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Country’s gross foreign exchange reserve stood at $3,376.2 million on Thursday, reaching its highest level at the end of the fiscal year 2005-06, revealed the central bank data.
   But the reserve level is lower than the target level of $3,700 million set in the mid-term macroeconomic framework of the poverty reduction strategy paper.
   Nevertheless, the current level of reserve appeared as ‘safe level’ for the country’s external trading and eased the pressure on balance of payments significantly.
   With incremental inflow of foreign aid during the last quarters of the outgoing fiscal year, forex reserve got a boost.
   Initially the forex reserve suffered due to gradual depreciation of taka against dollar, coupled with higher growth of import against export.
   The balance of payments was, thus, also under strain due to higher trade gap and prolonged deficit in the current account balance in the first half of the outgoing fiscal year but started to improve in the third quarter.
   ‘While the overall current account balance had been positive over the July-March period, the financial account and balance of payments shortfalls caused some day-to-day volatility,’ said the Bangladesh Bank Quarterly released on Tuesday.
   ‘Maturing liabilities for FY05 oil imports on deferred payment basis and lower receipts of external development assistance caused the imbalance,’ it added.
   The overall balance of payments suffered deficit of $107 million in July-December period that turned around to a surplus of $43 million in July-April period.
   ‘Robust growth of exports and remittances, reinforced by a slower growth in imports had led to a favourable current account balance,’ the central bank analysis said.
   ‘The lower import demand may have been conditioned in part by a tighter credit policy and by the higher international prices of some importable,’ it added.
   The fiscal year 2005-06 started with a lower forex reserve of $2,929.9 million and it continued to decline for the few months to $2,416.80 million at the end of November 2005. The reserve again started to rise and go through a fluctuation.
   Although, at the end-June, forex reserve increased significantly, in most of the timed in outgoing fiscal year, reserve level was below the level of corresponding periods of previous fiscal.
   As the exchange rate came under pressure and dollar became dearer in the market, many urged the central bank to release some dollar from the foreign exchange reserve.
   But the Bangladesh Bank maintained its tight stance on not selling dollar from the reserve, rather advised the banks to improve their fund management system.
   Even then, the central bank provided some foreign exchange through over-draft facility to ease the pressure in the market.
   The official estimation of the central bank also showed that exchange rate of taka against per dollar decreased to Tk 70.00 at the end of May, 2006 from Tk 70.40 at the end of April, 2006, thus taka depreciated by 8.93 per cent in May, 2006 over June, 2005.
   The inter-bank weighted average exchange rate on June 29, 2006 stood at Tk 69.49 for buying and Tk 69.85 for selling, thus mid-rate was Tk 69.67. The rate reflected some appreciation of taka against the dollar.
   The total depreciation rate in the outgoing fiscal year is likely to be 10 per cent.

The United Arab Emirates will recruit Bangladeshi professionals if the two countries sign a memorandum of understanding to give legal coverage to manpower export to the Middle East country.
   Such a memorandum is likely to be signed in August, said sources in the expatriates’ welfare and overseas employment ministry.
   In this connection, the sources added, the labour affairs minister of the UAE, Ali Abdulla Al Kaabi, might visit Bangladesh to hold talks on ways and means to increase manpower import from Bangladesh.
   Currently, private companies of the oil-rich Arab country recruit workers from different countries, including Bangladesh, according to their requirements and choices.
   However, the public sector of that country needs skilled professionals in diverse areas and Bangladesh could explore opportunities by making an official arrangement, officials of the UAE government are learnt to have conveyed to the Bangladesh ambassador there.
   Bangladeshi doctors, engineers, nurses and skilled manpower in a number of technical professions have good chances of getting jobs in the United Arab Emirates.
   The Bangladesh ambassador met officials and people concerned following assurances from the UAE government for recruitment of skilled professionals during the recent visit of the prime minister, Khaleda Zia to the Emirates.
   The ambassador also invited the UAE minister to visit Bangladesh and a tentative schedule of the visit has also been given some time in August.
   The UAE officials were also quoted to have said that signing of a memorandum of understanding could pave the way for recruitment of technical professionals from Bangladesh in the years to come.
   Officials of the overseas employment ministry said a memorandum of understanding would ensure discipline, proper record-keeping, and resolution to disputes and problems, if any.
   Dhaka has been lobbying hard with a number of countries in recent times to augment the flow of manpower exports in the near future and thus increase the earnings from remittance, the second-most important area of foreign exchange earning after the readymade garment sector.

