraud and turned over $13.7 million in cash and property and agreed to help prosecutors in Enron-related cases. He faces up to 10 years in prison but could get less if prosecutors are pleased with his help.

European stock markets must develop a joint trading platform in the medium term, the head of German stock market operator Deutsche Boerse said in a newspaper interview published Friday.
   Otherwise the Americans will take charge of the industry-wide consolidation in Europe, Deutsche Boerse chief Reto Francioni told the daily Frankfurter Allgemeine Zeitung.
   ‘We in Europe must find our own solution with regard to the consolidation of the European stock markets,’ he said
   ‘If we don’t succeed, for whatever reason, then we’ll have to take the US exchanges into the equation,’ Francioni said.
   Deutsche Boerse has tried on several occasions to merge with the London Stock Exchange, but the negotiations have always foundered, not least on national sensibilities.
   Tie-up talks between the Frankfurt exchange and its pan-European rival Euronext also appear to have stalled on the issue of where the new merged group would be headquartered.
   Deutsche Boerse would like to play a key role in the consolidation process, but favoured taking a role as an equal rather dominant partner, Francioni said.
   Earlier this week, Deutsche Boerse supervisory board member Friedrich von Metzler had said that Francioni’s ‘excellent contacts all over the world’ would enable the German group to build up new partnerships in North America and Europe.

The battle between South Korea’s KTG Corp and US investor Carl Icahn heated up on Friday when the tobacco giant solicited proxy votes ahead of a stand-off general shareholders’ meeting.
   KTG is to replace six outgoing directors of its 12-member board at the meeting on March 17, billed here as a showdown between the KTG management and Icahn and his partners.
   ‘KTG Corporation today filed its proxy statement and proxy card with the Financial Supervisory Commission regarding the company’s 19th general meeting of shareholders scheduled for March 17,’ the company said in a statement.
   The filing of proxy documents with financial autorities paves the way for the company to start collecting proxies from shareholders from Monday.
   KTG also confirmed an earlier decision by the current board to put only two of the six seats up for a vote among five candidates, including three from Icahn’s side, a move that drew fire from Icahn and dissident shareholders.
   The two seats to be voted on are for ordinary directors while the four others double as the company’s auditors committee, which KTG has already filled with its own nominees.
   Voters will now simply be asked to cast ‘yes’ or ‘no’ votes for the four auditor seats at the shareholders meeting as there are no other candidates for these special places, KTG said.
   Warren Lichtenstein, a candidate backed by Icahn, said in a letter sent to KTG Wednesday that the company should elect the six directors by cumulative voting and then hold an additional vote later on to choose auditors.
   Cumulative voting gives minority shareholders more power by allowing them to cast their votes in any combination.
   KTG said in turn that like any other shareholders, Icahn could have submitted candidates for the audit committee seats in compliance with established procedures ‘but they chose not to do so.
   ‘It is disingenuous of the dissidents to now blame the company for their own decisions,’ it added.
   ‘KTG will continue to follow the procedures that have been established by its independent board and that are consistent with Korean law and market practice,’ it said.
   An analyst with Samsung Securities said Icahn would need 24 per cent of shareholders behind him in addition to his own 6.6 per cent holdings to win at least one seat on the board through cumulative voting.
   If Icahn’s bid fails, he is expected to continue pressing for the company to buy back shares, sell off non-core assets and spin off its ginseng unit, the analyst said.
   The demands have sparked concern about a possible takeover bid by the US corporate raider who has also been engaged in a battle for control of the US media conglomerate Time Warner.
   KTG shares have been on a roller coaster as the tussle unfolds. Prices rose when Icahn announced his demands for a sell-off and then fell when the firm refused. If Icahn wants to boost his shareholding, prices could rise again.
   ‘The future movement of share prices will depend on whether Icahn’s side wants to buy up more shares but there is no clear sign yet of Icahn seeking to do so,’ said an analyst at Daewoo Securities.
   KTG fell 2.65 per cent Friday to 55,000 won.

Hong Kong shares are likely to trade firmer next week as continued inflow of institutional funds underpin the market, dealers said Friday.
   They said market sentiment has improved with strong fund flows supporting interest in blue chips.
   ‘There are funds coming in mainly because investors are positive about China stocks and the state of Hong Kong economy. I can see more funds are coming back to Hong Kong,’ said Peter Lai, sales director at DBS Vickers Securities.
   However, dealers believe any gains will be capped by caution ahead of the release of key US economic data due out later Friday and next week.
   New US Federal Reserve chief Ben Bernanke had indicated more interest rate hikes in his first report on the economy because of the threat of higher inflation from a strong economy and higher energy prices.
   Although his speech provided no surprises, investors are still cautious about the upcoming data for clues about the current status of the inflation, Lai said.
   The US is due to release producer prices for January and consumer sentiment Friday as well as January’s consumer prices on Wednesday.
   Property stocks, which made further gains on the back of the recent cuts in bank mortgage loan rates, will continue to do well next week, dealers said.
   For the week ending February 17 the Hang Seng Index gained 49.74 points, or 0.32 per cent, to close trade Friday at 15,475.69.
   Lai expects the main index to trade at a support level of 15,200 points and may try the 15,800-point mark.