The government may backtrack on its decision to borrow $250 million from the Standard Chartered Bank for oil import, if Kuwait supplies the petroleum products on a six-month deferred payment, energy officials said.
   ‘If we get oil on six-month deferred payment, as assured by the Kuwaiti government, there is no need to take the $250 million loan from StanChart,’ the energy and mineral resources adviser, Mahmudur Rahman, told New Age on Tuesday.
   The government in February approved a Bangladesh Petroleum Corporation proposal to borrow the sum from StanChart for meeting additional oil import bills on the wake of the soaring global prices and as the nationalised commercial banks had difficulties to arrange the foreign exchange required.
   Economists, however, criticised the government move to borrow from a foreign commercial bank on a higher interest rate.
   The BPC and the bank had been doing the paperwork on the loan and the state-run petroleum agency was expected to get the loan in July, sources in the energy and mineral resources division said.
   But, the government is now hopeful to be able to import oil in its remaining tenure on a payment deferred for half a year from the Kuwait Petroleum Corporation, Mahmud told New Age.
   ‘In the meantime, we will get the loan from the Islamic Development Bank and the next government will have a better position to repay the dues of the KPC, as the domestic price of oils have already been raised,’ he said.
   The government is now desperately trying to solve the intricacies of the deferred payment that have surfaced, as the KPC asked the BPC to open a letter of credit with one of the three foreign commercial banks — StanChart, Citibank NA and American Express.
    Although the Kuwait government in the second week of June assured Bangladesh that the KPC would provide the BPC oil in six-month deferred payment, the National Bank of Kuwait has refused to shoulder the burden of around $750 million.
   StanChart and Citibank NA are also uninterested in opening LCs on the deferred payment.
   Against this backdrop, the government is now considering to request the KPC to allow opening of the LC with a state-run bank — Agrani or Janata, sources said.

Different labourer organisations on Friday demanded immediate implementation of the tripartite agreement to resolve the crisis in garment sector.
   The Textile Garments Workers Federation leaders from a protest rally at Topkhana road demanded implementation of the agreement with effect from today (Saturday).
   Labourer leader Abul Hossain urged the authorities to announce the minimum wage commission report within two months.
   The federation leaders Lovely Yesmin, Arif Chowdhury and Shahidul Islam also spoke on the occasion.
   The Garments Workers Unity Forum also held a rally at Muktangan in demand for stopping termination of workers’ job in the garment factories.
   The forum president, Moshrefa Mishu, expressed dissatisfaction with delaying of the implementation of tripartite agreement.
   Among others, forum leaders Shahidul Islam Sabuj and Kamal Debnath addressed the rally.

India’s annual inflation rate jumped to 5.44 per cent, its highest in 13 months, official figures showed Friday, spurring concerns the central bank will hike interest rates again.
   Higher prices of pulses, fruits, vegetables and fuels drove inflation to 5.44 per cent for the week ended June 17 from 5.24 per cent in the previous week.
   The rate, as measured by the wholesale price index, was higher than most analyst forecasts of around 5.35 per cent and was nudging the top end of the central bank’s estimated range of 5.0-5.5 per cent for the financial year ending March 2007 due to higher food and energy prices.
   The increase fanned speculation about more rate tightening.
   ‘The (Reserve Bank of India) will probably revise up its inflation forecast range to 5.5-to-6.0 per cent from 5.0-to-5.5 per cent at its policy meeting on July 25. It will also likely hike rates by 25 basis points at that meeting,’ said Rajeev Malik, economist at JP Morgan in Singapore.
   ‘Also given the still-high pace of credit expansion, the RBI is likely to think about a hike in the cash reserve ratio, currently at five per cent, in the next few months,’ he said.

The import of coal from India through all the borders of Sylhet will stop from Saturday at the directive of the government for high sulphur content in it.
   The environment ministry, during the rule of the previous government, banned import of coal containing over one per cent sulphur to protect the country’s environment.
   As the price of coal with one per cent sulphur was sky-high in India, the coal traders used to import coal having nearly two per cent sulphur content seeking extension of time for the last two years.
   But recently when the coal traders went to the ministry for renewing their licenses, they were informed that import of coal with more sulphur content than the approved level would not be allowed after June 30 of the current year.
   The commerce ministry sources said coal containing more sulphur than the
   approved level is harmful for environment.
   Local coal traders said that if the import of coal stops
   more firewood would be
   needed for the brick kilns, resulting in increased felling of trees, which is also a threat for environment.
   The president of Sylhet Coal Importers Group, Abdal Miah, said the government decision to stop import of Indian coal would be harmful for all.
   If coal with only one per cent sulphur content is to be imported from elsewhere, it would have to be done by sea route and this would render the land ports useless, he added.
   Group general secretary Kalander Ali said the government has already directed the brick field owners to make 120 feet high chimney for brick kilns to protect the environment.
   In such an event, there is less possibility that the coal containing more sulfur than the specified level would cause harm to the environment.
   The coal importers urged the government to immediately change its decision stopping import of Indian coal with more sulphur content from July 1.
   Customs sources said the country earns over Tk 100 crore revenue from coal import through the land ports every year.
   More than 7,000 tonnes of coal is imported through Barachhara, Tamabil and Sutarkandi land ports on an average per day during November-February period and 2,000 tonnes per day during March-October. The government earns Tk 1,100 as revenue per ton of coal.
   If the import of coal is stopped the government will be deprived of this earning and the target of revenue earnings from the land ports would not be achieved.
   The revenue earnings of the land ports here mostly depend on coal import. If the coal import is stopped, the activities of the land ports may come to a halt.
   Besides, the production in brick fields and steel mills depends on imported coal and over 10,000 labourers are directly involved with jumping of coals.

Despite India’s ban on export on some commodities, including sugar, Bangladesh can import sugar from India, which originates in any third country.
   Sources in the business circle said the ban would be effective only on the commodities produced domestically in India.
   They said the ban, however, would not hamper the export of products, which were earlier imported to India from any third source.
   Utilising the 3rd country provision, Bangladesh can import sugar from India, which the Indian importers procured from countries like Brazil, Thailand or elsewhere.
   Apart from producing sugar domestically, India usually import raw sugar from different countries and after refining, they export the finished sugar to other countries.
   Meanwhile, the Indian government would allow the export of products against some 250 L/Cs (letters of credit) opened by Bangladeshi importers before the ban was imposed on export of pulses, sugar and wheat a few days ago.
   Soon after imposition of the ban, Commerce Minister Hafiz Uddin Ahmed has said that the decision of the Indian government to stop export of wheat, sugar and pulses to other countries would not have any negative impact on the Bangladesh market.
   The country does not import any huge quantity of sugar, wheat and pulses from India. Mainly, it imports sugar from Brazil and Thailand, and pulses from Myanmar, Australia, Canada and Turkey, and wheat from Australia, Canada and the United States.
   According to the Commerce Ministry statistics, during the last nine months, the country imported 4.5124 lakh tonnes of sugar from across the world. Of the imported sugar, only 53,400 metric tons of sugar came from India.

The Privatisation Commission has decided to sell the National Sugar Mills Limited situated in Kishoreganj to push forward the privatisation process of the sick industries.
   Sources said the PC has already offered a tender for prospective international and domestic buyers to auction the mills, a state-owned enterprise, run by the Bangladesh Sugar and Food Industries Corporation under the Ministry of Industries.
   Under the terms and conditions of the tender, the buyers will not be able to use 32.41-acre land of the mills for other purposes excepting establishment of industrial units.
   Potential foreign buyers, including expatriate Bangladeshis, have been advised to procure tender documents by July 9.

Prime Minister Manmohan Singh promised Friday his government will do all it can to help farmers in India’s main cotton belt where crippling debts and falling prices have pushed many to suicide.
   ‘I want to assure you that both the Maharashtra government and the federal government will jointly find a solution to all problems with all sincerity,’ Singh told farmers in the badly-hit Vidarbha region of western Maharashtra state.
   ‘I am aware of your problems. I can understand the pain and anguish you have gone through.’
   Singh made the comments at the start of a two-day visit to Vidarbha, during which he is slated to visit families of farmers who have ended their lives and who are still struggling to pay off debts.
   The premier was expected some time during the tour to announce a relief package of 40 billion rupees (865 million dollars) aimed at waiving off loans, improving irrigation and encouraging diversified farming, newspaper reports said.
   Alluding to the package but without giving details, the premier told farmers it would address several problems associated with the agricultural crisis.
   ‘I heard that irrigation means are not available. We will announce a package to improve the situation,’ he told the farmers.
   ‘I also heard that there should be alternative livelihoods. The package will also take care of that too.’
   He said that he was confident that the situation in the region would improve, but it would take time.
   ‘I am confident that Vidarbha will improve and the phase you are going through now, you will not have to go through it again.’
   Singh told farmers that the administration would also look at more immediate problems such as the lack of health facilities.
   Agriculture minister Sharad Pawar, who is accompanying the prime minister, acknowledged the situation was serious.
   ‘India is going through a severe agrarian crisis and yes, even if there is single suicide death, it disturbs everybody,’ Pawar told private CNN-IBN network ahead of the visit.
   The minister said the government will also provide seeds at a subsidised rate.
   Federal government officials say more than 8,900 farmers have committed suicide since 2001 in four states hardest hit by the ongoing agricultural crisis, including 980 in Maharashtra alone.
   The number has been dismissed as far too low by activists and, according to a state government-backed report, more than 4,100 farmers ended their lives in Maharashtra in 2004 alone.
   Rights activists say farmers are being driven to the wall by mounting debts—loan sharks demand up to 120 per cent annual interest—failed harvests and the tumbling price of cotton, the region’s main crop.
   The prime minister’s visit is being seen as a sign that the government is taking the situation seriously.
   Agriculture is essential to the well-being of Indian society as it employs some 60 per cent of the country’s workforce and accounts for a quarter of India’s GDP.
   Federal government figures say that close to a million farmers committed suicide between 1995 and 2003 nationwide.

International air passenger traffic in May rose 7.0 per cent year-on-year but high oil prices and rising interest rates could stall economic growth and dent travel demand, a global industry group said Friday.
   International Air Transport Association (IATA) director general Giovanni Bisignani urged airlines to manage capacity carefully to minimise the impact on the industry, which has seen record orders for aircraft.
   ‘Although load factors are at historically high levels, we need to continue to manage capacity carefully to make sure that record aircraft orders do not become our Achilles heel,’ he said in a statement issued by IATA’s regional office here.
   ‘There is a risk that high oil prices and rising interest rates in many major economies will trigger an economic slowdown later this year, removing the support provided by demand-led revenue growth. That is why even more efficiency and greater change are needed.’
   Bisignani said strong growth in the world’s major economies supported the 7.0 per cent expansion in international passenger traffic in May while freight volumes also increased 5.1pc during the month.
   ‘This positive demand environment is helping the global airline industry offset some of the sharp increases in jet fuel prices and it is helping airlines boost revenues by an average 10 per cent over the past three years,’ he said.