Japanese share prices face a series of hurdles next week as investors fret about the Iran nuclear stand-off, an end to Japan’s easy credit policy and the prime minister’s political problems, dealers said Friday.
   The market will also be very concerned that foreign investors’ love affair with Japanese stocks is now abating although the country’s solid economic recovery should limit the downside after heavy losses this week, they added.
   For the week to February 17, the Tokyo Stock Exchange’s benchmark Nikkei-225 index lost 544.38 points or 3.35 per cent to 15,713.45 in choppy trade.
   The broader TOPIX index of all first-section shares fell 54.89 points or 3.31 per cent to 1,605.33.
   ‘The market is closely watching the Iran nuclear issue as crude oil prices are expected to be influenced (by the dispute),’ said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.
   The United States and Europe are pushing for a UN Security Council response on Iran’s nuclear programme and are awaiting a March 6 report by the UN nuclear watchdog which will be crucial in deciding what action, if any, is taken.
   ‘Since Japan imports oil from Iran, there is a possibility that Japan will be severely damaged,’ said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.
   Nakai noted that foreign investors had turned net sellers of Japanese stocks due to worries over an expected end to the current super-loose monetary policy as well as the falling approval ratings of Prime Minister Junichiro Koizumi.

Indian share prices fell 1.41 per cent on Friday, closing below the 10,000 level as investors locked-in gains and chose not to build up fresh positions ahead of the February 28 budget, dealers said.
   They said selling pressure was seen in infrastructure and agro-commodity sectors like sugar and tea, which had run higher in previous weeks. The benchmark 30-share Sensex index fell 143.19 points to 9,981.11.
   ‘There was some concern with investors and funds not willing to build fresh positions at the weekend. We expect the markets to remain range-bound,’ said Rajesh Jain of brokerage Pranav Securities.

A Japanese court Friday refused to release on bail Takafumi Horie, the flamboyant millionaire who founded Internet firm Livedoor but now faces charges of fraud, reports said.
   His lawyer had applied for bail to the Tokyo District Court after the 33-year-old was indicted for alleged violation of securities laws Monday, Jiji Press and Kyodo News said.
   But the court rejected the application Friday, the news agencies said.
   The Livedoor founder has been jailed since January 23, a far cry from his glamorous office and residence in the towering Roppongi Hills complex.
   Horie was once hailed as a harbinger of a new brash Japanese corporate culture, showing up to work in a tee-shirt and launching hostile takeover bids for a baseball team and Japan’s most watched television network.

Japan’s Mitsubishi Motors has reached an outline agreement to buy a stake of at least 20 per cent in Chinese carmaker South East Motor (Fujian) from Taiwan’s China Motor, a spokesman said Friday.
   Mitsubishi Motors, Japan’s fourth-largest automaker and the only one now in the red, wants to expand its presence in mainland China.
   ‘We have agreed with China Motor that we will buy about 20-25 per cent of the shares of South East Motor,’ said the spokesman for Mitsubishi Motors.
   ‘By the purchase of the stake we aim to strengthen our operation in China although the details of the agreement are still under negotiation,’ he said.
   An official at China Motor in Taipei confirmed an agreement had been reached in principle for it to sell a 20 per cent stake in South East Motor (SouEast) to the Japanese automaker.
   The SouEast venture, established in 1995 with registered capital of 138 million dollars, was set up as a 50-50 joint venture between China Motor Corp and China’s Fujian Motor Industry Corp.
   Fujian Industrial Motor Group’s stake in SouEast will remain unchanged while China Motor will retain 30 per cent after the sale to Mitsubishi.
   Mitsubishi Motors has previously said it planned to participate in the management of SouEast and make it a production and sales center of Mitsubishi cars in China.
   The deal will be Mitsubishi’s second investment in a Chinese automaker. It already has a 16 per cent stake in Changfeng Motor.
   The mainland China newspaper China Business News cited a top executive from China Motor as saying the deal would be wrapped up next month, ending negotiations that began more than two years ago.
   SouEast, a relatively minor player in China’s booming auto market, has struggled as bigger rivals such as Honda and Toyota have battled for supremacy in the world’s fastest growing market.
   SouEast sales in 2004 slumped to 60,069 units from 83,533 units a year earlier, according to the company’s website.

4.84pc land tax collected in Cox’s Bazar
Only 4.84 percent land development revenue was recovered in the first seven months of the current fiscal in Cox’s Bazar. This was disclosed at a recent review meeting of Cox’s Bazar land development revenue collection affairs in Cox’s Bazar organised by the Land Reform Board. Sources said about Tk 43 crore 21 lakh were recovered as land development revenue against the target of over Tk 897 crore 85 lakh in the seven months till January this year of 2005-06 fiscal and it was only 4.84 percent of the total expectation. Besides, over Tk 33 crore 92 lakh was recovered till December of the current fiscal against the general demand revenue of Tk 143 crore 64 lakh.
— BDNews

Dhaka to attend trade fair in India
Bangladesh will participate in a 13 day international trade fair beginning 20 Feb in Guwahati, the capital of the northeastern Indian State of Assam, India. A total of 29 Bangladeshi companies, under the initiative and management of the Export Promotion Bureau, are going to display their products in nine product categories. The products are melamine, stationary, dry cell battery, food products, furniture, cosmetics, handloom products and herbal medicine. Various countries from across the world, including Iran, Pakistan, China, Myanmar and the Philippines, will participate in the fair, according to an official release.
— UNB

Uni-President to form jv in Beijing
Uni-President Enterprises Corp, Taiwan’s leading food company, said Friday it will set up 600 million yuan ($75 million) bottled drinks joint venture in Beijing with China-based Nissin Hualong Food and Japan’s Nissin Food Products Co. The three firms are scheduled to sign an agreement in Beijing Sunday on the venture, named Jinmailang Drink (Beijing) Co Ltd, according to a statement from Uni-President. Uni-President’s wholly-owned President Enterprises (China) Investment Co Ltd will hold 50 per cent stake in Jinmailang, while a Nissin Hualong unit will take 33.3 per cent and Nissin’s Hong Kong unit will own the remaining 16.7 per cent.
— AFP