Prime Minister John Howard said he would not be blackmailed by Telstra Friday and criticised the telecom giant’s controversial US boss for boasting about a recent plunge in its share price.
   Howard said unlike Telstra chief executive Sol Trujillo, he was extremely concerned about the stock freefall and dismissed as ‘bluster’ a public campaign by the company for regulatory protection of a proposed broadband network.
   Howard rejected Trujillo’s view, expressed this week, that the share price plunge was something to be proud of because it partly reflected Telstra’s heavy spending on infrastructure to drive future returns.
   ‘We are very concerned about the share price,’ Howard told commercial radio.
   ‘I don’t think it helps for people to make off-the-cuff comments ... that in the cool light of day he (Trujillo) might have wished he hadn’t made.’
   Howard’s conservative government wants a healthy Telstra share price so it can sell its remaining 51.8 per cent stake in the company and reap more than 30 billion dollars (22.5 billion US).
   However, the stock has fallen more than 25 per cent to about 3.70 dollars since Trujillo took over last July, delaying the plans of a government determined not to proceed with a ‘fire sale’ of Australia’s largest telecoms firm.
   Adding to the tensions between the government and the US management team Trujillo has installed at Telstra, is the company’s insistence it will not invest in a high-speed broadband network unless regulations are changed so it can charge competitors commercial rates for access.
   Howard said he would not change competition rules for Telstra despite repeated complaints from executives that over-regulation is hampering the three billion dollar broadband investment.
   ‘One thing I don’t do is succumb to blackmail,’ he said.
   ‘I’d simply say to Mr. Trujillo, and I say to the board of Telstra; we have made our position regarding regulation in telecommunications very clear and we’re not going to be persuaded to change it,’ he said.
   ‘I suggest they continue their discussions with (competition authorities) because bluster about changing the regulations is not going to achieve anything.’
   Trujillo on Thursday said he took responsibility for the part of the share price plunge attributable to Telstra’s increased spending.

Shareholders in the European steel group Arcelor were voting here Friday on a proposal to marry their business to Mittal Steel and jilt the Russian group Severstal, which could yet make a comeback.
   The meeting, to begin at 0900 GMT, is one more step in the five-month-long saga of attempts by Mittal Steel to win Arcelor and create by far the biggest steel group in the world.
   Arcelor is recommending acceptance of a share and cash offer which values it at about 28.0 billion euros (35.6 billion dollars) and would create a group with 320,000 employees that produced about 116.0 million tonnes of steel per year, or about 10.0 percent of the world market.
   But Severstal, which until recently had been courted by Arcelor as a so-called ‘white knight’ to ward of Mittal Steel, maintained last-minute suspense about whether or not it would make a new move to try to entice shareholders away from the terms of a deal worked out on Sunday.
   On Wednesday, a French member of parliament, Leonce Deprez, speaking after talking to the head of Severstal, Alexei Mordashov, said the Russian group ‘had not given up’.
   Last week the Arcelor board did a backwards flip by spurning Severstal and accepting improved terms from Mittal Steel. Significant shareholders in Arcelor were believed to have made it clear that they did not relish a deal with Severstal.
   The French side said that the offer from Mittal Steel was now friendly, in contrast to an initial approach announced in January.
   Arcelor was formed of formerly state-owned interests in France, Luxembourg, Belgium and Spain. The prospect that it might come under foreign control caused consternation, notably in France.
   Mittal Steel is a quoted, privately owned company registered in the Netherlands but controlled by the Mittal family which is based in London and has its roots in India.

World oil prices continued to climb on Friday owing to jitters over motor fuel supplies before a long holiday weekend in the United States, dealers said.
   New York’s main contract, light sweet crude for delivery in August, climbed 16 cents to 73.68 dollars per barrel in electronic deals before the official opening of the US market. The contract earlier hit 73.85 dollars—the highest point since May 11.
   In London on Friday, Brent North Sea crude for August delivery rose 27 cents to 73.15 dollars per barrel in electronic trading after earlier touching 73.35.
   ‘The Independence Day holiday weekend in the US starts (on Saturday) and demand for gasoline should be very high, much higher in fact than last year according to some sources,’ Sucden analyst Sam Tilley said.
   About 35 million Americans are expected to take to their cars over the weekend, putting severe strain on the country’s gasoline or petrol stocks.
   Meanwhile, New York’s oil market will remain closed on Monday and Tuesday for Independence Day July 4th celebrations. US gasoline stocks are already being stretched amid the ongoing peak-demand driving season.
   ‘Oil prices are continuing to gain support (on Friday) from strong underlying US demand for gasoline where consumption levels are continuing to rise despite prices that are up over 20-per cent year-on-year,’ added Barclays Capital analyst Kevin Norrish.
   Crude futures have climbed since Monday, supported by refinery disruption in the United States, strong US and Chinese demand and persistent concerns on the nuclear energy standoff with Iran, the fourth-largest global oil producer. Oil prices extended gains following news from the US Department of Energy of steep falls in both motor fuel and crude stockpiles.
   According to the DoE, demand for gasoline rose 1.2 per cent in the week that ended June 23 to 9.54 million barrels per day, matching a record high set in August 2005.
   Gasoline stocks in the US had fallen by one million barrels to 212.4 million last week, compared with market expectations for a rise of 450,000 barrels.
   Meanwhile, the oil market has drawn some comfort from the prospect of a pause in US interest rate hikes, following the Federal Reserve’s decision on Thursday to hike borrowing costs by a quarter-point to 5.25 per cent.
   ‘The Fed comments... spread relief throughout the market for those that have been worried about inflation, higher interest rates and slower demand growth,’ Sucden analysts added.
   Crude prices are now within two dollars of historic levels. New York crude had hit a record 75.35 dollars last April, while London Brent had struck 74.97 dollars in May, on the back of heightened concerns over Iran.

The dollar sank against major rivals on Friday after the US Federal Reserve raised borrowing costs as expected but also hinted at a pause in the central bank’s series of rate hikes, dealers said.
   The euro jumped to 1.2710 dollars in early European trading from 1.2656 dollars late on Thursday in New York, after earlier hitting 1.2733 dollars—last seen on June 8.
   The dollar sank to 114.78 yen from 115.14 yen on Thursday.
   On Thursday the Fed hiked its federal funds rate by a quarter point, as expected, to 5.25 per cent and rewrote its policy statement in a way seen by markets as signaling an end soon to its series of interest rate rises.
   The Federal Open Market Committee (FOMC) said inflation remains a threat even while economic growth is moderating.
   ‘The dollar suffered large losses in the aftermath of the FOMC statement which market participants interpreted as a signal of an imminent pause in the monetary tightening cycle,’ said Bank of Tokyo-Mitsubishi economist Derek Halpenny.
   ‘The dropping of the sentence ‘further policy firming may yet be needed to address inflation risks’ was the key focus of the market and the probability of an August rate hike has fallen from over 90 per cent to about 65 per cent.’
   The widely expected increase was the 17th consecutive quarter-point move by the Fed, which has been moving to normalize rates and stem inflationary pressures after dropping its federal funds rate as low as 1.0 per cent.
   Meanwhile, the euro gained on expectations that the gap between interest rates in the US and the eurozone will shrink, dealers said.
   Next Thursday, interest rate calls are also due from the European Central Bank and the Bank of England, whose borrowing costs currently stand at 2.75 per cent and 4.50 per cent respectively.
   The euro was changing hands at 1.2710 dollars against 1.2656 on Thursday, 145.87 yen (145.74), 0.6936 pounds (0.6922) and 1.5671 Swiss francs (1.5651).
   The dollar stood at 114.78 yen (115.14) and 1.2327 Swiss francs (1.2367).
   The pound was being traded at 1.8336 dollars (1.8276).
   On the London Bullion Market, the price of an ounce of gold rose to 599.70 dollars per ounce, from 589.25 dollars late on Thursday.

Asian stock markets shot higher Friday on Wall Street’s lead after the Federal Reserve hinted at a pause in US interest rate rises, soothing fears over slowing global growth, dealers said.
   The dollar dropped after the Fed hiked its overnight federal funds rate by a quarter point as expected to 5.25 per cent and rewrote its policy statement in a way that raised market hopes that an end to its series of rate rises is close.
   ‘The Fed’s comments gave a very strong hint that there will be an end soon to the interest rate hike cycle,’ said Peter Lai, sales director at securities firm DBS Vickers in Hong Kong.
   ‘Investors are very positive believing the Fed will stop the rate hike soon,’ he added.
   Global stock markets have been roiled recently by fears that the US central bank under new chairman Ben Bernanke might slam the brakes on economic growth with aggressive interest rate rises in order to keep inflation under control.
   That would be bad news for Asian economies which rely on the huge pool of US consumers to buy their exports.
   ‘The end of interest rate hikes by the Fed would be good for the Asian economies,’ said Yoshikiyo Shimamine, chief economist at Dai-ichi Research Institute in Tokyo.
   ‘The US economy is expected to slow down but the pace of the slowdown would be milder if the Fed halts raising rates,’ he added.
   In Tokyo, the Nikkei-225 index closed up 384.03 points or 2.54 per cent at 15,505.18.

A consortium led by India’s Videocon Industries has signed $340 million worth exploration and production sharing agreements (EPSA) with Oman, seeking to enhance overseas oil reserves that can be earmarked for refining in India.
   Oman’s minister of oil and gas, Mohammed bin Hamad bin Saif Al Romhi signed seven EPSAs worth around $340 million with various companies Thursday.
   ‘The initial investment will be USD 30 million and we are planning to drill a minimum of eleven wells. We’ve estimated about 150 million to 160 million barrels of oil in the block and there is some potential for gas condensates,’S Padmanabhan Director, Videocon Industries Ltd. said.
   The consortium comprise Videocon Industries (25 per cent), Gas Authority of India (25 per cent), Hindustan Petroleum Corp Ltd (12.5 per cent) and Bharat Petroleum Corp Ltd (12.5 per cent) and Australia’s Oilex (25 per cent) is the operator.
   For Videocon with a 25 per cent interest in India’s largest private sector and producing 50,000 barrels per day at RAVVA in Andhra Pradesh, this is the first oil block abroad, though the company is into agreements for blocks in Australia.
   The Indian consumer durables major has said it intends to pursue oil exploration proposals in Yemen and Libya too.
   Work on Block 56, located onshore adjacent to producing fields operated by Petroleum Development Oman (PDO) in the South Oman Salt Basin, will commence in July, a statement by Videocon Industries said.
   Videocon already has manufacturing facility for air conditioners in Oman and can provide immediate infrastructure required by operator Oilex to establish a joint venture in Oman to take up exploration work expeditiously,’ it said.

Indian shares prices closed 4.4 per cent higher Friday, in line with firmer Asian markets after the US Federal Reserve signalled it may pause in its rate hiking cycle, dealers said.
   They said choppiness may be seen in the Indian markets ahead with India’s central bank expected to raise short-term interest rates next month to curb inflation which hit a 13-month high on Friday, rising to 5.44 per cent.
   The US Federal Reserve lifted its benchmark rate Thursday for the 17th straight time by a quarter point to 5.25 per cent but dealers said markets interpreted its policy statement as a hint the Fed may pause in its credit tightening campaign.
   The benchmark 30-share Sensex index opened up 1.5 per cent with the buying momentum sustained by local funds and finally closed with a gain of 447.09 points or 4.4 per cent at 10,609.25.

A Paris appeal court upheld Friday a complaint by the luxury products giant LVMH that the stockbroking arm of Morgan Stanley had damaged it with incomplete financial analysis.
   The tribunal confirmed a decision by a commercial court on January 12 which had found that ‘Morgan Stanley was at fault to the prejudice of LVMH’ because of financial analysis published by the brokers between 1999 and 2003.
   But the appeal court did not give judgement on the prejudice, which the commercial court had valued at 30 million euros (38 million dollars). The appeal court said an expert would calculate the moral and material damages.

The success of a World Trade Organisation (WTO) meeting hung in the balance Friday as negotiators struggled to settle chronic differences and revive the Doha Round talks on tearing down barriers to global commerce.
   WTO chief Pascal Lamy issued a stern warning to governments in the 149-nation body, saying they could no longer afford to duck a deal after missing a host of deadlines during almost five years of stumbling talks.
   ‘I would urge all of you to reflect seriously and urgently on what the implications might be before it really is too late, and to reassess your positions and the way you have been negotiating,’ Lamy told a session of the 149-nation WTO.
   ‘If things don’t turn around radically in the next hours, we will quite frankly be facing a crisis.’
   ‘Procrastination does not bring success,’ he warned.
   The goal of the round, which was launched in the Qatari capital in 2001, is to tear down trade barriers and help developing economies accelerate economic growth.
   Negotiations were originally meant to finish in 2004, but the end-date was later pushed back to December 2006.
   ‘The positions are still entrenched,’ Indian Commerce Minister Kamal Nath said on Friday.
   Nath, who on Thursday had threatened to walk out of the talks, reaffirmed that the United States, the European Union and other developed countries should make good on commitments to harness trade to help the poor.
   He said developing nations would not compromise simply to meet a deadline for ending the talks.
   Negotiations here centre on the mathematics for cutting farm subsidies and customs duties, a crucial step towards completing the round.
   European Union Trade Commissioner Peter Mandelson made little comment as he left Friday’s session.
   ‘There was movement by some but not by all,’ he told journalists.
   There have been conflicting signs over potential concessions in recent days.
   The EU has signalled that it may be prepared to offer deeper cuts in its customs duties on imported agricultural produce.
   However, EU negotiators have persistently said that other WTO players must match any new European move—something they have so far failed to do, Mandelson reiterated Friday.
   The EU, as well as key developing country players such as Brazil and India, are pressing the United States to offer deeper cuts in subsidies for its farmers.
   Last October, Washington offered cuts but critics said they lacked the bite to stop US agri-business from skewing world farm trade against its competitors.
   US Agriculture Secretary on Friday urged others to step up to the plate.
   ‘We never said it was a final offer. We said it was conditional on others moving,’ he told journalists.
   The United States in turn has the EU in its sights, saying it is waiting for Brussels to come forward on customs duties.
   Both Washington and Brussels are also demanding deeper cuts in customs duties on manufactured goods levied by emerging countries such as Brazil and India, but the latter counter that the rich must give way.
   ‘We’re caught in a position of everyone waiting for someone else to move first,’ sad WTO spokesman Keith Rockwell said.

EU Trade Commissioner Peter Mandelson is ready to cut duties currently applied to agricultural imports by half to secure a global trade deal, a spokesman for the European Union said Friday.
   ‘Mr Mandelson said that the EU was ready to cut by at least 50 per cent its applied customs duties,’ an EU spokesman,
   who declined to be named, told AFP.
   However, the offer is conditional on reciprocal concessions from other WTO members, especially the United States which must offer greater cuts in farming subsidies.
   Until now, the EU had said it was offering to cut import tariffs by 39 per cent, while the
   United States had been pressing the Europeans for a 66 per cent cut.
   According to the Europeans that 39 per cent would have translated into an average 46 cut in real terms on tariffs that are actually applied at the EU’s borders. Mandelson’s proposal would raise the latter figure to 50 per cent.
   Mandelson met five other key trading powers late Thursday at the World Trade Organisation.
   WTO Director General Pascal Lamy had signalled that he was aiming for a 54 per cent decrease, in line with a proposals from the G20 group of emerging and developing nations.
   The 149 WTO members are meeting in Geneva to try to revitalise the near five year-old Doha round of talks on liberalising new areas of commerce, which is aimed primarily at harnessing trade for the benefit of developing nations.

The United States accused key ally Japan Thursday of ‘hiding behind’ the European Union to demand trade concessions at a key ministerial meeting aimed at opening up global commerce.
   As Japanese Prime Minister Junichiro Koizumi and US President George W. Bush celebrated Thursday their close friendship at their final White House summit, a US trade official slammed Tokyo for using the Europeans as a shield to seek concessions from the United States.
   ‘We have negotiating forums here and that’s a chance for Japan to stop hiding behind the EU here,’ the official said, on the sidelines of a WTO meeting in Geneva of around 60 countries cantered on formulating ways to cut farm subsidies and tariffs for manufactured goods and agricultural products.
   The negotiations are seen by many as a last-ditch attempt to revitalize the stalled Doha Round of multilateral trade talks, in which Washington has come under fire for its massive farm subsidies that allegedly dampen competition.
   The US official charged that Japan was overly protecting its farm market, especially rice, the national staple of Japan on which Tokyo imposes a tariff of ‘around 750 per cent’.
   ‘If you cut that even by 75 per cent you’re going to have a triple digit tariff. Now some people may be able to compete in Japan under those terms. Our high quality rice, no doubt we’d do well. But is that really going to be an open market?,’ the official asked.
   The sharp criticism came as Koizumi, on a final North American tour before he stands down in September, got a lavish welcome worthy of a state visit in the United States.
   ‘Japan is a big beneficiary of the trading system, big winner in (the trade of manufactured goods) and services but is not contributing here in agriculture, to move negotiations forward,’ he said of the divisive talks in Geneva.

The Italian energy group ENI and Gazprom of Russia are preparing a deal that would give ENI access to Russian gas reserves and let Gazprom sell directly to Italian customers, Italian Foreign Minister Massimo D’Alema said here Friday.
   ‘The agreement being prepared between ENI and Gazprom is a strategic
   agreement of a new quality,’ D’Alema said after meeting his Russian counterpart Sergei Lavrov.
   ‘We are looking at opening the market to Gazprom so it can sell gas to Italy directly without going through intermediaries,’ he added.
   The deal, he said, was in exchange for Russia allowing Italian major ENI access to Russian resources.
   ‘ENI wants to take part in exploration for raw materials and not just buying them.’
   Italy, the third largest European natural gas market after Britain and Germany, imports 36.5 per cent of its gas from Russia.
   Italy was affected in January by a gas dispute between Russia and Ukraine, when delivery cuts had a knock-on effect in several European countries.
   At a meeting with Russian President Vladimir Putin earlier this month, Italian Prime Minister Romano Prodi had talked up the prospect of ‘cross investments’ between the two countries.

The European Commission voiced hope Friday for a stronger-than-expected recovery in Europe this year, forecasting accelerating growth in the 12-nation eurozone despite soaring oil prices.
   In a quarterly report, the European Union’s executive arm said the economy of the single currency zone is ‘growing at one of the most robust paces since the beginning of the decade’.
   This creates ‘an environment potentially capable of weathering the negative effects of high oil prices, recent stock market turbulence and the appreciation of the euro,’ it noted.
   ‘Continued improvements in business and consumer confidence in recent months suggest that the upswing could surprise on the upside in the next quarters,’ noted the report.
   Although the United States and Europe’s key Asian trading partners are powering ahead, the 25-nation EU has struggled to pull out of a prolonged economic slowdown.
   The Brussels report cited no new figures, but earlier this month the EU executive forecast growth for the second and third quarters of 2006 of between 0.5-0.9 per cent, and in the fourth quarter between 0.4-1.0 per cent.
   It noted that first quarter growth had edged up to 0.6 per cent, while underlying growth momentum, as measured by the year-on-year growth rate, stands at 1.9 per cent—the second-best reading since the beginning of 2001.
   The optimism voiced in the quarterly report was echoed by a rise in the EU’s Economic Sentiment Indicator, which rose to its highest level since early 2001, at 108.8 points for the 25-nation EU and 107.2 points for the eurozone.
   But the commission warned that growth in Europe next year could be more tempered.
   ‘The risks to growth appear greater and more tilted to the downside for 2007,’ it said, noting in particular that ‘oil price increases above those already assumed cannot be ruled out.’
   The upbeat report came as new EU data indicated that eurozone inflation remains higher than EU monetary authorities would like.

The World Bank on Friday vowed to improve its much-criticized forestry program in Cambodia, after an internal review found the scheme failed to prevent illegal logging.
   The review also found that the Bank’s program did not meet its own environmental standards, and failed to preserve forests that local communities prized for cultural or economic reasons.
   ‘It is arguable whether and to what extent the project had a positive impact on what actually happened in the field,’ the report said.
   When the Bank project was approved in 2000, over-exploitation of timber resources and illegal logging were threatening to exhaust Cambodia’s forest resources in as little as five years, the bank said in a statement.
   The five-million-dollar project focused on addressing the critical but difficult issue of preventing illegal logging, it said.
   Ian Porter, the Bank’s country director for Cambodia, vowed to improve the scheme, saying: ‘Many poor communities depend on access to forest products for their livelihoods.
   ‘This is too critical an issue for the World Bank to simply walk away.’
   In a statement, the Bank conceded to many of the problems cited in the review and vowed to overhaul the project.

Sri Lanka’s central bank forecast Friday the economy would grow by eight per cent this year, up from six per cent in 2005, despite high oil prices and fears of a return to a bloody civil war.
   Nivad Cabraal, who takes over as governor of the Central Bank of Sri Lanka on Saturday, said strong 8.1 per cent growth in the first quarter made the bank optimistic about achieving eight per cent in 2006.
   ‘It’s a tough call but we can see growth rates increasing in all sectors,’ Cabraal said. ‘In the first quarter we’ve seen very encouraging indicators and I’m confident eight per cent growth can be achieved this year.’
   Sri Lanka’s economic growth last topped 8.0 per cent in 1978 when it rose 8.2 per cent, a year after becoming the first nation in South Asia to liberalise its economy from socialist prescriptions.
   
   High oil prices and a worsening security situation were the two biggest challenges faced by the tropical island nation as it seeks to achieve eight per cent growth, Cabraal said.
   ‘The oil price increase is by far the biggest challenge,’ Cabraal said. ‘The negative impact felt in the economy because of the security situation is the other but our development must take place whatever challenges we face.’
   Fighting between government forces and Tamil Tiger rebels has escalated since December and official figures show at least 820 people have been killed in the past seven months despite a truce that is now virtually confined to paper.
   International ratings agencies Fitch and Standard and Poor’s downgraded the island’s credit outlook to negative from stable in April, citing fears of a slide back to full-scale civil war.
   The conflict between the majority Sinhalese and minority Tamils has claimed over 60,000 lives since 1972 and the violence is estimated to have shaved two per centage points off growth annually, according to central bank studies.
   The latest uncertainty is spooking companies which before the spike in violence had hoped to take advantage of a stock market boom. Most are delaying plans for initial public offerings, according to brokers.

Brazilian President Luiz Inacio Lula da Silva has signed a decree adopting Japan’s digital television system for his country over US and European standards.
   The decree made official an agreement under which Brazil would adopt Japan’s ISDB-T standard and Tokyo adopts Brazil’s technical innovations. It was signed by communications ministers Helio Costa of Brazil and Heizo Takenaka of Japan.
   ‘This is a milestone in Brazilian-Japanese relations,’ Lula said Thursday on announcing his decision.
   Japanese, US and European officials have been competing for the deal for months.
   But Japan sweetened its offer by persuading electronics giant Toshiba, which stands to benefit from the agreement, to plan a new investment in Brazil.
   Brazil, the world’s fifth most populous nation, is a lucrative potential market, with its consumers buying 10 million analog or traditional television sets last year, with a 12 per cent growth forecast for 2006.
   The Brazilian government estimates that in the next 10 to 20 years, the digital television market in Brazil will grow to a 40 billion dollar business.
   Digital television is gradually replacing analog as it permits a greater range of channels and broadcasts on radio, the Internet and on mobile telephones, of which Brazil has 90 million in service.
   ‘The day a Brazilian can make an appointment with his doctor or take a class on television is getting near,’ Lula said, referring to his government’s plan to exploit digital television’s interactive, social and public service potential.
   Brazil hopes to convince its Mercosur partners—Argentina, Paraguay, Uruguay and Venezuela—to also adopt Japan’s digital television system.
   It is expected Brazil will take seven years to make the digital signal available throughout its territory and 10 years before all broadcasting switches over to digital.

Mohammad Mosaddak Ali and Mohammad Lutfar Rahman made chairman and vice-chairman of the IFIC Bank Limited respectively in the 445th board of directors’ meeting at the bank’s head office in Dhaka recently.
   Al-Haj Mohammad Mosaddak Ali is a member of parliament and a successful entrepreneur, sports organizer, media entrepreneur and associated with a number of business ventures. Mohammad Lutfar Rahman is a successful entrepreneur and associated with a number of business enterprises. He is the Managing Director of Dhaka-Shanghai Ceramics Limited, a joint venture company.

Tk 300 crore loss for improper hide handling
Bangladesh is losing around Tk 300 crore in foreign exchange every year due to unscientific handling and preservation of cattle hides. Leather industry experts estimated the extent of the loss at a seminar held in Ziaur Rahman Auditorium here on Saturday. LSBPC, BFLLEA of Commerce Ministry, Bangladesh Tannery Association and Natore Zilla Chamra Babosayee Samiti jointly organised the seminar on the necessity of scientific handling and preservation of hides. The BFLLEA president, Tipu Sultan, presented the keynote paper in the seminar. Hide traders and concerned officials from 32 districts of Rajshahi, Khulna and Barisal divisions took part in it.
— UNB

French consumer confidence up
French consumer confidence picked up in June after three months running of decline, with a national index rising to minus 28 from minus 30 in May, seasonally-corrected data released Friday by the statistics institute INSEE showed. The index stood at minus 27 in April, minus 26 in March and minus 24 in February. ‘Almost all the balances of opinion’ between positive and negative responses that comprise the index rose in June, INSEE said. The prospects for improving households’ personal financial situation were stable however.
— AFP